Star Pipe Prods. v. United States, Slip Op. 19-84
| Decision Date | 08 July 2019 |
| Docket Number | Slip Op. 19-84,Court No. 17-00229 |
| Parties | STAR PIPE PRODUCTS, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Kavita Mohan and Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, argued for Plaintiff. With them on the brief was Francis J. Sailer.
Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With her on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Elizabeth A. Speck, Senior Trial Counsel. Of counsel on the brief was Khalil N. Gharbieh, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.
This action involves a challenge to a U.S. Department of Commerce ("Commerce" or "the agency") scope determination for the antidumping duty order on steel threaded rod ("STR") from the People's Republic of China ("the PRC" or "China"). See Certain Steel Threaded Rod from the People's Republic of China , 74 Fed. Reg. 17,154 (Dep't Commerce Apr. 14, 2009) (notice of antidumping duty order) ("STR Order "); Final Scope Ruling for Star Pipe Products' Joint Restraint Kits, A-570-932 (July 31, 2017) ("Final Scope Ruling"), ECF No. 16-3; Compl., ECF No. 2.1 Plaintiff, Star Pipe Products ("Star Pipe"), seeks judgment on the agency record pursuant to U.S. Court of International Trade ("CIT") Rule 56.2 regarding Commerce's determination that the STR components of Star Pipe's Joint Restraint Kits are subject to the STR Order . See Pl.'s Mot. for J. on the Admin. R. and Mem. of Law in Supp. of Pl.'s Mot. for J. on the Agency R. ("Pl.'s Mem.") at 9-28, ECF No. 21; Star Pipe Prods.' Reply Br. ("Pl.'s Reply") at 1-13, ECF No. 28. Star Pipe further argues that Commerce improperly issued liquidation instructions ordering U.S. Customs and Border Protection ("CBP") to retroactively suspend liquidation of, or assess antidumping duties on, the STR components of the Joint Restraint Kits that Star Pipe entered before the date on which Commerce initiated a formal scope inquiry. See Pl.'s Mem. at 28-34; Pl.'s Reply at 13-21. Defendant, United States ("the Government"), urges the court to sustain Commerce's scope determination and asserts that Commerce has issued lawful liquidation instructions to CBP. Def.'s Resp. to Pl.'s Mot. for J. Upon the Agency R. ("Def.'s Resp.") at 5-28, ECF No. 25. For the reasons discussed herein, the court sustains Commerce's scope determination and denies as moot Plaintiff's challenge to the liquidation instructions.
Commerce issued the STR Order on April 14, 2009. See STR Order , 74 Fed. Reg. at 17,154. Therein, Commerce defined the scope of the order as follows:
The merchandise covered by this order is steel threaded rod. Steel threaded rod is certain threaded rod, bar, or studs, of carbon quality steel, having a solid, circular cross section, of any diameter, in any straight length, that have been forged, turned, cold-drawn, cold-rolled, machine straightened, or otherwise cold-finished, and into which threaded grooves have been applied. In addition, the steel threaded rod, bar, or studs subject to this order are non-headed and threaded along greater than 25 percent of their total length. A variety of finishes or coatings, such as plain oil finish as a temporary rust protectant, zinc coating (i.e., galvanized, whether by electroplating or hot-dipping), paint, and other similar finishes and coatings, may be applied to the merchandise.
Id. at 17,155. Commerce also set forth certain metallurgical requirements for in-scope products; several exclusions from the scope; and the relevant Harmonized Tariff Schedule ("HTSUS") subheadings for "convenience and customs purposes." Id.
On October 5, 2016, Star Pipe, a U.S. importer, requested a scope determination regarding its Joint Restraint Kits. See Scope Ruling Req. for Joint Restraint Kits (Oct. 5, 2016), CR 1, PR 1-2. The Joint Restraint Kits in question consist of a combination of castings, bolts, bolt nuts, washers, and STR components and "are used in the water and wastewater industry to connect and secure pipes and to bolt together pipe joints, so that the pipe joints form a water tight restraint to maintain the free and controlled flow of water/waste water." Id. at 2.
Star Pipe acknowledged that the kits contain STR components that, if imported alone, would be subject to the STR Order . Id. Star Pipe argued, however, that because the STR components are "incidental to the kit itself," the Joint Restraint Kits should not be subject to the STR Order . Id. at 2-3. Vulcan Threaded Products, Inc. ("Vulcan"), a U.S. producer of steel threaded rod, opposed Star Pipe's request. See Vulcan's Opp'n to Tianjin Star's Scope Ruling Req. (Nov. 18, 2016) ("Vulcan's Opp'n"), PR 4.2 On January 3, 2017, Star Pipe provided Commerce with additional information requested by the agency. See Scope Ruling Req. for Joint Restraint Kits (Jan. 3, 2017), CR 2, PR 6 (supplement). Thereafter, Commerce extended the deadline for issuing a final scope ruling to April 3, 2017. See Ext. of Deadline for Final Scope Ruling (Feb. 13, 2017), PR 9.
On March 31, 2017, Commerce initiated a formal scope inquiry. See Scope Inquiry Initiation (March 31, 2017) ("Inquiry Initiation Notice"), PR 11. Commerce explained that it initiated the inquiry pursuant to 19 C.F.R. § 351.225(e) "[i]n order to fully consider the submissions that we have received in connection with Star Pipe's scope ruling request." Id. at 1. Commerce noted that "formal initiation does not preclude [the agency] from issuing a decision based on the criteria enumerated in 19 [C.F.R. §] 351.225(k)(1)." Id. Star Pipe and Vulcan filed comments in the scope inquiry. See Comments on Initiation of Scope Inquiry Concerning Joint Restraint Kits (Apr. 10, 2017) ("Star Pipe's Cmts."), PR 12; Vulcan's Rebuttal to Star Pipe's Scope Ruling Initiation Comments (Apr. 17, 2017), PR 13.
Req. for Clarification on the Dep't's Final Scope Ruling for Joint Restraint Kits (Aug. 21, 2017), Attach. 1 (CBP Message No. 7222301 (Aug. 10, 2017)), PR 21.
On August 21, 2017, Star Pipe requested Commerce to clarify whether "the instructions ... are intended to suspend liquidation and assess [antidumping duties] on Star Pipe's imports of Joint Restraint Kits entered prior to the date of initiation or are intended ... to be prospective only." Id. at 3. Commerce did not respond to Star Pipe's request for clarification before the court assumed jurisdiction over the matter on August 30, 2017. See Summons, ECF No. 1; Def.'s Resp. at 23 n.6. On October 3, 2017, the court enjoined liquidation of unliquidated entries of Star Pipe's Joint Restraint Kits. Order (Oct. 3, 2017) ("Oct. 3, 2017 Order"), ECF No. 15.
On November 30, 2018, the court ordered the parties to file a joint status report explaining whether liquidation of Star Pipe's Joint Restraint Kits that entered before Commerce initiated the scope inquiry on March 31, 2017, had been suspended and as of what date any suspension occurred. See Order (Nov. 30, 2018) ("Nov. 30, 2018 Order"), ECF No. 32 (). Following several extensions, on March 4, 2019, the parties filed a Joint Status Report. See Jt. Status Report. On May 22, 2019, the court heard oral argument on Star Pipe's motion for judgment on the agency record. See Docket Entry, ECF No. 57.
The court has jurisdiction pursuant to § 516A(a)(2)(B)(vi) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(vi)(2012),3 and 28 U.S.C. § 1581(c). The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).
Because descriptions of merchandise covered by the scope of an antidumping or countervailing duty order must be written in general terms, issues may arise as to whether a particular product is included within the scope of such an order. See 19 C.F.R. § 351.225(a). When those issues arise, Commerce's regulations provide for the agency to issue "scope rulings" that clarify whether the contested product falls within an antidumping or countervailing duty order's scope. Id. Although there are no specific statutory provisions that govern the interpretation of the scope of an order, the determination of whether a product is included within the scope of an order is governed by case law and the regulations published at 19 C.F.R. § 351.225. Meridian Prods., LLC v. United States , 851 F.3d 1375, 1381 (Fed. Cir. 2017) (citation omitted); see also Eckstrom Indus., Inc. v. United States , 254 F.3d 1068, 1071-72 (Fed. Cir. 2001) ().
Scope determinations for particular products generally proceed in the following order. Initially,...
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