OMG, Inc. v. United States

• Decision Date: 28 August 2020
• Docket Number: 2019-2131
• Citation: 972 F.3d 1358
• Parties: OMG, INC., Plaintiff-Appellee v. UNITED STATES, Defendant-Appellant Mid Continent Steel & Wire, Inc., Defendant-Appellee
• Court: U.S. Court of Appeals — Federal Circuit

972 F.3d 1358

OMG, INC., Plaintiff-Appellee

v. UNITED STATES, Defendant-AppellantMid Continent Steel & Wire, Inc., Defendant-Appellee

2019-2131

United States Court of Appeals, Federal Circuit.

Decided: August 28, 2020

Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York, NY, argued for plaintiff-appellee. Also represented by David M. Murphy ; Kavita Mohan, Andrew Thomas Schutz, Washington, DC.

Sosun Bae, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellant. Also represented by Ethan P. Davis, Jeanne Davidson, Patricia M. Mccarthy ; Nikki Kalbing, Office of the Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

Adam H. Gordon, The Bristol Group PLLC, Washington, DC, for defendant-appellee. Also represented by Ping Gong.

Before Prost, Chief Judge, Moore and Stoll, Circuit Judges.

Stoll, Circuit Judge.

The Government appeals a decision of the United States Court of International Trade affirming a remand determination of the United States Department of Commerce. Commerce originally determined that imports of certain masonry anchors are within the scope of relevant antidumping and countervailing duty orders. On appeal, the Court of International Trade concluded that Commerce's original scope ruling was contrary to law and the anchors were outside the scope of the orders, remanding to Commerce for reconsideration. On remand, Commerce determined under protest that the subject anchors are not within the scope of the relevant orders. The Court of International Trade affirmed Commerce's remand determination. We affirm.

BACKGROUND

Domestic industry participants believing that "a class or kind of foreign merchandise is being, or is likely to be, sold in the United States at less than its fair value" may petition Commerce to impose antidumping duties on importers of foreign merchandise. 19 U.S.C. §§ 1673, 1673a(b). If Commerce determines that the subject foreign merchandise is being, or is likely to be, sold in the United States at less than its fair value, and the International Trade Commission (ITC) determines that an industry in the United States has been materially injured or is threatened with material injury, Commerce will issue an antidumping duty order. Id. §§ 1673, 1673e(a). The antidumping duty order "includes a description of the subject merchandise, in such detail as [Commerce] deems necessary." Id. § 1673e(a)(2).

Similarly, domestic industry participants believing that a government or public entity within a foreign country is providing a countervailable subsidy for a class or kind of merchandise that is imported, sold, or likely to be sold into the United States may petition Commerce to impose countervailing duties on such merchandise. Id. §§ 1671(a), 1671a(b). If Commerce determines that a countervailable subsidy is being provided to such merchandise and the ITC determines that an industry in the United States has been materially injured or is threatened with material injury, Commerce will issue a countervailing duty order. Id. §§ 1671(a), 1671e(a). Like an antidumping order, a countervailing duty order "includes a description of the subject merchandise, in such detail as [Commerce] deems necessary." Id. § 1671e(a)(2). After an antidumping or countervailing duty order has issued, "[a]ny interested party may apply for a ruling as to whether a particular product is within the scope of an order." 19 C.F.R. § 351.225(c)(1).

In 2014, Mid Continent Steel & Wire, Inc. filed a petition with Commerce requesting the imposition of antidumping and countervailing duties on imports of certain steel nails from India, the Republic of Korea, Malaysia, the Sultanate of Oman, Taiwan, the Republic of Turkey, and the Socialist Republic of Vietnam. In 2015, Commerce issued antidumping and countervailing duty orders based on Mid Continent's petition. See Certain Steel Nails from the Socialist Republic of Vietnam: Countervailing Duty Order ("Countervailing Duty Order "), 80 Fed. Reg. 41,006 (Dep't of Commerce July 14, 2015) ; Certain Steel Nails from the Republic of Korea, Malaysia, the Sultanate of Oman, Taiwan, and the Socialist Republic of Vietnam: Antidumping Duty Orders ("Antidumping Duty Order "), 80 Fed. Reg. 39,994 (Dep't of Commerce July 13, 2015) (collectively, "the Orders").

As relevant here, the Orders cover:

certain steel nails having a nominal shaft length not exceeding 12 inches. Certain steel nails include, but are not limited to, nails made from round wire and nails that are cut from flat-rolled steel. Certain steel nails may be of one piece construction or constructed of two or more pieces. Certain steel nails may be produced from any type of steel, and may have any type of surface finish, head type, shank, point type and shaft diameter. Finishes include, but are not limited to, coating in vinyl, zinc (galvanized, including but not limited to electroplating or hot dipping one or more times), phosphate, cement, and paint. Certain steel nails may have one or more surface finishes. Head styles include, but are not limited to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank styles include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted. Screw-threaded nails subject to this proceeding are driven using direct force and not by turning the nail using a tool that engages with the head. Point styles include, but are not limited to, diamond, needle, chisel and blunt or no point.

Countervailing Duty Order , 80 Fed. Reg. at 41,006 (emphasis added to disputed language) (footnote omitted); see also Antidumping Duty Order , 80 Fed. Reg. at 39,995 (same). The Orders set out several exclusions, but they do not expressly exclude anchors.

OMG, Inc. imports zinc masonry anchors from Vietnam. OMG's anchors consist of two components: a zinc alloy body and a zinc-plated steel pin. The anchors are designed to attach termination bars to concrete or masonry walls. Installing OMG's zinc anchors requires predrilling a hole with a diameter that matches the shank diameter of the anchor and is at least half an inch deeper than the anchor embedment. J.A. 53. The anchor is then inserted into the predrilled hole and "tap[ped] lightly" with a hammer "until [the] head of [the] anchor body is set gently against the termination bar." J.A. 54. To complete installation, the hammer is used to drive the head of the steel pin flush with the head of the anchor body, thereby expanding the anchor body in the predrilled hole to fix the anchor in place. See J.A. 29, 54.

In 2016, OMG submitted a scope ruling request to Commerce asking that Commerce find its zinc anchors outside the scope of the Orders. Commerce determined that "OMG's anchors should not be considered a ‘composite good,’ but rather a single item." J.A. 504. Examining the Orders’ scope language, Commerce found it "unambiguous as to whether zinc anchors can be classified as subject merchandise" and concluded that "the inclusion of the anchors is stated clearly." J.A. 502. Focusing on the steel pin, Commerce reasoned that "[t]he galvanized pin is a steel nail with a body or attachment. By this logic, OMG's zinc anchors are, in fact, a steel nail with two components, which matches the plain description of the scope covering certain steel nails of two or more components plated in zinc." Id. In reaching this conclusion, Commerce noted "the identical function of both steel nails and steel pins as fasteners, and [that] each is installed into position with the use of a hammer." J.A. 503. Commerce further concluded that the factors enumerated in 19 C.F.R. § 351.225(k)(1) supported its conclusion. Accordingly, Commerce issued a final scope ruling determining that OMG's anchors are within the scope of the Orders.

OMG challenged Commerce's final scope ruling before the Court of International Trade (CIT). The CIT agreed with Commerce that the Orders’ scope language is unambiguous and noted that the plain meaning of the language of the Orders therefore governed its determination as to whether OMG's anchors were within the Orders’ scope. OMG, Inc. v. United States , 321 F. Supp. 3d 1262, 1268 (Ct. Int'l Trade 2018). Considering the plain meaning of the term "nail," the CIT consulted several dictionary definitions, which it determined "present a ‘single clearly defined or stated meaning’: a slim, usually pointed object used as a fastener designed for impact insertion." Id. at 1268–69 (citation omitted). The CIT then reasoned that OMG's anchors are unambiguously outside the scope of the Orders because they are not nails within the plain meaning of the word. Id. at 1269. Specifically, OMG's anchors are "not inserted by impact into the materials to be fastened." Id. The CIT faulted Commerce for simultaneously "mak[ing] its determination based upon the steel pin" and acknowledging in its final scope ruling that OMG's anchors are unitary articles of commerce. Id. The CIT noted that the parties did not dispute that "the steel pin fits within the common definition of a nail." Id. But that was not the relevant question—rather, because the anchors are unitary articles, "the entire product, not just a component part, must be defined as a nail to fall within the scope of the [O]rders." Id. Accordingly, the CIT "remand[ed] to Commerce for further consideration consistent with [its] opinion." Id.

On remand, Commerce found "that OMG's zinc anchors fall outside the scope of the Orders, but" issued its "remand redetermination under respectful protest." J.A. 518. The CIT affirmed Commerce's remand determination.

The Government appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

DISCUSSION

The Government argues that the CIT erred in concluding that OMG's anchors are outside the scope of the Orders. According to the Government, the plain language of the Orders covering nails "constructed of two or more...