Court Opinion

ID: 4315288
Source: CourtListenerOpinion
Date Created: 2018-09-25 23:02:14.833221+00
Date Added: 2024-06-11T14:44:43.235576
License: Public Domain

Slip Op. 18-

               UNITED STATES COURT OF INTERNATIONAL TRADE

 SIMPSON STRONG-TIE COMPANY,

                Plaintiff,

         v.
                                                 Before: Gary S. Katzmann, Judge
 UNITED STATES,
                                                 Court No. 17-00057
                Defendant,

        and

 MID CONTINENT STEEL & WIRE, INC.,

               Defendant-Intervenor.

                                          OPINION

[Commerce’s Final Results are remanded and plaintiff’s motion for judgment on the agency
record is granted in part.]

                                                                  Dated: 6HSWHPEHU

George R. Tuttle, III, and Vickie Wu, The Law Offices of George R. Tuttle, of Larkspur, CA,
argued for plaintiff.

Stephen C. Tosini, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department
of Justice, of Washington, DC, argued for defendant. With him on the brief were Chad A. Readler,
Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy,
Assistant Director, and Sosun Bae, Trial Attorney. Of counsel on the brief was Jessica DiPietro,
Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department
of Commerce, of Washington, DC.

Adam H. Gordon, The Bristol Group PLLC, of Washington, DC, argued for defendant-intervenor.
With him on the brief was Ping Gong.

       Katzmann, Judge: The court today reviews another installment in the continuing mystery

series, “Is It Classified As A Nail?” See OMG, Inc., v. United States, 42 CIT __, Slip Op. 18-63
Court No. 17-00057                                                                            Page 2

(May 29, 2018). Plaintiff Simpson Strong-Tie Company (“Simpson”) challenges the Department

of Commerce’s (“Commerce”) determination that zinc and nylon anchors imported by Simpson

fall within the scope of the Antidumping Duty Orders on Certain Steel Nails from the People’s

Republic of China. Antidumping and Countervailing Duty Order on Certain Steel Nails from the

People’s Republic of China: Final Scope Ruling on Simpson Strong-Tie Company’s (Zinc and

Nylon Nailon) Anchors, 73 Fed. Reg. 44,961 (Dep’t Commerce Mar. 20, 2017), P.R. 36 (“Final

Scope Ruling”); Antidumping Duty Order: Certain Steel Nails from the People’s Republic of

China, 73 Fed. Reg. 44,961 (Dep’t Commerce Aug. 1, 2008) and Certain Steel Nails from the

People’s Republic of China, 76 Fed. Reg. 30,101 (Dep’t Commerce May 24, 2011) (Final Results

of Changed Circumstances Review) (collectively “the Orders”). Simpson argues that its anchors

are not steel nails and, therefore, do not fall within the scope of the Orders and that Commerce’s

scope determination is unsupported by substantial evidence on the record and is otherwise not in

accordance with law. Compl., Apr. 12, 2017, ECF No. 10; Pl.’s Mot. For J. on the Agency R. and

Br. in Supp., Aug. 22, 2017, ECF No. 24 (“Pl.’s Br.”); Pl.’s Reply, Jan. 30, 2018, ECF No. 30.

The court concludes that Commerce’s determination was not in accordance with law.

                                         BACKGROUND

A.     Legal and Regulatory Framework of Scope Reviews Generally.

       Dumping occurs when a foreign company sells a product in the United States for less than

fair value – that is, for a lower price than in its home market. Sioux Honey Ass’n v. Hartford Fire

Ins. Co., 672 F.3d 1041, 1046 (Fed. Cir. 2012). Similarly, a foreign country may provide a

countervailable subsidy to a product and thus artificially lower its price. U.S. Steel Grp. v. United

States, 96 F.3d 1352, 1355 n.1 (Fed. Cir. 1996). To empower Commerce to offset economic

distortions caused by dumping and countervailable subsidies, Congress enacted the Tariff Act of
Court No. 17-00057                                                                            Page 3

1930. 1 Sioux Honey Ass’n, 672 F.3d at 1046–47. Under the Tariff Act’s framework, Commerce

may -- either upon petition by a domestic producer or of its own initiative -- begin an investigation

into potential dumping or subsidies and, if appropriate, issue orders imposing duties on the subject

merchandise. Id.

       In order to provide producers and importers with notice as to whether their products fall

within the scope of an antidumping or countervailing duty order, Congress has authorized

Commerce to issue scope rulings clarifying “whether a particular type of merchandise is within

the class or kind of merchandise described in an existing . . . order.”                19 U.S.C. §

1516a(a)(2)(B)(vi). As “no specific statutory provision govern[s] the interpretation of the scope

of antidumping or countervailing orders,” Commerce and the courts developed a three-step

analysis. Shenyang Yuanda Aluminum Indus. Eng’g Co. v. United States, 776 F.3d 1351, 1354

(Fed. Cir. 2015); Polites v. United States, 35 CIT __, __, 755 F. Supp. 2d 1352, 1354 (2011); 19

C.F.R. § 351.225(k).

       Because “[t]he language of the order determines the scope of an antidumping duty order[,]”

any scope ruling begins with an examination of the language of the order at issue. Tak Fat Trading

Co. v. United States, 396 F.3d 1378, 1382 (Fed. Cir. 2005) (citing Duferco Steel, Inc. v. United

States, 296 F.3d 1087, 1097 (Fed. Cir. 2002)). If the terms of the order are unambiguous, then

those terms govern. Id. at 1382–83.

        However, if Commerce determines that the terms of the order are either ambiguous or

reasonably subject to interpretation, then Commerce “will take into account . . . the descriptions

of the merchandise contained in the petition, the initial investigation, and [prior] determinations

1
 Further citations to the Tariff Act of 1930 are to the relevant portions of Title 19 of the U.S.
Code, 2012 edition.
Court No. 17-00057                                                                            Page 4

[of Commerce] (including prior scope determinations) and the [International Trade] Commission.”

19 C.F.R. § 351.225(k)(1) (“(k)(1) sources”); Polites, 755 F. Supp. 2d at 1355; Meridian Prod.,

851 F.3d 1375, 1382 (Fed. Cir. 2017). To be dispositive, the (k)(1) sources “must be ‘controlling’

of the scope inquiry in the sense that they definitively answer the scope question.” Polites, 755 F.

Supp. 2d at 1355 (quoting Sango Int’l v. United States, 484 F.3d 1371, 1379 (Fed. Cir. 2007)). If

Commerce “can determine, based solely upon the application and the descriptions of the

merchandise referred to in paragraph (k)(1) of . . . section [351.225], whether a product is included

within the scope of an order . . . [Commerce] will issue a final ruling[.]” 19 C.F.R. § 351.225(d).

       If section 351.225(k)(1) analysis is not dispositive, Commerce will initiate a scope inquiry

under § 351.225(e), and apply the five criteria from Diversified Prods. Corp v. United States, 6
CIT 155, 162, 572 F. Supp. 883, 889 (1983) as codified in 19 C.F.R. § 351.225(k)(2). 2

B.     The Petition and Nail Orders.

       On May 29, 2007, Mid Continent Steel & Wire (“Mid Continent”) and other producers of

steel nails petitioned Commerce to impose antidumping duties on certain steel nails from the

United Arab Emirates and the People’s Republic of China. Letter from Grunfeld Desiderio

Lebowitz Silverman Klestadt, LLP to Sec’y of Commerce Pertaining to Fastenal Scope

Comments, P.R. 17 (Nov. 15, 2016) at Ex. 11, Petition for the Imposition of Antidumping Duties

against Certain Steel Nails from the People’s Republic of China and United Arab Emirates (May

29, 2007) (“Petition”). Commerce later determined that dumping was occurring, but first advised

Customs and Border Patrol (“CBP”) in Commerce Message 8213213 -- issued on July 31, 2008,

2
  These criteria are: (1) the physical characteristics of the product, (2) the expectations of the
ultimate purchasers, (3) the ultimate use of the product, (4) the channels of trade in which the
product is sold, and (5) the manner in which the product is advertised and displayed. 19 C.F.R. §
351.225(k)(2); see Diversified Prods., 572 F. Supp. at 889.
Court No. 17-00057                                                                                 Page 5

a day prior to the issuance of the Orders -- that articles classified under HTSUS 7907.00.6000

(“Other articles of zinc: other”) were excluded from the scope of the Orders and advised CBP to

liquidate entries on such products without the assessment of antidumping duties. Letter from Law

Offices of George R. Tuttle to Sec’y of Commerce, P.R. 3–4 (July 21, 2016) (“Scope Ruling

Request”) at Attach. 3. Thereafter, on August 1, 2008, Commerce issued its antidumping duty

Orders covering certain steel nails from China. The scope of the Orders reads in full:

       The merchandise covered by this proceeding includes certain steel nails having a
       shaft length up to 12 inches. Certain steel nails include, but are not limited to, nails
       made of round wire and nails that are cut. Certain steel nails may be of one piece
       construction or constructed of two or more pieces. Certain steel nails may be
       produced from any type of steel, and have a variety of finishes, heads, shanks, point
       types, shaft lengths and shaft diameters. Finishes include, but are not limited to,
       coating in vinyl, zinc (galvanized, whether by electroplating or hot-dipping one or
       more times), phosphate cement, and paint. Head styles include, but are not limited
       to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker.
       Shank styles include, but are not limited to, smooth, barbed, screw threaded, ring
       shank and fluted shank styles. Screw-threaded nails subject to this proceeding are
       driven using direct force and not by turning the fastener using a tool that engages
       with the head. Point styles include, but are not limited to, diamond, blunt, needle,
       chisel and no point. Finished nails may be sold in bulk, or they may be collated
       into strips or coils using materials such as plastic, paper, or wire. Certain steel nails
       subject to this proceeding are currently classified under the Harmonized Tariff
       Schedule of the United States (“HTSUS”) subheadings 7317.00.55, 7313.00.65 and
       7317.00.75.

       Excluded from the scope of this proceeding are roofing nails of all lengths and
       diameter, whether collated or in bulk, and whether or not galvanized. Steel roofing
       nails are specifically enumerated and identified in ASTM Standard F 1667 (2005
       revision) as Type 1, Style 20 nails. Also excluded from the scope are the following
       steel nails: 1) Non-collated (i.e., hand driven or bulk), two-piece steel nails having
       plastic or steel washers (caps) already assembled to the nail, having a bright or
       galvanized finish, a ring, fluted or spiral shank, an actual length of 0.500” to 8”,
       inclusive; and an actual shank diameter of 0.1015” to 0.166”, inclusive; and an
       actual washer or cap diameter of 0.900” to 1.10”, inclusive; 2) Non-collated (i.e.,
       hand-driven or bulk), steel nails having a bright or galvanized finish, a smooth,
       barbed or ringed shank, an actual length of 0.500” to 4”, inclusive; an actual shank
       diameter of 0.1015” to 0.166”, inclusive; and an actual head diameter of 0.3375” to
       0.500”, inclusive; 3) Wire collated steel nails, in coils, having a galvanized finish,
       a smooth, barbed or ringed shank, an actual length of 0.500” to 1.75”, inclusive; an
       actual shank diameter of 0.116” to 0.166”, inclusive; and an actual head diameter
Court No. 17-00057                                                                            Page 6

       of 0.3375” to 0.500”, inclusive; and 4) Non-collated (i.e., hand-driven or bulk),
       steel nails having a convex head (commonly known as an umbrella head), a smooth
       or spiral shank, a galvanized finish, an actual length of 1.75” to 3”, inclusive; an
       actual shank diameter of 0.131” to 0.152”, inclusive; and an actual head diameter
       of 0.450” to 0.813”, inclusive.

       Also excluded from the scope of this order are corrugated nails. A corrugated nail
       is made of a small strip of corrugated steel with sharp points on one side. Also
       excluded from the scope of this order are fasteners suitable for use in powder-
       actuated hand tools, not threaded and threaded, which are currently classified under
       HTSUS 7317.00.20 and 7313.00.30.

       Also excluded from the scope of this order are thumb tacks, which are currently
       classified under HTSUS 7317.00.10.00.

       Also excluded from the scope of this order are certain brads and finish nails that
       are equal to or less than 0.0720 inches in shank diameter, round or rectangular in
       cross section, between 0.375 inches and 2.5 inches in length, and that are collated
       with adhesive or polyester film tape backed with a head seal adhesive.

       Also excluded from the scope of this order are fasteners having a case hardness
       greater than or equal to 50 HRC, a carbon content greater than or equal to 0.5
       percent, a round head, a secondary reduced-diameter raised head section, a centered
       shank, and a smooth symmetrical point, suitable for use in gas-actuated hand tools.

       While the HTSUS subheadings are provided for convenience and customs
       purposes, the written description of the scope of this order is dispositive.

Orders (emphasis added).

       On July 13, 2010, CBP reclassified zinc anchors previously classified under HTSUS 7317

as properly falling under HTSUS 7907.00.6000 (“Other articles of zinc: other”) because “the

anchor generally predominates by weight.” ACE Request 23031: Nail-In Anchors with Steel

Nails, A-570-909, P.R. 36 (Mar. 27, 2012) at Attach. 2.

C.     Factual and Procedural History of this Case.

       On July 21, 2016, Simpson, an importer of zinc and nylon anchors, filed a request with

Commerce for a scope ruling that its zinc and nylon anchors should be excluded from the scope of
Court No. 17-00057                                                                                Page 7

the Orders. Scope Ruling Request. In its Scope Ruling Request, Simpson described its zinc and

nylon anchors as follows:

        The Zinc Nailon™ Anchors consist of two components: (1) a zinc alloy body; and
        (2) a carbon and stainless steel (Type 304) drive pin. Simpson’s zinc anchors are
        assembled at the time of importation, meaning that the steel pin has been inserted
        into the body of the zinc alloy anchor. Simpson’s zinc Nailon™ anchors are
        classified under subheading 7907.00.6000 (footnote omitted) of the Harmonized
        Tariff Schedules of the United States (HTSUS).

        The Nylon Nailon™ Anchors also consist of two components. Rather than a zinc
        alloy body, however, they have a nylon shell or body, and likewise have a carbon
        and stainless steel (type 304) pin. The Nylon Nailon™ pin drive anchors are
        classified pursuant to GRI 3(b) and the “composite goods” rule under HTSUS
        heading 3926 as: Other articles of plastics and articles of other materials of headings
        3901 to 3914, specifically 3926.90.9980 “other.”

Id. at 4.

        Following Simpson’s Scope Ruling Request, Mid Continent submitted comments arguing

that Simpson’s zinc and nylon anchors were within the scope of the Orders. Letter from the Bristol

Group PLLC to Sec’y Commerce, P.R. 18 (Nov. 15, 2016). Simpson filed timely rebuttal

comments. Letter from Law Offices of George R. Tuttle to Sec’y Commerce, P.R. 22 (Nov. 23,

2016) (“Simpson Rebuttal Comments”).           Midwest Fastener, Corp. and Fastenal Company

Purchasing also submitted comments in support of Simpson’s Scope Ruling Request. Letter from

Clark Hill PLC to Sec’y Commerce, P.R. 21 (Nov. 23, 2016); Letter from Gunfeld Desiderio

Lebowitz Silverman Klestadt, LLP to Sec’y Commerce, P.R. 26 (Nov. 25, 2016).

        On March 20, 2017, Commerce issued its Final Scope Ruling, in which it determined that,

although the language of the Orders did not expressly mention anchors, the unambiguous language

of the Orders reasonably included anchors and the (k)(1) sources supported its conclusion;

therefore, Simpson’s zinc and nylon anchors were within the scope of the Orders. Final Scope

Ruling at 12. Specifically, Commerce determined that the description of Simpson’s anchors, the
Court No. 17-00057                                                                             Page 8

ITC Report description of the domestic like product under the heading “The Product” -- which

described “a masonry anchor that comprises a zinc anchor and a steel wire nail” -- and its prior

scope determinations dispositively placed Simpson’s anchors within the scope of the Orders. Id.

at 11.

         Simpson filed a complaint with this court contesting the Final Scope Ruling and on August

22, 2017, Simpson submitted its Motion for Judgment on the Agency Record and Brief in Support.

Compl.; Pl.’s Br. Defendant the United States (“The Government”) and defendant-intervenor Mid

Continent submitted their briefs in opposition on November 30, 2017. Def.-Inter.’s Br., ECF No.

28; Def’s. Br., ECF No. 29. Simpson replied on January 20, 2017. Pl.’s Reply., ECF No. 30. Oral

argument was held before this court on September 6, 2018. ECF No. 45.

                       JURISDICTION AND STANDARD OF REVIEW

         This court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C.

§ 1516a(a)(2)(B)(vi).     The standard of review in this action is set forth in 19 U.S.C. §

1516a(b)(l)(B)(i): “[t]he court shall hold unlawful any determination, finding or conclusion found

. . . to be unsupported by substantial evidence on the record, or otherwise not in accordance with

law.”

                                           DISCUSSION

         The Government argues that: (1) Commerce’s determination that Simpson’s zinc and nylon

anchors fit within the plain language of the Orders is in accordance with law; (2) there is substantial

evidence that the (k)(1) sources dispositively place Simpson’s products within the scope of the

Orders; (3) a formal scope inquiry was unnecessary and thus Commerce did not need to consider

the (k)(2) sources; and (4) Commerce may instruct CBP to retroactively suspend liquidation on

Simpson’s shipments entered prior to the date of Commerce’s ruling.
Court No. 17-00057                                                                          Page 9

       “[T]he question of whether the unambiguous terms of a scope control the inquiry, or

whether some ambiguity exists, is a question of law that we review de novo.” Meridian, 851 F.3d

at 1382. The court concludes that the products at issue are not nails within the plain meaning of

the word “nail” and, therefore, are outside the scope of the Orders.

       As the Federal Circuit has held, the terms of an order govern its scope. Duferco, 296 F.3d

at 1097; see Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1072 (Fed. Cir. 2001);

Wheatland Tube Co. v. United States, 161 F.3d 1365, 1370 (Fed. Cir. 1998). “Although the scope

of a final order may be clarified, it can not be changed in a way contrary to its terms.” Duferco,
296 F.3d at 1097 (quoting Smith Corona Corp. v. United States, 915 F.2d 683, 686 (Fed. Cir.

1990)). For that reason, “if [the scope of an order] is not ambiguous, the plain meaning of the

language governs.” ArcelorMittal Stainless Belg. N.V. v. United States, 694 F.3d 82, 87 (Fed.

Cir. 2012).

       “In determining the common meaning of a term, courts may and do consult dictionaries,

scientific authorities, and other reliable sources of information including testimony of record.”

NEC Corp. v. Dep’t of Commerce, 23 CIT 727, 731, 74 F. Supp. 2d 1302, 1307 (1999) (quoting

Holford USA Ltd. v. United States, 19 CIT 1486, 1493–94, 912 F. Supp. 555, 561 (1995)).

Furthermore, antidumping duty orders “should not be interpreted in a vacuum devoid of any

consideration of the way the language of the order is used in the relevant industry.” Fedmet Res.

Corp. v. United States, 755 F.3d 912, 921 (Fed. Cir. 2014) (quoting ArcelorMittal, 694 F.3d at 88).

Accordingly, “[b]ecause the primary purpose of an antidumping order is to place foreign exporters

on notice of what merchandise is subject to duties, the terms of an order should be consistent, to

the extent possible, with trade usage.” ArcelorMittal, 694 F.3d at 88.
Court No. 17-00057                                                                        Page 10

        A nail, as defined by OXFORD’S ENGLISH DICTIONARY (3rd ed. 2003) is “a small metal

spike with a sharpened end and a blunt head, which may be driven in to a surface with a hammer

or other tool in order to fasten things together.” THE AMERICAN HERITAGE DICTIONARY OF THE

ENGLISH LANGUAGE (4th ed. 2000) defines a nail as “[a] slim, pointed piece of metal hammered

into material as a fastener.” Similarly, WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY OF

THE   ENGLISH LANGUAGE (UNABRIDGED) (“WEBSTER’S”) (1993) defines a nail as “a slender and

usually pointed and headed fastener designed for impact insertion.” These definitions present a

“single clearly defined or stated meaning”: a slim, usually pointed object used as a fastener

designed for impact insertion. Unambiguous, WEBSTER’S (1986), quoted in Meridian, 851 F.3d at

1381 n.7. Therefore, “nail” is an unambiguous term. See OMG,Slip Op. 18-63 at 9–10 (finding

the meaning of the term “nail” used in scope order covering certain steel nails from Vietnam was

unambiguous).

        The merchandise at issue here does not fit into the above definitions. Simpson described

its zinc anchor as: “(1) a zinc alloy body; and a (2) carbon and stainless steel (Type 304) drive

pin.” Scope Ruling Request at 4. Similarly, Simpson described its nylon anchor as: “(1) a nylon

shell or body, and likewise have (2) a carbon and stainless steel (type 304) pin.” Id. Commerce

made its determination based upon the steel pin, arguing “an essential portion of the two-piece

anchor is, in fact, made of steel, namely the steel drive nail.” Final Scope Ruling at 13. However,

as Commerce acknowledged in its Final Scope Ruling, Simpson’s anchor nails are not reasonably

separable; Simpson’s anchors are unitary articles of commerce. Id. at 15; Def.’s Br. at 8, 14. As

such, the entire product, not just a component part, must be defined as a nail to fall within the

scope of the Orders. See OMG, Slip Op. 18-63 at 10.
Court No. 17-00057                                                                           Page 11

        The entire product is not a nail “constructed of two or more pieces.” The definitions of a

nail cited above define a nail as a fastener inserted by impact into the materials to be fastened. The

merchandise at issue is not inserted by impact into the materials to be fastened in the same manner

as a nail. Rather, Simpson’s anchors “secure themselves to the wall using a mechanical wedging

effect created by the expansion of the anchor against the side of a predrilled hole as a result of

driving the pin in to the anchor.” Scope Ruling Request at 3. Simpson describes the process as

follows:

        1. A hole is drilled in the base material using a carbide drill bit in the same
           diameter as the nominal diameter of the anchor to be installed.
        2. The hole is drilled to the specified embedment depth.
        3. The fixture (or item to be attached to the wall) is positioned and the Nailon™
           anchor is inserted through the fixture and into the hole.
        4. The Nailon™ anchor is tapped with a hammer until flush with the fixture and
           then the pin is driven until flush.

Scope Ruling Request at 4. Therefore, unlike two-piece nails, Simpson’s anchors are not inserted

by impact into the materials to be fastened and do not “grip by friction” in the same manner as a

nail. Id.

        Trade usage also does not support Commerce’s determination. The examples of trade

usage in the record demonstrate that the nail industry categorizes anchors with steel pins as

anchors, not two-piece nails. Simpson Rebuttal Comments at Ex. 1 (“Metal hit anchors . . . consist

of a cylindrical zinc alloy body and zinc plated steel pin expander”); Ex. 3 (describing in the

Petition the merchandise intended to be covered by the scope order and excluding anchors from

the list of steel wire nails); Ex. 4 (example of a “Two Piece Impact Nail” which did not include an

anchor body); Ex. 5 (General Services Administration “commercial item description” of nail
Court No. 17-00057                                                                                Page 12

anchors as including an anchor body with a steel nail). 3 For example, when the word “nail” is

used, it is done so to either explicitly or implicitly modify the noun “anchor” as in “Flat Head Nail

Anchors,” “Mushroom Head Nail Anchors,” and “Hammer Nail Drive Concrete Anchors.” Id. at

Exs. 5, 12. These examples evidence that industry usage comports with the plain meaning of the

word “nail” because of its recognized functionality in the overall product – an anchor. According

to industry usage, the pin is a nail but the unitary article of commerce is an anchor.

         The court’s prior decision in OMG supports this conclusion. 4 In that case, this court

addressed whether the OMG merchandise -- a zinc anchor body with a steel pin -- fell within the

meaning of the term “nail” as utilized in antidumping and countervailing duty orders covering

“certain steel nails . . . of two or more pieces” from Vietnam. OMG, Slip Op. 18-63 at 10–11;

Certain Steel Nails from the Socialist Republic of Vietnam: Countervailing Duty Order, 80 Fed.

Reg. 41,006 (Dep’t Commerce July 14, 2015) and Certain Steel Nails from the Republic of

Korea, Malaysia, the Sultanate of Oman, Taiwan, and the Socialist Republic of Vietnam:

Antidumping Duty Orders, 80 Fed. Reg. 39,994 (Dep’t Commerce July 13, 2015) (collectively the

“Vietnam Orders”). 5 The court determined that the OMG zinc anchor was unambiguously

3
  The General Services Administration is a federal agency that provides centralized procurement
for the federal government and its commercial item description is authorized for use by all federal
agencies. Simpson Rebuttal Comments at Ex. 5; see GENERAL SERVICES ADMINISTRATION,
https://www.gsa.gov/about-us/background-and-history (last visited Sept. 12, 2018).
4
  At oral argument, the Government contended that the details contained in the ITC Report for
the investigation at issue here distinguished this case from OMG. See Certain Steel Nails from
China, Investigation No. 731-TA-1114 (Final), USITC Publication 4022 (July 2008). This
argument is unpersuasive. The plain scope language unambiguously excludes the anchors, and
so a (k)(1) analysis -- in which the ITC Report would be relevant -- is unnecessary.
5
    The Vietnam Orders do, however, differ from the Orders at issue here in some of the exclusions:

         (1) Certain steel nails packaged in combination with one or more non-subject
         articles, if the total number of nails . . . is less than 25; (2) Certain steel nails with
         a nominal shaft length of one inch or less that are (a) a component of an
Court No. 17-00057                                                                             Page 13

excluded from the scope of the Vietnam Orders because: (1) the term “nail” was unambiguous and

distinct from the term “anchor”; (2) trade usage regarding delivered products guides interpretation

of the proper meaning of the terms of a scope order; (3) the OMG merchandise, as a unitary article

of commerce, was an anchor; and (4) the record demonstrated that the nail industry categorized

the OMG merchandise as an anchor, not a nail. Id.

       Similarly, here, the Simpson merchandise consists of an anchor body attached to a steel

pin. Scope Ruling Request at 4. Although the Simpson merchandise also includes a nylon anchor,

the distinction from a zinc anchor is immaterial because neither product is reasonably separable.

Final Scope Ruling at 15. Indeed, it is for precisely that reason that Commerce determined that

Simpson’s anchors should be treated as unitary articles of commerce. Id. (“This is not a situation

where the subject merchandise may be readily segregated from other articles with which it is

packaged and separately valued for duty assessment purposes.”). In contrast to nails of any sort,

which are objects inserted directly into the material to be fastened without need for a predrilled

hole, Simpson’s anchors instead “secure themselves into the wall using a mechanical wedging

effect created by the expansion of the anchor against the side of a predrilled hole as a result of

       unassembled article, (b) the total number of nails is sixty (60) or less, and (c) the
       imported assembled article falls into one of the following eight groupings: 1)
       builders’ joinery and carpentry of wood that are classifiable as windows, French-
       windows, and their frames; 2) builders’ joinery and carpentry of wood that are
       classifiable as doors and their frames and thresholds; 3) swivel seats with variable
       height adjustment; 4) seats that are convertible into beds . . . 5) seats of cane, osier,
       bamboo or similar materials ; 6) other seats with wooden frames . . . 7) furniture of
       wood . . . or 8) furniture of materials other than wood, metal, or plastics. The
       aforementioned imported unassembled articles are currently classified under the
       following HTSUS subheadings: 4418.10, 4418.20, 9401.30, 9401.40, 9401.51,
       9401.59, 9401.61, 9401.69, 9403.30, 9403.40, 9403.50, 9403.60, 9403.81 or
       9403.89.

Vietnam Orders.
Court No. 17-00057                                                                        Page 14

driving the pin in to the anchor.” Scope Ruling Request at 3. In addition, as the record

demonstrates, both products are categorized as anchors, and not as two-piece nails, by the nail

industry. Simpson Rebuttal Comments at Exs. 1–5, 8, 12. Therefore, just like the OMG

merchandise, Simpson’s products are properly considered anchors and not two-piece nails. See

OMG, Slip Op. 18-63 at 11. 6

       The Government asserts that “the (k)(1) sources are determinative as to whether the zinc

and nylon anchors fall within the scope of the order” and, therefore, Commerce did not need to

consider industry usage. Def.’s Br. at 16. However, neither Commerce in its Final Scope Ruling

nor the Government in its brief furnished support for this proposition. Instead, the Government

asserts that because Simpson’s product “is a steel nail attached to a zinc or nylon body” and that

“a product need not be explicitly listed in the scope to be included in the order,” Commerce’s

determination was supported by substantial evidence. Id. at 17 (emphasis in original). This is a

circular argument. Asserting something does not make it so, but that is precisely what Commerce

did here. See Duferco, 296 F.3d at 1096 (“Commerce cannot find authority in an order based on

the theory that the order does not deny authority.”); Bell Supply Co., LLC v. United States, 42 CIT

__, __, 179 F. Supp. 3d 1082, 1097 (2016) (“Supporting the inclusion of merchandise based on

6
  Meridian Products v. United States, 890 F.3d 1272 (2018), does not affect this conclusion. In
that case, the Federal Circuit determined that the court had not afforded sufficient deference to
Commerce’s interpretation of the scope language because “Commerce’s original scope ruling
[wa]s reasonable and supported by substantial evidence” in that case. Id. at 1281 (citing Nippon
Steel Corp. v. United States, 458 F.3d 1345, 1359 (Fed. Cir. 2006) (holding that deference is due
“[s]o long as there is adequate basis in support of the [agency’s] choice of evidentiary weight”)).
In this case, however, Commerce’s determination that anchors fit within the definition of nails,
viewed within the context of the relevant industry, is not reasonable or adequately supported for
the reasons already discussed. Thus, Commerce’s interpretation of the scope language here is not
entitled to deference.
       Court No. 17-00057                                                                            Page 15

       the lack of any exclusionary language is tantamount to shifting the burden to exclude certain

       merchandise on the party arguing for its exclusion, which . . . is incompatible with Duferco.”).

               Accordingly, Simpson’s anchors, taken as a unitary article of commerce, are not nails

       within the word’s plain meaning and thus do not fall within the unambiguous scope of the Orders.

                                                 CONCLUSION

               The court remands to Commerce for further consideration consistent with this opinion.

       Commerce shall issue appropriate instruction to U.S. Customs and Border Protection regarding

       the retroactive suspension of liquidation. Commerce shall file with this court and provide to the

       parties a revised scope determination within 90 days of the date of this order; thereafter, the parties

       shall have 30 days to submit briefs addressing the revised final determination to the court and the

       parties shall have 15 days thereafter to file reply briefs with the court.

       SO ORDERED.

                                                                      /s/ Gary S. Katzmann
                                                                      Gary S. Katzmann, Judge

Dated: 6HSWHPEHU
                     New York, New York