United States Court of Appeals
for the Federal Circuit
__________________________
KING SUPPLY COMPANY, LLC
(DOING BUSINESS AS KING ARCHITECTURAL
METALS),
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant,
and
TUBE FORGINGS OF AMERICA, INC.,
Defendant-Appellant,
and
WELDBEND CORP.,
Defendant-Appellant,
and
HACKNEY LADISH, INC.,
Defendant.
__________________________
2011-1252, -1253
__________________________
Appeals from the United States Court of International
Trade in case no. 09-CV-0477, Senior Judge R. Kenton
Musgrave.
___________________________
Decided: March 27, 2012
___________________________
KING SUPPLY CO v. US 2
THOMAS V. VAKERICS, Barnes, Richardson & Colburn,
of Washington, DC, argued for plaintiff-appellee. With
him on the brief was STEPHEN W. BROPHY.
LAWRENCE J. BOGARD, Neville Peterson LLP, of Wash-
ington, DC, argued for defendant-appellant Tube Forgings
of America, Inc. With him on the brief was MEREDITH A.
DEMENT.
JEFFERY C. LOWE, Mayer Brown LLP, of Washington,
DC, argued for defendant-appellant Weldbend Corp.
With him on the brief was SIMEON M. KRIESBERG.
__________________________
Before RADER, Chief Judge, and BRYSON and REYNA,
Circuit Judges.
REYNA, Circuit Judge.
Weldbend Corp. (“Weldbend”) and Tube Forgings of
America, Inc. (“Tube Forgings”) appeal the decision of the
Court of International Trade (“Trade Court”) reversing a
scope ruling by the U.S. Department of Commerce
(“Commerce”). The Trade Court concluded that King
Supply Co.’s (“King”) imports of steel butt-weld pipe
fittings were outside the scope of an antidumping duty
(“AD”) order, reasoning that the AD order was restricted
to pipe fittings used in piping systems, whereas King’s
pipe fittings are used only in structural contexts. Because
the Trade Court gave inadequate deference to Com-
merce’s scope ruling that the antidumping duty order did
not contain such an end-use restriction, 1 we reverse.
I. BACKGROUND
Generally, whenever domestic producers of a particu-
lar product believe that imports of certain competing
1 End-use restrictions, which generally limit the
scope of antidumping duty orders based on the ultimate
usage of the imported merchandise, are sometimes also
referred to as end-use exclusions or end-use requirements.
3 KING SUPPLY CO v. US
goods are being sold in the United States at less than fair
market value (i.e., being “dumped”), they may petition
Commerce to impose antidumping duties on the imports
of the goods. Walgreen Co. v. United States, 620 F.3d
1350, 1351 (Fed. Cir. 2010). If Commerce finds a petition
sufficient, Commerce initiates an investigation to pre-
liminarily determine if there is a reasonable basis to
conclude that dumping is occurring or is likely to occur.
19 U.S.C. §§ 1673a, 1673b(b)(1)(A). Concurrently, the
U.S. International Trade Commission (“ITC”) investigates
whether there is a reasonable indication that a domestic
industry of like products is or is likely to be materially
injured by virtue of the dumped imports. Id.
§ 1673b(a)(1)(A). If the respective investigations result in
final determinations of dumping and material injury or
threat of material injury, Commerce issues an AD order
imposing antidumping duties on the appropriate imported
merchandise. Id. § 1673d(c)(2). While petitioners and
other interested parties in the investigation may propose
the scope of merchandise to be investigated, Commerce
alone defines the scope of the AD order.
After an AD order is issued, Commerce is often called
upon to issue “scope rulings” to clarify the scope of the AD
order and determine whether particular products are
included within its scope. Walgreen, 620 F.3d at 1352
(quoting 19 C.F.R. § 351.225(a)). In making such scope
rulings, while the plain language of the AD order is
paramount, Commerce must also take into account “[t]he
descriptions of the merchandise contained in the petition,
the initial investigation, and the determinations of the
Secretary [of Commerce] (including prior scope determi-
nations) and the Commission.” 19 C.F.R. § 351.225(k)(1);
Walgreen, 620 F.3d at 1357. 2 Consequently, a scope
2 In the event that examination of these criteria is
not dispositive, the Secretary must look to additional
factors such as the physical characteristics of the product,
the expectations of consumers, and the channels of trade
by which the product is sold. 19 C.F.R. § 351.225(k)(2).
KING SUPPLY CO v. US 4
ruling is a highly fact-intensive and case-specific determi-
nation.
A. The Original Petition and Antidumping Duty Order
In 1991 certain domestic producers submitted an an-
tidumping duty investigation petition to Commerce and
the ITC with respect to imports of butt-weld pipe fittings
from China and Thailand (the “Petition”). The leading
paragraph in the “product description” section of the
Petition identified products subject to the investigation in
terms of their physical characteristics (“carbon steel butt-
weld fittings having an inside diameter of less than 360
millimeters,” and satisfying certain American Society for
Testing and Materials (“ASTM”) and American National
Standards Institute (“ANSI”) industry standards for
materials and dimensions), and went on in subsequent
paragraphs to describe how butt-weld pipe fittings are
generally made, used, and sold. JA261-62. 3 For example,
the second paragraph of the Petition explained that “butt-
weld fittings are forged steel products used to join pipe
sections in piping systems where conditions require
permanent, welded connections, as distinguished from
fittings based on other fastening methods (e.g., threaded,
grooved, or bolted fittings).” Id.
On May 18, 1992, Commerce issued a final affirma-
tive determination that the products at issue were indeed
being dumped. Final Determination of Sales at Less Than
Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings
From the People’s Republic of China, 57 Fed. Reg. 21,058
(May 18, 1992). This final determination included a
description of the subject products tracking the language
used in the first two paragraphs of the Petition:
In this case, neither party contends that such additional
factors need to be considered, and so we do not address
such factors.
3 Citations to “JA__” refer to the parties’ Joint Ap-
pendix.
5 KING SUPPLY CO v. US
The products covered by this investigation are
carbon steel butt-weld pipe fittings, having an in-
side diameter of less than 14 inches, imported in
either finished or unfinished form. These formed
or forged pipe fittings are used to join sections in
piping systems where conditions require perma-
nent, welded connections, as distinguished from
fittings based on other fastening methods
(e.g., threaded, grooved, or bolted fittings).
Id. 4
In June 1992, the ITC concluded that the domestic in-
dustry was materially injured by virtue of the dumped
imports. Carbon Steel Butt- Weld Pipe Fittings from
China and Thailand, Invs. Nos. 731-TA-520 and 521,
USITC Pub. 2528 (Int’l Trade Comm’n June 25, 1992)
(“ITC Final Determination”). The ITC explained that “the
like product is all domestically produced carbon steel
butt-weld pipe fittings having an inside diameter of less
than 14 inches, whether finished or unfinished.” Id. at 4,
5, I-16. The ITC’s investigation also revealed that in
addition to their use in piping systems to convey gases or
liquids in various contexts, the butt-weld pipe fittings at
issue were also used in “structural applications” as sup-
port members, including in “fences, guardrails, play-
ground equipment, and scaffolding.” Id.
In July 1992, Commerce issued an AD order imposing
antidumping duties on the subject merchandise, mirror-
Commerce’s notice of initiation of the investiga-
4
tion and its preliminary determination used essentially
the same language when describing the scope of the
investigation. Initiation of Antidumping Duty Investiga-
tion: Certain Carbon Steel Butt- Weld Pipe Fittings From
the People’s Republic of China, 56 Fed. Reg. 27,730 (June
17, 1991); Preliminary Determination of Sales at Less
Than Fair Value: Certain Carbon Steel Butt-Weld Pipe
Fittings From the People’s Republic of China, 56 Fed. Reg.
66,831 (Dec. 26, 1991).
KING SUPPLY CO v. US 6
ing the operative language from Commerce’s final deter-
mination:
The products covered by this order are carbon
steel butt-weld pipe fittings, having an inside di-
ameter of less than 14 inches, imported in either
finished or unfinished form. These formed or
forged pipe fittings are used to join sections in pip-
ing systems where conditions require permanent,
welded connections, as distinguished from fittings
based on other fastening methods (e.g., threaded,
grooved, or bolted fittings).
Certain Carbon Steel Butt-Weld Pipe Fittings from China,
57 Fed. Reg. 29,702-03 (July 6, 1992) (“AD Order”).
B. King’s Imported Products and Commerce’s Scope
Ruling
In March 2009, King requested that Commerce issue
a scope ruling that butt-weld pipe fittings imported by
King from China are outside the scope of the AD Order.
King’s request indicated that its imported butt-weld pipe
fittings are physically identical to those subject to the AD
Order. JA908, JA913 (“The physical characteristics of the
subject merchandise and King Architectural’s imports are
the same.”). King argued that the second sentence of the
AD Order was an end-use restriction that “expressly
limits the scope [of the AD Order] to pipe fittings used to
join sections of piping systems.” JA910. By contrast,
King’s imported butt-weld pipe fittings were “for struc-
tural use in applications such as handrails, fencing, and
guardrails.” JA908.
Commerce issued its scope ruling on October 21, 2009,
concluding that King’s imports were included within the
scope of the AD Order. Final Scope Ruling: Antidumping
Duty Order on Carbon Steel Butt-Weld Pipe Fittings from
the People’s Republic of China (“PRC”), Scope Inquiry No.
A-570-814 (Oct. 20, 2009) (the “Scope Ruling”); JA1187-
93. Commerce emphasized that not only were King’s
7 KING SUPPLY CO v. US
products physically identical to the products described in
the first sentence of the AD Order, but evidence also
showed King’s products met the same ASTM and ANSI
industry standards as were referenced in the Petition.
Scope Ruling, at 5; JA1192. Commerce found further
support in the ITC’s final determination, which defined
the domestic like products as including “all pipe fittings
having an inside diameter of less than 14 inches, whether
finished or unfinished regardless of use.” Id. at 5-6;
JA1192-93 (emphases added).
Commerce rejected King’s arguments that its prod-
ucts were outside the scope of the AD Order because they
were not “used to join sections in piping systems,” ex-
plaining that the second sentence was not an end-use
restriction but merely a statement that “distinguished
butt-welding from other types of fastening methods.” Id.
at 5; JA1192. Commerce elaborated as follows:
Specifically, we find that this sentence uses piping
systems as an example of an instance where a
permanent, welded connection is desired. We find
that the language “are used” does not mean that
the use identified is necessarily the exclusive use.
Thus, we conclude that the second sentence does
not contain an end-use exclusion, but a descrip-
tion of a possible end-use.
Id. Accordingly, Commerce concluded that King’s pipe
fittings were subject to the AD Order. Id.
King challenged the Scope Ruling at the Trade Court,
continuing to contend that the second sentence of the AD
Order is an end-use restriction which places King’s prod-
ucts outside of its scope. The Trade Court agreed with
King, focusing on the AD Order language “[t]hese formed
or forged pipe fittings are used to join sections in piping
systems,” and finding that “[t]he Order describes the use
(one and only one use) of pipe fittings subject to the scope
of the investigation. No other use is described. As so
described, it amounts to an exclusive use.” King Supply
KING SUPPLY CO v. US 8
Co. v. United States, No. 09-00477, 2010 Ct. Int’l Trade
LEXIS 112, at *7 (Sept. 30, 2010) (“CIT Op.”) (emphasis
in original). According to the Trade Court, the second
sentence of the AD Order could not be reasonably read as
merely noting an example of an end-use for the subject
merchandise, since “[t]he reference to use in piping sys-
tems does not indicate, for example, a qualification of ‘for
example,’ ‘e.g.,’ ‘such systems as,’ ‘chiefly used,’ ‘princi-
pally used,’ ‘capable of being used,’ or any other such
similarly expansive signal.” Id. at *8. Although the
Trade Court thus found the meaning of the AD Order
plain, even looking beyond the four corners of the AD
Order, the Trade Court stated that it “was unable to find
evidence to support Commerce’s interpretive conclusion.”
Id. at *15.
Accordingly, the Trade Court vacated the Scope Rul-
ing and remanded to Commerce to issue a determination
that King’s butt-weld pipe fittings are excluded from the
scope of the Order. Id. at *18-19. Commerce obliged, and
on remand construed the AD Order to exclude King’s pipe
fittings used in structural applications. JA824-25 (“Scope
Ruling II”). The Trade Court sustained Commerce’s
redetermination and entered final judgment. Weldbend
and Tube Forgings, two domestic producers of butt-weld
pipe fittings who had intervened before the Trade Court,
appealed to this court, contending that Commerce’s Scope
Ruling was correct and should have been affirmed by the
Trade Court.
II. DISCUSSION
In reviewing the Trade Court’s decision on the Scope
Ruling, “we step into the shoes of the [Trade Court] and
apply the same deferential ‘substantial evidence’ standard
of review that it applied to its review of Commerce’s
determination.” Walgreen, 620 F.3d at 1354 (citation
omitted). We must therefore uphold Commerce’s deter-
mination unless the Scope Ruling is “unsupported by
9 KING SUPPLY CO v. US
substantial evidence on the record, or otherwise not in
accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).
Commerce is entitled to substantial deference with
regard to its interpretations of its own antidumping duty
orders. Tak Fat Trading Co. v. United States, 396 F.3d
1378, 1382 (Fed. Cir. 2005). This deference is appropriate
because the meaning and scope of antidumping orders are
issues “particularly within the expertise” and “special
competence” of Commerce. Sandvik Steel Co. v. United
States, 164 F.3d 596, 600 (Fed. Cir. 1998). We have noted
that “[a] party challenging [Commerce’s] determination
under the substantial evidence standard ‘has chosen a
course with a high barrier to reversal.’” Nippon Steel
Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir.
2006) (citing Mitsubishi Heavy Indus., Ltd. v. United
States, 275 F.3d 1056, 1060 (Fed. Cir. 2001)). Indeed,
“[e]ven if it is possible to draw two inconsistent conclu-
sions from evidence in the record, such a possibility does
not prevent Commerce’s determination from being sup-
ported by substantial evidence.” Am. Silicon Techs. v.
United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001). This
broad deference is not unlimited, however, since “Com-
merce cannot interpret an antidumping order so as to
change the scope of that order, nor can Commerce inter-
pret an order in a manner contrary to its terms.” Wal-
green, 620 F.3d at 1354 (citations and internal quotation
marks omitted).
A. Commerce’s Scope Ruling Reasonably
Interpreted the AD Order to Not In-
clude an End-Use Restriction
End-use restrictions in AD orders, while appropriately
utilized in certain cases, are disfavored because they can
be difficult to enforce. This is because the physical char-
acteristics of an imported product are more readily identi-
fiable than the product’s end use, which may be unclear at
the time of importation. Accordingly, when Commerce
intends to impose end-use restrictions, Commerce consis-
KING SUPPLY CO v. US 10
tently uses express terms such as “only” or “solely” to
indicate restrictions on end uses for certain products. See,
e.g., Live Swine from Canada, 70 Fed. Reg. 12,181, 12,182
(Mar. 11, 2005) (Countervailing Duty Order) (excluding
swine “being used for breeding stock only”); Certain
Softwood Lumber Products from Canada, 67 Fed. Reg.
36,070, 36,071 (May 22, 2002) (Countervailing Duty
Order) (excluding softwood lumber products that are
“used solely” for certain single family home construction);
Engineered Process Gas Turbo-Compressor Systems,
Whether Assembled or Unassembled, and Whether Com-
plete or Incomplete, from Japan, 62 Fed. Reg. 32,584
(June 16, 1997) (AD order) (covering “only those [turbo-
compressor systems] used in the petrochemical and fertil-
izer industries”). In its opinion, the Trade Court ac-
knowledged that “Commerce has apparently described
usage with more precision and specificity in other con-
texts when including or excluding products from the scope
of an antidumping duty order.” CIT Op. at *8.
We hold that end-use restrictions do not apply to AD
orders unless the AD order at issue includes clear exclu-
sionary language. The requisite clear exclusionary lan-
guage must leave no reasonable doubt that certain
products were intended to be outside the scope of the AD
order based solely on the end use of those products. Such
language being absent from the AD Order in this case, we
cannot deem unreasonable Commerce’s determination
that the AD Order fails to give rise to an end-use restric-
tion.
Here, the AD Order specifies the physical characteris-
tics of all pipe fittings covered by it, then states that the
fittings “are used” in a certain exemplary context. This
language is reasonably understood as exemplary and not
absolute, despite the absence of more direct qualifiers
that could have been included in the AD Order such as
“for example” or “principally used,” as the Trade Court
would require. For example, some cups “are used” to hold
liquids, but also “are used” to hold pencils. While these
11 KING SUPPLY CO v. US
examples shed light on the functional capabilities of the
cups, they do not necessarily preclude other uses for such
cups. The phrase “are used” alone does not compel a
reading of an exclusive end-use, and it does not render a
reading of an exemplary use unreasonable or outside the
scope of Commerce’s broad authority to interpret its own
AD orders.
In Wheatland Tube Co. v. United States, this court
upheld Commerce’s scope ruling that an antidumping
order excluded certain kinds of pipe regardless of actual
use. 161 F.3d 1365, 1368 (Fed. Cir. 1998). The scope of
the orders at issue in Wheatland provided in part that
“[s]tandard pipe that is dual or triple certified/stenciled
that enters the U.S. as line pipe of a kind used for oil and
gas pipelines is also not included in this investigation.” Id.
at 1367 (emphasis added). Wheatland, a domestic pro-
ducer, argued that the phrase “of a kind used for” ex-
cluded only line pipe that was actually used for oil and
gas pipelines. Id. at 1369. This court upheld Commerce’s
rejection of that argument, finding that it “contradict[ed]
the unambiguous language of the Orders, which refers to
the pipes’ principal use at the time of entry instead of
actual use.” Id. As in Wheatland, we decline to read any
perceived ambiguity in the AD Order to construe a stated
exemplary use as an exclusive use, particularly where
Commerce reasonably interpreted the AD Order other-
wise. 5
The Trade Court placed undue emphasis on the
phrase “are used . . . in piping systems” to the exclusion of
the remainder of the second sentence of the AD Order,
which delineates between different kinds of fastening
5 The orders in Wheatland also expressly stated
that the line pipe at issue was “not included” in the re-
sulting orders, providing another instance in addition to
those discussed above where Commerce used clear exclu-
sionary language (e.g., “only” or “solely”) that is absent in
the AD Order.
KING SUPPLY CO v. US 12
methods and their suitability for certain applications.
Commerce understood the second sentence of the AD
Order as merely a mention of “piping systems as an
example of an instance where a permanent, welded con-
nection is desired.” Scope Ruling, at 5; JA1192. In es-
sence, Commerce concluded that “the second sentence
distinguishes butt-welding from other types of fastening
methods” such as threaded, grooved, or bolted fittings. Id.
The plain language of the AD Order is entirely consistent
with Commerce’s interpretation that piping systems are
included as an example of a suitable application for
permanent, welded connections obtainable via butt-weld
pipe fittings. When read in this manner, the “are used . .
. in piping systems” language is not an end-use restric-
tion, but is informative and non-superfluous.
B. The Considerations Under 19 C.F.R. §
351.225(k)(1) Support Commerce’s
Scope Ruling
Commerce’s Scope Ruling is also supported by sub-
stantial evidence in view of its considerations under 19
C.F.R. § 351.225(k)(1), which provides that “in consider-
ing whether a particular product is included within the
scope of an order or a suspended investigation, the Secre-
tary will take into account . . . [t]he descriptions of the
merchandise contained in the petition, the initial investi-
gation, and the determinations of the Secretary (including
prior scope determinations) and the Commission.”
The second sentence of the AD Order language tracks
the key language from the second paragraph of the Peti-
tion exactly. Compare AD Order, with Petition (JA903)
(referring in both cases to butt-weld pipe fittings being
“used to join pipe sections in piping systems where condi-
tions require permanent, welded connections, as distin-
guished from fittings based on other fastening methods
(e.g., threaded, grooved, or bolted fittings)”). In context,
the Petition further explains this language by noting that
finished butt-weld pipe fittings share common physical
13 KING SUPPLY CO v. US
characteristics such as beveled edges to facilitate welding
the fittings to the pipes for more permanent connections.
JA903. Thus, the “used to join pipe sections in piping
systems where conditions require permanent, welded
connections” language in the AD Order is best understood
as likewise being intended to distinguish physical charac-
teristics and capabilities of the subject pipe fittings,
rather than specify an exclusive end-use. Indeed, the
ITC’s investigation expressly noted the use of the subject
pipe fittings in a variety of contexts, including structural
applications for which King alleges its pipe fittings are
used (i.e., fences and guardrails), clearly indicating that
the ITC did not consider piping systems as the sole end-
use for the subject pipe fittings.
King’s products undisputedly satisfy the physical de-
scription of the products provided in the first sentence of
the AD Order—they are “carbon steel butt-weld pipe
fittings, having an inside diameter of less than 14 inches,
imported in either finished or unfinished form.” King’s
products also possess other physical attributes indicated
in the original Petition, such as compliance with the
specified ASTM and ANSI standards for materials and
dimensions. Commerce even found that King’s pipe
fittings “create permanent, welded connections and meet
required chemical composition, heat number, and physical
characteristics to be used in piping systems.” Scope
Ruling, at 5; JA1192. The domestic products and King’s
imports have the same classifications under the Harmo-
nized Tariff Schedule of the United States (“HTSUS”).
Because King’s pipe fittings satisfy the physical charac-
teristics of the pipe fittings in the AD Order, and because
the AD Order was reasonably interpreted by Commerce to
include no end-use restrictions, Commerce’s Scope Ruling
was supported by substantial evidence and the Trade
Court erred by substituting its interpretation of the AD
Order for that of Commerce.
Lastly, none of this court’s precedent relied upon by
the parties or the Trade Court mandates a different
KING SUPPLY CO v. US 14
result. First, this case is different from that in Eckstrom
Indus., Inc. v. United States, which involved similar butt-
weld pipe fittings but otherwise very dissimilar facts. 254
F.3d 1068 (Fed. Cir. 2001). Although the AD order in
Eckstrom referred to “certain stainless steel butt-weld
pipe fittings,” the word “certain” alone does not create an
end-use restriction. Id. at 1070. On its face, the anti-
dumping order in Eckstrom stated no fewer than five
conditions of use for the subject merchandise. Id. The
central issue in Eckstrom was not whether the AD order
included an end-use restriction, but whether certain cast
pipe fittings, as opposed to wrought pipe fittings, were
within the scope of the antidumping order. Id. at 1070-
71. We concluded that cast fittings were outside the scope
of the AD order because: (1) the petition was clearly
directed to wrought fittings only, citing to wrought fitting
industry standards and describing manufacturing proc-
esses inapplicable to cast fittings; (2) the ITC’s domestic
industry investigation was directed to “formed or forged
stainless steel products,” which excludes cast fittings; (3)
the ITC’s investigation was directed to wrought fittings
classifiable under HTSUS 7307.23.00, which does not
encompass cast fittings; and (4) the order itself was
directed to “welded” pipe fittings, which suggested that
the subject fittings were better understood as wrought
than cast. Id. at 1074-76. There are no such plainly
exclusive indications in this case.
This case is also unlike Duferco Steel Co. v. United
States, which involved a scope ruling in which Commerce
interpreted the antidumping orders to include certain
steel floor plates because “the petitions originally included
these products” and “there [was] no language in the
orders specifically excluding these products.” 296 F.3d
1087, 1095 (Fed. Cir. 2002). We reversed because Com-
merce had impermissibly relied upon language in the
petitions rather than the orders, to modify the scope of the
orders by effectively importing a physical description of
certain products that was not present in the text of the
15 KING SUPPLY CO v. US
order. Id. at 1096-98. We explained that “Commerce
cannot find authority in an order based on the theory that
the order does not deny authority.” Id. at 1096. Here, the
Scope Ruling properly clarified the scope of the AD Or-
der—it did not change the scope of the order or alter its
express terms as in Duferco.
IV. CONCLUSION
We find that Commerce’s determination in the Scope
Ruling was supported by substantial evidence, and that
the Trade Court gave insufficient deference to Commerce
in interpreting Commerce’s own AD Order. On the record
before us, it was reasonable for Commerce to have read
the second sentence of the AD Order as not constituting
an end-use restriction. Because Commerce was within its
discretion to deem King’s imported pipe fittings within
the scope of the AD Order, we reverse the Trade Court’s
judgment to the contrary.
REVERSED