Judges, Attorneys Talk Ambiguity of Butt-Weld Pipe Fittings AD Order in Oral Arguments

Judges on the U.S. Court of Appeals for the Federal Circuit asked appellants to explain why they shouldn’t remand a case regarding the ambiguity of the term “butt-weld” in an antidumping duty order on butt-weld pipe fittings from China. They said that if the term is not ambiguous because industry practice defines it, as the appellants claim, then what the industry practice actually entails is a factual question that must be decided by the Commerce Department (Vandewater International v. U.S., Fed. Cir. # 23-1093).

Christopher Curran, the attorney representing appellant Sigma, argued that the issue is a legal one. In deciding that importer Vandewater’s steel branch outlets fell under the scope of the AD order on Chinese butt-weld pipe fittings, Commerce assumed there was ambiguity in the term “butt-weld” and moved straight on to (k)(1) and (k)(2) analyses, giving “short shrift” to a "(k)(0)" one, he said. He said the department chose not to consider industry standards in its decision.

Because this was a question about ambiguity, it was a question of a law that merited de novo review in the appeals court, he argued.

“I think if you answered the first question, the '(k)(0)' question, there wouldn't be a dispute, there wouldn't be a factual issue, because it would be apparent under the properly interpreted plain meaning of the order that these welded outlets, branch outlets, don't fall within the order,” he said.

A judge said that he had read the American Society of Mechanical Engineers’ definition of “butt-welding” but still wasn’t “100% clear” on what the industry standard was.

However, the court told DOJ attorney Meen-Geu Oh that if Commerce would be in the wrong if it had chosen to disregard industry standards in its ambiguity determination, as they were “relevant” to it.

“Is it not the case that Commerce is saying, ‘No, we’re not going to consider the industry standard?’” Judge Timothy Dyk asked.

Oh said that, though he didn’t think that Dyk agreed, Sigma was simply arguing that the industry standard was dispositive while Commerce had found otherwise. Siding with Oh, another judge said that he understood the department to have looked at the relevant industry standards, found them not to be enough and moved on an analysis to (k)(1) factors.

Dyk asked Oh to show him where Commerce had made that ruling, and Oh pointed him to a section in which Commerce held that the industry standards were “not binding and not conclusive either way.”

“Other cases have said you need to look at industry standards and consider that,” Dyk said. “I’m not understanding how Commerce’s decision here is consistent with those cases.”