965 F.2d 1056 (Fed. Cir. 1992), 91-1236, IPSCO, Inc. v. United States

Docket Nº:91-1236, 91-1257.
Citation:965 F.2d 1056
Party Name:IPSCO, INC. and Ipsco Steel, Inc., Plaintiffs/Cross-Appellants, and The Algoma Steel Corporation, Ltd. and Sonco Steel Tube Div., Ferrum, Inc., Plaintiffs, v. The UNITED STATES, Defendant-Appellee, v. LONE STAR STEEL COMPANY, Defendant-Appellant.
Case Date:June 03, 1992
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1056

965 F.2d 1056 (Fed. Cir. 1992)

IPSCO, INC. and Ipsco Steel, Inc., Plaintiffs/Cross-Appellants,

and

The Algoma Steel Corporation, Ltd. and Sonco Steel Tube

Div., Ferrum, Inc., Plaintiffs,

v.

The UNITED STATES, Defendant-Appellee,

v.

LONE STAR STEEL COMPANY, Defendant-Appellant.

Nos. 91-1236, 91-1257.

United States Court of Appeals, Federal Circuit

June 3, 1992

Page 1057

Rufus E. Jarman, Jr., Barnes, Richardson & Colburn, New York City, argued for plaintiffs/cross-appellants. With him on the brief was Alan Goggins.

Valerie A. Slater, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C., argued for defendant-appellant.

Jeanne E. Davidson, Atty., Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for defendant-appellee. With her on the brief were Stuart M. Gerson, Asst. Atty. Gen. and David M. Cohen, Director. Also on the brief was Thomas G. Ehr, Atty.-Advisor, Office of the Chief Counsel for Import Admin., Dept. of Commerce, of counsel.

Before RICH, Circuit Judge, SMITH, Senior Circuit Judge, and RADER, Circuit Judge.

RADER, Circuit Judge.

In a case challenging an antidumping investigation, the Lone Star Steel Company appealed a May 18, 1989, order of the United States Court of International Trade. IPSCO, Inc. v. United States, 714 F.Supp. 1211 (Ct. Int'l Trade 1989) (IPSCO II ). This order rejected the United States Department of Commerce International Trade Administration's (ITA) method of calculating the value of oil country tubular goods (OCTG). Because ITA reasonably interpreted 19 U.S.C. § 1677b(e) (1988), this court reverses the trial court's order and upholds ITA's original calculation method.

Cross-appellants, IPSCO, Inc., and IPSCO Steel, Inc. (IPSCO), appealed an October 30, 1990, order of the trial court. IPSCO, Inc. v. United States, 749 F.Supp. 1147 (Ct. Int'l Trade 1990) (IPSCO IV ). This order sustained ITA's decision to base the value of a particular grade of OCTG on three, rather than six, months of tonnage data. Because IPSCO did not timely object, this court affirms the trial court's order.

BACKGROUND

OCTG--steel pipe for oil and gas wells--comes in two grades: prime and limited-service. After production of a manufacturing lot, the producer categorizes the pipe into two OCTG grades. Pipe that meets the standards of the American Petroleum Institute (API) becomes prime OCTG. Pipe

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beneath API standards becomes limited-service OCTG. The API standards rate pipe based on stress and serviceability tests.

Producers sell prime OCTG under a warranty and at a higher price than limited-service OCTG. Limited-service OCTG sells without a warranty and at prices below prime OCTG. Other than quality and market value, there are no differences between prime and limited-service OCTG. The same materials, processes, labor, and overhead go into the manufacturing lot which yields both grades of OCTG. Moreover buyers purchase the separate grades for the same purpose--"down hole" use in oil and gas wells.

In July 1985, Lone Star Steel, a domestic producer of OCTG, filed an antidumping petition against Canadian OCTG producers. In 1986, the ITA determined that Canadian producers had sold pipe in the United States at less than fair value. Antidumping; Oil Country Tubular Goods from Canada; Final Determination of Sales at Less than Fair Value, 51 Fed.Reg. 15029 (Apr. 22, 1986), as amended, 51 Fed.Reg. 29579 (Aug. 19, 1986). ITA's determination extended to both prime and limited-service OCTG. Id. at 15,036.

ITA later issued an antidumping duty order. Antidumping Duty Order; Oil Country Tubular Goods (OCTG) from Canada, 51 Fed.Reg. 21782 (June 16, 1986), as amended, 51 Fed.Reg. 29579 (Aug. 19, 1986). Canadian pipe producers, including IPSCO, appealed ITA's final determination to the Court of International Trade. IPSCO, Inc. v. United States, 687 F.Supp. 633 (Ct. Int'l Trade 1988) (IPSCO I ). IPSCO challenged ITA's method for assigning costs to limited-service OCTG. In particular, IPSCO challenged ITA's equal allocation of production costs between the prime and limited-service pipe. Because produced simultaneously, limited-service and prime pipe in fact had identical production costs. ITA treated limited-service pipe as a co-product of prime pipe.

IPSCO argued that ITA should instead treat limited-service OCTG as a by-product. When calculating values under 19 U.S.C. § 1677b(e), the ITA generally deducts the value of by-products from the combined cost of producing the prime product. By-products, however, are secondary products not subject to investigation. IPSCO II, 714 F.Supp. at 1213 n. 2.

Upon initial consideration, the trial court remanded the case to ITA for a fuller explanation of its method for calculating value. IPSCO I, 687 F.Supp. at 638. On September 2, 1988, ITA restated the reasons for treating limited-service OCTG as a co-product. ITA relied heavily on IPSCO's treatment of limited-service OCTG as a co-product in some financial statements.

IPSCO again challenged ITA's decision. IPSCO, Inc. v. United States, 714 F.Supp. 1211 (Ct. Int'l Trade 1989) (IPSCO II ). In IPSCO II, IPSCO again argued that limited...

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