All international trade lawyers and consultants should be aware that after 88 years, the 1916 Antidumping Act has finally come to life.
On December 4, 2003 a Federal District Court jury returned a verdict in the first case ever tried under the Act. Goss Graphics, brought a damage action under the act against our clients, TKS, Ltd. and its American importer, TKS USA for selling large newspaper printing presses in the States at costs lower than in Japan. While rejecting a majority of Goss's claims, the jury did award over $10,000,000 for certain lost sales, an amount which will be trebled and costs awarded. Post-trial motions have been filed and an appeal is imminent.
Traditionally the Trade Bar has considered the Act a relic of an earlier time. The Litigation Bar has taken another view. They view the Act as alive and well and the newest weapon in international business competition litigation.
For those of you unfamiliar with the 1916 Anti-Dumping Act, here is the statute:
15 U.S.C. Section 72
Section 72. Importation or sale of articles at less than market value or wholesale price
It shall be unlawful for any person importing or assisting in importing any articles from any foreign country into the United States, commonly and systematically to import, sell or cause to be imported or sold such articles within the United States at a price substantially less than the actual market value or wholesale price of such articles, at the time of exportation to the United States, in the principal markets of the country of their production, or of other foreign countries to which they are commonly exported after adding to such market value or wholesale price, freight, duty, and other charges and expenses necessarily incident to the importation and sale thereof in the United States: Provided, That such act or acts be done with the intent of destroying or injuring an industry in the United States, or of preventing the establishment of an industry in the United States, or of restraining or monopolizing any part of trade and commerce in such articles in the United States.
Any person who violates or combines or conspires with any other person to violate this section is guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding $ 5,000, or imprisonment not exceeding one year, or both, in the discretion of the court.
Any person injured in his business or property by reason of any violation of, or combination or conspiracy to violate, this section, may sue therefor in the district court of the United States for the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages sustained, and the cost of the suit, including a reasonable attorney's fee.
The foregoing provisions shall not be construed to deprive the proper State courts of jurisdiction in actions for damages thereunder.
[Enacted 9/8/16, ch 463, Title VIII, Section 801, 39 Stat. 798]
Most people associate "dumping" with "lost leader". A violation of the 1916 Act, however, can occur even if your client sells for a profit. All that is necessary is that the product be sold at a higher price in the country of manufacture that in the United States. While sales and profit are normal parts of legitimate competition, ultimately your client's true intent will be judged by a jury. Intent is almost always proved by circumstantial evidence. Acting upon Advice of Counsel is evidence of the client's bona fides.
Nor does your client have to be a manufacturer to be subject to the 1916 Act as it also applies to importers. Damages are measured by the lost profit on the lost sales. Further damages may be awarded for "price suppression" caused by your client's actions.
Neither predatory intent nor product identicality required. There can be differences between the export and home product. The degree of difference will be a significant issue. Generally differences are viewed from the standpoint of consumer use, preference and technological differences.
The fact that the 1916 Act was declared illegal by the WTO has no effect on the legality of the statute or private claims to enforce it. Many bills have been introduced in Congress to repeal the Act but all have failed. Currently bills are pending, but little action is anticipated given 2004 is an election year.
Those of you familiar with the Byrd Amendment may ask why someone file under the 1916 Act instead of claiming injury under the Byrd Amendment? The 1916 Act measure of damage greatly exceeds the compensation granted under the Byrd Amendment. The 1916 Act also compensates for damage suppression. Plus the 1916 Act is punitive in nature, all damages are trebled and prosecution fees and costs are assessed as damages.
Your client is not without protection,however. The Act, while providing a civil remedy, is criminal in nature being malum prohibitum rather than malum in se. A such it requires specific intent. As with all claims requiring specific intent, the bona fides of your client become extremely powerful evidence. In this regard, Advice of Counsel may be a defense. However the Advice of Counsel defense does not come without cost. One claiming the defense waives the attorney or barrister client privilege. Consequently you should not so advise. Instead, you should advise them to immediately obtain advice of experienced and competent 1916 Act counsel to determine if their trade activities in the past, as well as those contemplated in the future are at risk under the Act. Should litigation ensue, it will be necessary for counsel advising on the 1916 Act to provide expert opinion testimony in support of the advice.
See www.1916AntiDumpingAct.com for more information
(c)2004 Law Chamber of Nicholas
Critelli, p.c.