CIT says ITA Must Consider 'Other Factors' in Affirmative AD Scope Determinations

The International Trade Administration must consider factors beyond scope language when including a product in an antidumping or countervailing duty order, said the Court of International Trade in a remand of an ITA scope determination. The ITA had ruled that plaintiff A.L. Patterson, Inc.’s steel coil rod falls within the scope of the antidumping duty order on certain steel threaded rod from China (A-570-932). In so doing, the ITA declined to consider Patterson’s evidence that (1) the original AD petition did not include steel coil rod; and (2) the ITA and International Trade Commission did not investigate dumped steel coil rod imports nor injury to domestic industry by such imports. The ITA said the language of the scope was unambiguous in its inclusion of steel coil rod, so it did not have to examine other factors. But CIT disagreed, and said if the ITA interpreted the scope to include a product then it is subject to interpretation. Therefore, said CIT, the ITA had to consider the other factors.

In its arguments, the ITA relied on the Court of Appeals for the Federal Circuit’s 2002 opinion in Duferco Steel, Inc. v. United States. In Duferco, CAFC established a three-step process for scope determinations: (i) the ITA looks to the scope language itself to see if there is language in the order subject to interpretation (ii) if there is language subject to interpretation, then the ITA moves on to examine factors described in 19 CFR 351.225(k)(1), which include the descriptions of the merchandise in the petition, the initial investigation, and the determinations of the ITA and ITC; (iii) if these (k)(1) factors are not dispositive, then the ITA evaluates the five factors set forth in 19 CFR 351.225(k)(2) such as, among other things, physical characteristics, consumer expectations, etc.

The ITA argued Duferco says it doesn’t have to move on to the second step of the process if the scope language is unambiguous. But if that were the case, CIT said, the ITA may completely disregard all evidence contrary to inclusion of a product in the scope if the ITA concludes that the language unambiguously includes the product.

According to CIT, the ITA’s interpretation of Duferco was inaccurate, because the CAFC opinion addressed a case where there the scope was unambiguous because there was no possible interpretation that the product could be included in the scope. But in this case, CIT said, the scope was by definition subject to interpretation because the ITA was interpreting the scope to include the product. Furthermore, CIT said, both CAFC and CIT have in the past approved of ITA scope determinations that resort to other factors without even finding the scope was ambiguous.

CIT remanded the scope determination back to the ITA and ordered the ITA to reconsider whether Patterson’s steel rod falls within the scope of the AD order, this time including the factors established in 19 CFR 351.225(k)(1).

(Slip Op. 12-103, dated 08/06/12, public version issued 08/17/12, Judge Goldberg)