Trade Updates for Week of May 16, 2018

United States Court of International Trade

 

Remanded Scope Determination on Cast Iron Electrical Conduit Fittings

In Atkore Steel Components, Inc. v. United States, Slip Op. 18-52, Court No. 17-00077 (May 15, 2018) the Court reviewed Commerce’s determinations in a scope ruling which held plaintiff’s cast iron electrical conduit articles fall within the antidumping order on certain malleable iron pipe fittings from the People’s Republic of China. Plaintiff argued the results were not supported by substantial evidence and were unlawful. For the following reasons the Court agreed with plaintiff and remanded the scope inquiry to Commerce for reconsideration.

Plaintiff argued that the scope determination was unlawful because Commerce unreasonably delayed its inquiry. 19 C.F.R. § 351.225(c)(2) required Commerce to issue final scope ruling or initiate a scope inquiry within 45 days from the date of Commerce’s receipt of an application for a scope ruling. However, the regulation also allows Commerce to extend any time limit for good cause. Here, Commerce took 118 days, but had issued notifications of extension because of the complexity of the matter. The Court refused to hold the inquiry unlawful due to the delay because no statute or regulation contains any penalties for delay and because plaintiff did not object to the delay when Commerce initially sent notification of the delay.

More importantly, Commerce’s determination was not supported by substantial evidence. In order to issue a final scope ruling Commerce must find that the scope of the antidumping order was unambiguous, if not the agency must consider relevant factors specified in the regulations. In this case, Commerce found the scope of the dumping order unambiguous despite substantial discussion of the factors specified for further analysis in the regulation. The Court held however, that the term “pipe” is a broad term and there is ambiguity as to whether all non-grooved cast iron pipe fittings fall within “certain malleable iron pipe fittings, cast, other than grooved fittings” as mentioned in the order. The Court held that Commerce must determine whether the physical differences raised in Atkore’s ruling request were relevant to the scope of the Antidumping Order, as per 19 C.F.R. § 351.225(k)(1).  For example, Commerce failed to consider the industry standard of PSI rating for pipes, which the products at issue do not meet, and physical differences between the products at issue and the products in the order raised by plaintiffs. If Commerce finds that the (k)(1) sources are not dispositive, then it must consider the (k)(2) sources.  The Court remanded the case for Commerce to assess the factors mandated by regulation.