Sango Intern. L.P. v. U.S., Slip Op. 06-61. Court No. 05-00145.

• Decision Date: 01 May 2006
• Docket Number: Slip Op. 06-61. Court No. 05-00145.
• Citation: 429 F.Supp.2d 1356
• Parties: SANGO INTERNATIONAL L.P., Plaintiff, v. UNITED STATES, Defendant, Ward Manufacturing, Inc., Anvil International, Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

429 F.Supp.2d 1356

SANGO INTERNATIONAL L.P., Plaintiff, v. UNITED STATES, Defendant,

Ward Manufacturing, Inc., Anvil International, Inc., Defendant-Intervenors.

Slip Op. 06-61. Court No. 05-00145.

United States Court of International Trade.

May 1, 2006.

Baker & McKenzie LLP, Washington, DC (William D. Outman, II), (Stuart P. Seidel), (Kevin J. Sullivan) for Plaintiff Sango International, L.P.

(Patricia M. McCarthy), Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; (Kelly B. Blank), Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice; (David Samuel Silverbrand) Commercial Litigation Branch, Civil Division, United States Department of Justice, Peter D. Keisler, Assistant Attorney General, Commercial Litigation Branch, Civil Division, United States Department of Justice; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Kemba Eneas, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for Defendant, of counsel.

Schagrin Associates (Roger B. Schagrin), (Brian E. McGill), (Michael J. Brown), for Defendant-Intervenors Ward Manufacturing, Inc., & Anvil International, Inc.

OPINION

BARZILAY, Judge.

I. Introduction

This case concerns the scope of the antidumping duty order issued by the Department of Commerce ("Commerce" or "Department") on Certain Malleable Iron Pipe Fittings, Cast, Other Than Grooved, from the People's Republic of China. 68 Fed.Reg. 69,376 (Dec. 12, 2003) ("Order"). Pursuant to Rule 56.2 of the United States Court of International Trade, Plaintiff Sango International L.P. ("Sango") has moved for a judgment upon the agency record declaring that Commerce's scope ruling holding that gas meter swivels and gas meter nuts fall within the ambit of the Order is unsupported by substantial evidence on the record and otherwise is not in accordance with the law. See Notice Final Scope Ruling (Jan. 11, 2005) (Pl.'s App. 630-44) ("Scope Ruling"). For the reasons stated below, this court denies Plaintiff's motion for judgment on the agency record.

II. Procedural History

On December 12, 2003, Commerce issued an antidumping order imposing duties on "certain malleable iron pipe fittings, cast, other than grooved fittings, from the People's Republic of China" ("China" or "PRC"). Order, 68 Fed.Reg. 69,377. The Order described the covered products as

certain malleable iron pipe fittings, cast, other than grooved fittings, from the People's Republic of China. The merchandise is classified under item numbers 7307.19.90.30, 7307.19.90.60 and 7307.19.90.80 of the Harmonized Tariff Schedule (HTSUS). Excluded from the scope of this order are metal compression couplings, which are imported under HTSUS number 7307.19.90.80. A metal compression coupling consists of a coupling body, two gaskets, and two compression nuts. These products range in diameter from 1/2 inch to 2 inches and are carried only in galvanized finish. Although HTSUS subheadings are provided for convenience and U.S. Customs and Border Protection (CBP) purposes, the Department's written description of the scope of this proceeding is dispositive.

Id.¹ Pursuant to 19 C.F.R. § 351.225(c)(1), on July 28, 2004, Nitek Electronics, Inc., an importer of gas meter swivels and gas meter nuts, and Sango, an United States manufacturer which insulates imported gas meter swivels, applied to Commerce for a scope ruling that would exclude gas meter swivels and nuts from the Order. See Application Scope Ruling Meter Swivels & Meter Nuts (Pl.'s App. 1-12). On August 10, 2004, Defendant-Intervenors Ward Manufacturing, Inc. ("Ward"), and Anvil International, Inc. ("Anvil"),² submitted comments to Commerce contending that gas meter swivels and nuts fall within the Order because they are "malleable iron pipe fittings which are cast and that are not grooved fittings and are not compression fittings." Ward Resp. Application Scope Ruling (Def.'s App. Tab 1, at 1).

Commerce began a formal scope inquiry on September 13, 2004, in accordance with 19 C.F.R. § 351.225(e), as it was "unable to determine conclusively that meter swivels and meter nuts are pipe fittings and are treated as such within the industry." Scope Inquiry Initiation (Pl.'s App. 289-90). As interested parties, Anvil and Ward respectively submitted briefs on whether meter swivels and nuts lie within the scope of the Order on October 4, 2004, and October 14, 2004. On October 18, 2004, Commerce notified Ward that it had submitted these filings without the certifications mandated by 19 C.F.R. § 351.303(g), forcing the Department to reject them. The Department, however, gave Ward a one-day extension to resubmit its briefs, which Ward promptly did. See Commerce Deficiency Letter (Def.-Intervenors' App. Tab 4); Ward Case Br. (Oct. 19, 2004) (Def.-Intervenors' App. Tab 5); Ward Rebuttal Br. (Oct. 19, 2004) (Def.-Intervenors' App. Tab 5).

In its investigation, Commerce analyzed the Order, the petition, the initial investigation, determinations of the United States International Trade Commission ("ITC"), and the determinations of the Secretary of Commerce to determine whether these sources proved dispositive as to whether gas meter swivels and nuts fall within the Order's scope. See 19 C.F.R. § 351.225(k)(1). Commerce found these sources dispositive and issued the Scope Ruling on January 11, 2005, finding that gas meter swivels and gas meter nuts fall within the scope of the Order. See Scope Ruling at 12-14. Specifically, it determined that:

First, these products are manufactured from malleable iron using a casting process in the PRC. Second, these products are indisputably "fittings;" they are "pipe fittings" because they are parts of a piping system, they direct the flow of the gas through a piping system, and can be, although are not always, connected to other pipe fittings or pipes. Finally, they are neither grooved fittings nor compression couplings, both of which are specifically excluded.

Id. at 12. Sango then brought this action to contest the Scope Ruling.

Plaintiff Sango sets forth three contentions in its motion for judgment on the agency record. First, it maintains that it was clear error for Commerce to grant Defendant-Intervenors extensions to refile their case and rebuttal briefs after discovering that the initial submissions lacked administratively-mandated certifications. Consequently, Sango avers that these submissions should not constitute a part of the agency record. Second, Sango claims that gas meter swivels and gas meter nuts lie unambiguously outside the scope of the Order, "as evidenced by the language of the Order, the facts of the record and other administrative determinations," rendering Commerce's Scope Ruling unsupported by substantial evidence and otherwise not in accordance with the law. Pl.'s Mot. J. A.R. 2. Finally, Sango believes the court should deem Commerce's Scope Ruling invalid because the Department failed to consider the so-called Diversified Products criteria³ enumerated in 19 C.F.R. § 351.225(k)(2).

III. Discussion

A. Preliminary Issues: Defendant-Intervenors' Submission Extension

Sango asserts that the Department erred by granting Anvil and Ward a one-day extension to re-file their case brief and rebuttal case brief, which lacked certifications required by 19 C.F.R. § 351.303(g), and that the briefs therefore should not become part of the record. See Mem. Supp. Pl.'s Mot. J. A.R. 35. Plaintiff's argument is without merit. Only with a demonstration of "substantial prejudice" can Sango challenge Commerce's decision to provide Defendant-Intervenors with a one-day extension to resubmit their documents. Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539, 90 S.Ct. 1288, 25 L.Ed.2d 547 (1970) (citation omitted); see 5 U.S.C. § 706 (1966) ("due account shall be taken of the rule of prejudicial error" in reviewing agency action); Intercargo Ins. Co. v. United States, 83 F.3d 391, 394-95 (Fed.Cir.1996). The Supreme Court has long upheld "the general principle that (i)t [sic] is always within the discretion of . . . an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it." Am. Farm Lines, 397 U.S. at 539, 90 S.Ct. 1288 (quotations & citation omitted). Further, Commerce's own regulations state that "[u]nless expressly precluded by statute, the Secretary may, for good cause, extend any time limit established" within the antidumping and countervailing duties regulations. 19 C.F.R. § 351.302(b).⁴ Plaintiff makes no assertion that substantial prejudice to its case arose from the Department's decision. Therefore, its claim must fail.

B. The Scope Ruling

1. Standard of Review

In reviewing a Commerce antidumping order scope determination, this court upholds the Department's conclusion unless the court finds it "unsupported by substantial evidence or otherwise not in accordance with law." Steel Auth. of India, Ltd. v. United States, 25 CIT 482, 485, 149 F.Supp.2d. 921, 926 (2001) (quoting 19 U.S.C. § 1516a(b)(1)(B) (1994)) (quotations omitted); see 19 U.S.C. § 1516a(b)(1)(B)(i) (1996); Nippon Steel Corp., NKK v. United States, 219 F.3d 1348, 1355 (Fed.Cir. 2000). In this context, "substantial evidence" denotes "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 619-20, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)) (quotations omitted). Crucially, "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Id. at 620, 86 S.Ct. 1018 (citation omitted). Similarly, a scope...