Deacero S.A. de C v. v. United States

942 F. Supp. 2d 1321, 2013 CIT 126, 2013 WL 5779648, 35 I.T.R.D. (BNA) 2113, 2013 Ct. Intl. Trade LEXIS 134
United States Court of International Trade·Decided September 30, 2013·No. Slip Op. 13-126; Court 12-00345·Published·Cited by 7 cases

Opinion

OPINION AND ORDER

GOLDBERG, Senior Judge:

Plaintiffs Deacero S.A. de C.V. and Deacero USA, Inc. (collectively, “Deacero”) contest the Department of Commerce’s (“Commerce” or the “Department”) affirmative final determination of circumvention of the antidumping duty order on certain wire rod from Mexico. See Carbon and Certain Alloy Steel Wire Rod from Mexico, 77 Fed.Reg. 59,892 (Dep’t Commerce Oct. 1, 2012) (affirmative final *1324 determination of circumvention) (“Final Determination”). In that determination, Commerce found that wire rod with an actual diameter of 4.75 millimeter (“mm”) to 5.00 mm constituted a minor alteration of subject merchandise under 19 U.S.C. § 1677j(c) (2006), and that it was, accordingly, subject to the antidumping duty order. 77 Fed.Reg. at 59,893.

In the instant action, Deacero contends, inter alia, that 4.75 mm steel wire rod was not a circumventing minor alteration of subject merchandise because it was both in existence during the original investigation and specifically excluded from the scope of the subject merchandise as defined during the investigation. For the following reasons, the court agrees and remands to Commerce for reconsideration of its affirmative circumvention finding.

FACTUAL BACKGROUND

On August 31, 2001, U.S. wire rod producers petitioned for the imposition of antidumping duties on carbon and certain steel wire rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine at less than fair value. Admin. R. Pub. (“P.R.”) Pt. 1, Doc. 10, Ex. 2; Admin. R. Conf. (“C.R.”) Pt. 3, Doc. 4, Ex. 2. Following the International Trade Commission’s (“ITC”) and Commerce’s investigations, Commerce published notice of an antidumping duty order on October 29, 2002 (the “Order”). Carbon and Certain Alloy Steel Wire Rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, 67 Fed.Reg. 65,945 (Dep’t Commerce Oct. 29, 2002) (notice of antidumping duty orders). Adopting petitioners’ scope recommendation, Commerce defined the Order’s scope as follows:

The merchandise subject to these orders is certain hot-rolled products of carbon steel and alloy steel, in coils, of approximately round cross section, 5.00 mm or more, but less than 19.00 mm, in solid cross-sectional diameter.
Specifically excluded are steel products possessing the above-noted physical characteristics and meeting the Harmonized Tariff Schedule of the United States (HTSUS) definitions for (a) stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete reinforcing bars and rods. Also excluded are (f) free machining steel products (i.e., products that contain by weight one or more of the following elements: 0.03 percent or more of lead, 0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of phosphorus, more than 0.05 percent of selenium, or more than 0.01 percent of tellurium).
Also excluded from the scope are 1080 grade tire cord quality wire rod and 1080 grade tire bead quality wire rod.... All products meeting the physical description of subject merchandise that are not specifically excluded are included in this scope.

Id. at 65,946. The ITC found a single like product “consisting of all carbon and certain alloy steel wire rod included within Commerce’s scope, and including the grade 1080 tire bead and tire cord quality wire rod that has been excluded from Commerce’s scope.” P.R. Pt. 2, Doc. 14, Attach, at 7; C.R. Pt. 4, Doc. 15, Attach, at 7.

Several years later, Deacero — a Mexican steel wire rod manufacturer — began producing and selling 4.75 mm wire rod. On February 11, 2011, U.S. wire rod producers requested that the Department initiate either a scope inquiry or an anti-circumvention inquiry 1 to determine whether im *1325 ports of Deacero’s 4.75 mm wire rod should be subject to antidumping duties. P.R. Pt. 1, Docs. 1-2; -C.R. Pt. 3, Docs. 1-2.

Commerce declined to initiate 'a scope inquiry, finding that the Order referred to actual diameter and that wire rod with an actual diameter of less than 5.00 mm was outside the scope of the Order. P.R. Pt. 1, Doc. 24 at 13; C.R. Pt. 3, Doc. 7 at 13. Moreover, as Commerce found that wire rod less than 5.00 mm in diameter was commercially available prior to issuance of the Order, Commerce did not initiate a later-developed product inquiry. Id. at 14. Commerce did, however, initiate a minor alteration inquiry to determine whether wire rod between 4.75 mm and 5.00 mm was- “altered in form or appearance in minor respects,” and includable within the scope of the Order. See Carbon and Certain Alloy Steel Wire Rod from, Mexico, 76 Fed.Reg. 33,218, 33,219 (Dep’t Commerce June 8, 2011) (initiation of anti-circumvention inquiry).

Throughout the proceeding, Deacero argued that 4.75 mm wire rod was not a minor alteration of subject merchandise. In support, Deacero noted that 4.75 mm wire rod existed before the wire rod investigation, and petitioners chose to exclude it' from the Order’s scope. See, e.g., P.R. Pt. 2, Doc. 27 at 7-8; C.R. Pt. 4, Doc. 22 at 7-8. Commerce rejected Deacero’s argument, finding that a product’s existence before the investigation does not “preclude! ] the Department from conducting a minor alterations analysis.” P.R. Pt. 2, Doc. 47 at 4; C.R. Pt. 4, Doc. 26 at 4. As a result, Commerce proceeded with an analysis of the five analytical factors found in the legislative history accompanying the circumvention statute. Id. (citing S.Rep. No. 100-71, at 100 (1987)). The Department issued its final affirmative determination of circumvention on October 1, 2012. Final Determination, 77 Fed.Reg. at 59,-893.

SUBJECT MATTER JURISDICTION AND STANDARD OF REVIEW

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Deacero S.A. de C v. v. United States, 942 F. Supp. 2d 1321, 2013 CIT 126, 2013 WL 5779648, 35 I.T.R.D. (BNA) 2113, 2013 Ct. Intl. Trade LEXIS 134 (cit 2013).

942 F. Supp. 2d 1321 (Deacero S.A. de C v. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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