Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01363/USCOURTS-ca13-15-01363-0/pdf.json

Parties Involved:
ArcelorMittal USA, LLC
Not party
Deacero S.A. de C.V.
Appellee
Deacero USA, Inc.
Appellee
Evraz Rocky Mountain Steel
Not party
Gerdau Ameristeel U.S. Inc.
Not party
Nucor Corporation
Appellant
United States
Not party

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

DEACERO S.A. DE C.V., DEACERO USA, INC.,

Plaintiffs-Appellees

v.

UNITED STATES, ARCELORMITTAL USA, LLC, 

GERDAU AMERISTEEL U.S. INC., NUCOR 

CORPORATION,

Defendants-Appellants

EVRAZ ROCKY MOUNTAIN STEEL,

Defendant

______________________ 

2015-1362, 2015-1363, 2015-1367

______________________ 

Appeals from the United States Court of International 

Trade in No. 1:12-cv-00345-RWG, Senior Judge Richard 

W. Goldberg.

______________________ 

Decided: April 5, 2016

______________________ 

 JAY CHARLES CAMPBELL, White & Case LLP, Washington, DC, argued for plaintiffs-appellees. Also represented by DAVID BOND, TING-TING KAO. 

ALEXANDER V. SVERDLOV, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, Washington, DC, argued for defendant-appellant 

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2 DEACERO S.A. DE C.V. v. US

United States. Also represented by BENJAMIN C. MIZER, 

ROBERT E. KIRSCHMAN, JR., REGINALD T. BLADES, JR.; 

DAVID W. RICHARDSON, Office of the Chief Counsel for 

Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.

KATHLEEN CANNON, Kelley Drye & Warren LLP, 

Washington, DC, argued for defendants-appellants ArcelorMittal USA, LLC, Gerdau Ameristeel U.S. Inc. Also 

represented by ROBERT ALAN LUBERDA, PAUL C.

ROSENTHAL, DAVID C. SMITH, JR. 

DANIEL B. PICKARD, Wiley Rein, LLP, Washington, 

DC, for defendant-appellant Nucor Corporation. Also 

represented by DERICK HOLT, MAUREEN E. THORSON. 

______________________ 

Before REYNA, BRYSON, and CHEN, Circuit Judges.

REYNA, Circuit Judge.

Appellants appeal a judgment of the U.S. Court of International Trade (“Trade Court”) affirming the U.S. 

Department of Commerce’s (“Commerce”) remand determination on certain small-diameter steel wire rod. Commerce initiated a minor alteration anti-circumvention 

inquiry and determined that certain small-diameter steel 

wire rod was included within the scope of the subject 

antidumping duty order. On appeal, the Trade Court 

concluded that Commerce erred in its minor alterations 

analysis and remanded to Commerce. On remand, Commerce changed its determination and found under protest 

the steel wire rod excluded from the scope of the antidumping duty order. The Trade Court affirmed, and 

Appellants appeal. We hold that Commerce’s initial 

minor alteration anti-circumvention determination was in 

accordance with law and supported by substantial evidence. As such, the judgment of the Trade Court is reversed. 

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DEACERO S.A. DE C.V. v. US 3

BACKGROUND

Antidumping Duty Order on Steel Wire Rod 

On August 31, 2001, U.S. steel wire rod producers

filed an antidumping petition against imports of steel 

wire rod from Mexico and several other countries. 

J.A. 225. Steel wire rod is a hot-rolled, intermediate steel 

product with a round cross-section. It is sold in wound 

coils and used to manufacture steel wire and downstream 

products made with steel wire. The standard specification for steel wire rod, ASTM A510, lists nominal sizes for 

steel wire rod ranging from 5.5 mm to 19 mm, each with a 

tolerance of plus or minus 0.40 mm. J.A. 234, 237. 

The petition set 5.00 mm as the minimum diameter of 

the steel wire rod covered by the scope of the petition:

For purposes of this investigation, the merchandise covered by these investigations is certain hotrolled, carbon steel and alloy steel products, in 

coils, of approximately round cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 

inch), inclusive, in solid cross-sectional diameter.

J.A. 229. The petition noted that “[m]ost of the industrial 

quality wire rod is produced and sold in 7/32 inch (5.5 

mm) diameter, which is also the smallest cross-sectional 

diameter that is hot-rolled in significant commercial 

quantities.” J.A. 228. 

On October 1, 2002, the International Trade Commission (“ITC”) issued its final determination that a U.S. 

industry was materially injured by virtue of less-thanfair-value imports of certain steel wire rod from Brazil, 

Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine. The ITC reiterated that the “like product” subject to the investigation was “certain hot-rolled 

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4 DEACERO S.A. DE C.V. v. US

products of carbon steel and alloy steel, in coils, of approximately round cross section, 5.00 mm or more, but less

than 19.00 mm, in solid cross-sectional diameter.”1 On 

October 15, 2002, the ITC notified Commerce of its final 

determination. J.A. 222, 3045. 

On October 29, 2002, Commerce issued an antidumping duty order on steel wire rod from Brazil, Indonesia, 

Mexico, Moldova, Trinidad and Tobago, and Ukraine. The 

duty order defined the scope as steel wire rod with a 

cross-sectional diameter of “5.00 mm or more, but less 

than 19.00 mm.” J.A. 222. Non-individually investigated 

Mexican exporters were assigned a weighted-average 

margin of 20.11%.2 

Deacero S.A.P.I. de C.V. and Deacero USA, Inc. (together, “Deacero”) are Mexican manufacturers of steel 

wire rod and other steel products. Deacero was not individually investigated in the underlying antidumping duty 

investigation. As such, its imports of subject merchandise 

were made subject to the 20.11% “all-others” rate. After 

the duty order issued, Deacero invested in, manufactured, 

and ultimately imported into the United States steel wire 

rod within a diameter of 4.75 mm, 0.25 mm smaller than 

the steel wire rod subject to the duty order. 

 

1 Carbon and Certain Alloy Steel Wire Rod from 

Brazil, Canada, Indonesia, Mexico, Moldova, Trinidad 

and Tobago, and Ukraine, Nos. 701-TA-417-421; 731-TA953, 954, 956-959, 961, & 962, USITC 3546 (Oct. 1, 2002) 

(Final).

2 Carbon and Certain Alloy Steel Wire Rod from 

Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, 

and Ukraine, 67 Fed. Reg. 65945, 65946–47 (Dep’t Commerce Oct. 29, 2002).

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Procedural History

On February 11, 2011, two groups of U.S. steel wire 

rod producers filed separate letters requesting that Commerce initiate a scope inquiry to determine whether steel 

wire rod with an actual diameter between 4.75 and 5.00 

mm was within the scope of the antidumping duty order 

on steel wire rod from Mexico. Alternatively, they requested that Commerce initiate an anti-circumvention 

inquiry to determine whether 4.75 mm steel wire rod 

should be included within the scope of the antidumping 

duty order as either “minor alterations of merchandise” or 

“later-developed merchandise.” 19 U.S.C. § 1677j(c)(1), 

(d)(1) (2006). 

On May 31, 2011, Commerce instituted an anticircumvention inquiry on steel wire rod between 4.75 and 

5.00 mm. Commerce determined that 4.75 to 5.00 mm 

steel wire rod was a minor alteration of the subject merchandise and that its import into the United States constituted an affirmative circumvention of the duty order. 

J.A. 193. Commerce declined to initiate a circumvention 

inquiry as to whether 4.75 mm steel wire rod constituted 

a later-developed product because “such small diameter 

wire rod was commercially available prior to the issuance” 

of the duty order. J.A. 192. Deacero appealed. Commerce’s later-developed product determination is not 

before us on appeal. 

On September 30, 2013, the Trade Court remanded 

for reconsideration and redetermination. Deacero S.A. de 

C.V. v. United States, 942 F. Supp. 2d 1321, 1332 (Ct. Int’l 

Trade 2013). The Trade Court found that Commerce’s 

affirmative circumvention determination was not supported by substantial evidence because 4.75 mm steel 

wire rod fell outside the literal scope of the duty order and 

was “commercially available” at the time of the original 

investigation. Id. at 1324. The Trade Court relied on 

Wheatland in determining that Commerce erred in exCase: 15-1363 Document: 3-2 Page: 5 Filed: 04/05/2016
6 DEACERO S.A. DE C.V. v. US

panding the duty order to cover more than “insignificantly 

changed” merchandise. Id. at 1328–32 (citing and quoting 

Wheatland Tube Co. v. United States, 161 F.3d 1365, 1370 

(Fed. Cir. 1998)). The Trade Court remanded and instructed Commerce to reconsider its affirmative circumvention determination and to “thoroughly explain how the 

record and relevant law supports that determination.” Id.

at 1332. 

On January 28, 2014, Commerce changed course and 

issued under protest a redetermination of negative circumvention, reasoning that it had “no alternative” to 

determine otherwise after the Trade Court’s decision. 

J.A. 137, 142. After another appeal, the Trade Court 

remanded again, instructing Commerce to “consider whether it wishes to revisit or elaborate on its finding 

that small-diameter wire rod was commercially available 

prior to issuance of the [subject antidumping duty order].” 

Deacero S.A.P.I. de C.V. v. United States, No. 12-00345, 

36 Int’l Trade Rep. (BNA) 861, 2014 Ct. Intl. Trade LEXIS 

99, at *21–22 (Ct. Int’l Trade Aug. 28, 2014). Commerce 

declined to revisit its findings. J.A. 172. 

On December 22, 2014, the Trade Court affirmed the 

negative circumvention determination. Deacero S.A.P.I. 

de C.V. v. United States, No. 12-00345, 36 Int’l Trade Rep. 

(BNA) 1515, 2014 Ct. Intl. Trade LEXIS 159, at *2 (Ct. 

Int’l Trade Dec. 22, 2014). Observing that Commerce 

declined to revisit its findings, the Trade Court found that 

substantial evidence supports the negative circumvention 

determination as to 4.75 mm steel wire rod. Id. 

The government, along with U.S. industry participants ArcelorMittal USA LLC, Gerdau Ameristeel U.S. 

Inc., and Nucor Corporation, appeal. We have jurisdiction 

under 28 U.S.C. § 1295(a)(5) (2012).

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DEACERO S.A. DE C.V. v. US 7

STANDARD OF REVIEW

We review Trade Court decisions de novo, applying 

the same standard used by the Trade Court when reviewing Commerce decisions. Downhole Pipe & Equip., L.P. v. 

United States, 776 F.3d 1369, 1373 (Fed. Cir. 2015) (citation omitted). Under that standard, we will uphold 

Commerce’s determinations unless they are “unsupported 

by substantial evidence on the record, or otherwise not in 

accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). 

Substantial evidence is “more than a mere scintilla” 

and amounts to what a “reasonable mind might accept as 

adequate to support a conclusion.” Downhole, 776 F.3d at 

1374 (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 

U.S. 197, 229 (1938)). Our review is limited to the record 

before Commerce in the particular administrative proceeding at issue and includes all “evidence that supports 

and detracts” from Commerce’s conclusion. Sango Int’l 

L.P. v. United States, 567 F.3d 1356, 1362 (Fed. Cir. 

2009). An agency finding may still be supported by substantial evidence even if two inconsistent conclusions can 

be drawn from the evidence. Downhole, 776 F.3d at 1374 

(citing Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 

(1966)).

DISCUSSION

The government argues that Commerce’s initial decision that Deacero’s 4.75 mm steel wire rod was a minor 

alteration and that its imports circumvented the antidumping duty order was reasonable and supported by 

substantial evidence. According to the government, 

whether a good is within the literal scope of a duty order 

is not the inquiry, given that the purpose of the minor 

alterations subsection is to determine whether products 

not included in the literal scope of the duty order should 

be deemed covered by the scope of the duty order. The 

government notes that although the statute is silent on 

how Commerce should determine whether an alteration is 

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8 DEACERO S.A. DE C.V. v. US

“minor,” Commerce’s practice has been to review five 

factors identified in the statute’s legislative history when 

making this determination: (1) the overall physical 

characteristics of the product; (2) the expectations of the 

ultimate user; (3) the end use of the product; (4) channels 

of trade and advertising; and (5) the cost of modification 

relative to the value of the products at issue. Nippon 

Steel Corp. v. United States, 219 F.3d 1348, 1354 (Fed. 

Cir. 2000); see also S. Rep. No. 100-71 (1987). The government argues that requiring Commerce to consider 

commercial availability is not among the five factors. 

The government asserts that it is immaterial that the 

merchandise at issue may have been commercially available somewhere in the world at the time the petition was 

filed because the subsection on minor alterations, 19 

U.S.C. § 1677j(c), contains no reference to commercial 

availability. Imposing a requirement to consider commercial availability under § 1677j(c) would add a requirement 

to the statute that is not there, and would render superfluous the inquiry for later-developed merchandise under 

§ 1677j(d). 

The government argues that the evidence demonstrates that 4.75 mm steel wire rod was not being produced in Mexico or in the United States and was not 

commercially available at the time the petition was filed. 

J.A. 71–74, 136. The evidence further shows that after 

Commerce issued the order, Deacero began to produce 

and import into the United States 4.75 mm steel wire rod 

that met the five-factor test, including that it possessed 

the same physical characteristics and commercial uses as 

5.00 mm steel wire rod. 

Deacero counters that Commerce’s initial anticircumvention determination was not supported by substantial evidence. Commerce failed to account for the 

antidumping duty order’s literal exclusion of smalldiameter steel wire rod and ignored its own finding that 

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DEACERO S.A. DE C.V. v. US 9

small-diameter steel wire rod was commercially available 

in Japan in 1998, roughly two years before the petition 

was filed. Deacero contends that the evidence indicates 

that small-diameter steel wire rod was well known at the 

time the petition was filed. Deacero asserts that the five 

factors addressed by Commerce only examine whether an 

alteration was minor—not whether subject merchandise 

was altered in the first place. By definition, merchandise 

that was well known but not included in the investigation 

cannot later constitute subject merchandise that is “altered.” Deacero further contends that record evidence 

demonstrates that 4.75 mm steel wire rod was imported 

for different commercial uses than 5.00 mm steel wire rod. 

See J.A. 406–37, 693–95, 3257–88, 3621–23. We address 

the parties’ arguments in turn.

I.

In order to effectively combat circumvention of antidumping duty orders, Commerce may determine that 

certain types of articles are within the scope of a duty 

order, even when the articles do not fall within the order’s 

literal scope. See Target Corp. v. United States, 609 F.3d 

1352, 1355 (Fed. Cir. 2010) (quoting Wheatland, 161 F.3d 

at 1370). The Tariff Act identifies four articles that may 

fall within the scope of a duty order without unlawfully 

expanding the order’s reach: (1) merchandise completed 

or assembled in the United States with components 

produced in a foreign country subject to the duty order (19 

U.S.C. § 1677j(a)); (2) merchandise completed or assembled in foreign countries using merchandise subject to a 

duty order (id. § 1677j(b)); (3) merchandise “altered in 

form or appearance in minor respects . . . whether or not 

included in the same tariff classification” (id. § 

1677j(c)(1)); and (4) later-developed merchandise that 

would have been included in the order (id. § 1677j(d)). 

The Trade Court erred in interpreting Wheatland to 

mean that if an article is not expressly included within 

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the literal terms of the scope of the duty order, that article 

cannot be subject to an anti-circumvention inquiry. In 

Wheatland, we held that minor alteration inquiries are 

inappropriate when the antidumping duty order expressly 

excludes the allegedly altered product. Wheatland, 161 

F.3d at 1369–70. In that case, the final determination of 

less-than-fair-value sales contained an express exclusion 

that made clear what merchandise was not covered:

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. 

Id. at 1367 (emphases in Wheatland opinion) (citation 

omitted). We reasoned in Wheatland that including the 

excluded standard pipe products would “frustrate the 

purpose of the antidumping laws because it would allow Commerce to assess antidumping duties on products 

intentionally omitted from the ITC’s injury investigation.” 

Id. at 1371. 

In Nippon Steel, we concluded that Commerce could 

institute an anti-circumvention inquiry on products with 

chemical weights exceeding the literal scope of the duty 

order. Nippon Steel Corp. v. United States, 219 F.3d 

1348, 1350, 1356–57 (Fed. Cir. 2000). The duty order 

covered steel products not exceeding 0.0008% boron. Id.

at 1350. We distinguished Wheatland because the extra 

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DEACERO S.A. DE C.V. v. US 11

boron above 0.0008% did not significantly alter the merchandise at issue. Id. at 1356–57 (citation omitted). We 

also observed that the explicit exclusions in Wheatland

“were well known when the order was issued” and 

amounted to more than “insignificant alterations to an 

existing product.” Id. at 1356. 

Unlike Wheatland, the duty order at issue contains no 

explicit exclusion of small-diameter steel wire rod. Although the scope of the duty order sets a cross-sectional 

range (5.00 mm to 19.00 mm), that cannot be read to 

expressly exclude for purposes of anti-circumvention 

inquiries all products outside that range. J.A. 222. The 

purpose of minor alteration anti-circumvention inquiries 

is to determine whether articles not expressly within the 

literal scope of a duty order may nonetheless be found 

within its scope as a result of a minor alteration to merchandise covered in the investigation. To conclude otherwise would render meaningless Congress’s intent to 

address circumvention concerns. Here, the duty order 

explicitly excludes certain metallic compositions of steel 

wire rod, but goes no further. Thus, while the duty order 

provides a cross-sectional range, it does not provide that 

steel wire rod less than 5.00 mm diameter should necessarily be excluded from its scope. 

II.

We conclude that Commerce’s initial minor alteration 

anti-circumvention determination was supported by 

substantial evidence. Specifically, substantial evidence 

supports Commerce’s conclusion that the smallest diameter steel wire rod produced in the investigated countries 

at the time the petition was filed was 5.5 mm. That some 

quantity of small-diameter steel wire rod may have been 

in existence at some time in non-investigated countries 

does not limit Commerce’s minor alteration analysis in 

the proceeding under review. 

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12 DEACERO S.A. DE C.V. v. US

CONCLUSION

Commerce’s initial minor alteration anticircumvention affirmative determination is in accordance 

with law and supported by substantial evidence. The 

decision of the Trade Court is hereby reversed and Commerce’s initial affirmative circumvention determination is 

reinstated.

REVERSED

COSTS

Each party shall bear its own costs. 

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