Duferco Steel, Inc. v. U.S.

• Decision Date: 29 May 2001
• Docket Number: No. 99-12-00771.,Slip Op. 01-62.,99-12-00771.
• Citation: 146 F.Supp.2d 913
• Parties: DUFERCO STEEL, INC., Plaintiff, v. UNITED STATES, Defendant, and Bethlehem Steel Corp. & U.S. Steel Group, A Unit of USX Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

146 F.Supp.2d 913

DUFERCO STEEL, INC., Plaintiff, v. UNITED STATES, Defendant, and Bethlehem Steel Corp. & U.S. Steel Group, A Unit of USX Corporation, Defendant-Intervenors.

Slip Op. 01-62.

No. 99-12-00771.

United States Court of International Trade.

May 29, 2001.

COPYRIGHT MATERIAL OMITTED

White & Case (Walter J. Spak, Vincent Bowen), Washington, D.C., for Plaintiff.

Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of

Justice; Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Mildred E. Steward, Attorney, Office of Chief Counsel for Import Administration, United States Department of Commerce, of Counsel, for Defendant.

Dewey Ballantine (Michael H. Stein, Bradford L. Ward, Rory F. Quirk, Navin Joneja), Washington, D.C., for Defendant-Intervenors.

OPINION

CARMAN, Chief Judge.

This action is before the Court on plaintiff Duferco Steel, Inc.'s (Plaintiff) Rule 56.2 Motion for Judgment on the Agency Record. At issue is the United States Department of Commerce's (Commerce) determination that certain cut-to-length carbon steel floor plate imported by Plaintiff falls within the scope of antidumping duty and countervailing duty orders issued in 1993. The challenged ruling was issued following a scope investigation conducted pursuant to 19 C.F.R. § 351.225(d). This matter properly falls within the Court's jurisdiction under 28 U.S.C. § 1581(c).

BACKGROUND

On June 30, 1992, members of the United States domestic steel industry (Petitioners) petitioned Commerce and the International Trade Commission (ITC) to commence antidumping (AD) and countervailing duty (CVD) investigations of certain flat-rolled carbon steel products, including cut-to-length steel plate from Belgium. The petitions defined the subject merchandise as, "certain cut-to-length carbon steel plate." The petitions further defined the scope of the proposed investigations by reference to descriptions and definitions contained in the Harmonized Tariff Schedules of the United States (HTSUS). Specifically, the petitions made reference to HTSUS, Chapter 72, Note 1(k), which, in relevant part, defines "flat-rolled products" as:

Rolled products of solid rectangular (other than square) cross section... Flat-rolled products include those with patterns in relief derived directly from rolling (for example, grooves, ribs, checkers, tears, buttons, lozenges)... provided they do not assume the character of articles or products of other [HTSUS] headings.

In July 1992, Commerce and the ITC initiated investigations of the subject merchandise. See Initiation of Antidumping Duty Investigations and Postponement of Preliminary Determinations: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate from Various Countries, 57 Fed.Reg. 33,488 (July 29, 1992); Initiation of Countervailing Duty Investigations and Postponement of Preliminary Determinations: Certain Steel Products from Austria, Belgium Brazil, France, Germany, Italy, Korea, Mexico, New Zealand, Spain, Sweden, Taiwan, and the United Kingdom, 57 Fed.Reg. 32,970 (July 24, 1992) (collectively, Notices of Initiation). Based on the petitions, the agencies defined "certain cut-to-length carbon steel plate," and thus the scope of the investigation, as:

... hot-rolled carbon steel universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 millimeters but not exceeding 1,250 millimeters and of a thickness of not less than 4 millimeters, not in coils and without patterns in relief) of solid rectangular (other than square) cross section, of rectangular shape, neither clad, plated nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances; and certain hot-rolled carbon steel flat products in straight lengths, of solid rectangular (other than square) cross-section, of rectangular shape, hot-rolled, neither clad, plated, nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances, 4.75 millimeters or more in thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness....

57 Fed.Reg. at 33,492.

Additionally, to aid in determining the appropriate foreign like product, Commerce established several "product matching criteria" which were sent to potential targets of the AD investigation. The purpose of these criteria was to provide potential respondents with a detailed description of the types of merchandise that would be subject to investigation and to allow interested parties to raise concerns over the inclusion or exclusion of certain criteria. One of the criteria described the subject merchandise as "whether checkered or not." According to Commerce, the term "checkered" is generally recognized as referring to a raised pattern in relief. None of the parties to whom the product matching criteria were sent commented negatively on the inclusion of this phrase.

During the course of its investigation, Commerce received an inquiry from a foreign manufacturer seeking to clarify whether its product fell within the scope of the agency's investigation. This manufacturer produced steel plate that originally possessed a rectangular cross-section, but was later further worked resulting in a product with bevelled edges and a distinctly nonrectangular cross-section. In response to this inquiry, Petitioners formally amended the scope of their petitions to include products of the type produced by the foreign manufacturer—i.e., carbon steel flat-rolled products which have bevelled edges or other surface or edge characteristics which might render their cross-section other than rectangular, so long as those modifications do not cause them to assume the character of products of other HTSUS item numbers.

In December 1992 Commerce published its preliminary CVD determination, incorporating the scope language contained in the Notices of Initiation. See Preliminary Affirmative Countervailing Duty Determinations and Alignment of Final Countervailing Duty Determinations with Final Antidumping Duty Determinations: Certain Steel Products from Belgium, 57 Fed.Reg. 57,750, 57,761 (December 7, 1992). At this point, Commerce had not ruled upon the foreign manufacturers' scope request.

On January 5, 1993, after evaluating the foreign manufacturer's inquiry and Petitioners' response, Commerce issued a "Decision Memorandum" on whether products of nonrectangular cross-section were included in the scope of its investigations. Commerce concluded:

While petitioners may have cited a tariff schedule definition of flat-rolled products which excluded flat products of nonrectangular cross-section, petitioners' own scope definition does not exclude such products. Recognizing that heretofore these products have not been subject to these investigations, and that we must confront the practical issues of how they will be treated within these investigations, we nevertheless recommend accepting petitioners' clarification that flat-rolled products of nonrectangular cross-section are covered by these investigations and that the scope of the four classes or kinds be modified to reflect this.

Decision Memorandum, From Roland McDonald to Joseph Spetrini, January 25, 1993, reprinted in, Defendant's Exhibits, Exhibit 7, p. 10.

Shortly thereafter, in February 1993, Commerce published its preliminary AD determination. See Notice of Preliminary Determinations of Sales at Less Than Fair Value and Postponement of Final Determinations: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate from Belgium, 58 Fed.Reg. 7,075 (Feb. 4, 1993) (Preliminary AD Determination). Commerce again incorporated the scope language set forth in the Notices of Initiation. Additionally, Commerce incorporated Appendix I to the Notice of Preliminary Determination of Sales at Less than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, a separate determination issued the same day. 58 Fed.Reg. 7066 (Feb. 4, 1993) (Preliminary Appendix I). This Appendix discussed scope issues that had been raised since its investigations were initiated. It stated:

On November 25, 1992, petitioners requested that products of nonrectangular cross-section be included in the scope of the investigations regarding all four classes or kinds of merchandise. Petitioners noted that this was a clarification and not a broadening of the scope. After analyzing all information submitted on the record on this issue, we have included products of nonrectangular cross-section in the scope of all four classes or kinds.

Id. at 7,069.

Then, on July 9, 1993, Commerce published its final determinations in the AD and CVD investigations. See Final Determination of Sales at Less than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel Plate from Belgium, 58 Fed.Reg. 37,083, 37,084 (July 9, 1993) (Final AD Determination); Final Affirmative Countervailing Duty Determinations: Certain Steel Products from Belgium, 58 Fed.Reg. 37273, 37274 (July 9, 1993) (Final CVD Determination). Again, Commerce carried over the scope language used throughout the administrative proceedings. Commerce also incorporated by reference Appendix I of the final Argentina antidumping duty determination (Final Appendix I). Final Appendix I stated:

In contrast to the petitions' explicit exclusion of products of nonrectangular shape, nowhere do the petitions specifically exclude nonrectangular cross-section products from the scope of the investigations......