Opinion ID: 777073
Heading Depth: 2
Heading Rank: 3

Heading: The Court's Definition of Flat-Rolled versus the HTSUS Definition of Flat-Rolled.

Text: 41 We need not comment on whether Commerce or the court used the proper methodology to arrive at a definition for flat-rolled, the operative term at issue, or whether they should have relied solely on the HTSUS definition of that term. Even assuming that Novosteel has squarely presented this question for our review, it has nevertheless failed to explain how the HTSUS definition of flat-rolled differs in any material respect from the flat-rolled definition actually used by the court. 42 As noted in the court's opinion, HTSUS defines flat-rolled by contrasting it with another definition (semi-finished); thus, flat-rolled means products that are not other products of a solid section, which have not been further worked [other] than subjected to primary hot-rolling .... Novosteel, 128 F.Supp.2d at 728 (citations omitted) (emphasis added). Stated differently, HTSUS defines flat-rolled to refer to products that, in addition to primary hot-rolling, have also been further worked. The Court of International Trade, meanwhile, ultimately defined flat-rolled as meaning to subject an existing product to some process of development, treatment or manufacture beyond primary hot-rolling. 43 As we see it, this definition looks every bit the same as the HTSUS definition. Novosteel has not even compared these two definitions, much less explained why they differ and why that difference should change the judgment of the court and the Commerce Department. At most, then, the ruling of the court here, even assuming it is error, amounts to nothing more than harmless error, see U.S. CIT R. 61. 44 D. Nothing in the Wirth Decision Purports to Control the Definition of Further Worked (or Flat-Rolled). 45 The Court of International Trade has held that Commerce must either act in accord with its prior, similar scope determinations or else provide rational reasons for deviating from them. Springwater Cookie & Confections, Inc. v. United States, 20 CIT 1192, 1196 (CIT 1996). Citing this principle, Novosteel asserts that Commerce (and the court) erred because Commerce had allegedly defined further worked in another, similar scope determination ( see Wirth ) so that that term encompassed only a distinct set of steel-making processes; and that, in this case, Commerce disregarded the definition in Wirth without explaining why. 46 For purposes of this appeal, we assume without holding that the controlling principle is the principle laid down in Springwater Cookie. But as the Court of International Trade here reasoned, nothing in either its Wirth decision or in the underlying Wirth scope determination suggests that Commerce could assign only one meaning to the term further worked or, more important, to the term actually used in the Plate Orders, flat-rolled, so as to limit those terms to a distinct and ordered set of processes only. Accordingly, while the scope determination in Wirth and the scope determination here share some similarities, e.g., Wirth addressed the applicability of antidumping orders directed to cut-to-length carbon steel plate from Brazil, none of those similarities compels a contrary conclusion about the definition of further worked, flat-rolled or the processes that they could and could not include. 47 E. The Reiner Brach Sales Brochure. 48 Given our deferential standard of review, we also uphold Commerce's finding that Reiner Brach could possibly have had additional treatment done on its profile slabs so as to have that steel product flat-rolled, i.e., further worked. As noted, the Court of International Trade and Commerce both largely based this finding on the brochure that Reiner Brach had admittedly circulated to its U.S. customers. This finding, moreover, led Commerce and the court to conclude that an examination of the initial criteria (the petitions and the initial investigations by Commerce and the ITC) did not definitively resolve whether the Plate Orders included or excluded this particular product; and thus, that application of the Diversified Products criteria was necessary. 49 Mindful of the low threshold needed to show that Commerce here justifiably found an ambiguity, we agree that Reiner Brach's sales brochure, along with the admission that Reiner Brach produces its steel at a two high reversing mill, provide the requisite substantial evidence. Most significant, the brochure states that Reiner Brach guarantees its steel meets strict  flatness ... tolerances  and that a  hydraulic press as well as five roll flattening machine are employed to back up this guaranty.  (J.A. 759) (emphasis added). These statements alone could lead one to reasonably infer that, indeed, Reiner Brach uses equipment to produce flat-rolled steel, i.e., steel that it had further worked beyond the hot-rolling process. 50 As if to strengthen that point, the brochure adds that the profile slab augment[s] the shrinking supply of ... thick plate — i.e., flat-rolled steel — in the world. And that Reiner Brach undertakes certain processes in order to produce very thick profiling slabs of superior internal integrity, as shown by the ultrasonic testing... performed manually on each finished slab to provide our customers with internal integrity assurance. Reasonably construed, a fact finder could read these other statements to confirm that Reiner Brach may indeed have undertaken processes to help refine and test its steel ( i.e., to further work its steel) and to thereby produce profiling slabs of superior internal integrity. This inference is further bolstered by the admission that Novosteel apparently made in its brief about Reiner Brach having its profile slab produced at a two high reversing mill, a mill that is capable of producing the type of steel covered by the Plate Orders. 51 In a sense, a short brochure might seem like a slender reed on which to base a scope determination, especially one in which the appellate record alone includes more than 1300 pages. After all, one might think that the government or the Defendant-Intervenors could have had an expert (or several experts) examine one of Reiner Brach's profile slabs and determine one way or the other whether the steel exhibited signs of additional treatment or processes beyond primary hot rolling. Or that an expert could have examined other evidence, like the Reiner Brach brochure, and concluded that the statements in that brochure showed that the steel profile slab was flat-rolled within the technical meaning of that term. 52 But the final scope determination here did not actually turn on this brochure; the Commerce Department and the Court of International Trade instead considered the brochure's statements for the limited purpose of determining whether the Orders unambiguously included or excluded the Reiner Brach profile slab, thereby necessitating resort to the Diversified Products criteria and the record evidence addressed to those criteria, e.g., a survey about the tolerances for Reiner Brach profile slab, the various admissions, answers to questionnaires and other information provided by Novosteel itself, a specification guide and treatise, as well as the information contained in Reiner Brach's sales brochure, etc. (Novosteel, unsurprisingly, does not challenge the court's thorough analysis under these latter criteria.) Further, other reasonable fact finders might just as well consider this brochure the proverbial smoking gun, an admission that Reiner Brach produces the very kind of flat-rolled steel covered by the Plate Orders. 53 In any event, our court of course plays a limited role in reviewing determinations by the Commerce Department. And so, even assuming we might find differently if we had to make these findings in the first instance, we obviously have no authority to do so now. See Gerald Metals, Inc., 132 F.3d at 719-20 (reiterating the substantial-evidence standard of review as whether a reasonable mind might accept the evidence in the record as sufficient to support a conclusion). Nor do we think it necessary (or even justifiable) to scrutinize the record for other evidentiary arguments that Novosteel could have squarely presented but nevertheless did not, e.g., that the flatness or the five roll flattening machine referred to in the Reiner Brach brochure means something different than the flat-rolled used in the Orders themselves. In the end, therefore, we cannot conclude that the brochure here constitutes something less than substantial evidence. Thus, we affirm the judgment with respect to this ruling, too. 54 F. Waiver and the Retroactive Imposition of Antidumping Duties. 55 The last issue raised by Novosteel is whether Commerce could retroactively apply the Plate Orders, as construed in its scope determination, to the profile slab that Novosteel had imported for four years without paying estimated duties. Novosteel, however, failed to preserve this issue for our review, for it waived this retroactivity argument by not presenting it in the principal summary judgment brief filed with the Court of International Trade. See Viskase Corp. v. Am. Nat'l Can Co., 261 F.3d 1316, 1326, 59 USPQ2d 1823, 1830 (Fed.Cir.2001) (noting that appellate courts only rarely will entertain evidence and issues ... not properly raised in proceedings below). Raising the issue for the first time in a reply brief does not suffice; reply briefs reply to arguments made in the response brief — they do not provide the moving party with a new opportunity to present yet another issue for the court's consideration. Further, the non-moving party ordinarily has no right to respond to the reply brief, at least not until oral argument. As a matter of litigation fairness and procedure, then, we must treat this argument as waived. 56 Novosteel, understandably enough, has tried its best to circumvent waiver, saying that it raised the question (as indeed it did) before the Commerce Department and that it alluded to the retroactivity argument in the complaint filed with the Court of International Trade (though only the most strained reading of the complaint would justify that latter assertion). But the sources it cites are irrelevant for waiver purposes. A party does not preserve or waive an issue based on the arguments it presented to an administrative agency; a party merely exhausts that issue before the agency so as to give a court the proper basis to review that issue on appeal or via a complaint. See, e.g., Sandvik Steel Co. v. United States, 164 F.3d 596, 599 (Fed.Cir.1998). Similarly, a party does not waive an argument based on what appears in its pleading; a party waives arguments based on what appears in its brief. 57 So, given that Novosteel did not present its retroactivity argument to the Court of International Trade until after it had filed its principal summary judgment brief, and given that parties must give a trial court a fair opportunity to rule on an issue other than by raising that issue for the first time in a reply brief, we conclude that Novosteel has indeed waived this argument for purposes of our review.