Respondents Sanctioned For Discovery Violation

by Jones Day

On September 28, 2017, in Certain Carbon and Alloy Steel Products; Inv. No. 337-TA-1002, ALJ Lord issued the public version of her order requiring Respondents Wuhan Iron and Steel Group Corp., Wuhan Iron and Steel Co., Ltd., and WISCO America Co., Ltd. (“WISCO”) and Jiangsu Shagang Group and Jiangsu Shagang International Trade Co., Ltd. (“Shagang”) each pay about $35,000 to Complainant in attorney’s fees as a sanction for violating an order requiring the production of certain discovery.  The ALJ further held that an adverse inference would be entered against both parties.

By way of background, the ALJ previously entered Order No. 61 required that WISCO and Shagang produce witnesses and documents related to, inter alia, their manufacturing capacity and output.  Order No. 61 set May 31, 2017, as the deadline for achieving compliance with the discovery required by the Order.  When this deadline was not met, Complainant moved for sanctions against both parties.

Commission Rule 210.33 provides that monetary and/or non-monetary sanctions may be imposed for failure to comply with an order compelling discovery. 19 C.F.R. § 210.33. Nonmonetary sanctions include making an adverse inference, excluding evidence, determining an issue against a party, or any other sanction available under Fed. R. Civ. P. 37(b).  19 C.F.R. § 210.33(b).  In lieu of or in addition to non-monetary sanctions, an ALJ may order the offending party to pay reasonable expenses, including attorneys’ fees. 19 C.F.R. § 210.33(c). The award of non-monetary sanctions requires a showing that a party has violated a discovery order, including “an order for the taking of a deposition or the production of documents.” 19 C.F.R. § 210.33(b).

The ALJ held that Shagang did not dispute that their responsive documents regarding production capacity were provided almost two weeks after the deadline set in Order No. 61.  The ALJ similarly held that the WISCO Respondents failed to provide any production capacity information for Wuhan Iron and Steel Group Corp. (one of three WISCO Respondents).

Accordingly, the ALJ held with respect to Shagang and WISCO that (1) it is determined as a matter of fact that they maintain sufficient manufacturing capacity to threaten Complainant with substantial harm; and (2) that each party would be responsible for one third of Complainant’s attorney’s fees in enforcing Order 61.


Discovery in a Section 337 investigation is both broad and fast-paced.  However, the ITC takes discovery obligations seriously, and parties need to dedicate the resources necessary to comply with those obligations.  Here, not only were the Respondents required to pay Complainant’s attorney’s fees, but an adverse inference was entered against them with respect to the issues relating to the late discovery.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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