German press manufacturer MAN Roland has gone on the offensive in the dumping lawsuit filed against the company by Goss Graphic Systems.

MAN Roland released a statement touting the latest report by the U.S. Commerce Department, which cleared MAN Roland of any dumping for the review period Sept. 1, 1998, through Aug. 31, 1999. This was the first of three review periods MAN Roland must pass before it is relieved of any tariffs on press sales in the United States.

MAN Roland’s lawyer, Todd Andrew, did not return calls requesting an interview, but said in the statement: “The recent finding by the Commerce Department vindicates our position that we have never engaged in unfair sales practices. It also shows that the latest Goss lawsuit, claiming treble damages for dumping, is without merit.”

Yves Rogivue, MAN Roland’s chief executive officer, also took the opportunity to comment, saying that the lawsuit is an attempt to “chill the marketplace,” artificially raise market prices and deflect attention from the real causes of Goss’ problems. Rogivue also said in the statement that feedback from former Goss employees and customers supports his claim that the suit was a deterrent from Goss’ problems, but gave no indication of what the problems were.

Tokyo Kikai Seisakusho, another defendant, was also cleared of dumping for the same review period, which included TKS’s sale to The Columbus (Ohio) Dispatch. The Dispatch was one of 19 newspapers recently subpoenaed by Goss to submit records of all business dealings with any of the defendants from Jan. 1, 1991, to the present. It is the second review period that the Japanese press manufacturer has passed, leaving just one more review.

Mitsubishi Heavy Industries and Koenig & Bauer AG, the two other defendants, were not available for comment.

Antidumping Act

The Antidumping Act of 1916, which Goss is using to sue the press manufacturers, states that it is unlawful for any person who is importing or selling goods to sell those goods at less than the actual market value or wholesale price with the intent of destroying or injuring an industry in the United States, preventing the establishment of an industry in the United States, or restraining or monopolizing any part of the trade and commerce of those goods in the United States.

It further states: “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 of the controversy, and shall recover threefold the damages sustained, and the cost of the suit, including a reasonable attorney’s fee.”

Goss faces several problems in this approach to try to recover the damages.

First, only a handful of companies have ever tried to recover damages under the act since its introduction 85 years ago, and not a single company was successful. Winning a lawsuit will be difficult for Goss because it will need to prove to the court that KBA, MAN Roland, Mitsubishi and TKS all dumped presses with the intent of injuring or destroying Goss.

“Under the 1916 Act, the court must find very specific intent to injure before the defendant is ruled guilty,” said Yoshi Saito, TKS’s lawyer.

Goss also faces an uphill battle, according to Saito, if it tries to use the prices of goods as evidence, since the Commerce Department has a different approach toward pricing than the District Court’s approach, which is more favorable to the defendants. Approval from the Commerce Department helps prove that the defendants will not be found to have dumped presses in the court either, according to Saito.

“When we talk about costs, we generally talk about variable costs and fixed costs, which together make up the cost of production. In Commerce Department policy, when you talk about dumping, you talk about price below the full cost of production,” Saito said. “Under the 1916 Act, the price has to be so low that it doesn’t even cover the variable cost, which is only a portion of the cost of production.”

Saito said Goss will have to prove that what they found is entirely different from what the Commerce Department found. He added: “Frankly, I don’t know how they’re going to do it … It’s a Herculean task, almost impossible.”

Goss may face another roadblock that could kill the lawsuit altogether.

The Antidumping Act of 1916 is in conflict with rules established by the World Trade Organization. As a member of the WTO, the United States must comply with the rules.

The WTO has urged the United States to repeal the law altogether, or at least bring it in compliance with WTO regulations, and has given the U.S. Congress until July 26 to accomplish the task. The WTO originally gave the Unites States until March 26 to solve the conflict, but granted a four-month extension after U.S. representatives to the WTO protested that the 2000 elections and the shift of the government made the original six-month compliance period unreasonable.

If the antidumping act is completely removed without a grandfather clause to protect the suit, Goss could see it thrown out. Saito said TKS is taking the approach that the suit will make its way through the courts, and is very serious about the litigation.

“We’re very faithfully following the instructions of the court, and are doing everything we are expected to do under the federal rules,” he stated. “I don’t think anyone is in a position to predict the final outcome of the case.”

Goss refused to comment on statements by MAN Roland and TKS, as well as any aspect of the lawsuit.