Sango Intern. L.P. v. U.S.

• Decision Date: 03 April 2008
• Docket Number: Slip Op. 08-37. Court No. 05-00145.
• Citation: 556 F.Supp.2d 1327
• Parties: SANGO INTERNATIONAL L.P., Plaintiff, v. UNITED STATES, Defendant, Ward Manufacturing, Inc., Anvil International, Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

556 F.Supp.2d 1327

SANGO INTERNATIONAL L.P., Plaintiff, v. UNITED STATES, Defendant Ward Manufacturing, Inc., Anvil International, Inc., Defendant-Intervenors.

Slip Op. 08-37. Court No. 05-00145.

United States Court of International Trade.

April 3, 2008.

COPYRIGHT MATERIAL OMITTED

Baker & McKenzie, LLP, (William D. Outman, II), Stuart P. Seidel, and Kevin J. Sullivan, for Plaintiff.

Jeffrey S. Bucholtz, Acting Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; (Loren M. Preheim), David S. Silverbrand, Kelly B. Blank, and Michael D. Panzera Commercial Litigation Branch, Civil Division, U.S. Department of Justice; Jonathan Zielinski, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of counsel, for Defendant United States.

Schagrin Associates, (Roger B. Schagrin), Brian E. McGill, and Michael J. Brown, for Defendant-Intervenors.

OPINION

BARZILAY, Judge.

This case returns to the court following a redetermination by the U.S. Department of Commerce ("Commerce") pursuant to the court's remand order in Sango Int'l L.P. v. United States, Slip Op. 07-101, 2007 WL 1888342 (July 2, 2007) (not reported in F.Supp.) ("Sango III").¹ Plaintiff Sango International L.P. challenges Commerce's final scope ruling, which determined that gas meter swivels and nuts fell within the scope of the antidumping order on certain malleable iron pipe fittings from China. See Final Scope Ruling on Whether Meter Swivels and Meter Nuts are Excluded from the Scope of the Antidumping Duty Order on Malleable Iron Pipe Fittings from the People's Republic of China (ITA Jan. 11, 2005) ("Final Scope Ruling"); Antidumping Duty Order: Certain Malleable Iron Pipe Fittings from the People's Republic of China, 68 Fed.Reg. 69,376, 69,377 (Dep't Commerce Dec. 12, 2003) (the "AD Order"). For the reasons stated herein, the court now holds that substantial evidence supports Commerce's conclusion that gas meter swivels and nuts are within the scope of the AD Order. See Final Redetermination Pursuant to Court Remand: Sango International L.P. v. United States (ITA Oct. 26, 2007) ("Final Redetermination"), available at http://ia.ita.doc.gov/remands/ 07-101.pdf. Therefore, Commerce's Final Redetermination is affirmed.

I. Background

In its January 2005 Final Scope Ruling, Commerce determined that gas meter swivels and nuts fall within the scope of the AD Order based on its conclusions that the scope language was dispositive and that further analysis under the 19 C.F.R. § 351.225(k)(2) criteria was unnecessary.² See Final Scope Ruling at 14. Plaintiff appealed the ruling to this court, alleging that Commerce's holding was unsupported by substantial evidence on the record. See Sango I, 30 CIT at___, 429 F.Supp.2d at 1357.

The court affirmed Commerce's ruling, holding that the facts presented in the administrative record when read together "in the light of the [AD Order ]'s language, reasonably provide adequate evidence to place gas meter swivels and gas meter nuts within the scope of the [AD Order]." Id. at, 429 F.Supp.2d at 1362. Finding that "the language of the antidumping petition, [the] administrative factual findings and legal conclusions, and the preliminary antidumping order dispositively place[d] gas meter swivels and gas meter nuts within the scope of the antidumping order," this court held that Commerce "did not err by not examining the Diversified Products factors in 19 C.F.R. § 351.225(k)(2)...." Id. at ___, 429 F.Supp.2d at 1362 n. 10; see Diversified Prods. Corp. v. United States, 6 CIT 155, 162, 572 F.Supp. 883, 889 (1983) (setting out scope inquiry criteria that were subsequently codified in § 351.225(k)(2)). Plaintiff then appealed.

In May 2007, the Federal Circuit reversed and remanded with instructions that Commerce "consider the criteria in section 351.225(k)(2) in arriving at a scope determination," making clear that it "express[ed] no views as to what the results of that determination should be." Sango II, 484 F.3d at 1382 & n. 10. The Federal Circuit explained that "when the criteria set forth in section 351.225(k)(1)—the description of the merchandise contained in the antidumping petition, the initial investigation by Commerce and the Commission, and the determinations of Commerce and the Commission—are not `dispositive,' then Commerce must, in issuing its scope ruling, `further consider' the criteria set forth in section 351.225(k)(2)." Id. at 1379.

The case was remanded to Commerce on July 2, 2007, for "consider[ation of] the factors set forth in 19 C.F.R. § 351.225(k)(2)...." Sango III, Slip Op. 07-101, 2007 WL 1888342, at * 1. After releasing a draft remand determination to interested parties in September 2007, Commerce received comments from Plaintiff, as well as Defendant-Intervenors Ward Manufacturing, Inc. and Anvil International, Inc., regarding the new evidence and arguments that Plaintiff placed on the record. In October 2007, Commerce adopted the findings in its draft and filed its final remand redetermination with the Court. See generally Final Redetermination. Specifically, Commerce found that

the physical characteristics of the merchandise at issue, the expectations of the ultimate purchasers, the ultimate use, and the channels of trade in which gas meter swivels and nuts are sold are the same as the type of merchandise covered by the scope of the [AD Order] on [malleable iron pipe fittings ("MIPF") ] from the PRC.³ We further found that the manner in which gas meter swivels and nuts are advertised is not the same as MIPF covered by the [AD Order], However, we determined that the manner in which gas meter swivels and nuts are advertised alone is not enough to determine that gas meter swivels and nuts fall outside the scope of the [AD Order].

Id. at 18. Based on these findings, Commerce ultimately concluded that "gas meter swivels and nuts are within the scope of the [AD Order]." Id. Plaintiff then brought this action to contest Commerce's Final Redetermination.

II. Standard of Review

When reviewing a scope determination, this court must "sustain `any determination, finding or conclusion found' by Commerce unless it is `unsupported by substantial evidence on the record, or otherwise not in accordance with law.'" Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed.Cir.1996) (quoting 19 U.S.C. § 1516a(b)(1)(B)). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct 1018, 16 L.Ed.2d 131 (1966) (quotations & citation omitted). In determining whether substantial evidence exists, "[the court] review[s] the record in its entirety, including all evidence that `fairly detracts from the substantiality of the evidence.'" Consol. Bearings Co. v. United States, 412 F.3d 1266, 1269 (Fed.Cir.2005) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed.Cir.1984)). Even if "the possibility of drawing two inconsistent conclusions from the evidence" may exist, that possibility, in itself "does not prevent an administrative agency's findings from being supported by substantial evidence." Consolo, 383 U.S. at 620, 86 S.Ct. 1018. Although the court gives "significant deference" to Commerce's interpretation of its own orders, "a scope determination is not in accordance with the law if it changes the scope of an order or interprets an order in a manner contrary to the order's terms." Allegheny Bradford Corp. v. United States, 28 CIT 830, 842, 342 F.Supp.2d 1172, 1183 (2004) (citation omitted). As a result, Commerce may interpret scope orders to include the subject merchandise "only if they contain language that specifically includes the subject merchandise or may be reasonably interpreted to include it." Id. at 843 n. 6, 342 F.Supp.2d at 1184 n. 6.

III. Discussion

Plaintiff contests Commerce's final scope redetermination, claiming that Commerce erred in finding that meter swivels and nuts fall within the scope of the AD Order. PI. Comments 2-3. To determine whether the scope of an order includes a particular product, Commerce will take the "descriptions of the merchandise contained in the petition, the initial investigation, and the determinations of the Secretary (including prior scope determinations) and the [International Trade] Commission" into account. § 351.225(k)(I). Where the criteria are not dispositive, Commerce will also consider the Diversified Products factors, as codified in the regulations: "(i) the physical characteristics of the product; (ii) the expectations of the ultimate purchasers; (iii) the ultimate use of the product; (iv) the channels of trade in which the product is sold; and (v) the manner in which the product is advertised and displayed." § 351.225(k)(2); see Diversified Prods. Corp., 6 CIT at 162, 572 F.Supp. at 889.

A. Physical Characteristics Under § 351.225(k)(2)(i)

With regard to the physical characteristics analysis, Plaintiff argues the following: (1) Commerce was wrong to collectively evaluate swivels and nuts; (2) swivels and nuts do not connect directly to pipe; (3) swivels and nuts do not share the same threading standards with MIPF; and (4) swivels require gaskets to connect to gas meters, and thus differ from MIPF. PI. Comments 3-12.

1. Commerce's Collective Evaluation of Gas Meter Swivels and Nuts

Plaintiff relies on Sango II to support its position that gas meter swivels and nuts must be treated separately for purposes of a scope determination, arguing that "the [Federal Circuit], in reversing the [Court of International Trade], evaluated gas meter swivels and gas meter nuts as separate and distinct products, and concluded that the gas meter swivel and gas meter nuts, on their own, differed from the pipe fittings in the [AD Order]...." PI. Comments 3-4. Plaintiff, however, misconstrues ...