CAFC says ITA Should Consider Goods as Delivered, not as Ordered, in AD/CV Scope Rulings

The characteristics of delivered merchandise, rather than the characteristics of merchandise as ordered, govern interpretations of whether the merchandise falls within the scope of an antidumping or countervailing duty order, said the Court of Appeals for the Federal Circuit in reversing an International Trade Administration AD/CV scope determination on stainless steel plate in coils, which had been affirmed by the Court of International Trade.

The ITA had said the scope of the orders, which says that products subject to the order are “4.75mm or more in thickness,” is ambiguous because it does not say whether that thickness is the nominal or actual measurement. So it resorted to other factors by examining industry custom and found the scope referred to nominal thickness. CIT agreed, and sustained in July 2011. On appeal from CIT, CAFC said that because antidumping duty orders apply to goods as imported, not as ordered, “the proper context in which to interpret the scope of the antidumping duty order is the industry practice regarding delivered products.”

(When the ITA issued nine antidumping and countervailing duty orders on stainless steel plate in coils from six countries¹ in 1999, it did not specify whether the minimum thickness of 4.75mm referred to nominal thickness of the merchandise or the actual thickness, which due to imperfections in the manufacturing process may be slightly under or over the ordered or nominal thickness and still meet the specifications of the contract order. The ITA requested only data on plaintiff Arcelormittal Stainless Belgium’s (ASB) sales of merchandise with an actual thickness of 4.75mm or more during the 2000-01 administrative review of the AD order on stainless steel plate in coils from Belgium. When ASB again submitted data only on such merchandise in the 2003-04 review, the ITA said the AD order includes merchandise with a nominal thickness of 4.75mm, and advised ASB to request a scope inquiry on the issue if it wanted to exclude merchandise with an actual thickness under 4.75mm.)

In its scope determination, the ITA said the language of the scope was ambiguous because it was unclear whether it referred to actual or nominal thickness, and therefore required examination using other factors. After examining these other factors, including industry practice, it found ASB’s merchandise with an actual thickness of less than 4.75mm but a nominal thickness of 4.75mm to be within the scope of the AD duty order.

On appeal, the Court of International Trade sustained the ITA’s scope determination, holding that it was reasonable for the ITA to conclude that its failure to specify whether the scope referred to actual or nominal thickness rendered the scope ambiguous.

ASB challenged CIT’s finding that substantial evidence supported the ITA’s determination that the scope was ambiguous. According to ASB, the plain language of the AD duty order is not ambiguous because a number, unless otherwise modified, means the actual number. Thus, said ASB, the ITA erred in examining other factors such as industry practice. The ITA countered that AD duty orders cannot be interpreted in a vacuum devoid of any consideration of the way the language is used in the relevant industry.

CAFC agreed with the ITA’s argument that industry usage is important when interpreting the language of an AD duty order: “the terms of an order should be consistent, to the extent possible, with trade usage,” it said. But the ITA’s interpretation of industry practice was flawed, CAFC said. The ITA concluded the industry’s practice of using nominal thickness when ordering stainless steel plate in coils rendered the scope of the AD duty order ambiguous, CIT said, but AD duty orders apply to goods as imported, not as they may have been ordered. Therefore, said CAFC, the ITA should have referred to industry practice regarding delivered products.

(See ITT’s Online Archives 11071924 for summary of CIT’s affirmance of the ITA scope ruling at issue, reversed by this CAFC ruling.)

(Arcelormittal Stainless Belgium N.V. v. United States, Appeal No. 2011-1578, dated 09/07/12, Judges Rader, Plager, and Linn)

(Attorneys: Bryan Dayton of Shearman & Sterling for plaintiff-appellant ASB; Patricia McCarthy for defendant-appellee U.S.; Jeffrey Beckington of Kelley Drye and Warren for defendant-appellee (Allegheny Ludlum Corporation)

¹The AD/CV duty orders with similar language include stainless steel plate in coils from Belgium (A-423-808 / C-423-809); Canada (A-122-830); Italy (A-475-822 / C-475-823); Korea (A-580-831 / C-580-832); South Africa (A-791-805); and Taiwan (A-583-830).