Sango Intern., L.P. v. U.S.

• Decision Date: 02 May 2007
• Docket Number: No. 2006-1485.,2006-1485.
• Citation: 484 F.3d 1371
• Parties: SANGO INTERNATIONAL, L.P., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Ward Manufacturing, Inc. and Anvil International, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

484 F.3d 1371

SANGO INTERNATIONAL, L.P., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Ward Manufacturing, Inc. and Anvil International, Inc., Defendants-Appellees.

No. 2006-1485.

United States Court of Appeals, Federal Circuit.

May 2, 2007.

William D. Outman, II, Baker & McKenzie, LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Stuart P. Seidel and Kevin J. Sullivan.

David Silverbrand, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee United States. With him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Kemba Eneas, Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC. Of counsel were John D. McInerney, Chief Counsel, and Berniece A. Browne, Senior Litigation Counsel.

Roger B. Schagrin, Schagrin Associates, of Washington, DC, argued for defendants-appellees Ward Manufacturing, Inc., et al. Of counsel were Michael J. Brown and Brian E. McGill.

Before NEWMAN, SCHALL, and MOORE, Circuit Judges.

SCHALL, Circuit Judge.

Sango International, L.P. ("Sango") appeals the decision of the United States Court of International Trade upholding the determination of the Department of Commerce ("Commerce") that Sango's imported gas meter swivels and gas meter nuts are within the scope of an antidumping order covering malleable iron pipe fittings, other than grooved fittings, from the People's Republic of China. See Sango Int'l L.P. v. United States (CIT Decision), 429 F.Supp.2d 1356 (Ct. Int'l Trade 2006). Because we conclude that Commerce's decision is not supported by substantial evidence, we reverse the decision of the Court of International Trade and remand the case for further proceedings consistent with this opinion.

BACKGROUND

I.

The antidumping laws protect United States industries against the domestic sale of foreign manufactured goods at prices below the fair market value of those goods in the foreign country. AIMCOR v. United States, 141 F.3d 1098, 1101 (Fed.Cir. 1998); see also Allegheny Ludlum Corp. v. United States, 287 F.3d 1365, 1368 (Fed. Cir.2002) ("Under the statutory scheme established by the Tariff Act of 1930 . . . American industries may petition for relief from imports that are sold in the United States at less than fair value (`dumped'), or which benefit from subsidies provided by foreign governments."). If a less-than-fair-value sale of imported goods results in actual or threatened injury to the corresponding domestic industry, a duty may be imposed on the imported merchandise. Micron Tech., Inc. v. United States, 117 F.3d 1386, 1389 (Fed.Cir.1997). The duty is "equal to the amount by which the normal value exceeds the export price . . . for the merchandise."¹ RHP Bearings Ltd. v. United States, 288 F.3d 1334, 1337 (Fed. Cir.2002) (quoting 19 U.S.C. § 1673).

An antidumping investigation is initiated when a domestic industry petitions Commerce to investigate allegations of dumping by foreign manufacturers. Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1089 (Fed.Cir.2002). In due course, Commerce makes a preliminary determination as to whether the imported merchandise is being sold, or is likely to be sold, at less than fair value. 19 U.S.C. § 1673b(b)(1)(A). While Commerce is making its preliminary determination, the International Trade Commission ("Commission") makes a preliminary determination as to whether there is a "reasonable indication" that an industry in the United States is "materially injured or is threatened with material injury . . . by reason of imports of the subject merchandise [or] that imports of the subject merchandise are not negligible." Id. § 1673b(a)(1). If the investigation is not terminated at the preliminary stage, Commerce makes its final determination as to less-than-fair-value sales, or the likelihood of less-than-fair-value sales, in the United States. Id. § 1673d(a)(1). At the same time, the Commission finalizes its determination as to the existence or threat of material injury. Id. § 1673d(b)(1). If both the less-than-fair-value inquiry by Commerce and the injury inquiry by the Commission are "answered in the affirmative," Commerce issues the appropriate antidumping order. Duferco Steel, 296 F.3d at 1089; see 19 U.S.C. § 1673d(c)(2).

II.

On October 30, 2002, Commerce received an antidumping petition from Anvil International, Inc. ("Anvil") and Ward Manufacturing, Inc. ("Ward"), domestic manufacturers of pipe fittings, asking Commerce to investigate the importation of malleable iron pipe fittings, other than grooved fittings, from the People's Republic of China. Pipe fittings are formed connector pieces that are used in the construction of piping systems.

In the section of the petition describing the scope of the investigation, Anvil and Ward stated that the goods at issue were currently classified under item numbers 7307.19.90.30, 7307.19.90.60, and 7307.19.90.80 of the Harmonized Tariff Schedule ("HTSUS").² Petition for the Imposition of Antidumping Duties: Malleable Iron Pipe Fittings from China, at 6 (Oct. 30, 2002) ("Antidumping Petition"). They further stated, however, that "[t]he product description of the subject merchandise, and not HTSUS classifications, should be dispositive of whether merchandise is covered by this petition." Id. Turning to the uses of the goods at issue, Ward and Anvil stated that "the principle uses of malleable iron pipe fittings are in gas lines, piping systems of oil refineries, and gas and water systems of buildings." Id. at 4. Finally, the petition provided information concerning the specifications and characteristics of the pipe fittings:

Malleable iron fittings are produced to the American Society for Testing and Materials (ASTM) standard A-126(A) . . . . The fittings are threaded to the American National Standards (ANSI) specifications. They are available in many configurations, the most common being 90 degree elbows, tees, couplings, crosses, and unions. They are produced in both black (ungalvanized) and galvanized form . . . . Normally, the ungalvanized fittings are produced to ASTM A-197 specifications and threaded to B.16.14 specifications, and the galvanized fittings are made to ASTM A-153 specifications and threaded to B.16.14 specifications. Malleable pipe fittings are normally threaded and attached to pipe by screwing. . . . The grooved fittings which are excluded from the scope of this investigation and like product are a completely different form of fitting, in which split couplings are attached to a circumferential groove close to the end of each piece to be joined. A gasket inside the coupling seals against the pipe and the coupling.

Id. at 4-5.

One of the fittings covered by the petition, an elbow fitting, is depicted below.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

An elbow fitting allows two pieces of pipe to be connected, and permits the resulting connection to turn ninety degrees. Pipe is threaded into each opening in the elbow. Tees and crosses are similar to elbows but have three and four openings (threaded for pipe connections), respectively. The threads on both the pipe and the fittings conform to ANSI B1.20.1, which specifies National Pipe Thread ("NPT"). CIT Decision, 429 F.Supp.2d at 1361; Antidumping Petition, at 4.

In its Notice of Initiation of the antidumping investigation, Commerce set forth the scope of the products included in the investigation:

[T]he products covered are shipments of 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 subheadings are provided for convenience and customs purposes. The written description of the scope of this proceeding is dispositive.

Notice of Initiation of Antidumping Duty Investigation: Certain Malleable Iron Pipe Fittings From the People's Republic of China, 67 Fed.Reg. 70,579 (Nov. 25, 2002). On December 12, 2003, following the investigation by Commerce and the Commission that resulted from the Anvil and Ward petition, Commerce issued an antidumping order titled Certain Malleable Iron Pipe Fittings, Cast, Other Than Grooved, from the People's Republic of China ("Order"). CIT Decision, 429 F.Supp.2d at 1357 (citing 68 Fed.Reg. 69,376 (Dec. 12, 2003)). The Order covered the following products:

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. at 1357-58.

III.

Sango is a United States manufacturer that insulates gas meter swivels and nuts. Id. at 1358. Gas meter swivels are used to connect a gas meter to a piping system. A swivel has the standard NPT threaded connection on one side³ and a shaped flange with a notch on the other side. The shaped flange mates with a gas meter through the use of a gas meter nut. Because of the flange connection, the gas meter swivels can only connect to pipe on one side and a gas meter on the other side. Typical gas meter swivels are shown below.

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