Bell Supply Co. v. United States

• Citation: 190 F.Supp.3d 1244
• Decision Date: 23 November 2016
• Docket Number: Court No. 14–00066,Slip Op. 16–109
• Parties: Bell Supply Company, LLC, Plaintiff, v. United States, Defendant, and Boomerang Tube LLC et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

190 F.Supp.3d 1244

Bell Supply Company, LLC, Plaintiff,

v.United States, Defendant,andBoomerang Tube LLC et al., Defendant-Intervenors.

Slip Op. 16–109

Court No. 14–00066

United States Court of International Trade.

November 23, 2016

Donald Bertrand Cameron , Julie Clark Mendoza , Rudi Will Planert , Brady Warfield Mills , Mary Shannon Hodgins , and Sarah Suzanne Sprinkle , Morris, Manning & Martin, LLP, of Washington, DC, for plaintiff.

Loren Misha Preheim , Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With him on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Jeanne E. Davidson , Director, and Claudia Burke , Assistant Director. Of counsel on the brief was Whitney Marie Rolig , Senior Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Roger Brian Schagrin , Christopher Todd Cloutier , John Winthrop Bohn , Jordan Charles Kahn , and Paul Wright Jameson , Schagrin Associates, of Washington, DC, for defendant-intervenors Boomerang Tube LLC, TMK IPSCO Tubulars, V&M Star L.P., and Wheatland Tube Company.

Robert Edward DeFrancesco, III and Alan Hayden Price , Wiley Rein, LLP, of

Washington, DC, for defendant-intervenor Maverick Tube Corporation.

Debbie Leilani Shon , Jon David Corey , Jonathan Gordon Cooper , and Josef Teboho Ansorge , Quinn Emanuel Urquhart & Sullivan, LLP, of Washington, DC, for defendant-intervenor United States Steel Corporation.

OPINION

Kelly, Judge:

Before the court is the U.S. Department of Commerce's ("Commerce" or "Department") second remand redetermination filed pursuant to the court's order in Bell Supply Co. v. United States, 40 CIT ––––, 179 F.Supp.3d 1082 (2016) ("Bell Supply II") for a remand to Commerce for further consideration of Commerce's findings in Final Results of Redetermination Pursuant to Remand, Nov. 9, 2015, ECF No. 88–1 ("First Remand Results"). See Final Results of Second Redetermination Pursuant to Remand, Aug. 11, 2016, ECF No. 132–1 ("Second Remand Results").

The court reviews Commerce's determinations: (1) that unfinished green tubes¹ manufactured in China and subsequently finished in third countries into oil country tubular goods ("OCTG") are not within the scope of the antidumping and countervailing duty orders covering certain OCTG from the People's Republic of China ("PRC" or "China"); and (2) that OCTG finished in Indonesia from Chinese unfinished green tubes do not circumvent antidumping and countervailing duty orders covering OCTG from China. See Second Remand Results; see alsoCertain Oil Country Tubular Goods From the People's Republic of China, 75 Fed. Reg. 3,203 (Dep't Commerce Jan. 20, 2010) (amended final affirmative countervailing duty determination and countervailing duty order) ("CVD Order"); Certain Oil Country Tubular Goods From the People's Republic of China, 75 Fed. Reg. 28,551 (Dep't Commerce May 21, 2010) (amended final determination of sales at less than fair value and antidumping duty order) ("ADD Order"). The court sustains Commerce's determinations because Commerce has complied with the court's order in Bell Supply II and Commerce's conclusions are supported by substantial evidence.

BACKGROUND

The court assumes familiarity with the facts of this case as set out in its two previous opinions. SeeBell Supply Company, LLC v. United States, 39 CIT ––––, 83 F.Supp.3d 1311 (2015) ("Bell Supply I"); Bell Supply II, 40 CIT ––––, 179 F.Supp.3d at 1082. Nonetheless, some facts directly relevant to reviewing Commerce's Second Remand Results bear repeating.

On January 20, 2010 and May 21, 2010, respectively, Commerce published the countervailing and antidumping duty orders on OCTG from the PRC. See CVD Order, 75 Fed. Reg. at 3,203, ADD Order, 75 Fed. Reg. at 28,551. The CVD and ADD Orders (collectively "Orders") define the subject merchandise as:

certain oil country tubular goods ("OCTG"), which are hollow steel products of circular cross-section, including oil well casing and tubing, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, regardless of end finish (e.g., whether or not plain end, threaded, or threaded and coupled) whether or not conforming to American Petroleum Institute ("API") or non–API specifications, whether finished (including limited service OCTG products) or unfinished (including green tubes and limited service OCTG products), whether or not thread protectors are attached. The scope of the order also covers OCTG coupling stock. Excluded from the scope of the order are: casing or tubing containing 10.5 percent or more by weight of chromium; drill pipe; unattached couplings; and unattached thread protectors.

CVD Order, 75 Fed. Reg. at 3,203 –04; ADD Order, 75 Fed. Reg. at 28,553.

On June 20, 2012, Commerce initiated a scope inquiry regarding Plaintiff's merchandise following a request from Defendant–Intervenors United States Steel Corporation ("U.S. Steel"), TMK IPSCO, Wheatland Tube Company, Boomerang Tube LLC, and V&M Star L.P.² See Initiation of Scope Inquiry, PD 25, bar codes 3082712–01, 3082735–01 (June 21, 2012).³

On February 7, 2014, Commerce issued a final scope ruling determining that unfinished green tubes manufactured in China processed into finished OCTG in third countries are subject to the Orders because such merchandise is not substantially transformed during the finishing process. See Final Scope Ruling on Green Tubes Manufactured in the People's Republic of China and Finished in Countries Other than the United States and the People's Republic of China, May 14, 2014, ECF No. 31–1 ("Final Scope Ruling"); see also19 C.F.R. § 351.225(e) (2013).⁴

Plaintiff challenged the Final Scope Ruling in this court, arguing that Commerce's determination unlawfully expanded the scope of the Orders and relied on a substantial transformation analysis unsupported by substantial evidence and otherwise not in accordance with law. Compl. ¶¶ 21, 25, Apr. 4, 2014, ECF No. 8; seeBell Supply I, 39 CIT at ––––, 83 F.Supp.3d at 1313–14. The court held that Commerce failed to follow the interpretive framework established in its regulations and therefore unlawfully expanded the scope of the Orders to include Plaintiff's merchandise. SeeBell Supply I, 39 CIT at ––––, 83 F.Supp.3d at 1328–30. The court remanded Commerce's scope determination with instructions to "identify actual language from the scope of the Orders that could be reasonably interpreted to include OCTG finished in third countries in order to find that the merchandise is covered by the scope of the Orders," as required pursuant to the regulatory scheme. Id. at 1329.

On first remand,⁵ Commerce determined that the plain language of the Orders covered unfinished green tubes manufactured in China, regardless of whether the tubes are subsequently finished into OCTG in third countries. See First Remand Results at 2, 15, 20. After reviewing comments from Plaintiff and replies from Defendant and Defendant–Intervenors, the court determined that Commerce's First Remand Results did not comply with the court's remand order in Bell Supply I and that the results were not supported by substantial evidence or in accordance with law. Bell Supply II, 40 CIT at ––––, 179 F.Supp.3d at 1090, 1091, 1104–05. Specifically, the court held that Commerce did not comply with the court's instruction that it must identify language in the Orders that could be reasonably interpreted to include OCTG finished in third countries, prior to finding that OCTG finished in third countries is within the Orders' scope. Id. at 1104 (citing Bell Supply I, 39 CIT at ––––, 83 F.Supp.3d at 1329 ). Although Commerce did identify actual language that appeared in the scope of the Orders, the court held the language was insufficient to permit Commerce to determine that the Orders unambiguously include OCTG finished in third countries. Bell Supply II, 40 CIT at ––––, 179 F.Supp.3d at 1104. The court further held that Commerce's interpretation of the scope language of the Orders was unsupported by substantial evidence because Commerce did not identify evidence from the 19 C.F.R. § 351.225(k)(1) sources to support its interpretation. Id., 40 CIT at ––––, 179 F.Supp.3d at 1090. The court also held that, to the extent that the scope language remained ambiguous following consultation of the (k)(1) sources, Commerce did not evaluate the factors under 19 C.F.R. § 351.225(k)(2), as required by its regulation. Id., 40 CIT at ––––, 179 F.Supp.3d at 1104–05. The court remanded Commerce's redetermination again for further consideration and instructed that, on second remand, Commerce

must identify evidence from the descriptions of the merchandise in the (k)(1) sources to reasonably interpret the scope language of the Orders to cover Chinese green tubes finished in third countries. If the descriptions of the merchandise in the (k)(1) sources are not dispositive, then Commerce must proceed to evaluate the factors under 19 C.F.R. § 351.225(k)(2) as directed by its regulations. If Commerce is unable to find that the scope of the Orders cover the merchandise at issue under the (k)(2) factors, then the merchandise is not within the scope of the Orders. In the event Commerce determines that the merchandise at issue falls outside the scope of the Orders, Commerce is also free to employ a circumvention analysis pursuant to 19 C.F.R. § 351.225(h) and 19 U.S.C. § 1677j(b) to bring the merchandise within the reach of the Orders because the scope language does not expressly exclude Chinese green tubes that are finished in a foreign third country. Or, Commerce can forego a circumvention inquiry and determine that Chinese green tubes subsequently finished in countries other than the United States and China fall outside the scope of the Orders.

Id., 40 CIT at ––––, 179 F.Supp.3d 1104–05 (internal citations omitted).

On August 11, 2016, Commerce...