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

• Decision Date: 04 June 2009
• Docket Number: No. 2008-1357.,2008-1357.
• Parties: SANGO INTERNATIONAL L.P., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Ward Manufacturing, Inc. and Anvil International, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

567 F.3d 1356

SANGO INTERNATIONAL L.P., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, and Ward Manufacturing, Inc. and Anvil International, Inc., Defendants-Appellees.

No. 2008-1357.

United States Court of Appeals, Federal Circuit.

June 4, 2009.

William D. Outman, II, Baker & McKenzie, LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Stuart P. Seidel and Kevin J. Sullivan.

Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee United States. With her on the brief were Jeanne E. Davidson, Director, and L. Misha Preheim, Trial Attorney. Of counsel on the brief was Jonathan Zielinski, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.

Roger B. Schagrin, Schagrin Associates, of Washington, DC, argued for defendants-appellees Ward Manufacturing, Inc., et al. With him on the brief was John W. Bohn.

Before MICHEL, Chief Judge, SCHALL, and MOORE, Circuit Judges.

SCHALL, Circuit Judge,

This is a trade case. The issue is whether gas meter swivels and nuts imported into the United States from the People's Republic of China by Sango International L.P. ("Sango") are within the scope of the antidumping order titled Certain Malleable Iron Pipe Fittings from the People's Republic of China, 68 Fed.Reg. 69,376 (Dep't of Commerce Dec. 12, 2003) (the "Antidumping Order" or "order"). In Sango International L.P. v. United States, 429 F.Supp.2d 1356 (Ct. Int'l Trade 2006) ("Sango I"), the United States Court of International Trade upheld the determination of the Department of Commerce ("Commerce") that the swivels and nuts are malleable iron pipe fittings ("MIPFs") within the scope of the Antidumping Order. In reaching that determination, Commerce concluded that the criteria set forth in 19 C.F.R. § 351.225(k)(1) were dispositive. Id. at 1359. In Sango International, L.P. v. United States, 484 F.3d 1371, 1373 (Fed.Cir.2007) ("Sango II"), we concluded that substantial evidence did not support Commerce's conclusion that the § 351.225(k)(1) criteria were dispositive. We therefore reversed the decision of the Court of International Trade and remanded the case to the court with the instruction that it, in turn, remand the case to Commerce so that Commerce could consider the criteria set forth in 19 C.F.R. § 351.225(k)(2) in arriving at a scope determination. Id. at 1382.

On remand, after considering the § 351.225(k)(2) criteria, Commerce again determined that the gas meter swivels and nuts imported by Sango are within the scope of the Antidumping Order. Sango Int'l L.P. v. United States, No. 05-00145 (Dep't of Commerce Oct. 26, 2007), available at http://ia.ita.doc.gov/remands/07-101.pdf ("Remand Determination"). Sango appealed the Remand Determination to the Court of International Trade, which affirmed Commerce's determination. Sango Int'l L.P. v. United States, 556 F.Supp.2d 1327 (Ct. Int'l Trade 2008) ("Sango III"). Sango now appeals the decision of the Court of International Trade in Sango III. We affirm.

BACKGROUND

I.

Sango is a United States company that insulates gas meter swivels and nuts. Sango II, 484 F.3d at 1375. Gas meter swivels are used to connect a gas meter to a piping system. A swivel has a threaded connection on one end and a shaped flange with a notch on the other end. The shaped flange mates with a gas meter through the use of a meter nut. Because of the flange connection, a gas meter swivel can only connect to a gas meter on its flange end. Typical gas meter swivels are shown below.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

A typical gas meter nut is shown below.

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The Antidumping Order covers products classified under headings 7307.19.90.30, 7307.19.90.60, and 7307.19.90.80 of the Harmonized Tariff Schedule of the United States ("HTSUS"). 68 Fed.Reg. at 69,377. The Antidumping Order resulted from an antidumping petition from Anvil International, Inc. ("Anvil") and Ward Manufacturing, Inc. ("Ward"), two domestic manufacturers of pipe fittings, and from the investigation that followed the petition.¹ Sango II, 484 F.3d at 1373. During the period following the issuance of the order, Sango caused to be imported into the United States from the People's Republic of China gas meter swivels and nuts. Upon entry, United States Customs and Border Protection ("Customs") classified the products under HTSUS heading 7307.19.90.60. That heading covers "Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel: Cast fittings: Other: Other Threaded." Customs's classification brought the swivels and nuts within the scope of the Antidumping Order.

After Customs classified the imported swivels and nuts under HTSUS heading 7307.19.90.60 and rejected Sango's request for classification under HTSUS heading 9028.90.00 (parts for and accessories to gas meters), Sango requested a scope ruling from Commerce. Sango II, 484 F.3d at 1376. Pursuant to 19 C.F.R. § 351.225(c)(1), an importer may request from Commerce a ruling as to whether a particular product is within the scope of an antidumping order. The inquiry that Commerce conducts in a scope ruling is governed by the regulation set forth at 19 C.F.R. § 351.225(k), which provides as follows:

(k) [I]n considering whether a particular product is included within the scope of an order ..., the Secretary [of Commerce] will take into account the following:

(1) 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.

(2) When the above criteria are not dispositive, the Secretary will further consider:

(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.

If Commerce "can determine, based solely upon the application [for a scope ruling] and the descriptions of the merchandise referred to in [§ 351.225(k)(1)], whether a product is included with the scope of an order ..., [it] will issue a final ruling." 19 C.F.R. § 351.225(d). If Commerce cannot so determine, it will issue a ruling that further inquiry is warranted. Id. § 351.225(e).

On September 13, 2004, Commerce determined that a formal scope inquiry was necessary in order to determine whether the gas meter swivels and nuts imported by Sango are within the scope of the Antidumping Order. See Sango I, 429 F.Supp.2d at 1358. In the inquiry that followed, Commerce considered the factors listed in 19 C.F.R. § 351.225(k)(1). It thus reviewed the antidumping petition, the initial investigation, its own determinations, and the determinations of the Commission during the investigation. Id. at 1358-59. Finding these sources dispositive, Commerce issued a ruling in which it determined that the swivels and nuts were within the scope of the Antidumping Order. Id. at 1359.

Sango filed suit in the Court of International Trade to challenge Commerce's scope ruling, and Ward and Anvil intervened. The Court of International Trade affirmed Commerce's ruling, holding that the facts presented in the administrative record, when read together "in light of the [o]rder's language, reasonably provide adequate evidence to place gas meter swivels and gas meter nuts within the scope of the [o]rder." Id. at 1362. The court determined that Commerce "did not err by not examining the ... factors in 19 C.F.R. § 351.225(k)(2)," id. at 1362 n. 10, and that its scope ruling was "supported by substantial evidence and in accordance with law," id. at 1362.

In Sango II, we determined that substantial evidence did not support Commerce's conclusion that the sources it reviewed pursuant to § 351.225(k)(1) were dispositive as to whether the imported gas meter swivels and nuts are within the scope of the Antidumping Order. Id. at 1381-82. We therefore reversed the Court of International Trade's decision and remanded with the instruction that Commerce "consider the criteria in § 351.225(k)(2) in arriving at a scope determination." Id. at 1382.

II.

Pursuant to our direction, the Court of International Trade remanded the case to Commerce for it to consider the factors set forth at 19 C.F.R. § 351.225(k)(2). Sango Int'l L.P. v. United States, No. 05-00145, 2007 WL 1888342, at *1 (Ct. Int'l Trade July 2, 2007). For purposes of its scope inquiry, Commerce relied upon, inter alia, the petition filed by Ward and Anvil and the report issued by the Commission in the initial investigation of MIPFs from the People's Republic of China, Investigation No. 731-TA1021, Publication 3649 (December 2003) ("Commission Report"). Remand Determination, at 24.

In its inquiry, Commerce considered whether, when viewed collectively, the gas meter swivels and nuts imported by Sango are within the scope of the Antidumping Order. Id. at 5. It provided five reasons for this approach: (1) in Sango I, the Court of International Trade treated gas meter swivels and nuts "as a single entity" because they must bind to each other to function; (2) the Federal Circuit did not indicate in Sango II that gas meter swivels and nuts should be treated separately; (3) in Sango's scope ruling request, the swivels and nuts were treated collectively; (4) "record evidence show[ed] that gas meter nuts cannot be used without gas meter swivels, and that gas meter swivels cannot be used without gas meter nuts;" and (5) Customs categorized gas meter swivels and nuts under a single HTSUS category because they "are never used individually." Id. at 5, 20.

Addressing the first factor in 19 C.F.R. § 351.225(k)(2) (physical...