Sango International L.P. v. United States

Slip Op. 08-37

UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
SANGO INTERNATIONAL L.P., :
:
Plaintiff, :
:
v. :
:
UNITED STATES, : Before: Judith M. Barzilay, Judge
: Court No. 05-00145
Defendant, :
:
WARD MANUFACTURING, INC., :
ANVIL INTERNATIONAL, INC., :
:
Defendant-Intervenors. :
____________________________________:

OPINION

[Commerce’s Final Redetermination is affirmed.]

Dated: April 03, 2008

Baker & McKenzie, LLP, (William D. Outman, II), Stuart P. Seidel, and Kevin J. Sullivan for
Plaintiff.

Jeffrey S. Bucholtz, Acting Assistant Attorney General; Jeanne E. Davidson, Director, Patricia
M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice; (Loren M. Preheim), David S. Silverbrand, Kelly B. Blank, and Michael
D. Panzera, Commercial Litigation Branch, Civil Division, U.S. Department of Justice;
Jonathan Zielinski, Office of the Chief Counsel for Import Administration, U.S. Department of
Commerce, of counsel, for Defendant United States.

Schagrin Associates, (Roger B. Schagrin), Brian E. McGill, and Michael J. Brown for
Defendant-Intervenors.

BARZILAY, JUDGE: This case returns to the court following a redetermination by the

U.S. Department of Commerce (“Commerce”) pursuant to the court’s remand order in Sango
Court. No. 05-00145 Page 2

Int’l L.P. v. United States, Slip Op. 07-101, 2007 WL 1888342 (July 2, 2007) (not reported in F.

Supp.) (“Sango III”).1 Plaintiff Sango International L.P. challenges Commerce’s final scope

ruling, which determined that gas meter swivels and nuts fell within the scope of the antidumping

order on certain malleable iron pipe fittings from China. See Final Scope Ruling on Whether

Meter Swivels and Meter Nuts are Excluded from the Scope of the Antidumping Duty Order on

Malleable Iron Pipe Fittings from the People’s Republic of China (ITA Jan. 11, 2005) (“Final

Scope Ruling”); Antidumping Duty Order: Certain Malleable Iron Pipe Fittings from the

People’s Republic of China, 68 Fed. Reg. 69,376, 69,377 (Dep’t Commerce Dec. 12, 2003) (the

“AD Order”). For the reasons stated herein, the court now holds that substantial evidence

supports Commerce’s conclusion that gas meter swivels and nuts are within the scope of the AD

Order. See Final Redetermination Pursuant to Court Remand: Sango International L.P. v.

United States (ITA Oct. 26, 2007) (“Final Redetermination”), available at

http://ia.ita.doc.gov/remands/07-101.pdf. Therefore, Commerce’s Final Redetermination is

affirmed.

I. Background

In its January 2005 Final Scope Ruling, Commerce determined that gas meter swivels and

nuts fall within the scope of the AD Order based on its conclusions that the scope language was

dispositive and that further analysis under the 19 C.F.R. § 351.225(k)(2) criteria was

1
Familiarity with the procedural history and reasoning of Sango Int’l L.P. v. United
States, 30 CIT __, 429 F. Supp. 2d 1356 (2006) (“Sango I”), Sango Int’l, L.P. v. United States,
484 F.3d 1371 (Fed. Cir. 2007) (“Sango II”), and Sango III is presumed.
Court. No. 05-00145 Page 3

unnecessary.2 See Final Scope Ruling at 14. Plaintiff appealed the ruling to this court, alleging

that Commerce’s holding was unsupported by substantial evidence on the record. See Sango I,

30 CIT at __, 429 F. Supp. 2d at 1357.

The court affirmed Commerce’s ruling, holding that the facts presented in the

administrative record when read together “in the light of the [AD Order]’s language, reasonably

provide adequate evidence to place gas meter swivels and gas meter nuts within the scope of the

[AD Order].” Id. at __, 429 F. Supp. 2d at 1362. Finding that “the language of the antidumping

petition, [the] administrative factual findings and legal conclusions, and the preliminary

antidumping order dispositively place[d] gas meter swivels and gas meter nuts within the scope

of the antidumping order,” this court held that Commerce “did not err by not examining the

Diversified Products factors in 19 C.F.R. § 351.225(k)(2) . . . .” Id. at __, 429 F. Supp. 2d at

1362 n.10; see Diversified Prods. Corp. v. United States, 6 CIT 155,162, 572 F. Supp. 883, 889

(1983) (setting out scope inquiry criteria that were subsequently codified in § 351.225(k)(2)).

Plaintiff then appealed.

In May 2007, the Federal Circuit reversed and remanded with instructions that Commerce

“consider the criteria in section 351.225(k)(2) in arriving at a scope determination,” making clear

2
The relevant scope language of the AD Order reads:
For purposes of this order, the products covered are certain
malleable iron pipe fittings, cast, other than grooved fittings, from
the People's Republic of China. . . . Excluded from the scope of
this order are metal compression couplings, which are imported
under HTSUS number 7307.19.90.80. A metal compression
coupling consists of a coupling body, two gaskets, and two
compression nuts.
AD Order, 68 Fed. Reg. at 69,377.
Court. No. 05-00145 Page 4

that it “express[ed] no views as to what the results of that determination should be.” Sango II,

484 F.3d at 1382 & n.10. The Federal Circuit explained that “when the criteria set forth in

section 351.225(k)(1) – the description of the merchandise contained in the antidumping petition,

the initial investigation by Commerce and the Commission, and the determinations of Commerce

and the Commission – are not ‘dispositive,’ then Commerce must, in issuing its scope ruling,

‘further consider’ the criteria set forth in section 351.225(k)(2).” Id. at 1379.

The case was remanded to Commerce on July 2, 2007, for “consider[ation of] the factors

set forth in 19 C.F.R. § 351.225(k)(2) . . . .” Sango III, Slip Op. 07-101, 2007 WL 1888342,

at *1. After releasing a draft remand determination to interested parties in September 2007,

Commerce received comments from Plaintiff, as well as Defendant-Intervenors Ward

Manufacturing, Inc. and Anvil International, Inc., regarding the new evidence and arguments that

Plaintiff placed on the record. In October 2007, Commerce adopted the findings in its draft and

filed its final remand redetermination with the Court. See generally Final Redetermination.

Specifically, Commerce found that

the physical characteristics of the merchandise at issue, the expectations of the
ultimate purchasers, the ultimate use, and the channels of trade in which gas meter
swivels and nuts are sold are the same as the type of merchandise covered by the
scope of the [AD Order] on [malleable iron pipe fittings (“MIPF”)] from the
PRC.[3] We further found that the manner in which gas meter swivels and nuts are
advertised is not the same as MIPF covered by the [AD Order]. However, we
determined that the manner in which gas meter swivels and nuts are advertised
alone is not enough to determine that gas meter swivels and nuts fall outside the
scope of the [AD Order].

3
For more information on Commerce’s analysis of gas meter swivels and nuts, see Final
Redetermination at 6-19. See also Malleable Iron Pipe Fittings from China, USITC Pub. 3649,
No. 731-TA-1021, at 3-16, (Dec. 2003) (“ITC Report”), available at
http://hotdocs.usitc.gov/docs/pubs/701_731/pub3649.pdf.
Court. No. 05-00145 Page 5

Id. at 18. Based on these findings, Commerce ultimately concluded that “gas meter swivels and

nuts are within the scope of the [AD Order].” Id. Plaintiff then brought this action to contest

Commerce’s Final Redetermination.

II. Standard of Review

When reviewing a scope determination, this court must “sustain ‘any determination,

finding or conclusion found’ by Commerce unless it is ‘unsupported by substantial evidence on

the record, or otherwise not in accordance with law.’” Fujitsu Gen. Ltd. v. United States, 88 F.3d

1034, 1038 (Fed. Cir. 1996) (quoting 19 U.S.C. § 1516a(b)(1)(B)). Substantial evidence is “such

relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”

Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966) (quotations & citation omitted). In

determining whether substantial evidence exists, “[the court] review[s] the record in its entirety,

including all evidence that ‘fairly detracts from the substantiality of the evidence.’” Consol.

Bearings Co. v. United States, 412 F.3d 1266, 1269 (Fed. Cir. 2005) (quoting Atl. Sugar, Ltd. v.

United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)). Even if “the possibility of drawing two

inconsistent conclusions from the evidence” may exist, that possibility, in itself “does not prevent

an administrative agency’s findings from being supported by substantial evidence.” Consolo,

383 U.S. at 620. Although the court gives “significant deference” to Commerce’s interpretation

of its own orders, “a scope determination is not in accordance with the law if it changes the scope

of an order or interprets an order in a manner contrary to the order’s terms.” Allegheny Bradford

Corp. v. United States, 28 CIT 830, 842, 342 F. Supp. 2d 1172, 1183 (2004) (citation omitted).

As a result, Commerce may interpret scope orders to include the subject merchandise “only if
Court. No. 05-00145 Page 6

they contain language that specifically includes the subject merchandise or may be reasonably

interpreted to include it.” Id. at 843 n.6, 342 F. Supp. 2d at 1184 n.6.

III. Discussion

Plaintiff contests Commerce’s final scope redetermination, claiming that Commerce

erred in finding that meter swivels and nuts fall within the scope of the AD Order. Pl. Comments

2-3. To determine whether the scope of an order includes a particular product, Commerce will

take the “descriptions of the merchandise contained in the petition, the initial investigation, and

the determinations of the Secretary (including prior scope determinations) and the [International

Trade] Commission” into account. § 351.225(k)(1). Where the criteria are not dispositive,

Commerce will also consider the Diversified Products factors, as codified in the regulations: “(i)

the physical characteristics of the product; (ii) the expectations of the ultimate purchasers; (iii)

the ultimate use of the product; (iv) the channels of trade in which the product is sold; and (v) the

manner in which the product is advertised and displayed.” § 351.225(k)(2); see Diversified

Prods. Corp., 6 CIT at 162, 572 F. Supp. at 889.

A. Physical Characteristics Under § 351.225(k)(2)(i)

With regard to the physical characteristics analysis, Plaintiff argues the following: (1)

Commerce was wrong to collectively evaluate swivels and nuts; (2) swivels and nuts do not

connect directly to pipe; (3) swivels and nuts do not share the same threading standards with

MIPF; and (4) swivels require gaskets to connect to gas meters, and thus differ from MIPF. Pl.

Comments 3-12.
Court. No. 05-00145 Page 7

1. Commerce’s Collective Evaluation of Gas Meter Swivels and Nuts

Plaintiff relies on Sango II to support its position that gas meter swivels and nuts must be

treated separately for purposes of a scope determination, arguing that “the [Federal Circuit], in

reversing the [Court of International Trade], evaluated gas meter swivels and gas meter nuts as

separate and distinct products, and concluded that the gas meter swivel and gas meter nuts, on

their own, differed from the pipe fittings in the [AD Order] . . . .” Pl. Comments 3-4. Plaintiff,

however, misconstrues the court’s conclusion in Sango II.

As the Federal Circuit explained in its decision:

In sum, while we are not prepared to hold that Sango is entitled to a ruling by
Commerce that gas meter swivels and nuts are outside the scope of the [AD
Order], . . . we do hold that substantial evidence does not support Commerce’s
conclusion . . . . We thus hold that Commerce should have considered the criteria
of 19 C.F.R. § 351.225(k)(2) to determine whether the swivels and nuts are pipe
fittings within the scope of the [AD Order].

Sango II, 484 F.3d at 1381-82 (emphasis added). The plain meaning of the language makes clear

that the Federal Circuit remanded the case simply to give Commerce an opportunity to perform a

§ 351.225(k)(2) analysis. As the decision contains no language suggesting or mandating that

swivels and nuts should be treated separately, the court must employ the traditional standard for

its review of Commerce’s collective treatment of the products.

Furthermore, contrary to Plaintiff’s allegations, the fact that the Federal Circuit addressed

the characteristics of gas meter swivels and nuts in turn does not merit a conclusion that swivels

and nuts are “separate and distinct” products. Pl. Comments 3. Indeed, the language of the

opinion lends support to the opposite conclusion, i.e., that gas meter swivels and nuts should be

treated collectively. For example, the Federal Circuit noted that the “flanged end [of the swivel]
Court. No. 05-00145 Page 8

will only fit over and mate to a dry, diaphragm-type gas meter through the use of a gas meter

nut.” Sango II, 484 F.3d at 1380 (emphasis added). It also noted that “[a gas meter nut] can only

be mated to a comparably threaded connection on a gas meter.” Id. at 1381. Because the Federal

Circuit opinion lacks a clear mandate that gas meter swivels and nuts must be evaluated

separately, this court must determine whether substantial evidence supports Commerce’s

decision to evaluate swivels and nuts collectively. See Fujitsu Gen. Ltd., 88 F.3d at 1038.

In this case, Commerce analyzed the evidence in the record and “[found] it reasonable to

consider gas meter swivels and nuts collectively when considering whether gas meter swivels

and nuts fall within the scope of the [AD Order].” Final Redetermination at 5-6. In so

concluding, Commerce took several factors into consideration: (1) the court “treated gas meter

swivels and nuts as a single unit because they must bind with each other to function”4; (2) the

Federal Circuit did not make an explicit finding or mandate that gas meter swivels and nuts

should be treated separately; (3) Plaintiff and A.Y. McDonald Manufacturing Co. (“McDonald”)

“submitted their scope ruling requests on gas meter swivels and nuts, collectively”; (4) “the

record evidence show[ed] that gas meter nuts cannot be used without gas meter swivels, and that

gas meter swivels cannot be used without gas meter nuts”; and (5) U.S. Customs and Border

Protection’s (“Customs”) finding that “gas meter swivels and nuts are never used individually

4
Although the court held that it would “treat [swivels and nuts] as a one unit” just as it
would “a pipe fitting union comprised of three pieces screwed together,” the court recognizes
that swivels and nuts are separate components. Sango I, 30 CIT at __, 429 F. Supp. 2d at 1362 n.
8 (emphasis added). Nevertheless, “since a gas meter swivel and nut must bind with each other
to function,” these components must therefore be examined collectively. Id.
Court. No. 05-00145 Page 9

and, therefore, should be categorized under a single [heading of the HTSUS] category.”5 Final

Redetermination at 5, 20. Based on the aforementioned factors, the court holds that substantial

evidence supports a collective evaluation of swivels and nuts.

2. Plaintiff’s “Directly Connect” Argument

Plaintiff relies on the ITC’s statement that MIPF are “used for connecting the bores of

two or more pipes or tubes, connecting a pipe to some other apparatus, changing the direction of

fluid flow, or closing a pipe,” to argue that gas meter swivels and nuts are not pipe fittings

because they do not connect “directly” to pipe. ITC Report at 5; Pl. Comments 7-12. The court

is not persuaded.

a. “Direct” Connection between Swivels and Pipe

The record provides no support for Plaintiff’s claim that gas meter swivels must connect

directly to pipe.6 Neither the language of the AD Order nor that of the ITC Report require MIPF

to connect directly to pipe. See AD Order, 68 Fed. Reg. at 69,377; ITC Report at 5. Moreover,

the ITC’s definition does not specify whether any of the connections listed in the definition are

more “typical” than others. ITC Report at 5; see Final Redetermination at 7. Thus, absent such a

specification, there can be no requirement that swivels predominantly perform a particular

function, i.e., connect directly to a pipe, in order to qualify as MIPF.

5
The Federal Circuit has held that “it is permissible to refer to Customs rulings on the
[HTSUS] to find precision in the reach of the scope order.” Tak Fat Trading Co. v. United
States, 396 F.3d. 1378, 1386 (Fed. Cir. 2005).
6
The court need not address whether gas meter nuts connect directly to pipe given
Commerce’s concession that “a gas meter nut can only be used for connecting a gas meter swivel
to a gas meter and cannot be used for connecting two pipes together.” Final Redetermination
at 8.
Court. No. 05-00145 Page 10

The record also contains evidence that the domestic industry produces swivels with

female threaded ends, which can connect directly to pipe with exterior threads. Pl. App. 29, 347;

Pl. Comments 5. Although Sango attempts to focus the court’s attention exclusively on male

threaded swivels by alleging that female threaded swivels are uncommon and infrequently used,

the very existence of female threaded swivels enables some swivels to connect directly to pipe

and therefore undermines Plaintiff’s argument.7 Pl. Comments 5. The record also does not

support Plaintiff’s claims that “male threaded swivels are outside the scope of the [AD Order]”

and that “[a]ll of the pipe fittings covered by the [AD Order] are female connections.” Pl.

Comments 5. Plaintiff’s own submissions contain illustrations of male threaded MIPF as

examples of pipe fittings within the scope of the AD Order. Pl. Comments 5; Pl.’s Reply Br. Ex.

1, Sango I, 30 CIT __, 429 F. Supp. 2d 13568; Pl. App. 542-568.9 In addition, “neither the ITC

Report, the petition, nor the scope of the [AD Order] specify that only female threaded MIPF are

included within the scope.” Final Redetermination at 20. Therefore, Plaintiff’s argument that

the AD Order is limited to fittings with female threads fails.

That male threaded MIPFs fall within the scope of the AD Order strengthens the

proposition that male threaded swivels are also MIPF despite their need for an additional fitting

to connect with pipe. Within the piping system itself, connections containing a male threaded

7
Moreover, because the central issue before this court is whether “gas meter swivels and
nuts are MIPF which are covered by the scope of the [AD Order],” not whether swivels with a
particular type of connection are MIPF, the court need not restrict its review solely to male
threaded swivels. Final Redetermination at 20.
8
Figs. 100-03, 121, 133–37, 241, 245-46.
9
Figs. 1003-004, 1022, 1051, 1203-04, 1602, 1604, 1642, 1644, 1648, 1650.
Court. No. 05-00145 Page 11

MIPF also require a fitting with female threads on both ends in order to connect said fitting to a

male threaded pipe. The resulting connection – male threaded MIPF, a MIPF with female

threads on both ends, and a pipe – illustrates that two or more fittings may connect components

within the piping system and that fittings need not always create a “direct” connection between

the bores of two or more pipes within the system. See ITC Report at 5. Similarly, to connect a

gas meter to a piping system using a male threaded swivel requires a three-part connection

consisting of a gas meter nut, a male threaded swivel, and another MIPF. Just as the use of two

or more MIPF to connect pipe does not render said fittings outside the scope of the AD Order,

the use of a three-part connection consisting of a nut, swivel, and another MIPF does not exclude

gas meter nuts from the scope of the AD Order. Accordingly, Plaintiff’s argument that gas meter

swivels and nuts are not MIPF because they do not directly connect to pipe is without merit.

b. Connecting Pipe to “Some Other Apparatus”

Plaintiff’s “direct connect” argument also fails because it overemphasizes that MIPFs are

used for connecting the bores of two or more pipes while almost entirely ignoring that they can

also be used for “connecting a pipe to some other apparatus.” ITC Report at 5; Pl. Comment 7-

12. In this case, swivels and nuts are used to connect pipe to “some other apparatus” – namely,

the gas meter.10 See ITC Report at 5. Without the use of a swivel and nut, it would be

impossible to form a secure connection between the piping system and the gas meter. See Sango

10
Because the court found that substantial evidence supports Commerce’s collective
evaluation of swivels and nuts, gas meter nuts need not directly connect pipe to some other
apparatus in order to qualify as MIPF. Rather, the swivel-nut unit need only create a connection
between the piping system and the gas meter in order to meet the ITC’s definition, and thereby
fall within the scope of the AD Order.
Court. No. 05-00145 Page 12

II, 484 F.3d at 1381 (noting that swivels and nuts “allow a gas meter to be connected to the

system.”). Additionally, Commerce itself found that “[g]as meter swivels and nuts are expected

to be used to connect a pipe to another apparatus, a gas meter.” Final Redetermination at 15.

Because gas meter swivels and nuts connect piping systems to the gas meters, both fixtures are

MIPF within the scope of the AD Order.

c. The Use of a Gasket to Make a Swivel-Meter Connection

As a corollary argument, Plaintiff also contends that swivels do not connect directly with

gas meters and are more akin to compression fittings than MIPF because the flanged end requires

a gasket and insulation in order to form a vibration-free and spark-free connection. Pl.

Comments 10. Plaintiff then contrasts swivels and nuts to MIPF which “form a seal by the

simple act of being screwed together with a length of pipe to form the seal.” Pl. Comments 10.

That swivels may require a gasket to make an ideal connection does not support the claim that

swivels are akin to compression fittings, nor does it render swivels outside the scope of the AD

Order. As the AD Order specifically states: “[e]xcluded from the scope of this order are metal

compression couplings, . . . [which] consist[] of a coupling body, two gaskets, and two

compression nuts.” AD Order, 68 Fed. Reg. at 69,377. In contrast, a swivel requires at most one

nut and one gasket to function optimally, while the specifically excluded product requires two

nuts and two gaskets. See id.; Pl. Comments 10. That the AD Order does not explicitly exclude

products that use only one nut or fitting indicates that the use of a single nut and gasket is not

significant enough to place that product outside the scope of the AD Order. As Commerce

found, based on the ITC Report, “[v]arious apparatus may require [the] specific physical
Court. No. 05-00145 Page 13

characteristics of an MIPF to make the proper connection between the apparatus and the pipe.

The fact that the specific physical characteristics required by the apparatus may only be used in

certain types of MIPF connections does not preclude MIPF from being covered by the [AD

Order].” Final Redetermination at 7. Similarly, Commerce found that “[t]here is nothing in the

record or the scope that indicates that the scope intends to exclude all malleable iron pipe fittings

with specialized applications.” Scope Ruling at 13. Thus, the court finds that the use of a single

gasket does not render the swivel-nut unit outside the scope of the AD Order.

3. Threading Specifications

Plaintiff also contends that gas meter swivels and nuts are not pipe fittings because they

are manufactured with thread specifications that differ from MIPF specifications. Pl. Comments

9-10; see Final Redetermination at 10, 22-23; Sango II, 484 F.3d at 1378, 1380. Although

Plaintiff cites evidence showing that gas meter swivels are manufactured to ANSI B109.1

specifications while pipe fittings comply with ANSI 16.3 or ANSI 16.41, Plaintiff ignores record

evidence contradicting its argument. Pl. Comments 10. For example, Commerce found that “the

standards included in the investigation were not intended as an exhaustive list of the standards

applicable to the MIPF covered by the [AD Order]” because they do not cover flanged MIPF and

because the original petition only lists the specifications to which malleable pipe fittings will

“normally” be produced.11 Final Redetermination at 10, 23. Commerce then cited the ITC

11
Use of the word “normally” demonstrates that there are other standards than those
specified in the petition that are, nevertheless, included within the scope of the order. See
Dorbest Ltd., v. United States, 30 CIT __, __, 462 F. Supp. 2d 1262, 1270 (2006) (stating that
“use of the word ‘normally’ means that Commerce may select other data as warranted under the
circumstances.”).
Court. No. 05-00145 Page 14

Report, where the ITC “found one domestic like product to include all MIPF other than grooved

fittings, co-extensive with the scope,” and “specifically differentiated both threaded and flanged

MIPF from the excluded grooved fittings . . . .” Id. at 23. The record evidence on ANSI

specifications also indicates that gas meter swivels and nuts share some of the same threading

standards.12 As Commerce stated:

Language from the [ITC] investigation states that MIPF are produced to ASTM,
ANSI, and ASME specifications.[13] The ANSI B109.1 standard is included
within the ANSI specifications. The language from the [ITC] investigation also
states that “normally the ungalvanized fittings are produced to ASME 16.3 or
ASME B16.39 using material specification ASTM A197 and threaded
ANSI/ASME B1.20.1 . . . galvanized fittings are coated to ASTM A 153 or
ASTM B633 and threaded to B.1.20.1.” Gas meter swivels are manufactured to
several standards as follows: “Body: Malleable Iron, per ASTM A197, Threads:
per ANSI B.1.20.1, ANSI B 109.1, and Dimensions: per ANSI B109.1.”[14] Gas
meter swivels meet the material standard specification listed in the investigation,
ASTM A197, and are threaded on one end to the threading standard specifically
listed in the investigation, ANSI B.1.20.1.

Final Redetermination at 22-23 (footnotes omitted).15 Given the extensive evidence on record

contradicting Sango’s claims concerning threading specifications, Plaintiff’s argument fails.

12
At oral argument, defense counsel noted that some gas meter swivels and nuts share
threading standard ANSI B1.20.1 with MIPF. Pl. App. 472-473.
13
See ITC Report at 7-8.
14
Pl. App. 473, 524.
15
In stating that “gas meter swivels are manufactured to ANSI B109.1 specifications, not
ANSI 16.3 or ANSI 16.14, as are pipe fittings,” Pl. Comments 10, Plaintiff ignores that swivels
meet the material standard specification ASTM A197 and are threaded on one end to ANSI
B.1.20.1. Pl. Comments 10; see Final Redetermination at 22-23.
Court. No. 05-00145 Page 15

B. The Other § 351.225(k)(2) Factors

Pursuant to § 351.22(k)(2)(ii)-(iii), Commerce must consider the expectations of the

ultimate purchasers and the ultimate use of the product. See § 351.225(k)(2)(ii)-(iii). With

regard to these factors, Plaintiff argues that purchasers neither expect swivels and nuts to meet

MIPF threading standards, nor expect to find swivels and nuts in plumbing supply stores and

retail establishments. Pl. Comment 12. In disagreeing with Plaintiff’s distinctions between the

customer expectations and ultimate use of MIPF and gas meter swivels and nuts, Commerce

cited the ITC Report and the petition. Final Redetermination at 15. Specifically, Commerce

noted that: (1) the ITC Report “specifically states that the ultimate purchasers of MIPF include

natural gas utility companies; (2) the petition and ITC Report detail a broad customer base that

includes “HVAC contractors, OEM, and natural gas and water utility companies” as well as

plumbing contractors and home-owners; (3) the petition mentions that MIPF are used in gas lines

and piping systems of oil refineries; (4) the ITC Report includes the “use of a gas meter swivel

and nut by including the criterion that MIPF also connect a pipe to some other apparatus.” Id.

Based on Commerce’s heavy reliance on the findings of the ITC Report, substantial evidence

supports the conclusion that “the expectations of the ultimate purchasers and ultimate use of gas

meter swivels and nuts support finding that these products fall within the scope of the [AD

Order].” Id.

With regard to channels of distribution, Plaintiff claims that “gas meter swivels and gas

meter nuts move in distribution channels separate and apart from MIPF.” Pl. Comment 15; see

§ 351.225(k)(2)(iv). Plaintiff’s argument, however, ignores that MIPF and gas meter swivels and
Court. No. 05-00145 Page 16

nuts share a common distribution channel, wholesalers and distributors. Final Redetermination

at 17. The ITC Report noted that MIPF are

distributed through two channels, wholesale and retail, each of which has
experienced consolidation in recent years. The malleable fittings sold for
residential uses and for commercial and industrial uses are the same, and the
domestic like product and subject imports compete directly in both channels.
Purchasers reported an increasing overlap in customers between the two channels,
citing the tendency of large hardware chains to offer malleable fittings to
contractors, who traditionally purchased from wholesalers rather than retailers.
The line between the two channels is blurring.

ITC Report at 3. Commerce ultimately concluded that

[t]here seems to be little distinction, if any, between the channels of trade for
MIPF and gas meter swivels and nuts. The record shows that gas meter swivels
and nuts are sold through the wholesale/distributor channel, one of the channels of
trade indicated in the ITC Report for MIPF. . . . That gas meter swivels and nuts
are sold in the wholesale and distributor channel of trade, does not exclude gas
meter swivels and nuts from the scope of the [AD Order] because the ITC
specifically included this channel of trade in its report as one of the channels of
trade for MIPF.

The initial investigation included both wholesale and retail channels as possible
channels of distribution of covered MIPF. Gas meter swivels and nuts are
distributed through the wholesale channel and therefore, fall within the channels
of distribution of MIPF covered by the [AD Order].

Final Redetermination at 17. As gas meter swivels and nuts are sold through the wholesale

channel of trade, a channel through which MIPF are also sold, substantial evidence supports

Commerce’s conclusion that gas meter swivels and nuts fall within the scope of the AD Order.

Although Commerce admits that gas meter swivels and nuts are advertised and offered

for sale differently than MIPF, it properly found that this difference was not outweighed by the

other factors contained in § 351.225(k)(2). See § 351.225(k)(2)(v); Final Redetermination at 18.
Court. No. 05-00145 Page 17

This distinction does not on its own require a finding that the product falls outside the scope of

the AD Order. Id.

IV. Conclusion

For the foregoing reasons, the court holds that Commerce’s conclusions based on the

factors set forth in § 351.225(k)(2) are supported by substantial evidence. Therefore,

Commerce’s scope determination is AFFIRMED.

Dated: April 3, 2008 /s/ Judith M. Barzilay
New York, NY Judith M. Barzilay, Judge