Midwest Fastener Corp. v. United States

Slip Op. 21-7
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Claire R. Kelly, Judge
Court No. 17-00231
OPINION AND ORDER
[Remanding the U.S. Department of Commerce’s second remand redetermination
that strike pin anchors are within the scope of the antidumping duty order covering
certain steel nails from the People’s Republic of China.]
Dated: January 21, 2021
Robert Kevin Williams and Mark Rett Ludwikowski, Clark Hill PLC, of Chicago, IL,
for plaintiff, Midwest Fastener Corp.
Sosun Bae, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for defendant. 	Also on the briefs were
Patricia M. McCarthy, Assistant Director, Jeanne E. Davidson, Director, Ethan 	P.
Davis, 	Acting 	Assistant 	Attorney 	General, 	and 	Jeffrey 	Bossert 	Clark, 	Acting
Assistant Attorney General. 	Of Counsel were Vania Y. Wang and Jared Cynamon,
Attorneys, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington, DC.
MIDWEST FASTENER CORP.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
MID CONTINENT STEEL & WIRE,
INC.,
Defendant-Intervenor.
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Adam Henry Gordon and Ping Gong, The Bristol Group PLLC, of Washington, DC,
for defendant-intervenor, Mid Continent Steel & Wire, Inc.
Kelly, 	Judge: 	Before 	the 	court 	is 	the 	U.S. 	Department 	of 	Commerce’s
(“Commerce”) second remand redetermination filed pursuant to the court’s order in
Midwest Fastener Corp. v. United States, 44 CIT __, 435 F. Supp. 3d 1262 (2020)
(“Midwest II”). 	See Final Results of Redetermination Pursuant to Ct. Remand [in
Midwest II], June 17, 2020, ECF No. 87-1 (“Second Remand Results”). 	In Midwest
II, the court remanded for a second time Commerce’s determination that Midwest
Fastener Corp.’s (“Midwest” or “Plaintiff”) strike pin anchors are within the scope of
the antidumping duty (“ADD”) order covering certain steel nails from the People’s
Republic of China (“PRC”). 	See Midwest II, 44 CIT at __, 435 F. Supp. 3d at 1272;
see also Midwest Fastener Corp. v. United States, 42 CIT __, __, 348 F. Supp. 3d 1297,
1302 (2018) (“Midwest I”); [ADD] Order on Certain Steel Nails from the [PRC]: Final
Ruling on Midwest Fastener Strike Pin Anchors, (Aug. 2, 2017), ECF No. 21-3 (“Final
Scope Ruling”); Final Results of Redetermination Pursuant to Ct. Remand, Apr. 25,
2019, ECF No. 61 (“Remand Results”); Certain Steel Nails from the [PRC], 73 Fed.
Reg. 44,961 (Dep’t Commerce Aug. 1, 2008) (notice of [ADD] order) (“PRC Nails
Order”). 	Commerce, under respectful protest, 1 continued to find that Midwest’s
strike pin anchors fall within the scope of the PRC Nails Order. See generally Second
Remand Results. 	On August 28, 2020, the Court of Appeals for the Federal Circuit
1 By adopting a position “under protest,” Commerce preserves its right to appeal. See
Viraj Grp., Ltd. v. United States, 343 F.3d 1371, 1376 (Fed. Cir. 2003).
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(“Court of Appeals”) decided OMG, Inc. v. United States, 972 F.3d 1358 (Fed. Cir.
2020), aff’g 43 CIT __, 389 F. Supp. 3d 1312 (2019) (“OMG”), interpreting nearly
identical language in the ADD and countervailing duty (“CVD”) orders covering
certain 	steel 	nails 	from, 	in 	pertinent 	part, 	the 	Socialist 	Republic 	of 	Vietnam
(“Vietnam”). For the following reasons, the court reconsiders its ruling in Midwest I,
and remands Commerce’s Second Remand Results with instructions to render its
determination in conformity with OMG.
BACKGROUND
The court assumes familiarity with the facts as set forth in its previous opinion
and recounts the facts relevant to the issues currently before the court. See Midwest
II, 44 CIT at __, 435 F. Supp. 3d at 1265–66. 	On August 1, 2008, Commerce issued
the PRC Nails Order, which covers, in pertinent part, “nails . . . constructed of two or
more pieces.” See PRC Nails Order, 73 Fed. Reg. at 44,961. Midwest is an importer
of strike pin anchors. 2 	On August 2, 2017, Commerce, at Midwest’s request, issued
2 As explained in the previous opinion:
Midwest’s strike pin anchors have four components—a steel pin, a
threaded body, a nut and a flat washer. 	Midwest avers that the pin
component is not meant to be removed from the anchor and can only be
removed with the aid of a claw hammer or pliers. The strike pin anchor
is prepared for use by first drilling a hole through an object, and then
drilling another hole into the masonry upon which the object is to be
attached. After the two holes are aligned, the anchor is pushed through
the hole in the object and into the hole in the masonry. 	The nut and
washer components are then tightened to orient and position the anchor,
(footnote continued)
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a final scope ruling determining that Midwest’s strike pin anchors are unambiguously
covered by the scope of the PRC Nails Order based on the plain language of the order,
as well as its analysis of sources enumerated under 19 C.F.R. § 351.225(k)(1) (2017). 3
See Final Scope Ruling at 10–13. As such, Commerce did not perform an analysis of
factors enumerated under § 351.225(k)(2) (“(k)(2) analysis”). Id.
In Midwest I, the court remanded Commerce’s determination, holding that
neither the plain language of the PRC Nails Order, nor Commerce’s analysis under
19 C.F.R. § 351.225(k)(1) “explain what it means for a product to be a nail constructed
of two or more pieces.” Midwest I, 42 CIT at __, 348 F. Supp. 3d at 1302 (discussing
Commerce’s 	reliance 	on 	prior 	scope 	determinations 	and 	a 	report 	of 	the 	U.S.
International Trade Commission). 	After consulting dictionary definitions of the
terms “nails” and “constructed”, the court concluded that Commerce's determination
that the PRC Nails Order unambiguously covers strike pin anchors is unsupported
by substantial evidence and remanded for Commerce to conduct a formal scope
inquiry and (k)(2) analysis. Midwest I, 42 CIT at __, 348 F. Supp. 3d at 1306.
On 	remand, 	Commerce 	continued 	to 	assert 	that 	the 	PRC 	Nails 	Order
unambiguously covers Midwest’s strike pin anchors, Remand Results at 7–11, but
and the pin component is subsequently struck with a hammer. 	The
action of striking the pin component expands the anchor body and
results in the fastening of the desired item against the masonry.
Midwest II, 44 CIT at __, 435 F. Supp. 3d at 1265–66 (citations omitted).
3 Further citations to the Code of Federal Regulations are to the 2017 edition.
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conducted a (k)(2) analysis under protest. Id. at 11–19. In Midwest II, the court held
Commerce’s position that the scope of the order unambiguously covers Midwest’s
strike pins anchors was unsupported by substantial evidence because Commerce’s
analysis did not reasonably demonstrate how the phrase “nails . . . constructed of two
or more pieces” 	encompasses the strike pin anchors. 	See Midwest II, 44 CIT at __,
435 F. Supp. 3d at 1267–71; see also PRC Nails Order, 73 Fed. Reg. at 44,961. The
court also held that Commerce’s (k)(2) analysis erred in several respects, see Midwest
II, 44 CIT at __, 435 F. Supp. 3d at 1271–72, and rejected Commerce’s attempt to find
only the pin component dutiable. See id. at __, 435 F. Supp. 3d at 1273.
For its second remand redetermination, Commerce again maintained that the
PRC Nails Order is unambiguous, but conducted a revised (k)(2) analysis in light of
Midwest II. 	See Second Remand Results at 6–28. 	However, after briefing on the
Second Remand Results before this court concluded, the Court of Appeals issued
OMG. 	See generally 972 F.3d 1358. 	In OMG, the Court of Appeals affirmed a
decision of this Court disposing of an appeal from Commerce’s final ruling clarifying
the scope of ADD and CVD orders covering certain steel nails from, in pertinent part,
Vietnam. See generally id.; see also Certain Steel Nails from [Vietnam], 80 Fed. Reg.
41,006 (Dep’t Commerce July 14, 2015) ([CVD] order) (“Vietnam CVD Order”);
Certain Steel Nails from the Republic of Korea, Malaysia, the Sultanate of Oman,
Taiwan, and [Vietnam], 80 Fed. Reg. 39,994 (Dep’t Commerce July 13, 2015) ([ADD]
orders) (“Vietnam ADD Order”) (collectively, “Vietnam Orders”).
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As with the PRC Nails Order, the pertinent language from the Vietnam Orders
states that the orders cover “[c]ertain steel nails . . . of one piece construction or
constructed of two or more pieces.” 	Compare Vietnam CVD Order, 80 Fed. Reg. at
41,006 (citations omitted), and Vietnam ADD Order, 80 Fed. Reg. at 39,995 (citations
omitted), with PRC Nails Order, 73 Fed. Reg. at 44,961. 4 As such, the court requested
4 The scope language with respect to the Vietnam Orders and PRC Nails Order are
nearly identical. In pertinent part, the Vietnam Orders cover:
certain steel nails having a nominal shaft length not exceeding 12
inches. Certain steel nails include, but are not limited to, nails made
from round wire and nails that are cut from flat-rolled steel. Certain
steel nails may be of one piece construction or constructed of two or more
pieces. Certain steel nails may be produced from any type of steel, and
may have any type of surface finish, head type, shank, point type and
shaft diameter. Finishes include, but are not limited to, coating in vinyl,
zinc (galvanized, including but not limited to electroplating or hot
dipping one or more times), phosphate, cement, and paint. Certain steel
nails may have one or more surface finishes. Head styles include, but
are not limited to, flat, projection, cupped, oval, brad, headless, double,
countersunk, and sinker. Shank styles include, but are not limited to,
smooth, barbed, screw threaded, ring shank and fluted. Screw-threaded
nails subject to this proceeding are driven using direct force and not by
turning the nail using a tool that engages with the head. Point styles
include, but are not limited to, diamond, needle, chisel and blunt or no
point.
Vietnam CVD Order, 80 Fed. Reg. at 41,006 (citations omitted); Vietnam ADD Order,
80 Fed. Reg. at 39,995 (citations omitted). The PRC Nails Order covers:
certain steel nails having a shaft length up to 12 inches. Certain steel
nails include, but are not limited to, nails made of round wire and nails
that are cut. Certain steel nails may be of one piece construction or
constructed of two or more pieces. Certain steel nails may be produced
from any type of steel, and have a variety of finishes, heads, shanks,
point types, shaft lengths and shaft diameters. Finishes include, but are
(footnote continued)
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the parties brief their respective positions on the relevance of OMG to the disposition
of this action. See Letter Req. Suppl. Briefing, Sept. 8, 2020, ECF No. 93.
In their responses, all parties indicated that whether Midwest’s anchors fall
within the scope of the order should be reconsidered in light of OMG. See Def.’s Resp.
Ct.’s Order on Suppl. Briefing, Nov. 3, 2020, ECF No. 97; Def.-Intervenor’s Resp. Ct.’s
Order on Suppl. Briefing, Nov. 3, 2020, ECF No. 98; Pl.’s Resp. Ct.’s Order on Suppl.
Briefing, Nov. 4, 2020, ECF No. 99.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction over Plaintiff’s challenge to Commerce’s scope
determination pursuant to section 516A of the Tariff Act of 1930, as amended, 19
U.S.C. § 1516a(a)(2)(B)(vi) (2012), 5 and 28 U.S.C. § 1581(c) (2012), which grant the
court authority to review actions contesting scope determinations that find certain
merchandise to be within the class or kind of merchandise described in an ADD or
CVD order. See 19 U.S.C. § 1516a(a)(2)(B)(vi); 28 U.S.C. § 1581(c) (2012). The court
not 	limited 	to, 	coating 	in 	vinyl, 	zinc 	(galvanized, 	whether 	by
electroplating or hot dipping one or more times), phosphate cement, and
paint. Head styles include, but are not limited to, flat, projection,
cupped, oval, brad, headless, double, countersunk, and sinker. Shank
styles include, but are not limited to, smooth, barbed, screw threaded,
ring shank and fluted shank styles. Screw-threaded nails subject to this
proceeding are driven using direct force and not by turning the fastener
using a tool that engages with the head. Point styles include, but are not
limited to, diamond, blunt, needle, chisel and no point.
PRC Nails Order, 73 Fed. Reg. at 44,961.
5 Further citations to the Tariff Act of 1930, as amended, are to the relevant
provisions of Title 19 of the U.S. Code, 2012 edition.
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will uphold Commerce’s determination unless it is “unsupported by substantial
evidence on the record, or otherwise not in accordance with law . . .” 	19 U.S.C. §
1516a(b)(1)(B)(i).
DISCUSSION
The language of an antidumping duty order dictates its scope. 	See Duferco
Steel, Inc. v. United States, 296 F.3d 1087, 1097 (Fed. Cir. 2002) (“Duferco”) (citing
Ericsson GE Mobile Commc’ns, Inc. v. United States, 60 F.3d 778, 782 (Fed Cir. 1995)
(“Ericsson GE Mobile”)). Commerce’s regulations authorize it to issue scope rulings
to clarify whether a particular product is within the scope of an order. See 19 C.F.R.
§ 351.225(a). 	To determine whether a product is within the scope of an ADD order,
Commerce looks at the plain language of that order. See Duferco, 296 F.3d at 1097.
When considering the scope language, Commerce will take into account descriptions
of the merchandise contained in: (1) the petition; (2) the initial investigation; and (3)
past determinations by the Commission and by Commerce, including prior scope
determinations (collectively “(k)(1) sources”). 	19 C.F.R. § 351.225(k)(1); see also 19
C.F.R. § 351.225(d). 	When the (k)(1) sources are not dispositive, Commerce will
initiate a formal scope inquiry and further consider:
(i) 	The physical characteristics of the product;
(ii) 	The expectations of the ultimate purchasers;
(iii) 	The ultimate use of the product;
(iv) 	The channels of trade in which the product is sold; and
(v) 	The manner in which the product is advertised and displayed.
19 C.F.R. § 351.225(k)(2).
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Commerce has broad authority “to interpret and clarify its antidumping duty
orders.” Ericsson GE Mobile, 60 F.3d at 782; see also King Supply Co., LLC v. United
States, 674 F.3d 1343, 1348 (Fed. Cir. 2012) (stating that “Commerce is entitled to
substantial deference with regard to its interpretations of its own antidumping
orders.”). However, Commerce may not interpret an order “so as to change the scope
of that order, nor can Commerce interpret an order in a manner contrary to its terms.”
Eckstrom Indus., Inc. v. United States, 254 F.3d 1068, 1072 (Fed. Cir. 2001) (citing
Wheatland Tube Co. v. United States, 161 F.3d 1365, 1370 (Fed. Cir. 1998)).
In OMG the Court of Appeals acknowledged that “the language of the [Vietnam
Orders] may not unambiguously define the universe of ‘nails . . . constructed of two
or more pieces’ in every context.” 	OMG, 972 F.3d at 1364. 	However, the Court of
Appeals held that the Vietnam Orders were unambiguous with respect to the
importer’s anchors, that the anchors are not nails regardless of whether they are
comprised of two-pieces, and that Commerce erred in focusing its analysis on the pin-
component of the anchor. See id. at 1364–66.
In light of the Court of Appeals’ ruling in OMG, the court reconsiders its ruling
in Midwest I. 	The court retains the 	general power to reconsider non-final orders.
See, e.g., Union Steel v. United States, 35 CIT 1647, 1659, 804 F. Supp. 2d 1356, 1367
(2011). U.S. Court of International Trade Rule 54(b) allows the court to revisit non-
final determinations, as justice requires, meaning when necessary under the relevant
circumstances. 	See Irwin Indus. Tool Co. v. United States, 41 CIT __, 269 F. Supp.
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3d 1294, 1300–01 (2017). 	The court may consider “whether there has been a
controlling or significant change in the law or whether the court previously ‘patently’
misunderstood the parties, decided issues beyond those presented, or failed to
consider controlling decisions or data.” 	Id. at __, 269 F. Supp. 3d at 1301 (citations
omitted). 	OMG constitutes a controlling or significant change in the law that
warrants reconsideration of the court’s ruling in Midwest I.
The court reconsiders its ruling that the language of the PRC Nails Order is
ambiguous as well as the court’s consequent instruction to Commerce to perform a
(k)(2) analysis. Although Midwest I observed that neither the words of the PRC Nails
Order, prior scope rulings, nor the ITC report clarified what it meant for a product to
be a nail constructed of two or more pieces, see Midwest I, 348 F. Supp. 3d at 1302,
Commerce should now make its determination in accordance with the Court of
Appeals’ product-specific analysis of the scope of the Vietnam Orders. See OMG, 972
F.3d at 1364; compare Vietnam CVD Order, 80 Fed. Reg. at 41,006 (citations
omitted), and Vietnam ADD Order, 80 Fed. Reg. at 39,994 (citations omitted), with
PRC Nails Order, 73 Fed. Reg. at 44,961. 6 	As such, the court remands the Second
Remand Results for reconsideration in conformity with OMG.
6 For the same reasons set forth in OMG, the Court of Appeals also affirmed this
Court’s decision in Simpson Strong-Tie Co. v. United States, 43 CIT __, 393 F. Supp.
3d 1251 (2019), aff’d, 818 Fed. Appx. 1019 (Fed. Cir. 2020), which concluded that
certain zinc and nylon anchors were outside the scope of ADD and CVD orders
covering steel nails from the PRC.
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CONCLUSION
For the foregoing reasons, it is
ORDERED 	that 	Commerce’s 	redetermination 	is 	remanded 	for
reconsideration consistent with this opinion; and it is further
ORDERED that Commerce shall file its remand redetermination with the
court within 60 days of this date; and it is further
ORDERED that the parties shall have 30 days thereafter to file comments on
the remand redetermination; and it is further
ORDERED that the parties shall have 30 days to file their replies to
comments on the remand redetermination; and it is further
ORDERED that the parties shall have 14 days thereafter to file the Joint
Appendix; and it is further
ORDERED that Commerce shall file the administrative record within 14 days
of the date of filing of its remand redetermination.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: 	January 21, 2021
New York, New York
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