Maquilacero S.A. de C v. v. United States
2017 CIT 117
Ct. Intl. Trade2017Background
- In 1992 Commerce issued an antidumping duty Order on circular welded non‑alloy steel pipe from Mexico; the Order's exclusion paragraph broadly excepted "mechanical tubing." The ITC, however, found no material injury from imports of subject mechanical tubing from Mexico.
- In 2015 Commerce issued a Final Scope Ruling finding Maquilacero’s black, circular tubing (produced to ASTM A‑513) was within the Order because Maquilacero did not "stencil" its tubes as A‑513; Commerce relied on the earlier Prolamsa scope ruling, which described Prolamsa’s excluded tubing as "single stenciled as ASTM A‑513."
- Maquilacero argued it met ASTM A‑513 and the physical/chemical criteria in Prolamsa, so under the plain scope language (which unqualifiedly excludes mechanical tubing) its products should be excluded. Maquilacero also argued stenciling is not a physical characteristic and Commerce unlawfully added that requirement.
- The government and intervenor defended Commerce’s reliance on Prolamsa and its interpretation that stenciling is required to effect the mechanical‑tubing exclusion, asserting (k)(1) sources were dispositive and (k)(2) factors need not be considered.
- Commerce had actually analyzed Maquilacero’s product under the (k)(2) factors and found it met the physical/chemical criteria of Prolamsa except for stenciling; despite that, Commerce denied exclusion because of lack of stencil.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Order's unqualified exclusion for "mechanical tubing" plainly excludes Maquilacero's tubing | Maquilacero: plain language of the Order excludes all mechanical tubing (including A‑513 product); no additional conditions required | Gov: "mechanical tubing" is ambiguous; Commerce permissibly consulted (k)(1) sources and interpreted the exclusion in light of Prolamsa | Court: The term was ambiguous, so (k) tools could be used, but Commerce may not add a stenciling requirement absent support in the Order or investigation record |
| Whether Commerce lawfully imported a stenciling requirement from the Prolamsa ruling into the Order's mechanical‑tubing exclusion | Maquilacero: Stenciling is not a physical characteristic; adding it narrows the exclusion and unlawfully amends the Order | Gov/Wheatland: Prolamsa description (which mentioned stenciling) is a proper (k)(1) source; stenciling helps enforce the exclusion | Court: Commerce unlawfully expanded the Order by imposing a stenciling requirement; stenciling was not in the Order or the investigative record as a required characteristic |
| Whether Commerce reasonably relied solely on the Prolamsa Final Scope Ruling rather than ITC findings and other (k)(1) materials | Maquilacero: ITC determination and investigation record support exclusion; Commerce failed to explain disregarding them | Gov: Commerce considered (k)(1) sources and reasonably found them nondispositive, so reliance on Prolamsa was permissible | Court: Commerce unreasonably elevated a happenstance descriptive detail from Prolamsa over the investigative record and ITC findings; it could not interpret the Order to reach products the ITC found non‑injurious |
| Whether Commerce was required to analyze (k)(2) factors and whether Maquilacero met them | Maquilacero: Even if (k)(1) not dispositive, (k)(2) factors show Maquilacero's tubing is mechanical tubing and excluded | Gov: (k)(1) was dispositive; Commerce was not required to reach (k)(2) | Court: Commerce did perform a (k)(2)-style analysis and found Maquilacero met the Prolamsa physical criteria; because the stenciling requirement was unlawful, Commerce must find Maquilacero excluded based on that analysis on remand |
Key Cases Cited
- Sango International, L.P. v. United States, 484 F.3d 1371 (Fed. Cir.) (scope inquiries governed by Commerce regulations)
- Duferco Steel, Inc. v. United States, 296 F.3d 1087 (Fed. Cir.) (order language is the cornerstone; (k)(1) sources cannot substitute for the order)
- Fedmet Resources Corp. v. United States, 755 F.3d 912 (Fed. Cir.) (deference to Commerce but scope determinations are fact‑specific)
- King Supply Co. v. United States, 674 F.3d 1343 (Fed. Cir.) (scope determinations receive deference)
- Eckstrom Industries, Inc. v. United States, 254 F.3d 1068 (Fed. Cir.) (Commerce may not change scope in a way contrary to order terms)
- Wheatland Tube Co. v. United States, 161 F.3d 1365 (Fed. Cir.) (Commerce may not apply antidumping duties to products the ITC found non‑injurious)
- Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778 (Fed. Cir.) (agency may not rewrite unambiguous statutory or regulatory language)
- Russello v. United States, 464 U.S. 16 (Sup. Ct.) (express mention of one thing implies exclusion of another)