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WT/DS162/R/Add.1 Page 53


In this connection, Japan points out that Zenith III's judgement has limited binding effect in the US judicial system.  It is at most a non-binding decision except perhaps in subsidiary district courts in its circuit192 (though, given the criticisms of other courts, it might very well be reversed in the Third Circuit if the issue arises again).  Also, modern courts have heavily criticised the court's analysis in Zenith III, noting, in particular, that it ignores the text of the Act (as the United States does in the present proceeding).


The United States submits that Japan provides no support for its assertion that the relatively recent and extensively researched Zenith III decisions are "discredited", other than to point out that the District Courts in Geneva Steel and Wheeling-Pittsburgh disagreed with some aspects of Zenith III.  It is not the function of the present Panel to interpret US law, but only to ascertain what US courts and other relevant authorities understand it to be.  Moreover, there is simply no basis for such a negative characterisation of the Zenith III precedents, which include not one but three decisions by a court of appeals and a very important Supreme Court construction of the Sherman Act.   The District Court decision in Zenith III was cited and followed by the District Court in Helmac I and the Supreme Court based its 1993 Brooke Group decision in part on its own 1986 decision in Matsushita Electrical.

(e) Western Concrete Structures v. Mitsui & Co.


With regard to the treatment of the 1916 Act by the US Circuit Courts of Appeal, Japan recalls that, in 1985, the Ninth Circuit noted that the "express purpose of the Act is to protect domestic industries from dumping by their foreign competitors."193


The United States considers that the Ninth Circuit's 1985 Western Concrete decision limiting who has "standing" to bring a 1916 Act claim does not establish that the Act is an "antidumping" law.  The court of appeals cited the Clayton Act as analogous to the 1916 Act194 and noted that plaintiff had alleged that defendants intended to injure their preferred customers' competitors and to drive them out of the market.  The court stated that "in every reported case, the statute has been applied or restricted to domestic producers (or importers […] where there were no domestic producers […]) of the dumped good, prohibiting restraint or monopolization of the dumped good."195


The United States also recalls that, in 1983, the Third Circuit Court of Appeals similarly concluded that the "primary aim of the 1916 Act is to prohibit anticompetitive pricing" and held that the plaintiff must show a specific, not just general, predatory intent to injure or destroy an industry.196  

192 In this regard, Japan notes that, although the United States claims the decision is a Third Circuit opinion, the US discussion focuses on a District Court case which was affirmed in part and reversed in part by the Third Circuit.  Thus, most of the US argument on this point is based on dicta from a 20-year-old, much criticised District Court opinion, not a 3rd Circuit opinion.  The Third Circuit never found that the 1916 Act has only antitrust elements; rather, it found that it has both antitrust and antidumping elements, and that its "primary aim" is to prohibit anti-competitive pricing.  Japan refers to In re Japanese Electronic Products II, Op. Cit., p. 325.  Thus, according to Japan, the United States juggles the two (actually three) opinions and confuses the issue.

193 Western Concrete, Op. Cit., p. 1019.  Japan notes that the Third Circuit twice addressed issues arising from the district court decision in Zenith III (both before and after the case went to the Supreme Court), but in neither decision did the Circuit Court address the specific issue of whether the law should be construed as an antidumping or antitrust statute.  Japan refers to In re Japanese Electronic Products II, Op. Cit.; In re Japanese Electronic Products III, Op. Cit.  The Second Circuit once addressed the issue of who would have standing under the 1916 Act.  Japan refers to Isra Fruit Ltd. v. Agrexco Agr. Export Co., Op. Cit.

194 The United States refers to Western Concrete, Op. Cit., p. 1019.

195 Ibid.

196 The United States refers to In re Japanese Electronic Products II, Op. Cit., p. 325.   

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