United States Court of Appeals
for the Federal Circuit
______________________
DOWNHOLE PIPE & EQUIPMENT, L.P., AND
DP-MASTER MANUFACTURING CO., LTD.,
Plaintiffs-Appellants,
v.
UNITED STATES, VAM DRILLING USA,
TEXAS STEEL CONVERSIONS, INC.,
ROTARY DRILLING TOOLS, AND TMK IPSCO,
Defendants-Appellees,
AND
UNITED STATES STEEL CORPORATION,
Defendant.
______________________
2014-1225
______________________
Appeal from the United States Court of International
Trade in No. 11-00081, Senior Judge Nicholas Tsoucalas.
______________________
Decided: January 29, 2015
______________________
MARK B. LEHNARDT, Lehnardt & Lehnardt LLC, of
Liberty, Missouri, argued for plaintiffs-appellants.
2 DOWNHOLE PIPE & EQUIPMENT v. US
MIKKI COTTET, Senior Trial Counsel, Commercial Lit-
igation Branch, Civil Division, United States Department
of Justice, of Washington, DC, argued for defendant-
appellee United States. With her on the brief were
STUART F. DELERY, Assistant Attorney General, JEANNE
E. DAVIDSON, Director, and CLAUDIA BURKE, Assistant
Director. Of counsel was MICHAEL THOMAS GAGAIN, Office
of the Chief Counsel for Import Administration, United
States Department of Commerce, of Washington, DC.
ROGER B. SCHAGRIN, Schagrin Associates, of Washing-
ton, DC, argued for defendants-appellees VAM Drilling
USA, Texas Steel Conversion, Inc., Rotary Drilling Tools,
and TMK IPSCO. With him on the brief was JOHN W.
BOHN.
______________________
Before REYNA, LINN, and WALLACH, Circuit Judges.
WALLACH, Circuit Judge.
Appellants Downhole Pipe & Equipment, LP, and DP-
Master Manufacturing Co., Ltd. (collectively, “Downhole
Pipe”) appeal the decisions of the United States Court of
International Trade (“CIT”) (1) affirming the United
States Department of Commerce’s (“Commerce”) scope
and industry support determinations and (2) sustaining
Commerce’s Final Results of Redetermination Pursuant
to Court Remand. See Downhole Pipe & Equip., LP v.
United States (Downhole Pipe II), 949 F. Supp. 2d 1288
(Ct. Int’l Trade 2013); Downhole Pipe & Equip. LP v.
United States (Downhole Pipe I), 887 F. Supp. 2d 1311
(Ct. Int’l Trade 2012); see also Drill Pipe From the People’s
Republic of China, A-570-965 (Dep’t of Commerce May 13,
2013) (final results of redetermination pursuant to court
remand) (Public Joint Appendix (“P.J.A.”) 2388–406)
(“Remand Results”); Drill Pipe From the People’s Republic
of China, 75 Fed. Reg. 4,531 (Dep’t of Commerce Jan. 28,
2010) (initiation of antidumping duty investigations)
DOWNHOLE PIPE & EQUIPMENT v. US 3
(“Initiation”). Because Commerce’s determinations were
supported by substantial evidence and were not otherwise
contrary to law, this court affirms.
BACKGROUND
I. Facts
Downhole Pipe is a United States importer of “drill
pipe” produced by DP-Master Manufacturing Co., Ltd.
(“DP-Master”), a Chinese producer. Drill pipe is a special-
ized high-strength iron alloy tube, used in oil-drilling
applications, and is manufactured in three stages: first,
seamless tubes called “green tube” are produced from raw
steel; second, the manufacturer uses complex processes to
“upset” and heat-treat green tube to thicken the ends and
increase the yield strength to the desired American Petro-
leum Institute (“API”) grade; third, the manufacturer
friction-welds a specialized “tool joint” to the ends of the
heat-treated and upset tube to complete the drill pipe.
While green tube is the primary input in the production of
drill pipe, it can also be processed into other “oil country
tubular goods.” Oil country tubular goods, which consist
primarily of casing and tubing, are used in connection
with the transport of oil and gas, while drill pipe is pri-
marily used in drilling.
II. Proceedings
In 2009, Commerce received a petition from several
domestic drill pipe producers, including Appellees VAM
Drilling USA, Texas Steel Conversion, Inc., Rotary Drill-
ing Tools, and TMK IPSCO (collectively, “Petitioners”),
seeking imposition of antidumping and countervailing
duties on drill pipe from the People’s Republic of China
(“China”). Drill Pipe From the People’s Republic of China,
No. A-570-965 (Dep’t of Commerce Dec. 31, 2009) (petition
for the imposition of antidumping and countervailing
duties) (P.J.A. 56–230) (“Petition”). Some of the petition-
ers produce green tube for drill pipe, while others produce
4 DOWNHOLE PIPE & EQUIPMENT v. US
finished drill pipe. Prior to Commerce’s initiation of the
antidumping investigation, Downhole Pipe objected to the
proposed scope of the investigation, arguing green tube
should not be included within the scope, because it was
already covered by an ongoing investigation into oil
country tubular goods, and Commerce should disregard
green tube production for purposes of calculating domestic
industry support.
After considering these objections, Commerce revised
the scope of the investigation in the Initiation, specifying
“‘[t]he scope does not include . . . unfinished tubes for
casing or tubing covered by any other antidumping or
countervailing duty order.’” Downhole Pipe I, 887 F.
Supp. 2d at 1316 (citation omitted); Initiation, 75 Fed.
Reg. at 4,535. Commerce also found sufficient domestic
industry support for the Petition, as calculated using the
revised scope. Therefore, in 2010, Commerce initiated the
antidumping investigation of drill pipe from China.
In its Preliminary Determination, Commerce deter-
mined drill pipe from China was, or was likely to be, sold
in the United States at less-than-fair value. Drill Pipe
From the People’s Republic of China, 75 Fed. Reg. 51,004
(Dep’t of Commerce Aug. 18, 2010) (preliminary determi-
nation of sales at less than fair value and affirmative
determination of critical circumstances, and postpone-
ment of final determination) (“Preliminary Determina-
tion”). While Commerce maintained the scope as defined
in the Initiation over Downhole Pipe’s objections, in the
Preliminary Determination it stated, given “concerns
regarding the imprecision of the definition of ‘green tubes
suitable for drill pipe’ currently contained in the scope,” it
would “request additional information regarding charac-
teristics distinguishing green tube for drill pipe from
green tube for casing and tubing covered under the orders
on [oil country tubular goods from China].” Id. at 51,006.
Further,
DOWNHOLE PIPE & EQUIPMENT v. US 5
[u]nless specific characteristics are provided
which distinguish between green tube for drill
pipe and green tube for casing and tubing, all
green tubes . . . will be removed from the scope of
the . . . investigations on drill pipe from [China]
and will instead be considered as covered under
the existing [orders on oil country tubular goods
from China].
Id.
Commerce issued its Final Determination on January
11, 2011, continuing to find drill pipe from China was
being, or was likely to be, sold in the United States at
less-than-fair value. Drill Pipe From the People’s Repub-
lic of China, 76 Fed. Reg. 1,966 (Dep’t of Commerce Jan.
11, 2011) (final determination of sales at less-than-fair
value and critical circumstances) (“Final Determination”),
and accompanying Issues & Decision Memorandum
(“Issues & Dec. Mem.”) (P.J.A. 1890–938).
For the Final Determination, Commerce “developed
characteristics for drill pipe green tubes based on numer-
ous submissions of factual data from parties regarding the
physical and chemical characteristics of drill pipe and
drill pipe green tubes.” Issues & Dec. Mem. at 11. Thus,
“Commerce narrowed the scope by adding three physical
criteria to the description of subject green tube.” Down-
hole Pipe I, 887 F. Supp. 2d at 1317. Specifically, Com-
merce narrowed the scope to green tube: (1) that is
seamless; (2) that has a certain outer diameter; and (3)
that contains specific percentages of molybdenum and
chromium. Issues & Dec. Mem. at 11. Thus, the scope
specified in the Final Determination reads:
The products covered by the investigation are
steel drill pipe, and steel drill collars, whether or
not conforming to [API] or non-API specifications.
Included are finished drill pipe and drill collars
without regard to the specific chemistry of the
6 DOWNHOLE PIPE & EQUIPMENT v. US
steel (i.e., carbon, stainless steel, or other alloy
steel), and without regard to length or outer di-
ameter. Also included are unfinished drill collars
(including all drill collar green tubes) and unfin-
ished drill pipe (including drill pipe green tubes,
which are tubes meeting the following description:
seamless tubes with an outer diameter of less than
or equal to 6 5⁄8 inches (168.28 millimeters), con-
taining between 0.16 and 0.75 percent molyb-
denum, and containing between 0.75 and 1.45
percent chromium). The scope does not include . . .
unfinished tubes for casing or tubing covered by
any other antidumping or countervailing duty or-
der.
Final Determination, 76 Fed. Reg. at 1,967 (emphasis
added).
As part of its Final Determination, Commerce also
calculated a surrogate value for the green tube input as
one of the factors of production. Two sources were on the
record to serve as surrogate data: (1) price quotes printed
in a trade publication called Metal Bulletin Research for
grades J and K casing and tubing (“J/K 55”) and (2) the
average transaction prices paid for products imported into
India under the Harmonized Tariff Schedule of India
(“IHTS”) subheadings 7304.23 and 7304.29. Commerce
ultimately determined the best available information was
the average Indian import prices for sales of merchandise
under these IHTS subheadings. Using this data, Com-
merce calculated a surrogate value of $2,511.67 for the
green tube input.
Downhole Pipe appealed several of Commerce’s de-
terminations to the CIT, including its inclusion of green
tube within the scope of the investigation and in the
industry support calculation, as well as its choice of the
surrogate data used to value the green tube input. In
Downhole Pipe I, the CIT rejected Downhole Pipe’s scope
DOWNHOLE PIPE & EQUIPMENT v. US 7
arguments, reasoning Commerce had discretion to deter-
mine scope and could not reconsider industry support
after initiation of the investigation. The CIT also re-
manded the Final Determination to Commerce with
instructions to reconsider the surrogate values used for
green tube. In particular, the CIT found Commerce had
failed to address the InfoDrive India (“InfoDrive”) import
data Appellants had placed on the administrative record
that called into question Commerce’s finding that green
tube entered India under IHTS subheadings 7304.23 and
7304.29. The CIT acknowledged data from the IHTS
subheadings might be the best available information, but
it could not affirm the Final Determination on the basis of
the explanation provided by Commerce.
On remand, Commerce examined all other potential
surrogate values for green tube on the record, including:
(1) import statistics for goods imported into India under
IHTS categories 7304.23, 7304.29, and 7304.59; (2) Metal
Bulletin Research price data for J/K 55 and for “P110”;
(3) adjusted value data for alloy steel billets processed
into green tube provided by Appellants; and (4) adjusted
value data for seamless tubes provided by Appellants.
Commerce found the price data for products entered
under IHTS 7304.59 (as opposed to IHTS 7304.23 and
7304.29) was the best available information on the record
because it was most representative of the green tube used
for drill pipes, contemporaneous with the period of inves-
tigation, duty and tax exclusive, publicly available, and
represented a broad market average. Commerce also
confirmed its analysis with a National Import Specialist
at United States Customs and Border Protection (“Cus-
toms”). Although in its draft remand results Commerce
used data from both IHTS 7304.59.10 and IHTS
7304.59.20, in its final Remand Results Commerce based
the surrogate value for green tube on the average unit
value of entries made under IHTS 7304.59.20 alone.
8 DOWNHOLE PIPE & EQUIPMENT v. US
On return to the CIT, Appellants argued the Remand
Results were unsupported by substantial evidence and
were otherwise not in accordance with law. Therefore,
Downhole Pipe asked the CIT to once again remand the
issue of the surrogate values used to value the green tube.
In Downhole Pipe II, the CIT sustained the Remand
Results.
Downhole Pipe appeals. This court has jurisdiction
pursuant to 28 U.S.C. § 1295(a)(5) (2012).
DISCUSSION
I. Standard of Review
This court reviews the decisions of the CIT de novo,
“apply[ing] anew the same standard used by the [CIT].”
Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d
1375, 1380 (Fed. Cir. 2008) (internal quotation marks and
citation omitted). Under that standard, this court must
uphold Commerce’s determinations unless they are “un-
supported by substantial evidence on the record, or oth-
erwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i) (2006). “Although such review
amounts to repeating the work of the [CIT], we have
noted that ‘this court will not ignore the informed opinion
of the [CIT].’” Diamond Sawblades Mfrs. Coal. v. United
States, 612 F.3d 1348, 1356 (Fed. Cir. 2010) (quoting
Suramerica de Aleaciones Laminadas, C.A. v. United
States, 44 F.3d 978, 983 (Fed. Cir. 1994)); see also Cleo
Inc. v. United States, 501 F.3d 1291, 1296 (Fed. Cir. 2007)
(“When performing a substantial evidence review, . . . we
give great weight to the informed opinion of the [CIT].
Indeed, it is nearly always the starting point of our analy-
sis.”) (internal quotation marks and citation omitted).
Substantial evidence is defined as “more than a mere
scintilla,” as well as evidence that a “reasonable mind
might accept as adequate to support a conclusion.” Con-
sol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229 (1938).
DOWNHOLE PIPE & EQUIPMENT v. US 9
This court’s review is limited to the record before Com-
merce in the particular review proceeding at issue and
includes all “evidence that supports and detracts” from
Commerce’s conclusion. Sango Int’l L.P. v. United States,
567 F.3d 1356, 1362 (Fed. Cir. 2009). An agency finding
may still be supported by substantial evidence even if two
inconsistent conclusions can be drawn from the evidence.
Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).
II. Legal Framework
The United States imposes duties on foreign-produced
goods sold in the United States at less-than-fair value
(“antidumping duties”), 19 U.S.C. § 1673(1), or that
benefit from subsidies provided by foreign governments
(“countervailing duties”), id. § 1671(a)(1). Commerce is
responsible for investigating whether there have been, or
are likely to be, sales at less-than-fair value or whether a
subsidy has been provided, id. §§ 1673(1), 1671(a)(1),
while the International Trade Commission determines
whether imported merchandise materially injures or
threatens to materially injure the pertinent domestic
industry, id. §§ 1673d(b)(1), 1671d(b)(1). “If both inquir-
ies are answered in the affirmative, Commerce issues the
relevant antidumping and countervailing duty orders.”
Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1089
(Fed. Cir. 2002). The orders contain a description of the
merchandise that is covered by the order, called the scope.
19 U.S.C. §§ 1671e(a)(2), 1673e(a)(2).
Antidumping investigations are typically initiated by
a petition filed with Commerce by a domestic industry.
Duferco Steel, 296 F.3d at 1089. The petition defines the
initial scope of the investigation. Id. After a petition is
received, several statutory criteria must be met before
Commerce may initiate an investigation, including de-
termining whether the petition was filed on behalf of the
domestic industry, 19 U.S.C. § 1673a(c)(1)(A)(ii), (c)(2),
and whether there is domestic industry support for the
10 DOWNHOLE PIPE & EQUIPMENT v. US
petition, id. § 1673a(c)(4). To determine whether there is
industry support, Commerce must determine whether
domestic producers or workers who support the petition
“account for at least 25 percent of the total production of
the domestic like product.” Id. § 1673a(c)(4)(A)(i). If
Commerce determines the petition lacks industry support,
it “shall dismiss the petition [and] terminate the proceed-
ing.” Id. § 1673a(c)(3). If, however, Commerce “makes a
determination with respect to initiating an investigation,
the determination regarding industry support shall not be
reconsidered.” Id. § 1673a(c)(4)(E) (emphasis added).
Once an antidumping investigation has been initiat-
ed, to determine whether foreign goods are being sold or
are likely to be sold in the United States at less-than-fair
value, id. § 1673, Commerce compares the export price (or
constructed export price) of a foreign producer’s sales with
“normal value” (the price in the foreign market), id.
§ 1677b(a). If the price of an item in the foreign market
(normal value) is higher than the price for the same item
in the United States (export price), dumping has occurred.
Id. § 1677(35)(A) (The antidumping duty margin is “the
amount by which the normal value exceeds the export
price or constructed export price of the subject merchan-
dise.”).
Further, if Commerce considers the exporting country
a “nonmarket economy country,”1 it determines normal
1 A “nonmarket economy country” is “any foreign
country that [Commerce] determines does not operate on
market principles of cost or pricing structures, so that
sales of merchandise in such country do not reflect the
fair value of the merchandise.” 19 U.S.C. § 1677(18)(A).
“Because it deems China to be a nonmarket economy
country, Commerce generally considers information on
sales in China and financial information obtained from
Chinese producers to be unreliable for determining, under
DOWNHOLE PIPE & EQUIPMENT v. US 11
value by valuing the “factors of production” used in pro-
ducing the merchandise in a comparable market econo-
my 2 to come up with “surrogate values.” See id.
§ 1677b(c)(1)(B). In doing so, Commerce “attempt[s] to
construct a hypothetical market value of that product” in
the nonmarket economy. Nation Ford Chem. Co. v. Unit-
ed States, 166 F.3d 1373, 1375 (Fed. Cir. 1999). Thus,
Commerce must value the factors of production “to the
extent possible . . . in one or more market economy coun-
tries that are—(A) at a level of economic development
comparable to that of the nonmarket economy country,
and (B) significant producers of comparable merchandise.”
19 U.S.C. § 1677b(c)(4)(A)–(B).
The statute also directs Commerce to value the factors
of production “based on the best available information
regarding the values of such factors in a market economy
country.” Id. § 1677b(c)(1)(B) (emphasis added). Com-
merce has discretion to determine what constitutes the
best available information, as this term is not defined by
statute. QVD Food Co. v. United States, 658 F.3d 1318,
1323 (Fed. Cir. 2011). However, “Commerce generally
selects, to the extent practicable, surrogate values that
are publicly available, are product-specific, reflect a broad
market average, and are contemporaneous with the
period of review.” Qingdao Sea-Line Trading Co. v.
United States, 766 F.3d 1378, 1386 (Fed. Cir. 2014).
19 U.S.C. § 1677b(a), the normal value of the subject
merchandise.” Shanghai Foreign Trade Enters. Co. v.
United States, 318 F. Supp. 2d 1339, 1341 (Ct. Int’l Trade
2004).
2 Here, “Commerce selected India as the primary
surrogate country, and used Indian data to calculate
surrogate values for two key drill pipe inputs relevant to
this case.” Downhole Pipe I, 887 F. Supp. 2d at 1316.
12 DOWNHOLE PIPE & EQUIPMENT v. US
III. Commerce Properly Included Green Tube in the Scope
of the Investigation and in the Calculation of Industry
Support
Appellants challenge the lawfulness of including
green tube within the scope of the investigation, and
consequently of including green tube in the industry
support calculation. In Downhole Pipe I, the CIT rejected
Downhole Pipe’s scope arguments, reasoning (1) Com-
merce has discretion to define the scope of the investiga-
tion, and (2) Commerce is barred by statute from
reconsidering industry support after the initiation of an
investigation. Downhole Pipe I, 887 F. Supp. 2d at 1319
(Downhole Pipe’s “sole argument—that some green tube
used to produce [oil country tubular goods] meet the
technical specifications of the Final Determination and
are thus subject to two antidumping orders—has little
bearing on Commerce’s decision to initiate the investiga-
tion.”). In support of its conclusions, the CIT pointed to
three prior International Trade Commission determina-
tions, which describe “why technical specifications and
customer expectations led it to treat green tube for drill
pipe as a ‘distinct like product’ from green tube for [oil
country tubular goods].” Id. at 1320 (citation omitted).
Therefore, the CIT concluded, “[g]iven the end-use excep-
tion and the extensive evidence showing a distinction in
channels of distribution, customer expectations, and
technical specifications, it would not be appropriate for
this court to usurp Commerce’s exercise of discretion in
defining the scope of the Initiation.” Id.
Nonetheless, on appeal, Downhole Pipe continues to
argue that Commerce may not include products within
the scope of an investigation that are already covered by
the scope of another investigation or order. As to the
three criteria identified by Commerce as distinguishing
green tube for drill pipe from green tube for oil country
tubular goods—i.e., that green tube for drill pipe (1) is
seamless, (2) has an outside diameter of 6 5/8 inches or
DOWNHOLE PIPE & EQUIPMENT v. US 13
less, and (3) has 0.16%–0.75% molybdenum and 0.75%–
1.45% Chromium—Downhole Pipe argues the record lacks
substantial evidence to support these three criteria.
Further, Appellants argue, “[b]ecause these three criteria
do not distinguish drill-pipe green tube from [oil country
tubular goods] green tube, the same green tube is imper-
missibly covered by two antidumping duty orders.”
Appellants’ Br. 30.
In support, Appellants rely on record evidence that
purportedly establishes that each of these three criteria
may apply to green tube used to produce oil country
tubular goods. Specifically, as to the first criterion, Appel-
lants argue that while all green tube used for drill pipe
must be seamless, some green tube used to produce oil
country tubular goods is also seamless. As to the second
criterion, Appellants note some oil country tubular goods
use green tube with an outside diameter of less than or
equal to 6 5/8 inches. Finally, regarding chemistry,
Appellants contend there are no API specifications for
“minimum alloy requirements for casing, tubing, and drill
pipe.” Id. at 31.
In addition, Appellants argue that without the inclu-
sion of green tube production volume in its industry
support calculation, the Petition lacks the requisite indus-
try support. Appellants’ Br. 32 (“A cursory review of the
industry support calculation after removing green tube
producers indicates that petitioners would not satisfy the
required 25% industry-support threshold.”). Therefore,
Appellants insist the industry support calculation must be
remanded. As to the statutory bar against revising this
calculation post-initiation, Appellants contend it “properly
raised this scope/industry support issue prior to the
Initiation.” Id. at 34.
These arguments are unavailing because Commerce
reasonably included green tube within the scope of the
investigation. First, substantial evidence supports Com-
14 DOWNHOLE PIPE & EQUIPMENT v. US
merce’s identification of three physical characteristics
that distinguish green tube for drill pipe from that in-
tended for oil country tubular goods. As Commerce ex-
plained, the first criterion (that green tube for drill pipe
must be seamless) was “based on Petitioners’ comments
and submission of technical specifications.” Issues & Dec.
Mem. at 11. As to the second criterion, that the drill pipe
green tube must have a certain outer diameter, Com-
merce explained this was “based on DP-Master Group’s
submission of [API] specifications for drill pipe.” Id. As to
the final criterion regarding the green tube’s chemical
composition, this was “based on Petitioners’ submission of
declarations from experienced drill pipe engineers who
direct the purchase of green tubes for drill pipe based on
specific physical and chemical requirements.” Id. While
Appellants invite this court to reweigh this evidence, this
court may not do so. See Trent Tube Div., Crucible Mate-
rials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807, 815
(Fed. Cir. 1992) (“It is not for this court on appeal to
reweigh the evidence or to reconsider questions of fact
anew.”).
It is important to note that Appellants have failed to
identify any green tube intended for oil country tubular
goods that satisfies all three of these criteria. As the
Government points out, “[i]n order to be covered by the
Order here, the green tube must satisfy all three of the
requirements established by Commerce.” United States’
Br. 19. Appellants have not called into question Com-
merce’s conclusion that, “[w]hile the DP-Master Group
has provided specifications for certain [oil country tubular
goods] that overlap in some characteristics with drill pipe,
no specifications for [oil country tubular goods] have been
placed on the record that meet all of the criteria for drill
pipe green tube.” Issues & Dec. Mem. at 11. Even if
Downhole Pipe had been able to do so, moreover, Com-
merce added an explicit exception to exclude any such
overlapping goods: “The scope does not include . . . unfin-
DOWNHOLE PIPE & EQUIPMENT v. US 15
ished tubes for casing or tubing covered by any other
antidumping or countervailing duty order.” Final Deter-
mination, 76 Fed. Reg. at 1,967. As the CIT pointed out,
Downhole Pipe did “not analyze the purported overlap in
light of this potentially remedial exception,” Downhole
Pipe I, 887 F. Supp. 2d at 1319, and makes no attempt to
do so before this court.
As to Downhole Pipe’s insistence that industry sup-
port must be recalculated using a revised scope, Appel-
lants have not overcome the statutory obstacle to doing
so. That is, while 19 U.S.C. § 1673a(c)(4)(E) provides that
any potential interested party may submit comments or
information on the issue of industry support prior to the
initiation of an investigation, it explicitly states “[a]fter
[Commerce] makes a determination with respect to initi-
ating an investigation, the determination regarding
industry support shall not be reconsidered.” 19 U.S.C.
§ 1673a(c)(4)(E). Given this court’s finding that Downhole
Pipe has failed to demonstrate Commerce erred in includ-
ing green tube within the scope, this statutory bar means
the contention that Commerce must redetermine whether
there is sufficient industry support necessarily fails. This
is not to say a party may not challenge whether its goods
properly fall within the scope,3 but only that the industry
support calculation is not reviewable under these circum-
stances.
Accordingly, Commerce’s inclusion of green tube in
the scope of the investigation and in the calculation of
3 Indeed, pursuant to 19 C.F.R. § 351.225 (2012), a
party can request a scope determination to determine
whether its merchandise falls within the scope of an
order. Here, as the CIT observed, “DP-Master does not
export green tube to the U.S., and neither it nor any party
below have requested a scope determination.” Downhole
Pipe I, 887 F. Supp. 2d at 1318.
16 DOWNHOLE PIPE & EQUIPMENT v. US
industry support was supported by substantial evidence
and was not contrary to law.
IV. Substantial Evidence Supports Commerce’s Selection
of the Surrogate Value for Green Tube
Appellants also challenge the lawfulness of Com-
merce’s selection of a surrogate value for valuing green
tube, as redetermined following the remand by the CIT.
In Downhole Pipe I, the CIT ordered a remand because
“Commerce’s rebuttal of each of [Downhole Pipe’s] four
alternative surrogates . . . d[id] not cure its inadequate
explanation of its reliance upon the IHTS data,” and “its
failure here to explain evidence apparently contrary to a
finding central to its determination leaves the court
without the means necessary to affirm it as supported by
the record.” Downhole Pipe I, 887 F. Supp. 2d at 1325
(internal citations omitted). The CIT noted on remand,
“Commerce [was] not barred from selecting the IHTS
data,” but it was required to “explain why such data is
more representative of the price for drill pipe green tube
than other potential surrogate values in light of InfoDrive
data that appears to demonstrate that [IHTS] 7309.23
and 7309.29 do not actually ‘capture’ green tube and are
highly distorted by expensive, finished tubular goods.” Id.
As noted, on remand Commerce examined four poten-
tial data sources for valuing green tube: (1) import statis-
tics for goods imported into India under IHTS categories
7304.23, 7304.29, and 7304.59; (2) Metal Bulletin Re-
search price data for J/K 55 and P110; (3) adjusted value
data for alloy steel billets processed into green tube; and
(4) adjusted value data for seamless tubes. Commerce
then determined it had incorrectly found that IHTS
7304.23 and 7304.29 were the proper IHTS subheadings
for green tube, and instead determined that IHTS
7304.59.20 was the proper subheading.
In Downhole Pipe II, the CIT affirmed the Remand
Results, holding “[a]lthough IHTS 7304.59.20 does not
DOWNHOLE PIPE & EQUIPMENT v. US 17
perfectly cover [Downhole Pipe’s] [drill pipe green tubes],
Commerce’s decision was reasonable nonetheless given
the record support for IHTS 7304.59.20 and the relative
weakness of the alternative values.” Downhole Pipe II,
949 F. Supp. 2d at 1295. Specifically, the CIT held,
“Commerce reasonably determined that IHTS 7304.59.20
import data satisfied more of its selection criteria than
the flawed alternatives on the record,” id. at 1297, and, in
contrast to the alternate surrogate values on the record,
“Commerce found that the IHTS 7304.59.20 data is ‘con-
temporaneous with the [period of investigation], repre-
sent[s] a broad market average, [is] tax and duty
exclusive, and [is] publicly available, thus comporting
with [Commerce’s] selection criteria.’” Id. (citations
omitted). For these reasons, the CIT held Commerce
reasonably determined that data from IHTS 7304.59.20
was the best available information on the record and
Commerce “reasonably rejected” the alternative surrogate
values. Id. at 1296–97 (citations omitted).
On appeal, Downhole Pipe challenges Commerce’s se-
lection of the surrogate value for green tube on three
grounds. First, Appellants contend Commerce improperly
rejected the alternative surrogate values on the record,
and that its legal analysis in support of selecting IHTS
7304.59.20 was insufficient. Specifically, Appellants
characterize “Commerce’s legal analysis to support select-
ing IHTS 7304.59.20” as “a one-sentence assertion regard-
ing classification under IHTS, which Commerce supported
with a two-sentence memo reporting some sort of confir-
mation from [Customs].” Appellants’ Br. 43. They there-
fore claim that when analyzing the competing IHTS
subheadings on the record, Commerce improperly “ig-
nore[d] basic legal principles—such as [General Rule of
Interpretation] 2(a)—which require some analysis before
dismissal.” Id. In so arguing, Appellants concede “the
process of selecting [surrogate values] is necessarily
imprecise,” but nonetheless argue that “Commerce must
18 DOWNHOLE PIPE & EQUIPMENT v. US
strive for accuracy in value to comply with its obligation
to calculate margins as accurately as possible.” Id. at 24–
25.
This court declines Appellants’ invitation to reweigh
the evidence in order to reject Commerce’s conclusions,
which were well-supported and fully explained. See id. at
44–49 (challenging each of Commerce’s conclusions re-
garding the alternative surrogate values on the record
and offering Appellants’ own interpretations). Regarding
Downhole Pipe’s argument that Commerce’s “legal analy-
sis” of the competing tariff headings was insufficient
because Commerce failed to employ the General Rules of
Interpretation of the Harmonized Tariff Schedule as part
of its evidentiary determination, this is not a customs
classification case. Commerce was not required to engage
in a classification analysis to determine which IHTS
subheading contained entries of drill pipe green tube;
rather, it was required to determine which of the compet-
ing subheadings constituted the best available infor-
mation for valuing the green tube input. In addition, as
the CIT pointed out, Appellants “do not cite any legal
authority demonstrating that Commerce must conduct a
full classification analysis when considering import data
from a particular foreign tariff heading as a surrogate
value,” and Appellants “provide virtually no legal analysis
contravening Commerce’s selection.” Downhole Pipe II,
949 F. Supp. 2d at 1293.
As to its selection process, in the Remand Results
Commerce explained it used “a process of elimination” to
select IHTS subheadings 7304.59.10 and 7304.59.20
because “[c]ategorization of products under the HTS is a
process of elimination.” Remand Results at 5. Using this
process, Commerce explained it rejected IHTS 7304.23
and 7304.29 because the former captures processed semi-
finished drill pipe and the latter captures semi-finished
casing and tubing, which are not inputs for drill pipe.
Therefore, these headings were “no longer the best avail-
DOWNHOLE PIPE & EQUIPMENT v. US 19
able information on the record.” Id. at 7. Commerce
further explained, “after examining all possible subcate-
gories under IHTS heading 7304, the process of eliminat-
ing the other items entering under these headings
demonstrates that categories 7304.59.10 and 7304.59.20
cover drill pipe green tube as defined in the scope of the
Order.” Id. at 5. Of these two subheadings, Commerce
found the latter better represented green tube because
further classification under these subheadings was based
on tube diameters, and 7304.59.20 better reflected the
diameter of the green tube covered by the Order. Id.
To the extent Downhole Pipe requests this court to
reweigh Commerce’s findings with regard to each head-
ing, this court may not do so. “This court’s duty is ‘not to
evaluate whether the information Commerce used was
the best available, but rather whether a reasonable mind
could conclude that Commerce chose the best available
information.’” Zhejiang DunAn Hetian Metal Co. v.
United States, 652 F.3d 1333, 1341 (Fed. Cir. 2011) (quot-
ing Goldlink Indus. Co. v. United States, 431 F. Supp. 2d
1323, 1327 (Ct. Int’l Trade 2006)). In light of Commerce’s
well-reasoned explanation of its selection process, this
court finds Commerce’s selection of data from IHTS
7304.59.20 was supported by substantial evidence.
As to Appellants’ argument that Commerce unreason-
ably rejected the alternative surrogate values on the
record, Commerce appropriately evaluated each of the
alternatives on the record and provided an ample expla-
nation as to why it should be rejected. With regard to the
price data for J/K 55 from the Metal Bulletin Research,
Commerce explained this data was not the best available
information on the record because: (1) “it is not contempo-
raneous;” (2) “it represents only a single month of price
data;” (3) “J/K 55 cannot be used to produce drill pipe;”
and (4) J/K 55 “is at best comparable [to green tube],
differing in alloying element content and production
methods.” Remand Results at 8. Moreover, the J/K 55
20 DOWNHOLE PIPE & EQUIPMENT v. US
data did not reflect actual sales prices, but rather offer
prices. Id. at 5–6. Commerce reasonably concluded the
J/K 55 data did not satisfy its selection criteria. See
Qingdao Sea-Line, 766 F.3d at 1386 (“Commerce general-
ly selects, to the extent practicable, surrogate values that
are publicly available, are product-specific, reflect a broad
market average, and are contemporaneous with the
period of review.”).
Commerce rejected the P110 price data from the Met-
al Bulletin Research for similar reasons, finding P110 is
not representative of green tube because it is a finished
oil country tubular good product that cannot be used as
an input for drill pipe. Remand Results at 9. Additional-
ly, the P110 data was based on offer prices and only
contained one month of pricing information. Id. As
compared to the data from IHTS 7304.59.20, Commerce
reasonably found these alternatives were not the best
available information for valuing the green tube input.
Similarly, Commerce reasonably explained why the
adjusted value data offered by Downhole Pipe for alloy
steel billets processed into green tube and for seamless
tubes were not the best available information as com-
pared to the data from IHTS 7304.59.20. Specifically,
Commerce found the record lacked sufficient information
to adjust the values for the required alloying costs and
that calculating such adjustments required proprietary
information. Id. at 9–11. Because Commerce’s regula-
tions direct it to use “publicly available information,” 19
C.F.R. § 351.408(c)(1), Commerce rejected these adjusted
values. Thus, Commerce supported with substantial
evidence its determinations that it had selected the best
available information and reasonably rejected the alter-
natives proposed by Downhole Pipe.
Appellants also argue Commerce’s choice of a surro-
gate value for green tube is “aberrantly high” and there-
fore outside the bounds of commercial reality. Appellants’
DOWNHOLE PIPE & EQUIPMENT v. US 21
Br. 41. Specifically, Downhole Pipe claims Commerce’s
choice of the average price for goods entered under IHTS
7304.59.20 resulted in a surrogate value of $4,978.11 for
green tube, which is “aberrantly high” because it is almost
double the value of the $2,511.67 figure Commerce used
in the Final Determination based on goods entered under
IHTS 7304.23.90. Appellants point out IHTS 7304.59.20
is a basket category for alloy seamless tubes, while the
previously-selected IHTS 7304.23.90 includes both fin-
ished and unfinished drill pipe. Therefore, Appellants
argue, “[u]nder the basic principle that an input should
not be valued more than the finished product, Commerce
failed to select an accurate [surrogate value],” and
“[e]xacerbating Commerce’s error is uncontroverted
industry expert testimony establishing the value of green
tube at approximately 30% of the value of finished drill
pipe.” Id. at 25. In support, Downhole Pipe points to the
InfoDrive data for entries made under IHTS 7304.59.10
and 7304.59.20 that Appellants argue “conclusively
demonstrated that there were no entries of drill-pipe
green tube under IHTS 7304.59.10, and no entries of
d[r]ill pipe green tube in at least 60% of entries under
IHTS 7304.59.20.” Id. at 46.
As the Government notes, “[a]lthough Downhole suc-
ceeds in creating a stark comparison, Downhole fails to do
so using substantiated reference points.” United States’
Br. 41. In particular, while Downhole Pipe argues the
value of a finished drill pipe should not exceed the value
of an individual input, like green tube, its comparison
relies on the incorrect assumption that IHTS 7304.59.20
covers green tube exclusively and IHTS 7304.23.90 covers
semi-finished or finished drill pipe exclusively. Appel-
lants fail to provide any evidence in support of this propo-
sition. For example, Appellants state “IHTS 7304.59.20
most likely also lacked entries of drill-pipe green tube,”
citing for support its own comments submitted in re-
sponse to the draft remand results and the InfoDrive
22 DOWNHOLE PIPE & EQUIPMENT v. US
data. Appellants’ Br. 45 (citing P.J.A. 2289–91, 2305–26)
(emphasis added). As noted above, Commerce provided
substantial evidence to support its finding that the data
from IHTS 7304.59.20 was the best available information
on the record.
Finally, Downhole Pipe argues Commerce erred in re-
lying on a memo from the National Import Specialist to
confirm its selection of IHTS 7304.59 as the appropriate
heading for drill pipe green tube. Specifically, Appellants
claim they “expose[] six significant flaws, that cannot be
filled in by Commerce’s four post hoc attempts in the
Remand to bolster the quality of the [National Import
Specialist’s] Memo.” Id. at 49. These alleged flaws in-
clude (1) that Appellants cannot determine whether
Commerce contacted the National Import Specialist by
“email, letter, fax, telephone, over coffee, or through a
friend”; (2) there is no indication that Commerce supplied
the scope language to the National Import Specialist for
her consideration; (3) there is no indication that a discus-
sion of the scope language occurred, and therefore there is
no record evidence establishing what the National Import
Specialist considered prior to confirming Commerce’s
selection; (4) “there is no indication that the [National
Import Specialist] has any training regarding how to
classify imports under IHTS categories—or whether the
[National Import Specialist] had any relevant training at
all”; (5) the memo does not indicate whether Customs
evaluated other IHTS categories or considered legal
principles regarding how to classify drill pipe green tube;
and (6) there is no indication of how Customs “confirmed”
Commerce’s IHTS classification decision. Id. at 49–52.
Given Commerce’s well-reasoned explanation why da-
ta from IHTS 7304.59.20 constituted the best available
information for valuing green tube, this court need not
entertain this argument. As the CIT correctly noted: first,
“Commerce did not rely solely on the [National Import
Specialist] Memo in its analysis . . . [and] explained that
DOWNHOLE PIPE & EQUIPMENT v. US 23
it ‘confirmed’ [its] analysis with the [Customs] official,”
and second, this “argument is entirely conjectural. [Ap-
pellants] insist that the [National Import Specialist]
Memo contains several possible flaws, but fail to identify
any evidence in the record supporting their assertions.”
Downhole Pipe II, 949 F. Supp. 2d at 1296; see also Peti-
tioners’ Br. 31 (“The bulk of Downhole’s argument con-
sists of totally unsupported speculation that when
contacted by Commerce, . . . a senior [Customs] official,
incompetently rendered an informal opinion without
reviewing any of the necessary documents or understand-
ing any of the legal principles involved. A presumption of
correctness surrounds agency proceedings.”). Substantial
evidence supports Commerce’s selection of the surrogate
value for green tube.
CONCLUSION
For the foregoing reasons, the decision of the United
States Court of International Trade is
AFFIRMED