Fedmet Resources Corp. v. United States

911 F. Supp. 2d 1348, 2013 CIT 68, 2013 WL 2364191, 35 I.T.R.D. (BNA) 1517, 2013 Ct. Intl. Trade LEXIS 68
CourtUnited States Court of International Trade
DecidedMay 30, 2013
DocketSlip Op. 13-68; Court 12-00215
StatusPublished
Cited by5 cases

This text of 911 F. Supp. 2d 1348 (Fedmet Resources Corp. v. United States) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fedmet Resources Corp. v. United States, 911 F. Supp. 2d 1348, 2013 CIT 68, 2013 WL 2364191, 35 I.T.R.D. (BNA) 1517, 2013 Ct. Intl. Trade LEXIS 68 (cit 2013).

Opinion

OPINION

TSOUCALAS, Senior Judge:

Before the court is Fedmet Resources Corporation’s (“Fedmet”) USCIT Rule 56.2 motion for judgment on the agency record appealing the United States Department of Commerce’s (“Commerce”) fi *1350 nal scope ruling regarding antidumping and countervailing duty orders on magnesia carbon bricks (“MCBs”). Pl.’s Mot. J. Agency R. at 1-2 (“Pl.’s Br.”); see Certain Magnesia Carbon Bricks from the People’s Republic of China and Mexico: Final Scope Ruling — Fedmet Resources Corporation, Case Nos. A-201-837, A-570-954 and C-570-955 (July 3, 2012), Pub. R.2d 74 at 1-2 (“Final Scope Ruling”). 1 Fedmet imports “Bastion”-trademarked magnesia alumina carbon bricks (“MACBs”), which contain alumina in addition to magnesia and carbon. Pl.’s Br. at 6. In its Final Scope Ruling, Commerce determined that Fedmet’s Bastion bricks are within the scope of the antidumping and countervailing duty orders. Final Scope Ruling at 1-2. Fedmet argues that Commerce’s ruling is not based on substantial evidence or otherwise in accordance with the law because MACBs have distinct physical and commercial characteristics from in-scope MCBs, and because the International Trade Commission («ITC”) ¿id not consider MACBs in its injury determination. PL’s Br. at 9-11; see Certain Magnesia Carbon Bricks from China and Mexico (Final), USITC Pub. 4182, Inv. Nos. 701-TA-468 and 731-TA-1166-1167 at 3-6 (Sept. 2010) (“ITC Final Determination”). Commerce and defendant-intervenors Resco Products, Inc. (“Resco”), ANH Refractories Company, and Magnesita Refractories Company (collectively, “defendant-intervenors”) oppose the motion. See Commerce’s Resp. PL’s Br. at 7-8 (“Commerce Resp.”); ANH’s Resp. PL’s Br. at 2-5 (“ANH Resp.”); Magnesita’s & Resco’s Resp. PL’s Br. at 4-5 (“M & R Resp.”).

BACKGROUND

In September 2010, Commerce published antidumping duty orders on MCBs from Mexico and the People’s Republic of China (“PRC”), and a separate countervailing duty order on MCBs from the PRC. Certain MCBs From Mexico and the PRC: Antidumping Duty Orders, 75 Fed. Reg. 57,257, at 57,257 (Sept. 20, 2010) (“AD Orders ”); Certain MCBs from the PRC: Countervailing Duty Order, 75 Fed. Reg. 57,442, at 57,442 (Sept. 21, 2010) (“CVD Order,” and collectively, “the Orders”). MCBs are a type of “refractory brick” necessary for certain applications in the steelmaking industry. R.3d 3 Ex. 1 at 6-7. Steelmakers use refractory bricks as lining for the inside of ladles that transport and pour molten steel and as lining for the inside of metallurgy furnaces. Id. & Ex. 2 at 5-7. Refractory bricks undergo repeated exposure to extreme temperatures and caustic substances in these roles, meaning each brick has a limited useful life. Id. Ex. 2 at 5-6. Bricks used in certain locations — particularly at the “slag line and at the top of the steel melt[,] where active chemical processes are taking place and impurities and waste tend to aggregate” — experience more wear than bricks in other locations. Id. at 5. Consequently, producers offer a wide range of refractory bricks with finely tuned chemistries for use in different parts of the ladle or furnace. Id. at 5-6. Steelmakers arrange these specialized bricks to achieve uniform deterioration and to lower costs, although the exact arrangement “may be quite different from shop to shop.” Id. at 5-7.

*1351 MCBs are a particularly strong variety of refractory brick composed of magnesia (MgO) and added carbon. Id. Ex. 1 at 10-12 & Ex. 2 at 5-7. MCBs exhibit high thermal conductivity, low porosity, and high corrosion resistance. R.2d 18 at 5 (citing R.3d 3 Ex. 1 at 10-11). Consequently, MCBs are used where corrosion is most severe — the slag line, the lower sidewall, the upper sidewall, the roofs of ladles, and the wall lining of high-temperature furnaces. R.3d 3 Ex. 1 at 6-7.

The scope of the Orders covers “certain chemically-bonded ... magnesia carbon bricks with a magnesia component of at least 70 percent magnesia ... by weight, ... with carbon levels ranging from trace amounts to 30 percent by weight, regardless of enhancements ... and regardless of whether or not antioxidants are present.” Pl.’s Br. at 6 (quoting AD Orders, 75 Fed.Reg. at 57,257; CVD Order, 75 Fed. Reg. at 57,443).

On May 3, 2011, Fedmet filed a scope ruling request to determine whether its Bastion MACB product is covered under the Orders. Certain Magnesia Carbon Bricks from the PRC and Mexico: Preliminary Scope Ruling — Fedmet Resources Corporation, Case Nos. A-201-837, A-570-954, and C-570-955 at 1 (Mar. 30, 2012) (“Preliminary Scope Ruling”). Fedmet’s Bastion bricks contain 70-90% magnesia and 3-15% carbon, levels well within the scope’s technical parameters. PL’s Br. at 6-7. However, Fedmet argues that the 8-15% alumina (A1203) content of its Bastion bricks distinguish them from in-scope MCBs. Id. at 3. Specifically, the alumina reacts with magnesia in the brick at steelmaking temperatures to form a mineral called spinel. Id. “The spinel improves the performance of the brick in certain applications by promoting permanent expansion of the brick when it is heated, which hinders the formation of cracks, and maintains that expansion when the ladle cools between uses.” Id.

All parties agree there is no standard chemical definition for bricks marketed as MACBs. Final Scope Ruling at 9; see PL’s Reply at 6. Evidence on the record demonstrates that the term “MACB” can refer to bricks with more than 70% magnesia (“low-alumina bricks”), as well as bricks with less than 70% magnesia (“high-alumina bricks”). 2 Preliminary Scope Ruling Ex. 2 at 3 (online description of products marketed as MACBs with less than 70% magnesia content); R.2d 18 Ex. 1 at 3 (in reference to MACBs, “carbon-bonded bricks with 50-90% [magnesia] or 40-50% [alumina] are used in the Asian region”); R.4th 2 at 3-10 (discussing industry naming conventions indicating that any brick with a majority magnesia content and added alumina and carbon can be called an MACB): Fedmet stated at oral argument that the minimum level of alumina required to form spinel is about 5%, Hr’g Tr. at 17, Fedmet Res. Corp. v. United States, No. 12-00215 (Ct. Int’l Trade Mar. 26, 2013), but there is little evidence in the administrative record to support this claim. See Preliminary Scope Ruling Ex. 1 at 100-01 (showing that bricks with 4% added alumina exhibit characteristics similar to bricks with 5-7% added alumina, but noting that bricks with 4% alumina “show[] less expansion[,] which may not be optimal” for preventing slag penetration).

*1352

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911 F. Supp. 2d 1348, 2013 CIT 68, 2013 WL 2364191, 35 I.T.R.D. (BNA) 1517, 2013 Ct. Intl. Trade LEXIS 68, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fedmet-resources-corp-v-united-states-cit-2013.