Sandvik Steel Co. v. U.S., Slip Op. 97-13.

• Decision Date: 03 February 1997
• Docket Number: Slip Op. 97-13.,Court No. 95-12-01782.
• Citation: 957 F.Supp. 276
• Parties: SANDVIK STEEL COMPANY, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

957 F.Supp. 276

SANDVIK STEEL COMPANY, Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 97-13.

Court No. 95-12-01782.

United States Court of International Trade.

February 3, 1997.

Akin, Gump, Strauss, Hauer & Feld, Washington, DC (Warren E. Connelly, Lori A. Manca), counsel, for plaintiff.

Frank W. Hunger, Assistant Attorney General, Washington, DC; Joseph I. Liebman, Attorney in Charge, International Trade Field Office; James A. Curley, Civil Division, Dept. of Justice, Commercial Litigation Branch; Beth C. Brotman, Office of Assistant Chief Counsel, United States Customs Service, New York City, Joan L. MacKenzie, Office of Chief Counsel for Import Administration, Dept. of Commerce, Washington, DC, of counsel, for defendant.

OPINION

POGUE, Judge:

This case is before the court on motions for summary judgment. The principal issue is whether the court has jurisdiction to hear plaintiff's claim that the United States Customs Service ("Customs") wrongfully assessed antidumping duties on certain imported merchandise allegedly outside the scope of an antidumping duty order.

BACKGROUND

Plaintiff made six entries of steel tubing from Sweden between December 19, 1989 and November 20, 1990. Customs suspended their liquidation upon importation. On October 2, 1992, Customs liquidated a different entry of plaintiff's composite tubes and collected both antidumping and regular customs duties. Between July 1, 1993 and September 17, 1993 Customs liquidated the six suspended entries and collected regular customs duties of 8.0 percent ad valorem and antidumping duty deposits of 20.47 percent ad valorem, plus accrued interest. These seven entries, (the six plus the Oct. 2, 1992 entry), were apparently the only entries for which Customs collected antidumping duties on plaintiff's importation of composite tubes.¹ Plaintiff believed that its merchandise was beyond the scope of the antidumping duty order, and filed protests with Customs challenging the assessments. The protests were denied on July 7, 1995.

The antidumping duty order covered:

[S]tainless steel hollow products including pipes, tubes, hollow bars and blanks therefor, of circular cross section, containing over 11.5 percent chromium by weight, as provided for under the Harmonized System (HS) of Customs nomenclature item numbers 7304.41.00.00 and 7304.49.00.00.

52 Fed.Reg. 45,985 (Dep't Comm. Dec. 3, 1987) (antidumping duty order). Plaintiff's merchandise consists of seamless composite tubes. A composite tube is a carbon steel "inner" tube that has an outer covering or coating made of stainless steel. The carbon steel "inner" portion of the tube constitutes 75 percent of the weight of the entire tube. The stainless steel "outer" portion constitutes the other 25 percent of the tube's weight. Chromium constitutes 18 to 19 percent of the weight of the stainless steel portion of a composite tube. Thus the stainless steel portion of a composite tube accounts for only 25 percent of the weight of the entire tube, and the entire tube contains less than 5 percent chromium by weight. For the six entries that are the subject of this action, both Customs and plaintiff classified the product as a cold-drawn, seamless, non-alloy steel tube under HTSUS item number 7304.31.60.50. Plaintiff claims that the merchandise is beyond the scope of the antidumping duty order because the merchandise contains less than 5 percent chromium by weight of the entire tube and the merchandise is not classified under either 7304.41.00.00 or 7304.49.00.00, HTSUS, which are the two headings directly identified in the order.

DISCUSSION

The gravamen of plaintiff's complaint is that the antidumping duty order² does not cover plaintiff's composite tubes. Plaintiff seeks to invoke the court's jurisdiction under 28 U.S.C. § 1581(a)³ or alternatively under 28 U.S.C. § 1581(i)⁴ to have the Court review the scope of the antidumping duty order de novo and determine whether its merchandise falls within the order's scope. Defendant contends that plaintiff should have sought a scope determination from the United States Department of Commerce ("Commerce"), see 19 C.F.R. 353.29, which then could have been reviewed in this court under 28 U.S.C. § 1581(c).⁵

The question before the court is the proper jurisdictional basis for plaintiff's suit and which of three jurisdictional provisions, 28 U.S.C. § 1581(a), (c), or (i), if any, covers plaintiff's case. The difficulty posed by the present case is that Customs ab initio did not assess antidumping duties on plaintiff's composite tubes. Plaintiff challenges Customs' change of course, made without any apparent direction from Commerce, and the inclusion of its merchandise within the scope of the antidumping duty order.

The Court of International Trade reviews scope determinations under 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2)(B)(vi); see, e.g., Springwater Cookie & Confections Inc., v. United States, slip op. 96-160, 1996 WL 554536 (September 25, 1996)(reviewing scope determination by Commerce). Through a scope determination, Commerce interprets an antidumping duty order and determines whether certain products fall within its scope. See 19 C.F.R. § 353.29; Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778, 783 (Fed.Cir. 1995)("the Commerce Department is responsible for interpreting the antidumping duty order and determining whether certain products fall within the scope of the order as interpreted."). A scope determination can be initiated by Commerce (the International Trade Administration), 19 C.F.R. § 353.29(a), or by the application of an interested party, 19 C.F.R. § 353.29(b). The application contains detailed information which Commerce considers in determining whether a scope inquiry is warranted. Id. If no inquiry is warranted, Commerce "issues a final ruling as to whether the merchandise which is the subject of the application is included in the existing order." Id. If a scope inquiry is warranted, Commerce requests comments from all interested parties, and subsequently issues its determination. Id. Liquidation is suspended pending "a preliminary or final scope ruling." 19 C.F.R. § 353.29(j)(1).

The Court of International Trade reviews Commerce's scope determinations to judge whether they are in accordance with law and supported by substantial evidence. See 19 U.S.C. § 1516a(b)(1)(B)(1994).

Upon assessment of the antidumping duties in issue, plaintiff did not request a scope determination from Commerce. Instead, plaintiff protested Customs' assessment of antidumping duties, and commenced this action when Customs denied its protests, asserting jurisdiction under 28 U.S.C. § 1581(a) or (i).

The Court of International Trade has section 1581(a) jurisdiction over denials by Customs of protests filed under 19 U.S.C. § 1515.⁶ The subject matter of section 1515 protests is prescribed by 19 U.S.C. § 1514(a), which lists seven categories of protestable Customs decisions.⁷ At the same time, section 1514(b) of the statute states:

With respect to determinations made under section 1303 of this title or subtitle IV [containing the antidumping laws] of this chapter which are reviewable under section 1516a of this title, determinations of the appropriate customs officer are final and conclusive upon all persons (including the United States and any officer thereof) unless a civil action contesting a determination listed in 1516a of this title is commenced in the United States Court of International Trade ...

19 U.S.C. § 1514(b)(1994). Section 1516a, referenced in section 1514(b), enumerates several types of determinations that are reviewable in the Court of International Trade under 28 U.S.C. § 1581(c), one of which is "[a] determination by the administering authority [Commerce] as to whether a particular type of merchandise is within the class or kind of merchandise described in an ... antidumping ... duty order." 19 U.S.C. § 1516a(a)(2)(b)(vi). This provision mirrors the substantive issue raised by plaintiff's complaint. When this provision is read in conjunction with section 1514(b), it is apparent that unless there is a request for a scope determination from Commerce, Customs' decision concerning the scope of an antidumping duty order is "final and conclusive." 19 U.S.C. § 1514(b); see also Fujitsu Ten Corp. of Am. v. United States, 957 F.Supp. 245, 248-249 (1997)(explaining the operation of 19 U.S.C. §§ 1514(b), 1516a(a)(2)(B)(iv), and 1514(a)).

A suit challenging Customs' inclusion of merchandise within the scope of an antidumping duty order does not fall within the purview of section 1514(a). See Fujitsu Ten, at 7, at ___. Therefore, it cannot be challenged under the protest procedure. Rather, by operation of section 1514(b), that scope challenge must be made before Commerce, and subsequently, an action commenced in the Court of International Trade under 28 U.S.C. § 1581(c). Id. Failure to follow that procedure renders a Customs decision concerning the scope of an antidumping order "final and conclusive." Id. Section 1581(c) affords the exclusive judicial remedy to contest such a decision, after the administrative procedure of a scope determination has been exhausted. Id.

Plaintiff had an opportunity to request a scope ruling from Commerce when it learned that antidumping duties were being assessed on its entries. Liquidation was suspended for the entries covered by the protests forming the basis of plaintiff's claim. During that period plaintiff should have requested a scope determination from Commerce, a remedy available to plaintiff as an interested party. See 19 C.F.R §§ 353.29(b); 353.2(k)(1). In addition, another entry of plaintiff was liquidated with antidumping duties on October 2, 1992, fully 10 months before the other entries were liquidated. Again, plaintiff had an opportunity to request a scope determination. Any request would have suspended liquidation pending a preliminary or final scope ruling from Commerce. See 19...