Olympia Industrial, Inc. v. United States , 30 Ct. Int'l Trade 1011 ( 2006 )

Slip Op. 06-110
UNITED STATES COURT OF INTERNATIONAL TRADE
:
OLYMPIA INDUSTRIAL, INC., :
:
Plaintiff, :
:
v. :
:
UNITED STATES, : Before: Richard K. Eaton,
: Judge
Defendant, :
: Court No. 04-00647
and :
:
AMES TRUE TEMPER, :
:
Deft.-Intervenor. :
:
OPINION
[United States Department of Commerce’s Final Scope Ruling
sustained]
Dated: July 24, 2006
Hume & Associates, PC (Robert T. Hume, Akil Vohra, and Jon
C. Cooper), for plaintiff.
Peter D. Keisler, Assistant Attorney General, Civil
Division, United States Department of Justice; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
Sates Department of Justice (Stephen Carl Tosini), for defendant.
Wiley, Rein & Fielding, LLP (Charles Owen Verrill, Jr. and
Timothy C. Brightbill), for defendant-intervenor.
Eaton, Judge: This matter is before the court on plaintiff
Olympia Industrial, Inc.’s (“plaintiff” or “Olympia”) motion for
judgment upon the agency record pursuant to USCIT Rule 56.2. By
Court No. 04-00467 Page 2
its motion, plaintiff challenges the determination of the United
States Department of Commerce (“Commerce” or the “Department”)
that its multi-use tough tool (“MUTT”) is included within the
scope of the antidumping duty orders covering heavy forged hand
tools (“HFHTs”) from the People’s Republic of China (“PRC”),
specifically the order applicable to axes, adzes and similar
hewing tools. See Final Scope Ruling—Request by Olympia
Industrial, Inc. for a Scope Ruling on the MUTT (ITA Dec. 9,
2004) (“Final Scope Ruling”); see also HFHTs, Finished or
Unfinished, With or Without Handles From the PRC, 56 Fed. Reg.
6622 (Feb. 19, 1991) (“HFHTs Orders”).
Plaintiff seeks a remand of the Final Scope Ruling to allow
Commerce to reconsider its findings. See Pl.’s Mem. of Pts.
Auth. Supp. R. 56.2 Mot. (“Pl.’s Mem.”) at 16. Defendant United
States (“defendant” or the “Government”), on behalf of Commerce,
opposes the motion and requests that the Department’s Final Scope
Ruling be sustained. See Def.’s Response to Pl.’s Mot. (“Def.’s
Resp.”) at 1. Defendant-intervenor Ames True Temper (“Ames”)
joins in opposition to plaintiff’s motion. See Def.-Int.’s
Response to Pl.’s Mot. (“Def.-Int.’s Resp.”) at 1.
Jurisdiction lies with 28 U.S.C. § 1581(c) (2000) and 19
U.S.C. § 1516a(2)(B)(vi) (2000). Because the MUTT’s utility as a
Court No. 04-00467 Page 3
tool comes from its steel head with a sharp blade that can be
used for cutting and chopping, the court finds that it is a
hewing tool similar to an axe or adze and, thus, sustains
Commerce’s Final Scope Ruling.
BACKGROUND
On March 25, 2003, Commerce published notice that it would
conduct an administrative review of merchandise subject to the
four antidumping duty orders on HFHTs from the PRC for the period
beginning February 1, 2002 and ending January 31, 2003. See
Initiation of Antidumping and Countervailing Duty Administrative
Reviews and Requests for Revocation in Part, 68 Fed. Reg. 14,394,
14,395 (ITA Mar. 25, 2003). On July 10, 2003, Commerce notified
Olympia that data concerning scrapers, with or without handles,
should be submitted as those tools were subject to the order
applicable to axes, adzes, and similar hewing tools (“axes/adzes
order”). See Scope Ruling Request on Scrapers Submitted on
Behalf of Olympia Industrial, Inc. (Oct. 9, 2003) (“Scope Ruling
Request”) at 3. On October 9, 2003, plaintiff submitted an
application to Commerce pursuant to 19 C.F.R. § 351.225(c)
(2005),1 asking the agency to issue a scope ruling finding that
1
The regulation provides, in pertinent part, that:
Any interested party may apply for a ruling
as to whether a particular product is within
the scope of an order or a suspended
(continued...)
Court No. 04-00467 Page 4
the MUTT did not fall within the ambit of the HFHTs Orders. See
id. at 10. Pursuant to its regulations, Commerce engaged in an
initial scope investigation and found that the language of the
HFHTs Orders was not dispositive of the scope question. See
Final Scope Ruling at 2. Thus, on December 2, 2003, in
1
(...continued)
investigation. The application must be
served upon all parties on the scope service
list [which includes all persons that have
participated in any segment of the
proceeding] . . . and must contain the
following, to the extent reasonably available
to the interested party . . .
(i) A detailed description of the
product, including its technical
characteristics and uses, and its
current U.S. Tariff Classification
number;
(ii) A statement of the interested
party’s position as to whether the
product is within the scope of an
order or a suspended investigation,
including:
(A) A summary of the reasons for
this conclusion,
(B) Citations to any applicable
statutory authority, and
(C) Any factual information
supporting this position, including
excerpts from portions of the
Secretary’s or the Commission’s
investigation, and relevant prior
scope rulings. . . .
19 C.F.R. § 351.225(c).
Court No. 04-00467 Page 5
accordance with 19 C.F.R. § 351.225(e),2 Commerce initiated a
formal scope inquiry. See id. To facilitate its investigation,
Commerce instructed the parties to submit supplemental filings.
As part of those filings, Commerce instructed Olympia to
identify the specific MUTT models that were to be examined. See
Pl.’s Mem. at 3. Olympia complied, stating that the models to be
reviewed were “three MUTT blades (5"x4", 8"x4" and 9"x7") without
handles and the same MUTT blades with handles identified by eight
model numbers . . . 64-386, 64-389, 64-392, 64-393, 64-394, 64-
396, 64-397 and 64-398.” Id. at 3–4. After analyzing the MUTT
based on the additional information obtained in the scope
inquiry, Commerce determined that it was subject to the terms of
the axes/adzes order because it was reasonable to find the tool
to be an axe, adze, or similar hewing tool. See Final Scope
Ruling at 1.
2
Under 19 C.F.R. § 351.225(e):
If the Secretary finds that the issue of
whether a product is included within the
scope of an order . . . cannot be determined
based solely upon the application and the
descriptions of the merchandise referred to
in paragraph (k)(1) of this section, the
Secretary will notify by mail all parties on
the Department’s scope service list of the
initiation of a scope inquiry.
19 C.F.R. § 351.225(e).
Court No. 04-00467 Page 6
STANDARD OF REVIEW
When reviewing Commerce’s final determination finding a
particular type of merchandise to be within the class or kind of
merchandise described in an antidumping duty order, the court
“shall hold unlawful any determination, finding, or conclusion
found . . . to be unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C. §
1516a(b)(1)(B)(i). “Substantial evidence is ‘such relevant
evidence as a reasonable mind might accept as adequate to support
a conclusion.’” Huaiyin Foreign Trade Corp. (30) v. United
States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol.
Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). The existence of
substantial evidence is determined “by considering the record as
a whole, including evidence that supports as well as evidence
that ‘fairly detracts from the substantiality of the evidence.’”
Id. (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556,
1562 (Fed. Cir. 1984)). Finally, the possibility of drawing two
opposite, yet equally justified conclusions from the record will
not prevent the agency’s determination from being supported by
substantial evidence. Consolo v. Fed. Mar. Comm’n, 383 U.S. 607,
620 (1966).
Court No. 04-00467 Page 7
DISCUSSION
I. Relevant Law
Commerce’s regulations require the agency to engage in a
two-step analysis when determining whether particular merchandise
is included within the scope of an antidumping duty order.3
First, upon receiving an application from an interested party,4
Commerce is directed to conduct an investigation that is limited
to the consideration of: (1) the descriptions contained in the
petition filed by domestic interested parties seeking the
original antidumping order; (2) the initial antidumping
investigation; and (3) any relevant determinations issued by the
International Trade Commission (“ITC” or the “Commission”). See
19 C.F.R. § 351.225(k)(1);5 see also 19 C.F.R. § 351.202(a) (“The
3
Once the product is determined to be within the scope
of the order, it is then referred to as subject merchandise.
“Subject merchandise” is defined as “the class or kind of
merchandise that is within the scope of an investigation, a
review, a suspension agreement, an order under this subtitle or
section 1303 of this title, or a finding under the Antidumping
Act, 1921.” 19 U.S.C. § 1677(25).
4
Section 1677(9)(A) of Title 19 provides, in relevant
part, that “[t]he term ‘interested party’ means . . . a foreign
manufacturer, producer, or exporter, or the United States
importer, of subject merchandise . . . .” 19 U.S.C. §
1677(9)(A).
5
The regulation provides that:
With respect to those scope determinations
that are not covered under paragraphs (g)
through (j) of this section, in considering
whether a particular product is included
within the scope of an order or a suspended
(continued...)
Court No. 04-00467 Page 8
Secretary normally initiates antidumping . . . investigations
based on petitions filed by a domestic interested party.”).
Commerce may also consider the Harmonized Tariff Schedule of the
United States (“HTSUS”) subheading under which the product is
imported. The HTSUS subheading for a product, however, is not
dispositive of whether that product falls within the scope of an
antidumping duty order. See Smith Corona Corp. v. United States,
915 F.2d 683, 687 (Fed. Cir. 1990). If Commerce’s review of this
evidence leads it to conclusively determine that the product is,
or is not included within the scope of the order, the Department
is then required to issue a final scope ruling. See 19 C.F.R. §
351.225(d) (“If the Secretary can determine, based solely upon
the application and the descriptions of the merchandise referred
to in paragraph (k)(1) of this section, whether a product is
included within the scope of an order . . . the Secretary will
issue a final ruling . . . .”).
Where Commerce finds that the information reviewed in the
5
(...continued)
investigation, the Secretary 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 Commission.
19 C.F.R. § 351.225(k)(1).
Court No. 04-00467 Page 9
initial investigation is not dispositive, it then proceeds to
notify the parties that it will begin a formal scope inquiry in
which it examines the factors commonly referred to as the
“Diversified Products” criteria in reference to the case where
they were first set forth. See Diversified Prods. Corp. v.
United States, 6 CIT 155, 162, 572 F. Supp. 883, 889 (1983).
These factors, which have since been reduced to a regulation, are
as follows:
(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.
19 C.F.R. § 351.225(k)(2).
The regulation, however, merely provides guidance to the
Department during its scope investigation. “The language of the
order determines the scope of an antidumping duty order.” Tak
Fat Trading Co. v. United States, 396 F.3d 1378, 1382 (Fed. Cir.
2005). Where the order’s scope language does not expressly
address the status of a particular product, the order “may be
interpreted as including subject merchandise only if [it]
contain[s] language that . . . may be reasonably interpreted to
include it.” Duferco Steel, Inc. v. United States, 296 F.3d
1087, 1089 (Fed. Cir. 2002). In other words, the language of the
Court No. 04-00467 Page 10
order controls Commerce’s inquiry. See id. at 1097 (“[R]eview of
the petition and the [antidumping] investigation may provide
valuable guidance as to the interpretation of the final order . .
. [b]ut they cannot substitute for language in the order
itself.”); see also Vertex Int’l, Inc. v. United States, 30 CIT
__, __, slip op. 06-10 at 7–8 (Jan. 19, 2006) (not published in
the Federal Supplement); Tianjin Mach. Import & Export Corp. v.
United States, 29 CIT __, __, 394 F. Supp. 2d 1369, 1373–74
(2005) (“Commerce must consult the final scope language as the
primary source in making a scope ruling because Commerce’s final
determination reflects the decision that has been made as to
which merchandise is within the final scope of the investigation
and is subject to the order.”) (internal quotation marks
omitted); Allegheny Bradford Corp. v. United States, 28 CIT __,
__, 342 F. Supp. 2d 1172, 1184 (2004) (“The language of an order
is the cornerstone of a court’s analysis of an order’s scope.”)
(internal quotation marks omitted).
Thus, the court’s task is to determine whether Commerce, in
the Final Scope Ruling, reasonably interpreted the scope language
of the HFHTs Orders to include the MUTT.
II. Results of the Department’s Initial Investigation
Following the regulation’s procedures, Olympia submitted its
Court No. 04-00467 Page 11
application to Commerce asking the agency to issue a final scope
ruling that the MUTT was not included within the HFHTs Orders.
In its application, Olympia contended that the words in the
original order clearly indicated that the MUTT was outside the
scope of the order. The scope language provided that:
The products covered by these investigations are HFHTs
comprising the following classes or kinds of
merchandise: (1) Hammers and sledges with heads over
1.5 kg. (3.33 pounds) (“hammers/sledges”); (2) bars
over 18 inches in length, track tools and wedges
(“bars/wedges”); (3) picks and mattocks
(“picks/mattocks”); and (4) axes, adzes and similar
hewing tools (“axes/adzes”). . . .
HFHTs are manufactured through a hot forge operation in
which steel is sheared to required length, heated to
forging temperature and formed to final shape on
forging equipment using dies specific to the desired
product shape and size. HFHTs are currently provided
for under the following Harmonized Tariff System (HTS)
subheadings: 8205.20.60, 8205.59.30, 8201.30.00, and
8201.40.60. Specifically excluded from these
investigations are hammers and sledges with heads 1.5
kg. (3.33 pounds) in weight and under, hoes and rakes,
and bars 18 inches in length and under.
HFHTs Orders, 56 Fed. Reg. at 6622–23 (emphasis in original).
For Olympia, the order supported its contention that the
MUTT is not included in the scope, primarily because it views the
MUTT as a scraper, and the order does not specifically mention
scrapers. See Scope Ruling Request at 5. Olympia’s application
further insisted that “[a] scraper is not a tool that is
‘similar’ to an axe or adze . . . .” Id. Moreover, Olympia
argued that the MUTT must be excluded from the order because it
Court No. 04-00467 Page 12
entered the MUTT under HTSUS subheading 8205.59.5510, which was
not listed in the order. In sum, Olympia maintained that, “[i]n
the case of scrapers, both the language [of the HFHTs Orders] and
the designated HTSUS subcategories are clearly dispositive of the
issue, and do not include scrapers.” Id. at 4 (emphasis in
original).
Plaintiff’s application also provided Commerce with the
following description of the MUTT:
The product in question is a scraper, with or without a
handle. Olympia imports the scraper without a handle,
but generally sells the scraper with a handle using the
trademark MUTT. Olympia sells three (3) types of
scrapers with blades that measure 5"x4", 8"x4", and
9"x7".
A scraper is a hand tool used in landscaping with a
long wooden handle and chisel-like blade at the end.
More specifically, a scraper can be used for cutting
roots, for edging, and even for chipping ice on
driveways or sidewalks. . . .
The scrapers imported by Olympia are made of steel and
manufactured using a forging process.
Scope Ruling Request at 2 (footnote omitted). According to
plaintiff, the merchandise at issue is a forged scraper with a
steel head and varying sized sharpened blades.
Along with the descriptions provided by plaintiff’s initial
application, Commerce also had at its disposal: (1) the language
contained in the domestic industry’s petition asking the
Court No. 04-00467 Page 13
Department and the ITC to provide relief from the claimed
injurious effects of HFHTs imports; (2) the original ITC final
injury determination; and (3) the applicable HTSUS subheading
under which Olympia was entering the MUTT. See generally HFHTs,
With or Without Handles, From the PRC-Antidumping Petition of
Woodings-Verona Tool Works, Inc. (Apr. 4, 1990) (the “Petition”);
HFHTs From the PRC, Determination of the Commission in Invs. No.
731-TA-457 (Final), USITC Pub. 2357 (Feb. 1991) (“Final Injury
Determination”); HTSUS 8205.59.5510 (2003).
In the Petition, the domestic industry provided the
following description:
The manufacturing process is generally described as a
hot forge operation in which fine grain special bar
quality steel of the needed metallurgy and cross-
sectional dimension is sheared to the required length,
heated to forging temperature in a fossil fuel furnace,
and formed to final shape on forging equipment using
dies specific to the desired product shape and size.
If heat treating is required, the formed shape is
quenched in a suitable media, such as an oil bath or a
water spray, and then tempered to the required
hardness. . . .
The merchandise in question is all imports from the PRC
currently classified under the following subheadings of
the [HTSUS], and before January 1, 1989, under the item
numbers of the Tariff Schedules of the United States
Annotated (“TSUSA”):
HTSUS 8205.20.60/TSUSA 651.2300
Hammers and Sledges, with or without their
Handles with Heads over 1.5 Kg (3.25 pounds)
each
HTSUS 8205.59.30/TSUSA 651.2500
Court No. 04-00467 Page 14
Crowbars, Track Tools, Wedges of Iron or
Steel
HTSUS 8201.30.00/TSUSA 648.5300
Picks and Mattocks/(as of 1/1/89) Mattocks,
Picks, Hoes, and Rakes and Parts Thereof
HTSUS 8201.40.60/TSUSA 648.6700
Axes, Adzes, etc./(as of 1/1/89) Axes and
Hewing Tools Other than Machetes and Parts,
Base Metal
The four classification subheadings listed above
provide the scope of this Petition and describe four
distinct like product groups (and class or kind of
merchandise groups) except that (1) hoes and rakes in
HTSUS 8201.30.00 are not heavy forged hand tools and
are not subject to investigation, and (2) bars eighteen
inches and under in HTSUS 8205.59.30 are not heavy hand
tools and are not subject to investigation. . . .
Petition at 2, 11–12.
Commerce also considered the language of HTSUS 8205.59.5510,
the heading under which Olympia enters the MUTT.
8205 Handtools (including glass cutters) not
elsewhere specified or included; blow torches
and similar self-contained torches; vises,
clamps and the like, other than accessories
for and parts of machine tools; anvils;
portable forges; hand-or pedal-operated
grinding wheels with frameworks; base metal
parts thereof:
8205.59.55
10 Other . . . .
HTSUS 8205.59.5510 (2003).
Finally, the product description contained in the ITC Final
Court No. 04-00467 Page 15
Injury Determination provided that:
The HFHTs included in the scope of this investigation
consist of the following products, finished or
unfinished, with or without handles: (1) hammers,
sledges, and mauls (hammers and sledges or ‘striking
tools’), including drilling hammers and woodsplitting
mauls, with heads over 1.5 kilograms (3.3 pounds) each;
(2) bars of over 18 inches (45.72 centimeters) in
length, track tools, and wedges (bars and wedges or
‘bar tools’), including wrecking bars, digging bars,
tampers, and steel woodsplitting wedges; (3) picks and
mattocks (‘digging tools’); and (4) axes, adzes, and
similar hewing tools (axes and adzes or ‘hewing
tools’). . . .
The method used most often in the production of the
subject products is forging. This process involves
shearing the raw material (fine-grain, special bar-
quality steel) to a specific size and heating it in an
electric, gas, coal, or oil-fired furnace to a
temperature that renders the steel malleable. The raw
material is then shaped into the desired form by
intermittent blows of forging hammers fitted with
impression dies. After forging, numerous steps are
undertaken before manufacturing is completed. These
steps include trimming excess metal; heat treating to
increase strength; and grinding, polishing, and
painting to obtain a finished appearance.
Final Injury Determination at 95, 97–98.
After reviewing the above materials in light of the scope
language of the HFHTs Orders, Commerce concluded that they failed
to establish the status of the MUTT. In particular, Commerce
found that, while scrapers are not included in the referenced
HTSUS subheadings, such subheadings are “provided for convenience
and U.S. Customs Service purposes. The written description [in
the final order] remains dispositive.” Final Scope Ruling at 12
Court No. 04-00467 Page 16
(internal quotation marks and citation omitted); see also
Novosteel SA v. United States, 284 F.3d 1261, 1270 (Fed. Cir.
2002) (“[A] reference to an HTSUS number ‘is not dispositive’
about the scope of an antidumping or countervailing-duty order.”)
(quoting Smith Corona Corp., 915 F.2d at 687)). Thus, Commerce
initiated a scope inquiry and considered the additional factors
set forth in § 351.225(k)(2).
III. Scope Inquiry
Following its examination of the Diversified Products
criteria, Commerce issued its final determination on Olympia’s
request for a scope ruling on the MUTT. The Department found
that: (1) the MUTT was not specifically identified or excluded by
the scope of the HFHTs Orders; (2) neither the information
contained in the Petition or the ITC’s Final Injury Determination
provided a definition of “similar hewing tools”; (3) the product
descriptions contained in the Petition, the ITC’s Final Injury
Determination, and the HFHTs Orders could be “reasonably
interpreted to include the MUTT in the antidumping duty order on
axes/adzes”; and (4) an application of the Diversified Products
criteria supported the finding that the MUTT is properly included
within the scope of the HFHTs Orders. See Final Scope Ruling at
13, 20. Olympia challenges several aspects of the Final Scope
Ruling.
Court No. 04-00467 Page 17
A. Manufacturing Process
Olympia first contends that the language of the HFHTs Orders
cannot reasonably be read to include the MUTT because the roll
forge process used to manufacture the MUTT head is distinct from
the hot forge process described in the order.
According to plaintiff:
The [MUTT] is strong and durable, made of steel and
manufactured using a forging process. The forging
process, unlike the description in the scope of the
[Antidumping Duty] orders, is roll forging. A roll
forging process is a process where the steel is heated
then compressed between two rollers to the specified
thickness then cooled. When cooled the MUTT is cut to
its finished shape. The MUTT is not “formed to final
shape on forging equipment using dies specific to the
desired product shape and size.” While the MUTT is
produced in a forging factory, the tools needed to make
the MUTT are different from those used to make HFHTs.
Supplemental Submission on Scope Ruling Request on the MUTT (A
Forged Scraper) Submitted on Behalf of Olympia Industrial, Inc.
(“Supplemental Submission”) at 4 (emphasis in original) (footnote
omitted).
Plaintiff’s counsel further pursued this point at oral
argument. See Tr. of Civ. Cause for Or. Arg. (“Tr.”) at
3:2–8:24.
MR. COOPER: This process of roll forging takes the heated
steel, puts it through a set of rollers in
order to get the proper dimensions for this
material. It is then cut to shape, heat
Court No. 04-00467 Page 18
annealed, and then punched when necessary for
additional holes. . . . So the roll forge
process itself more significantly uses
completely different equipment than the hot
forge process . . . .
THE COURT: Are dies used at all in the production
of the MUTT?
MR. COOPER: Yes, Your Honor. The dies are used but
it’s a completely different kind of die.
As opposed to an open die which the
metal is forced into it, during the hot
forge process this die just guides the
metal into a shape that the rollers are
pushing it into. . . .
THE COURT: Now, explain to [the court] why that’s
not what is described [in the order].
MR. COOPER: The roll forge process is much [more]
low tech. It basically is heated steel
which is just coming down on basically a
vertical type conveyor. They cut it to
form it into a shape . . . . It’s
simply that the steel ingots are heated,
they are rolled into these conveyor
belts and there are dies on either side
just to keep basically the width from
coming too much.
Tr. at 3:22–25, 4:1,2, 11–16; 5:13–14; 6:23–25; 7:1, 6–9.
The Department insists that, if there are differences
between the roll forge and hot forge processes, those differences
are negligible and therefore cannot be reasonably understood to
exclude the MUTT from the scope of the HFHTs Orders. See Final
Scope Ruling at 10—11, 16; see also Def.’s Resp. at 9—11.
Commerce maintains that the critical language in the HFHTs Orders
Court No. 04-00467 Page 19
relating to the manufacturing process is that “HFHTs are
manufactured through a hot forge operation. . . .” Final Scope
Ruling at 11. For Commerce, the words that follow, i.e., “in
which steel is sheared to required length, heated to forging
temperature and formed to final shape on forging equipment using
dies specific to the desired product shape and size,” simply
explain the general elements of all forging processes. Id. In
other words, Commerce asserts that the “plain language of . . .
[the HFHTs Orders] clearly indicates that the HFHTs covered by
these orders are manufactured through a ‘hot forge operation.’”
Id. Thus, the Department understands the “hot forge” language as
merely “describ[ing] production processes for HFHTs that are
illustrative and not exclusive of variations in the forging
process.” Final Scope Ruling at 11, 16 (“Since the scope allows
for variations in the forging process used to produce subject
merchandise, it follows that there will be variations in the
equipment used to conduct the hot-forge process.”).
The court finds that the differences between the roll forge
and hot forge processes do not render unreasonable Commerce’s
interpretation of the HFHTs Orders’ scope language to include the
MUTT. See Duferco, 296 F.2d at 1089. It is true that the hot
forge process contained in the HFHTs Orders describes the steel
Court No. 04-00467 Page 20
as being first sheared, then heated, and then formed into shape
by dies. In the forging process for the MUTT’s heads, on the
other hand, the steel is heated first, forced into its proper
dimensions by dies, cooled, and then sheared. Both processes are
clearly hot forging using dies to shape the metal. Plaintiff’s
counsel described the roll forge process as using dies to ensure
that the MUTT’s head is produced to the proper “dimensions,” and
that the die “guides the metal into a shape.” See Tr. at
7:10–14. Put another way, the dies used to manufacture the MUTT
head are “specific to the desired product shape and size.” HFHTs
Orders, 56 Fed. Reg. at 6623. The fact that the steel used to
create the MUTT head is cut after having been shaped is simply
not sufficient to remove the MUTT from the scope of the HFHTs
Orders.6 Thus, the court concludes that, because the variations
between the processes are not substantial, Commerce was
reasonable in finding that the MUTT is made by a forging process.
6
This situation is dissimilar from that faced by the
Court in Tianjin Machinery Import & Export Corp. v. United
States, 29 CIT __, __, 394 F. Supp. 2d 1369, 1374 (2005). There,
the Court sustained Commerce’s finding that tampers manufactured
through a cast process were not covered by the HFHTs Orders
because:
[T]he scope language in the HFHT Orders makes no
reference to any hand tool that is not identified as an
“HFHT,” i.e., as a “forged” hand tool, and does not
refer to any production of a hand tool by casting or by
any manufacturing process that is distinct from a
forging process.
Id., 394 F. Supp. 2d at 1374 (emphasis in original).
Court No. 04-00467 Page 21
B. Diversified Products Criteria
1. Physical Characteristics
Having found unconvincing plaintiff’s argument concerning
the manufacturing processes, the court turns to Commerce’s
examination of the MUTT using the Diversified Products criteria.
Commerce undertook this examination in order to determine whether
the MUTT could be reasonably said to be an “axe, adze, or similar
hewing tool” as described in the axes/adzes order. Addressing
the factors in the order that they appear in the regulation, the
first criterion reviewed is the MUTT’s physical characteristics.
See 19 C.F.R. § 351.225(k)(2)(i). For plaintiff, this factor
lends substantial support to its assertion that the MUTT is not
within the scope of the axes/adzes order.
Olympia states in its Supplemental Submission that the MUTT
has a “chisel-like blade” and is typically sold with a long
handle. See Supplemental Submission at 3. Although
acknowledging the presence of this blade, plaintiff asserts that
“[t]he physical characteristics of a MUTT are similar to those of
forged edgers, forged hoes, and forged shovels,” not axes or
adzes. Id. at 4 (footnotes omitted). For plaintiff:
An axe or adze head is placed at a 90 degree angle to
the shaft of the tool so the ultimate user can swing
the implement and obtains the striking power from the
Court No. 04-00467 Page 22
swing or arc of the tool. A MUTT head, on the other
hand, is not placed at a 90 degree angle, but in a
manner that is similar to the bristles of a broom or
the head of a rake. The physical structure of the tool
is entirely different from an axe or adze . . . .
Pl.’s Mem. at 9.
Olympia also focuses on the difference between the handle
attached to the MUTT blade and that which is attached to the axe
or adze head.
Olympia imports the tool without an attached handle,
but typically sells the tool with a wooden handle. The
blade of the MUTT under review measure 4"x5", 4"x8" and
7"x9" and the wooden shaft comes in five sizes 23",
30", 41", 48" and 54". Axes typically do not come with
wooden handles with shafts of 41", 48" and 54" because
these measurements would make the tool inordinately top
heavy not allowing the user to properly swing the axe.
The wooden handles [used on the MUTT] are typically
longer than an axe or adze . . . .
Additionally, the MUTT can also be purchased with the
nylon handle that functions as a firm grip to use for
scraping purposes. A similar handle is found on many
snow shovels . . . . Axes and adzes typically do not
have a nylon grip since it would diminish the utility
of the tool . . . .
Id. at 10.7 Thus, by emphasizing the differences between the
MUTT handle and that of an axe or adze, Olympia maintains its
position that Commerce was unreasonable in determining that the
physical characteristics of the MUTT were similar enough to an
axe or an adze to justify its conclusion that the MUTT was
7
At oral argument, plaintiff’s counsel reiterated for
the court the descriptions and arguments set forth in its
memorandum supporting its Rule 56.2 motion. See Tr. at
16:18–25.
Court No. 04-00467 Page 23
subject to the axes/adzes order.
With respect to Olympia’s claim that the physical appearance
of the MUTT precludes a reading of the HFHTs Orders’ scope
language to include the MUTT, Commerce focused on the “similar
hewing tool” language of the order and found that “[w]hile there
will be differences [between hewing tools and axes and adzes],
these differences will be minor, such that the other hewing tool
can reasonably be called ‘similar’ to an axe or adze, and still
be encompassed by the order.” Final Scope Ruling at 16. Put
another way, because the axes/adzes order covers axes, adzes, and
similar hewing tools, Commerce maintains that it is not enough
for plaintiff to point out the characteristics of its product
that distinguish it from an axe or adze to exclude the MUTT from
the scope of the order. Thus, Commerce argues that for the MUTT
to be found to lie outside the scope of the order, it must be
demonstrated that the phrase “similar hewing tool” cannot
reasonably be read to include the MUTT.
Commerce further asserts as without merit plaintiff’s claim
that the MUTT most closely resembles a shovel or other form of
landscaping or digging tool.
Court No. 04-00467 Page 24
Olympia . . . states that the MUTT has a chisel like
blade, which is used for cutting and chopping
applications. Thus, contrary to Olympia’s contention,
the MUTT is not like a shovel, as shovels are used for
digging and excavation. . . . Given the sharpened end
and flatness of the MUTT blade, it is more physically
similar to that of an axe or adze, rather than a
shovel. . . . Olympia’s brochure states that the MUTT
blade is “resharpenable,” thereby indicating that the
MUTT is initially sold with a sharpened edge. . . .
While there may be some difference in the degree to
which the edge is sharp between the MUTT and an axe or
adze, we note that the scope contemplates that there
will be some differences between an axe or adze and
“similar hewing tools.”
Final Scope Ruling at 15–16. That is, Commerce found that the
MUTT, because of its steel head and sharpened edge, was similar
enough to an axe or adze head to reasonably include the MUTT
within the scope of the order.
The court agrees with plaintiff that the MUTT indeed has
some physical characteristics that are distinct from those of an
axe or adze. In particular, the MUTT head, unlike that of an axe
or adze, is not attached to its handle at a ninety degree angle
and the MUTT handle is considerably longer than that attached to
an axe or adze. It is worth noting, however, that an axe head is
attached so that the blade is parallel to the handle, while that
of an adze is placed perpendicular to its handle. Thus, the
position of the head to the handle is not a determinative
characteristic. It is also the case that the physical
Court No. 04-00467 Page 25
characteristics of the MUTT’s head are similar to that of an axe
or adze. That is, the MUTT head is made of steel, is “strong and
durable,” and the blade, which is sharpened at the time of sale,
may be re-sharpened. See Supplemental Submission at 4 (“The
[MUTT] is strong and durable, made of steel and manufactured
using a forging process.”); see also Pl.’s App. to R. 56.2 Mot.
(“Pl.’s App.”) at App. 3 (describing the MUTT as having a “Rolled
Forged, Heat Treated Tempered Head,” and “Resharpenable Blade.”).
The dictionary defines the word “hew” as meaning “[t]o
strike forcibly with a cutting tool . . . .” VII The Oxford
English Dictionary 194 (2d ed. 1989); see also The American
Heritage Dictionary of the English Language 849 (3d ed. 1992)
(“To strike or cut . . . .”). It follows, then, that a hewing
tool is designed to be capable of performing tasks that involve
cutting by striking, i.e., chopping. In order to efficiently and
effectively complete such tasks, a hewing tool must have a strong
head with a sharpened blade. As indicated by plaintiff’s own
sales literature, the MUTT has a forged, heat-treated and
tempered steel head with a re-sharpenable blade. See Pl.’s App.
at App. 3. For axes, adzes, and the MUTT, the characteristic
that gives them utility as a tool is the head and blade.
Therefore, as the MUTT shares with axes and adzes the physical
characteristic of a substantial head with a sharpened blade that
Court No. 04-00467 Page 26
is attached to a handle, the court finds that Commerce reasonably
concluded that the MUTT has the physical characteristics of a
hewing tool that is similar to an axe or adze.
2. Expectations of the Ultimate Purchaser
The next factor Commerce considers in a scope inquiry is
whether the expectations of the ultimate purchaser of the product
are the same as those who purchase products already found to be
within the scope of an antidumping duty order. Here, Commerce
determined that, while the MUTT has a multitude of uses, the
ultimate purchaser of the MUTT can have similar expectations to
those of a purchaser who buys an axe or an adze. See Final Scope
Ruling at 17.
Olympia insists that the ultimate purchasers of the MUTT are
not the same as those seeking to buy an axe or an adze.
According to plaintiff, because the MUTT is “generally sold in
the gardening sections of hardware and do-it-yourself (DIY)
stores[,] . . . [t]he customer that purchases a MUTT is one who
generally intends to use the MUTT for ‘light’ work and expects
the tool to perform a number of different tasks around the yard.”
Supplemental Submission at 4—5. Moreover, Olympia suggests that
“[t]he type of customer that purchases a HFHT includes
professionals that buy the tools for heavy work such as cutting
Court No. 04-00467 Page 27
down trees . . . or digging ditches . . .,” rather than someone
intending to do more moderate tasks. Id. at 5. Thus, Olympia
maintains that the MUTT is outside the scope of the HFHTs Orders
because, simply put, a “customer will not purchase a MUTT to cut
down a tree or to split wood.” Id.
Plaintiff further states that:
[A]n end user of this tool can expect that the MUTT can
be used for a variety of activities including:
scraping, digging, ice breaking, lot clearance,
trenching, shingle removal, tile removal, carpet and
floor removal, removing ice from a driveway and paint
removal. An axe or adze, however, cannot be used for
these additional tasks and an end user would not
conceive of using an axe to remov[e] shingles, remov[e]
paint, or tak[e] out linoleum.
Pl.’s Mem. at 11. Thus, Olympia’s position is that, unlike the
consumer who purchases an axe, the MUTT consumer is not buying
the tool solely for its ability to cut or chop, but rather
expects to use the tool for many purposes including scraping and
digging.
Commerce, on the other hand, found that the MUTT’s ultimate
purchasers and those who buy HFHTs “have very similar
expectations,” primarily because “the over-riding purpose of the
MUTT is to cut and chop.” Final Scope Ruling at 17. According
to Commerce, “Olympia . . . failed to provide any evidence . . .
Court No. 04-00467 Page 28
that a purchaser of the MUTT would obtain this tool with the
expectation of using it in a significantly different manner than
merchandise covered by the antidumping duty order on axes, adzes,
and similar hewing tools.” Id.
Despite its finding, Commerce concedes that a consumer’s
expectations for the compared products would not be exactly the
same. See id. The Department states that, while an axe is
limited to activities such as felling trees, chopping and
splitting wood, and hewing timber, and an adze is used
principally for rough-shaping wood, the MUTT is capable of
performing a number of different functions. See id.; see also
Webster’s Third New International Dictionary 153, 32 (1981).
Irrespective of this finding, Commerce returns to the line of
reasoning it adopted when analyzing the physical characteristics
of the MUTT to justify its conclusion that purchasers of the tool
can have similar expectations to axe or adze consumers.
Specifically, Commerce observes that “the scope anticipated that
there [would] be some differences between axes or adzes and other
hewing tools because it uses the word ‘similar.’” Final Scope
Ruling at 17. For Commerce, the word “similar” adequately
compensates for any potential differences between the
expectations of an axe or adze consumer and those of a MUTT
purchaser.
Court No. 04-00467 Page 29
Finally, Commerce found that Olympia failed to produce any
evidence supporting its contention that purchasers of the MUTT
tended to be “do-it-yourselfers” as distinct from professional
contractors or construction personnel. See id. According to
Commerce, “[g]iven that the vast majority of homeowners have
trees and shrubs on their property and a significant percentage
of homeowners have fireplaces, it is logical to assume that
individual homeowners purchase a large percentage of the axes and
adzes sold in hardware and DIY stores.” Id.
The court finds that Commerce reasonably concluded that a
person buying the MUTT has, at least, some of the expectations of
the purchaser of an axe or adze. Indeed, where a product has a
variety of uses, and thus a consumer may expect the product to
perform an array of tasks, this Court has stated that:
The applicable regulation . . . does not provide that
the products being compared must have identical uses.
Rather, the [Department] is directed to evaluate the
Diversified Products criteria and determine whether a
product is sufficiently similar as merchandise
unambiguously within the scope of an order as to
conclude the two are merchandise of the same class or
kind.
Wirth Ltd. v. United States, 22 CIT 285, 300, 5 F. Supp. 2d 968,
981 (1998) (sustaining Commerce’s conclusion that purchasers of
profile slab have similar expectations to purchasers of carbon
steel plate). In other words, if two products can be used in at
Court No. 04-00467 Page 30
least some of their applications for similar, if not identical
purposes, Commerce may conclude that purchasers of the products
have similar expectations.
First, it is worth noting that while plaintiff claims that
the MUTT cannot be used to fell trees or chop or split wood,
neither can an adze. Nor can an axe be employed to rough-shape
wood in the same manner as an adze. In addition, while an adze
cannot effectively be employed by swinging it across the body at
a standing object, an axe can. Here, it is undisputed that a
purchaser of a MUTT may have similar expectations as a purchaser
of an axe or adze. For instance, a purchaser might expect to use
the MUTT with its steel head and sharpened blade to cut or chop
tree roots or small branches, or for lot clearance. See Pl.’s
App. at App. 3. Indeed, plaintiff’s brochure states the “best”
MUTT blade a purchaser might buy if he or she intends to use the
MUTT for chopping or cutting. See Pl.’s App. at App. 3
(“Original MUTT. Best for chopping and cutting with its 4"
blade.). Because a consumer might reasonably purchase an axe or
adze to accomplish the same or similar cutting and chopping
tasks, the court finds reasonable Commerce’s conclusion that the
ultimate expectations of both kinds of purchasers are similar
enough to support a reading of the scope language to include the
MUTT.
Court No. 04-00467 Page 31
3. The Ultimate Use of the Product
Third among the Diversified Products criteria is the
ultimate use of the product. Here, Commerce claims that the MUTT
is ultimately used to hew, cut, or chop, while Olympia insists
that the MUTT is a scraper that is used for light work, such as
landscaping and ice removal.
Olympia first takes issue with Commerce’s finding that the
MUTT is primarily used to cut or chop. For Olympia, in order for
Commerce to find that the MUTT is subject to the axes/adzes
order, it must be established that the primary use of the tool is
the same as an axe, adze, or similar hewing tool. In plaintiff’s
view, “[i]t is clear that the class referred to in the HFHT Order
relating to axes, adzes and other hewing tools has the major
function of cutting or chopping. This is not the overriding
function of the MUTT.” Pl.’s Mem. at 13. In support of this
assertion, Olympia states that:
The MUTT is clearly a scraper whose primary function is
to serve as a tool that facilitates the separation of
materials attached during construction such as shingles
from a roof, tile from a floor, paint from a wall and
other similar applications such as removing ice from a
driveway. None of the major functions of the MUTT
serves to cut or chop, but merely serves as a byproduct
of the tool since it has a sharp blade. The MUTT comes
with a wooden handle as described before whose length
would make it extremely cumbersome to swing as an axe
might. . . .
Court No. 04-00467 Page 32
Thus, the evidence on the record clearly points to the
conclusion that the ultimate use of Olympia’s MUTT is
to scrape, not to “hew” as alleged by Commerce.
Id.Commerce recognized that the MUTT can be used as a scraper,
but nonetheless found that even the act of scraping shingles off
of a roof required the user to exert force similar to that
required to operate a hewing tool. Commerce concluded that:
Based on our review of the record, it is clear that the
ultimate use of Olympia’s MUTT is essentially to cut
and chop. The scope of one of the classes or kinds of
merchandise subject to the HFHTs Orders is axes, adzes,
and similar hewing tools. . . . [T]he definition of
the term “hew” is “to cut with blows of a heavy cutting
instrument.” See Merriam-Webster’s Online Dictionary
at www.webster.com. This definition demonstrates that
a hewing tool is one that is relatively heavy and is
designed to employ the weight of the tool to assist in
cutting or chopping. Olympia’s brochure identifies the
first two uses for MUTT as “cutting” and “chopping.”
Moreover, all of the other uses identified in the
brochure, such as scraping, ice breaking, shingle
removal, carpet removal, etc., involve applying force
to an object through the use of a sharpened blade.
Thus, both tools employ the weight of the tool to cut
or chop. Therefore, based upon the record evidence, we
find that the MUTT is used for cutting tasks that are
very similar to the cutting tasks for which axes and
adzes are used.
Final Scope Ruling at 18 (emphasis in original).
Commerce also seeks to refute what it perceives to be
Olympia’s claim that the MUTT may only be included within the
Court No. 04-00467 Page 33
ambit of the axes/adzes order if the sole use of the tool was to
cut or chop. See Def.’s Resp. at 13. As with the expectations
of the ultimate purchaser, Commerce argues that it is not
required to find that the MUTT may be used only to cut and chop
for it to be included within the scope of the axes/adzes order.
Rather, Commerce maintains that it need only demonstrate that
some of the uses of the MUTT are like those of an axe or adze.
See id. For Commerce, “Olympia repeatedly described the uses of
scrapers to include cutting and chopping, which are akin to the
uses of ‘similar hewing tools.’” Id.; see Scope Ruling Request
at 2 (“[The MUTT] can be used for cutting roots . . . and even
for chipping ice on driveways or sidewalks.”); Supplemental
Submission at 4 (“[T]he tool is intended for multiple uses
including cutting [and] chopping . . . .”). Therefore, Commerce
insists that its finding that the MUTT is a hewing tool similar
to an axe or adze is reasonable.
The court finds unconvincing plaintiff’s argument that the
ultimate use criterion of the Diversified Products factors
requires the compared products to have identical uses in order
for the subject product to be within the scope of an order. This
Court has previously held that it is not necessary for Commerce
to find that a product is exclusively used for the same purpose
as another product subject to an antidumping duty order to
Court No. 04-00467 Page 34
justify including that product within the scope of the order.
See Novosteel SA v. United States, 25 CIT 2, 18, 128 F. Supp. 2d
720, 735 (2001) (“[T]wo products need not be an identical
replacement for one another to have similar ultimate uses. . . .
The ultimate use criterion does not require a complete overlap of
uses to be supported by substantial evidence.”). Indeed, the
Novosteel Court sustained Commerce’s finding that “several of the
ultimate uses [for profile slabs] are the same as those for other
products within the scope of the . . . orders.” See id., 128 F.
Supp. 2d at 734 (internal citations and quotation marks omitted).
Applying that standard to the facts presented here, the
court concludes that Commerce reasonably found that the MUTT has
similar ultimate uses as axes and adzes. The MUTT, like the
other tools, has a head of steel and a sharpened blade, and is
used to cut and chop. According to Olympia’s own sales brochure,
the first two functions listed for the MUTT are cutting and
chopping. See Pl.’s App. at App. 3. The first page of the
brochure provides the following:
The MUTT is a multiple use tough tool. One of the most
versatile tools in the market and the leader in its
class.
In the short time since Village Blacksmith introduced
the MUTT, more and more uses for this unique tool have
been discovered . . .
• Cutting
Court No. 04-00467 Page 35
• Chopping
• Scraping
• Digging
• Ice Breaking
• Lot Clearance
• Root Removal
• Sod Cutting
• Trenching
• Shingle Removal
• Tile Removal
• Carpet & Floor Removal
• Paint Removal
• Construction Clean-up
• And Many More Applications
Id. The brochure description is surrounded by pictures of the
MUTT being used to complete various tasks, including chopping
tree roots. Id. Thus, as it is clear that the MUTT has ultimate
uses that involve cutting and chopping, Commerce was reasonable
in concluding that the MUTT has similar ultimate uses to axes and
adzes.
4. Channels of Trade in which the Product is Sold
The penultimate factor the Department considers when
conducting a formal scope inquiry is whether the product is sold
in the same channels of trade as other products that are
unequivocally included within the scope of the order.
Court No. 04-00467 Page 36
In the Final Scope Ruling, the Department found unavailing
plaintiff’s argument that the MUTT was not sold in the same
channels of trade as axes and adzes because it was sold in the
gardening department of hardware stores. See Final Scope Ruling
at 19. Commerce observed that:
There are many types of tools subject to the HFHTs
Orders that are normally sold in the garden section of
hardware and [do it yourself] stores. Picks, mattocks,
and axes are frequently considered agricultural tools
and, for this reason, are more likely to be found in
the garden section of a retail store rather than a tool
section.
Id. (emphasis in original).
Aside from insisting that its product is sold in a different
part of hardware stores from axes and adzes, plaintiff does not
vigorously dispute this point. See Pl.’s Mem. at 15. Indeed,
Olympia concedes that “the MUTT and subject HFHTs are sold in the
same channel[s] of trade.” Id. (internal quotation marks and
footnote omitted); see also Supplemental Submission at 5.
Thus, as plaintiff concedes that this factor does not assist
its case, the court finds that this criterion adds to the
reasonableness of Commerce’s interpretation of the HFHTs Orders’
scope language to encompass the MUTT.
Court No. 04-00467 Page 37
5. Manner in which the Product is Advertised and
Displayed
The final criterion Commerce applies in determining whether
a product falls within the scope of an antidumping order is
whether the product is advertised and displayed in the same
manner as products already deemed to be subject to the order.
Plaintiff again reasserts its claim that the MUTT is not
advertised and displayed in the same manner as other heavy forged
hand tools because the MUTT is a light-work tool that is sold in
the garden section of retail stores. See Final Scope Ruling at
19. Olympia also states that it advertises the MUTT to retailers
using a separate catalog from that used to sell its other
products. See Supplemental Submission at 3. In that brochure,
however, Olympia states that the MUTT “can be cross-merchandised
in many departments for its multiple uses.” Pl.’s App. at App.
3.
The court finds plaintiff’s argument regarding this factor
to be without merit. The record indicates that both the MUTT and
other HFHTs are advertised and displayed in the garden section of
hardware stores. In addition, plaintiff’s own brochure
emphasizes that, because of its many uses, the MUTT can be sold
in a variety of different retail departments. Thus, the manner
Court No. 04-00467 Page 38
in which the MUTT is advertised and displayed is not materially
different from that of tools unequivocally within the scope of
the axes/adzes order.
CONCLUSION
The court finds that Commerce properly sought guidance from
the Diversified Products criteria to aid its interpretation of
the language of the HFHTs order. In addition, because the MUTT
is a forged, steel, durable tool with a sharpened blade that can
be used for cutting and chopping, the court finds that Commerce
reasonably found that the words of the order included the MUTT as
a “similar hewing tool.” See Duferco, 296 F.3d at 1089. Thus,
the court sustains Commerce’s Final Scope Ruling and dismisses
this case. Judgment shall be entered accordingly.
/s/Richard K. Eaton
Richard K. Eaton
Dated: July 24, 2006
New York, New York