Downhole Pipe & Equipment, L.P. v. United States
2015 U.S. App. LEXIS 1391
| Fed. Cir. | 2015Background
- Downhole Pipe (U.S. importer) and DP‑Master (Chinese producer) imported drill pipe made from "green tube"; green tube can also be used to make oil country tubular goods (casing/tubing).
- Domestic producers petitioned Commerce (2009) to initiate antidumping investigation of drill pipe from China; Commerce initiated after finding sufficient domestic industry support.
- Commerce’s Final Determination (2011) narrowed the scope to include green tube meeting three physical criteria (seamless; outer diameter ≤ 6 5/8 in.; specified Mo and Cr ranges) but excluded unfinished tubes covered by other orders.
- Commerce, treating China as a nonmarket economy, used surrogate values from Indian import data to value the green tube input; initial surrogate used averaged IHTS 7304.23/7304.29 data giving $2,511.67, later remanded to reconsider surrogate choice.
- On remand Commerce selected IHTS 7304.59.20 import data as the best available surrogate for green tube (resulting in a higher value); CIT sustained Commerce’s remand results and Downhole Pipe appealed to the Federal Circuit.
- The Federal Circuit reviewed substantial‑evidence and statutory arguments concerning scope inclusion, industry‑support calculation, and surrogate‑value selection, and affirmed the CIT and Commerce.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Inclusion of green tube in scope and in industry‑support calculation | Downhole Pipe: green tube already covered by OC‑goods order; Commerce’s three criteria don’t distinguish drill‑pipe green tube from OC‑goods green tube, so scope inclusion and industry‑support are improper | Government/Commerce: Commerce reasonably exercised scope discretion; three physical criteria supported by record and scope contains explicit exception for goods covered by other orders; industry‑support not reconsiderable post‑initiation under statute | Affirmed. Substantial evidence supports Commerce’s scope criteria; statutory bar prevents revisiting industry‑support after initiation |
| Whether Commerce could reconsider industry support after initiation | Downhole Pipe: raised pre‑initiation, so industry support must be recalculated if scope changed | Commerce: 19 U.S.C. § 1673a(c)(4)(E) bars reconsidering industry support after initiation | Affirmed. Statute prohibits post‑initiation reconsideration; no relief warranted |
| Selection of surrogate value for green tube (remand) | Downhole Pipe: Commerce’s selection of IHTS 7304.59.20 was unsupported; alternatives (Metal Bulletin prices, adjusted billet/seamless data, other IHTS headings) were better; result is aberrantly high and inconsistent with commercial reality | Commerce: followed best‑available‑information criteria (publicly available, contemporaneous, broad market average, duty/tax exclusive); reasonably rejected alternatives for being non‑contemporaneous, offer prices, not product‑specific, or requiring proprietary adjustments; confirmed classification with Customs specialist | Affirmed. Substantial evidence supports Commerce’s choice of IHTS 7304.59.20 and rejection of alternatives |
| Reliance on Customs National Import Specialist memo | Downhole Pipe: memo is flawed, anecdotal, and inadequately documented; reliance is arbitrary | Commerce: memo was confirmatory, not sole basis; selection rests on whole‑record analysis and explained process of elimination | Affirmed. Commerce did not rely solely on memo and record supports its explanation |
Key Cases Cited
- Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375 (Fed. Cir. 2008) (standard of review for Federal Circuit reviewing CIT decisions)
- Diamond Sawblades Mfrs. Coal. v. United States, 612 F.3d 1348 (Fed. Cir. 2010) (deference to CIT’s informed opinion in substantial‑evidence review)
- Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978 (Fed. Cir. 1994) (respect for CIT’s findings in appellate review)
- Cleo Inc. v. United States, 501 F.3d 1291 (Fed. Cir. 2007) (CIT’s opinions carry great weight in substantial‑evidence review)
- Consolo v. Federal Maritime Comm’n, 383 U.S. 607 (U.S. 1966) (agency findings may be supported even if record allows inconsistent conclusions)
- Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197 (U.S. 1938) (definition of substantial evidence)
- Nation Ford Chem. Co. v. United States, 166 F.3d 1373 (Fed. Cir. 1999) (surrogate valuation in nonmarket‑economy cases)
- Qingdao Sea‑Line Trading Co. v. United States, 766 F.3d 1378 (Fed. Cir. 2014) (Commerce’s surrogate‑selection criteria: public, product‑specific, broad average, contemporaneous)
- Duferco Steel, Inc. v. United States, 296 F.3d 1087 (Fed. Cir. 2002) (petition defines investigation scope; role of Commerce and ITC)
- Zhejiang DunAn Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011) (review assesses whether a reasonable mind could conclude Commerce chose best available information)