Saha Thai Steel Pipe Pub. Co. v. United States

• Decision Date: 06 October 2021
• Docket Number: Court No. 1:20-cv-133,Slip Op. No. 21-135
• Citation: 547 F.Supp.3d 1278
• Parties: SAHA THAI STEEL PIPE PUBLIC COMPANY, LTD., Plaintiff, v. UNITED STATES, Defendant, and Wheatland Tube Company Defendant-Intervenor
• Court: U.S. Court of International Trade

547 F.Supp.3d 1278

SAHA THAI STEEL PIPE PUBLIC COMPANY, LTD., Plaintiff,

v. UNITED STATES, Defendant,andWheatland Tube Company Defendant-Intervenor

Slip Op. No. 21-135

Court No. 1:20-cv-133

United States Court of International Trade.

October 6, 2021

Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington D.C., for Plaintiff. With him on the brief was James C. Beaty.

In K. Cho, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C. for Defendant United States. With him on the brief were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, Commercial Litigation Branch, Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, and Jonzachary Forbes, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce.

Luke A. Meisner, Schagrin Associates, of Washington D.C., for Defendant-Intervenor. With him on the brief were Roger B. Schagrin and Kelsey M. Rule.

OPINION

Vaden, Judge:

Saha Thai Steel Pipe Public Company, Ltd. (Saha), filed this case under Section 516A of the Tariff Act of 1930, as amended. Saha challenges the final scope ruling issued by the U.S. Department of Commerce (Commerce) after Commerce conducted a scope inquiry into its 1986 antidumping duty order ("Thailand Order") on circular welded carbon steel pipes and tubes (CWP) imported from Thailand (Case No. A-549-502). Saha challenges Commerce's decision to assess antidumping duties on the importation of dual-stenciled pipe imported as line pipe from Thailand. See Compl. ¶ 1, ECF No. 6. Before the Court is the Plaintiff's Rule 56.2 Motion for Judgment on the Agency Record. Pl.’s Mot. for J. on the Agency R. (Pl.’s Mot.), ECF No. 26. For the reasons set forth below, the Court finds that Commerce's determination that dual-stenciled pipe is covered by the Thailand Order is not supported by substantial evidence, holds that Commerce's Final Scope Ruling constitutes an unlawful expansion of the scope of the underlying order, GRANTS the Plaintiff's Motion, and remands the Final Scope Ruling back to Commerce to render a redetermination consistent with this Court's opinion.

BACKGROUND

The products at issue in this case are Saha manufactured standard pipes, dual-stenciled pipes imported as line pipe, and line pipe, all produced in Thailand for importation into the United States. The International Trade Commission (ITC) has provided a concise and useful explanation of the differences between line pipe and standard pipe. The ITC's description, from its preliminary injury determination published before Commerce's antidumping order imposing duties on standard pipe imported from Thailand, is as follows:

We have addressed the like product question regarding standard pipes and tubes (standard pipe) and line pipes and tubes (line pipe) in prior investigations.

In those investigations, the Commission recognized distinctions between standard pipe and line pipe. Standard pipe is manufactured to American Society of Testing and Materials (ASTM) specifications and line pipe is manufactured to American Petroleum Institute (API) specifications. Line pipe is made of higher grade steel and may have a higher carbon and manganese content than is permissible for standard pipe. Line pipe also requires additional testing. Wall thicknesses for standard and line pipes, although similar in the smaller diameters, differ in the larger diameters. Moreover, standard pipe (whether imported or domestic) is generally used for low-pressure conveyance of water, steam, air, or natural gas in plumbing, air-conditioning, automatic sprinkler and similar systems. Line pipe is generally used for the transportation of gas, oil, or water in utility pipeline distribution systems.

Certain Welded Carbon Steel Pipes and Tubes from Thailand and Venezuela, Inv. Nos. 701-TA-242 and 731-TA-252 and 253 (Preliminary), USITC Pub. 1680 (Apr. 1985), Joint Appendix (J.A.) at 1094-96, ECF No. 42. So-called dual-stenciled pipe has received both an American Society of Testing and Materials (ASTM) stencil and an American Petroleum Institute (API) stencil, indicating that it meets the minimum requirements for both standards. See J.A. at 1563 (providing a definition for dual-stenciled pipe).

I. The Original Antidumping Investigation

Early in 1985, a subcommittee of the self-named Committee on Pipe and Tube Imports, with its constituent domestic manufacturers, asked Commerce to impose antidumping duties on circular welded carbon steel pipe imports from Thailand. See id. at 1090. Their original request sought the imposition of antidumping duties on standard, line, and dual-stenciled pipes. Id. Commerce responded to the petition with a memo on March 7, 1985, asking the petitioners to provide "[d]ocumentation which demonstrates that line pipe is manufactured in Thailand" and "[d]ocumentation which supports the allegation that line pipe from Thailand [was] being sold at less than fair value." J.A. at 1753.

After receiving Commerce's March 7th letter, the initial petitioners, among which was Defendant-Intervenor Wheatland Tube Company (Wheatland), filed an amended petition on March 12, 1985. Amended Petition Filed by Petitioner on March 12, 1985 , J.A. at 1755-79. In that amended petition, the initial petitioners rejected a meaningful distinction between standard and line pipe. Id. The initial petitioners instead argued that a precedent existed that collapsed line pipe and standard pipe into a single reviewable industry and that the better distinction was between small diameter and large diameter pipes. Id. at 1763. Despite these arguments in their amended petition, in a subsequent letter dated March 14, 1985, the initial petitioners expressly withdrew from their "petitions insofar as they concern line pipe, TSUS numbers 610.3208 and 3209." Letter Dated March 14, 1985, from Petitioner Regarding Partial Withdrawal of Petition , J.A. at 1781-82. The Tariff Schedule of the United States (TSUS) numbers 610.3208 and 3209 are the numbers under which line pipe, dual-stenciled or otherwise, would have been imported in 1985. See TSUS 1985 Version; see also Tr. of Oral Arg. 7:8-12, ECF No. 51, July 26, 2021 (Government and Wheatland's admission that line pipe and dual-stenciled pipe would have been imported under these numbers in 1985). At no point before or after submitting the March 14th letter did the initial petitioners provide any "[d]ocumentation" supporting "the allegation that line pipe from Thailand [was] being sold at less than fair value" or even "manufactured in Thailand." J.A. at 1753. Indeed, the initial petitioners acknowledged that "no Thai company is presently licensed to produce pipe to API specifications, and imports of API line pipe from Thailand are therefore not likely." J.A. at 1781.¹

About a month after the back-and-forth between Commerce and the initial petitioners, the ITC released a preliminary report titled Certain Welded Carbon Steel Pipes and Tubes from Thailand and Venezuela; Determination of the Commission in Investigation No. 701-TA-242: (Preliminary) Under the Tariff Act of 1930, Together with the Information Obtained in the Investigation. The ITC determined "pursuant to section 733(a) of the Tariff Act of 1930 ( 19 U.S.C. § 1673b(a) ), that there is a reasonable indication that an industry in the United States is threatened with material injury by reason of imports of welded carbon steel standard pipes and tubes from Thailand," i.e. , the standard pipe industry. J.A. at 1089. In its analysis, the ITC directly addressed the initial petitioners’ argument — that distinguishing between line and standard pipe was wrong and that the better distinction was between large and small diameter pipes — describing it as "somewhat arbitrary." See id. at 1096. The ITC further stated that "domestic line pipe is like imported line pipe and not like imported standard pipe," and "domestic standard pipe is like imported standard pipe and is not like imported line pipe." Id. The ITC also described at length the differences between standard pipe and line pipe. See id. at 1095.

Almost a year later in January 1986, Commerce issued its final determination that standard pipe from Thailand was being, or was likely to be, sold in the United States at less than fair value. Circular Welded Carbon Steel Pipes and Tubes from Thailand; Final Determination of Sales at Less Than Fair Value , 51 Fed. Reg. 3384 (Jan. 27, 1986), J.A. at 1216. This Final Determination described its scope as encompassing "certain circular welded carbon steel pipes and tubes, also known as ‘standard pipe ’ or ‘structural tubing,’ which includes pipe and tube with an outside diameter of 0.375 inch or more but not over 16 inches, or any wall thickness, as currently provided in items 610.3231, 610.3234, 610.3241, 610.3242, 610.3243, 610.3252, 610.3254, 610.3256, 610.3258 and 610.4925 of the Tariff Schedules of the United States Annotated." Id. (emphasis added). The TSUS numbers under which dual-stenciled and single-stenciled line pipes would have been imported in 1986 were not listed in this scope. This determination relied on the preliminary ITC report released in April 1985 that addressed the material injury caused to the U.S. standard pipe industry by the importation of standard pipe from Thailand, not by line or dual-stenciled pipe. Id.

After Commerce issued its Final Determination on standard pipe imported from Thailand, the ITC issued its own final report in February 1986. This report addressed the material injury to domestic industry, actual and threatened, resulting from the importation of standard pipe from Thailand and the importation of line and standard pipe from Turkey. See Certain Welded Carbon Steel Pipes and Tubes from Turkey and Thailand , Inv. Nos. 701-TA-253 and 731-TA-252, USITC Pub. 1810 (Feb. 1986) (ITC Final Determination), J.A. at 1221. The ITC evaluated the effects of both imported line pipe and...