Eckstrom Industries, Inc. v. U.S.

• Decision Date: 28 October 1998
• Docket Number: No. 97-10-01913.,Slip Op. 98-150.,97-10-01913.
• Citation: 27 F.Supp.2d 217
• Parties: ECKSTROM INDUSTRIES, INC., Plaintiff, v. The UNITED STATES, and The United States Department of Commerce, Defendants.
• Court: U.S. Court of International Trade

Page 217

27 F.Supp.2d 217

ECKSTROM INDUSTRIES, INC., Plaintiff, v. The UNITED STATES, and The United States Department of Commerce, Defendants.

Slip Op. 98-150.

No. 97-10-01913.

United States Court of International Trade.

October 28, 1998.

Powell, Goldstein, Frazer & Murphy, LLP, Washington, DC (N. David Palmeter, Susan M. Mathews, Ronald E. Minsk) for Plaintiff.

Frank W. Hunger, Assistant Attorney General of the United States, David M. Cohen, Director, Lucius B. Lau, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice (Linda A. Andros, Attorney-Advisor, Office of the Chief Counsel for Import Administration Department of Commerce, of counsel), for Defendant.

OPINION

POGUE, Judge.

This case is before the Court on Plaintiff's motion for judgment on the agency record pursuant to USCIT R. 56.2. The Plaintiff, Eckstrom Industries, Inc. ("Eckstrom"), challenges the determination of the Department of Commerce ("Commerce") that cast stainless steel butt-weld pipe fittings imported by Eckstrom are within the scope of the antidumping duty order on stainless steel butt-weld pipe fittings from Taiwan. See Amended Final Determination and Antidumping Duty Order: Certain Welded Stainless Steel Butt-Weld Pipe Fittings From Taiwan, 58 Fed.Reg. 33,250 (Dep't Commerce, June 16, 1993)(Pub.Doc. 4) ("Amended Final Determination"). Commerce issued its determination on September 29, 1997. See Final Affirmative Scope Ruling-Antidumping Duty Order on Stainless Steel Butt-Weld Pipe Fittings from Taiwan (A-583-816); Eckstrom Industries, Inc., (September 29, 1997)(Pub.Doc. 8)("Final Scope Ruling"). The Court has jurisdiction over this matter under 28 U.S.C. § 1581(c)(1994).

Background

A. The Documentary Record

On May 20, 1992, the Flowline Division of Markovitz Enterprises, Inc. ("Flowline") petitioned Commerce for the imposition of antidumping duties on "stainless steel butt-weld pipe fittings under 14 inches (inside diameter) imported from Taiwan and the Republic of Korea." See Petition for the Imposition of Antidumping Duties, (May 20, 1992)(Pub.Doc. 1) at 1 ("Petition"). In its petition, Flowline explained that,

Stainless steel butt-weld pipe fittings are used to connect pipe sections in piping systems where conditions require welded connections, as distinguished from fittings designed for other fastening methods (e.g., threaded, grooved, or bolted fittings). Stainless steel butt-weld fittings are used where one or more of the following conditions is a factor in designing the piping system: (1) corrosion of the piping system will occur if material other than stainless steel is used; (2) contamination of the material in the system by the system itself must be prevented; (3) high temperatures (in excess of 300°F) are present; (4) extreme low temperatures are present; (5) high pressures are contained within the system.

Petition at 3-4.

In defining the scope of its petition, Flowline first referenced subheading 7307.23 of the Harmonized Tariff Schedule ("HTSUS"). Id. at 1. Flowline next described the applicable specifications:

More specifically, the fittings subject to this petition are designated under Specification ASTM A403/A403M-1991, the standard specification for Wrought Austenitic Stainless Steel Pipe Fittings.... All products in these specifications are within the scope of this petition, including 90° long radius elbows, 90° reducing elbows, 90° short radius elbows, 45° long radius elbows, 180° long radius returns, caps, straight tees, reducing outlet tees, stub ends, concentric reducers, eccentric reducers, straight crosses, and reducing outlet crosses....

Id. at 1-2. Referring to the tariff and product specifications, Flowline stated, "[the] scope of this petition includes both finished fittings under these classifications, as well as unfinished fittings capable of meeting these specifications. It excludes threaded, grooved, and bolted fittings." Id. at 2.

Finally, Flowline described the manufacturing process by which the pipe fittings subject to its petition are made: "stainless steel butt-weld pipe fittings are generally cold-formed from fusion-welded stainless steel pipe. However, production of some types of stainless steel fittings, notably `stub ends[,]' requires heating the raw material and performing forging operations." Id. at 5.

In response to Flowline's petition, Commerce began an investigation. In its initiation notice, Commerce defined the scope of the investigations: "[t]he products subject to these investigations are stainless steel buttweld pipe fittings, whether finished or unfinished, under 14 inches inside diameter." Initiation of Antidumping Duty Investigations: Certain Stainless Steel Butt-Weld Pipe Fittings from the Republic of Korea and Taiwan, 57 Fed.Reg. 26,645 (Dep't Commerce, June 15, 1992)(Pub.Doc. 2)("Initiation Notice").

Commerce further explained that,

The subject merchandise is used where one or more of the following conditions is a factor in designing the piping system: (1) Corrosion of the piping system will occur if material other than stainless steel is used; (2)contamination of the material in the system by the system itself must be prevented; (3)high temperatures are present; (4) extreme low temperatures are present; (5) high pressures are contained within the system.

Id. Moreover, Commerce indicated that, "[s]tainless steel butt-weld pipe fittings come in a variety of shapes, with the following five shapes the most basic: `elbows', `tees', `reducers', `stub ends', and `caps'." Id. Finally, Commerce stated that, "[t]he stainless steel butt-weld pipe fittings subject to these investigations are classifiable under subheading 7307.23.00 of the [HTSUS.]" Id. In referencing the applicable tariff classification, however, Commerce disclaimed that, "[a]lthough the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of these investigations is dispositive." Id.

In its preliminary determination, Commerce defined the scope of investigation the same way it had in the Initiation Notice. See Preliminary Determination of Sales at Less Than Fair Value: Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan, 57 Fed.Reg. 61,047-48 (Dep't Commerce, December 23, 1992) ("Preliminary Determination"). In its final determination, however, Commerce defined the scope of investigation in the same manner as previously, except for the inclusion of the adjective "welded" in the second sentence of the scope definition: "[c]ertain welded stainless steel butt-weld pipe fittings[.]" Final Determination of Sales at Less Than Fair Value: Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan, 58 Fed.Reg. 28,556 (Dep't Commerce, May 14, 1993)("Final Determination").

Concurrent with Commerce's investigation of whether the subject imports were being sold at less than fair value, the International Trade Commission (the "Commission") conducted its investigation of whether the subject imports were causing material injury or the threat of material injury to the domestic industry. In conducting its investigation, the Commission sent questionnaires to importers and domestic producers of stainless steel butt-weld pipe fittings. In each questionnaire, the Commission specified that the subject pipe fittings "are provided for in subheading 7307.23.00" of the HTSUS without an accompanying disclaimer. See Pl.'s Mem. Supp. Mot. J. Agency R. at Exhibit 5 ("Importers' Questionnaire") and Exhibit 7 ("U.S. Producers' Questionnaire").

In its final affirmative determination, the Commission found that "an industry in the United States is materially injured by reason of imports from Taiwan of certain stainless steel butt-weld pipe fittings, whether finished or unfinished, under 14 inches inside diameter, provided for in subheading 7307.23.00 of the Harmonized Tariff Schedule of the United States[.]" Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan, USITC Pub. 2641, Inv. No. 731-TA-564 (Final)(June 1993) at 1. In defining the scope of its investigation, the Commission incorporated by reference its like product discussion in Certain Stainless Steel Butt-Weld Pipe Fittings from Korea, USITC Pub. 2601, Inv. No. 731-TA-563 (Final)(Feb. 1993)(Pub.Doc. 3)("ITC Final Determination").

In its final determination, the Commission stated that, "[i]mports of the subject stainless steel butt-weld pipe fittings are classified in HTS subheading 7307.23.00[.]" Id. at I-9. No disclaimer was included. With regard to product specifications, the Commission stated, "[t]he fittings themselves are usually designated under the performance specifications of ASTM A403/A403M-1991 and the dimensional specifications of ANSI B16.9-1986 and ANSI B16.28-1986." Id. at I-7. In describing the manufacturing process, the Commission explained [t]he domestic manufacturing sector includes integrated producers and combination producers. Integrated producers begin with stainless pipe as their raw material and perform forming, machining, and finishing operations. Combination producers produce some fittings inan integrated process and other fittings in a conversion process (performing only machining and finishing operations).

Generally, stainless steel butt-weld pipefittings are cold formed from fusion-welded or seamless stainless steel pipe. However, production of some types of fittings, notably stub-ends, requires heating the raw material and performing forging operations.

Id. at I-6.

Having made an affirmative dumping finding in the underlying action, Commerce made its final determination of the scope of the antidumping duty order on June 16, 1993. See Amended Final Determination at 33,250. Commerce entitled the determination, "Certain Welded Stainless Steel Butt-Weld Pipe Fittings From Taiwan." Id. (emphasis added). Moreover, in the Scope of Order¹ section of the determination, the second sentence began, "[c]ertain welded stainless steel butt-weld...