POWER TRAIN v. UNITED STATES
Court No. 12-00215
United States Court of International Trade
May 30, 2013
1348
Upon review of the record, the Court finds that Commerce’s determination that wheel hub assemblies with ABS elements are within the scope based upon a review of the (k)(2) Factors is supported by the record and otherwise in accordance with law.
CONCLUSION
For the foregoing reasons, it is hereby
Ordered that Commerce’s Final Scope Ruling is sustained; and it is further
Ordered that the stay entered by the Court on Plaintiff’s motion for oral argument (ECF No. 45) is hereby lifted; and it is further
Ordered that Plaintiff’s motion for oral argument (ECF No. 43) is hereby denied. Judgment to enter accordingly.
FEDMET RESOURCES CORPORATION, Plaintiff, v. UNITED STATES, Defendant, and ANH Refractories Company, Resco Products, Inc., and Magnesita Refractories Company, Defendants.
Court No. 12-00215
United States Court of International Trade
May 30, 2013
Slip Op. 13-68
TSOUCALAS, Senior Judge
Stuart F. Delery, Principal Deputy Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC (Antonia R. Soares); Office of Chief Counsel for Import Administration, United States Department of Commerce, Devin S. Sikes, Of Counsel, for the United States, Defendant.
Jochum, Shore & Trossevin, PC, (Marguerite Ellen Trossevin, Andrew M. Shore, James J. Jochum, Washington, DC, and Reza Karamloo) for ANH Refractories Company, Defendant-Intervenor.
Doyle, Barlow & Mazard PLLC, Washington, DC (Camelia C. Mazard) for Resco Products, Inc., and Magnesita Refractories Company, Defendant-Intervenors.
OPINION
TSOUCALAS, Senior Judge:
Before the court is Fedmet Resources Corporation’s (“Fedmet”) USCIT Rule 56.2 motion for judgment on the agency record appealing the United States Department of Commerce’s (“Commerce”) fi-
BACKGROUND
In September 2010, Commerce published antidumping duty orders on MCBs from Mexico and the People’s Republic of China (“PRC”), and a separate countervailing duty order on MCBs from the PRC. Certain MCBs From Mexico and the PRC: Antidumping Duty Orders, 75 Fed. Reg. 57,257, at 57,257 (Sept. 20, 2010) (“AD Orders”); Certain MCBs from the PRC: Countervailing Duty Order, 75 Fed. Reg. 57,442, at 57,442 (Sept. 21, 2010) (“CVD Order,” and collectively, “the Orders”). MCBs are a type of “refractory brick” necessary for certain applications in the steelmaking industry. R.3d 3 Ex. 1 at 6-7. Steelmakers use refractory bricks as lining for the inside of ladles that transport and pour molten steel and as lining for the inside of metallurgy furnaces. Id. & Ex. 2 at 5-7. Refractory bricks undergo repeated exposure to extreme temperatures and caustic substances in these roles, meaning each brick has a limited useful life. Id. Ex. 2 at 5-6. Bricks used in certain locations—particularly at the “slag line and at the top of the steel melt[,] where active chemical processes are taking place and impurities and waste tend to aggregate”—experience more wear than bricks in other locations. Id. at 5. Consequently, producers offer a wide range of refractory bricks with finely tuned chemistries for use in different parts of the ladle or furnace. Id. at 5-6. Steelmakers arrange these specialized bricks to achieve uniform deterioration and to lower costs, although the exact arrangement “may be quite different from shop to shop.” Id. at 5-7.
The scope of the Orders covers “certain chemically-bonded ... magnesia carbon bricks with a magnesia component of at least 70 percent magnesia ... by weight, ... with carbon levels ranging from trace amounts to 30 percent by weight, regardless of enhancements ... and regardless of whether or not antioxidants are present.” Pl.’s Br. at 6 (quoting AD Orders, 75 Fed.Reg. at 57,257; CVD Order, 75 Fed. Reg. at 57,443).
On May 3, 2011, Fedmet filed a scope ruling request to determine whether its Bastion MACB product is covered under the Orders. Certain Magnesia Carbon Bricks from the PRC and Mexico: Preliminary Scope Ruling—Fedmet Resources Corporation, Case Nos. A-201-837, A-570-954, and C-570-955 at 1 (Mar. 30, 2012) (“Preliminary Scope Ruling”). Fedmet’s Bastion bricks contain 70-90% magnesia and 3-15% carbon, levels well within the scope’s technical parameters. Pl.’s Br. at 6-7. However, Fedmet argues that the 8-15% alumina (Al2O3) content of its Bastion bricks distinguish them from in-scope MCBs. Id. at 3. Specifically, the alumina reacts with magnesia in the brick at steelmaking temperatures to form a mineral called spinel. Id. “The spinel improves the performance of the brick in certain applications by promoting permanent expansion of the brick when it is heated, which hinders the formation of cracks, and maintains that expansion when the ladle cools between uses.” Id.
All parties agree there is no standard chemical definition for bricks marketed as MACBs. Final Scope Ruling at 9; see Pl.’s Reply at 6. Evidence on the record demonstrates that the term “MACB” can refer to bricks with more than 70% magnesia (“low-alumina bricks”), as well as bricks with less than 70% magnesia (“high-alumina bricks”).2 Preliminary Scope Ruling Ex. 2 at 3 (online description of products marketed as MACBs with less than 70% magnesia content); R.2d 18 Ex. 1 at 3 (in reference to MACBs, “carbon-bonded bricks with 50-90% [magnesia] or 40-50% [alumina] are used in the Asian region”); R.4th 2 at 3-10 (discussing industry naming conventions indicating that any brick with a majority magnesia content and added alumina and carbon can be called an MACB). Fedmet stated at oral argument that the minimum level of alumina required to form spinel is about 5%, Hr’g Tr. at 17, Fedmet Res. Corp. v. United States, No. 12-00215 (Ct. Int’l Trade Mar. 26, 2013), but there is little evidence in the administrative record to support this claim. See Preliminary Scope Ruling Ex. 1 at 100-01 (showing that bricks with 4% added alumina exhibit characteristics similar to bricks with 5-7% added alumina, but noting that bricks with 4% alumina “show[] less expansion[,] which may not be optimal” for preventing slag penetration).
Fedmet alleges that the Final Scope Ruling is unsupported by substantial evidence and contrary to law because the steel industry considers MACBs to be distinct products from MCBs. Specifically, Fedmet argues: (1) language in the petition, questionnaire responses, and investigations indicates the scope should be interpreted to exclude MACBs; (2) MACBs are distinguishable from in-scope MCBs on the basis of their distinct physical properties; and (3) Commerce acted contrary to law by interpreting the scope as covering MACBs even though the ITC excluded them from its injury determination. Pl.’s Br. at 12-38.
JURISDICTION
The court has jurisdiction over this matter pursuant to
STANDARD OF REVIEW
The court must uphold Commerce’s scope determination unless it is “unsupported by substantial evidence on the record, or not otherwise in accordance with law.”
“[T]he plain language of the ... order is paramount” in determining whether particular products are included in the scope. King Supply Co. v. United States, 674 F.3d 1343, 1345 (Fed. Cir. 2012); see Walgreen Co. v. United States, 620 F.3d 1350, 1354 (Fed. Cir. 2010). Nevertheless, antidumping and countervailing duty orders “sometimes employ general language,” which “can render the ... scope ambiguous.” See Mid Continent Nail Corp. v. United States, 35 CIT ___, ___, 770 F. Supp. 2d 1372, 1378 (2011);
ANALYSIS
If a scope contains language “that is subject to interpretation,” Commerce will resolve the ambiguity using the interpretive tools contained in
Under
I. Commerce’s 19 C.F.R. § 351.225(k)(1) Analysis
Commerce determined that “at no point in either the petition, the ... pre-initiation stage, or the [ITC’s determination] did [Resco] identify the chemical composition and technical specifications of each type of refractory brick, or expressly state that [MACBs] with a chemical composition like [Fedmet’s Bastion brick] fall outside the scope.” Final Scope Ruling at 5. In other words, Commerce found each reference to “MACBs” in the (k)(1) evidence to be ambiguous with respect to whether it actually identified low-alumina bricks like the Bastion brick. In light of this ambiguity, Commerce determined that the (k)(1) evidence was inconclusive and further analysis under the (k)(2) factors was necessary to determine to whether Fedmet’s Bastion MACBs were within the scope. Id.; Preliminary Scope Ruling at 26-27.
Fedmet insists that Commerce’s analysis is not supported by substantial evidence because MACBs are simply understood to be distinct from MCBs. See Pl.’s Br. at 13-24. Claiming that “MCBs do not contain added alumina,” Fedmet argues that each reference to MACBs in the (k)(1) evidence demonstrates that MACBs like its Bastion brick were never intended to be included in the scope. Id. at 24. For example, Fedmet notes that Resco named “magnesite, fired bauxite, magnesia dolomite and [MACBs]” as products that “are not generally substitutable [for in-scope MCBs], in a technical sense, due to varying chemical and physical properties and wear characteristics.” R.3d 3 Ex. 1 at 10. Based on this statement, Fedmet concludes that Resco “expressly” excluded low-alumina MACBs like Fedmet’s Bastion brick from the scope. Pl.’s Br. at 13-14. Fedmet also identifies a questionnaire response where Resco stated that “[t]he scope of our petition focuses only on MCB” and that “[t]hese other products [including MACBs] do not provide the same performance where MCB are used in steelmaking and steel handling applications.” R.3d 3 Ex. 2 at 4. Fedmet argues this response “can only be read as confirmation that the scope language defining MCBs was adequate to clearly exclude [MACBs].” Pl.’s Br. at 16.
Because Resco’s use of the term “MACB” does not differentiate between high-alumina and low-alumina MACBs, the petition and questionnaire response language Fedmet identifies is plainly ambiguous. See Preliminary Scope Ruling at 26-27. MACBs “generally” are not substitutable for MCBs, but record evidence shows that low-alumina MACBs specifically are often substituted for MCBs due to their similar or even enhanced performance in MCB applications. Id. at Exs. 1 & 2; R.2d 19 at 8-13 & Exs. 2, 5. In a later response, Resco went on to describe how products it excluded by name from the proposed scope always fall outside of the scope’s plain language, while making no similar claim elsewhere about MACBs. See R.3d 3 Ex. 3 at 1. As Commerce reasonably determined, without further chemical specification, these references to MACBs indicate that Resco may have intended to exclude only some MACBs, namely, high-alumina MACBs that can never meet the scope’s plain language. See Preliminary Scope Ruling at 26-27.
Fedmet’s remaining arguments are similarly unpersuasive. Fedmet avers that Commerce failed “to meaningfully address the repeated, express statements by Resco that it did not intend to cover [MACBs].” Pl.’s Br. at 18. Fedmet argues further that Commerce “chose[] to accept” Resco’s explicit statements excluding MACBs from the scope, and that Commerce cannot now change its position. Pl.’s Br. at 20. Fedmet also insists that Commerce and Resco never offered a “plausible alternative interpretation” of the references to MACBs in the petition and the questionnaire responses. Pl.’s Br. at 22. In fact, Resco never expressly stated that MACBs with in-scope quantities of magnesia and carbon should be excluded from the Orders. See R.3d 3 Exs. 1-3; Preliminary Scope Ruling at 26-27; Pl.’s Br. at 29 (quoting testimony before the ITC where counsel for Resco listed MACBs alongside other excluded bricks, but did not distinguish between high- and low-alumina MACBs). Furthermore, Fedmet’s refusal to consider the difference between high- and low-alumina varieties of MACB does not eliminate the inherent linguistic ambi-
As every piece of (k)(1) evidence is ambiguous as to whether it is referring to MCBs with added alumina or to all bricks with more than 50% magnesia, some carbon, and some alumina, Commerce’s determination that the (k)(1) factors were not dispositive was reasonable. See Preliminary Scope Ruling at 4-27; Final Scope Ruling at 3-5.
II. Commerce’s 19 C.F.R. § 351.225(k)(2) Analysis
Fedmet contends that “even if the [c]ourt were to find that Commerce was lawfully permitted to consider the factors in
First, Fedmet claims “Commerce’s finding is contrary to the ITC’s final injury determination,” wherein “the [ITC] found that ‘other refractory bricks, such as fired magnesite, fired bauxite, magnesia dolomite, and [MACBs] ... do not have the same physical characteristics of MCB, are easily differentiated by price, and their uses are not perceived by the steel producers as substitutable.’” Pl.’s Br. at 33 (quoting ITC Final Determination, at 1-8). Fedmet again fails to acknowledge the difference between high-alumina and low-alumina MACBs. Therefore, Fedmet has not demonstrated how this reference to MACBs definitively identifies all MACBs instead of only those high-alumina MACBs that are not interchangeable with MCBs. See id.
Second, Fedmet argues that Commerce “ignore[d] the extensive and detailed evidence” demonstrating that Bastion MACBs are distinct from in-scope MCBs due to their spinel-producing alumina content “in favor of a single article that Commerce found on the internet” in a publication called Millennium Steel. Pl.’s Br. at 33-34. Fedmet challenges “the bonafides of this publication” and “the credentials of the authors of this study,” while simultaneously insisting that the Millennium study supports its own conclusion that MACBs are distinguishable from MCBs. Pl.’s Br. at 34-35.
Fedmet has not demonstrated that Commerce’s reliance on the Millennium study was unreasonable. The court’s role is not to reweigh evidence, see Laminated Woven Sacks, 716 F. Supp. 2d at 1328 (citing Burlington Truck Lines, 371 U.S. at 168), and it will not accept Fed-
Third, Fedmet contends that Commerce improperly “dismissed the information” contained in the Pocket Manual on the basis that it contains ambiguous language as to the chemical content of MACBs. Pl.’s Br. at 36. Appearing directly below a table titled “Classification of the [AMCBs] according to ISO/DIS 10081-4,” the Pocket Manual notes: “Regarding the magnesia side of the variation range of MgO and Al2O3 at the moment carbon-bonded bricks with 50-90% MgO or 40-50% Al2O3 are used in the Asian region. These bricks are designated as [MACBs].” R.2d 18 Ex. 1 at 108. The remainder of the article makes conclusions regarding the difference between AMCBs and MCBs, without further specifying the nature of MACBs. Id. at 108-11. Commerce argues that it “reasonably found the reference to MACBs in the Pocket Manual ambiguous as to the chemical composition of [MACBs] because it is unclear whether the focus of the paragraph is MACBs or [AMCBs], which contain a higher alumina content than [MACBs],” and is unclear as to whether that “standard” applies outside of Asia. Def.’s Resp. at 33.
Extending to Commerce the appropriate deference in analyzing the record before it, King Supply Co., 674 F.3d at 1348, Commerce’s treatment of this passage as ambiguous was reasonable. In context, the Pocket Manual can reasonably be considered ambiguous as to which bricks “are designated as [MACBs],” and by whom. See R.2d 18 Ex. 1 at 107-11. For example, the quote does not illuminate whether a brick with 91% magnesia, 8% alumina, and 1% carbon can be considered an MACB, or whether it would be called something else outside of Asia. See id. at 108. Furthermore, even if Commerce determined MACBs can contain “up to 50%” alumina as Fedmet insists it should have, the Pocket Manual would not undermine the Final Determination. The Pocket Manual simply does not identify any physical characteristics or uses that distinguish low-alumina MACBs like Fedmet’s Bastion bricks from MCBs. See id. at 107-11. Moreover, several pieces of record evidence otherwise support Commerce’s finding that there is substantial physical and functional overlap between low-alumina MACBs like Fedmet’s Bastion brick and in-scope MCBs. See Preliminary Determination Exs. 1 & 2; ITC Final Determination at 1-9; R.2d 19 at Exs. 3 & 5.
Lastly, Fedmet argues that Commerce improperly relied on statements in the ITC’s determination indicating that carbon—not alumina—is the most important additive in preventing slag penetration in
For the foregoing reasons, and on balance with Commerce’s analysis of the remaining (k)(2) factors including the manner of advertisement and ultimate use of low-alumina MACBs, Commerce’s interpretation of the scope using the (k)(2) factors was reasonable. See Preliminary Scope Ruling at 27-29; Final Scope Ruling at 8-10.
III. ITC Injury Determination
According to Fedmet, “[t]he antidumping statute provides that in order to impose antidumping duties on imported merchandise, there must be affirmative determinations by both Commerce and the ITC.” Pl.’s Br. at 30 (citing
Even assuming that Fedmet’s interpretation of the law is correct, see Wheatland Tube, 161 F.3d at 1371, Commerce’s determination was not contrary to law. Because there is substantial evidence on the record demonstrating that low-alumina MACBs are interchangeable with in-scope MCBs, the question of whether or not the ITC considered an MACB is irrelevant. See Preliminary Determination Exs. 1 & 2; ITC Final Determination at 1-9; R.2d 19 at Exs. 3 & 5. Even so, the record indicates that the ITC did include a low-alumina MACB in its injury determination. See Final Scope Ruling at 5. Specifically, as Commerce explained in the Final Scope Ruling, “the ITC included [Resco’s] Maxline 10 AFX trademarked product, an MCB with added alumina, in its pricing analysis.” Id. at 5; see Pl.’s Br. at 24 (“MCBs do not contain added alumina.”).
In its Reply brief, Fedmet argues that the Maxline 10 AFX brick is not an MACB because the ITC record does not describe
CONCLUSION
The record demonstrates a physical distinction between low-alumina MACBs and high-alumina MACBs, imparting an ambiguity into the phrase “MACB” in each (k)(1) source. Commerce therefore acted reasonably in moving on to the (k)(2) factors to determine whether Fedmet’s Bastion brick is covered under the scope of the Orders. Although Fedmet is able to identify evidence showing that low-alumina MACBs exhibit certain characteristics as a result of spinel formation, it does not and cannot refute evidence demonstrating that these characteristics are the same as those that set in-scope MCBs apart from other refractory products, namely, slag resistance and low porosity. As there is substantial evidence in the record showing that low-alumina MACBs like Fedmet’s Bastion brick meet the scope’s plain language and are interchangeable with in-scope MCBs, Fedmet’s motion for judgment on the agency record must be denied. Judgment will be entered accordingly.