Slip Op. 06-61 UNITED STATES COURT OF INTERNATIONAL TR ADE

____________________________________ : SANGO INTERNATIONAL L.P., : : Plaintiff, : : v. : : UNITED STATES, : Before: Judith M. Barzilay, Judge : Court No. 05-00145 Defendan t, :

: WARD MANUFACTURING, INC., : ANVIL INTERNATIONAL, INC., : : Defendan t-Interveno rs. : ____________________________________: OPINION [Plaintiff’s motion for judgment on the agency record is denied.] Dated: May 1, 2006 Baker & McKenzie LLP ( William D. O utman, II ), ( Stuart P. Se idel

), ( Kevin J. Sullivan ) for Plaintiff Sango International, L.P. (Patricia M. McCarthy ), Assistan t Director, C ommerc ial Litigation Branch, C ivil Division, U

nited States

Departme

nt of Justic e; (

Kelly B. Blank

), Attorney , Comm ercial Litigation B ranch, Civi l Division, United Stat es Departm

ent of Justi ce; (

David Samu el Silverbrand

) Comme rcial Litigat

ion Branch, Civil Divis ion, United States Depa

rtment of Justice, Peter D. Ke isler , Assistant Attorney General, Commercial Litigation Branch, Civil Division, United Stat

es Departm

ent of Justi ce; David M. Co hen , Director, Commercial Litigation Branch, Civil Divis ion, United

States Depa

rtment of Justice; Kemba Eneas , Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for Defendan t. Schagrin A ssociates (Roger B. Sc hagrin ), ( Brian E. McG

ill), ( Michael J. Brown ), for Defendan t-Interveno rs Ward Man

ufacturing , Inc., & An

vil Internati onal, Inc.Court. No. 05-00145 Page 2 I. Introduction This case concerns the scope of the antidumping duty order issued by the Department of Commerce (“Commerce” or “Department”) on Certain Mal leable Iron P

ipe Fittings

, Cast, Oth er Than Grooved, from the People’s Republic of China . 68 Fed. Reg. 69,376 (Dec. 12, 2003) (“Order”). Pursuant to Rule 56.2 of the United States Court of International Tra de, Plaintiff Sango International L.P. (“Sango”) has moved for a judgment upon the agency record declaring that Commerce’s scope ruling holding that gas meter swivels and gas meter nuts fall within the ambit of t he Order is u

nsupported

by substant

ial evidence

on the record

and otherwi se is not in accordance with the law. See Notice Final Scope Ruling (Jan. 11, 2005) (Pl.’s App. 630-44) (“Scope Ruling”). For the reasons stated below, this court denies Plaintiff’s motion for judgment on the agency record.
II. Proced ural History On December 12, 2003, Commerce issued an antidumping order imposing duties on “certain malleable iron

pipe fittin

gs, cast, ot

her than gro oved fittin

gs, from the People’ s Republic of China” (“China” or “PRC”). Order , 68 Fed. R eg. 69,377 . The Order

described th e covered products as certain malleable iron pipe fittings, cast, other than grooved fitt ings, from the People’s Re

public of China. The m

erchandise i s classified

under item

numbers 7307.19.90.30, 7307.19.90.60 and 7307.19.90.80 of the Harmonized Tariff Schedule (HTSUS). Excluded from the scope of this order are metal compression couplings, which are im

ported unde

r HTSUS nu

mber 7307 .19.90.80 . A metal compression coupling consists of a coupling body, two gaskets, and two compress ion nuts. Th

ese product s range in dia

meter fro m 1/2 inch

to 2 inches and are carri ed only in ga lvanized fi

nish. Altho

ugh HTSUS subheading s are provided for convenience and U.S. Customs and Border Protection (CBP) purposes, t

he Departm

ent’s writte

n description of the sco

pe of this p roceeding is dispositive.Court. No. 05-00145 Page 3

1 The languag e describing the scope of

the antidum

ping invest

igation rem

ained identi cal from the investigation’s initiation, through the preliminary and final deter minations, to the antidumping order, except that the investigation notice had yet t o exclude metal compression couplings from the scope. See Notice o f Initiation o

f Antidump ing Duty Inv

estigation: Certain Malleable Iron Pipe Fittings from the People’s Republic of China , 67 Fed. Reg. 70,579, 70,579 (Dep’t Com

merce Nov . 25, 2002) ; Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Malleable Iron Pipe Fi ttings from the People’s Republic of China , 68 Fed. Reg. 33,911, 33,913 (Dep’t Commerce June 6, 2003); Final Deter

mination of

Sales at Les

s Than Fair

Value and C

ritical Circ umstances: Certain Malleable Iron Pipe Fittings from the People’s Republic of China , 68 Fed. Reg. 61,395, 61,397 (De

p’t Comm

erce Oct. 28 , 2003); Notice of Amended Final Determination of Sales at Less Than Fair Value: Certain Malleable Iron Pipe Fittings from the People’ s Republic of China , 68 Fed. Reg. 65,873, 65,873 (Dep’t Commerce Nov. 24, 2003).

2 Defendant-Intervenors were petitioners in Commerce’s original antidumping investigation. Id. 1 Pursuant to

19 C.F.R. § 351.225( c)(1), on Ju ly 28, 2004 , Nitek Elec tronics, Inc ., an importer of gas meter swivels a

nd gas met

er nuts, and

Sango, an U

nited States

manufac turer which insulates imported gas meter swivels, applied to Commerce for a scope ruling that would exclude gas meter swivels and nuts from the Order. See Applica tion Scope R uling Meter S wivels &
Meter Nuts (Pl.’s App. 1-12). On August 10, 2004, Defendant-Intervenors Ward Manufacturing, Inc. (“Wa rd”), and An

vil Internati onal, Inc. ( “Anvil”), 2 submitted commen ts to Comm

erce contending that gas meter swivels and nuts fall within the Order because they ar e “malleable iron pipe fittin gs which are

cast and that

are not groo ved fitting s and are not compress ion fitting s.” Ward Resp. Application Scope Ruling (Def.’s App. Tab 1, at 1). Commerce began a formal scope inquiry on September 13, 2004, in accordance with 19 C.F.R. § 3 51.225(e), as it was “unable to deter mine conc lusively tha

t meter swi

vels and m eter nuts are pipe

fittings an

d are treated

as such with

in the indus try.” Scope Inquiry Initiation (Pl.’s App. 289-9 0). As inter

ested partie s, Anvil and

Ward resp ectively sub mitted bri efs on whetherCourt. No. 05-00145 Page 4

meter swivels and nuts lie within the scope of the Order on October 4, 2004, and October 14, 2004. On October 18, 2004, Commerce notified Ward that it had submitted these filings without the certifications mandated by 19 C.F.R. § 351.303(g), forcing the Department to reject them. The Departm

ent, howev er, gave W ard a one-da y extension

to resubm

it its briefs , which W ard promptly did. See Comme rce Deficien cy Letter (Def.-Inte rvenors’ Ap

p. Tab 4); W

ard Case Br. (Oct. 19, 2004) (Def.-Intervenors’ App. Tab 5); Ward Rebuttal Br. (Oct. 19, 2004) (Def.- Intervenors’ App. Tab 5). In its investigation, Commerce analyzed the Order, the petition, the initi al investigation, determinations of the United States International Trade Commission (“ITC”), and the determina tions of the

Secretary of

Comme rce to determ

ine whether

these source s proved dispositive as to whether gas meter swivels and nuts fall within the Order’ s scope. See 19 C.F.R. § 351.225(k)(1). Commerce found these sources dispositive and issued the Scope Ruling on January 11, 2005, finding that gas meter swivels and gas meter nuts fall within the scope of the Order. See Scope Ruling at 12-14. Sp ecifically, it determined that: First, these

products are

manufac tured from

malleable

iron using a

casting proc ess in the PRC. Second, these products are indisputably “fittings;” they ar e “pipe fittings” b ecause they

are parts of

a piping sys tem, they

direct the f

low of the g as through a pi

ping system , and can be, although ar e not always , connected

to other pipe fittings or pipes. Finally, they are neither grooved fitt ings nor compression couplings, both of which are specifically excluded. Id. at 12. Sango then brought this action to contest the Scope Ruling. Plaintiff Sango sets f

orth three contentions in

its motion

for judgm

ent on the ag ency record. Firs t, it maint

ains that it w as clear error for Comm

erce to grant

Defendan

t-Interveno rs extensions to refile their case and rebuttal brie fs after discovering that the initial submissions lacked adm

inistrativel

y-mandat ed certifica

tions. Con sequently, Sango avers that theseCourt. No. 05-00145 Page 5

3 These fact ors rece ive thei r name from Diversified Prods. Cor

p. v. United

States , 6 CIT 155, 572 F. Supp. 883 ( 1983), in w hich this Co

urt first ou

tlined them

prior to thei

r regulatory codification. These descriptive elements encompass: “(i) The physical charact eristics of the product; (ii ) The expect

ations of th e ultimate

purchasers; (iii) The ulti

mate use o f the produ

ct; (iv) The cha

nnels of tra

de in which t

he product i s sold; and (v ) The manner in which t

he product is advertised and displayed.” 19 C.F.R. § 351.225(k)(2). submissio ns should no t constitute

a part of the

agency reco rd. Second , Sango clai ms that gas meter swiv els and gas m

eter nuts lie u

nambiguo usly outsid

e the scope o f the Order , “as evidenced by the language of the Order, the facts of the record and other administrative determinations,” rendering Commerce’s Scope Ruling unsupported by substantial evidence and otherwise not in accorda

nce with the

law. Pl.’s M ot. J. A.R. 2. Finally, Sango belie ves the cour

t should deem Commerce’s Scope Ruling invalid because the Department failed to consider the so-called Diversified

Products criteria 3 enumerate d in 19 C.F. R. § 351.2 25(k)(2).

III. Discussion A. Preliminary Issues: Defendant-Intervenors’ Submission Extension Sango asserts that the Department erred by granting Anvil and Ward a one-day extension to re-file their case brief and rebuttal case brie f, which lacked certifications required by 19 C.F.R. § 351.303(g), and that the briefs therefore should not become part of the record. See Mem. Supp. Pl.’s Mot. J. A.R. 35. Plaintiff’s argument is without merit. Only with a demonstration of “substantial prejudice” can Sango challenge Commerce’s decision to provide Defendant-Intervenors with a one-day extension to resubmit their documents. Am. Farm L ines v. Black Ball F

reight Serv. , 397 U.S. 532, 539 (1 970) (citation omitted) ; see 5 U.S.C. § 706 (1966) (“due accou

nt shall be ta

ken of the r

ule of preju

dicial error”

in reviewin

g agency act

ion); IntercargoIns. Co. v. United Stat es , 83 F.3d 39 1, 394-95 (F ed. Cir. 19 96). The Su preme Cou

rt has long upheld “the gen eral princip le that (i)t [ sic] is alwa ys within th e discretion

of . . . anCourt. No. 05-00145 Page 6

4 The court as sumes tha

t such consi deration is g iven equally to submis sions of bo th petitioners and respondents. administrative agency to relax or modify its procedural rules adopted for the order ly transaction of busines s before it w

hen in a give

n case the ends of justic e require it. ” Am. Farm L ines , 397 U.S. at 539 (quotations

& citation om

itted). Furt

her, Com merce’s ow

n regulation s state that “[u]nless expressl y preclud ed by stat ute, the S ecretar y may, for go od cause, extend an y time limit established” within the antidumping and countervailing duties regul ations. 19 C.F.R. § 351.302(b ). 4 Plaintiff makes no assertion that substantial prejudice to its ca se arose from the Department’s decision. Therefore, its claim must fail. B. The Scope Ruling 1. Standar d of Review In reviewing a Commerce antidumping order scope determination, this court upholds the Department’s conclusion unless the court finds it “unsupported by substanti al evidence or otherwise not in accorda

nce with law .” Steel Auth. of India, Lt d. v. United

States , 25 CIT 482, 485, 149 F. Supp. 2d. 921, 926 (2001) (quoting 19 U.S.C. § 1516a(b)(1)(B) (1994)) (quotations omitted); see 19 U.S.C. § 1516a(b)( 1)(B)(i) (19 96); Nippon Ste el Corp., N KK v. Unite

d States , 219 F.3d 13 48, 1355 (F ed. Cir. 20 00). In this c ontext, “su bstantial evidence” den

otes “such relevant evi dence as a rea sonable m ind might accept as ade quate to sup port a conclu sion.” Consolo v. Fed. Mar. C

omm’n , 383 U.S. 607, 619-20 (1966) (quoting Consol. Edison Co. of N.Y.
v. NLRB , 305 U.S. 197, 229 (1938)) (quotations omitted). Crucially, “the possibility of drawing two inconsi stent conclu sions from the evidenc e does not pr event an adm

inistrative a

gency’s finding f rom being

supported by substantia

l evidence. ” Id. at 620 (citation omitted). Similarly, a scope determination is not in accordance with law “if it changes the scope of an orde r orCourt. No. 05-00145 Page 7

interprets an

order in a manner contra ry to the orde

r’s terms. ” Allegheny B radford Co rp. v. United Stat

es , 28 CIT ___, ___, 342 F. Supp. 2d 1172, 1183 (2004). “Scope orders may be interpreted

as including

subject me

rchandise o nly if they c ontain lang uage that sp ecifically includes the

subject me

rchandise o r may be rea sonably int erpreted to i

nclude it.” Id. at 1184 n.6 (quoting Duferco Ste el, Inc. v. U nited States , 296 F.3d 1087, 1089 (Fed. Cir. 2002)) (quotations omitted). The first step in evaluating whether Commerce properly placed gas meter swivels and nuts within the scope of the Order requires the court to examine “the antidumping petit ion, the factual findings and legal conclusions adduced from the administrative investigations, and t he prelimina ry order.” Duferco Ste el , 296 F.3d at 1097 (quoting Smith Coro na Corp. v. United States , 915 F.2d 6 83, 685 (Fe d. Cir. 199 0)) (quotati ons omitte d); see Tak Fat T rading Co. v. United Stat

es , 396 F.3d 1378, 1382 (Fed. Cir. 2 005); 19 C. F.R. § 351 .225(k). A mong thes e sources, the language of the order receives the greatest wei ght. See Tak Fat Trading , 396 F.3d a t 1382; Duferco Ste el , 296 F.3d a t 1097. If t

hese mater

ials do not p rove dispos itive, the co urt then turns to the Diversified

Products criteria outl ined in 19 C .F.R. § 35 1.225(k)(2 ) to make it s determination. See Tak Fat Trading , 396 F.3d a t 1382; Allegheny B radford , 342 F. Su

pp. 2d at 1183; 19 C.F.R. § 351.225(k). 2. The 19 C .F.R. § 35 1.225(k)(1)Factors As noted earlier, Commerce’s Order defined the Order’s scope as encompassing certain malleable iron pipe fittings, cast, other than grooved fitt ings, from the People's R

epublic of China. The

merchand

ise is classif

ied under ite

m numbe rs 7307.19.90.30, 7307.19.90.60 and 7307.19.90.80 of the Harmonized Tariff Schedule (HTSUS). Excluded from the scope of this order are metal compression couplings, which are im

ported unde

r HTSUS nu

mber 7307 .19.90.80 . A metalCourt. No. 05-00145 Page 8

compression coupling consists of a coupling body, two gaskets, and two compress ion nuts. Th

ese product s range in dia

meter fro m 1/2 inch

to 2 inches and are carried only in galvanized finish. Order , 68 Fed. R

eg. at 69,37 6. Likewis e, througho ut the antidu

mping pro ceedings, C ommerc e used almost identical language to describe the scope. See supra n.1. The antidumping petition and related ITC documents employed the same terminology as well. See Anvil & Ward, Malleable Iron Pipe Fittings from China: Antidumping Duty Petition 4 (Oct. 30, 2002) (describing requested investigatory scope as in Order , though lacking metal compression coupling ex ception) (“P etition”); Malleable Iron Pipe Fittings from China , ITC Publ’n No. 3649, Investigation No. 731-TA-1021 (Final), at 5 (Dec. 2003) (“ITC, 3649 ”). The ITC publications and administrative documents regarding the antidumping investigation flesh out the meaning of the Order’s text. According to the ITC, [p]ipe fittings generally are used for connecting the bores of two or more pipes or tubes, connecting a pipe

to some ot

her apparatu s, changing

the directio n of fluid flow, or closing the pipe. The material from which MCIPF [malleable cast iron pipe fittin gs] are ma

de, cast iron , is a general

term for a

lloys com posed prim

arily of iron, carbon (greater than two percent) and silic on. Malleable Iron Pipe Fittings from China: Determination and Views of the Commission , ITC Publ’n No. 3568, Inve stigation N o. 731-TA- 1021 (Preli minary), a

t 5 (Dec. 200 2) (footno te omitted) ( “ITC, 3568 ”); see ITC, 3649 a t 3; see also Petition at 5 (“Malleab le pipe fitti ngs are normally . . . attached to pipe by screwing.”) (emphasis added); Anvil& Ward, Amendment to the Petition for the Imposition of Antidumping Duties: Malleable Iron Pipe Fittings from China , at 4 (Nov. 12, 2002) (same) (“Pet. Am.”). Further, pipe fittings are threaded, “normally” to the American National Standards Institute (ANSI) B1.20.1 specification. Pet. Am. at 3; Petition atCourt. No. 05-00145 Page 9

5 Union nuts, which are undisputably covered by the Order, are threaded to a di fferent ANSI specification, B16.39. Def.-Intervenors’ Mem. P. & A. Opp’n Mot. Sango J. A.R. 12 n.7.

6 A gas meter nut is secured to a meter swivel to attach the latter to a gas meter. See Mem. Supp. Pl.’s Mot. J. A.R. 16, 17.

7 Whether a

swivel can c onnect direc tly to a pipe r emains co ntentious. In contrast t o Sango, Commerce insists that “[m]eter swivels and nuts can be physically connected to a pipe.” Def.’s Mem. Opp’n Pl.’s Mot. J. A.R. 10 (quoting Scope Ruling at 12) (quota tions omit

ted); see Def.-Intervenors’ Mem. P. & A. Opp’n Mot. Sango J. A.R. 12. 4; see ITC, 3568 at 6. 5 3. Plaintiff’s Argument Sango believes that “the discussion of the class or kind of merchandise contained i n the Order unam

biguously excludes” ga s meter swivels and ga s meter nut s from thi s rubric and t hat therefore “the Departm

ent’s Scope

Ruling to th e contrary is

not support

ed by substa

ntial evidence nor is it otherwise in accord ance with th e law.” Mem . Supp. Pl. ’s Mot. J. A. R. 2. It bases this cl aim on the

specialized

nature of th e products. A meter sw ivel can con

nect only wi

th a gas meter

on one end a

nd a pipe fi

tting on the o ther, 6 while a “pip e ‘fitting’ i s almost alw ays physically t

hreaded ont

o one end of

a length of

pipe and is the means wh ereby the pip e is joined to (i) anothe

r length of p ipe; (ii) a gas meter bar or (iii) a gas m eter swivel. ” Mem. Sup

p. Pl.’s Mot. J. A.R . 9 (empha sis added). In essence, because nei ther gas me

ter swivels n

or nuts can attach to a le

ngth of pip e, 7 they cannot qualify as pipe fittings. See Mem. Sup p. Pl.’s Mot . J. A.R. 10, 1 6, 19; Pl.’s

Reply 2, 4. In a parallel l ine of reasoning, Plain tiff claim s that gas meters and swivels

constitute d

ifferent a rticles of co mmerce t

han pipe fi

ttings and, therefore, cannot fall within the scope of the Order. See Mem. Supp. Pl.’s Mot. J. A.R. 9.Court. No. 05-00145 Page 10

8 Since a gas m

eter swivel a

nd nut mus t bind with e ach other to f unction, th e court will treat them as one unit for this discussion, just as it would, for example, a pipe fitting union comprised of three pieces screwed together. Cf. Def.-Inte rvenors’ Mem . P. & A. Op p’n Mot. Sango J. A.R. 12 & n.7.

9 Sango’s argument that the HTSUS classification headings invoked in the Order and other administrative materials preclude the inclusion of gas meter swivels and nuts wit hin the scope is groundless. See Mem. Supp. Pl.’s Mot J. A.R. 11, 21-27. The Order it self states t hat “[a]lthou gh HTSUS subheading s are provide d for conve nience and U .S. Custom s and Borde r Protection (CBP) purposes, the Department’s written description of the scope of this pr oceeding is dispositi

ve.” Order , 68 Fed. R

eg. at 69,37 6; see Tak Fat Trading Co. , 396 F.3d at 1383. 4. Analysi s Despite Sango’s protests to the contrary, gas meter nuts and swivels posse ss the characteristics of pipe fittings outlined in the Order a nd thus fall within its scope. As Plaintiff concedes, the products are cast, made of malleable iron, manufactured in the PRC, and do not fall within the express exceptions within the Order. See Pl.’s App. 610. Likew ise, the swi

velnut unit 8 connects to

a gas meter

and links th

is apparatus

to a piping s ystem via a

less special ized pipe fitting to manipulate the flow of the gas. See Pl.’s Br. 10 ; see, e.g. , Pl.’s App. 369, 374. Although the swivel may not direct ly touch a pi

pe, there is n

othing in th e record of t

his case to require that

pipe fittin

gs must di

rectly conne ct to a pipe to be consider

ed pipe fitt

ings. Furth er, swivels are threaded according to the ANSI B1.20.1 specification characte ristic of all pipe fittings. Even Sango’s brief notes that pipe fittings “almost always” connect to a pi pe on one end; sometimes they

do not. Mem . Supp. Pl. ’s Mot. J. A. R. 9. Final ly, Sango’s contention

that gas meters

and swivels

are separate

articles of c ommerc e from pip e fittings f ails since th e Order does not address this issue when outlining its scope. Together, t hese facts, read in light of the Order’s lang

uage, reaso nably provi de adequate evidence to

place gas meter swivels

and gas

meter nuts

within the s cope of the

Order. 9 Consequently, this court must uphold the DepartmentCourt. No. 05-00145 Page 11

10 Because the court finds that the language of the antidumping petition, administrative factual fi ndings and l egal conclu sions, and t he prelimi

nary antidu

mping ord

er dispositi

vely places gas meter swivels and gas meter nuts within the scope of the antidumping order, it holds that the Dep artment di d not err by n ot examinin

g the Diversified

Products factors in 19 C.F.R. § 351.225(k)(2), and the court also need not address these crit eria. See Tak Fat Trading , 396 F.3d at 1382; Allegheny Bradford , 342 F. Supp. 2d at 1183; 19 C.F.R. § 351.225(k). of Commerce’s Scope Ruling as supported by substantial evidence and in accordance with law. 10
IV. Conclusion For the reasons stated above, Sango’ s motion f or judgme

nt on the age

ncy record is
DENIED.

May 1, 2006 /s/ Judith M. Barzilay Dated:________________________

__________________________ New York, NY Judge