Fedmet Resources Corp. v. United States ( 2013 )

Slip Op. 13- 68
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Nicholas Tsoucalas, Senior Judge
___________________________________
FEDMET RESOURCES CORPORATION, :
:
Plaintiff, :
:
v. : Court No.: 12-00215
:
UNITED STATES, :
:
Defendant, :
:
and :
:
ANH REFRACTORIES COMPANY, RESCO :
PRODUCTS, INC., and MAGNESITA :
REFRACTORIES COMPANY, :
:
Defendants. :
:
OPINION
Held: Plaintiff Fedmet Resources Corporation’s motion for judgment
on the agency record is denied.
Dated: May 30, 2013
Morris, Manning & Martin LLP, (Jeffrey O. Frank, Brady W.
Mills, Donald B. Cameron, Julie C. Mendoza, Mary S. Hodgins, and R.
Will Planert) for Fedmet Resources Corporation, Plaintiff.
Stuart F. Delery, Principal Deputy Assistant Attorney General;
Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Antonia R. Soares); Office of Chief
Counsel for Import Administration, United States Department of
Commerce, Devin S. Sikes, Of Counsel, for the United States,
Defendant.
Jochum, Shore & Trossevin, PC, (Marguerite Ellen Trossevin,
Andrew M. Shore, James J. Jochum, and Reza Karamloo) for ANH
Refractories Company, Defendant-Intervenor.
Doyle, Barlow & Mazard PLLC, (Camelia C. Mazard) for Resco
Products, Inc., and Magnesita Refractories Company, Defendant-
Intervenors.
Case No. 12-00215 Page 2
TSOUCALAS, Senior Judge: Before the court is Fedmet Resources
Corporation’s (“Fedmet”) USCIT Rule 56.2 motion for judgment on the
agency record appealing the United States Department of Commerce’s
(“Commerce”) final scope ruling regarding antidumping and
countervailing duty orders on magnesia carbon bricks (“MCBs”).
Pl.’s Mot. J. Agency R. at 1–2 (“Pl.’s Br.”); see Certain Magnesia
Carbon Bricks from the People’s Republic of China and Mexico: Final
Scope Ruling — Fedmet Resources Corporation, Case Nos. A-201-837,
A-570-954 and C-570-955 (July 3, 2012), Pub. R. 2d 74 at 1–2
(“Final Scope Ruling”).1 Fedmet imports “Bastion”-trademarked
magnesia alumina carbon bricks (“MACBs”), which contain alumina in
addition to magnesia and carbon. Pl.’s Br. at 6. In its Final
Scope Ruling, Commerce determined that Fedmet’s Bastion bricks are
within the scope of the antidumping and countervailing duty orders.
Final Scope Ruling at 1–2. Fedmet argues that Commerce’s ruling is
not based on substantial evidence or otherwise in accordance with
the law because MACBs have distinct physical and commercial
characteristics from in-scope MCBs, and because the International
Trade Commission (“ITC”) did not consider MACBs in its injury
1
Commerce implemented its new electronic filing system during
the course of the proceedings below, causing the administrative
record to be subdivided into four parts. Unless otherwise noted,
all documents in the first, second, third, and fourth divisions of
the record hereinafter will be designated “R.1st,” “R.2d,” “R.3d,”
and “R.4th,” respectively. The first and second portions of the
record contain public documents, while the third and fourth
portions contain confidential documents.
Case No. 12-00215 Page 3
determination. Pl.’s Br. at 9–11; see Certain Magnesia Carbon
Bricks from China and Mexico (Final), USITC Pub. 4182, Inv. Nos.
701-TA-468 and 731-TA-1166–1167 at 3–6 (Sept. 2010) (“ITC Final
Determination”). Commerce and defendant-intervenors Resco
Products, Inc. (“Resco”), ANH Refractories Company, and Magnesita
Refractories Company (collectively, “defendant-intervenors”) oppose
the motion. See Commerce’s Resp. Pl.’s Br. at 7–8 (“Commerce
Resp.”); ANH’s Resp. Pl.’s Br. at 2–5 (“ANH Resp.”); Magnesita’s &
Resco’s Resp. Pl.’s Br. at 4–5 (“M&R Resp.”).
BACKGROUND
In September 2010, Commerce published antidumping duty orders
on MCBs from Mexico and the People’s Republic of China (“PRC”), and
a separate countervailing duty order on MCBs from the PRC. Certain
MCBs From Mexico and the PRC: Antidumping Duty Orders, 75 Fed. Reg.
57,257, at 57,257 (Sept. 20, 2010) (“AD Orders”); Certain MCBs from
the PRC: Countervailing Duty Order, 75 Fed. Reg. 57,442, at 57,442
(Sept. 21, 2010) (“CVD Order,” and collectively, “the Orders”).
MCBs are a type of “refractory brick” necessary for certain
applications in the steelmaking industry. R.3d 3 Ex. 1 at 6–7.
Steelmakers use refractory bricks as lining for the inside of
ladles that transport and pour molten steel and as lining for the
inside of metallurgy furnaces. Id. & Ex. 2 at 5–7. Refractory
bricks undergo repeated exposure to extreme temperatures and
caustic substances in these roles, meaning each brick has a limited
Case No. 12-00215 Page 4
useful life. Id. Ex. 2 at 5–6. Bricks used in certain locations
— particularly at the “slag line and at the top of the steel
melt[,] where active chemical processes are taking place and
impurities and waste tend to aggregate” — experience more wear than
bricks in other locations. Id. at 5. Consequently, producers
offer a wide range of refractory bricks with finely tuned
chemistries for use in different parts of the ladle or furnace.
Id. at 5–6. Steelmakers arrange these specialized bricks to
achieve uniform deterioration and to lower costs, although the
exact arrangement “may be quite different from shop to shop.” Id.at 5–7.
MCBs are a particularly strong variety of refractory brick
composed of magnesia (MgO) and added carbon. Id. Ex. 1 at 10–12 &
Ex. 2 at 5–7. MCBs exhibit high thermal conductivity, low
porosity, and high corrosion resistance. R.2d 18 at 5 (citing R.3d
3 Ex. 1 at 10–11). Consequently, MCBs are used where corrosion is
most severe — the slag line, the lower sidewall, the upper
sidewall, the roofs of ladles, and the wall lining of high-
temperature furnaces. R.3d 3 Ex. 1 at 6–7.
The scope of the Orders covers “certain chemically-bonded . .
. magnesia carbon bricks with a magnesia component of at least 70
percent magnesia . . . by weight, . . . with carbon levels ranging
from trace amounts to 30 percent by weight, regardless of
enhancements . . . and regardless of whether or not antioxidants
Case No. 12-00215 Page 5
are present.” Pl.’s Br. at 6 (quoting AD Orders, 75 Fed. Reg. at
57,257; CVD Order, 75 Fed. Reg. at 57,443).
On May 3, 2011, Fedmet filed a scope ruling request to
determine whether its Bastion MACB product is covered under the
Orders. Certain Magnesia Carbon Bricks from the PRC and Mexico:
Preliminary Scope Ruling — Fedmet Resources Corporation, Case Nos.
A-201-837, A-570-954, and C-570-955 at 1 (Mar. 30, 2012)
(“Preliminary Scope Ruling”). Fedmet’s Bastion bricks contain
70–90% magnesia and 3–15% carbon, levels well within the scope’s
technical parameters. Pl.’s Br. at 6–7. However, Fedmet argues
that the 8–15% alumina (Al2O3) content of its Bastion bricks
distinguish them from in-scope MCBs. Id. at 3. Specifically, the
alumina reacts with magnesia in the brick at steelmaking
temperatures to form a mineral called spinel. Id. “The spinel
improves the performance of the brick in certain applications by
promoting permanent expansion of the brick when it is heated, which
hinders the formation of cracks, and maintains that expansion when
the ladle cools between uses.” Id.
All parties agree there is no standard chemical definition for
bricks marketed as MACBs. Final Scope Ruling at 9; see Pl.’s Reply
at 6. Evidence on the record demonstrates that the term “MACB” can
refer to bricks with more than 70% magnesia (“low-alumina bricks”),
as well as bricks with less than 70% magnesia (“high-alumina
Case No. 12-00215 Page 6
bricks”).2 Preliminary Scope Ruling Ex. 2 at 3 (online description
of products marketed as MACBs with less than 70% magnesia content);
R.2d 18 Ex.1 at 3 (in reference to MACBs, “carbon-bonded bricks
with 50–90% [magnesia] or 40–50% [alumina] are used in the Asian
region”); R.4th 2 at 3–10 (discussing industry naming conventions
indicating that any brick with a majority magnesia content and
added alumina and carbon can be called an MACB). Fedmet stated at
oral argument that the minimum level of alumina required to form
spinel is about 5%, Hr’g Tr. at 17, Fedmet Res. Corp. v. United
States, No. 12-00215 (Ct. Int’l Trade Mar. 26, 2013), but there is
little evidence in the administrative record to support this claim.
See Preliminary Scope Ruling Ex. 1 at 100–01 (showing that bricks
with 4% added alumina exhibit characteristics similar to bricks
with 5–7% added alumina, but noting that bricks with 4% alumina
“show[] less expansion[,] which may not be optimal” for preventing
slag penetration).
In its preliminary determination, Commerce ruled that Fedmet’s
Bastion low-alumina MACB is within the scope of the Orders.
Preliminary Scope Ruling at 1–2. Commerce first found that
“[b]ased on the magnesia and carbon content alone, it appears that
2
As the amount of magnesia in an MACB increases, the amount
of room left for added alumina decreases. Hence, a low-alumina
brick with 70% magnesia cannot contain more than 30% alumina,
whereas a high-alumina brick with less than 70% magnesia can have
up to nearly 50% alumina. Bricks with more alumina than magnesia
are called alumina magnesia carbon bricks (“AMCBs”). R.4th 2 at 3.
Case No. 12-00215 Page 7
Fedmet’s Bastion[] [MACBs] fall within the scope of the Orders”
because they contain more than 70% magnesia and have some added
carbon. Id. at 26. Nevertheless, Commerce found “it necessary to
look beyond the language of the scope of the Orders because of the
potential ambiguity regarding whether the plain language of the
scope covers MCBs with alumina.” Id. Commerce then determined
that conflicting language in the petition and in the investigations
before it and the ITC “prevent[ed] a definitive conclusion on these
sources alone.” Id. at 26–27. Upon consideration of the physical
characteristics, purchaser expectations, end use, channels of
trade, price, and manner of advertising, however, Commerce
concluded that Fedmet’s Bastion bricks did fall within the scope of
the Orders. Id. at 27–32. Commerce later affirmed each of these
determinations in its Final Scope Ruling. Final Scope Ruling at
1–12.
Fedmet alleges that the Final Scope Ruling is unsupported by
substantial evidence and contrary to law because the steel industry
considers MACBs to be distinct products from MCBs. Specifically,
Fedmet argues: (1) language in the petition, questionnaire
responses, and investigations indicates the scope should be
interpreted to exclude MACBs; (2) MACBs are distinguishable from
in-scope MCBs on the basis of their distinct physical properties;
and (3) Commerce acted contrary to law by interpreting the scope as
covering MACBs even though the ITC excluded them from its injury
Case No. 12-00215 Page 8
determination. Pl.’s Br. at 12–38.
JURISDICTION
The court has jurisdiction over this matter pursuant to
section 516(a)(2)(B)(vi) of the Tariff Act of 1930, as amended, 19
U.S.C. § 1516a(a)(2)(B)(vi) (2006).3
STANDARD OF REVIEW
The court must uphold Commerce’s scope determination unless it
is “unsupported by substantial evidence on the record, or not
otherwise 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)), “taking into account the entire record, including
whatever fairly detracts from the substantiality of the evidence.”
Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir.
1984).
“[T]he plain language of the . . . order is paramount” in
determining whether particular products are included in the scope.
King Supply Co. v. United States, 674 F.3d 1343, 1345 (Fed. Cir.
2012); see Walgreen Co. v. United States, 620 F.3d 1350, 1354 (Fed.
Cir. 2010). Nevertheless, antidumping and countervailing duty
3
All further citations to the Tariff Act of 1930 are to the
relevant provisions of Title 19 of the United States Code, 2006
edition, and all applicable supplements thereto.
Case No. 12-00215 Page 9
orders “sometimes employ general language,” which “can render the
. . . scope ambiguous.” See Mid Continent Nail Corp. v. United
States, 35 CIT __, __, 770 F. Supp. 2d 1372, 1378 (2011); 19 C.F.R.
§ 351.225(a) (2013). A scope ruling “is a highly fact-intensive
and case-specific determination,” King Supply Co., 674 F.3d at
1345, that is “particularly within the expertise of [Commerce].”
Sandvik Steel Co. v. United States, 164 F.3d 596, 600 (Fed. Cir.
1998). Thus, challenging a scope ruling is “a course with a high
barrier to reversal.” Nippon Steel Corp. v. United States, 458
F.3d 1345, 1352 (Fed. Cir. 2006) (quoting Mitsubishi Heavy Indus.,
Ltd. v. United States, 275 F.3d 1056, 1060 (Fed. Cir. 2001))
(internal quotation marks omitted).
ANALYSIS
If a scope contains language “that is subject to
interpretation,” Commerce will resolve the ambiguity using the
interpretive tools contained in 19 C.F.R. § 351.225. Duferco
Steel, Inc. v. United States, 296 F.3d 1087, 1096–97 (Fed. Cir.
2007). Fedmet concedes “the scope language alone is not
dispositive of the treatment of [MACBs] under the [O]rders.” Pl.’s
Reply at 2–3; see Def.’s Br. at 13–14.
Under 19 C.F.R. § 351.225(k)(1), Commerce must first consider
“[t]he descriptions of the merchandise contained in the petition,
the initial investigation, and the determinations of [Commerce] .
. . and the [ITC].” Id. If those “criteria are not dispositive,”
Case No. 12-00215 Page 10
Commerce must then consider the factors listed in paragraph (k)(2):
“(i) [t]he physical characteristics of the product; (ii) [t]he
expectations of the ultimate purchasers; (iii) [t]he ultimate use
of the product; (iv) [t]he channels of trade in which the product
is sold; and (v) [t]he manner in which the product is advertised
and displayed.” Id. § 351.225(k)(2).
I. Commerce’s 19 C.F.R. § 351.225(k)(1) Analysis
Commerce determined that “at no point in either the petition,
the . . . pre-initiation stage, or the [ITC’s determination] did
[Resco] identify the chemical composition and technical
specifications of each type of refractory brick, or expressly state
that [MACBs] with a chemical composition like [Fedmet’s Bastion
brick] fall outside the scope.” Final Scope Ruling at 5. In other
words, Commerce found each reference to “MACBs” in the (k)(1)
evidence to be ambiguous with respect to whether it actually
identified low-alumina bricks like the Bastion brick. In light of
this ambiguity, Commerce determined that the (k)(1) evidence was
inconclusive and further analysis under the (k)(2) factors was
necessary to determine to whether Fedmet’s Bastion MACBs were
within the scope. Id.; Preliminary Scope Ruling at 26–27.
Fedmet insists that Commerce’s analysis is not supported by
substantial evidence because MACBs are simply understood to be
distinct from MCBs. See Pl.’s Br. at 13–24. Claiming that “MCBs
do not contain added alumina,” Fedmet argues that each reference to
Case No. 12-00215 Page 11
MACBs in the (k)(1) evidence demonstrates that MACBs like its
Bastion brick were never intended to be included in the scope. Id.
at 24. For example, Fedmet notes that Resco named “magnesite,
fired bauxite, magnesia dolomite and [MACBs]” as products that “are
not generally substitutable [for in-scope MCBs], in a technical
sense, due to varying chemical and physical properties and wear
characteristics.” R.3d 3 Ex. 1 at 10. Based on this statement,
Fedmet concludes that Resco “express[ly]” excluded low-alumina
MACBs like Fedmet’s Bastion brick from the scope. Pl.’s Br. at
13–14. Fedmet also identifies a questionnaire response where Resco
stated that “[t]he scope of our petition focuses only on MCB” and
that “[t]hese other products [including MACBs] do not provide the
same performance where MCB are used in steelmaking and steel
handling applications.” R.3d 3 Ex. 2 at 4. Fedmet argues this
response “can only be read as confirmation that the scope language
defining MCBs was adequate to clearly exclude [MACBs].” Pl.’s Br.
at 16.
Fedmet’s approach obscures two critical facts supported by the
record that instill the term “MACB” with considerable ambiguity.
First, advertisements and other record evidence indicate that the
term “MACB” can refer to low-alumina bricks as well as high-alumina
bricks. Preliminary Scope Ruling, at Ex. 2; R.2d 18 Ex. 1 at 3;
R.4th 2 at 3–10. Second, record evidence of industry naming
conventions reasonably suggests that so long as the magnesia
Case No. 12-00215 Page 12
content of a brick with added alumina remains above 70%, it can be
called either an MCB or an MACB. R.2d 19 at Ex. 2 (advertisements
describing the “Vesuvius”-trademarked product as an MCB even though
it contains levels of added alumina comparable to the Bastion MACB
product); Preliminary Scope Ruling at Ex. 2 (several online
marketing sources describing products as MCBs even though they
contain added alumina). Consequently, without further
specification, “MACB” may refer to only high-alumina MACBs in some
contexts, to high- and low-alumina MACBs in others, or to MCBs with
added alumina in others still. R.2d 19 at Ex. 2; Preliminary Scope
Ruling at Ex. 2. Commerce recognized this ambiguity throughout its
analysis, id. at 19, 26–27; Final Scope Ruling at 5, and reasonably
concluded it could not determine whether low-alumina MACBs like
Fedmet’s Bastion bricks were outside the scope based on the (k)(1)
evidence alone. See ArcelorMittal Stainless Belg. N.V. v. United
States, 694 F.3d 82, 88 (Fed. Cir. 2012) (“[A]ntidumping orders
should not be interpreted in a vacuum devoid of any consideration
of the way the language of the order is used in the relevant
industry.”).
Because Resco’s use of the term “MACB” does not differentiate
between high-alumina and low-alumina MACBs, the petition and
questionnaire response language Fedmet identifies is plainly
ambiguous. See Preliminary Scope Ruling at 26–27. MACBs
“generally” are not substitutable for MCBs, but record evidence
Case No. 12-00215 Page 13
shows that low-alumina MACBs specifically are often substituted for
MCBs due to their similar or even enhanced performance in MCB
applications. Id. at Exs. 1 & 2; R.2d 19 at 8–13 & Exs. 2, 5. In
a later response, Resco went on to describe how products it
excluded by name from the proposed scope always fall outside of the
scope’s plain language, while making no similar claim elsewhere
about MACBs. See R.3d 3 Ex. 3 at 1. As Commerce reasonably
determined, without further chemical specification, these
references to MACBs indicate that Resco may have intended to
exclude only some MACBs, namely, high-alumina MACBs that can never
meet the scope’s plain language. See Preliminary Scope Ruling at
26–27.
Fedmet’s remaining arguments are similarly unpersuasive.
Fedmet avers that Commerce failed “to meaningfully address the
repeated, express statements by Resco that it did not intend to
cover [MACBs].” Pl.’s Br. at 18. Fedmet argues further that
Commerce “chose[] to accept” Resco’s explicit statements excluding
MACBs from the scope, and that Commerce cannot now change its
position. Pl.’s Br. at 20. Fedmet also insists that Commerce and
Resco never offered a “plausible alternative interpretation” of the
references to MACBs in the petition and the questionnaire
responses. Pl.’s Br. at 22. In fact, Resco never expressly stated
that MACBs with in-scope quantities of magnesia and carbon should
be excluded from the Orders. See R.3d 3 Exs. 1–3; Preliminary
Case No. 12-00215 Page 14
Scope Ruling at 26–27; Pl.’s Br. at 29 (quoting testimony before
the ITC where counsel for Resco listed MACBs alongside other
excluded bricks, but did not distinguish between high- and low-
alumina MACBs). Furthermore, Fedmet’s refusal to consider the
difference between high- and low-alumina varieties of MACB does not
eliminate the inherent linguistic ambiguity supporting multiple
reasonable interpretations of the (k)(1) evidence. See Preliminary
Scope Ruling at 19, 26–27; Final Scope Ruling at 5.
As every piece of (k)(1) evidence is ambiguous as to whether
it is referring to MCBs with added alumina or to all bricks with
more than 50% magnesia, some carbon, and some alumina, Commerce’s
determination that the (k)(1) factors were not dispositive was
reasonable. See Preliminary Scope Ruling at 4–27; Final Scope
Ruling at 3–5.
II. Commerce’s 19 C.F.R. § 351.225(k)(2) Analysis
Fedmet contends that “even if the [c]ourt were to find that
Commerce was lawfully permitted to consider the factors in 19
C.F.R. § 351.225(k)(2), Commerce’s findings under those factors are
also unsupported by substantial evidence.” Pl.’s Br. at 11.
Fedmet argues that Commerce made four general errors in finding
that the physical characteristics of its Bastion brick are similar
to those of in-scope MCBs.4 Pl.’s Br. at 33–38.
4
Fedmet includes two additional paragraph-long sections
titled “Channels of Trade and Price and Manner of Sale and
Advertising” and “Expectations of the Ultimate Purchaser and
Case No. 12-00215 Page 15
First, Fedmet claims “Commerce’s finding is contrary to the
ITC’s final injury determination,” wherein “the [ITC] found that
‘other refractory bricks, such as fired magnesite, fired bauxite,
magnesia dolomite, and [MACBs] . . . do not have the same physical
characteristics of MCB, are easily differentiated by price, and
their uses are not perceived by the steel producers as
substitutable.’” Pl.’s Br. at 33 (quoting ITC Final Determination,
at I-8). Fedmet again fails to acknowledge the difference between
high-alumina and low-alumina MACBs. Therefore, Fedmet has not
demonstrated how this reference to MACBs definitively identifies
all MACBs instead of only those high-alumina MACBs that are not
interchangeable with MCBs. See id.Second, Fedmet argues that Commerce “ignore[d] the extensive
and detailed evidence” demonstrating that Bastion MACBs are
distinct from in-scope MCBs due to their spinel-producing alumina
content “in favor of a single article that Commerce found on the
Ultimate Use of the Product.” Pl.’s Br. at 37–38. In those
sections, Fedmet argues that Commerce improperly based its finding
that “MCBs and [MACBs] are ‘interchangable’” on “certain product
advertisements it pulled off the internet . . . by entities who
were not parties to Commerce’s scope inquiry,” Pl.’s Br. at 37
(quoting Final Scope Ruling at 10), and “ignore[d] detailed
evidence provided by Fedmet on the different specific uses of
[MACBs].” Pl.’s Br. at 38. It is not the court’s role to reweigh
evidence before Commerce, see Laminated Woven Sacks Comm. v. United
States, 716 F. Supp. 2d 1316, 1328 (2010) (citing Burlington Truck
Lines Inc. v. United States, 371 U.S. 156, 168 (1962)), and there
is substantial additional evidence on the record indicating that
low-alumina MACBs like Fedmet’s Bastion brick are in fact
interchangeable with MCBs. See Preliminary Determination Exs. 1 &
2; ITC Final Determination at I-9; R.2d 19 at Exs. 3 & 5.
Case No. 12-00215 Page 16
internet” in a publication called Millennium Steel. Pl.’s Br. at
33–34. Fedmet challenges “the bona fides of this publication” and
“the credentials of the authors of this study,” while
simultaneously insisting that the Millennium study supports its own
conclusion that MACBs are distinguishable from MCBs. Pl.’s Br. at
34–35.
Fedmet has not demonstrated that Commerce’s reliance on the
Millennium study was unreasonable. The court’s role is not to
reweigh evidence, see Laminated Woven Sacks, 716 F. Supp. 2d at1328 (citing Burlington Truck Lines, 371 U.S. at 168), and it will
not accept Fedmet’s invitation to do so here, especially in the
complete absence of evidence questioning the study’s credibility.
In any event, Commerce used the Millennium study to “confirm[] that
MCBs with added alumina are widely used” in the same applications
and have similar physical properties as in-scope MCBs. Preliminary
Scope Ruling at 28 & Ex. 1 (internal quotation marks omitted). The
study concludes that some MACBs may offer better performance than
non-alumina MCBs in areas where MCBs are generally used. Id. Ex.
1 at 101–02. Nevertheless, according to the Millennium study,
“[e]xcessive expansion” caused by spinel formation in high-alumina
MACBs “may lead to development of stresses which causes structural
spalling.” See id. at 100–02. Consequently, the Millennium study
is consistent with other record evidence demonstrating a physical
distinction between high-alumina and low-alumina MACBs — that
Case No. 12-00215 Page 17
spinel formation in low-alumina MACBs provides the same physical
properties that set in-scope MCBs apart from other refractory
bricks, whereas spinel formation in high-alumina MACBs causes those
bricks to behave like other out-of-scope refractory products. See
Preliminary Scope Ruling at 28–29.
Third, Fedmet contends that Commerce improperly “dismissed the
information” contained in the Pocket Manual on the basis that it
contains ambiguous language as to the chemical content of MACBs.
Pl.’s Br. at 36. Appearing directly below a table titled
“Classification of the [AMCBs] according to ISO/DIS 10081-4,” the
Pocket Manual notes: “Regarding the magnesia side of the variation
range of MgO and Al2O3 at the moment carbon-bonded bricks with
50–90% MgO or 40–50% Al2O3 are used in the Asian region. These
bricks are designated as [MACBs].” R.2d 18 Ex. 1 at 108. The
remainder of the article makes conclusions regarding the difference
between AMCBs and MCBs, without further specifying the nature of
MACBs. Id. at 108–11. Commerce argues that it “reasonably found
the reference to MACBs in the Pocket Manual ambiguous as to the
chemical composition of [MACBs] because it is unclear whether the
focus of the paragraph is MACBs or [AMCBs], which contain a higher
alumina content than [MACBs],” and is unclear as to whether that
“standard” applies outside of Asia. Def.’s Resp. at 33.
Extending to Commerce the appropriate deference in analyzing
the record before it, King Supply Co., 674 F.3d at 1348, Commerce’s
Case No. 12-00215 Page 18
treatment of this passage as ambiguous was reasonable. In context,
the Pocket Manual can reasonably be considered ambiguous as to
which bricks “are designated as [MACBs],” and by whom. See R.2d 18
Ex. 1 at 107–11. For example, the quote does not illuminate
whether a brick with 91% magnesia, 8% alumina, and 1% carbon can be
considered an MACB, or whether it would be called something else
outside of Asia. See id. at 108. Furthermore, even if Commerce
determined MACBs can contain “up to 50%” alumina as Fedmet insists
it should have, the Pocket Manual would not undermine the Final
Determination. The Pocket Manual simply does not identify any
physical characteristics or uses that distinguish low-alumina MACBs
like Fedmet’s Bastion bricks from MCBs. See id. at 107–11.
Moreover, several pieces of record evidence otherwise support
Commerce’s finding that there is substantial physical and
functional overlap between low-alumina MACBs like Fedmet’s Bastion
brick and in-scope MCBs. See Preliminary Determination Exs. 1 & 2;
ITC Final Determination at I-9; R.2d 19 at Exs. 3 & 5.
Lastly, Fedmet argues that Commerce improperly relied on
statements in the ITCs determination indicating that carbon — not
alumina — is the most important additive in preventing slag
penetration in bricks with greater than 70% magnesia. Pl.’s Br. at
46–47. Fedmet insists that “the significance of spinel formation
is that it promotes permanent expansion of the bricks, which, in
turn, reduces slag penetration of the joints between the bricks.”
Case No. 12-00215 Page 19
Pl.’s Br. at 37. However, Fedmet does not cite any record evidence
that contravenes the ITC’s conclusion that “[t]he carbon in MCBs”
also “prevents liquid slag from penetrating and eroding bricks.”
ITC Final Determination at I-9; see Pl.’s Br. at 46–47. Further,
as the Millennium study noted, too much alumina can cause cracks
that lead to excessive slag penetration, meaning that the relevance
of Fedmet’s claims are limited by their lack of chemical
specificity. Preliminary Scope Ruling Ex. 1 at 100. Put simply,
the record shows that the low alumina content in an MACB like
Fedmet’s Bastion brick promotes the same physical characteristics
that set in-scope MCBs apart from other refractory products — slag
resistance and low porosity. Id.; ITC Final Determination at I-9;
R.2d 19 Ex. 3 at 176.
For the foregoing reasons, and on balance with Commerce’s
analysis of the remaining (k)(2) factors including the manner of
advertisement and ultimate use of low-alumina MACBs, Commerce’s
interpretation of the scope using the (k)(2) factors was
reasonable. See Preliminary Scope Ruling at 27–29; Final Scope
Ruling at 8–10.
III. ITC Injury Determination
According to Fedmet, “[t]he antidumping statute provides that
in order to impose antidumping duties on imported merchandise,
there must be affirmative determinations by both Commerce and the
ITC.” Pl.’s Br. at 30 (citing 19 U.S.C. § 1673). Consequently,
Case No. 12-00215 Page 20
“the failure of the ITC to have investigated or reached an
affirmative determination with respect to [MACBs] is itself
sufficient grounds for holding that the scope of the Orders does
not cover [MACBs].” Id. Although there is no controlling
authority explicitly supporting Fedmet’s legal position, see
Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1075 n.3
(Fed. Cir. 2001) (declining to reach the question of whether the
exclusion of a product from the ITC investigation, by itself, could
establish that the product is not covered under the scope);
Wheatland Tube Co. v. United States, 161 F.3d 1365, 1371 (Fed. Cir.
1998) (stating in dicta that scope inconsistencies between the
ITC’s investigation and Commerce’s investigation would “frustrate
the purpose of antidumping laws”), no party offers an alternative
interpretation of the Act. See Commerce Resp. at 23–26; ANH Resp.
at 26; M&R Resp. at 8–9. Commerce and defendant-intervenors argue
instead that the ITC did include an MACB in its injury
determination. Commerce Resp. at 23–26; ANH Resp. at 26; M&R Resp.
at 8–9.
Even assuming that Fedmet’s interpretation of the law is
correct, see Wheatland Tube, 161 F.3d at 1371, Commerce’s
determination was not contrary to law. Because there is
substantial evidence on the record demonstrating that low-alumina
MACBs are interchangeable with in-scope MCBs, the question of
whether or not the ITC considered an MACB is irrelevant. See
Case No. 12-00215 Page 21
Preliminary Determination Exs. 1 & 2; ITC Final Determination at I-
9; R.2d 19 at Exs. 3 & 5. Even so, the record indicates that the
ITC did include a low-alumina MACB in its injury determination.
See Final Scope Ruling at 5. Specifically, as Commerce explained
in the Final Scope Ruling, “the ITC included [Resco’s] Maxline 10
AFX trademarked product, an MCB with added alumina, in its pricing
analysis.” Id. at 5; see Pl.’s Br. at 24 (“MCBs do not contain
added alumina.”).
In its Reply brief, Fedmet argues that the Maxline 10 AFX
brick is not an MACB because the ITC record does not describe it as
containing alumina and because Resco has not provided any evidence
that the Maxline brick promotes the formation of spinel. Pl.’s
Reply at 16–18. However, Fedmet fails to address record evidence
indicating that any MCB with added alumina can be called an MACB.
See R.4th 2 at 3–10 (discussing naming conventions); Preliminary
Scope Ruling at Ex. 2; R.2d 19 at Ex. 2. In the absence of a
standard technical definition for MACBs based on spinel formation
that readily distinguishes Resco’s Maxline brick from other low-
alumina MACBs, Commerce’s determination was justified and in
accordance with the law. See R.4th 2 at 3–10; Preliminary Scope
Ruling at Ex. 2; R.2d 19 at Ex. 2.
CONCLUSION
The record demonstrates a physical distinction between low-
alumina MACBs and high-alumina MACBs, imparting an ambiguity into
Case No. 12-00215 Page 22
the phrase “MACB” in each (k)(1) source. Commerce therefore acted
reasonably in moving on to the (k)(2) factors to determine whether
Fedmet’s Bastion brick is covered under the scope of the Orders.
Although Fedmet is able to identify evidence showing that low-
alumina MACBs exhibit certain characteristics as a result of spinel
formation, it does not and cannot refute evidence demonstrating
that these characteristics are the same as those that set in-scope
MCBs apart from other refractory products, namely, slag resistance
and low porosity. As there is substantial evidence in the record
showing that low-alumina MACBs like Fedmet’s Bastion brick meet the
scope’s plain language and are interchangeable with in-scope MCBs,
Fedmet’s motion for judgment on the agency record must be denied.
Judgment will be entered accordingly.
/s/NICHOLAS TSOUCALAS
Nicholas Tsoucalas
Senior Judge
Dated: May 30, 2013
New York, New York