Sango International, L.P. v. United States

United States Court of Appeals for the Federal Circuit

2006-1485

SANGO INTERNATIONAL L.P.,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee,

and

WARD MANUFACTURING, INC.
and ANVIL INTERNATIONAL, INC.,

Defendants-Appellees.

William D. Outman, II, Baker & McKenzie, LLP, of Washington, DC, argued for
plaintiff-appellant. With him on the brief were Stuart P. Seidel and Kevin J. Sullivan.

David Silverbrand, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for defendant-appellee
United States. With him on the brief were Peter D. Keisler, Assistant Attorney General,
David M. Cohen, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on
the brief was Kemba Eneas, Attorney, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, of Washington, DC. Of
counsel were John D. McInerney, Chief Counsel, and Berniece A. Browne, Senior
Litigation Counsel.

Roger B. Schagrin, Schagrin Associates, of Washington, DC, argued for
defendants-appellees Ward Manufacturing, Inc., et al. Of counsel were Michael J.
Brown and Brian E. McGill.

Appealed from: United States Court of International Trade

Judge Judith M. Barzilay
 United States Court of Appeals for the Federal Circuit

2006-1485

SANGO INTERNATIONAL, L.P.,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee,

and

WARD MANUFACTURING, INC.
and ANVIL INTERNATIONAL, INC.,

Defendants-Appellees,

DECIDED: May 2, 2007

Before NEWMAN, SCHALL, and MOORE, Circuit Judges.

SCHALL, Circuit Judge.

Sango International, L.P. (“Sango”) appeals the decision of the United States

Court of International Trade upholding the determination of the Department of

Commerce (“Commerce”) that Sango’s imported gas meter swivels and gas meter nuts

are within the scope of an antidumping order covering malleable iron pipe fittings, other
than grooved fittings, from the People’s Republic of China. See Sango Int’l L.P. v.

United States (CIT Decision), 429 F. Supp. 2d 1356 (Ct. Int’l Trade 2006). Because we

conclude that Commerce’s decision is not supported by substantial evidence, we

reverse the decision of the Court of International Trade and remand the case for further

proceedings consistent with this opinion.

BACKGROUND

I.

The antidumping laws protect United States industries against the domestic sale

of foreign manufactured goods at prices below the fair market value of those goods in

the foreign country. AIMCOR v. United States, 141 F.3d 1098, 1101 (Fed. Cir. 1998);

see also Allegheny Ludlum Corp. v. United States, 287 F.3d 1365, 1368 (Fed. Cir.

2002) (“Under the statutory scheme established by the Tariff Act of 1930 . . . American

industries may petition for relief from imports that are sold in the United States at less

than fair value (‘dumped’), or which benefit from subsidies provided by foreign

governments.”). If a less-than-fair-value sale of imported goods results in actual or

threatened injury to the corresponding domestic industry, a duty may be imposed on the

imported merchandise. Micron Tech., Inc. v. United States, 117 F.3d 1386, 1389 (Fed.

Cir. 1997). The duty is “equal to the amount by which the normal value exceeds the

export price . . . for the merchandise.” 1 RHP Bearings Ltd. v. United States, 288 F.3d

1334, 1337 (Fed. Cir. 2002) (quoting 19 U.S.C. § 1673).

1
The “normal value” is “the price at which the subject merchandise is first
sold . . . for consumption in the exporting country.” 19 U.S.C. § 1677b. The “export
price” is “the price at which the subject merchandise is first sold . . . in the United
States.” Id. § 1677a.

2006-1485 2
 An antidumping investigation is initiated when a domestic industry petitions

Commerce to investigate allegations of dumping by foreign manufacturers. Duferco

Steel, Inc. v. United States, 296 F.3d 1087, 1089 (Fed. Cir. 2002). In due course,

Commerce makes a preliminary determination as to whether the imported merchandise

is being sold, or is likely to be sold, at less than fair value. 19 U.S.C. § 1673b(b)(1)(A).

While Commerce is making its preliminary determination, the International Trade

Commission (“Commission”) makes a preliminary determination as to whether there is a

“reasonable indication” that an industry in the United States is “materially injured or is

threatened with material injury . . . by reason of imports of the subject merchandise [or]

that imports of the subject merchandise are not negligible.” Id. § 1673b(a)(1). If the

investigation is not terminated at the preliminary stage, Commerce makes its final

determination as to less-than-fair-value sales, or the likelihood of less-than-fair-value

sales, in the United States. Id. § 1673d(a)(1). At the same time, the Commission

finalizes its determination as to the existence or threat of material injury. Id.

§ 1673d(b)(1). If both the less-than-fair-value inquiry by Commerce and the injury

inquiry by the Commission are “answered in the affirmative,” Commerce issues the

appropriate antidumping order. Duferco Steel, 296 F.3d at 1089; see 19 U.S.C.

§ 1673d(c)(2).

II.

On October 30, 2002, Commerce received an antidumping petition from Anvil

International, Inc. (“Anvil”) and Ward Manufacturing, Inc. (“Ward”), domestic

manufacturers of pipe fittings, asking Commerce to investigate the importation of

malleable iron pipe fittings, other than grooved fittings, from the People’s Republic of

2006-1485 3
China. Pipe fittings are formed connector pieces that are used in the construction of

piping systems.

In the section of the petition describing the scope of the investigation, Anvil and

Ward stated that the goods at issue were currently classified under item numbers

7307.19.90.30, 7307.19.90.60, and 7307.19.90.80 of the Harmonized Tariff Schedule

(“HTSUS”). 2 Petition for the Imposition of Antidumping Duties: Malleable Iron Pipe

Fittings from China, at 6 (Oct. 30, 2002) (“Antidumping Petition”). They further stated,

however, that “[t]he product description of the subject merchandise, and not HTSUS

classifications, should be dispositive of whether merchandise is covered by this

petition.” Id. Turning to the uses of the goods at issue, Ward and Anvil stated that “the

principle uses of malleable iron pipe fittings are in gas lines, piping systems of oil

refineries, and gas and water systems of buildings.” Id. at 4. Finally, the petition

provided information concerning the specifications and characteristics of the pipe

fittings:

2
HTSUS heading 7307.19.90.30 covers “Tube or pipe fittings (for example,
couplings, elbows, sleeves), of iron or steel: Cast fittings: Other: Other Unions.” HTSUS
heading 7307.19.90.60 covers “Tube or pipe fittings (for example, couplings, elbows,
sleeves), of iron or steel: Cast fittings: Other: Other Other: Other: Threaded.” HTSUS
heading 7307.19.90.80 covers “Tube or pipe fittings (for example, couplings, elbows,
sleeves), of iron or steel: Cast fittings: Other: Other Other: Other: Other.”

2006-1485 4
 Malleable iron fittings are produced to the American Society for Testing
and Materials (ASTM) standard A-126(A) . . . . The fittings are threaded to
the American National Standards (ANSI) specifications. They are
available in many configurations, the most common being 90 degree
elbows, tees, couplings, crosses, and unions. They are produced in both
black (ungalvanized) and galvanized form . . . . Normally, the
ungalvanized fittings are produced to ASTM A-197 specifications and
threaded to B.16.14 specifications, and the galvanized fittings are made to
ASTM A-153 specifications and threaded to B.16.14 specifications.
Malleable pipe fittings are normally threaded and attached to pipe by
screwing. . . . The grooved fittings which are excluded from the scope of
this investigation and like product are a completely different form of fitting,
in which split couplings are attached to a circumferential groove close to
the end of each piece to be joined. A gasket inside the coupling seals
against the pipe and the coupling.

Id. at 4-5.

One of the fittings covered by the petition, an elbow fitting, is depicted below.

An elbow fitting allows two pieces of pipe to be connected, and permits the resulting

connection to turn ninety degrees. Pipe is threaded into each opening in the elbow.

Tees and crosses are similar to elbows but have three and four openings (threaded for

pipe connections), respectively. The threads on both the pipe and the fittings conform

to ANSI B1.20.1, which specifies National Pipe Thread (“NPT”). CIT Decision, 429 F.

Supp. 2d at 1361; Antidumping Petition, at 4.

2006-1485 5
 In its Notice of Initiation of the antidumping investigation, Commerce set forth the

scope of the products included in the investigation:

[T]he products covered are shipments of certain malleable iron pipe
fittings, cast, other than grooved fittings, from the People’s Republic of
China. The merchandise is classified under item numbers 7307.19.90.30,
7307.19.90.60 and 7307.19.90.80 of the Harmonized Tariff Schedule.
HTSUS subheadings are provided for convenience and customs
purposes. The written description of the scope of this proceeding is
dispositive.

Notice of Initiation of Antidumping Duty Investigation: Certain Malleable Iron Pipe

Fittings From the People’s Republic of China, 67 Fed. Reg. 70,579 (Nov. 25, 2002). On

December 12, 2003, following the investigation by Commerce and the Commission that

resulted from the Anvil and Ward petition, Commerce issued an antidumping order titled

Certain Malleable Iron Pipe Fittings, Cast, Other Than Grooved, from the People’s

Republic of China (“Order”). CIT Decision, 429 F. Supp. 2d at 1357 (citing 68 Fed. Reg.

69,376 (Dec. 12, 2003)). The Order covered the following products:

certain malleable iron pipe fittings, cast, other than grooved fittings, from
the People’s Republic of China. The merchandise is classified under item
numbers 7307.19.90.30, 7307.19.90.60 and 7307.19.90.80 of the
Harmonized Tariff Schedule (HTSUS). Excluded from the scope of this
order are metal compression couplings, which are imported under HTSUS
number 7307.19.90.80. A metal compression coupling consists of a
coupling body, two gaskets, and two compression nuts. These products
range in diameter from 1/2 inch to 2 inches and are carried only in
galvanized finish. Although HTSUS subheadings are provided for
convenience and U.S. Customs and Border Protection (CBP) purposes,
the Department’s written description of the scope of this proceeding is
dispositive.

Id. at 1357-58.

2006-1485 6
 III.

Sango is a United States manufacturer that insulates gas meter swivels and nuts.

Id. at 1358. Gas meter swivels are used to connect a gas meter to a piping system. A

swivel has the standard NPT threaded connection on one side 3 and a shaped flange

with a notch on the other side. The shaped flange mates with a gas meter through the

use of a gas meter nut. Because of the flange connection, the gas meter swivels can

only connect to pipe on one side and a gas meter on the other side. Typical gas meter

swivels are shown below.

As indicated, a gas meter nut is used to connect a gas meter swivel to a gas meter.

Below is a typical gas meter nut.

3
The parties dispute whether the NPT threaded end of a swivel can
connect to pipe or only a pipe fitting. Anvil and Ward assert that a swivel can have
either male or female threads, which would allow the swivel to connect directly to pipe.
Sango argues that a swivel cannot connect to pipe without a fitting and that the
drawings relied on by Anvil and Ward “depict articles in use midway in the last century
and last updated in January, 1981.” In other words, the parties dispute whether gas
meter swivels are currently sold with a female threaded end.

2006-1485 7
Gas meter swivels and nuts are manufactured to ANSI standard B109.1, which covers

Diaphragm Type Gas Displacement Meters.

During the period following the issuance of the Order, Sango caused to be

imported into the United States from the People’s Republic of China gas meter swivels

and nuts. Upon entry, Customs classified the swivels and nuts under HTSUS

7307.19.90.60. On December 21, 2004 and February 9, 2005, Customs rejected

Sango’s claim that the goods should be classified under HTSUS 9028.90.00, as parts

and accessories to gas meters. In reaching its conclusion, Customs explained that the

swivels and nuts work together to connect a pipe elbow to a gas meter by screwing.

Customs determined that the meter swivels and nuts were thus parts of general use that

should be classified under HTSUS heading 7307. This determination resulted in the

swivels and nuts being covered by the Order, since the Order states that the

merchandise subject to it “is classified under item numbers 7307.19.90.30,

7307.19.90.60 and 7307.19.90.80 of the Harmonized Tariff Schedule.” 4 Id. at 1357-58.

4
We have been informed by the parties that, pursuant to an order of the
Court of International Trade, the goods will not be liquidated until the resolution of all
appeals.

2006-1485 8
 IV.

There is no statutory provision governing the interpretation of the scope of

antidumping orders. However, pursuant to 19 C.F.R. § 351.225(c)(1), an importer may

request a scope ruling as to whether a particular product is covered by an antidumping

order. 5 Upon receipt of a request for a scope ruling, Commerce conducts an inquiry

into whether the product is covered by the antidumping order at issue. This inquiry is

governed by regulation:

[I]n considering whether a particular product is included within the scope
of an order or a suspended investigation, the Secretary [of Commerce] will
take into account the following:
(1) The descriptions of the merchandise contained in the petition, the initial
investigation, and the determinations of the Secretary (including prior
scope determinations) and the [International Trade] Commission.
(2) When the above criteria are not dispositive, the Secretary [of
Commerce] will further consider:
(i) The physical characteristics of the product;
(ii) The expectations of the ultimate purchasers;
(iii) The ultimate use of the product;
(iv) The channels of trade in which the product is sold; and
(v) The manner in which the product is advertised and displayed.

5
In its entirety, section 351.225(c)(1) reads,

Contents and service of application. Any interested party may apply for a
ruling as to whether a particular product is within the scope of an order or
a suspended investigation. The application must be served upon all
parties on the scope service list described in paragraph (n) of this section,
and must contain the following, to the extent reasonably available to the
interested party:
(i) A detailed description of the product, including its technical
characteristics and uses, and its current U.S. Tariff Classification number;
(ii) A statement of the interested party’s position as to whether the product
is within the scope of an order or a suspended investigation, including:
(A) A summary of the reasons for this conclusion,
(B) Citations to any applicable statutory authority, and
(C) Any factual information supporting this position, including
excerpts from portions of the Secretary’s or the Commission's
investigation, and relevant prior scope rulings.

2006-1485 9
19 C.F.R. § 351.225(k).

If Commerce “can determine, based solely upon the application [for a scope

ruling] and the descriptions of the merchandise referred to in paragraph (k)(1) of . . .

section [351.225], whether a product is included within the scope of an order . . ., the

Secretary will issue a final ruling.” 19 C.F.R. § 351.225(d). If Commerce cannot so

determine, Commerce will initiate a scope inquiry. Id. § 351.225(e).

On July 28, 2004, Sango requested a scope ruling that would exclude gas meter

swivels and nuts from the coverage of the Order. Anvil and Ward submitted comments

to Commerce arguing that the swivels and nuts should be covered by the Order

because they are “malleable iron pipe fittings which are cast and that are not grooved

fittings and are not compression fittings.” CIT Decision, 429 F. Supp. 2d at 1358.

On September 13, 2004, Commerce decided that a formal scope inquiry was

required because it was “unable to determine conclusively that meter swivels and meter

nuts are pipe fittings and are treated as such within the industry.” Id. (quoting 19 C.F.R.

§ 351.225(e) (internal quotation marks omitted)). Thereafter, in accordance with 19

C.F.R. § 351.225(k)(1), Commerce analyzed the Order, the antidumping petition, the

initial investigation, and its determinations and the determinations of the Commission to

determine whether the gas meter swivels and nuts were within the scope of the Order.

Id. at 1358-59; see 19 C.F.R. § 351.225(k)(1). Commerce found these sources

dispositive and on January 11, 2005, issued a ruling in which it determined that the

swivels and nuts were within the scope of the Order, stating as follows:

2006-1485 10
 First, these products are manufactured from malleable iron using a casting
process in the PRC. Second, these products are indisputably “fittings;”
they are “pipe fittings” because they are parts of a piping system, they
direct the flow of the gas through a piping system, and can be, although
are not always, connected to other pipe fittings or pipes. Finally, they are
neither grooved fittings nor compression couplings, both of which are
specifically excluded.

CIT Decision, 429 F. Supp. 2d at 1359 (citing United States Department of Commerce,

Final Scope Ruling on Whether Meter Swivels and Meter Nuts Are Excluded from the

Scope of the Antidumping Duty Order on Malleable Iron Pipe Fittings from the People’s

Republic of China, at 12 (Jan. 11, 2005) (“Scope Ruling”)).

V.

Pursuant to 19 U.S.C. § 1516a(a)(2), Sango timely filed suit in the Court of

International Trade to challenge Commerce’s scope ruling, and Ward and Anvil

intervened. Id. In due course, Sango moved for judgment on the administrative record,

arguing that gas meter swivels and nuts are unambiguously outside the scope of the

Order and, in the alternative, that Commerce’s scope ruling was invalid because it failed

to consider the criteria set forth in 19 C.F.R. § 351.225(k)(2). 6 Id. at 1361-62.

Addressing Sango’s motion, the Court of International Trade examined “‘the

antidumping petition, the factual findings and legal conclusions adduced from the

administrative investigations, and the preliminary order.’” Id. at 1360 (quoting Duferco

Steel, 296 F.3d at 1097). The court explained that the “language of the order receives

the greatest weight.” Id. The court also reviewed the Commission’s publications and

6
The criteria listed in 19 C.F.R. §351.225(k)(2) are sometimes referred to
as the Diversified Products criteria, after Diversified Products Corp. v. United States. 6
Ct. Int’l Trade 155 (1983).

2006-1485 11
administrative documents concerning the antidumping investigation, on the ground that

those items served to “flesh out the meaning of the Order’s text.” Id. at 1361. The court

noted that the Commission had explained that

[p]ipe fittings generally are used for connecting the bores of two or more
pipes or tubes, connecting a pipe to some other apparatus, changing the
direction of fluid flow, or closing the pipe. The material from which MCIPF
[malleable cast iron pipe fittings] are made, cast iron, is a general term for
alloys composed primarily of iron, carbon (greater than two percent) and
silicon.

Id. (quoting United States International Trade Commission, Malleable Iron Pipe Fitting

from China: Determination and Views of the Commission, Investigation No. 731-TA-

1021 (Preliminary), at 5 (Dec. 2002)) (alterations in original).

The Court of International Trade concluded that “the products are cast, made of

malleable iron, manufactured in the PRC, and do not fall within the express exceptions

within the Order.” Id. at 1362. On this basis, the court determined that it “must uphold

. . . Commerce’s Scope Ruling as supported by substantial evidence and in accordance

with law.” Id. This appeal by Sango followed. We have jurisdiction over a final decision

of the Court of International Trade pursuant to 28 U.S.C. § 1295(a)(5).

DISCUSSION

I.

We reapply the standard of review employed by the Court of International Trade.

Wheatland Tube Co. v. United States, 161 F.3d 1365, 1369 (Fed. Cir. 1998). That

means that we must uphold a scope ruling unless we find it to be “unsupported by

substantial evidence on the record or otherwise not in accordance with law.” 19 U.S.C.

§ 1516a(b)(1)(B). Substantial evidence is such relevant evidence as a reasonable mind

would accept as adequate to support the conclusion reached. Consol. Edison v. Nat’l

2006-1485 12
Labor Relations Bd., 305 U.S. 197, 229 (1938). The substantial evidence inquiry takes

into account both the evidence that supports and detracts from the conclusion reached.

See Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir. 2006).

II.

Sango argues that gas meter swivels and nuts are distinct articles of commerce

outside the scope of the Order. Sango states that the only part of a gas meter swivel

that meets ANSI Standard B1.20.1 (NPT) is the one end that connects to a pipe fitting.

Sango explains that the other end of a gas meter swivel is flanged and “specially

designed to join with the gas meter, and this flanged end cannot join to any pipe or any

other section of a gas piping system.” At the same time, Sango points out that pipe

fittings, which are covered by the Order, are manufactured to meet ANSI standard

B1.20.1, while gas meter swivels and nuts are manufactured to a different ANSI

standard, B109.1, which covers Diaphragm Type Gas Displacement Meters. Sango

points out that the threading of a gas meter nuts is straight (as opposed to the NPT

tapered threading, specified by ANSI standard B1.20.1), which precludes a gas meter

nut from being threaded together with any pipe or pipe fitting.

Sango argues that the essential characteristic of pipe fittings is that they “join[]

together two lengths of, or cap[], a pipe.” It further argues that the swivels do not

connect to pipe, and that at most they connect to pipe fittings, which are not pipe.

Sango urges that the gas meter nut is “even less susceptible to characterization as a

pipe fitting. It is never used for connecting the bores of two or more pipes together.”

2006-1485 13
 Sango asserts that these facts show Commerce’s determination was not

supported by substantial evidence. Sango states that, in its scope ruling, Commerce

basically relied upon three considerations: 1) the gas meter swivels and nuts are

manufactured from malleable iron using a casting process in China; 2) they are

indisputably “fittings”; and 3) the products are neither grooved fittings nor compression

couplings, which are expressly excluded from the scope of the Order. Pointing to the

evidence just noted, however, Sango argues that “[t]here is no proof of record . . . that

gas meter swivels and gas meter nuts are ‘indisputably’ fittings.” Finally, Sango urges

that the fact that gas meter swivels and nuts are not expressly excluded from the scope

of the Order does not mean that they are included: “[a] gas meter is not specifically

excluded nor is a valve or length of pipe. They are clearly not pipe fittings.”

Sango asks us to direct the Court of International Trade to remand to Commerce

with the instruction that Commerce find that gas meter swivels and gas meter nuts are

outside the scope of the Order. In the alternative, it argues that because the criteria

under 19 C.F.R. § 351.225(k)(1) are not dispositive, we should direct the Court of

International Trade to remand to Commerce for a scope determination after

consideration of the criteria set forth in 19 C.F.R. § 351.225(k)(2).

The government and intervenors Anvil and Ward respond that the Court of

International Trade correctly upheld Commerce’s determination as supported by

substantial evidence. The government argues that the threaded connection on the

meter swivels is an NPT connection, a “characteristic of all pipe fittings.” The

government further argues that “the record . . . contains schematics of the gas piping

system of which meter swivels and meter nuts are an integral part.” The government

2006-1485 14
urges that Sango’s arguments represent an effort “to circumvent the language of the

[O]rder by distinguishing the meter swivels and meter nuts from other pipe fittings based

upon the specialized use of meter swivels and meter nuts, as well as the fact that they

are manufactured according to different specifications than other malleable iron pipe

fittings.” According to the government, the “plain language of the [O]rder does not

specify any manufacturing standards, but, rather, only provides a description of the

subject merchandise in general terms, as required by regulation.”

III.

Section 351.225(k) states that when the criteria set forth in section

351.225(k)(1)—the description of the merchandise contained in the antidumping

petition, the initial investigation by Commerce and the Commission, and the

determinations of Commerce and the Commission—are not “dispositive,” then

Commerce must, in issuing its scope ruling, “further consider” the criteria set forth in

section 351.225(k)(2). “Dispositive” means “[h]aving the quality or function of directing,

controlling, or disposing of something.” Oxford English Dictionary (2d ed. 1989); see

Coltec Indus., Inc. v. United States, 454 F.3d 1340, 1351 (Fed. Cir. 2006) (consulting

dictionaries to construe statutory terms). For present purposes, it seems to us that

“controlling” is the key part of the definition. Thus, we think that to be “dispositive,” the

section 351.225(k)(1) criteria must be “controlling” of the scope inquiry in the sense that

they definitively answer the scope question. Viewing the evidence of record, we are

constrained to agree with Sango’s alternative argument that Commerce’s conclusion

that the criteria set forth in 19 C.F.R. § 351.225(k)(1) are dispositive of whether the gas

meter swivels and the gas meter nuts are within the scope of the Order is not supported

2006-1485 15
by substantial evidence. Put another way, we cannot say that substantial evidence

supports the proposition that the section 351.225(k)(1) criteria definitively answer the

scope question in this case.

The evidence relating to the section 351.255(k)(1) criteria—the antidumping

petition, the initial antidumping investigation, and the determinations of Commerce and

the Commission—demonstrates that the focus of the antidumping investigation was on

what one would consider traditional pipe fittings. The antidumping petition states that

pipe fittings are “normally threaded and attached to pipe by screwing.” Further, the

petition distinguishes grooved fittings, explaining that they are “a completely different

form of fitting” because of the way in which they mate with and seal pipe. Antidumping

Petition, at 5; see United States International Trade Commission, Malleable Iron Pipe

Fittings from China: Determination and Views of the Commission, Investigation No. 731-

TA-1021 (Final), at I-6 to I-7 (Dec. 2003). At the same time, Commerce’s Notice of

Initiation of the antidumping investigation, the Commission’s Preliminary Determination,

and Commerce’s Final Determination all refer to “certain malleable iron pipe fittings,

cast, other than grooved, from the People’s Republic of China,” adding that “[t]he

merchandise is classified under item numbers 7307.19.90.30, 7307.19.90.60 and

7307.19.90.80.” As seen in footnote 2, these headings cover what one would consider

to be traditional pipe fittings, one of which (an elbow) is depicted above. Finally, as

already seen, the fittings covered by the Order are manufactured to ANSI standard

B1.20.1. That standard, titled “Pipe Threads, General Purpose (Inch),” provides for

NPT connections that utilize tapered threads.

2006-1485 16
 We think that the evidence suggests that Sango’s gas meter swivels and gas

meter nuts differ from the pipe fittings covered by the Order. The gas meter swivel and

gas meter nut depicted above are typical of the items illustrated in the copy of the

brochure that Sango submitted to Commerce on October 4, 2004, and that Commerce

accepted in connection with the scope determination proceedings. As indicated, the

swivel that is depicted has a male thread at one end and a special flange and notch at

the other. The male threaded end cannot connect directly to pipe (which, as we

understand the parties’ arguments, always has a male thread at each end) but, to the

extent relevant here, only to a pipe fitting. The flanged end will only fit over and mate to

a dry, diaphragm-type gas meter through the use of a gas meter nut. Gas meter

swivels are cast in accordance with the ASTM A-197 specification for Cupola Malleable

Iron. An article so manufactured is denominated as a Meter Class Connection under

ANSI Standard B109.1, which covers Diaphragm Type Gas Displacement Meters.

ANSI standard B109.1 specifies non-NPT threaded meter connections according to the

size of the gas meter. 7 ANSI standard B109.1 differs from ANSI standard B1.20.1 (the

standard governing fittings covered by the Order) in that ANSI B109.1 provides a

standard for manufacturing and installing a gas meter, including the non-NPT

connections for the meter. The flanged end of a gas meter swivel must be produced to

ANSI B109.1 to mate with one of the Connection Dimensions set forth in Appendix A to

ANSI B109.1. These dimensions are designated, for example, as 5 Lt., 10 Lt., terms of

reference that are specific to gas meters and not to pipe fittings. The swivels and nuts

7
One exception in ANSI B109.1 is that a 1” Pittsburgh-style meter does use
NPT threaded connections.

2006-1485 17
comply with ANSI B109.1 and allow the transition from the gas meter to the piping

system. To accomplish this, the end of the swivel that mates with the piping system

complies with ANSI B1.20.1 and utilizes NPT.

For its part, the gas meter nut also is manufactured to ANSI B109.1

specifications. It must have thread specifications meeting one of the connection

designations set forth in Appendix B to ANSI B109.1. The thread size of a gas meter

nut is controlled by the size of the meter connection. For example, a 5 Lt. gas meter nut

can only thread onto a 5 Lt. connection on a gas meter. Finally, a gas meter nut has a

specially threaded inside diameter. For this reason, it does not, and cannot, connect to

any length of pipe. Neither can it connect to, or form any part of, any pipe fitting. It can

only be mated to a comparably threaded connection on a gas meter.

Thus, the evidence suggests that gas meter swivels and nuts differ from

traditional pipe fittings because the flanged end of the swivel only mates and seals to a

gas meter through the use of a meter nut. Significantly, gas meter swivels and nuts

never appear in a piping system without a gas meter. In other words, swivels and nuts

serve no purpose in a piping system except to allow a gas meter to be connected to the

system. This is in contrast to the fittings covered by the Order. Whatever their form (for

example, elbow, cross, or tee), the purpose of those fittings is to connect pipe (whether

gas pipe or pipe for another service). Their purpose is not to connect something else,

such as a gas meter, into a piping system.8

8
We are cognizant of the government’s argument that it is improper to
consider the specialized use of meter swivels and meter nuts, as well as the fact that
they are manufactured according to different specifications than other malleable iron
pipe fittings. The government urges that the plain language of the Order does not

2006-1485 18
 Gas meter swivels are able to connect, at least on one side, with a pipe fitting. 9

In this sense, as Commerce found, they “indisputably” are fittings. However, Commerce

next concluded that swivels are pipe fittings within the scope of the Order “because they

are parts of a piping system, they direct the flow of the gas through a piping system, and

can be, although are not always, connected to other pipe fittings or pipes.” This, we

think, is where Commerce erred. It is not enough that the swivels and nuts are “parts of

a piping system.” Rather, they must be the kind of fittings that are covered by the

Order. However, as just discussed, in our view the evidence of record suggests that

gas meter swivels, as well as gas meter nuts, differ from the pipe fittings that are

covered by the Order. Under these circumstances, at the least, it cannot be said that

the criteria set forth in 19 C.F.R. § 351.225(k)(1) are dispositive on the question of

whether Sango’s gas meter swivels and nuts are covered by the Order.

(Cont’d. . . .)
specify any manufacturing standards, but, rather, only provides a description of the
subject merchandise in general terms, as required by regulation. The answer to this
argument is that the section 351.225(k)(1) evidence, which is used to determine the
Order’s scope, includes ANSI and ASME standards, see Antidumping Petition, at 4-5,
and the use of pipe fittings, see United States International Trade Commission,
Malleable Iron Pipe Fitting from China: Determination and Views of the Commission,
Investigation No. 731-TA-1021 (Preliminary), at 5 (Dec. 2002). Thus, it is appropriate to
consider the different specifications and uses for gas meter swivels and nuts.
9
As discussed supra in note 3, the parties dispute whether a gas meter
swivel can connect to pipe directly. We think that this factual dispute is something that
could be resolved by looking at the “physical characteristics of the product” under the 19
C.F.R. § 351.225(k)(2) criteria.

2006-1485 19
 In sum, while we are not prepared to hold that Sango is entitled to a ruling by

Commerce that gas meter swivels and nuts are outside the scope of the Order, for the

reasons set forth above, we do hold that substantial evidence does not support

Commerce’s conclusion that the criteria set forth at 19 C.F.R. § 351.225(k)(1) are

dispositive as to whether gas meter swivels and nuts are within the scope of the Order.

We thus hold that Commerce should have considered the criteria of 19 C.F.R.

§ 351.225(k)(2) to determine whether the swivels and nuts are pipe fittings within the

scope of the Order. Accordingly, we reverse the decision of the Court of International

Trade and remand the case to the court for a further remand to Commerce, so that

Commerce may consider the criteria in section 351.225(k)(2) in arriving at a scope

determination. 10

CONCLUSION

The final decision of the Court of International Trade is reversed. The case is

remanded to the Court of International Trade for further proceedings consistent with this

opinion.

COSTS

Each party shall bear its own costs.

REVERSED and REMANDED

10
Needless to say, we express no views as to what the results of that
determination should be.

2006-1485 20