Downhole Pipe & Equipment, L.P. v. United States

776 F.3d 1369, 2015 WL 364272, 36 I.T.R.D. (BNA) 1197, 2015 U.S. App. LEXIS 1391
CourtCourt of Appeals for the Federal Circuit
DecidedJanuary 29, 2015
Docket2014-1225
StatusPublished
Cited by81 cases

This text of 776 F.3d 1369 (Downhole Pipe & Equipment, L.P. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Downhole Pipe & Equipment, L.P. v. United States, 776 F.3d 1369, 2015 WL 364272, 36 I.T.R.D. (BNA) 1197, 2015 U.S. App. LEXIS 1391 (Fed. Cir. 2015).

Opinion

WALLACH, Circuit Judge.

Appellants Downhole Pipe & Equipment, LP, and DP-Master Manufacturing Co., Ltd. (collectively, “Downhole Pipe”) appeal the decisions of the United States Court of International Trade (“CIT”) (1) affirming the United States Department of Commerce’s (“Commerce”) scope and industry support determinations and (2) sustaining Commerce’s Final Results of Redetermination Pursuant to Court Remand. See Downhole Pipe & Equip., LP v. United States (Downhole Pipe II), 949 F.Supp.2d 1288 (Ct.Int’l Trade 2013); Downhole Pipe & Equip. LP v. United States (Downhole Pipe I), 887 F.Supp.2d 1311 (Ct.Int’l Trade 2012); see also Drill Pipe From the People’s Republic of China, A-570-965 (Dep’t of Commerce May 13, 2013) (final results of redetermination *1371 pursuant to court remand) (Public Joint Appendix (“P.J.A.”) 2388-406) (“Remand Results”); Drill Pipe From the People’s Republic of China, 75 Fed.Reg. 4,531 (Dep’t of Commerce Jan. 28, 2010) (initiation of antidumping duty investigations) (“Initiation ”). Because Commerce’s determinations were supported by substantial evidence and were not otherwise contrary to law, this court affirms.

BACKGROUND

I. Facts

Downhole Pipe is a United States importer of “drill pipe” produced by DP-Master Manufacturing Co., Ltd. (“DP-Master”), a Chinese producer. Drill pipe is a specialized high-strength iron alloy tube, used in oil-drilling applications, and is manufactured in three stages: first, seamless tubes called “green tube” are produced from raw steel; second, the manufacturer uses complex processes to “upset” and heat-treat green tube to thicken the ends and increase the yield strength to thé desired American Petroleum Institute (“API”) grade; third, the manufacturer friction-welds a specialized “tool joint” to the ends of the heat-treated and upset tube to complete the drill pipe. While green tube is the primary input in 'the production of drill pipe, it can also be processed into other “oil country tubular goods.” Oil country tubular goods, which consist primarily of casing and tubing, are used in connection with the transport of oil and gas, while drill pipe is primarily used in drilling. •

II. Proceedings

In 2009, Commerce received a petition from several domestic drill pipe producers, including Appellees VAM Drilling USA, Texas Steel Conversion, Inc., Rotary Drilling Tools, and TMK IPSCO (collectively, “Petitioners”), seeking imposition of anti-dumping and countervailing duties on drill pipe from the People’s Republic of China (“China”). Drill Pipe From the People’s Republic of China, No. A-570-965 (Dep’t of Commerce Dec. 31, 2009) (petition for the imposition of antidumping and countervailing duties) (P.J.A. 56-230) (“Petition ”). Some of the petitioners produce green tube for drill pipe, while others produce finished drill pipe. Prior to Commerce’s initiation of the antidumping investigation, Downhole Pipe objected to the proposed scope of the investigation, arguing green tube should not be included within the scope, because it was already covered by an ongoing investigation into oil country tubular goods, and Commerce should disregard green tube production for purposes of calculating domestic industry support.

After considering these objections, Commerce revised the scope of the investigation in the Initiation, specifying “ ‘[t]he scope does not include ... unfinished tubes for casing or tubing covered by any other antidumping or countervailing duty order.’ ” Downhole Pipe I, 887 F.Supp.2d at 1316 (citation omitted); Initiation, 75 Fed.Reg. at 4,535. Commerce also found sufficient domestic industry support for the Petition, as calculated using the revised scope. Therefore, in 2010, Commerce initiated the antidumping investigation of drill pipe from China.

In its Preliminary Determination, Commerce determined drill pipe from China was, or was likely to be, sold in the United States at less-than-fair value. Drill Pipe From the People’s Republic of China, 75 Fed.Reg. 51,004 (Dep’t of Commerce Aug. 18, 2010) (preliminary determination of sales at less than fair value and affirmative determination of critical circumstances, and postponement of final determination) (“Preliminary Determination”). While Commerce maintained the scope as defined in the Initiation over Downhole Pipe’s objections, in the Prelim *1372 inary Determination it stated, given “concerns regarding the imprecision of the definition of ‘green tubes suitable for drill pipe’ currently contained in the scope,” it would “request additional information regarding characteristics distinguishing green tube for drill pipe from green tube for casing and tubing covered under the orders on [oil country tubular goods from China].” Id. at 51,006. Further,

[ujnless specific characteristics are provided which distinguish between green tube for drill pipe and green tube for casing and tubing, all green tubes ... will be removed from the scope of the ... investigations on drill pipe from [China] and will instead be considered as covered under the existing [orders on oil country tubular goods from China],

Id.

Commerce issued its Final Determination on January 11, 2011, continuing to find drill pipe from China was being, or was likely to be, sold in the United States at less-than-fair value. Drill Pipe From the People’s Republic of China, 76 Fed.Reg. 1,966 (Dep’t of Commerce Jan. 11, 2011) (final determination of sales at less-than-fair value and critical circumstances) (“Final Determination ”), and accompanying Issues & Decision Memorandum (“Issues & Dec. Mem.”) (P.J.A. 1890-938).

For the Final Determination, Commerce “developed characteristics for drill pipe green tubes based on numerous submissions of factual data from parties regarding the physical and chemical characteristics of drill pipe and drill pipe green tubes.” Issues & Dec. Mem. at 11. Thus, “Commerce narrowed the scope by adding three physical criteria to the description of subject green tube.” Downhole Pipe I, 887 F.Supp.2d at 1317. Specifically, Commerce narrowed the scope to green tube: (1) that is seamless; (2) that has a certain outer diameter; and (3) that contains specific percentages of molybdenum and chromium. Issues & Dec. Mem. at 11. Thus, the scope specified in the Final Determination reads:

The products covered by the investigation are steel drill pipe, and steel drill collars, whether or not conforming to [API] or non-API specifications. Included are finished drill pipe and drill collars without regard to the specific chemistry of the steel (i.e., carbon, stainless steel, or other alloy steel), and without regard to length or outer diameter. Also included are unfinished drill collars (including all drill collar green tubes) and

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776 F.3d 1369, 2015 WL 364272, 36 I.T.R.D. (BNA) 1197, 2015 U.S. App. LEXIS 1391, Counsel Stack Legal Research, https://law.counselstack.com/opinion/downhole-pipe-equipment-lp-v-united-states-cafc-2015.