Cablesa S.A. de C v. v. United States

Slip Op. 07-29
UNITED STATES COURT OF INTERNATIONAL TRADE
CABLESA S.A. DE C.V., :
Plaintiff, :
v. :
UNITED STATES, :
Defendant, : Court No. 05-00388
and :
AMERICAN SPRING WIRE CORP., :
INSTEEL WIRE PRODUCTS COMPANY,
and SUMIDEN WIRE PRODUCTS CORP., :
Defendant-Intervenors. :
[Commerce’s Final Scope Determination is sustained.]
Decided: March 1, 2007
Arent Fox, PLLC (Kay C. Georgi and Mark P. Lunn), for Plaintiff.
Peter D. Keisler, Assistant Attorney General; Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Stephen C. Tosini);
Marisa B. Goldstein, Office of the Chief Counsel for Import Administration, U.S. Department of
Commerce, Of Counsel; for Defendant.
Collier Shannon Scott, PLLC (Paul C. Rosenthal, Kathleen W. Cannon, R. Alan Luberda,
and David C. Smith, Jr.), for Defendant-Intervenors.
OPINION
RIDGWAY, Judge:
In this action, Plaintiff Cablesa S.A. de C.V. – a Mexican manufacturer of prestressed
concrete steel wire strand (“PC strand”) – contests the U.S. Department of Commerce’s final
Court No. 05-00388 Page 2
determination that Cablesa’s zinc-coated product is within the scope of the antidumping duty order
on PC strand from Mexico. See Prestressed Concrete Steel Wire Strand from Mexico: Scope Inquiry
Final Determination, Inv. No. A-201-831 (June 16, 2004) (“Final Scope Determination”).
Pending before the Court is Plaintiff’s Motion for Judgment on the Agency Record, in which
Cablesa urges that Commerce’s Final Scope Determination be vacated. Emphasizing that the
antidumping duty order at issue expressly excludes “galvanized” PC strand, and asserting that its
zinc-coated product is in fact “galvanized,” Cablesa contends that Commerce should have reached
a negative scope determination without conducting a Diversified Products analysis. In the
alternative, Cablesa argues that Commerce’s Diversified Products analysis was flawed, and that the
agency’s conclusion as a result of that analysis is not supported by substantial evidence in the
record. See generally Plaintiff’s Memorandum in Support of Motion for Judgment on the Agency
Record (“Pl.’s Brief”); Reply Brief in Support of Plaintiff’s Rule 56.2 Motion for Judgment Upon
the Agency Record (“Pl.’s Reply Brief”).
Cablesa’s motion is opposed by the Government and by Defendant-Intervenors, American
Spring Wire Corporation, Insteel Wire Products Company, and Sumiden Wire Products Company
(“the Domestic Industry”), who maintain that the Final Scope Determination is supported by
substantial evidence and is otherwise in accordance with law, and should therefore be sustained in
all respects. See generally Defendant’s Memorandum in Opposition to Plaintiff’s Motion for
Judgment Upon the Agency Record (“Def.’s Brief”); Defendant-Intervenors’ Memorandum in
Opposition to Plaintiff’s Motion for Judgment on the Agency Record (“Def.-Ints.’ Brief”).
Court No. 05-00388 Page 3
Jurisdiction lies under 28 U.S.C. § 1581(c) (2000).1 For the reasons set forth below,
Cablesa’s Motion for Judgment on the Agency Record is denied.
I. Background
In late February 2003, the Commerce Department initiated an antidumping investigation of
prestressed concrete steel wire strand (“PC strand”) from Mexico (among other countries), pursuant
to a petition filed by the Domestic Industry. See Prestressed Concrete Steel Wire Strand from
Brazil, India, the Republic of Korea, Mexico, and Thailand: Initiation of Antidumping Duty
Investigations, 68 Fed. Reg. 9050 (Feb. 27, 2003) (“Notice of Investigation”). The Notice of
Investigation defined the scope of the investigation at issue:
For purposes of these investigations, prestressed concrete steel wire (PC strand) is
steel strand produced from wire of non-stainless, non-galvanized steel, which is
suitable for use in prestressed concrete (both pretensioned and post-tensioned)
applications. The product definition encompasses covered and uncovered strand and
all types, grades, and diameters of PC strand.
The merchandise under these investigations is currently classifiable under
subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized Tariff Schedule of
the United States (HTSUS). Although the HTSUS subheadings are provided for
convenience and Customs purposes, the written description of the merchandise under
investigation is dispositive.
Notice of Investigation, 68 Fed. Reg. at 9050-51 (emphasis added).
1
All statutory citations herein are to the 2000 edition of the U.S. Code.
Similarly, all citations to regulations are to the 2003 edition of the Code of Federal
Regulations. However, the pertinent text of the cited provisions remained the same at all relevant
times.
Court No. 05-00388 Page 4
The Notice of Investigation thus framed the scope of the investigation in language that was
broad and inclusive (encompassing “covered and uncovered strand and all types, grades, and
diameters of PC strand”), carving out two specific exceptions for wire that was produced from either
“stainless” or “galvanized” steel. Neither “stainless” nor “galvanized” were further defined in either
the Domestic Industry’s petition or the Notice of Investigation.2
The Notice of Investigation invited comments from interested parties as to the scope of
products to be either covered or excluded from the antidumping investigation. See Notice of
Investigation, 68 Fed. Reg. at 9050-51. In response, Cablesa filed comments asserting that
Commerce should exclude from the investigation PC strand coated with textile or any other
“nonmetallic” material, in particular plastic-coated (“covered”) PC strand. See generally Domestic
Industry’s Rebuttal Letter (April 23, 2004). Cablesa’s comments made no reference to PC strand
coated with zinc.
In its Preliminary Antidumping Determination, the Commerce Department concluded that
“covered” (e.g., plastic-coated) PC strand was included in the scope of the investigation, and that
both covered and uncovered PC strand “constitute one class or kind of merchandise,” based on the
agency’s analysis of the five Diversified Products criteria. See Prestressed Concrete Steel Wire
Strand from Mexico: Notice of Preliminary Determination, 68 Fed. Reg. 42,378, 42,379 (July 17,
2003) (“Preliminary AD Determination”) (citing Diversified Prods. Corp. v. United States, 6 CIT
155, 162, 572 F. Supp. 883, 889 (1983)). Commerce further stated that the “defining characteristic
2
The petition filed by the Domestic Industry noted that PC strand covered by the
investigation generally is produced to ASTM specifications (specifically, ASTM A-416).
Court No. 05-00388 Page 5
of these products continues to be the strand, and covering the merchandise does not change the
strand or its chemical or physical properties.” Id. The Preliminary AD Determination calculated
Cablesa’s preliminary dumping margin at 77.2%. Id. at 42,382.3
Cablesa first mentioned the existence of U.S. sales of its zinc-coated PC strand only after the
factual record of the antidumping investigation had closed. See Domestic Industry’s Scope Request
(Feb. 6, 2004) at 2. In response, the Domestic Industry sought to have Commerce confirm that only
PC strand manufactured from steel wire that conformed to ASTM A-475 (“Standard Specification
for Zinc Coated Steel Wire Strand”) qualified under the exclusion for “galvanized” steel wire. See
Pl.’s Brief at 4. However, Commerce rejected the Domestic Industry’s requests as untimely. See
id.
In early December 2003, Commerce reached its final determination in the antidumping
investigation, calculating Cablesa’s final antidumping duty margin based on total adverse facts
available (as its preliminary margin had been calculated). See Prestressed Concrete Steel Wire
Strand from Mexico: Notice of Final Determination of Sales at Less Than Fair Value, 68 Fed. Reg.
68,350, 68,350-51 (Dec. 8, 2003) (“Final AD Determination”). In late January 2004, Commerce’s
Antidumping Order issued, directing Customs to assess antidumping duties on Cablesa’s entries of
subject merchandise. The scope language in both the Final AD Determination and the Antidumping
Order was virtually identical to the language in the Notice of Investigation. No further explanation
3
Commerce calculated Cablesa’s preliminary margin based on total adverse facts available,
based on its determination that Cablesa had provided unreliable and misleading information in the
course of the investigation. See Preliminary Determination, 68 Fed. Reg. at 42,380-82. Commerce’s
use of adverse facts available is not contested here.
Court No. 05-00388 Page 6
of what constituted “galvanized” steel wire was provided. See Final AD Determination, 68 Fed.
Reg. at 68,350; Prestressed Concrete Steel Wire Strand from Mexico: Notice of Antidumping Duty
Order, 69 Fed. Reg. 4112 (Jan. 28, 2004) (“Antidumping Order”).4
In January 2004, Cablesa attempted to import its zinc-coated PC strand without paying
antidumping duties, asserting that the product was excluded from the scope of the Antidumping
Order as “galvanized” PC strand. Customs disagreed, and Cablesa sought a ruling from the
Commerce Department. See Cablesa’s Scope Request (Feb. 3, 2004).
The Domestic Industry filed its own request for a ruling several days later. The Domestic
Industry urged Commerce to find that, “for purposes of the antidumping duty order, the term
‘galvanized’ has its common meaning in the industry, and that meaning is that the product must be
coated with a continuous and reasonably uniform layer of zinc and/or zinc oxide to the minimum
specifications set forth in ASTM A-475, which represents the industry understanding of the
minimum zinc application necessary to meet the purpose of preventing corrosion.” See Domestic
Industry’s Scope Request (Feb. 6, 2004) at 3.5
In determining whether a product is within the scope of an antidumping duty order,
Commerce engages in a three-step process. Commerce first must examine the language of the order
at issue. The “predicate for the interpretive process is language in the order that is subject to
interpretation.” Tak Fat Trading Co. v. United States, 396 F.3d 1378, 1383 (Fed. Cir. 2005). If the
4
Commerce made only the necessary conforming changes, such as changing the language
“merchandise under these investigations . . .” to “merchandise subject to the order . . . .” Id.5
The Domestic Industry also argued that, because Cablesa’s zinc-coated product is classified
within the HTSUS numbers specified in the petition and in the Antidumping Order, it is subject
merchandise. Id.Court No. 05-00388 Page 7
terms of the order are dispositive, then the order governs. If the order alone is not dispositive, the
interpretive process is governed by 19 C.F.R. § 351.225(d), which directs Commerce to determine
whether it can make a ruling based upon the request for a scope ruling and the factors listed in
section 351.225(k)(1) – specifically, “the descriptions of the merchandise contained in the petition,
the initial investigation, and the determinations [of Commerce] (including prior scope
determinations) and the Commission.” 19 C.F.R. § 351.225(k)(1). If that analysis is not dispositive,
Commerce initiates a scope inquiry pursuant to 19 C.F.R. § 351.225(e), and applies the five
Diversified Products criteria as codified in the agency’s regulations. See 19 C.F.R. § 351.225(k)(2);
Diversified Prods., 6 CIT 155, 572 F. Supp. 883.
In this case, Commerce found that the scope of the order was ambiguous and subject to
interpretation as to the definition of “non-galvanized” wire. Commerce examined the Antidumping
Order, the underlying petition, and the preliminary and final results of the investigations of both
Commerce and the ITC. Commerce also considered the arguments advanced by Cablesa and the
Domestic Industry as to the definition of PC strand made from galvanized wire.
Cablesa asserted that its “galvanizing process and the zinc content of [its] product meet all
applicable industry standards and guidelines for galvanized product,” although it provided no
galvanization standard applicable to PC strand. See Cablesa’s Scope Request at 8. The Domestic
Industry argued, in turn, that galvanized PC strand is understood in the industry to mean PC strand
“coated with a continuous and reasonably uniform layer of zinc and/or zinc oxide to the minimum
specifications set forth in ASTM A-475.” Domestic Industry’s Scope Request at 3. The Domestic
Industry further argued that the plain language of the petition states that only galvanized wire strand
Court No. 05-00388 Page 8
that falls outside the HTSUS numbers listed in the Antidumping Order is excluded from the scope
of the order. According to the Domestic Industry, “because Cablesa’s zinc-coated product is
classified within the HTSUS numbers listed in the petition and the scope of the order, it is subject
PC strand.” Id.Commerce determined that the scope language of the Antidumping Order, together with the
product descriptions in the original petition and the Commission’s preliminary and final
determinations, provided no clear definition of galvanized PC strand. See Scope Inquiry Initiation
(Feb. 23, 2004) at 3. Commerce therefore initiated a scope inquiry pursuant to 19 C.F.R. §
351.225(e). In the course of its inquiry, Commerce issued two questionnaires to Cablesa, requesting
information relevant to the Diversified Products criteria, including the physical characteristics of
Cablesa’s zinc-coated PC strand, the expectations of ultimate purchasers, the ultimate use of the
merchandise, channels of trade, and how the merchandise is advertised and displayed. Cablesa
responded, and all parties filed comments and rebuttal comments.
Commerce’s Final Scope Determination concluded that Cablesa’s zinc-coated PC strand
“did not differ in any material way from the grease and plastic coated PC strand also sold by
Cablesa,” and did not “meet any industry standard for galvanization.” Final Scope Determination
at 1. The Final Scope Determination further explained:
Cablesa’s PC strand with a 0.05 oz./sq. ft. zinc coating has no physical properties or
end uses that are substantially different from subject PC strand. Cablesa has not
presented any recognized industry standard to support its claim that its 0.05 oz./sq.
ft. zinc coated PC strand is truly galvanized or any technical evidence that a zinc
coating of 0.05 oz./sq. ft. provides better corrosion protection than a plastic and
grease coating.
Final Scope Determination at 8. Accordingly, Commerce determined that Cablesa’s zinc-coated PC
Court No. 05-00388 Page 9
strand was included within the scope of the original Antidumping Order on PC strand from Mexico,
and that PC strand is properly classified as “galvanized” only if it meets ASTM A-475 standards.
Id.II. Analysis
Cablesa contends that the Commerce Department erred in finding that “non-galvanized steel”
was ambiguous as used in the Antidumping Order and, thus, that Commerce improperly conducted
a Diversified Products analysis rather than finding that Cablesa’s zinc-covered PC strand was
excluded from the scope of the Order pursuant to 19 C.F.R. § 351.225(d).
Distilled to its essence, Cablesa’s theory is that the plain meaning of the language defining
the scope of the Antidumping Order can be discerned by reference to the American Heritage
Dictionary, which defines “galvanized” as “to coat (iron or steel) with rust-resistant zinc.” See
American Heritage Dictionary of the English Language at 744 (3d ed. 1992) (emphasis added).
Cablesa emphasizes that its product is in fact coated with zinc, and thus affords protection against
corrosion, which is the purpose of galvanization. As discussed below, however, Cablesa’s
arguments are unavailing.
A.
The Commerce Department’s starting point was the relevant language of the Antidumping
Order itself. A review of that language indicates that it is quite broad, encompassing “all types,
grades and diameters” of PC strand, including both covered and uncovered (or coated and uncoated)
PC strand. On its face, the Order is broadly written to embrace PC strand with any covering or
Court No. 05-00388 Page 10
coating, as further specified under the HTSUS.6 Although an order cannot be interpreted broadly
when a broad construction is “belied by the terms of the order,” the language of the Order at issue
here is generally expansive. See Allegheny Bradford Corp. v. United States, 28 CIT ____, ____,
342 F. Supp. 2d 1172, 1186-87 (2004) (citing Duferco Steel Inc. v. United States, 296 F.3d 1087,
1098 (Fed. Cir. 2002), quoting Eckstrom Indus. Inc. v. United States, 254 F.3d 1068, 1073 (Fed. Cir.
2001)).
The language of the Antidumping Order does define the subject merchandise to require that
the strand be manufactured from “non-stainless, non-galvanized steel.” Cablesa argues that there
is no need to resort to extrinsic evidence to define “non-galvanized steel” wire. But Cablesa itself
looks beyond the four corners of the Order and invokes the American Heritage Dictionary to support
its claim that its zinc-coated product is a “galvanized” product outside the scope of the Order. Thus,
as even Cablesa implicitly concedes, reference to some extrinsic evidence is necessary to give
meaning to the term “galvanized” as it is used in the Antidumping Order. It is Commerce’s decision
to resort to industry standards rather than a dictionary that is the gravamen of Cablesa’s complaint.
Commerce’s reasoning in this case is fully consonant with the case law in similar cases
involving ambiguity in the definition of manufacturing processes. In Novosteel, for example, the
Court of Appeals held that Commerce properly applied the Diversified Products factors where the
petitions and the initial investigations failed to clarify whether the term “flat-rolled” unambiguously
encompassed the merchandise in question. See Novosteel, SA v. United States, 284 F.3d 1261,
6
The petition filed by the Domestic Industry indicated that ASTM-conforming galvanized
PC strand was classified under a different tariff subheading (HTSUS 7312.10.3074) than subject PC
strand. See generally Domestic Industry’s Scope Request at Exhs. 6, 7.
Court No. 05-00388 Page 11
1266, 1274 (Fed. Cir. 2002). Similarly, the court in Tak Fat agreed that the terms “pickled,”
“marinated,” and “acidified,” as used in an antidumping order on preserved mushrooms, were
subject to interpretation. The court upheld Commerce’s reliance on extrinsic evidence to establish
a minimum acid content for “acidified” mushrooms (an undefined term set forth in the order), and
rejected the foreign producer’s argument that any acid content qualified its product for exclusion
from the order. See Tak Fat Trading Co. v. United States, 396 F.3d 1378, 1385-86 (Fed. Cir. 2005).
See also Allegheny Bradford, 28 CIT at ____, 342 F. Supp. 2d at 1186 (as used in order, terms
“elbows,” “trees,” “reducers,” “stub ends,” and “caps” were “general,” and allowed Commerce
“room to interpret whether a given product bears a shape that is covered by the scope”).
As the Government aptly observes, like the production processes referred to in the orders at
issue in Novosteel and Tak Fat, the term “galvanized” in the Order here “generally identifies a
process without specifically defining the process.” See Def.’s Brief at 11. It was therefore not
unreasonable for Commerce to find that the scope of the Order was ambiguous and that a Diversified
Products analysis was necessary.
Relying on Ericsson, Cablesa seeks to portray Commerce’s actions as an impermissible and
unfair expansion of the scope of the Order. See Pl.’s Brief at 13-14; Pl.’s Reply Brief at 5 (citing
Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778, 782 (Fed. Cir. 1995)). But
– in contrast to Ericsson – Commerce in this case did not abandon one scope determination for a
more exacting one. See Ericsson, 60 F.3d at 783. Nor did Commerce nullify any portion of the
Order’s scope which would otherwise have excluded Cablesa’s product (as Commerce was found
Court No. 05-00388 Page 12
to have done in Allegheny Bradford).7 Thus, for example, Commerce did not re-define the scope
of the Order to include galvanized steel (a product that is excluded by the plain language of the
Order). Commerce instead sought merely to determine the meaning of “non-galvanized steel” as
that term was used in the Order.
Contrary to Cablesa’s claims, the facts of this case are closer to San Francisco Candle than
to Ericsson. See generally San Francisco Candle Co., Inc. v. United States, 104 Fed. Appx. 714(Fed. Cir. 2004), aff’g 27 CIT 704, 265 F. Supp. 2d 1374 (2003). The Court of Appeals there
reasoned that Commerce could apply an objective test to determine whether certain products fell
under an exclusion from the scope of an antidumping order on petroleum wax candles from China.
See San Francisco Candle, 104 Fed. Appx. at 717 (discussing Commerce’s application of “minimally
decorative” test to determine which candles are excluded from scope of order as Christmas novelty
candles); see also Tak Fat, 396 F.3d at 1386 (sustaining Commerce’s use of standard definition of
“pickling” and “acidified” based upon acetic acid concentrations).
So too Commerce in this case reasonably determined that the scope of the Order was
ambiguous, and sought to establish an objective standard for products falling within the exclusion
for PC strand made of galvanized wire. Indeed, as the Government notes, Cablesa itself implicitly
conceded in the course of the scope inquiry that there is some amount of zinc coating that – as a
practical matter – does not suffice to resist corrosion. See Def.’s Brief at 10 (citing Cablesa’s Scope
7
Invoking Allegheny Bradford, Cablesa argues that including its zinc-coated PC strand
within the scope of the Order undermines the “integrity of the investigation’s prior stages.” See Pl.’s
Brief at 18 (citing Allegheny Bradford, 28 CIT at ____, 342 F. Supp. 2d at 1188. As the Domestic
Industry notes, however, the existence of imports of Cablesa’s zinc-coated PC strand were not
disclosed until late in the investigation. See Def.-Ints.’ Brief at 24.
Court No. 05-00388 Page 13
Request at 8, which asserted that the zinc coating on Cablesa’s product meets the industry standard
sufficient to prevent corrosion). In contrast, in the course of this litigation, Cablesa went so far as
to claim that “any strand coated with any level of zinc is excluded from the scope of [this] order.”
See Pl.’s Brief at 19. Taking that argument to its logical extreme, the Domestic Industry pointedly
notes that “[u]nder Cablesa’s logic, a PC strand coil that was spray painted with zinc paint, or that
contained trace amounts of zinc within the wire itself, would be excluded as ‘galvanized’ because
it contained or was coated with some zinc.” See Def.-Ints.’ Brief at 20.8
In sum, nothing required Commerce to reject technical standards developed within the
industry in favor of an arbitrary definition of “galvanized” – much less no definition at all.9
Commerce committed no error in determining that the term “galvanized” was ambiguous as used
in the scope of the Order and proceeding to a Diversified Products analysis.
8
The Domestic Industry seeks to drive its point home by reference to another critical term
that is not defined in the Order in this case: “[T]he Order . . . also states that PC strand made from
stainless wire is excluded. Like the term ‘galvanized,’ the term ‘stainless’ is subject to detailed
industry standards as to minimum levels of specified alloy contents. The dictionary, however,
merely defines ‘stainless steel’ as ‘steel alloyed with chromium, etc., virtually immune to rust and
corrosion.’ See Webster’s New World Dictionary at 1304 (3d College Ed. 1988). If such simplistic
dictionary terms were employed to define steel terms that are recognized within the industry to have
very specific meanings, foreign producers intent on evading an order could easily undertake a slight
modification to their product and claim that the product falls outside a generic dictionary definition
of a term.” See Def.-Ints.’ Brief at 20-21.
9
Cablesa emphasizes that Commerce rebuffed the Domestic Industry’s attempts in the course
of the antidumping proceeding to persuade the agency to define “galvanized” by reference to ASTM
A-475. See generally Pl.’s Brief at 4, 11. But Cablesa reads much too much into Commerce’s
rejection of the Domestic Industry’s submissions. Commerce simply returned the submissions as
untimely. In accordance with 19 C.F.R. § 351.104, Commerce did not consider the content of the
submissions, and did not address the merits of the Domestic Industry’s claims. See Def.’s Brief at
13; Def.-Ints.’ Brief at 5.
Court No. 05-00388 Page 14
B.
Cablesa contends that, even if a Diversified Products analysis was warranted, Commerce’s
conduct of that analysis was flawed, and the conclusion that the agency reached was erroneous. See
generally Pl.’s Brief at 20-23; Pl.’s Reply Brief at 8-15. As detailed below, however, Commerce’s
analysis was generally sound, and its Final Scope Determination is both supported by substantial
evidence in the record and otherwise in accordance with law.
1. Cablesa’s Threshold Claim
Cablesa’s threshold attack on Commerce’s Diversified Products analysis accuses Commerce
of engaging in circular logic and defeating the purpose of the Diversified Products analysis by
defining “galvanization” before examining the physical characteristics of Cablesa’s zinc-coated PC
strand. See generally Pl.’s Brief at 22-23; Pl.’s Reply Brief at 8-10. To be sure, Commerce might
have articulated parts of its rationale more artfully. But Cablesa’s critique is largely lacking in
merit.
Contrary to Cablesa’s assertions, Commerce did not define the standard for PC strand made
from galvanized wire before analyzing the Diversified Products factors. Rather, Commerce
compared Cablesa’s zinc-coated product to two standards – one recognized by all to be galvanized
(ASTM A-475), and the other recognized by all to be non-galvanized (subject PC strand). See
generally Final Scope Determination at 6-7; Def.’s Brief at 14-15. Commerce considered the
arguments and factual submissions of both Cablesa and the Domestic Industry. And, when Cablesa
asserted that its zinc-coated PC strand met the minimum industry standards for galvanization,
Commerce properly requested that Cablesa identify any standards on which it relied. But Cablesa
Court No. 05-00388 Page 15
then argued – as it does now – that in fact no such standard exists. See Cablesa’s Scope
Questionnaire Responses (March 18, 2004) at 2-5 (stating “no ASTM standard applies to galvanized
PC strand” and “there are no official specifications for galvanized PC strand”).
2. Cablesa’s Challenges to the Merits of Commerce’s “Diversified Products” Analysis
As discussed above, in Diversified Products, this court held that – in determining whether
a product falls within the scope of an order – Commerce should consider five criteria: (1) the
physical characteristics of the product in question as compared to subject merchandise; (2) customer
expectations with respect to the product in question as compared to subject merchandise; (3) end
uses of the product at issue as compared to subject merchandise; (4) channels of distribution for the
product at issue as compared to subject merchandise; and (5) the manner in which the products are
advertised and displayed. See generally Diversified Prods., 6 CIT at 162, 572 F. Supp. at 889; 19
C.F.R. § 351.225(k)(2). In the case at bar, Commerce properly determined that – while the fifth
criterion is not relevant to the PC strand industry – the remaining four factors all support the
conclusion that Cablesa’s zinc-coated PC strand is within the scope of the Order.
The parties’ arguments as to each of the four applicable criteria are addressed below, in turn.
a. Physical Characteristics
Commerce’s determination that the physical characteristics of Cablesa’s zinc-coated PC
strand are not materially different from PC strand covered by the Order is supported by substantial
evidence. As part of its Diversified Products analysis, Commerce compared the physical
characteristics of Cablesa’s PC strand to both subject PC strand and ASTM A-475, the generally-
Court No. 05-00388 Page 16
accepted industry standard for galvanization of steel wire, to determine whether Cablesa’s product
met the requirements for exclusion from the Order – that is, whether Cablesa’s product is indeed
“galvanized.” See generally Final Scope Determination at 6. Commerce concluded that, although
PC strand made from ASTM A-475 galvanized wire is substantially different from subject PC
strand, Cablesa’s zinc-coated PC strand lacks physical properties sufficient to differentiate it from
subject PC strand in any significant way. Id. at 8.
Comparing the physical characteristics of the respective products, Commerce found that “the
physical properties and end uses of galvanized PC strand per ASTM A-475 are substantially
different from subject PC strand,” while Cablesa’s zinc-coated PC strand “has no physical properties
or end uses that are substantially different from subject PC strand.” See Final Scope Determination
at 8. In examining Cablesa’s zinc-coated product, Commerce properly focused on the zinc coating,
because all parties agreed that the diameter, grade, and “type” (normal or low relaxation) of
Cablesa’s zinc-coated product was covered by the Order. See, e.g., Domestic Industry’s Scope
Request at 9, 12. Those other physical properties are identical to the physical properties of subject
PC strand and are, indeed, the critical properties identified in the specification for PC strand. In
particular, ASTM A-416 sets forth the defining characteristics of PC strand, and refers to three
physical characteristics – diameter, grade, and type (normal or low relaxation).
Cablesa concedes that its zinc-coated PC strand satisfies all of the technical specifications
for subject PC strand consistent with ASTM A-416. Cablesa therefore emphasizes the zinc coating
on its product to attempt to distinguish its PC strand from the other PC strand products covered by
the Order. See generally Pl.’s Brief at 23-31. Cablesa maintains that the zinc coating it applies
Court No. 05-00388 Page 17
provides “protection against corrosion,” rendering its product more like galvanized PC strand
conforming to ASTM A-475 (which is excluded from the Order) than it is to the PC strand products
that are subject to the Order. Id.However, Commerce found that the zinc coating applied to Cablesa’s PC strand is minimal
– 0.05 oz./sq. ft., in contrast to the minimum coating weight of 0.40 oz./sq. ft. required for
“galvanized” steel wire, as specified by ASTM A-475. See Final Scope Determination at 2-7. Other
record evidence indicated that, in violation of ASTM A-475, the zinc coating on Cablesa’s product
was not uniform, but was instead thin and uneven. See Domestic Industry’s Scope Request at 11-12.
In addition, there was evidence that samples of Cablesa’s zinc-coated PC strand showed evidence
of corrosion only a few months after importation, indicating a lack of the corrosion-resistance that
one would expect of a “galvanized” product. Id. at l2.
Moreover, as Commerce found, even if the zinc coating applied to Cablesa’s product in fact
imparted some modest incremental degree of corrosion resistance to the PC strand, that fact alone
would not be sufficient to distinguish Cablesa’s product from subject PC strand. See Final Scope
Determination at 7. In the original antidumping investigation, for example, Commerce concluded
that plastic-coated PC strand was properly within the scope of the investigation (notwithstanding
whatever additional protection the plastic coating might provide). As Commerce there stated, the
“defining characteristic [of PC strand] continues to be the strand, and covering the merchandise does
not change the strand or its chemical or physical properties.” See Preliminary AD Determination,
68 Fed. Reg. at 42,379 (citation omitted).
Court No. 05-00388 Page 18
Evidence of record supports Commerce’s finding that the zinc coating on Cablesa’s PC
strand does not provide the corrosion resistance that Cablesa claims. For example, the results of
tests conducted on a sample of Cablesa’s product indicated that it had an average zinc coating
weight on each of the seven wires of the strand of only 0.039 oz./sq. ft. – below even the 0.05 oz./sq.
ft. coating that Cablesa claims, and less than one-tenth of the zinc coating required for galvanized
steel wire under ASTM A-475. The tested sample also showed evidence of corrosion. See generally
Domestic Industry’s Scope Request at Atts. 1, 4. The ASTM A-475 specification for galvanized
steel requires that the zinc coating be “continuous and reasonably uniform.” Cablesa’s product did
not meet that requirement.
In an effort to respond to the test results, Cablesa provided an affidavit from Dr. Ned Burns,
to support its claims as to the alleged corrosion resistant properties and the galvanized nature of its
zinc-coated PC strand. See Cablesa’s Additional Scope Comments (April 6, 2004) at Att. A.
However, information and argumentation submitted by the Domestic Industry substantially
undermined the Burns Affidavit. See generally Def.-Ints.’ Brief at 29.
For example, the Domestic Industry questions whether the sample of zinc-coated PC strand
that Cablesa provided to Dr. Burns was representative. Id. The Domestic Industry further notes that
there is no evidence that Dr. Burns tested the sample that he received; the record is thus devoid of
any test results to rebut those submitted by the Domestic Industry. Id. Nor did the Burns Affidavit
attest that Cablesa’s zinc-coated PC strand conformed to any independently-published standards for
specified characteristics of galvanized steel. Id.
Court No. 05-00388 Page 19
Cablesa argues that it should not be required to identify independent sources or standards to
establish that its product is galvanized. However, Commerce had to weigh the Burns Affidavit in
light of the evidence submitted by the Domestic Producers that undercuts – and, in some instances,
flatly contradicts – Dr. Burns’ findings. Under the circumstances, it was not unreasonable for
Commerce to seek information from objective or independent sources to support the contentions in
the parties’ submissions.
Cablesa also submitted internal company documents such as purchase orders and mill
certificates in an effort to prove customer demand for its zinc-coated PC strand, and points to those
documents as evidence that its zinc-coated PC strand is recognized as galvanized. See generally
Pl.’s Brief at 31-34. But Commerce and the Domestic Producers identified numerous internal
inconsistencies and discrepancies in Cablesa’s documents. Under the circumstances, it was not
unreasonable for Commerce to decline to rely on them.
Commerce concluded that “the primary purpose of galvanization is to protect steel which is
exposed to the elements from corrosion and it does not appear that Cablesa’s product rises to this
level.” See Scope Determination at 7. Contrary to Cablesa’s claim that Commerce never actually
determined that its zinc-coated PC strand is, in fact, not galvanized (see Pl.’s Brief at 12), the Final
Scope Determination expressly states that Cablesa’s product “does not have the physical
characteristics described in any industry standard for galvanization.” See Final Scope Determination
at 6.
Based on the record evidence as a whole, Commerce found that the physical characteristics
of Cablesa’s PC strand were comparable to those of subject PC strand products within the scope of
Court No. 05-00388 Page 20
the Order, because an objective, quantitative, generally-accepted industry standard requires that PC
strand be coated with a uniform layer of at least .40 oz./sq. ft. of zinc to be considered galvanized
(in contrast to the 0.05 oz./sq. ft. that Cablesa claims). See Final Scope Determination at 6-7.
Commerce further found that – even if it accepted Cablesa’s argument that the zinc coating on its
product provided some incremental corrosion protection – it offered no protection beyond that
afforded by the plastic-coated PC strand that is subject to the Order. See Final Scope Determination
at 6-7. In this sense, Cablesa’s product is not “like” the ASTM-conforming galvanized steel that is
excluded from the Order, and it is instead “like” the subject PC strand covered by the Order.
Moreover, Cablesa presented no other evidence to suggest that the physical characteristics of its
zinc-coated PC strand differed in any other way from subject PC strand.
Accordingly, substantial record evidence supports Commerce’s conclusion as to the first
criterion in its Diversified Products analysis. Cablesa’s zinc-coated PC strand has no physical
properties different from subject PC strand.
b. Customer Expectations
In the course of its analysis of the second Diversified Products criterion, Commerce
determined that Cablesa’s customers had no unique expectations for Cablesa’s product beyond those
for regular, non-coated PC strand. See Final Scope Determination at 7. Indeed, Commerce relied
in part on Cablesa’s own statements that its zinc-coated product is used for the same applications
as subject PC strand. Id.
Commerce’s determination on customer expectations is bolstered by record evidence
concerning the pricing of Cablesa’s product as compared to the pricing of uncoated or plastic-coated
Court No. 05-00388 Page 21
PC strand. See generally Domestic Industry Comments on Cablesa’s March 17, 2004 Questionnaire
Response (March 30, 2004) at 3, 7-8. In particular, the Domestic Industry questions the veracity
of Cablesa’s assertion that it made substantial investments to electro-galvanize its product, arguing
that the statement makes no “economic sense” since “there is no market” for the zinc-coated product
(other than the market for uncoated PC strand). See generally Def.-Ints.’ Brief at 32-33.
In response, Cablesa states that it has been shipping its zinc-coated product to the U.S. “since
1996 at the direct request of customers,” and points to purchase orders, quality certificates, and
customer affidavits in support of its claim. See Cablesa Brief at 34. As discussed above, however,
there are significant inconsistencies in those documents. Those inconsistencies, coupled with the
record evidence summarized above (establishing that customers have no different expectations for
Cablesa’s zinc-coated PC strand, as compared to subject PC strand) adequately justified
Commerce’s conclusion as to the second Diversified Products criterion.
c. End Use
As to the third Diversified Products criterion, Commerce found that Cablesa’s zinc-coated
PC strand has no end uses that are different from those of subject PC strand. See Final Scope
Determination at 8. Significantly, Cablesa concedes that the end uses for its zinc-coated PC strand
are the same as those for plastic-coated PC strand. See Pl.’s Brief at 34. Although – as Cablesa
emphasizes – that fact is not alone “dispositive” (see id.), it is yet another piece of evidence
supporting Commerce’s conclusion that Cablesa’s zinc-coated PC strand is covered by the
Antidumping Order.
Court No. 05-00388 Page 22
Other evidence similarly supports Commerce’s finding of identical end uses for Cablesa’s
zinc-coated PC strand and the subject merchandise, including product information provided by
certain of Cablesa’s customers. See generally Domestic Industry’s Rebuttal Letter (April 23, 2004)
at 6 & Att. 4. Cablesa cites to two affidavits in response. See Pl.’s Brief at 35-36. But, as the
Domestic Producers emphasize in their brief, the affidavits on which Cablesa relies do not say as
much as Cablesa suggests, and are otherwise of limited utility. See generally Def.-Ints.’ Brief at 34-
35.
Finally, Cablesa contends that Commerce incorrectly concluded that its product could not
be used in exposed environments. But even the Burns Affidavit that Cablesa relies on controverted
Cablesa’s position. See generally Def.-Ints.’ Brief at 35. Moreover, Cablesa pointed to no evidence
that its zinc-coated strand had actually been used in such an application. The purchase orders that
Cablesa points to do not establish such actual use. Indeed, the record evidence seems to indicate that
the PTI Barrier Cable specification that Cablesa cites actually requires zinc coating weights in
compliance with ASTM A-475. See Domestic Industry’s Factual Information Submission (March
19, 2004) at Att. 1. Because the zinc coating on Cablesa’s PC strand does not meet the ASTM A-
475 standard, it could not be used in such applications.
Like Commerce’s conclusions as to the first two criteria, its conclusion as to the third
criterion in its Diversified Products analysis is supported by substantial evidence in the record.
Commerce thus did not err in concluding that the end uses of Cablesa’s zinc-coated PC strand are
the same as those of subject PC strand. And that conclusion lends further support to the agency’s
finding that Cablesa’s zinc-coated PC product is within the scope of the Antidumping Order.
Court No. 05-00388 Page 23
d. Channels of Trade
In evaluating the fourth and final criterion of its Diversified Products analysis, Commerce
found that Cablesa sells all PC strand (whether zinc-coated or not) through the same channel of trade
– specifically, distributors. See Final Scope Determination at 7. Although Cablesa seeks to dismiss
that fact as “largely irrelevant,” the criterion is – as the Domestic Producers note – drawn directly
from the court’s opinion in Diversified Products and specifically codified in Commerce’s
regulations. See Pl.’s Brief at 36; Def.-Ints.’ Brief at 36.
Cablesa seeks, in effect, to recast the criterion to inquire not whether Cablesa’s zinc-coated
PC strand and the subject merchandise are sold through the same channel of trade, but – rather–
whether galvanized PC strand that is sold pursuant to the ASTM A-475 specification is sold through
a different channel of trade. See Pl.’s Brief at 36. However, Cablesa’s proposed inquiry is at odds
with the plain language of the applicable regulation. Further, the record is devoid of evidence on
point, because Cablesa does not manufacture galvanized PC strand that is produced to the ASTM
standard.
More to the point, the record indicates that Cablesa not only employs the same channel of
trade for both subject PC strand and zinc-coated PC strand; Cablesa also sells both products to the
same customers. See Final Scope Determination at 7-8. That fact provides further strong support
for Commerce’s conclusion that Cablesa’s zinc-coated PC strand shares all pertinent physical
characteristics, end uses, and channels of trade with subject PC strand, and that Cablesa’s zinc-
coated product – like all other PC strand – is within the scope of the Antidumping Order in this case.
Court No. 05-00388 Page 24
III. Conclusion
For all the reasons set forth above, Plaintiff’s Motion for Judgment on the Agency Record
is denied, and the Commerce Department’s Final Scope Determination is sustained.
Judgment will enter accordingly.
___________________________________
/s/
Delissa A. Ridgway
Judge
Decided: March 1, 2007
New York, New York
UNITED STATES COURT OF INTERNATIONAL TRADE
CABLESA S.A. DE C.V., :
Plaintiff, :
v. :
UNITED STATES, :
Defendant, : Court No. 05-00388
and :
AMERICAN SPRING WIRE CORP., :
INSTEEL WIRE PRODUCTS COMPANY,
and SUMIDEN WIRE PRODUCTS CORP., :
Defendant-Intervenors. :
JUDGMENT
This case having been duly submitted for decision; and the Court, after due
deliberation, having rendered a decision herein;
NOW, therefore, in conformity with said decision, it is
ORDERED that Plaintiff’s Motion for Judgment on the Agency Record is denied; and
it is further
ORDERED that the U.S. Department of Commerce’s Scope Inquiry Final
Determination in Prestressed Concrete Steel Wire Strand from Mexico, Inv. No. A-201-831
(June 16, 2004) is sustained; and it is further
ORDERED, ADJUDGED and DECREED that this action be, and it hereby is,
dismissed.
/s/
___________________________________
Delissa A. Ridgway
Judge
Dated: March 1, 2007
New York, New York
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