Trade Court Says ITC Didn't 'Relitigate' Negative Injury Finding on Rail Couplers

While Katzmann sent back the investigation on these grounds, the judge rejected all other claims by FRC importers. Namely, the judge said importer Strato failed to make a prima facie case that the proceedings were "tainted by material fraud" allegedly committed by the U.S. industry, and that the ITC wasn't "required to refuse to initiate or find good cause to initiate" the investigation on the basis that the commission had too recently made a negative injury determination on the products.

In addition, the court said the ITC properly decided to cumulate FRCs from China and Mexico, and that the importers don't have standing to raise a conflict-of-interest issue involving Amsted.

Importers led by Wabtec challenged the affirmative injury investigation on a host of bases, including the claim that the ITC relitigated the issue too soon after making a negative injury finding (see 2507070056). In July 2022, the commission unanimously found that FRCs from China imported in 2019-21 weren't injuring the U.S. industry. After this finding, new AD/CVD petitions were filed in September 2022 covering FRCs from China and Mexico imported in 2020-21.

The ITC then made its affirmative injury finding, prompting Wabtec to claim that the second FRC investigation is a mere "relitigation" of the first proceeding. The importer also said the commission failed to exercise its "inherent authority to preserve the integrity of its proceedings" by declining to reexamine FRCs without "adequate justification." Wabtec added that 19 U.S.C. Section 1675(b)(4) requires a petitioner to show "good cause" before seeking review of a final ITC determination "if less than two years have elapsed."

Katzmann rejected all of Wabtec's claims, first finding that the second case wasn't a relitigation of the first, since the proceedings had "different scopes, different subject countries, and different periods of investigation." The first proceeding covered "knuckles, coupler bodies, coupler yokes, and follower blocks imported from China" during the 2019–2021 period, while the second covered "knuckles and coupler bodies -- but not coupler yokes or follow blocks -- imported from China and Mexico ... [during] 2020–2022." While there's some overlap, there are also "distinct economic variables" that differ between the investigations, the court said.

The court added that the ITC has no "inherent authority" to refuse to initiate an investigation. Contrary to Wabtec's claim, the commission can't refuse to reexamine prior determinations without good cause, since the Commerce Department, and not the ITC, open investigations. When Commerce initiates an investigation, the commission is separately required to conduct its injury proceeding, the court said.

Katzmann also said that Section 1675(b)(4), which says the ITC may not review a final injury determination less than two years after the date of publication of that decision without good cause, clearly only applies to changed circumstances reviews. Since the present investigation isn't a changed circumstances review and the ITC wasn't reviewing its first injury finding, no good cause was needed, the court said.

The lone basis on which the court remanded the injury finding related to the ITC's refusal to exclude Amsted. Specifically, the judge said the commission failed to provide a rational link between the facts of Amsted's "domestic production performance" and its finding that Amsted's domestic production wasn't shielded from competition with subject imports. The ITC heavily relied on its conclusion that Amsted's reason for importation was to substitute Mexican FRCs for its domestic production of the same FRC products, indicating it didn't compete with imports from Mexico.

However, Katzmann said none of the statistics cited by the ITC "connect directly to the Commission’s determination that Amsted was not shielded from competition with subject merchandise from Mexico." These stats could also be consistent with Amsted's own reason for importation, which was to "complement production across its facilities," the court noted.

And while the ITC said excluding Amsted's data could skew the domestic industry data, the commission "failed to provide a rational explanation for why exclusion of a minority of domestic production would result in skewed domestic industry data." Removing some data doesn't, on its own, "skew the remaining data," Katzmann said. The judge added that the ITC failed to adequately account for the three other factors regarding exclusion, namely Amsted's share of domestic production, ratio of subject imports to U.S. production and primary interest.

The court then rejected Wabtec's claim the commission was barred from cumulating the imports from China with those from Mexico, since the Chinese imports were subject to a terminated injury investigation. The statute bars cumulation of imports "from any country with respect to which the investigation has been terminated." Katzmann said the phrase "the investigation" clearly means the current investigation and not a past one.

The judge also rejected the claim from importer Strato that the domestic industry defrauded the commission given new evidence showing U.S. FRC makers produced "knuckles following a new, non-approved design during the period of investigation." In 2017, petitioner McConway and Torley received a patent for a new knuckle. This new design received two approvals during the review period from the Association of American Railroads, which is the standard-setting group for North America's railroads.

Katzmann said that Strato failed to make a prima facie case of fraud. While the association declared that it was intending to investigate the new design, there's plenty of evidence showing that the new knuckle design was "annually approved" by the association. The association's letter announcing its intention to investigate the knuckle reflects "an ongoing dispute" on whether the new design is a "permissible product enhancement as opposed to a design change that required" approval from the association. But, this dispute doesn't amount to "clear and convincing evidence that the domestic industry knowingly misled" the commission, the decision said.

(Wabtec Corp. v. United States, Slip Op. 25-134, CIT Consol. # 23-00157, dated 10/08/25; Judge: Gary Katzmann; Attorneys: David Morrell of Jones Day for plaintiff Wabtec Corp.; James Smith of Covington & Burling for plaintiff Strato Inc.; Garrett Peterson for defendant U.S. government; Daniel Pickard of Buchanan Ingersoll for defendant-intervenor Coalition of Freignt Couplers Producers)