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Wheatland Tube Co. v. United States

November 23, 1998

WHEATLAND TUBE COMPANY, PLAINTIFF-APPELLANT,
v.
UNITED STATES, DEFENDANT,
v.
DONGBU STEEL CO., LTD., HYUNDAI PIPE CO., LTD., SEAH STEEL CORPORATION, SHINHO STEEL CO., LTD., AND UNION STEEL MFG. CO., DEFENDANTS-APPELLEES.



Before Mayer, Chief Judge, Plager, and Clevenger, Circuit Judges.

The opinion of the court was delivered by: Mayer, Chief Judge.

Appealed from: United States Court of International Trade Judge Jane A. Restani.

Wheatland Tube Company appeals the July 18, 1997, judgment of the Court of International Trade, Court No. 96-04-01078, which affirmed the Department of Commerce's final negative scope determination, Certain Circular Welded Non-Alloy Steel Pipe and Tube from Brazil, the Republic of Korea, Mexico and Venezuela, 61 Fed. Reg. 11,608 (Dep't Comm. 1996) ("Final Scope Determination"). Because this ruling is supported by substantial evidence and is otherwise in accordance with law, we affirm.

Background

On September 24, 1991, Wheatland Tube Company ("Wheatland") and other domestic pipe producers filed an antidumping petition covering circular welded non-alloy steel pipe, known as standard pipe, from several countries, including Korea, Mexico, and Brazil. Standard pipe meets the American Society for Testing and Materials (ASTM) A-53 standard and is used for low pressure applications, such as plumbing. In response, the Department of Commerce ("Commerce") initiated antidumping duty investigations. See Certain Circular Welded Non-Alloy Steel Pipe from Brazil, the Republic of Korea, Mexico and Venezuela, 56 Fed. Reg. 52,528 (Dep't Comm. 1991) ("Notice of Initiation"). It defined the scope of the investigations:

"The merchandise subject to these investigations is circular welded non-alloy steel pipes and tubes, of circular cross-section, not more than 406.4mm (16 inches) in outside diameter, regardless of wall thickness, surface finish (black, galvanized, or painted), or end finish (plain end, bevelled [sic] end, threaded, or threaded and coupled). These pipes and tubes are generally known as standard pipe, though they may also be called structural or mechanical tubing in certain applications. Standard pipes and tubes are intended for the low pressure conveyance of water, steam, natural gas, air, and other liquids and gases in plumbing and heating systems, air conditioning units, automatic sprinkler systems, and other related uses. Standard pipe may also be used for light load-bearing and mechanical applications, such as for fence tubing. Imports of these products are currently classifiable under the following Harmonized Tariff Schedule (HTS) subheadings: 7306.30.10 and 7306.30.50. Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of these investigations is dispositive." Id. at. 52,529.

The respondents, foreign pipe producers, requested clarification of the investigations' scope, specifically as it pertains to "triple-certified" standard pipe, which meets the ASTM A-53 standard in addition to others. Commerce also asked the petitioners, domestic pipe producers, whether the scope of the investigations should include dual-certified pipes, i.e., pipes that meet both the ASTM A-53 standard as well as the American Petroleum Institute (API) 5L or other line pipe specifications. Line pipe is more expensive to produce and is used in more demanding applications, such as oil and gas pipelines. In a November 19, 1991, letter, the petitioners responded to Commerce that "[d]ual or triple certified standard pipe should be covered by these investigations only if they enter the United States under one of the tariff numbers listed in section I.D.3 of the petitions" and "[a]ny pipe entered under HS item 7306.10.10 would be line pipe outside the scope of the petitions." Petitioner's March 5, 1992, letter to respondents similarly explains that "[t]he scope, as defined by the petition, the Department and the Commission, clearly excludes . . . imports of line pipe entering the United States in Harmonized Tariff System of the United States (HS) category 7306.10." The tariff numbers listed in I.D.3 of the petitions, all of which fall within subheading 7306.30, cover standard pipe and tariff numbers listed under 7306.10 refer to "[l]ine pipe of a kind used for oil or gas pipelines." Harmonized Tariff Schedule of the United States (1996), 7306.10 & 7306.30; see also Final Scope Determination, 61 Fed. Reg. at 11,611.

Commerce's final determinations adopt the description of the Notice of Initiation with the following caveat:

"The scope is not limited to standard pipe and fence tubing, or those types of mechanical and structural pipe that are used in standard pipe applications. All carbon steel pipes and tubes within the physical description outlined above are included within the scope of this investigation, except line pipe, oil country tubular goods, boiler tubing, cold-drawn or cold-rolled mechanical tubing, pipe and tube hollows for redraws, finished scaffolding, and finished rigid conduit. Standard pipe that is dual or triple certified/stenciled that enters the U.S. as line pipe of a kind used for oil or gas pipelines is also not included in this investigation." *fn1 Certain Circular Welded Non-Alloy Steel Pipe from Brazil, 57 Fed. Reg. 42,940, 42,941 (Dep't Comm. 1992) (final determination of LTFV sales) (emphasis added); see also Certain Circular Welded Non-Alloy Steel Pipe from Korea, 57 Fed. Reg. 42,942, 42,943 (Dep't Comm. 1992) (final determination of LTFV sales). Commerce ultimately published antidumping orders, whose scope mirrors the scope of the final determinations. See Certain Circular Welded Non-Alloy Steel Pipe from Brazil, the Republic of Korea (Korea), Mexico, and Venezuela, 57 Fed. Reg. 49,453, 49,453 (Dep't Comm. 1992) (notice of antidumping orders) ("Standard Pipe Orders").

Six months later, Wheatland and other domestic producers filed petitions with Commerce claiming that exports from Brazil, Korea, and Mexico of API 5L line pipe and dual-certified pipe were circumventing the antidumping duty orders because they were being sold for use in standard pipe applications. Wheatland filed a "minor alterations" anticircumvention petition under 19 U.S.C. § 1677j(c) (1994), stating that it was "requesting a circumvention inquiry and not a scope clarification." The Korean pipe producers argued in response that Wheatland's petition failed to state a claim under section 1677j(c) because it had not alleged that standard pipes had undergone a "minor alteration in form or appearance" before being imported as line or dual-certified pipes because standard and line pipes differ significantly. On June 7, 1993, Commerce "determined that a scope inquiry pursuant to 19 C.F.R. § 353.29(i) is the appropriate action to respond to the issues raised by petitioners." (emphasis added). Wheatland proceeded without objecting to Commerce's use of this kind of inquiry, admitting that "the analyses and results under either [the anticircumvention or scope clarification] approach would be the same."

Commerce's preliminary scope determination concluded that the scope description was ambiguous and that line and dual-certified pipe used in standard pipe applications were within the scope of the antidumping order. See Certain Circular Welded Non-Alloy Steel Pipe from Brazil, the Republic of Korea, Mexico and Venezuela, 59 Fed. Reg. 1929, 1933 (Dep't Comm. 1994) (preliminary affirmative scope determination). After evaluating the comments, however, Commerce's final determination concluded that the orders expressly exclude line and dual-certified pipe that enters the United States as line pipe regardless of actual use. See Final Scope Determination, 61 Fed. Reg. at 11,609. Wheatland appealed the Final Scope Determination to the United States Court of International Trade arguing that the scope of the antidumping orders include the accused products and that Commerce failed to conduct a minor alterations inquiry pursuant to 19 C.F.R. § 353.29(g) (1996). Initially, the government defended its decision to conduct only a scope inquiry pursuant to 19 C.F.R. § 353.29(i) (1996) because Wheatland did "not argue that the line pipe and dual-certified pipe have been altered in form or appearance in some minor respects" and had "never complained about Commerce's decision" to conduct a scope inquiry. The government later requested a remand, however, to consider the anticircumvention petition and either initiate a minor alterations investigation or file a reasoned explanation for the decision not to initiate one.

The court denied this motion on October 9, 1996, because "Commerce set forth its reason; no objection was made to treating [Wheatland's] request as one for a scope determination; and it would be a waste of time and improper to order a remand until error has been demonstrated." On April 8, 1997, the court ordered Commerce to supplement its brief on its interpretation of 19 U.S.C. § 1677j(c) and address any other legal issue pertaining to circumvention based on minor alterations. Commerce responded that on remand, it would be able to find that the alterations served to circumvent the antidumping orders if "from the standpoint of a practical businessman, [the merchandise] is the same stream of exports for which the order was issued." The court disagreed holding that the "minor alterations provision does not apply to a distinct product that is originally unambiguously outside the scope of the order and is not produced by altering the subject merchandise." It reasoned that "the intent of Congress is clear and the statutory language is unambiguous, applying only to merchandise that has been `altered in form or appearance in minor respects' from that which appears to have been originally within the scope of the antidumping order." (emphasis in original). Accordingly, the court denied Commerce's request for a remand. It also affirmed the Final Scope Determination because the Standard Pipe Orders clearly exclude line and dual-certified pipe. Wheatland appeals.

Discussion

In reviewing a decision by the Court of International Trade to affirm the agency's final determination, "we `apply anew' the court's statutorily-mandated standard of review to the administrative review." Torrington Co. v. United States, 82 F.3d 1039, 1044 (Fed. Cir. 1996) (quoting PPG Indus., Inc. v. United States, 978 F.2d 1232, 1236 (Fed. Cir. 1992)). Accordingly, we must affirm Commerce's final determination unless it is "unsupported by ...


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