Judges: Restani
Filed: Nov. 27, 2020
Latest Update: Nov. 27, 2020
Slip Op. 20-
UNITED STATES COURT OF INTERNATIONAL TRADE
TMB 440AE, INC. (FORMERLY KNOWN
AS ADVANCE ENGINEERING Before: Jane A. Restani, Judge
CORPORATION),
Plaintiff,
Court No. 18-00095
v.
UNITED STATES, PUBLIC VERSION
Defendant.
OPINION
[Department of Commerce Scope Determination regarding Seamless Pipe from the People’s
Republic of China is sustained.]
Dated: November 27, 2020
Ned H. Marshak, Jordan C. Kahn , and David M. Murphy, Grunfeld Desiderio Lebowitz
Silverman & Klestadt, LLP, of New York, NY and Washington D.C., and Dale E. Stackhouse
and Meghann C. T. Supino, Ice Miller LLP, of Indianapolis, IN for Plaintiff TMB 440AE, Inc.
Elizabeth A. Speck, Senior Trial Counsel, and Patricia M. McCarthy, Assistant Director,
Civil Division, U.S. Department of Justice, of Washington D.C., and of counsel Vania Y. Wang,
Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department
of Commerce, of Washington, D.C. for defendant United States. With them on the brief were
Jeffrey B. Clarke, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and
Franklin E. White, Jr., Assistant Director.
Restani, Judge: Before the court is the United States Department of Commerce’s
(“Commerce”) Final Results of Second Remand Redetermination, ECF No. 57-1 (Jul. 20, 2020)
(“Second Remand Results”) following the court’s opinion and order in TMB 440AE, Inc. v.
United States, Slip Op. 20-44, 2020 WL 1672841 (CIT Apr. 6, 2020) (“Second Remand Order”).
The court ordered Commerce to reconsider its determination finding that seamless pipe imported
by TMB 440AE, Inc. (formerly known as Advance Engineering Corporation) (“AEC”) was
Court No. 18-00095 Page 2
Public Version
within the scope of antidumping and countervailing duty orders on certain seamless pipe from
the People’s Republic of China (“PRC”).
Id. at *5–7;
see also Certain Seamless Carbon and
Alloy Steel Standard, Line, and Pressure Pipe from the People's Republic of China: Amended
Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 75 Fed.
Reg. 69,052 (Dep’t of Commerce Nov. 10, 2010) (“ADD Order”); Certain Seamless Carbon and
Alloy Steel Standard, Line, and Pressure Pipe from the People's Republic of China: Amended
Final Affirmative Countervailing Duty Determination and Countervailing Duty Order, 75 Fed.
Reg. 69,050 (Dep’t of Commerce Nov. 10, 2010) (“CVD Order”) (collectively, the “Orders”).
The court required Commerce to consider the sources listed in 19 C.F.R. § 351.225(k)(1) (“(k)(1)
sources”) in making its assessment of the scope of the Orders and to proceed to consider the
factors listed in 19 C.F.R. § 351.225(k)(2) (“(k)(2) factors”) if these sources were not dispositive.
Second Remand Order at *5–7.
Following remand, and after consulting those (k)(1) sources, Commerce
continues to find that AEC’s pipe is within the scope of the Orders. See Second Remand Results
at 2. For the reasons stated below, Commerce’s determination is sustained.
BACKGROUND
The court presumes familiarity with the facts of this case and will recount them only as
necessary. The Orders cover certain seamless pipe from the PRC,1 but exclude:
1
The Orders cover:
Court No. 18-00095 Page 3
Public Version
(1) All pipes meeting aerospace, hydraulic, and bearing tubing specifications; (2)
all pipes meeting the chemical requirements of ASTM A-335, whether finished or
unfinished; and (3) unattached couplings. Also excluded from the scope of the
order are all mechanical, boiler, condenser and heat exchange tubing, except when
such products conform to the dimensional requirements, i.e., outside diameter and
wall thickness of ASTM A-53, ASTM A-106 or API 5L specifications.
ADD Order, 75 Fed. Reg. at 69,052–53; CVD Order, 75 Fed. Reg. at 69,051. The Orders were
issued on November 10, 2010, but AEC did not receive a Notice of Action from United States
Customs and Border Protection (“CBP”) until October 3, 2016, informing AEC that it was
subject to duties pursuant to the Orders. See Second Remand Results at 1 n.4, 44. On October 20,
2017, AEC requested that Commerce conduct a scope ruling. See Letter from Grunfeld,
Desiderio, Lebowitz, Silverman & Klestadt LLP to the Sec’y of Commerce on behalf of AEC re
“Advance Engineering Corporation Scope Request,” A-570-956, C-570-957, P.R. 1-4, C.R. 1-4,
at 1 (Oct. 20, 2017) (“AEC Scope Request”).
Commerce determined that the AEC pipe fell within the language of the Orders and did
not meet the criteria to satisfy any exclusion. See TMB 440 AE, Inc. v. United States, 399 F.
Supp. 3d 1314, 1317 (CIT 2019) (“First Remand Order”). AEC asserted that its pipe fell within
[C]ertain seamless carbon and alloy steel (other than stainless steel) pipes and
redraw hollows, less than or equal to 16 inches (406.4 mm) in outside diameter,
regardless of wall-thickness, manufacturing process (e.g., hot-finished or cold-
drawn), end finish (e.g., plain end, beveled end, upset end, threaded, or threaded
and coupled), or surface finish (e.g., bare, lacquered or coated). Redraw hollows
are any unfinished carbon or alloy steel (other than stainless steel) pipe or “hollow
profiles” suitable for cold finishing operations, such as cold drawing, to meet the
American Society for Testing and Materials (“ASTM”) or American Petroleum
Institutes (“API”) specifications referenced below, or seamless carbon and alloy
steel (other than stainless steel) standard, line, and pressure pipes produced to the
ASTM A-53, ASTM A-106, ASTM A-334, ASTM A-589, ASTM A-795, ASTM
A-1024, and the API 5L specifications, or comparable specifications, and meeting
the physical parameters described above, regardless of application[.]
ADD Order, 75 Fed. Reg. at 69,053; CVD Order, 75 Fed. Reg. at 69,051.
Court No. 18-00095 Page 4
Public Version
the “aerospace specification” exclusion or should otherwise be excluded because, in its view, the
Orders were not intended to cover its specialized pipe. See id. at 1317, 1319.
Without consulting
the (k)(1) sources, Commerce determined that the Orders were unambiguous and clearly
included AEC’s pipe. See
id. The court held that Commerce was required to consult these
sources in determining if AEC’s pipe was properly included in the scope of the Orders and
remanded for reconsideration. See
id. at 1322.
On remand, Commerce consulted the (k)(1)
sources and determined that AEC’s pipe did not satisfy either the “aerospace specification”
exclusion or the ASTM A-335 specialized pipe exclusion. See Final Results of Remand
Redetermination, ECF No. 44-1, at 6–12, 16–18 (Nov. 11, 2019) (“First Remand Results”). The
court sustained Commerce’s determination that AEC’s pipe did not fall within the “aerospace
specification” exclusion, see Second Remand Order at *2–4, but determined that Commerce
misapprehended the question at hand and needed to further explain whether the Orders covered
pipe with the claimed specialized properties of AEC’s pipe.
Id. at *4–7.
On second remand, after consulting the (k)(1) sources as instructed by the court,
Commerce determined once again that AEC’s pipe fell within the scope of the Orders. Second
Remand Results at 1–2. Commerce determined that the (k)(1) sources were dispositive and
maintained that the term “commodity” pipe2 as used in the sources was never meant to define the
scope of the Orders to the exclusion of specialized pipe like AEC’s pipe. See id. at 24, 43.
Commerce determined that the properties of AEC’s pipe were not sufficiently analogous to
ASTM A-335 pipe, ultimately finding that the reasons behind the ASTM A-335 exclusion did
not apply to AEC’s pipe. See
id.
2
AEC uses the term “commodity” pipe to refer to standard, “off the shelf” pipe that has no
specialized properties. For further discussion of this term see Section I(B) of this opinion.
Court No. 18-00095 Page 5
Public Version
AEC contends that Commerce’s determination was not supported by substantial evidence
because an analysis of the (k)(1) sources revealed that the Orders were intended to apply solely
to “commodity” pipe and exclude pipe with AEC’s specialized properties. See Pl.’s Cmts. On
Second Remand Redetermination, ECF No. 60, at 22–25 (Aug. 19, 2020) (“AEC Br.”). In
addition, AEC argues that the reasons underlying the creation of the A-335 specialized pipe
exclusion also apply to AEC’s pipe. See id. at 7–8.
In the alternative, AEC contends that the
(k)(1) sources do not clarify the Orders and that Commerce was required to conduct a full scope
inquiry and consider the (k)(2) factors. See
id. at 7.
Finally, if AEC’s pipe is within the scope of
the Orders, AEC contends that Commerce cannot impose antidumping and countervailing duties
retroactively, and that its instruction to CBP to continue to suspend liquidation of entries of
AEC’s pipe was contrary to law. See
id. at 3, 28–31.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012). The court has authority
to review Commerce’s determination finding that merchandise falls within an antidumping or
countervailing duty order. 19 U.S.C. § 1516a(a)(2)(B)(vi). The determination will be upheld
unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance
with law[.]” 19 U.S.C. § 1516a(b)(1)(B)(i). A remand redetermination is “also reviewed for
compliance with the court’s remand order.” Xinjiamei Furniture (Zhangzhou) Co. v. United
States, 968 F. Supp. 2d 1255, 1259 (CIT 2014) (internal quotation and citation omitted).
“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.” Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1089 (Fed. Cir. 2002). Although
Commerce has the authority to clarify an order’s scope, it cannot interpret an order “in a way
Court No. 18-00095 Page 6
Public Version
contrary to its terms.” Whirlpool Co. v. United States,
890 F.3d 1302, 1308 (Fed. Cir. 2018)
(internal quotation and citation omitted).
DISCUSSION
Commerce is required to use the (k)(1) sources to ascertain the meaning of ambiguous
language in scope orders. See 19 C.F.R. § 351.225(k)(1). These sources are particularly useful in
contexts where the language of the orders may have a specific meaning based on the context in
which it was used during the underlying investigation. See Fedmet Res. Corp. v. United States,
755 F.3d 912, 921 (Fed. Cir. 2014) (“[T]he reason why the (k)(1) sources are afforded primacy
in the scope analysis is because interpretation of the language used in the orders must be based
on the meaning given to that language during the underlying investigations.”). Thus, on second
remand, Commerce considered the (k)(1) sources to assess the reasoning behind the ASTM A-
335 exclusion to see if that reasoning applied to AEC’s pipe. Commerce also examined the (k)(1)
sources to ascertain the intended meaning behind the term “commodity,” which was used
sporadically during the investigation, to determine whether it revealed an intention to exclude
specialty pipe (like AEC’s) from the Orders. After finding that AEC’s pipe fell within the scope
of the Orders, Commerce also instructed CBP to continue to suspend liquidation of entries of
AEC’s pipe. CBP Messages 8110301 & 8110302 re: “Scope Determination on
Countervailing/Antidumping Duty Order on Specialized Seamless Pipe (AEC Pipe) from the
People’s Republic of China (China) (C-570-957; A-570-956),” (Apr. 20, 2018) available at
https://aceservices.cbp.dhs.gov/adcvdweb/#messageDetails (last visited Nov. 20, 2020) (enter
"8110301" and "8110302" into search bar in top left corner; click "Search;" click on "8110301"
or "8110302" in the results to access Message Body) (“Instructions to CBP”).
I. Inclusion of AEC Pipe in the Scope of the Orders
Court No. 18-00095 Page 7
Public Version
Commerce focused its review of the (k)(1) sources on three questions: (1) what standard,
line and pressure (“SLP”) applications or end-uses were covered by the Orders, (2) how was the
term “commodity” used in the sources, and (3) what reasons motivated Commerce’s exclusion of
ASTM A-335 pipe from the scope of the Orders, based on instructions provided by the court
when the case was remanded. See Def.’s Resp. to the Parties’ Cmts. On the Dep’t of
Commerce’s Final Results of Redetermination, ECF No. 63, at 7 (Sept. 17, 2020) (“Gov. Br.”);
Second Remand Results at 24–34; see also Second Remand Order, at *5–7.
A. Standard Application of Pipe as Referenced in Petition and ITC Proceedings
For the first question, Commerce looked to the language of the Petition and subsequent
supplements, as well as language from the ITC proceedings to find that the Petitioners did not
intend to exclude pipes designed for non-industrial purposes. See Second Remand Results at 24.
In reviewing the Petition, Commerce noted that only line and pressure applications are described
in industrial terms, whereas the standard application for pipe is defined as “conveyance of water,
steam, natural gas, air, and other liquids and gasses in plumbing and heating systems, air
conditioning units, automatic sprinkler systems, and other related uses.” U.S. Steel Corp.,
“Petition for the Imposition of Antidumping and Countervailing Duties,” A-570-956 and C-570-
957, ECF No. 65, P.R. 1-4, C.R. 1-4, Exhibit L at 5, J.A. 246 (Sep. 16, 2009) (“Petition”).
Commerce observed that some of these uses and systems (e.g., air conditioning units, sprinkler
systems, plumbing and heating systems) are common in non-industrial settings and support an
inference that the standard application pipe described in the (k)(1) sources was meant to cover
residential uses. See Second Remand Results at 8.
As part of its analysis of the (k)(1) sources, Commerce also reviewed its own
recommendation to edit and then remove end-use language from the Orders by examining the
Court No. 18-00095 Page 8
Public Version
Petition and subsequent supplements, and found that the Petitioners did not originally include
end-use language as a way of limiting the scope to particular industries, but rather because they
were concerned that Chinese producers would circumvent the Orders simply by altering their
pipe’s specifications. See id. at 9–11;
see also U.S. Steel Corp., “Amendment to the Petition for
the Imposition of Antidumping and Countervailing Duties,” A-570-956 and C-570-957, ECF No.
65-1, P.R.R. 7-12, Exhibit 3 at 6–7, J.A. 97–98 (Sep. 25, 2009) (“First Supplement”); U.S. Steel
Corp., “Amendment to the Petition for the Imposition of Antidumping and Countervailing
Duties,” A-570-956 and C-570-957, ECF No. 65-1, P.R.R. 7-12, Exhibit 5 at 2–3, J.A. 133–34
(Sep. 29, 2009) (“Second Supplement”). Petitioners accepted Commerce’s suggestion to remove
end-use language from the scope because they were convinced that the scope as written would
sufficiently address this concern. See Second Remand Results at 11.
In reviewing the ITC documents as part of its analysis of (k)(1) sources, Commerce also
observed that the ITC had a broad view of the industries covered by the Orders because the ITC
noted that seamless SLP pipe is used “in mechanical applications for general construction.”
Second Remand Results at 20; Certain Seamless Carbon and Alloy Steel Standard, Line, and
Pressure Pipe from China (Preliminary), USITC Pub. 4106, Investig. Nos. 701-TA-469, 731-TA-
1168, at 6 (Nov. 2009) (“ITC Preliminary Report”); Certain Seamless Carbon and Alloy Steel
Standard, Line, and Pressure Pipe from China Prehearing Report to the Commission (Final),
Investig. Nos. 701-TA-469, 731-TA-1168 at II-1, II-10 (Aug. 30, 2010) (“ITC Prehearing
Report”). Commerce inferred that general construction includes more than just industrial or
commercial piping systems uses. See Second Remand Results at 21. Finally, Commerce noted,
however, that AEC’s pipe is used in various industrial settings based on AEC’s description of the
pipe’s uses in “Gate Station fabrications,” “meter sets by the natural gas industry” and “dairy,
Court No. 18-00095 Page 9
Public Version
food, agriculture, medical, and aerospace industries.” See Second Remand Results at 26; AEC
Scope Request at 3.
AEC contends that its pipe is not used in “general construction” but rather serves “a niche
market that requires malleable pipes that…bend without cracking or splitting in tight spaces,
whether in residential or other settings.” AEC Br. at 21. In fact, AEC claims that its argument
was never about whether the (k)(1) sources reveal that the Orders cover commercial or
residential end users, but rather contends that its pipe’s application was non-standard in nature
because it served a niche market seeking malleable pipe. Id. at 21–22.
Thus, it argues that its
pipe is not interchangeable with standard pipe.
Id. at 21.
Commerce observed that flexibility and
malleability were never discussed in the (k)(1) sources or in the scope language as relevant
characteristics for determining whether pipe is excluded from the Orders. Second Remand
Results at 26, 38. Thus, flexibility and malleability alone are likely insufficient to establish that
AEC’s pipe falls outside the scope of the Orders.
Commerce’s inference that the scope language covers non-industrial settings drawn from
the general description of standard pipe, including its use in “air conditioning units” and
“plumbing and heating systems,” is reasonable as these systems and units are found in non-
industrial settings. Second Remand Results at 8. Commerce’s understanding is further supported
by ITC’s discussion of “general construction,” which can reasonably be interpreted to include
both residential and industrial settings. See ITC Preliminary Report at 6; see also ITC Prehearing
Report at II-1, II-10; Second Remand Results at 20–21.
B. The Term “Commodity”
AEC contends that an analysis of the (k)(1) sources reveals that the Orders were meant to
cover “commodity” pipe and exclude specialized pipe. AEC argues that “commodity” is
Court No. 18-00095 Page 10
Public Version
consistently used “to broadly distinguish ‘standard’ or ‘ordinary’ from custom or specialized
pipe.” AEC Br. at 17. Specifically, AEC argues that a review of the use of the term “commodity”
in the (k)(1) sources reveals that the Petitioners were concerned with standard, “off the shelf”
pipe, and not with specialized pipe for niche markets. See AEC Br. at 16–19. AEC contends its
pipe’s “tight tolerances and chemical specifications” render it materially different from the pipe
covered by the Orders, making it “much more malleable, smoother, less subject to rust and
corrosion, and more precise in its dimensions” and that it should thus be excluded as specialized
pipe. See AEC Br. at 14; AEC Scope Request at 5–8, Exhibit B, Exhibit C (comparing AEC pipe
specifications to subject pipe).
Commerce, in its administrative review, determined that Petitioners did not intend to use
the term “commodity” to define the scope of the Orders and exclude certain specialized pipes.
Commerce identified inconsistent uses of the term “commodity” throughout the investigation,
suggesting that the term did not have a clear meaning and was not meant to create a general
exclusion for specialized pipe. Commerce found that “commodity” was used in two ways: (1) to
distinguish “mechanical tubing,” an explicitly excluded product, from covered pipes, and (2) to
describe a subsection of explicitly included pipes, quad-stenciled pipes. Second Remand Results
at 24. The (k)(1) sources describe differences between mechanical tubing and “commodity” pipe
such as custom sizing, more exacting requirements, and lower prices. See Certain Seamless
Carbon and Alloy Steel Standard, Line, and Pressure Pipe From China: Hearings Before the
United States International Trade Commission, ECF No. 65-1, P.R.R. 7-12, Exhibit 36 at 68, J.A.
1392 (Sept. 14, 2010) (testimony of George Thompson); U.S. Department of Commerce,
Memorandum from Analyst to File re: “U.S. Customs and Border Protection’s Inquiry Regarding
Court No. 18-00095 Page 11
Public Version
Mechanical Tubing,” ECF No. 65, P.R. 1-4, C.R. 1-4, Exhibit J at 1, J.A. 240 (June 24, 2010)
(“DOC CBP Memo”).3
“Commodity” is also used in a Preliminary Conference before the ITC by counsel for one
of the Petitioners to describe quad-stenciled pipe, which is pipe stenciled to four specifications:
ASTM A-106, ASTM A-53, API 5L-B, and AP15L-X42. See Certain Seamless Carbon and
Alloy Steel Standard, Line, and Pressure Pipe from China: Preliminary Conference Before the
United States International Trade Commission, ECF No. 65-1, P.R.R. 7-12, Exhibit 23 at 113,
J.A. 444 (Oct. 7, 2009) (“ITC Preliminary Conference”) (testimony of Roger Schagrin); see also
Second Remand Results at 18. Commerce noted that the Petition explicitly included pipe that is
stenciled to specifications outside of these four specifications. See Petition at 5–6. On remand,
Commerce determined that “commodity” is used in this context to refer to the “predominant (but
not sole) focus of the petitioners’ concern,” because if the Orders were only meant to cover
quad-stenciled pipe as “commodity” pipe, as implied by counsel’s use of the term in the ITC
Preliminary Conference, see ITC Preliminary Conference at 113, the scope of the Orders would
be severely narrowed. Second Remand Results at 18–19; see also Petition at 5–6.
Commerce observed that mechanical tubing is distinguished from “commodity” pipe in
the (k)(1) sources through its non-standard sizing individually customized for each customer,
Second Remand Results at 23–24, and while AEC’s pipe may be specialized,4 it is not
customized prior to importation. Second Remand Results at 30.
3
See DOC CBP Memo (“Generally, the seamless standard, line and pressure pipes are
commodity products made to standard pipe sizes (outside diameters and wall thicknesses)
whereas mechanical tubing is custom designed to meet a customer’s needs and is generally not
produced with the standard pipe diameters and wall thicknesses found in seamless standard, line,
and pressure pipes.”).
4
AEC points to its pipe’s flexibility, unique end use, and niche market to argue that its pipe
belongs in the specialized pipe category. See AEC Br. at 17–18.
Court No. 18-00095 Page 12
Public Version
Commerce’s determination that “commodity” is used in different contexts to mean
slightly different things, but not to generally exclude all specialized pipe, is also supported by a
letter of record. In a letter from Salem Steel advocating for an exclusion from the scope for
aviation, hydraulic and bearing tubing, Salem Steel pointed out that these tubes should be
excluded because they were “types of mechanical tubing and because they [were] not commodity
products.” Letter from Dorsey & Whitney LLP to the Sec’y of Commerce on behalf of Salem
Steel re: “Response to Commerce Department's June 23 Proposal to Change Scope Language to
Exclude Mechanical Tubing,” A-570-956, ECF No. 65, P.R.R. 1-4, Attachment 3 at 2, J.A. 331
(June 30, 2010) (“Letter from Salem Steel”). This phrasing could suggest that producers thought
of mechanical tubing as one category for exclusion under the Orders and “non-commodity” pipe
as a separate category for exclusion. Throughout the rest of the letter, however, the writers
conflate the two categories, classifying Salem Steel’s pipe as specialized mechanical tubing, and
describing how unlike seamless pipe (a “commodity” product), “mechanical tubing is a made-to-
order product made according to strict engineering specifications for specific end uses, but with
tight physical characteristics specified by the end-user.” Id. at 2–5.
Other (k)(1) sources follow a
similar pattern and support Commerce’s finding that “commodity” is primarily used to
differentiate mechanical tubing, an explicitly excluded category, from covered pipe.
“Commodity” is used to describe how “mechanical tubing” is different from subject pipe
because it is not made to standard sizes, meets stronger engineering specifications, and is
customized to a specific customer’s needs. See Letter from Salem Steel at 2–4, 6; DOC CBP
Memo; Letter from Steptoe & Johnson LLP to the Sec’y of Commerce on behalf of MC Tubular
Products, Inc. re: “Comments on the Department's June 23, 2010 Proposed Scope Modification,”
A-570-956, ECF No. 65-1, P.R.R. 7-12, Exhibit 18 at 4–5, J.A. 264 (June 30, 2010) (“Letter
Court No. 18-00095 Page 13
Public Version
from MC Tubular”). This distinction ultimately became an explicit exclusion within the Orders,
suggesting that any “non-commodity” pipe that was being referenced in these documents was
limited to mechanical tubing. See ADD Order 75 Fed. Reg. at 69,053; CVD Order, 75 Fed. Reg.
at 69,051 (“Also excluded from the scope of the order are all mechanical, boiler, condenser and
heat exchange tubing…”).
Accordingly, Commerce’s determination that “commodity” as used in the (k)(1) sources
was not meant to create a broad exclusion from the Orders for specialized pipe is supported by
substantial evidence and is in accordance with law.5
C. A-335 Exclusion
The court ordered Commerce to consider if the reasons behind the A-335 pipe exclusion
apply equally to AEC’s pipe such that AEC’s pipe should be excluded from the Orders. See
Second Remand Order at *5. During the investigation, language was added to the Orders to
explicitly exclude A-335 pipe after a request was made by Wyman-Gordon, a U.S. manufacturer
of A-335 pipe. Letter from Wyman-Gordon Forgings Inc. to U.S. Dep’t of Commerce re:
“Certain Seamless Steel Pipe from China,” A-570-956, ECF No. 65-1, P.R.R. 7-12, Exhibit 8 at
5
AEC notes that the Petition does not name AEC as a producer, importer, or seller of subject
merchandise or in any other capacity. See Petition at 5–6, Exhibit I-11, Exhibit I-14; see also
AEC Scope Request at 10–11. AEC argues that this demonstrates that “Petitioners did not view
AEC as a market competitor, or AEC Pipe as subject merchandise.” See AEC Br. at 9. As further
support for the argument that the domestic industry has no interest in AEC’s pipe and does not
consider it to be covered by the Orders, AEC also highlights the fact that Petitioners have not
opposed AEC’s motion or participated in AEC’s scope inquiry. See AEC Br. at 9. In response,
Commerce noted that the Petitioners specified that the data in this list “represent the best
information reasonably available to Petitioners.” Petition at 9–10; See Second Remand Results at
35–36, and further that it cannot make inferences about Petitioners’ silence. See Second Remand
Results at 36; Gov. Br. at 8 (citing PT Pindo Deli Pulp & Paper Mills v. United States, 825 F.
Supp. 2d 1310, 1320 (CIT 2012) (holding that “the failure to name foreign producers, of which
Petitioners [were] not aware, does not demonstrate an intent to exclude those producers from the
investigation”).
Court No. 18-00095 Page 14
Public Version
2, J.A. 145 (Oct. 27, 2009) (“Letter from Wyman-Gordon”). Commerce contends that no
reasoning was explicitly considered or endorsed by Commerce in the creation of this exclusion
because Petitioners themselves requested that the exclusion be included in the scope language,
see Petitioners’ Letter, “Certain Seamless Carbon and Alloy Steel Standard, Line and Pressure
Pipe from the People’s Republic of China: Request for Change in Scope Language,” ECF No.
65, P.R.R. 1-4, Attachment 4 at 1–2, J.A. 423–24 (July 2, 2010) (“Petitioner’s Letter to Exclude
A-335”), and Commerce provided only the Wyman-Gordon letter as justification for this change
in the scope language. See Certain Seamless Carbon and Alloy Steel Standard, Line, and
Pressure Pipe from the People’s Republic of China: Preliminary Determination of Sales at Less
Than Fair Value, Affirmative Preliminary Determination of Critical Circumstances, in Part, and
Postponement of Final Determination, 75 Fed. Reg. 22372, 22374–75 (April 28, 2010) (“AD
Preliminary Determination”). AEC points to language in the ITC proceeding and language
provided in Wyman-Gordon’s request to illustrate the reasoning behind the A-335 exclusion and
to argue that these reasons apply equally to its pipe. AEC Br. at 7, 10–12. AEC also argues that
the reasoning behind the A-335 exclusion is similar to that which applied to mechanical tubing,
and that its pipe is analogous to both. See id.
In its letter to Commerce, Wyman-Gordon requested an exclusion for three products,
including A-335 pipe, because “none of the other products covered by the petition are
substitutable for any of the three products.” Letter from Wyman Gordon at 2. The Commission
examined the reasoning behind the A-335 exclusion in more detail based on responses from U.S.
producers who highlighted “differences in the customer base and in pricing practices,” and that
A-335 pipe is “higher priced than other forms of seamless SLP pipe.” ITC Prehearing Report at
I-28, I-30. It also noted A-335’s high temperature applications (as compared to the lower
Court No. 18-00095 Page 15
Public Version
temperature applications of subject pipe), which require different heat treatments and different
chemistry. See
id. at I-26–I-27. The ITC cited reports of lack of interchangeability between
seamless pipe and A-335 pipe and noted that while A-335 pipe can be used in certain
applications, specifically pressure applications appropriate for X6 standard pipe, such
“substitution was not deemed economical and was not possible in reverse.”
Id. at I-28.
Commerce interprets the X standard pipe explanation to mean that Petitioners expected
pipe that fell into the A-335 exclusion to at least meet the specifications for X standard pipe, a
standard that AEC’s pipe does not meet. Second Remand Results at 29–30. AEC argues that
Commerce’s interpretation cannot be clearly inferred from the ITC report and that the purpose of
this section was to highlight the lack of interchangeability between the A-335 pipe and the
subject pipe, rather than to establish a clear standard that must be met. See AEC Br. at 20. AEC
contends that its pipe is not interchangeable with standard pipe because of its flexibility and
ability to deliver gas in tight spaces and notes that its pipe is priced higher than seamless SLP
pipe. See AEC Br. at 14, 26; AEC Scope Request at 5–8. AEC also pointed to its custom stencil:
[[ ]] to suggest that its pipe is not a
“comparable specification” under the Orders but is instead a superior pipe. See AEC Scope
Request at Exhibit C. Finally, AEC claims that it has been unable to domestically source its pipe.
See id. at 8–10 (citing exhibits comparing its product to domestically available pipe). Thus, AEC
concludes that its pipe is specialized and analogous to Wyman Gordon’s pipe and should be
excluded from the scope of the Orders. See AEC Br. at 11–13, 22–24.
6
In this opinion, X standard pipe will be used refer to an exact pipe specification for the purposes
of protecting confidential information. [[ ]].
Confidential Information Omitted
Court No. 18-00095 Page 16
Public Version
Commerce appropriately examined each of the (k)(1) sources and determined that the
reasoning behind the A-335 exclusion was not elucidated by the Petitioners or accepted by
Commerce when Commerce created the A-335 exclusion, as evidenced by Commerce’s stated
reasoning for editing the scope language. See Letter from Wyman Gordon at 1–2; Petitioner’s
Letter to Exclude A-335 at 1; AD Preliminary Determination at 22374–75. Commerce has now
addressed AEC’s claims by reviewing the (k)(1) sources and determining that the A-335
exclusion was granted because A-335 pipe is “superior” to seamless SLP pipe and that this
superiority requires meeting at least the standard of X standard pipe. See Second Remand
Results at 38–39. The ITC specifically noted that A-335 pipe can be stenciled to meet the X
standard pipe specifications but that this substitution would be costly and impractical. ITC
Prehearing Report at I-28. Commerce found an important distinction between AEC’s pipe and A-
335 pipe by pointing out that AEC’s pipe can be stenciled to meet the requirements of [[
]] and, unlike A-335 pipe, cannot meet the requirements of X standard pipe. See
Second Remand Results at 38–39.7
Commerce’s conclusion in the Second Remand Results that the A-335 exclusion was
meant to be narrow is also supported by Commerce’s choice to modify the final scope language
to exclude only A-335 pipe. See Second Remand Results at 12. It did not use other language
proposed by Petitioners or further exclusions proposed by Wyman Gordon in its letter to
Commerce. Compare Petitioner’s Letter to Exclude A-335 at 2, and Letter from Wyman Gordon
at 1–2, with ADD Order 75 Fed. Reg. at 69,053 and CVD Order, 75 Fed. Reg. at 69,051 (“all
7
While AEC’s more generalized view of the ITC documents is another possible reading, this
does not in and of itself mean that Commerce’s findings are unsupported by substantial evidence.
See Viet I–Mei Frozen Foods Co. v. United States, 839 F.3d 1099, 1106 (Fed. Cir. 2016) (noting
that the possibility of drawing multiple conclusions from the same evidence does not preclude
Commerce’s determinations from being unsupported by substantial evidence).
Confidential Information Omitted
Court No. 18-00095 Page 17
Public Version
pipes meeting the chemical requirements of ASTM A-335”). Wyman-Gordon’s request was
based on the specialized nature of the three pipe products it produces. See Letter from Wyman-
Gordon at 2 (emphasizing that “none of the other products covered by the petition are
substitutable for any of the three products described above for which we believe we are the only
US manufacturer”). Despite this alleged specialization, Commerce only excluded A-335 from
the final scope, supporting Commerce’s determination that the A-335 exclusion is narrow.
Thus, based on: (1) Commerce’s interpretation of the ITC investigation to mean that pipe
under the A-335 exclusion must meet at least the requirements of X standard pipe, and (2)
Commerce’s limited modification of the scope language to exclude A-335 pipe and not other
products referred to by Petitioners and Wyman Gordon, Commerce’s determination that AEC’s
pipe is included despite the A-335 exclusion is supported by substantial evidence and is in
accordance with law.
D. Conclusion
Upon review of the (k)(1) sources, Commerce has provided substantial evidence that
AEC’s pipe falls within the scope of the Orders. The court directed Commerce to examine the
(k)(1) sources as required by law to understand the meaning of the Orders and, if the (k)(1)
sources were not dispositive, to move on to the (k)(2) factors. See Second Remand Order at *7.
Here, Commerce has sufficiently analyzed the (k)(1) sources to determine that AEC’s pipe falls
within the scope of the Orders and is not subject to any exclusion. The (k)(1) sources are
dispositive and Commerce’s determination is supported by substantial evidence and is in
accordance with the law.
II. Retroactive Assessment of Duties
Confidential Information Omitted
Court No. 18-00095 Page 18
Public Version
On April 20, 2018, after determining that AEC’s pipe fell within the scope of the Orders,
Commerce instructed CBP to “continue to suspend liquidation of entries of certain seamless
carbon and alloy steel, line and pressure pipe from China, including AEC’s AEC Pipe.”
Instructions to CBP. AEC contends that it would be “fundamentally unfair” to retroactively
apply ADD/CVD duties to its product because the plain language of the ADD/CVD Orders did
not unambiguously include AEC’s pipe, and important records from the scope history that
Commerce relied upon in making its scope ruling regarding AEC’s pipe were not “readily
accessible,” as they were available in print and not in Commerce’s online document repository,
ACCESS. AEC Br. at 30.
AEC argues that the facts in this case are most similar to those in United Steel &
Fasteners, Inc. v. United States, 947 F.3d 794 (Fed. Cir. 2020). AEC argues that in United Steel,
the U.S. Court of Appeals for the Federal Circuit (“CAFC”) found that there was a genuine issue
as to whether the product was in scope and that the importer had relied on the government’s
failure to charge ADD/CVD duties, therefore “it was unlawful for Commerce to assess ADD
liability from the issuance date of the ADD order” but rather, pursuant to 19 C.F.R. §
351.225(l)(3), “Commerce may suspend liquidation beginning ‘on or after the date of initiation
of the scope inquiry.’” See AEC Br. at 28–29 (citing United
Steel, 947 F.3d at 801). Similarly,
AEC argues that it was not on notice that its pipe might be subject to the Orders because it was
not named in the Petition, see Petition at Exhibit I-11, was not invited to participate in the
investigations that resulted in the Orders, and it had imported its pipe for years without paying
ADD/CVD duties. AEC Br. at 29. In addition, AEC argues that the court has already decided
that a portion of the Orders are “facially ambiguous” by deciding that the aerospace exclusion
Court No. 18-00095 Page 19
Public Version
was unclear without reviewing the (k)(1) sources. AEC Br. at 29 (citing First Remand
Order, 399
F. Supp. 3d at 1321–23).
In response, the Government argues that the Orders are not ambiguous, that AEC’s pipe
clearly falls within the scope, and that the court’s remand order requiring a (k)(1) source analysis
does not necessarily imply that the Orders are facially ambiguous. See Gov. Br. at 16 (citing
First Remand Order, 399 F. Supp. 3d at 1320). The Government contends that AEC was on
notice that its product may fall within Commerce and ITC’s investigations and had an
opportunity to participate in the process because Commerce published initiation notices and the
resulting Orders in the Federal Register as required by law. See Gov. Br. at 19; Certain Seamless
Carbon and Alloy Steel Standard, Line, and Pressure Pipe from the People’s Republic of China:
Initiation of Countervailing Duty Investigation, 74 Fed. Reg. 52,945 (Dep’t of Commerce Oct.
15, 2009); Certain Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe from the
People’s Republic of China: Initiation of Antidumping Duty Investigation, 74 Fed. Reg. 52,744
(Dep’t of Commerce Oct. 14, 2009); CVD Order, 75 Fed. Reg. 69,050; ADD Order, 75 Fed.
Reg. 69,052. In addition, the Government notes that AEC had access to all (k)(1) sources used
in the scope ruling in paper form through the Department’s Central Records Unit, and that
Commerce was under no obligation to publish the documents online. See Gov. Br. at 20; see also
Suntec Indus. Co. v. United States,
857 F.3d 1363, 1369 (Fed. Cir. 2017) (“Like the Court of
International Trade, we conclude that the Federal Register notice did constitute notice as a matter
of law.”).
Finally, the Government points to recent case law from the CAFC which says that it is
proper for Commerce to continue to suspend entries if CBP suspends the entries before the scope
ruling, regardless of whether the orders were ambiguous. First, the Government notes that under
Court No. 18-00095 Page 20
Public Version
Quiedan Co. v. United States, when the product is “clearly within the language of the ADD
Order, considering the factors specified in § 351.225(k)(1),” and CBP has suspended entries
prior to the scope ruling, Commerce has the authority to continue these suspensions. Gov. Br., at
16, 18 (citing Quiedan Co. v. United States, 927 F.3d 1328, 1333 (Fed. Cir. 2019)). The
Government notes, and AEC does not dispute, that there is no evidence that CBP did not suspend
entries prior to the scope ruling in this case. See Gov. Br., at 18 (citing Second Remand Results
at 46). Second, even if the court found that the Orders were ambiguous as to the inclusion of
AEC’s pipe, the Government contends that the CAFC upheld CBP’s authority to suspend entries
for ambiguous orders and that Commerce can continue to suspend entries because without this
authority, 19 C.F.R. § 351.225(l) would be unnecessary. See Gov. Br. at 16–17; see also
Sunpreme Inc. v. United States,
946 F.3d 1300, 1317 (Fed. Cir. 2020) (en banc).
Recent en banc precedent from the CAFC establishes that when determining if
ADD/CVD liability attaches for a product subject to a scope ruling, the court’s key consideration
must be the timing of suspension of entries of the product by CBP. If CBP decides that a product
falls within the scope of ADD/CVD orders and begins suspending entries prior to the scope
ruling, and Commerce later determines in a scope ruling that the product is within the scope of
the Orders, then Commerce by regulation is to instruct CBP to continue to suspend liquidation.
See Sunpreme Inc., 946 F.3d at 1319 (holding that where “a suspension that predates the scope
inquiry already exists, subsection… [19 C.F.R. § 351.225](l)(3) …dictates that the existing
suspension ‘will continue.’ …[and] [n]o retroactivity concerns are raised because no new
Court No. 18-00095 Page 21
Public Version
suspension occurs.”).8 This holds true even if the court deems the Orders ambiguous. See
id. at
1321 (holding that “Customs has the authority to suspend liquidation of goods when it
determines that the goods fall within the scope of an ambiguous antidumping or countervailing
duty order.”). The CAFC noted that this interpretation of the statute and applicable regulation
removes perverse incentives that might lead companies to submit unmeritorious scope ruling
requests to Commerce in a delayed manner to expand the window between when CBP begins
suspending liquidation of entries and when Commerce issues its scope ruling on the product. See
Sunpreme
Inc., 946 F.3d at 1319–22.9
Whether or not the Order at issue can be labeled ambiguous in the abstract, United Steel,
to the extent it is not limited by Sunpreme, is not dispositive. In that case, CBP had not
suspended entries prior to Commerce’s scope ruling on the Plaintiff’s product. See United Steel,
947 F.3d at 797–798. Accordingly, the court in United Steel found that Commerce could not
8
See 19 C.F.R. § 351.225(l)(3) (“If the Secretary issues a final scope ruling, under either
paragraph (d) or (f)(4) of this section, to the effect that the product in question is included within
the scope of the order, any suspension of liquidation under paragraph (l)(1) or (l)(2) of this
section will continue. Where there has been no suspension of liquidation, the Secretary will
instruct the Customs Service to suspend liquidation and to require a cash deposit of estimated
duties, at the applicable rate, for each unliquidated entry of the product entered, or withdrawn
from warehouse, for consumption on or after the date of initiation of the scope inquiry. If the
Secretary's final scope ruling is to the effect that the product in question is not included within
the scope of the order, the Secretary will order any suspension of liquidation on the subject
product ended and will instruct the Customs Service to refund any cash deposits or release any
bonds relating to this product.”).
9
The government argues that the approximate one-year delay between when AEC received a
Notice of Action from CBP and when AEC requested a scope ruling from Commerce, could be
evidence of this circumvention tactic. See Gov. Br., at 18–19. The court need not resolve any
issue as to AEC’s intent.
Court No. 18-00095 Page 22
Public Version
instruct CBP to retroactively begin suspension of entries from the date of issuance of the ADD
order.
Id. at 802–03.10
As previously discussed, later cases solidified the importance under the applicable
regulation of CBP’s timing in initially suspending entries prior to Commerce’s scope ruling. See
Sunpreme Inc., 946 F.3d at 1319 (noting that there is “nothing ‘retroactive’ about continuing to
suspend liquidation where liquidation has already been suspended for the entire relevant time
period.”);
Quiedan, 927 F.3d at 1333 (noting that “that continued suspension of liquidation is
proper, at least where the scope ruling confirms a clear meaning”). The Government also argues
that AEC admits it was on notice that its pipe might be subject to the Orders prior to
Commerce’s issuance of its scope ruling because of CBP’s Notice of Action. See Second
Remand Results at 46; AEC Br. at 29. Although AEC argues that it did not expect to have to
participate in the initial ADD/CVD investigation, and that gaining access to the (k)(1) sources
was logistically challenging, see AEC Br. 29–30, it has not proffered evidence to contest the
timing of CBP’s suspension of entries. It appears that here, CBP suspended entries prior to the
initiation of the scope proceeding. Given CBP’s action, and that Commerce’s scope ruling that
AEC’s pipe is within the scope of the Orders is supported by substantial evidence and is in
accordance with law, an instruction to CBP to “continue to suspend liquidation of entries of
certain seamless carbon and alloy steel, line and pressure pipe from China, including AEC’s
AEC Pipe,” is proper and in accordance with law. Instructions to CBP.
10
Commerce has proposed new regulations in response to recent CAFC decisions on this issue
including United Steel and Sunpreme. See Regulations to Improve Administration and
Enforcement of Antidumping and Countervailing Duty Laws, 85 Fed. Reg. 49,472, 49,476,
49,483, 49,498 (Aug. 13, 2020) (summarizing Sunpreme, United Steel, and other cases that
affirm Commerce’s power to order CBP to continue to suspend liquidation of entries in some
contexts). Nothing in Commerce’s explanation of the case law in this proposed regulation
contradicts the court’s view of current law applicable to this case.
Court No. 18-00095 Page 23
Public Version
CONCLUSION
For the foregoing reasons, the court sustains Commerce’s determination in the Second
Remand Results that AEC’s pipe falls within the scope of the Orders and finds no error in an
instruction to CBP to continue to suspend liquidation of entries of AEC’s pipe.
/s/Jane A. Restani
Jane A. Restani, Judge
Dated: November 27, 2020
New York, New York
