Star Pipe Products v. United States
Opinion
Plaintiff Star Pipe Products ("Star Pipe") contests a 2017 "Final Scope Ruling" in which the International Trade Administration, U.S. Department of Commerce ("Commerce" or the "Department") interpreted the scope of an antidumping duty order (the "Order") on non-malleable cast iron pipe fittings from the People's Republic of China ("China") to include certain ductile iron flanges imported by Star Pipe. Before the court is Star Pipe's motion for judgment on the agency record, in which Star Pipe argues that Commerce should have determined that its ductile iron flanges are excluded from the scope of the Order.
Star Pipe claims in the alternative that Commerce erred in not initiating a formal scope inquiry, under which Commerce would have been required to consider additional criteria as set forth in the Department's regulation. Plaintiff also claims in the alternative that should the Final Scope Ruling be sustained, Commerce must be held to have acted unlawfully in issuing liquidation instructions to U.S. Customs and Border Protection ("Customs") directing the assessment of antidumping duties on entries of its flanges that were made prior to issuance of the Final Scope Ruling.
Defendant United States and defendant-intervenor Anvil International, LLC, a United States manufacturer of the domestic like product, oppose plaintiff's motion.
The court remands the Final Scope Ruling to Commerce for reconsideration. The court holds in abeyance any ruling on plaintiff's alternative claims pending resolution of plaintiff's claim contesting the Final Scope Ruling on the merits.
I. BACKGROUND
Commerce issued the antidumping duty order on non-malleable cast iron pipe fittings from China in April 2003.
Notice of Antidumping Duty Order: Non-Malleable Cast Iron Pipe Fittings From the People's Republic of China
,
Commerce issued the Final Scope Ruling on August 17, 2017, in which it ruled that the ductile iron flanges are within the scope of the Order. Final Scope Ruling on the Antidumping Duty Order on Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Request by Star Pipe Products (Aug. 17, 2017) (P.R. Doc. 13) (" Final Scope Ruling ").
Star Pipe commenced this action on September 15, 2017. Summons (Sept. 15, 2017), ECF No. 1 ; Compl. (Sept. 15, 2017), ECF No. 4. On May 10, 2018, Star Pipe filed the instant motion for judgment on the agency record. Pl.'s Mot. for J. on the Agency R. under Rule 56.2 (May 10, 2018), ECF No. 29 ("Pl.'s Br."). Defendant responded on August 24, 2018, and defendant-intervenor responded on September 7, 2018. Def.'s Resp. in Opp'n to Pl.'s Mot. for J. on the Agency R. (Aug. 24, 2018), ECF No. 37 ; Def.-Inter.'s Resp. in Opp'n to Pl.'s Mot. for J. on the Agency R. (Sept. 7, 2018), ECF No. 38. Plaintiff replied on September 25, 2018. Pl.'s Reply (Sept. 25, 2018), ECF No. 41.
II. DISCUSSION
A. Jurisdiction and Standard of Review
The court exercises subject matter jurisdiction according to section 201 of the Customs Courts Act of 1980,
B. The Final Scope Ruling Must Be Remanded to Commerce for Reconsideration
Determining whether merchandise is within the scope of an antidumping or countervailing duty order begins with the scope language.
Mid Continent Nail Corp. v. United States
,
Under its regulation governing scope determinations,
If Commerce determines that the criteria of § 351.225(k)(1) are not dispositive,
Commerce considers the other factors set forth in § 351.225(k)(2). Those factors are: "(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."
1. The Merchandise that Is the Subject of Star Pipe's Scope Ruling Request
The Scope Ruling Request stated that "[t]he products that are the subject of this scope request are flanges imported by Star Pipe that are made from ductile iron, and meet the American Water Works Association ('AWWA') Standard C115."
Scope Ruling Request
3. It stated that "[a] flange is an iron casting used to modify a straight end pipe to enable its connection either to a flanged pipe, a flanged pipe fitting or another flange attached to the otherwise straight end of another pipe, in order to connect pipes, valves, pumps and other equipment to form a piping system."
The Scope Ruling Request included specifications and illustrations for each of eleven models of ductile iron flanges, which are similar in design but vary with respect to dimensions and specifications.
3
Scope Ruling Request
Ex. 1 ("Star Pipe Products Catalog-Products Subject To Request"). Each is produced to be assembled to a ductile iron pipe.
2. The Scope Language in the Order
The scope language in the Order is as follows:
The products covered by this order are finished and unfinished non-malleable cast iron pipe fittings with an inside diameter ranging from 1/4 inch to 6 inches, whether threaded or unthreaded, regardless of industry or proprietary specifications. The subject fittings include elbows, ells, tees, crosses, and reducers as well as flanged fittings. These pipe fittings are also known as "cast iron pipe fittings" or "gray iron pipe fittings." These cast iron pipe fittings are normally produced to ASTM A-126 and ASME B.16.4 specifications and are threaded to ASME B1.20.1 specifications. Most building codes require that these products are Underwriters Laboratories (UL) certified. The scope does not include cast iron soil pipe fittings or grooved fittings or grooved couplings.
Fittings that are made out of ductile iron that have the same physical characteristics as the gray or cast iron fittings subject to the scope above or which have the same physical characteristics and are produced to ASME B.16.3, ASME B.16.4, or ASTM A-395 specifications, threaded to ASME B1.20.1 specifications and UL certified, regardless of metallurgical differences between gray and ductile iron, are also included in the scope of this petition [ sic ]. [ 4 ] These ductile fittings do not include grooved fittings or grooved couplings. Ductile cast iron fittings with mechanical joint ends (MJ), or push on ends (PO), or flanged ends and produced to American Water Works Association (AWWA) specifications AWWA C110 or AWWA C153 are not included.
Order
,
3. The Final Scope Ruling
The Final Scope Ruling states that "[f]or this scope proceeding, the Department examined the language of the
Order
, the description of the products contained in Star Pipe's scope ruling request, and prior scope determinations."
Final Scope Ruling
10. Commerce added that "[w]e find that these factors, are, together, dispositive as to whether the product at issue is subject merchandise, in accordance with 19 CFR 351.225(k)(1)."
Because the products at issue are made of ductile cast iron rather than non-malleable ("gray") cast iron, they are not described by the first paragraph of the scope language. Commerce concluded in the Final Scope Ruling that they were described by the first clause of the first sentence in the second paragraph, i.e., that the flanges are "[f]ittings that are made out of ductile iron that have the same physical characteristics as the gray or cast iron fittings subject to the scope above."
Order
,
Commerce rejected Star Pipe's contention that the flanges were not "pipe fittings" within the scope of the Order.
Final Scope Ruling
10. The Final Scope Ruling states that "[w]hile the scope of the
Order
does not provide a definition of the term 'pipe fittings,' ... the ITC does define the term in its final injury determination," adding that "the ITC states that '{p}ipe fittings generally are used to connect the bores of two or more pipes or tubes, connect a pipe to another apparatus, change the direction of fluid flow, or close a pipe.' "
Commerce also rejected Star Pipe's argument "that the ITC does not consider a flange to be a flanged fitting and that this demonstrates that flanges are different from fittings."
Commerce concluded, further, that the exclusion for ductile cast iron fittings in the last sentence of the scope language did not remove Star Pipe's flanges from the scope because these flanges had not been demonstrated to meet either of the American Water Works Association ("AWWA") specifications mentioned in the exclusion (AWWA C110 or AWWA C153).
4. The Final Scope Ruling Must Be Remanded for Reconsideration
The court concludes that Commerce failed to comply with its regulation when it reached a decision to place Star Pipe's flanges in the scope of the Order without considering the antidumping duty petition. In addition, Commerce failed to give fair and adequate consideration to record evidence contained in the final injury determination of the ITC that detracts from its conclusion. As a result of these failures, the Final Scope Ruling cannot be shown to be supported by substantial evidence contained on the record as a whole.
a. By Failing to Consider the Descriptions of the Merchandise Contained in the Petition, Commerce Did Not Comply with
The Department's regulation requires that the Secretary of Commerce "take into account ... [t]he descriptions of the merchandise contained in the petition, the initial investigation, and the determinations of the Secretary (including prior scope determinations) and the Commission."
The Scope Ruling Request included arguments grounded in the petition.
Scope Ruling Request
9-10. Star Pipe argued that the petition, while mentioning flanged fittings, made no mention of flanges.
In conclusion, Commerce did not comply with its regulation,
b. While Relying on the ITC Report for One Purpose, Commerce Failed to Address Record Evidence Detracting from its Conclusion that Star Pipe's Flanges Are Subject Merchandise
As mentioned previously, Commerce, in concluding in the Final Scope Ruling that Star Pipe's flanges are pipe fittings within the scope of the Order, relied upon certain language in the ITC's final injury determination concerning the uses of pipe fittings: "Specifically, the ITC states that 'pipe fittings generally are used to connect the bores of two or more pipes or tubes, connect a pipe to another apparatus, change the direction of fluid flow, or close a pipe.' " Final Scope Ruling 10 (footnote omitted). This statement appears in the "Product Description" section of the Views of the Commission in the ITC Report, Non-Malleable Pipe Fittings From China, Inv. No. 731-TA-990 (Final), USITC Pub. No. 3586 (Mar. 2003) (" ITC Report ") 4. Commerce concluded from this statement, which it interpreted to be a definition of the term "pipe fitting" as used in the scope language, that Star Pipe's flanges are "pipe fittings" for purposes of the Order. Final Scope Ruling 10. The ITC report and the Scope Ruling Request contain record evidence detracting from this conclusion.
The Final Scope Ruling did not quote or discuss the sentence in the ITC Report immediately preceding the one on which it relied. That preceding sentence, which followed a quotation of the scope language, was as follows: "Accordingly, the subject imports include non-malleable cast iron pipe fittings as well as certain ductile cast iron pipe fittings, such as those that can be used in traditionally non-malleable pipe fitting applications. " ITC Report 4 (emphasis added). This language at least suggests that the pipe fittings subject to the Order are those used in pipe fitting applications. 6 Here, there is evidence on the record that Star Pipe's ductile iron flanges are not suitable for, and are not approved for, use in pipe fitting applications. This evidence, which is contained in the Scope Ruling Request and its exhibits, indicates that Star Pipe's flanges, rather than being suitable for use by pipe fitters, are suitable for use, and are used, by pipe fabricators, who distribute pipes that have been modified by the addition of the flanges. See Scope Ruling Request 18.
The Scope Ruling Request identified only one use for Star Pipe's flanges: "to
modify a straight end pipe
to enable its connection either to a flanged pipe, a flanged pipe fitting or another flange attached to the otherwise straight end of another pipe, in order to connect pipes, valves, pumps and other equipment to form a piping system."
In summary, there is record evidence that the threaded flanges imported by Star Pipe, in their condition as entered, are not suitable for use in assembling piping systems.
7
Instead, according to the Scope Ruling Request and AWWA standard C115, to which they are described as conforming, they are suitable for use in the assembly of piping systems only after they have undergone post-importation assembly and fabrication. Nevertheless, Commerce, in the Final Scope Ruling, found that Star Pipe's flanges can connect the bores of two or more pipes,
Final Scope Ruling
10, or connect a pipe to another apparatus,
Other information in the ITC Report also detracts from the Department's conclusion that Star Pipe's flanges are subject merchandise. The ITC Report stated that "[f]langed fittings are different from threaded fittings in that the flanged fittings are cast with an integral rim, or flange, at the end of the fitting."
ITC Report
I-9 (footnote omitted). The report adds that "[t]he flanged connection is made by inserting a gasket in between the flanged ends of two separate pieces and securing the ends with several bolts,"
at I-9 n.53. Star Pipe's flanges do not conform to the description of "flanged fittings" in the ITC Report because they are not "cast with an integral rim, or flange, at the end of the fitting."
Other language in the ITC Report addresses the topic of flanged fittings made of ductile cast iron. Commerce does not mention in the Final Scope Ruling that the ITC considered all flanged ductile cast iron fittings to be excluded from the scope, regardless of specification. ITC Report I-1 n.1 ("The subject fittings include non-malleable and ductile elbows, ells, tees, crosses, and reducers as well as non-malleable flanged fittings."), I-8 ("[E]xcluded from the scope are flanged ductile cast iron fittings and ductile fittings produced to AWWA C110 or AWWA C153 specifications." (footnote omitted) ).
In defining the domestic like product, the ITC, observing that no domestic producer filed a questionnaire response indicating that it produced ductile cast iron flanged fittings, expressly declined to broaden the domestic like product beyond the scope of the investigation to add this class of products.
When viewed in the context of the ITC Report as a whole, the Department's conclusion that Star Pipe's flanges are subject merchandise raises a question for which the Final Scope Ruling does not provide a satisfactory answer. That question is how, if ductile iron flanged
fittings
were excluded from the scope of the antidumping duty investigation, ductile iron
flanges
nevertheless were intended to be treated as subject merchandise during that investigation. Commerce reached the conclusion that ductile iron flanges are within the scope even though the ITC Report makes no mention of ductile iron flanges (or non-malleable iron flanges, for that matter) and even though the ITC Report presents a detailed discussion of the various types of merchandise that are within the scope (and, therefore, within the domestic like product, which the ITC made equivalent to, and not broader than, the scope of the investigation).
See ITC Report
I-1 to I-9. The absence of any mention of ductile iron flanges, as opposed to ductile flanged fittings, in the ITC Report (and, according to plaintiff, in the petition) casts doubt on the premise that ductile iron flanges were contemplated as part of either the scope of the investigation or the scope of the domestic like product. The Final Scope Ruling does not analyze the issue of the physical and functional differences between ductile iron flanges and the examples of "subject fittings" listed in the scope language.
See Order
,
Read in the entirety, the ITC Report contains evidence lending weight to a conclusion that Star Pipe's flanges are not subject merchandise. Under
III. CONCLUSION AND ORDER
In conclusion, the Department's regulation contemplates that Commerce will give thorough and fair consideration to "[t]he descriptions of the merchandise contained in the petition ... and the determinations of the ... Commission,"
Because the court is ordering reconsideration of the Final Scope Ruling, it does not reach, at this stage of the litigation, either of Star Pipe's two alternative claims. Commerce is not directed to consider the factors in
Therefore, upon consideration of plaintiff's motion for judgment on the agency record and all papers and proceedings had herein, and upon due deliberation, it is hereby
ORDERED that the stay ordered in this case, Order (Jan. 8, 2019), ECF No. 48, be, and hereby is, terminated; it is further
ORDERED that the court's previous order granting plaintiff's motion for oral argument, Order (Oct. 25, 2018), ECF No. 45, be, and hereby is, vacated; it is further
ORDERED that plaintiff's motion for oral argument (Oct. 12, 2018), ECF No. 43, be, and hereby is, denied; it is further
ORDERED that plaintiff's motion for judgment on the agency record (May 10, 2018), ECF No. 29, be, and hereby is, granted in part; it is further ORDERED that Commerce, within 90 days from the date of issuance of this Opinion and Order, shall submit a redetermination upon remand ("Remand Redetermination") that complies with this Opinion and Order; it is further
ORDERED that defendant shall supplement the administrative record with documents, or portions thereof, considered by Commerce in reaching the decision in the Remand Redetermination; it is further
ORDERED that plaintiff and defendant-intervenor shall have 30 days from the filing of the Remand Redetermination in which to submit comments to the court; and it is further
ORDERED that defendant shall have 15 days from the date of filing of the last comment on which to submit a response.
All citations to documents from the administrative record are to public documents. These documents are cited as "P.R. Doc. __."
All statutory citations herein are to the 2012 edition of the United States Code and all regulatory citations herein are to the 2017 edition of the Code of Federal Regulations.
The eleven models are in four groups, identified by name and product code as follows:
"HI Hub threaded 125 lb. flanges for ductile pipe (ductile iron)" (product codes FLD02SP, FLD03SP, and FLD04SP);
"Reducing 125 lb. flanges for ductile pipe (ductile iron)" (product codes FLD0403, FLD0604, and FLD0804),
"Threaded 125 lb. flanges for studs for ductile pipe (ductile iron)" (product codes FLDTFS02, FLDTFS03, FLDTFS04), and
"Threaded 250 lb. flanges for studs for ductile pipe (ductile iron)" (product codes FL250D03 and FL250D04).
Scope Ruling Request
2;
see
The reference to "this petition" is incorrect and probably should read "this order." Because it is Commerce, not the petitioner, that ultimately determines the scope, the scope of the investigation as proposed in the petition is not necessarily the scope Commerce determines when issuing an order.
The Final Scope Ruling does not discuss whether the scope exclusion for "cast iron soil pipe fittings" has implications for this case.
"Pipe fitting" is defined as "the work of a pipe fitter," Merriam Webster Online , https://www.merriam-webster.com/dictionary/pipe fitting (last visited Feb. 8, 2019), and "pipe fitter" is defined as "a worker who installs and repairs piping," Merriam Webster Online , https://www.merriam-webster.com/dictionary/pipe fitter (last visited Feb. 8, 2019).
The scope language expressly includes unfinished non-malleable iron pipe fittings and might be read to include certain unfinished ductile iron fittings. The inclusion of certain "unfinished" articles in the scope does not support the placement of Star Pipe's flanges within the scope. Here, the record evidence is that the flange is imported in a finished form ready for attachment to a pipe by a pipe fabricator, with a threaded hub and other physical characteristics meeting AWWA C115. See Scope Ruling Request Ex. 3, Sec. 4.3.
One of the prior scope rulings on which Commerce relied in placing Star Pipe's flanges within the scope of the Order is Final Scope Ruling on the Black Cast Iron Flange, Green Ductile Flange, and the Twin Tee (Sept. 19, 2008) (" Taco Ruling "), appended to Final Scope Ruling as Attachment 4. Final Scope Ruling 10. In that ruling, Commerce found that the black and green flanges at issue in that proceeding were "flanged fittings"; Commerce reached this finding "because they are fittings that are cast with an integral rim, or flange, at the end of the fitting." Taco Ruling 9; cf. Final Scope Ruling 11 (noting that the ITC's statement demonstrates that flanges are different from flanged fittings). Commerce also relied upon Final Scope Ruling on the Antidumping Duty Order on Finished and Unfinished Non-Malleable Cast Iron Pipe Fittings from the People's Republic of China: Request by Napac for Flanged Fittings (Sept. 19, 2016) (" Napac Ruling "), appended to Final Scope Ruling as Attachment 2, for the proposition that Star Pipe's flanges have the same physical characteristics as the products at issue in that ruling. Final Scope Ruling 12. Some of the articles at issue in the Napac Ruling were described as gray iron flanged fittings, Napac Ruling 3, and the court is unable to conclude from the descriptions therein that the remaining articles were identical to Star Pipe's flanges.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.