US Arguing It Has Free Rein to Find Ambiguity Whenever It Wants, Petitioners Claim

The government is attempting to argue that it has the discretion to decide what antidumping and countervailing duty orders mean regardless of those orders’ plain language, pipe fitting petitioners argued July 1 (NORCA Industrial Company, LLC v. U.S., CIT Consol. # 23-00231).

Petitioners Tube Forgings of America and Mill Iron Works defended their March 21 motion for judgment (see 2403200072) in their brief, arguing again that the language of an antidumping duty order on finished and unfinished carbon steel butt-weld pipe fittings from China wasn’t ambiguous. In the alternative, they claimed that Commerce had failed to listen to “experienced, knowledgeable industry experts” in interpreting the scope.

The government’s response to the petitioners’ motion (see 2405310067) claimed that the order on “finished and unfinished” pipe fittings didn’t define “rough” fittings, but that industry evidence indicates that “rough” fittings have undergone one step of a three-step process while “unfinished” fittings have undergone two.

But both “rough” and “unfinished” pipe fittings are “butt-weld pipe fittings in unfinished form,” and thus are covered by the order, they argued.

The government also argued that the department has the discretion to look to primary sources to determine ambiguity after amendments to its regulations in 2021.

“In other words, according to the Government, in 2021 Commerce granted itself the authority to consider the primary and secondary interpretive sources listed in subsection 351.225(k)(1)(i) and (ii) if it so chooses, even when the unambiguous scope language of the order in question is dispositive,” the petitioners said.

This “is unpersuasive,” they said, and the U.S.’s opposition “merely repeats -- often literally -- Commerce’s flawed conclusions in the [covered merchandise inquiry], while asserting that they are reasonable.”

Commerce abused its discretion, regardless of the 2021 amendments, because it doesn’t have “unlimited” discretion to determine what an order means even when its language is unambiguous, they said.

Interpretive sources have always been considered “secondary” to an order’s plain language, they said, including by the U.S. Court of Appeals for the Federal Circuit in the 2017 case Meridian Products v. U.S. In that case, CAFC defined a two-step scope interpretation process by which Commerce must first look solely to the language of an order before considering other sources, they argued.

The U.S. claim that its 2021 regulatory amendments allow it to do otherwise “cannot be squared with case law,” they said.

Even if it could, however, the petitioners argued, Commerce hadn’t backed up its interpretation with substantial evidence -- rather, it relied only on a description of the pipe fitting product from the order’s petition and on a footnote in the International Trade Commission’s injury report. And the department “considered only sources that it deemed to support its conclusion while it refused to consider sources that detracted from it,” they alleged.

“Knowledgeable [carbon steel butt-weld pipe fitting] industry executives, each with decades of experience, submitted sworn declarations stating” that the terms “rough” and “unfinished” pipe fittings “have been and still are used interchangeably,” they said. Commerce's decision to ignore this after seeking out additional information shows that the department “failed to consider the weight of evidence on the record as a whole,” they said.

Further, they said that Commerce, by request of an initial petitioner, actually revised the order’s language during the drafting stages to remove the phrase that unfinished pipe fittings “that are not machined, not tooled, and not otherwise processed after forging” are subject to duties. The initial petitioner made that request because its intent was “to include imports of all butt-weld fittings of the kind described, whether finished or unfinished (wherever they may be classified),” in the order, Tube Forgings and Mill Iron Works said.

Such fittings “that are not machined, not tooled, and not otherwise processed after forging” are “unquestionably” rough fittings, the petitioners argued.