King Supply Co. v. United States , 2011 CIT 2 ( 2011 )

Slip Op 11 - 2
UNITED STATES COURT OF INTERNATIONAL TRADE
:
KING SUPPLY COMPANY LLC, d/b/a :
KING ARCHITECTURAL METALS, :
:
Plaintiff, :
:
v. : Before: R. Kenton Musgrave, Senior Judge
: Court No. 09-00477
UNITED STATES, :
:
Defendant, :
:
and :
:
WELDBEND CORP., TUBE FORGINGS :
OF AMERICA INC., and HACKNEY :
LADISH, INC., :
:
Defendant-Intervenors. :
:
OPINION
[Redetermination of pipe fittings from China used in structural applications as outside scope of
antidumping duty order remanded to International Trade Administration, U.S. Department of
Commerce.]
Decided: January 6, 2011
Barnes, Richardson & Colburn (Thomas V. Vakerics, Stephen W. Brophy, Cortney O'Toole
Morgan, Jeffrey S. Neeley, Matthew T. McGrath, and Michael S. Holton), for the plaintiff.
Tony West, Assistant Attorney General, Civil Division, United States Department of Justice,
Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation
Branch, Civil Division, United States Department of Justice (Michael D. Panzera); Office of the
Chief Counsel for Import Administration, United States Department of Commerce (Natasha
Robinson Coates), of counsel, for the defendant.
Mayor Brown LLP (Simeon M. Kriesberg and Jeffrey C. Lowe), for the defendant-intervenor
Weldbend Corporation.
Court No. 09-00477 Page 2
Neville Peterson LLP (Lawrence J. Bogard and Casey Kernan Richter), for the defendant-
intervenor Tube Forgings of America, Inc.
Saul Ewing, LLP (John Burt Totaro, Jr.) for the defendant-intervenor Hackney Ladish, Inc.
Musgrave, Senior Judge: Presuming familiarity with Slip Op. 10-111 (Sep. 30, 2010)
(“Opinion”), remanding to the International Trade Administration, U.S. Department of Commerce
(“Commerce”) the administrative ruling on the scope inquiry of plaintiff King Supply Co. LLC
(“King”) with respect to a certain antidumping duty order on carbon steel butt-weld pipe fittings
(“BWPF”),1 this opinion considers Commerce’s results of remand (“Remand Determination”) that
now, under protest, exclude from the ambit of the Order BWPF imported and used by King only in
architectural or structural applications. Weldbend Corporation and the government urge sustaining
the Remand Determination, while Tube Forgings of America, Inc. (“TFA”) and King argue for
further remand.
I
King requests further remand with instruction to Commerce to identify the specific
language in the Remand Determination that constitutes the scope ruling. See Comments of Plaintiff
on Final Results of Redetermination by the Department of Commerce, dated December 1, 2010
(“King’s Comments”), at 2-3. There is no need, because the Remand Determination is clear: “[i]n
accordance with the Court’s instructions, this redetermination pursuant to remand construes the
1
See Antidumping Duty Order and Amendment to the Final Determination of Sales at Less
Than Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the People’s Republic of
China, 57 Fed. Reg. 29702 (Dep’t Comm. July 6, 1992) (“Order”).
Court No. 09-00477 Page 3
scope of the order as excluding pipe fittings used only in structural applications, such as King’s
fittings used for structural applications, from the Order.”2 Remand Determination at 1.
In addition, King argues the Remand Determination is internally inconsistent.
Specifically, King requests deletion of “only” therefrom because it “may mistakenly be read to the
effect that ‘dual use’ pipe fittings are not excluded from the [Order] as dual use pipe fittings are not
limited in use to structural applications.” King’s Comments at 3. King also requests deletion of
“used by King” to ensure that pipe fittings imported by King ostensibly for resale and eventual use
in structural applications are excluded from the Order. Id. at 3-4.
These requests appear to emanate from examination of page 4 of the Remand
Determination, which explains Commerce’s finding that pipe fittings “imported by King and used
by King in structural applications” are excluded from the antidumping duty order, as compared with
page 5 of the redetermination, which generally explains that pipe fittings used in structural
applications are excluded from the order without regard to the identity of the importer (or user). Cf.
Remand Determination at 4-5 with King’s Comments at 1-4. The government’s detailed response,
with which the court concurs, needs little elaboration:
Consistent with the Court’s order, Commerce excluded pipe fittings used in
structural applications from the order without regard to the identity of the importer.
This fact is underscored by the language found in the scope ruling on page 5 of the
remand redetermination. In its scope ruling, Commerce explains that “[i]n
accordance with the Court’s instructions, this redetermination . . . construes the scope
of the order as excluding pipe fittings used only in structural applications, such as
King’s fittings used for structural applications.” Remand Determination at 5
(emphasis added). The phrase “pipe fittings used only in structural applications”
provides that pipe fittings used in structural applications regardless of the identity
2
“Order” was not specifically defined in the Remand Determination, but context, passim,
indicates the original antidumping duty order was intended.
Court No. 09-00477 Page 4
of the importer are excluded from the order. The words “such as” identify pipe
fittings used by King in structural applications as merely an example of such pipe
fittings excluded from the antidumping duty order.
The language on page 4 of the remand redetermination, which states that “we
find that fittings imported by King and used by King in structural applications . . . are
not covered by the scope of the Order,” is not inconsistent with the scope ruling on
page 5. This language must be read in the proper context. In the paragraph that
precedes the statement in question, Commerce identifies factual evidence presented
by King during the scope proceeding that indicated that its pipe fittings were used
exclusively in structural applications and not piping systems. Remand Determination
at 4. In restating this information about King’s business practice, Commerce
responds in the following paragraph [with] its finding that pipe fittings imported and
used by King now are excluded from the order. This finding on page 4, when read
in its proper context, represents Commerce’s conclusion with respect to coverage
based upon specific factual statements made in the preceding paragraph about King’s
business practice. There is no basis for interpreting Commerce’s conclusion as to
certain facts somehow constitutes the scope ruling itself. Because there is no internal
inconsistency in the remand redetermination, King’s request that this matter be
remanded to Commerce again should be rejected.
For similar reasons, King’s argument that Commerce should delete the words
“used by King” from the remand redetermination is unsupported. See King’s
Comments at 3-4; see also Remand Determination at 4 (“[W]e find that fittings
imported by King and used by King in structural applications, as described above, are
not covered by the scope of the Order”) (emphasis added). King argues that the
phrase in question, which is found on page 4 of the remand redetermination, indicates
that “in order to be excluded from the order, the imported pipe fittings must be used
by King in structural applications.” King’s Comments at 4. King then explains that
“pipe fittings imported by King for resale and eventual use in structural applications
are covered by the order, an interpretation in direct contradiction of the Court’s
order.” Id.
As explained above, the phrase in question is part of a sentence that does not
constitute the scope ruling. To the contrary, the sentence serves as the logical
conclusion as to specific factual statements made in the preceding paragraph on page
4. There is no basis, therefore, to conclude that “pipe fittings imported by King for
resale and eventual use in structural applications” somehow are covered by the
antidumping duty order. See King’s Comments at 4. Therefore, this Court should
reject King’s argument that Commerce should remove the phrase “used by King”
from the remand redetermination.
Court No. 09-00477 Page 5
Fourth, there is no valid basis for King’s request that Commerce delete the
word “only,” which precedes “structural applications” in certain instances, from the
remand redetermination. See, e.g., Remand Redetermination at 5 (“[T]his
redetermination pursuant to remand construes the scope of the order as excluding
pipe fittings used only in structural applications . . . from the [Order].”) (emphasis
added). According to King, the use of the word “only” “in this context . . . may
mistakenly be read to the effect that ‘dual use’ pipe fittings are not excluded from the
order as dual use pipe fittings are not limited in use to only structural applications.”
King’s Comments at 3. King’s concerns are unfounded.
This Court held that Commerce was required to exclude carbon steel
butt-weld pipe fittings used for structural applications from the scope of the
antidumping order. Commerce followed the Court’s instruction by issuing a scope
ruling that excluded such pipe fittings. See Remand Redetermination at 5.
Commerce included the word “only” in its remand redetermination to emphasize that
pipe fittings used in structural applications are excluded from the antidumping order
(i.e., only pipe fittings used in structural applications are excluded from the [Order]),
whereas those used in piping systems remain covered by the [Order]. The use of the
word “only” in the remand redetermination is consistent with this distinction, and in
no way renders Commerce’s remand redetermination inconsistent with the Court’s
order.
King’s insistence that the use of the word “only” may be misinterpreted is
wholly speculative and unsupported by any evidence. In any event, any such a
misinterpretation would be inconsistent with the Court’s holding that the end-use of
the pipe fitting determines whether it is covered by the antidumping duty order, rather
than the potential manner in which the pipe fitting may be used. See Court Order
accompanying . . . Slip Op. 10-111 . . . at 2 (ordering Commerce to issue a scope
determination “excluding carbon steel butt-weld pipe fittings used for structural
applications from the scope of the antidumping order on carbon steel butt-weld pipe
fittings from China.”) (emphasis added). For these reasons, King’s request that the
Court order Commerce to remove the word “only” from the remand redetermination
should be denied.
Defendant’s Response to Comments Regarding Redetermination Pursuant to Court Remand, dated
December 16, 2010 (“Defendant’s Response”), at 3-6 (court’s ellipses in last paragraph).
For these reasons, King’s request for further remand is denied.
Court No. 09-00477 Page 6
II
A
For its part, TFA criticizes this court’s original order of remand. TFA (re)argues that
the Order was intended to cover all pipe fittings meeting the Order’s physical description and that
this court’s rationale on the absence of an expansive signal (“e.g.,” “such,” etc.) in the clause “used
to join sections in piping systems” is a logical fallacy because a restrictive signal (“exclusive,”
“only,” etc.), normally expected if structural applications were intended to be excluded from the
Order’s scope, is likewise absent.3 According to TFA, the Opinion reduces the second sentence of
the scope language to “used . . . in piping systems” when the entire sentence actually serves to further
define the term “butt-weld” by distinguishing such fittings from other fitting forms, such as threaded,
grooved or bolted. The latter clauses of the second sentence, TFA contends, provide the “expansive
signal” the court “required” and are proof that its reading of the sentence is correct and the court’s
incorrect. “[A]t best,” TFA argues, “used . . . in piping systems” is “ambiguous” and is to be
resolved by reference to the description contained in the petition, the initial investigation, and the
3
See Comments of Defendant-Intervenor Tube Forgings of America, Inc. on The United
States Department of Commerce’s Final Results of Redetermination Pursuant to King Supply
Company LLC, d/b/a King Architectural Metals v. United States, et al., Court No. 09-00477, Slip
Op. 10-111 (September 30, 2010), dated December 1, 2010 (“TFA Comments”), at 5 (referencing
Opinion at n.3). Specifically, TFA contends the referenced administrative determinations are
“inapposite” to “the proposition that end-use restrictions are common and accepted limitations on
the scope of antidumping duty orders because the determinations cited by the Court each include
express restrictive language.” Id. However, these determinations were referenced only to support
the observation that “Commerce has apparently described usage with more precision and specificity
in other contexts when including or excluding products from the scope of an antidumping duty
order.” Opinion at 6.
Court No. 09-00477 Page 7
determinations of Commerce and the ITC, as required by 19 C.F.R. § 351.225(k)(1). See generally
TFA Comments at 3-7.
Such comments seem to overlook both the Opinion and the Remand Determination.
See, e.g., Opinion at 6 (“contrary to . . . the defendant-intervenors’[ ] reading of the second sentence
of the scope language, the fastening methods of pipe fittings are a separate consideration from, and
do not alter, this apparently explicit product use requirement”).
It may be recalled the Order is directed against
carbon steel butt-weld pipe fittings, having an inside diameter of less than 14 inches,
imported in either finished or unfinished form. These formed or forged pipe fittings
are used to join sections in piping systems where conditions require permanent,
welded connections, as distinguished from fittings based on other fastening methods
(e.g., threaded, grooved, or bolted fittings). . . .
57 Fed. Reg. at 29703.
It may also be recalled the domestic petitioners were aware this language was being
employed as the investigation and determinations progressed. See Order at 9 (“the domestic pipe
fittings industry submitted comments on the scope language of the investigations, with the result that
the language was altered in certain ways not relevant to this proceeding”).
As for King, its scope ruling did not depend upon discerning whether the scope
language implies that all piping systems require permanent, welded connections, or that some piping
systems do not require permanent, welded connections. The physical specifications of the
merchandise subject to the scope of the Order and addressed in the latter part of the second sentence
are not a matter of dispute and did not require further discussion. The operative scope language,
indicated by this matter, is the following: (1) “The products covered by this order” (i.e., subject
Court No. 09-00477 Page 8
merchandise; italics added) have certain physical characteristics. (2) “These . . . pipe fittings” (i.e.,
subject merchandise) “are used to join sections in piping systems where conditions require . . .” et
cetera (italics added).
This reference to use in piping systems cannot be ignored, or interpreted away, or
expansively interpreted as merely “an example of an instance where a permanent, welded connection
is desired.”4 To do so effects a material alteration in the expressed scope of the Order, as originally
published, and there is no authority for such alteration in the context of a scope inquiry pursuant to
19 C.F.R. § 351.225 (as previously discussed). See, e.g., Duferco Steel Inc. v. United States, 296
F.3d 1087, 1097 (Fed. Cir. 2002); Eckstrom Industries, Inc. v. United States, 254 F.3d 1068, 1072
(Fed. Cir. 2001); Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778, 782 (Fed.
Cir. 1995); Allegheny Bradford Corp. v. United States, 28 CIT 830, 342 F. Supp. 2d 1172 (2004).
TFA, however, in essence argues for an interpretation that accomplishes precisely that.
TFA’s position, that the Order in fact covers all less-than-14-inch BWPF, depends
for its validity on an obvious ellipsis in the second sentence of the scope language. None, however,
is discernable. Even if familiarity with the product leads to the observation that BWPFs are not only
used in piping systems, it does not logically follow, from the language employed in the Order, that
“subject merchandise,” to which the Order is directed, is obviously or necessarily all BWPF. See,
e.g., Eurodif S.A. v. United States, 30 CIT 682, 431 F. Supp. 2d 1351 (2006) (non-physical aspects
of merchandise may remove it from the “class or kind of merchandise” intended to be covered by
4
See Final Scope Ruling: Antidumping Duty Order on Carbon Steel Butt-Weld Pipe Fittings
from the People’s Republic of China, Public Record Document (“P.R. Doc.”) 29 at 5.
Court No. 09-00477 Page 9
an unfair trade order), aff’d 217 Fed. Appx. 963 (Fed. Cir. 2007), rev’d on other grounds, __ U.S.
___, 129 S. Ct. 878 (2009).
Furthermore, arguendo, even if “used . . . in piping systems” could be construed as
ambiguous, the court again notes (as it did in the Opinion) that there is nothing apparent in the
record, nor do the parties point to anything, that would resolve that ambiguity. The investigation,
as well as the determinations of Commerce and the ITC all describe the subject merchandise using
language nearly identical to that used in the Order, to wit: “used . . . in piping systems,” Opinion at
__, and no evidence suggests (nor do the parties argue) that the term “piping systems” may be
defined more broadly. See generally Opinion at 9-11. Cf. John Hancock Mut. Life Ins. Co. v.
Harris Trust & Sav. Bank, 510 U.S. 86, 109 (1993) (“reading the words ‘to the extent’ to mean
nothing more than ‘if,’ the Department has exceeded the scope of available ambiguity”); United
States v. Turkette, 452 U.S. 576, 581, 587 n.10 (1981) (aids or guides to statutory interpretation are
to be relied upon to resolve ambiguity, not create it); Nippon Kogaku (USA), Inc. v. United States,
673 F.2d, 380, 383 (1982) (same). Since those sources did and do not illuminate that the Order’s
scope language is susceptible to interpretation beyond the plain terms employed, any arguendo
assumption of ambiguity at that point would necessarily call for reference to the Diversified Products
criteria of 19 C.F.R. § 351.225(k)(2), as King previously argued in the alternative, which includes
consideration of “the expectations of the ultimate end users” and “the ultimate end use of the
product.” Such a review would not, at first blush, appear to support TFA’s favored “interpretation.”
As previously discussed, the second sentence of the Order’s scope language identifies
piping system use and only piping system use when describing how the subject merchandise is
Court No. 09-00477 Page 10
used. This is the public expression of the scope of the Order with respect to subject merchandise.
The language employed is literal, plain, clear, and without obvious indication that “used . . . in piping
systems” is superfluous or exemplary. See Walgreen Co. of Deerfield IL v. United States, 620 F.3d
1350, 1357 (Fed. Cir. 2010) (“[w]hile the petition, factual findings, legal conclusions, and
preliminary orders can aid in the analysis, they cannot substitute for the language of the order itself,
which remains the ‘cornerstone’ in any scope determination”) (italics added); Duferco Steel Inc. v.
United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002) (same). The only apparent statutory
authorization for including articles that do not fall within an order’s literal scope is via the anti-
circumvention provisions of 19 U.S.C. § 1677j. See, e.g., Wheatland Tube Co. v. United States, 161
F.3d 1365, 1370 (Fed. Cir. 1998). The present matter, however, involves a scope inquiry, and it is,
rather, TFA’s reading of “used to join sections in piping systems” that amounts to a material
alteration of that phrase. That reading expands beyond the plain meaning of this publicly expressed
scope language to depend upon either the addition of material words that are conspicuously absent
(e.g., an expansive signal), or ignorance of the phrase altogether. While the addition of a restrictive
signal would certainly add clarity, TFA’s argument in that regard does not logically imply that “used
. . . in piping systems” is unclear in its own right, or susceptible of meaning other than as written.
And by the same token, the scope language of the Order does not specify “all” with respect to the
pipe fittings that are expressed to be the subject of the Order.
The Order may not be interpreted in a manner contrary to its literal terms. E.g., Smith
Corona Corp. v. United States, 915 F.2d 683, 686 (Fed. Cir. 1990). TFA’s (re)argument of the
matter at this stage provides no cogent reason for altering the court’s previous conclusion.
Court No. 09-00477 Page 11
B
On the Remand Determination itself, TFA challenges Commerce’s conclusion that
the pipe fittings imported by King are used exclusively in structural applications as unsupported by
substantial evidence. See TFA’s Comments at 11-13. TFA contends
[t]he only record evidence supporting the conclusion that King and its customers
never use the BWPF imported by King in piping systems is provided by King’s
assertions regarding the final use of the products. With respect to King’s customers,
the record is devoid of any evidence except King’s unsupported and carefully
qualified assertion that its BWPF is not used in piping systems “to the best of {its}
knowledge.” Verification of the claim that neither King nor its customers ever utilize
BWPF imported by King in piping systems was not produced and[,] given the
post-importation nature of Kings assertion, is not possible.
Thus, the record contains, on one hand, King’s assertion that its BWPF are not used
in piping systems and, on the other hand, uncontroverted evidence that King’s BWPF
are physically identical to BWPF used in piping systems and are manufactured to
meet industry standards for BWPF used in piping systems. [Commerce]’s conclusion
that the BWPF imported by King are used exclusively in structural applications is
thus unsupported by substantial evidence on the record and should be rejected.
Id. at 12-13 (italics in original).
The government’s response is again instructive:
As an initial matter, the statement in Commerce’s remand redetermination
that King’s pipe fittings were used exclusively for structural applications refers only
to pipe fittings imported and used by King, not its customers. In the remand
redetermination, Commerce quoted a statement from King’s scope ruling request and
explained that “King provided information and evidence supporting its claim that its
fittings were used exclusively in ‘the production of handrails and other structural
applications.’” Remand Redetermination at 4 (quoting Letter to Secretary of
Commerce, from Law Firm of Sandler, Travis & Rosenberg, P.A. (Mar. 30, 2009)
(“Scope Request”), P.R. Doc. 1, at 7) (emphasis added). The citation following this
statement reads: “See Scope Inquiry Request, at 7.” This citation refers to the
statement found on page 7 of King’s scope ruling request, where King explains that,
“[t]o the extent King Architectural uses a small portion of its pipe fittings internally,
that use is devoted exclusively to the production of handrails and other structural
applications.” See Scope Request at 7 (emphasis added). Thus, as evidenced by the
Court No. 09-00477 Page 12
language on page 7 of King’s scope request, which Commerce directly quoted in its
remand redetermination, the statement in the remand redetermination refers only to
King’s use of its pipe fittings and not that of its customers.
Ignoring that Commerce referred only to the manner in which King itself uses
its pipe fittings, TFA incorrectly concludes that there is not substantial evidence on
the record to support a finding that King’s pipe fittings are used in structural
applications. Contrary to TFA’s contentions, as explained in the remand
redetermination, King provided sufficient substantial evidence to support its claim,
including, but not limited to, written statements from King itself, statements from its
website, as well as photographs. See Remand Redetermination at 4; see also Scope
Request at 7 (“To the extent King Architectural uses a small portion of its pipe
fittings internally, that use is devoted exclusively to the production of handrails and
other structural applications.”); see also Scope Request at Attachment 8B (providing
several photographs of pipe fittings produced by King and used in structural
applications); see also Scope Request at Attachment 9E (containing a page from
King's website, which describes King’s business as limited to producing pipe fittings
only used in structural applications). An examination of this evidence demonstrates
that Commerce reasonably concluded that to the extent King uses pipe fittings, those
pipe fittings are used exclusively in structural applications. Substantial evidence is
“such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951);
Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). Thus, to decide that
a decision is supported by substantial evidence, the Court need only find evidence
“which could reasonably lead to [Commerce’s] conclusion,” so that the conclusion
was a “rational decision.” Matsushita Electrical Industrial Co. v. United States, 750
F.2d 927, 933 (Fed. Cir. 1984). In light of the uncontested evidence presented,
Commerce reasonably concluded that King’s pipe fittings are used in structural
applications. Because Commerce’s determination is supported by substantial
evidence, this Court should reject TFA’s request for further remand proceedings.
Defendant’s Response at 8-9.
Examination of the record reveals substantial evidence supporting Commerce’s
conclusion. The Remand Determination will therefore be sustained and final judgment entered.
/s/ R. Kenton Musgrave
Dated: January 6, 2011 R. Kenton Musgrave, Senior Judge
New York, New York
Errata
King Supply Co., d/b/a/ King Architectural Metals v. United States, Court No. 09-00477, Slip
Op. 11-2 (Jan 6, 2011):
In the precis, change “remanded” to “sustained” and delete the remainder of the sentence.