Motions for Summary Determinations Regarding the Economic Prong – An Immovable Barrier?
Written by Hayley M. Ostrin and David H. Hollander
Time to read: 5 mins
In Certain Movable Barrier Operator Systems and Components Thereof (“Movable Barrier Operator Systems”), the ALJ ruled via a summary determination that the economic prong of domestic industry requirement was satisfied, despite finding that complainants had applied “an inflated sales-allocation percentage” to allocate investments to the domestic industry products1. Viewing the evidence in the light most favorable to respondents, the ALJ reasoned that there was enough information to determine that the complainant’s domestic investments comprised “a large percentage” of the complainant’s total investments and therefore qualified as “substantial,” though the “exact figure” for the complainant’s domestic industry expenditures was “unknown.”2
On review, the Commission found that the imprecision regarding the quantity of the domestic industry investments made the ALJ’s entry of summary determination inappropriate, because the final claimed amount of investments remained a disputed issue of material fact.3 The Commission remanded to the ALJ for a reevaluation of the domestic industry including “an appropriate assessment of the relative importance of complainant’s domestic activities related to the DI products.”4
On remand, both parties agreed that neither a second hearing nor additional evidence beyond what was produced in discovery and at trial was warranted.5 Instead, the complainant submitted a supplemental declaration from its economic expert that relied on the existing record but provided additional explanation of his allocation methodology, including alternative allocations that revised what the ALJ had previously found to be inflated values.6 In the Remand ID, the ALJ found the economic prong satisfied, concluding that the domestic industry investments are quantitatively significant under both the complainant’s original allocation analysis and its alternative analysis.7 The Remand ID is now back before the Commission for its review.
While the Commission may ultimately conclude that the domestic industry requirement has been satisfied in this investigation, the reversal of the ALJ’s original ruling may signal that complainants should not expect to prevail on summary determination on this issue as often as in the past. Most companies do not track investments in individual products, and often have to rely on various allocation methods, which result in approximate estimates of investments per product. If disputes about the precise figures are sufficient to create an issue of material fact, relatively few cases will pass muster on summary determination.
September 15, 2020
1 Order No. 38, Initial Determination (Pub. Version) at 21-22 (Dec. 16, 2019).
2 Id. at 17, 21-22 (finding that there was “no indication” that the complainant could not show a significant domestic industry under Subsection B, even “[a]ssuming, arguendo, that half of these sales were rendered ineligible . . . thereby halving the percentage allocation used to calculate [investments in the DI product].”).
3 Comm'n Order at 5.
5 Hearing Tr. [McNamara], 12:14-17, 15:18-20, 17:16-23, 40:22-41:1, 42:6-11 (May 22, 2020) (noting “no new evidence [will be] submitted other than that was submitted as part of the summary determination motion and the three exhibits that were submitted during the hearing”)
6 See Hearing Tr., 44:12-46:9.
7 Remand ID (Pub. Version) at 32-35 (Aug. 6, 2020).