Fedmet Resources Corp. v. United States

Slip Op. 13- 68

UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Nicholas Tsoucalas, Senior Judge
___________________________________
FEDMET RESOURCES CORPORATION, :
:
Plaintiff, :
:
v. : Court No.: 12-00215
:
UNITED STATES, :
:
Defendant, :
:
and :
:
ANH REFRACTORIES COMPANY, RESCO :
PRODUCTS, INC., and MAGNESITA :
REFRACTORIES COMPANY, :
:
Defendants. :
:

OPINION
Held: Plaintiff Fedmet Resources Corporation’s motion for judgment
on the agency record is denied.
Dated: May 30, 2013
Morris, Manning & Martin LLP, (Jeffrey O. Frank, Brady W.
Mills, Donald B. Cameron, Julie C. Mendoza, Mary S. Hodgins, and R.
Will Planert) for Fedmet Resources Corporation, Plaintiff.
Stuart F. Delery, Principal Deputy Assistant Attorney General;
Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Antonia R. Soares); Office of Chief
Counsel for Import Administration, United States Department of
Commerce, Devin S. Sikes, Of Counsel, for the United States,
Defendant.
Jochum, Shore & Trossevin, PC, (Marguerite Ellen Trossevin,
Andrew M. Shore, James J. Jochum, and Reza Karamloo) for ANH
Refractories Company, Defendant-Intervenor.
Doyle, Barlow & Mazard PLLC, (Camelia C. Mazard) for Resco
Products, Inc., and Magnesita Refractories Company, Defendant-
Intervenors.
Case No. 12-00215 Page 2

TSOUCALAS, Senior Judge: Before the court is Fedmet Resources

Corporation’s (“Fedmet”) USCIT Rule 56.2 motion for judgment on the

agency record appealing the United States Department of Commerce’s

(“Commerce”) final scope ruling regarding antidumping and

countervailing duty orders on magnesia carbon bricks (“MCBs”).

Pl.’s Mot. J. Agency R. at 1–2 (“Pl.’s Br.”); see Certain Magnesia

Carbon Bricks from the People’s Republic of China and Mexico: Final

Scope Ruling — Fedmet Resources Corporation, Case Nos. A-201-837,

A-570-954 and C-570-955 (July 3, 2012), Pub. R. 2d 74 at 1–2

(“Final Scope Ruling”).1 Fedmet imports “Bastion”-trademarked

magnesia alumina carbon bricks (“MACBs”), which contain alumina in

addition to magnesia and carbon. Pl.’s Br. at 6. In its Final

Scope Ruling, Commerce determined that Fedmet’s Bastion bricks are

within the scope of the antidumping and countervailing duty orders.

Final Scope Ruling at 1–2. Fedmet argues that Commerce’s ruling is

not based on substantial evidence or otherwise in accordance with

the law because MACBs have distinct physical and commercial

characteristics from in-scope MCBs, and because the International

Trade Commission (“ITC”) did not consider MACBs in its injury

1
Commerce implemented its new electronic filing system during
the course of the proceedings below, causing the administrative
record to be subdivided into four parts. Unless otherwise noted,
all documents in the first, second, third, and fourth divisions of
the record hereinafter will be designated “R.1st,” “R.2d,” “R.3d,”
and “R.4th,” respectively. The first and second portions of the
record contain public documents, while the third and fourth
portions contain confidential documents.
Case No. 12-00215 Page 3

determination. Pl.’s Br. at 9–11; see Certain Magnesia Carbon

Bricks from China and Mexico (Final), USITC Pub. 4182, Inv. Nos.

701-TA-468 and 731-TA-1166–1167 at 3–6 (Sept. 2010) (“ITC Final

Determination”). Commerce and defendant-intervenors Resco

Products, Inc. (“Resco”), ANH Refractories Company, and Magnesita

Refractories Company (collectively, “defendant-intervenors”) oppose

the motion. See Commerce’s Resp. Pl.’s Br. at 7–8 (“Commerce

Resp.”); ANH’s Resp. Pl.’s Br. at 2–5 (“ANH Resp.”); Magnesita’s &

Resco’s Resp. Pl.’s Br. at 4–5 (“M&R Resp.”).

BACKGROUND

In September 2010, Commerce published antidumping duty orders

on MCBs from Mexico and the People’s Republic of China (“PRC”), and

a separate countervailing duty order on MCBs from the PRC. Certain

MCBs From Mexico and the PRC: Antidumping Duty Orders, 75 Fed. Reg.

57,257, at 57,257 (Sept. 20, 2010) (“AD Orders”); Certain MCBs from

the PRC: Countervailing Duty Order, 75 Fed. Reg. 57,442, at 57,442

(Sept. 21, 2010) (“CVD Order,” and collectively, “the Orders”).

MCBs are a type of “refractory brick” necessary for certain

applications in the steelmaking industry. R.3d 3 Ex. 1 at 6–7.

Steelmakers use refractory bricks as lining for the inside of

ladles that transport and pour molten steel and as lining for the

inside of metallurgy furnaces. Id. & Ex. 2 at 5–7. Refractory

bricks undergo repeated exposure to extreme temperatures and

caustic substances in these roles, meaning each brick has a limited
Case No. 12-00215 Page 4

useful life. Id. Ex. 2 at 5–6. Bricks used in certain locations

— particularly at the “slag line and at the top of the steel

melt[,] where active chemical processes are taking place and

impurities and waste tend to aggregate” — experience more wear than

bricks in other locations. Id. at 5. Consequently, producers

offer a wide range of refractory bricks with finely tuned

chemistries for use in different parts of the ladle or furnace.

Id. at 5–6. Steelmakers arrange these specialized bricks to

achieve uniform deterioration and to lower costs, although the

exact arrangement “may be quite different from shop to shop.” Id.

at 5–7.

MCBs are a particularly strong variety of refractory brick

composed of magnesia (MgO) and added carbon. Id. Ex. 1 at 10–12 &

Ex. 2 at 5–7. MCBs exhibit high thermal conductivity, low

porosity, and high corrosion resistance. R.2d 18 at 5 (citing R.3d

3 Ex. 1 at 10–11). Consequently, MCBs are used where corrosion is

most severe — the slag line, the lower sidewall, the upper

sidewall, the roofs of ladles, and the wall lining of high-

temperature furnaces. R.3d 3 Ex. 1 at 6–7.

The scope of the Orders covers “certain chemically-bonded . .

. magnesia carbon bricks with a magnesia component of at least 70

percent magnesia . . . by weight, . . . with carbon levels ranging

from trace amounts to 30 percent by weight, regardless of

enhancements . . . and regardless of whether or not antioxidants
Case No. 12-00215 Page 5

are present.” Pl.’s Br. at 6 (quoting AD Orders, 75 Fed. Reg. at

57,257; CVD Order, 75 Fed. Reg. at 57,443).

On May 3, 2011, Fedmet filed a scope ruling request to

determine whether its Bastion MACB product is covered under the

Orders. Certain Magnesia Carbon Bricks from the PRC and Mexico:

Preliminary Scope Ruling — Fedmet Resources Corporation, Case Nos.

A-201-837, A-570-954, and C-570-955 at 1 (Mar. 30, 2012)

(“Preliminary Scope Ruling”). Fedmet’s Bastion bricks contain

70–90% magnesia and 3–15% carbon, levels well within the scope’s

technical parameters. Pl.’s Br. at 6–7. However, Fedmet argues

that the 8–15% alumina (Al2O3) content of its Bastion bricks

distinguish them from in-scope MCBs. Id. at 3. Specifically, the

alumina reacts with magnesia in the brick at steelmaking

temperatures to form a mineral called spinel. Id. “The spinel

improves the performance of the brick in certain applications by

promoting permanent expansion of the brick when it is heated, which

hinders the formation of cracks, and maintains that expansion when

the ladle cools between uses.” Id.

All parties agree there is no standard chemical definition for

bricks marketed as MACBs. Final Scope Ruling at 9; see Pl.’s Reply

at 6. Evidence on the record demonstrates that the term “MACB” can

refer to bricks with more than 70% magnesia (“low-alumina bricks”),

as well as bricks with less than 70% magnesia (“high-alumina
Case No. 12-00215 Page 6

bricks”).2 Preliminary Scope Ruling Ex. 2 at 3 (online description

of products marketed as MACBs with less than 70% magnesia content);

R.2d 18 Ex.1 at 3 (in reference to MACBs, “carbon-bonded bricks

with 50–90% [magnesia] or 40–50% [alumina] are used in the Asian

region”); R.4th 2 at 3–10 (discussing industry naming conventions

indicating that any brick with a majority magnesia content and

added alumina and carbon can be called an MACB). Fedmet stated at

oral argument that the minimum level of alumina required to form

spinel is about 5%, Hr’g Tr. at 17, Fedmet Res. Corp. v. United

States, No. 12-00215 (Ct. Int’l Trade Mar. 26, 2013), but there is

little evidence in the administrative record to support this claim.

See Preliminary Scope Ruling Ex. 1 at 100–01 (showing that bricks

with 4% added alumina exhibit characteristics similar to bricks

with 5–7% added alumina, but noting that bricks with 4% alumina

“show[] less expansion[,] which may not be optimal” for preventing

slag penetration).

In its preliminary determination, Commerce ruled that Fedmet’s

Bastion low-alumina MACB is within the scope of the Orders.

Preliminary Scope Ruling at 1–2. Commerce first found that

“[b]ased on the magnesia and carbon content alone, it appears that

2
As the amount of magnesia in an MACB increases, the amount
of room left for added alumina decreases. Hence, a low-alumina
brick with 70% magnesia cannot contain more than 30% alumina,
whereas a high-alumina brick with less than 70% magnesia can have
up to nearly 50% alumina. Bricks with more alumina than magnesia
are called alumina magnesia carbon bricks (“AMCBs”). R.4th 2 at 3.
Case No. 12-00215 Page 7

Fedmet’s Bastion[] [MACBs] fall within the scope of the Orders”

because they contain more than 70% magnesia and have some added

carbon. Id. at 26. Nevertheless, Commerce found “it necessary to

look beyond the language of the scope of the Orders because of the

potential ambiguity regarding whether the plain language of the

scope covers MCBs with alumina.” Id. Commerce then determined

that conflicting language in the petition and in the investigations

before it and the ITC “prevent[ed] a definitive conclusion on these

sources alone.” Id. at 26–27. Upon consideration of the physical

characteristics, purchaser expectations, end use, channels of

trade, price, and manner of advertising, however, Commerce

concluded that Fedmet’s Bastion bricks did fall within the scope of

the Orders. Id. at 27–32. Commerce later affirmed each of these

determinations in its Final Scope Ruling. Final Scope Ruling at

1–12.

Fedmet alleges that the Final Scope Ruling is unsupported by

substantial evidence and contrary to law because the steel industry

considers MACBs to be distinct products from MCBs. Specifically,

Fedmet argues: (1) language in the petition, questionnaire

responses, and investigations indicates the scope should be

interpreted to exclude MACBs; (2) MACBs are distinguishable from

in-scope MCBs on the basis of their distinct physical properties;

and (3) Commerce acted contrary to law by interpreting the scope as

covering MACBs even though the ITC excluded them from its injury
Case No. 12-00215 Page 8

determination. Pl.’s Br. at 12–38.

JURISDICTION

The court has jurisdiction over this matter pursuant to

section 516(a)(2)(B)(vi) of the Tariff Act of 1930, as amended, 19

U.S.C. § 1516a(a)(2)(B)(vi) (2006).3

STANDARD OF REVIEW

The court must uphold Commerce’s scope determination unless it

is “unsupported by substantial evidence on the record, or not

otherwise in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

“Substantial evidence is ‘such relevant evidence as a reasonable

mind might accept as adequate to support a conclusion,’” Huaiyin

Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374

(Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197,

229 (1938)), “taking into account the entire record, including

whatever fairly detracts from the substantiality of the evidence.”

Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir.

1984).

“[T]he plain language of the . . . order is paramount” in

determining whether particular products are included in the scope.

King Supply Co. v. United States, 674 F.3d 1343, 1345 (Fed. Cir.

2012); see Walgreen Co. v. United States, 620 F.3d 1350, 1354 (Fed.

Cir. 2010). Nevertheless, antidumping and countervailing duty

3
All further citations to the Tariff Act of 1930 are to the
relevant provisions of Title 19 of the United States Code, 2006
edition, and all applicable supplements thereto.
Case No. 12-00215 Page 9

orders “sometimes employ general language,” which “can render the

. . . scope ambiguous.” See Mid Continent Nail Corp. v. United

States, 35 CIT __, __, 770 F. Supp. 2d 1372, 1378 (2011); 19 C.F.R.

§ 351.225(a) (2013). A scope ruling “is a highly fact-intensive

and case-specific determination,” King Supply Co., 674 F.3d at

1345, that is “particularly within the expertise of [Commerce].”

Sandvik Steel Co. v. United States, 164 F.3d 596, 600 (Fed. Cir.

1998). Thus, challenging a scope ruling is “a course with a high

barrier to reversal.” Nippon Steel Corp. v. United States, 458

F.3d 1345, 1352 (Fed. Cir. 2006) (quoting Mitsubishi Heavy Indus.,

Ltd. v. United States, 275 F.3d 1056, 1060 (Fed. Cir. 2001))

(internal quotation marks omitted).

ANALYSIS

If a scope contains language “that is subject to

interpretation,” Commerce will resolve the ambiguity using the

interpretive tools contained in 19 C.F.R. § 351.225. Duferco

Steel, Inc. v. United States, 296 F.3d 1087, 1096–97 (Fed. Cir.

2007). Fedmet concedes “the scope language alone is not

dispositive of the treatment of [MACBs] under the [O]rders.” Pl.’s

Reply at 2–3; see Def.’s Br. at 13–14.

Under 19 C.F.R. § 351.225(k)(1), Commerce must first consider

“[t]he descriptions of the merchandise contained in the petition,

the initial investigation, and the determinations of [Commerce] .

. . and the [ITC].” Id. If those “criteria are not dispositive,”
Case No. 12-00215 Page 10

Commerce must then consider the factors listed in paragraph (k)(2):

“(i) [t]he physical characteristics of the product; (ii) [t]he

expectations of the ultimate purchasers; (iii) [t]he ultimate use

of the product; (iv) [t]he channels of trade in which the product

is sold; and (v) [t]he manner in which the product is advertised

and displayed.” Id. § 351.225(k)(2).

I. Commerce’s 19 C.F.R. § 351.225(k)(1) Analysis

Commerce determined that “at no point in either the petition,

the . . . pre-initiation stage, or the [ITC’s determination] did

[Resco] identify the chemical composition and technical

specifications of each type of refractory brick, or expressly state

that [MACBs] with a chemical composition like [Fedmet’s Bastion

brick] fall outside the scope.” Final Scope Ruling at 5. In other

words, Commerce found each reference to “MACBs” in the (k)(1)

evidence to be ambiguous with respect to whether it actually

identified low-alumina bricks like the Bastion brick. In light of

this ambiguity, Commerce determined that the (k)(1) evidence was

inconclusive and further analysis under the (k)(2) factors was

necessary to determine to whether Fedmet’s Bastion MACBs were

within the scope. Id.; Preliminary Scope Ruling at 26–27.

Fedmet insists that Commerce’s analysis is not supported by

substantial evidence because MACBs are simply understood to be

distinct from MCBs. See Pl.’s Br. at 13–24. Claiming that “MCBs

do not contain added alumina,” Fedmet argues that each reference to
Case No. 12-00215 Page 11

MACBs in the (k)(1) evidence demonstrates that MACBs like its

Bastion brick were never intended to be included in the scope. Id.

at 24. For example, Fedmet notes that Resco named “magnesite,

fired bauxite, magnesia dolomite and [MACBs]” as products that “are

not generally substitutable [for in-scope MCBs], in a technical

sense, due to varying chemical and physical properties and wear

characteristics.” R.3d 3 Ex. 1 at 10. Based on this statement,

Fedmet concludes that Resco “express[ly]” excluded low-alumina

MACBs like Fedmet’s Bastion brick from the scope. Pl.’s Br. at

13–14. Fedmet also identifies a questionnaire response where Resco

stated that “[t]he scope of our petition focuses only on MCB” and

that “[t]hese other products [including MACBs] do not provide the

same performance where MCB are used in steelmaking and steel

handling applications.” R.3d 3 Ex. 2 at 4. Fedmet argues this

response “can only be read as confirmation that the scope language

defining MCBs was adequate to clearly exclude [MACBs].” Pl.’s Br.

at 16.

Fedmet’s approach obscures two critical facts supported by the

record that instill the term “MACB” with considerable ambiguity.

First, advertisements and other record evidence indicate that the

term “MACB” can refer to low-alumina bricks as well as high-alumina

bricks. Preliminary Scope Ruling, at Ex. 2; R.2d 18 Ex. 1 at 3;

R.4th 2 at 3–10. Second, record evidence of industry naming

conventions reasonably suggests that so long as the magnesia
Case No. 12-00215 Page 12

content of a brick with added alumina remains above 70%, it can be

called either an MCB or an MACB. R.2d 19 at Ex. 2 (advertisements

describing the “Vesuvius”-trademarked product as an MCB even though

it contains levels of added alumina comparable to the Bastion MACB

product); Preliminary Scope Ruling at Ex. 2 (several online

marketing sources describing products as MCBs even though they

contain added alumina). Consequently, without further

specification, “MACB” may refer to only high-alumina MACBs in some

contexts, to high- and low-alumina MACBs in others, or to MCBs with

added alumina in others still. R.2d 19 at Ex. 2; Preliminary Scope

Ruling at Ex. 2. Commerce recognized this ambiguity throughout its

analysis, id. at 19, 26–27; Final Scope Ruling at 5, and reasonably

concluded it could not determine whether low-alumina MACBs like

Fedmet’s Bastion bricks were outside the scope based on the (k)(1)

evidence alone. See ArcelorMittal Stainless Belg. N.V. v. United

States, 694 F.3d 82, 88 (Fed. Cir. 2012) (“[A]ntidumping orders

should not be interpreted in a vacuum devoid of any consideration

of the way the language of the order is used in the relevant

industry.”).

Because Resco’s use of the term “MACB” does not differentiate

between high-alumina and low-alumina MACBs, the petition and

questionnaire response language Fedmet identifies is plainly

ambiguous. See Preliminary Scope Ruling at 26–27. MACBs

“generally” are not substitutable for MCBs, but record evidence
Case No. 12-00215 Page 13

shows that low-alumina MACBs specifically are often substituted for

MCBs due to their similar or even enhanced performance in MCB

applications. Id. at Exs. 1 & 2; R.2d 19 at 8–13 & Exs. 2, 5. In

a later response, Resco went on to describe how products it

excluded by name from the proposed scope always fall outside of the

scope’s plain language, while making no similar claim elsewhere

about MACBs. See R.3d 3 Ex. 3 at 1. As Commerce reasonably

determined, without further chemical specification, these

references to MACBs indicate that Resco may have intended to

exclude only some MACBs, namely, high-alumina MACBs that can never

meet the scope’s plain language. See Preliminary Scope Ruling at

26–27.

Fedmet’s remaining arguments are similarly unpersuasive.

Fedmet avers that Commerce failed “to meaningfully address the

repeated, express statements by Resco that it did not intend to

cover [MACBs].” Pl.’s Br. at 18. Fedmet argues further that

Commerce “chose[] to accept” Resco’s explicit statements excluding

MACBs from the scope, and that Commerce cannot now change its

position. Pl.’s Br. at 20. Fedmet also insists that Commerce and

Resco never offered a “plausible alternative interpretation” of the

references to MACBs in the petition and the questionnaire

responses. Pl.’s Br. at 22. In fact, Resco never expressly stated

that MACBs with in-scope quantities of magnesia and carbon should

be excluded from the Orders. See R.3d 3 Exs. 1–3; Preliminary
Case No. 12-00215 Page 14

Scope Ruling at 26–27; Pl.’s Br. at 29 (quoting testimony before

the ITC where counsel for Resco listed MACBs alongside other

excluded bricks, but did not distinguish between high- and low-

alumina MACBs). Furthermore, Fedmet’s refusal to consider the

difference between high- and low-alumina varieties of MACB does not

eliminate the inherent linguistic ambiguity supporting multiple

reasonable interpretations of the (k)(1) evidence. See Preliminary

Scope Ruling at 19, 26–27; Final Scope Ruling at 5.

As every piece of (k)(1) evidence is ambiguous as to whether

it is referring to MCBs with added alumina or to all bricks with

more than 50% magnesia, some carbon, and some alumina, Commerce’s

determination that the (k)(1) factors were not dispositive was

reasonable. See Preliminary Scope Ruling at 4–27; Final Scope

Ruling at 3–5.

II. Commerce’s 19 C.F.R. § 351.225(k)(2) Analysis

Fedmet contends that “even if the [c]ourt were to find that

Commerce was lawfully permitted to consider the factors in 19

C.F.R. § 351.225(k)(2), Commerce’s findings under those factors are

also unsupported by substantial evidence.” Pl.’s Br. at 11.

Fedmet argues that Commerce made four general errors in finding

that the physical characteristics of its Bastion brick are similar

to those of in-scope MCBs.4 Pl.’s Br. at 33–38.

4
Fedmet includes two additional paragraph-long sections
titled “Channels of Trade and Price and Manner of Sale and
Advertising” and “Expectations of the Ultimate Purchaser and
Case No. 12-00215 Page 15

First, Fedmet claims “Commerce’s finding is contrary to the

ITC’s final injury determination,” wherein “the [ITC] found that

‘other refractory bricks, such as fired magnesite, fired bauxite,

magnesia dolomite, and [MACBs] . . . do not have the same physical

characteristics of MCB, are easily differentiated by price, and

their uses are not perceived by the steel producers as

substitutable.’” Pl.’s Br. at 33 (quoting ITC Final Determination,

at I-8). Fedmet again fails to acknowledge the difference between

high-alumina and low-alumina MACBs. Therefore, Fedmet has not

demonstrated how this reference to MACBs definitively identifies

all MACBs instead of only those high-alumina MACBs that are not

interchangeable with MCBs. See id.

Second, Fedmet argues that Commerce “ignore[d] the extensive

and detailed evidence” demonstrating that Bastion MACBs are

distinct from in-scope MCBs due to their spinel-producing alumina

content “in favor of a single article that Commerce found on the

Ultimate Use of the Product.” Pl.’s Br. at 37–38. In those
sections, Fedmet argues that Commerce improperly based its finding
that “MCBs and [MACBs] are ‘interchangable’” on “certain product
advertisements it pulled off the internet . . . by entities who
were not parties to Commerce’s scope inquiry,” Pl.’s Br. at 37
(quoting Final Scope Ruling at 10), and “ignore[d] detailed
evidence provided by Fedmet on the different specific uses of
[MACBs].” Pl.’s Br. at 38. It is not the court’s role to reweigh
evidence before Commerce, see Laminated Woven Sacks Comm. v. United
States, 716 F. Supp. 2d 1316, 1328 (2010) (citing Burlington Truck
Lines Inc. v. United States, 371 U.S. 156, 168 (1962)), and there
is substantial additional evidence on the record indicating that
low-alumina MACBs like Fedmet’s Bastion brick are in fact
interchangeable with MCBs. See Preliminary Determination Exs. 1 &
2; ITC Final Determination at I-9; R.2d 19 at Exs. 3 & 5.
Case No. 12-00215 Page 16

internet” in a publication called Millennium Steel. Pl.’s Br. at

33–34. Fedmet challenges “the bona fides of this publication” and

“the credentials of the authors of this study,” while

simultaneously insisting that the Millennium study supports its own

conclusion that MACBs are distinguishable from MCBs. Pl.’s Br. at

34–35.

Fedmet has not demonstrated that Commerce’s reliance on the

Millennium study was unreasonable. The court’s role is not to

reweigh evidence, see Laminated Woven Sacks, 716 F. Supp. 2d at

1328 (citing Burlington Truck Lines, 371 U.S. at 168), and it will

not accept Fedmet’s invitation to do so here, especially in the

complete absence of evidence questioning the study’s credibility.

In any event, Commerce used the Millennium study to “confirm[] that

MCBs with added alumina are widely used” in the same applications

and have similar physical properties as in-scope MCBs. Preliminary

Scope Ruling at 28 & Ex. 1 (internal quotation marks omitted). The

study concludes that some MACBs may offer better performance than

non-alumina MCBs in areas where MCBs are generally used. Id. Ex.

1 at 101–02. Nevertheless, according to the Millennium study,

“[e]xcessive expansion” caused by spinel formation in high-alumina

MACBs “may lead to development of stresses which causes structural

spalling.” See id. at 100–02. Consequently, the Millennium study

is consistent with other record evidence demonstrating a physical

distinction between high-alumina and low-alumina MACBs — that
Case No. 12-00215 Page 17

spinel formation in low-alumina MACBs provides the same physical

properties that set in-scope MCBs apart from other refractory

bricks, whereas spinel formation in high-alumina MACBs causes those

bricks to behave like other out-of-scope refractory products. See

Preliminary Scope Ruling at 28–29.

Third, Fedmet contends that Commerce improperly “dismissed the

information” contained in the Pocket Manual on the basis that it

contains ambiguous language as to the chemical content of MACBs.

Pl.’s Br. at 36. Appearing directly below a table titled

“Classification of the [AMCBs] according to ISO/DIS 10081-4,” the

Pocket Manual notes: “Regarding the magnesia side of the variation

range of MgO and Al2O3 at the moment carbon-bonded bricks with

50–90% MgO or 40–50% Al2O3 are used in the Asian region. These

bricks are designated as [MACBs].” R.2d 18 Ex. 1 at 108. The

remainder of the article makes conclusions regarding the difference

between AMCBs and MCBs, without further specifying the nature of

MACBs. Id. at 108–11. Commerce argues that it “reasonably found

the reference to MACBs in the Pocket Manual ambiguous as to the

chemical composition of [MACBs] because it is unclear whether the

focus of the paragraph is MACBs or [AMCBs], which contain a higher

alumina content than [MACBs],” and is unclear as to whether that

“standard” applies outside of Asia. Def.’s Resp. at 33.

Extending to Commerce the appropriate deference in analyzing

the record before it, King Supply Co., 674 F.3d at 1348, Commerce’s
Case No. 12-00215 Page 18

treatment of this passage as ambiguous was reasonable. In context,

the Pocket Manual can reasonably be considered ambiguous as to

which bricks “are designated as [MACBs],” and by whom. See R.2d 18

Ex. 1 at 107–11. For example, the quote does not illuminate

whether a brick with 91% magnesia, 8% alumina, and 1% carbon can be

considered an MACB, or whether it would be called something else

outside of Asia. See id. at 108. Furthermore, even if Commerce

determined MACBs can contain “up to 50%” alumina as Fedmet insists

it should have, the Pocket Manual would not undermine the Final

Determination. The Pocket Manual simply does not identify any

physical characteristics or uses that distinguish low-alumina MACBs

like Fedmet’s Bastion bricks from MCBs. See id. at 107–11.

Moreover, several pieces of record evidence otherwise support

Commerce’s finding that there is substantial physical and

functional overlap between low-alumina MACBs like Fedmet’s Bastion

brick and in-scope MCBs. See Preliminary Determination Exs. 1 & 2;

ITC Final Determination at I-9; R.2d 19 at Exs. 3 & 5.

Lastly, Fedmet argues that Commerce improperly relied on

statements in the ITCs determination indicating that carbon — not

alumina — is the most important additive in preventing slag

penetration in bricks with greater than 70% magnesia. Pl.’s Br. at

46–47. Fedmet insists that “the significance of spinel formation

is that it promotes permanent expansion of the bricks, which, in

turn, reduces slag penetration of the joints between the bricks.”
Case No. 12-00215 Page 19

Pl.’s Br. at 37. However, Fedmet does not cite any record evidence

that contravenes the ITC’s conclusion that “[t]he carbon in MCBs”

also “prevents liquid slag from penetrating and eroding bricks.”

ITC Final Determination at I-9; see Pl.’s Br. at 46–47. Further,

as the Millennium study noted, too much alumina can cause cracks

that lead to excessive slag penetration, meaning that the relevance

of Fedmet’s claims are limited by their lack of chemical

specificity. Preliminary Scope Ruling Ex. 1 at 100. Put simply,

the record shows that the low alumina content in an MACB like

Fedmet’s Bastion brick promotes the same physical characteristics

that set in-scope MCBs apart from other refractory products — slag

resistance and low porosity. Id.; ITC Final Determination at I-9;

R.2d 19 Ex. 3 at 176.

For the foregoing reasons, and on balance with Commerce’s

analysis of the remaining (k)(2) factors including the manner of

advertisement and ultimate use of low-alumina MACBs, Commerce’s

interpretation of the scope using the (k)(2) factors was

reasonable. See Preliminary Scope Ruling at 27–29; Final Scope

Ruling at 8–10.

III. ITC Injury Determination

According to Fedmet, “[t]he antidumping statute provides that

in order to impose antidumping duties on imported merchandise,

there must be affirmative determinations by both Commerce and the

ITC.” Pl.’s Br. at 30 (citing 19 U.S.C. § 1673). Consequently,
Case No. 12-00215 Page 20

“the failure of the ITC to have investigated or reached an

affirmative determination with respect to [MACBs] is itself

sufficient grounds for holding that the scope of the Orders does

not cover [MACBs].” Id. Although there is no controlling

authority explicitly supporting Fedmet’s legal position, see

Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1075 n.3

(Fed. Cir. 2001) (declining to reach the question of whether the

exclusion of a product from the ITC investigation, by itself, could

establish that the product is not covered under the scope);

Wheatland Tube Co. v. United States, 161 F.3d 1365, 1371 (Fed. Cir.

1998) (stating in dicta that scope inconsistencies between the

ITC’s investigation and Commerce’s investigation would “frustrate

the purpose of antidumping laws”), no party offers an alternative

interpretation of the Act. See Commerce Resp. at 23–26; ANH Resp.

at 26; M&R Resp. at 8–9. Commerce and defendant-intervenors argue

instead that the ITC did include an MACB in its injury

determination. Commerce Resp. at 23–26; ANH Resp. at 26; M&R Resp.

at 8–9.

Even assuming that Fedmet’s interpretation of the law is

correct, see Wheatland Tube, 161 F.3d at 1371, Commerce’s

determination was not contrary to law. Because there is

substantial evidence on the record demonstrating that low-alumina

MACBs are interchangeable with in-scope MCBs, the question of

whether or not the ITC considered an MACB is irrelevant. See
Case No. 12-00215 Page 21

Preliminary Determination Exs. 1 & 2; ITC Final Determination at I-

9; R.2d 19 at Exs. 3 & 5. Even so, the record indicates that the

ITC did include a low-alumina MACB in its injury determination.

See Final Scope Ruling at 5. Specifically, as Commerce explained

in the Final Scope Ruling, “the ITC included [Resco’s] Maxline 10

AFX trademarked product, an MCB with added alumina, in its pricing

analysis.” Id. at 5; see Pl.’s Br. at 24 (“MCBs do not contain

added alumina.”).

In its Reply brief, Fedmet argues that the Maxline 10 AFX

brick is not an MACB because the ITC record does not describe it as

containing alumina and because Resco has not provided any evidence

that the Maxline brick promotes the formation of spinel. Pl.’s

Reply at 16–18. However, Fedmet fails to address record evidence

indicating that any MCB with added alumina can be called an MACB.

See R.4th 2 at 3–10 (discussing naming conventions); Preliminary

Scope Ruling at Ex. 2; R.2d 19 at Ex. 2. In the absence of a

standard technical definition for MACBs based on spinel formation

that readily distinguishes Resco’s Maxline brick from other low-

alumina MACBs, Commerce’s determination was justified and in

accordance with the law. See R.4th 2 at 3–10; Preliminary Scope

Ruling at Ex. 2; R.2d 19 at Ex. 2.

CONCLUSION

The record demonstrates a physical distinction between low-

alumina MACBs and high-alumina MACBs, imparting an ambiguity into
Case No. 12-00215 Page 22

the phrase “MACB” in each (k)(1) source. Commerce therefore acted

reasonably in moving on to the (k)(2) factors to determine whether

Fedmet’s Bastion brick is covered under the scope of the Orders.

Although Fedmet is able to identify evidence showing that low-

alumina MACBs exhibit certain characteristics as a result of spinel

formation, it does not and cannot refute evidence demonstrating

that these characteristics are the same as those that set in-scope

MCBs apart from other refractory products, namely, slag resistance

and low porosity. As there is substantial evidence in the record

showing that low-alumina MACBs like Fedmet’s Bastion brick meet the

scope’s plain language and are interchangeable with in-scope MCBs,

Fedmet’s motion for judgment on the agency record must be denied.

Judgment will be entered accordingly.

/s/NICHOLAS TSOUCALAS
Nicholas Tsoucalas
Senior Judge

Dated: May 30, 2013
New York, New York