Midwest Fastener Corp. v. United States

Slip Op. 21-86
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Claire R. Kelly, Judge
Court No. 17-00231
OPINION
[Sustaining the U.S. Department of Commerce’s third remand redetermination that
strike pin anchors are not within the scope of the antidumping duty order covering
certain steel nails from the People’s Republic of China.]
Dated: July 12, 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, and Brian
M. Boynton, Acting Assistant Attorney General. Of Counsel was Vania Wang,
Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce, of Washington, DC.
Adam Henry Gordon and Ping Gong, The Bristol Group PLLC, of Washington, DC,
for defendant-intervenor, Mid Continent Steel & Wire, Inc.
MIDWEST FASTENER CORP.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
MID CONTINENT STEEL & WIRE,
INC.,
Defendant-Intervenor.
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Kelly, 	Judge: 	Before 	the 	court 	is 	the 	U.S. 	Department 	of Commerce’s
(“Commerce”) third remand determination filed pursuant to the court’s order in
Midwest Fastener Corp. v. United States, 45 CIT __, 494 F. Supp. 3d 1335 (Jan. 21,
2021) (“Midwest III”). See Final Results of Redetermination Pursuant to Ct. Remand
[in Midwest III], March 22, 2021, ECF No. 104-1 (“Third Remand Results”). 	In
Midwest III, the court remanded for a third 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 III, 45 CIT at __, 494 F. Supp. 3d
at 1341–42; see also Midwest Fastener Corp. v. United States, 44 CIT __, __, 435 F.
Supp. 3d 1262, 1272 (March 4, 2020) (“Midwest II”); Midwest Fastener Corp. v.
United States, 42 CIT __, __, 348 F. Supp. 3d 1297, 1301–03 (Oct. 19, 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 [in Midwest I], Apr. 25,
2019, ECF No. 61 (“First Remand Results”); Final Results of Redetermination
Pursuant to Ct. Remand [in Midwest II], June 17, 2020, ECF No. 87-1 (“Second
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”).
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On August 28, 2020, the Court of Appeals for the Federal Circuit (“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”).
In Midwest III, the court reconsidered its ruling in Midwest I that the language
of 	the 	PRC 	Nails 	Order 	is 	ambiguous 	and 	ordered 	Commerce 	to 	make 	its
determination in accordance with the Court of Appeals’ decision in OMG. 	See
Midwest III, 45 CIT at __, 94 F. Supp. 3d at 1341. 	In its Third Remand Results,
Commerce determines that Midwest’s strike pin anchors do not fall within the scope
of the PRC Nails Order. 	See Third Remand Results at 1. 	Both Midwest and
Defendant-Intervenor Mid Continent Steel & Wire, Inc. (“Mid Continent” or “Def.-
Intervenor”) submit comments agreeing with Commerce’s Third Remand Results.
See Pl.’s Cmts. on Remand Determination, Apr. 20, 2021, ECF No. 106 (“Pl.’s Cmts.
on Third Remand Results”); Cmts. on Final Results Determination, Apr. 21, 2021,
ECF No. 107 (“Def.-Intervenor’s Cmts. on Third Remand Results”). 	Defendant
United States (“Defendant”) requests that the court sustain Commerce’s Third
Remand Results. See Def.’s Resp. to Cmts. on Remand Results, May 19, 2021, ECF
No. 108 (“Def.’s Resp. Br.”). For the following reasons, the court sustains Commerce’s
Third Remand Results.
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BACKGROUND
The court presumes familiarity with the facts of this case as set out in its
previous opinion ordering remand to Commerce, and now recounts those relevant to
the court’s review of the Third Remand Results. See Midwest III, 45 CIT at __, 494
F. Supp. 3d at 1337–40.
On August 1, 2008, Commerce issued the PRC Nails Order, which covers, in
relevant part, “nails…constructed of two or more pieces.” 	See PRC Nails Order, 73
Fed. Reg. at 44,961. 	In Midwest I, the court held that Commerce’s determination
that the PRC Nails Order unambiguously covers Midwest’s strike pin anchors 1 was
unsupported by substantial evidence and remanded for Commerce to conduct a
formal scope inquiry and an analysis under 19 C.F.R. § 351.225(k)(2)(2017) 2 (“(k)(2)
analysis”). 	Midwest I, 42 CIT at __, 348 F. Supp. 3d at 1302–06. On remand,
1 Midwest is an importer of strike pin anchors. As explained in Midwest II:
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,
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).
2 Further citations to the Code of Federal Regulations are to the 2017 Edition.
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Commerce continued to assert that the PRC Nails Order unambiguously covers
Midwest’s strike pin anchors, First Remand Results at 7–11, but conducted a (k)(2)
analysis under protest. Id. at 11–19.
In Midwest II, the court held that Commerce’s position that the scope of the
order unambiguously covers Midwest’s strike pins 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 1272. On the second remand, Commerce again determined 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 the conclusion of the briefing of the Second Remand Results
before this court, 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 OMG,
972 F.3d 1358; 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
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[Vietnam], 80 Fed. Reg. 39,994 (Dep’t Commerce July 13, 2015) ([ADD] orders)
(“Vietnam ADD Order”) (collectively “Vietnam Orders”). As in 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.
On September 8, 2020, the court requested further submissions from the
parties 	regarding 	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.
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.
On remand for the third time, Commerce determines that Midwest’s strike pin
anchors are not “nails…constructed of two or more pieces” and therefore are not
covered by the PRC Nails Order. 	Third Remand Results at 5. 	All parties request
that the court sustain Commerce’s findings. See Pl.’s Cmts. on Third Remand Results
at 1–2; Def.-Intervenor’s Cmts. on Third Remand Results at 1; Def.’s Resp. Br. at 2.
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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), 3 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
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
Defendant argues that Commerce’s Third Remand Results are supported by
substantial evidence and are otherwise in accordance with law and asks the court to
sustain the results. 	Def.’s Resp. Br. at 2. 	Both Plaintiff and Def.-Intervenor agree
with the Third Remand Results and also ask the court to sustain the results. 	Pl.’s
Cmts. on Third Remand Results at 1–2; Def.-Intervenor’s Cmts. on Third Remand
Results at 1. For the following reasons, the court sustains the Third Remand Results
as supported by substantial evidence and otherwise in accordance with law.
3 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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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.
“[T]he first step in a scope ruling proceeding is to determine whether the governing
language is in fact ambiguous.” 	ArcelorMittal Stainless Belgium N.V. v. United
States, 694 F.3d 82, 87 (Fed. Cir. 2012). “If it is not ambiguous, the plain meaning of
the language governs.” Id.
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.”).
In 	OMG, 	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 OMG, 972 F.3d at 1364–
66. In Midwest III, the court ordered Commerce to reconsider its finding that
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Midwest’s strike pin anchors are covered under the PRC Nails Order in light of OMG.
See Midwest III, 45 CIT at __, 494 F. Supp. 3d at 1341.
For its third remand, Commerce first compares the Vietnam Orders to the PRC
Nails Order. Third Remand Results at 4–5. Commerce determines that the relevant
language of the orders (“Certain steel nails may be of one-piece construction or
constructed of two or more pieces”) is identical and thus OMG is applicable to
Commerce’s analysis of whether Midwest’s strike pin anchors are covered by the PRC
Nails Order. Id.
Commerce then analyzes the similarity between Midwest’s strike pin anchors
to OMG, Inc.’s (“OMG”) zinc masonry anchors at issue in OMG. 	Id. at 5. 	In OMG,
the Court of Appeals found that OMG’s zinc masonry anchors were unitary articles
of commerce and must be analyzed as a single product. OMG, 972 F.3d at 1364–65.
The Court of Appeals also determined that even though OMG’s anchors require a
hammer to be installed, nails are defined by their fastening mechanism (i.e. nails are
“driven by impact through the materials to be fastened”), and OMG’s anchors are not
nails because they rely on a distinct fastening mechanism that relies not on impact
but on the “[e]xpansion of the zinc body against the interior of the pre-drilled hole.”
Id. Commerce observes numerous similarities between Midwest’s strike pin anchors
and OMG’s zinc masonry anchors and finds those similarities support the conclusion
that Midwest’s anchors are not covered by the PRC Nails Order. 	Third Remand
Results at 5; compare OMG, 972 F.3d at 1364–65 with Midwest II, 44 CIT __, 435 F.
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Supp. 3d at 1265–66. 	None of the parties challenges Commerce’s redetermination.
See Pl.’s Cmts. on Third Remand Results at 1–2; Def.-Intervenor’s Cmts. on Third
Remand Results at 1; Def.’s Resp. Br. at 2.
Commerce’s analysis is reasonable, supported by substantial evidence, and in
accordance 	with 	law. 	The 	record 	evidence 	supports 	Commerce’s 	finding 	that
Midwest’s strike pin anchors are substantially similar to OMG’s zinc masonry
anchors and that the relevant language of the PRC Nails Order and the Vietnam
Orders is identical. 	Compare OMG, 972 F.3d at 1364–65; with Midwest II, 44 CIT
__, 435 F. Supp. 3d at 1265–66; and 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. 	Therefore, Commerce
reasonably determines that pursuant to the Court of Appeals’ decision in OMG,
Midwest’s anchors are not “nails…constructed of two or more pieces” and are not
covered by the PRC Nails Order.
All parties agree with Commerce’s determinations in the Third Remand
Results and request that the Third Remand Results be sustained. See Pl.’s Cmts. on
Third Remand Results at 1–2; Def.-Intervenor’s Cmts. on Third Remand Results at
1. Defendant notes that neither party challenges the results and asserts that the
results “comply with the court’s remand order, are supported by substantial evidence,
and otherwise in accordance with law,” and thus should be sustained. Def.’s Resp. Br.
at 2. The court agrees, and the Third Remand Results are sustained.
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CONCLUSION
For the foregoing reasons, Commerce’s Third Remand Results are supported
by substantial evidence and comply with the court’s order in Midwest III and are
therefore sustained. Judgment will enter accordingly.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: 	July 12, 2021
New York, New York
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