King Supply Co. LLC v. United States

• Decision Date: 30 September 2010
• Docket Number: Court No. 09-00477
• Parties: KING SUPPLY COMPANY LLC, d/b/a KING ARCHITECTURAL METALS, Plaintiff, v. UNITED STATES, Defendant, and WELDBEND CORP., TUBE FORGINGS OF AMERICA INC., and HACKNEY LADISH, INC., Defendant-Intervenors.
• Court: U.S. Court of International Trade

KING SUPPLY COMPANY LLC, d/b/a KING ARCHITECTURAL METALS, Plaintiff,

v.UNITED STATES, Defendant, andWELDBEND CORP., TUBE FORGINGS OF AMERICA INC., and HACKNEY LADISH, INC., Defendant-Intervenors.

Court No. 09-00477

UNITED STATES COURT OF INTERNATIONAL TRADE

Decided: September 30, 2010

Dated: September 30, 2010、

Before: R. Kenton Musgrave, Senior Judge

OPINION

[Administrative determination that certain pipe fittings from China used in structural applications are within scope of antidumping duty order remanded to the International Trade Administration, U.S. Department of Commerce; judgment for the plaintiff.]

Barnes, Richardson & Colburn (Thomas V. Vakerics, Stephen W. Brophy, Cortney O'Toole Morgan, Jeffrey S. Neeley, Matthew T. McGrath, and Michael S. Holton), for the plaintiff.

Tony West, Assistant Attorney General, Civil Division, United States Department of Justice, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Michael D. Panzera); Office of the Chief Counsel for Import Administration, United States Department of Commerce (Natasha Robinson Coates), of counsel, for the defendant.

Mayor Brown LLP (Simeon M. Kriesberg and Jeffrey C. Lowe), for the defendant-intervenor Weldbend Corporation.

Neville Peterson LLP (Lawrence J. Bogard and Casey Kernan Richter), for the defendantintervenor Tube Forgings of America, Inc.

Saul Ewing, LLP (John Burt Totaro, Jr.) for the defendant-intervenor Hackney Ladish, Inc.

Musgrave, Senior Judge: The plaintiff King Supply Co. LLC ("King") invokes jurisdiction under 28 U.S.C. § 1581(c) to contest the ruling by the International Trade Administration of the U.S. Department of Commerce ("DOC" or "Commerce") that King's imports are within the scope of Antidumping Duty Order and Amendment to the Final Determination of Sales at Less Than Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of China, 57 Fed. Reg. 29702 (July 6, 1992) ("Order), which is directed, in pertinent part, to

carbon steel butt-weld pipe fittings, having an inside diameter of less than 14 inches, imported in either finished or unfinished form. These formed or forged pipe fittings are used to join sections in piping systems where conditions require permanent, welded connections, as distinguished from fittings based on other fastening methods (e.g., threaded, grooved, or bolted fittings)....

57 Fed. Reg. at 29703 (italics added). See 19 C.F.R. § 351.225(k).¹

King asserted to Commerce that its imports are used in structural applications, not piping systems, and hence are not within the scope of the Order. Commerce, however, concluded that the second sentence, above, "does not contain an end-use exclusion" that would otherwise exclude King's pipe fittings, implying, in essence, that the Order applies to all pipe fittings regardless of end use. DOC Final Scope Ruling Decision, PDoc 29, at 5. Commerce then ruled that King's imports are within the Order's scope because they meet the physical description of subject merchandise. For the following reasons, the court is persuaded that Commerce's rationale for its decision is incorrect. The matter must therefore be remanded for further proceedings consistent with this opinion.

Standard of Review

Review at this stage is pursuant to the substantial evidence standard of 19 U.S.C. § 1516a(b)(1)(B)(i), meaning "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). See also Micron Tech, Inc. v. United States, 117 F.3d 1386, 1393 (Fed. Cir. 1997). The context of such "reasonableness" is with respect to the record as a whole. See Mittal Steel Galati v. United States, 31 CIT 730, 731, 491 F. Supp. 2d 1273, 1275 (2007) (citing Nippon Steel Corp. v. United States, 485 F.3d 1345, 1350-51 (Fed. Cir. 2006)). Although the Court will give "significant" deference to Commerce's interpretation of its own antidumping duty orders, it will not do so with respect to an interpretation that changes the scope of a particular order or contradicts the order's express terms. See, e.g., Sango International L.P. v. United States, 32 CIT_, _, 556 F. Supp. 2d 1327, 1332 (2008); Allegheny Bradford Corp. v. United States, 28 CIT 830, 842, 342 F. Supp. 2d 1172, 1183 (2004).

Discussion

I

The language of an antidumping duty order is the "cornerstone" of scope analysis. See Allegheny Bradford, 28 CIT at 843, 342 F. Supp. 2d at 1184 (citations omitted). Scope language may be clarified for a low-threshold of ambiguity but not be interpreted so as to effectively change an order's scope nor declared ambiguous where no ambiguity exists. See, e.g., id. (referencing inter alia Novosteel SA v. United States, 284 F.3d 1261, 1272 (Fed. Cir. 2002). See also Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002) ("review of the petition and the investigation may provide valuable guidance as to the interpretation of the final order... [b]ut they cannot substitute for language in the order itself[:]... a predicate for the interpretive process is language in the order that is subject to interpretation") (italics added); Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778, 782 (Fed. Cir. 1995) (unfair trade orders may not be interpreted in a manner that changes their scope).

The defendant and defendant-intervenors argue that the second sentence of the Order's scope language is simply meant to distinguish permanent versus non-permanent fastening methods, as opposed to pipe fittings used in piping systems. For example, the defendant's brief describes a key criterion as "permanent, welded connections of the sort used in piping systems[.]" Def.'s Br. in Resp. to Pl.'s Mot. for J. Upon the Agency R. at 11 ("Def.'s Br.") (italics added). The problem with this construct is that it does not comport with the actual language of the Order. It is well established that operative terms in antidumping duty orders are to be given effect as written and not rendered mere surplusage. See, e.g., Eckstrom Industries Inc. v. United States, 254 F. 3d 1068, 1073 (Fed. Cir. 2001) ("the Government's interpretation of the conditions of use provision renders this language mere surplusage"); Bond Street, Ltd. v. United States, 33 CIT_, _, 637 F. Supp. 2d 1343, 1351 (2009) (key language in the order is not to be rendered "mere surplusage"); Vertex Int'l, Inc. v. United States, 30 CIT 73, 79-81 (2006) (Commerce is required to give effect to express language in antidumping duty orders). The defendant's (and defendant-intervenors') reading of the Order either renders "used... in piping systems" mere surplusage, erroneously conflates the quality of usage embodied by that phrase with joining methods, or inserts other language that simply does not exist in the Order.

Be that as it may, the court concurs with Commerce's finding that consideration of the Diversified Products factors of 19 C.F.R. § 351.225(k)(2) was unnecessary. See Allegheny Bradford, 28 CIT at 845, 342 F. Supp. 2d at 1185 (where the meaning of an order is plain, there is nothing more to interpret). King's alternative argument regarding subsection (k)(2) therefore need not be addressed. The Order's scope language plainly states, "[t]hese formed or forged pipe fittings are used to join sections in piping systems where conditions require permanent, welded connections, as distinguished from fittings based on other fastening methods (e.g., threaded, grooved, or bolted fittings)" (italics added). The Order describes the use (one and only one use) of the pipe fittings subject to the scope of the investigation. No other use is described. As so described, it amounts to an exclusive use. To conclude that this language is merely an example of "possible use" is to impute meaning that the language simply does not possess. Cf. Duferco Steel, supra, 296 F.3d at 1096 ("Commerce cannot find authority in an order based on the theory that the order does not deny authority"). The reference to use in piping systems does not indicate, for example, a qualificationof "for example," "e.g.," "such systems as," "chiefly used," "principally used," "capable of being used," or any other such similarly expansive signal that would indicate the interpretation the defendant and defendant-intervenors apparently argue. Further, contrary to Commerce's (and the defendant-intervenors') reading of the second sentence of the scope language, the fastening methods of pipe fittings are a separate consideration from, and do not alter, this apparently explicit product use requirement.

Scope definitions that include use as a defining characteristic of subject merchandise have been routinely upheld, ² and Commerce has apparently described usage with more precision and specificity in other contexts when including or excluding products from the scope of an antidumping duty order.³ The defendant-intervenor Tube Forgings of America (TFA) thus argues that in suchcontexts Commerce often requires end-use certificates when excluding products based on end-use, suggesting that the absence of a certificate requirement is a reason to find there is no end use restriction in the Order, but the Court cannot discern a consistent administrative policy on end-use certification.⁴ Even if one could be discerned, TFA's argument would appear to be directed more towards requiring certification in this instance, since the argument does not imply that "[t]hese... pipe fittings are used to join sections in piping systems" has any meaning other than as written.

And lest the reader wonder if there is sufficient ambiguity in "piping systems" to encompass structural applications, the record of the investigation reveals that all the parties, including Commerce and the U.S. International Trade Commission ("ITC" or "Commission"), hada precise understanding of what "piping systems" are: in the context of the...