Slip Op. 06-61
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
[Plaintiff’s motion for judgment on the agency record is denied.]
Dated: May 1, 2006
Baker & McKenzie LLP (William D. Outman, II), (Stuart P. Seidel), (Kevin J. Sullivan)
for Plaintiff Sango International, L.P.
(Patricia M. McCarthy), Assistant Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice; (Kelly B. Blank), Attorney, Commercial
Litigation Branch, Civil Division, United States Department of Justice; (David Samuel
Silverbrand) Commercial Litigation Branch, Civil Division, United States Department of Justice,
Peter D. Keisler, Assistant Attorney General, Commercial Litigation Branch, Civil Division,
United States Department of Justice; David M. Cohen, Director, Commercial Litigation Branch,
Civil Division, United States Department of Justice; Kemba Eneas, Attorney, Office of the Chief
Counsel for Import Administration, United States Department of Commerce, of counsel, for
Defendant.
Schagrin Associates (Roger B. Schagrin), (Brian E. McGill), (Michael J. Brown), for
Defendant-Intervenors Ward Manufacturing, Inc., & Anvil International, Inc.
Court. No. 05-00145 Page 2
I. Introduction
This case concerns the scope of the antidumping duty order issued by the Department of
Commerce (“Commerce” or “Department”) on Certain Malleable Iron Pipe Fittings, Cast, Other
Than Grooved, from the People’s Republic of China. 68 Fed. Reg. 69,376 (Dec. 12, 2003)
(“Order”). Pursuant to Rule 56.2 of the United States Court of International Trade, Plaintiff
Sango International L.P. (“Sango”) has moved for a judgment upon the agency record declaring
that Commerce’s scope ruling holding that gas meter swivels and gas meter nuts fall within the
ambit of the Order is unsupported by substantial evidence on the record and otherwise is not in
accordance with the law. See Notice Final Scope Ruling (Jan. 11, 2005) (Pl.’s App. 630-44)
(“Scope Ruling”). For the reasons stated below, this court denies Plaintiff’s motion for judgment
on the agency record.
II. Procedural History
On December 12, 2003, Commerce issued an antidumping order imposing duties on
“certain malleable iron pipe fittings, cast, other than grooved fittings, from the People’s Republic
of China” (“China” or “PRC”). Order, 68 Fed. Reg. 69,377. The Order described the covered
products as
certain malleable iron pipe fittings, cast, other than grooved fittings, from the
People’s Republic of China. The merchandise is classified under item numbers
7307.19.90.30, 7307.19.90.60 and 7307.19.90.80 of the Harmonized Tariff
Schedule (HTSUS). Excluded from the scope of this order are metal compression
couplings, which are imported under HTSUS number 7307.19.90.80. A metal
compression coupling consists of a coupling body, two gaskets, and two
compression nuts. These products range in diameter from 1/2 inch to 2 inches
and are carried only in galvanized finish. Although HTSUS subheadings are
provided for convenience and U.S. Customs and Border Protection (CBP)
purposes, the Department’s written description of the scope of this proceeding is
dispositive.
Court. No. 05-00145 Page 3
Id.1 Pursuant to 19 C.F.R. § 351.225(c)(1), on July 28, 2004, Nitek Electronics, Inc., an importer
of gas meter swivels and gas meter nuts, and Sango, an United States manufacturer which
insulates imported gas meter swivels, applied to Commerce for a scope ruling that would exclude
gas meter swivels and nuts from the Order. See Application Scope Ruling Meter Swivels &
Meter Nuts (Pl.’s App. 1-12). On August 10, 2004, Defendant-Intervenors Ward Manufacturing,
Inc. (“Ward”), and Anvil International, Inc. (“Anvil”),2 submitted comments to Commerce
contending that gas meter swivels and nuts fall within the Order because they are “malleable iron
pipe fittings which are cast and that are not grooved fittings and are not compression fittings.”
Ward Resp. Application Scope Ruling (Def.’s App. Tab 1, at 1).
Commerce began a formal scope inquiry on September 13, 2004, in accordance with 19
C.F.R. § 351.225(e), as it was “unable to determine conclusively that meter swivels and meter
nuts are pipe fittings and are treated as such within the industry.” Scope Inquiry Initiation (Pl.’s
App. 289-90). As interested parties, Anvil and Ward respectively submitted briefs on whether
1
The language describing the scope of the antidumping investigation remained identical
from the investigation’s initiation, through the preliminary and final determinations, to the
antidumping order, except that the investigation notice had yet to exclude metal compression
couplings from the scope. See Notice of Initiation of Antidumping Duty Investigation: Certain
Malleable Iron Pipe Fittings from the People’s Republic of China, 67 Fed. Reg. 70,579, 70,579
(Dep’t Commerce Nov. 25, 2002); Notice of Preliminary Determination of Sales at Less Than
Fair Value and Postponement of Final Determination: Certain Malleable Iron Pipe Fittings
from the People’s Republic of China, 68 Fed. Reg. 33,911, 33,913 (Dep’t Commerce June 6,
2003); Final Determination of Sales at Less Than Fair Value and Critical Circumstances:
Certain Malleable Iron Pipe Fittings from the People’s Republic of China, 68 Fed. Reg. 61,395,
61,397 (Dep’t Commerce Oct. 28, 2003); Notice of Amended Final Determination of Sales at
Less Than Fair Value: Certain Malleable Iron Pipe Fittings from the People’s Republic of
China, 68 Fed. Reg. 65,873, 65,873 (Dep’t Commerce Nov. 24, 2003).
2
Defendant-Intervenors were petitioners in Commerce’s original antidumping
investigation.
Court. No. 05-00145 Page 4
meter swivels and nuts lie within the scope of the Order on October 4, 2004, and October 14,
2004. On October 18, 2004, Commerce notified Ward that it had submitted these filings without
the certifications mandated by 19 C.F.R. § 351.303(g), forcing the Department to reject them.
The Department, however, gave Ward a one-day extension to resubmit its briefs, which Ward
promptly did. See Commerce Deficiency Letter (Def.-Intervenors’ App. Tab 4); Ward Case Br.
(Oct. 19, 2004) (Def.-Intervenors’ App. Tab 5); Ward Rebuttal Br. (Oct. 19, 2004) (Def.-
Intervenors’ App. Tab 5).
In its investigation, Commerce analyzed the Order, the petition, the initial investigation,
determinations of the United States International Trade Commission (“ITC”), and the
determinations of the Secretary of Commerce to determine whether these sources proved
dispositive as to whether gas meter swivels and nuts fall within the Order’s scope. See 19 C.F.R.
§ 351.225(k)(1). Commerce found these sources dispositive and issued the Scope Ruling on
January 11, 2005, finding that gas meter swivels and gas meter nuts fall within the scope of the
Order. See Scope Ruling at 12-14. Specifically, it determined that:
First, these products are manufactured from malleable iron using a casting process
in the PRC. Second, these products are indisputably “fittings;” they are “pipe
fittings” because they are parts of a piping system, they direct the flow of the gas
through a piping system, and can be, although are not always, connected to other
pipe fittings or pipes. Finally, they are neither grooved fittings nor compression
couplings, both of which are specifically excluded.
Id. at 12. Sango then brought this action to contest the Scope Ruling.
Plaintiff Sango sets forth three contentions in its motion for judgment on the agency
record. First, it maintains that it was clear error for Commerce to grant Defendant-Intervenors
extensions to refile their case and rebuttal briefs after discovering that the initial submissions
lacked administratively-mandated certifications. Consequently, Sango avers that these
Court. No. 05-00145 Page 5
submissions should not constitute a part of the agency record. Second, Sango claims that gas
meter swivels and gas meter nuts lie unambiguously outside the scope of the Order, “as
evidenced by the language of the Order, the facts of the record and other administrative
determinations,” rendering Commerce’s Scope Ruling unsupported by substantial evidence and
otherwise not in accordance with the law. Pl.’s Mot. J. A.R. 2. Finally, Sango believes the court
should deem Commerce’s Scope Ruling invalid because the Department failed to consider the
so-called Diversified Products criteria3 enumerated in 19 C.F.R. § 351.225(k)(2).
III. Discussion
A. Preliminary Issues: Defendant-Intervenors’ Submission Extension
Sango asserts that the Department erred by granting Anvil and Ward a one-day extension
to re-file their case brief and rebuttal case brief, which lacked certifications required by 19
C.F.R. § 351.303(g), and that the briefs therefore should not become part of the record. See
Mem. Supp. Pl.’s Mot. J. A.R. 35. Plaintiff’s argument is without merit. Only with a
demonstration of “substantial prejudice” can Sango challenge Commerce’s decision to provide
Defendant-Intervenors with a one-day extension to resubmit their documents. Am. Farm Lines v.
Black Ball Freight Serv., 397 U.S. 532, 539 (1970) (citation omitted); see 5 U.S.C. § 706 (1966)
(“due account shall be taken of the rule of prejudicial error” in reviewing agency action);
Intercargo Ins. Co. v. United States, 83 F.3d 391, 394-95 (Fed. Cir. 1996). The Supreme Court
has long upheld “the general principle that (i)t [sic] is always within the discretion of . . . an
3
These factors receive their name from Diversified Prods. Corp. v. United States, 6 CIT
155, 572 F. Supp. 883 (1983), in which this Court first outlined them prior to their regulatory
codification. These descriptive elements encompass: “(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.” 19 C.F.R. § 351.225(k)(2).
Court. No. 05-00145 Page 6
administrative agency to relax or modify its procedural rules adopted for the orderly transaction
of business before it when in a given case the ends of justice require it.” Am. Farm Lines, 397
U.S. at 539 (quotations & citation omitted). Further, Commerce’s own regulations state that
“[u]nless expressly precluded by statute, the Secretary may, for good cause, extend any time
limit established” within the antidumping and countervailing duties regulations. 19 C.F.R. §
351.302(b).4 Plaintiff makes no assertion that substantial prejudice to its case arose from the
Department’s decision. Therefore, its claim must fail.
B. The Scope Ruling
1. Standard of Review
In reviewing a Commerce antidumping order scope determination, this court upholds the
Department’s conclusion unless the court finds it “unsupported by substantial evidence or
otherwise not in accordance with law.” Steel Auth. of India, Ltd. v. United States, 25 CIT 482,
485, 149 F. Supp. 2d. 921, 926 (2001) (quoting 19 U.S.C. § 1516a(b)(1)(B) (1994)) (quotations
omitted); see 19 U.S.C. § 1516a(b)(1)(B)(i) (1996); Nippon Steel Corp., NKK v. United States,
219 F.3d 1348, 1355 (Fed. Cir. 2000). In this context, “substantial evidence” denotes “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, 619-20 (1966) (quoting Consol. Edison Co. of N.Y.
v. NLRB, 305 U.S. 197, 229 (1938)) (quotations omitted). Crucially, “the possibility of drawing
two inconsistent conclusions from the evidence does not prevent an administrative agency’s
finding from being supported by substantial evidence.” Id. at 620 (citation omitted). Similarly,
a scope determination is not in accordance with law “if it changes the scope of an order or
4
The court assumes that such consideration is given equally to submissions of both
petitioners and respondents.
Court. No. 05-00145 Page 7
interprets an order in a manner contrary to the order’s terms.” Allegheny Bradford Corp. v.
United States, 28 CIT ___, ___, 342 F. Supp. 2d 1172, 1183 (2004). “Scope orders may be
interpreted as including subject merchandise only if they contain language that specifically
includes the subject merchandise or may be reasonably interpreted to include it.” Id. at 1184 n.6
(quoting Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1089 (Fed. Cir. 2002)) (quotations
omitted).
The first step in evaluating whether Commerce properly placed gas meter swivels and
nuts within the scope of the Order requires the court to examine “the antidumping petition, the
factual findings and legal conclusions adduced from the administrative investigations, and the
preliminary order.” Duferco Steel, 296 F.3d at 1097 (quoting Smith Corona Corp. v. United
States, 915 F.2d 683, 685 (Fed. Cir. 1990)) (quotations omitted); see Tak Fat Trading Co. v.
United States, 396 F.3d 1378, 1382 (Fed. Cir. 2005); 19 C.F.R. § 351.225(k). Among these
sources, the language of the order receives the greatest weight. See Tak Fat Trading, 396 F.3d at
1382; Duferco Steel, 296 F.3d at 1097. If these materials do not prove dispositive, the court then
turns to the Diversified Products criteria outlined in 19 C.F.R. § 351.225(k)(2) to make its
determination. See Tak Fat Trading, 396 F.3d at 1382; Allegheny Bradford, 342 F. Supp. 2d at
1183; 19 C.F.R. § 351.225(k).
2. The 19 C.F.R. § 351.225(k)(1) Factors
As noted earlier, Commerce’s Order defined the Order’s scope as encompassing
certain malleable iron pipe fittings, cast, other than grooved fittings, from the
People's Republic of China. The merchandise is classified under item numbers
7307.19.90.30, 7307.19.90.60 and 7307.19.90.80 of the Harmonized Tariff
Schedule (HTSUS). Excluded from the scope of this order are metal compression
couplings, which are imported under HTSUS number 7307.19.90.80. A metal
Court. No. 05-00145 Page 8
compression coupling consists of a coupling body, two gaskets, and two
compression nuts. These products range in diameter from 1/2 inch to 2 inches
and are carried only in galvanized finish.
Order, 68 Fed. Reg. at 69,376. Likewise, throughout the antidumping proceedings, Commerce
used almost identical language to describe the scope. See supra n.1. The antidumping petition
and related ITC documents employed the same terminology as well. See Anvil & Ward,
Malleable Iron Pipe Fittings from China: Antidumping Duty Petition 4 (Oct. 30, 2002)
(describing requested investigatory scope as in Order, though lacking metal compression
coupling exception) (“Petition”); Malleable Iron Pipe Fittings from China, ITC Publ’n No.
3649, Investigation No. 731-TA-1021 (Final), at 5 (Dec. 2003) (“ITC, 3649 ”).
The ITC publications and administrative documents regarding the antidumping
investigation flesh out the meaning of the Order’s text. According to the ITC,
[p]ipe fittings generally are used for connecting the bores of two or more pipes or
tubes, connecting a pipe to some other apparatus, changing the direction of fluid
flow, or closing the pipe. The material from which MCIPF [malleable cast iron
pipe fittings] are made, cast iron, is a general term for alloys composed primarily
of iron, carbon (greater than two percent) and silicon.
Malleable Iron Pipe Fittings from China: Determination and Views of the Commission, ITC
Publ’n No. 3568, Investigation No. 731-TA-1021 (Preliminary), at 5 (Dec. 2002) (footnote
omitted) (“ITC, 3568 ”); see ITC, 3649 at 3; see also Petition at 5 (“Malleable pipe fittings are
normally . . . attached to pipe by screwing.”) (emphasis added); Anvil& Ward, Amendment to the
Petition for the Imposition of Antidumping Duties: Malleable Iron Pipe Fittings from China, at 4
(Nov. 12, 2002) (same) (“Pet. Am.”). Further, pipe fittings are threaded, “normally” to the
American National Standards Institute (ANSI) B1.20.1 specification. Pet. Am. at 3; Petition at
Court. No. 05-00145 Page 9
4; see ITC, 3568 at 6.5
3. Plaintiff’s Argument
Sango believes that “the discussion of the class or kind of merchandise contained in the
Order unambiguously excludes” gas meter swivels and gas meter nuts from this rubric and that
therefore “the Department’s Scope Ruling to the contrary is not supported by substantial
evidence nor is it otherwise in accordance with the law.” Mem. Supp. Pl.’s Mot. J. A.R. 2. It
bases this claim on the specialized nature of the products. A meter swivel can connect only with
a gas meter on one end and a pipe fitting on the other,6 while a “pipe ‘fitting’ is almost always
physically threaded onto one end of a length of pipe and is the means whereby the pipe is joined
to (i) another length of pipe; (ii) a gas meter bar or (iii) a gas meter swivel.” Mem. Supp. Pl.’s
Mot. J. A.R. 9 (emphasis added). In essence, because neither gas meter swivels nor nuts can
attach to a length of pipe,7 they cannot qualify as pipe fittings. See Mem. Supp. Pl.’s Mot. J.
A.R. 10, 16, 19; Pl.’s Reply 2, 4. In a parallel line of reasoning, Plaintiff claims that gas meters
and swivels constitute different articles of commerce than pipe fittings and, therefore, cannot fall
within the scope of the Order. See Mem. Supp. Pl.’s Mot. J. A.R. 9.
5
Union nuts, which are undisputably covered by the Order, are threaded to a different
ANSI specification, B16.39. Def.-Intervenors’ Mem. P. & A. Opp’n Mot. Sango J. A.R. 12 n.7.
6
A gas meter nut is secured to a meter swivel to attach the latter to a gas meter. See
Mem. Supp. Pl.’s Mot. J. A.R. 16, 17.
7
Whether a swivel can connect directly to a pipe remains contentious. In contrast to
Sango, Commerce insists that “[m]eter swivels and nuts can be physically connected to a pipe.”
Def.’s Mem. Opp’n Pl.’s Mot. J. A.R. 10 (quoting Scope Ruling at 12) (quotations omitted); see
Def.-Intervenors’ Mem. P. & A. Opp’n Mot. Sango J. A.R. 12.
Court. No. 05-00145 Page 10
4. Analysis
Despite Sango’s protests to the contrary, gas meter nuts and swivels possess the
characteristics of pipe fittings outlined in the Order and thus fall within its scope. As Plaintiff
concedes, the products are cast, made of malleable iron, manufactured in the PRC, and do not
fall within the express exceptions within the Order. See Pl.’s App. 610. Likewise, the swivel-
nut unit8 connects to a gas meter and links this apparatus to a piping system via a less specialized
pipe fitting to manipulate the flow of the gas. See Pl.’s Br. 10; see, e.g., Pl.’s App. 369, 374.
Although the swivel may not directly touch a pipe, there is nothing in the record of this case to
require that pipe fittings must directly connect to a pipe to be considered pipe fittings. Further,
swivels are threaded according to the ANSI B1.20.1 specification characteristic of all pipe
fittings. Even Sango’s brief notes that pipe fittings “almost always” connect to a pipe on one
end; sometimes they do not. Mem. Supp. Pl.’s Mot. J. A.R. 9. Finally, Sango’s contention that
gas meters and swivels are separate articles of commerce from pipe fittings fails since the Order
does not address this issue when outlining its scope. Together, these facts, read in light of the
Order’s language, reasonably provide adequate evidence to place gas meter swivels and gas
meter nuts within the scope of the Order.9 Consequently, this court must uphold the Department
8
Since a gas meter swivel and nut must bind with each other to function, the court will
treat them as one unit for this discussion, just as it would, for example, a pipe fitting union
comprised of three pieces screwed together. Cf. Def.-Intervenors’ Mem. P. & A. Opp’n Mot.
Sango J. A.R. 12 & n.7.
9
Sango’s argument that the HTSUS classification headings invoked in the Order and
other administrative materials preclude the inclusion of gas meter swivels and nuts within the
scope is groundless. See Mem. Supp. Pl.’s Mot J. A.R. 11, 21-27. The Order itself states that
“[a]lthough HTSUS subheadings are provided for convenience and U.S. Customs and Border
Protection (CBP) purposes, the Department’s written description of the scope of this proceeding
is dispositive.” Order, 68 Fed. Reg. at 69,376; see Tak Fat Trading Co., 396 F.3d at 1383.
Court. No. 05-00145 Page 11
of Commerce’s Scope Ruling as supported by substantial evidence and in accordance with law. 10
IV. Conclusion
For the reasons stated above, Sango’s motion for judgment on the agency record is
DENIED.
May 1, 2006 /s/ Judith M. Barzilay
Dated:________________________ __________________________
New York, NY Judge
10
Because the court finds that the language of the antidumping petition, administrative
factual findings and legal conclusions, and the preliminary antidumping order dispositively
places gas meter swivels and gas meter nuts within the scope of the antidumping order, it holds
that the Department did not err by not examining the Diversified Products factors in 19 C.F.R. §
351.225(k)(2), and the court also need not address these criteria. See Tak Fat Trading, 396 F.3d
at 1382; Allegheny Bradford, 342 F. Supp. 2d at 1183; 19 C.F.R. § 351.225(k).