[00:00:00] Speaker 01: Our next case is Sahag Ties Steel Hype Public Company versus the United States and Wheatland Tube. [00:00:11] Speaker 01: 2,022, 2,181. [00:00:11] Speaker 01: Mr. Claudia? [00:00:13] Speaker 01: Claudia, sir. [00:00:15] Speaker 02: Claudia. [00:00:17] Speaker 02: Good morning, Your Honors. [00:00:18] Speaker 02: I am Chris Cloutier here on behalf of Wheatland Tube. [00:00:23] Speaker 02: If I may just start by summarizing what I believe my opposing counsel's argument to be is that a circular welded pipe certified as complying with the industrial specification for standard pipe can never be referred to as standard pipe if it also meets a second industrial specification. [00:00:44] Speaker 02: 25 years ago, in a case involving my client, titled Wheatland Tube, the court considered a very similar issue. [00:00:52] Speaker 02: And that case turned on a scope published by the Department of Commerce that read, and I quote, standard pipe that is dual or triple certified slash stencil. [00:01:04] Speaker 02: So it's our position that a piece of pipe certified as being standard pipe remains standard pipe, no matter what else might happen to it. [00:01:14] Speaker 02: The scoped issue here, for example, contains no instructions for any further processing. [00:01:20] Speaker 03: Is there any affirmative evidence in the record that suggests that dual-stencil pipe is commonly referred to as standard pipe? [00:01:30] Speaker 02: The record evidence would be the definitions of scope from earlier cases that referred to it as standard pipe. [00:01:38] Speaker 03: Right. [00:01:39] Speaker 03: But I, just because of course, dual stencil pipe has a standard pipe certification, maybe that's a separate question from whether dual stencil pipe is commonly referred to in the industry as stencil pipe, I mean, as a standard pipe. [00:01:57] Speaker 03: You know, for example, if, if my kid has both a brown belt and a black belt in karate, nobody's calling my kid a brown belt. [00:02:08] Speaker 03: They're calling them a black belt. [00:02:11] Speaker 03: So, you know, how does it work in this industry? [00:02:17] Speaker 03: What do people in this industry commonly refer to double stenciled pipettes? [00:02:24] Speaker 02: I think, frankly, there's not that much dual stenciled pipe out there. [00:02:27] Speaker 02: But when they do see it, you may refer to it as either standard or lining pipe. [00:02:32] Speaker 02: And in this case what I think is important as the court held in Shenyang Uenda is that the standard pipe is indistinguishable from dual stencil pipe. [00:02:43] Speaker 02: As a practical matter the industrial specification for standard pipe has a tolerance of plus or minus 10% on the wall. [00:02:52] Speaker 02: So if the standard says for this size pipe it's got to be 10 millimeters you can roll it to 9 millimeters or roll it to 11 millimeters. [00:03:01] Speaker 02: And it still needs the specification. [00:03:03] Speaker 02: The standard for a line pipe requires a little bit thicker wall. [00:03:07] Speaker 02: So what we're talking about here is really a standard pipe that's rolled a little thicker than it might be otherwise. [00:03:12] Speaker 02: But it's still within the tolerance for standard pipe and can be sold as standard pipe and used as standard pipe. [00:03:18] Speaker 00: Does that still fall within the physical description in yours? [00:03:23] Speaker 00: fall within the description, the physical description? [00:03:26] Speaker 02: Absolutely, sir. [00:03:27] Speaker 02: It's standard pipe. [00:03:28] Speaker 02: It's within the tolerances for ASTM 853 and therefore it qualifies as standard pipe. [00:03:33] Speaker 00: So would you say that all pipe, regardless of name, that meets that physical description, that that pipe falls within the scope of the order? [00:03:44] Speaker 03: If it's referred to if it can be referred to as standard pipe Yes, but if it's commonly referred to in the industry in the industry as standard pipe Which it was in the petition we have any declarations in the record and like hey I'm a member of the industry and I know what the industry says about double stenciled pipe And double stenciled pipe in our industry is commonly referred to a standard pipe anything like that [00:04:09] Speaker 02: The answer is the only record I can refer you to is the scopes from the three cases where they specifically refer to standard pipe that is dual or triple stenciled. [00:04:21] Speaker 02: And those were filed by half a dozen domestic industry participants who all spend all of their day making steel pipes. [00:04:31] Speaker 00: What should you reach at that point where you're discussing commonly referred to in that language? [00:04:38] Speaker 00: Are you in the K1 factors area? [00:04:41] Speaker 02: I don't think you have to, but it seems that the Department of Commerce did. [00:04:47] Speaker 02: I follow the logic in OMG that once you read the scope, and if you know what that means, then you can just stop. [00:04:55] Speaker 02: Here, reading the scope, there's no exclusion for dual-stampled bifurcation. [00:05:00] Speaker 03: The CIT opinion at one point made an observation that the Federal Circuit has two lines of authority here. [00:05:06] Speaker 03: on scope, order, inquiries. [00:05:11] Speaker 03: Maybe one is OMG that you call that, another one is meridian. [00:05:15] Speaker 03: Do you agree that there's two different lines of authority going on here? [00:05:18] Speaker 02: Your honor, I think that the federal circuit has said different things at different times, but they're not really inconsistent. [00:05:25] Speaker 02: Neither one is wrong. [00:05:27] Speaker 02: I just, I believe that [00:05:30] Speaker 02: The logic expressed in OMG speaks to me. [00:05:33] Speaker 02: Because if you read the scope and at the end you know what the scope covers, I don't see why it's important to go into anything else. [00:05:41] Speaker 01: But there was a case on lawn pipe that was withdrawn, right? [00:05:48] Speaker 02: That's correct, Your Honor. [00:05:49] Speaker 01: And so the ITC didn't review it. [00:05:52] Speaker 02: The ITC reviewed all pipe imported from Thailand that met the physical description of the products that issue here. [00:06:01] Speaker 02: The reason that the case was withdrawn with respect to line pipe was at the time no one in Thailand possessed the API license necessary to manufacture line pipe. [00:06:11] Speaker 02: So there were no updates. [00:06:12] Speaker 03: But doesn't that inform what the scope of the order was? [00:06:18] Speaker 03: Because the order was confined to things that excluded line pipe. [00:06:22] Speaker 03: And at the time, apparently, the tariff numbers for line pipe included dual stencil pipe. [00:06:30] Speaker 02: Your Honor, that is a consequence of the general rule of interpretation number three by the World Customs Organization. [00:06:37] Speaker 02: that says when one imported product is simultaneously two things, you should classify it as the more specific tariff classification. [00:06:47] Speaker 02: In this case, LinePipe appears much higher on the page, and it says conforming to the API license, and then StandardPipe is actually imported under a bunch of classifications at the bottom of the page under other, other, other. [00:07:02] Speaker 02: So the fact that it's classified as line pipe is really of no moment. [00:07:07] Speaker 02: It's still standard pipe. [00:07:13] Speaker 01: Anything further? [00:07:14] Speaker 02: No. [00:07:15] Speaker 01: Thank you. [00:07:15] Speaker 01: Well, you can save eight minutes for a bottle if you need it. [00:07:20] Speaker 01: Mr. Gerle. [00:07:28] Speaker 04: May please the court. [00:07:29] Speaker 04: I'm James Dirling here today for Sahatai, the appellee. [00:07:34] Speaker 04: Let me jump to the question, is there any record evidence that dual stencil pipe is considered standard pipe? [00:07:41] Speaker 04: And the answer is an emphatic no. [00:07:43] Speaker 04: And the reason we know this with such clarity is during the trade court proceedings, Judge Vaden specifically posed that precise question [00:07:52] Speaker 04: sent both the government and Wheatland tube back searching he basically said can you find me any evidence at all in the 25 30 year history of the order on Thailand any order specific evidence that ever [00:08:09] Speaker 04: referred to dual stencil pipe as standard pipe, and they came back with nothing. [00:08:16] Speaker 04: They found some examples from other orders, which Judge Vaden discussed in his decision, but he put great emphasis in his decision on the fact that when specifically directed to look for that precise evidence, there was none. [00:08:31] Speaker 04: And as Judge Vaden put it, that fact spoke very, very loudly. [00:08:36] Speaker 04: The second point I'd like to make is that [00:08:40] Speaker 04: The main argument that Wheatland Tube is making is that somehow the physical description here is clear and therefore you don't need to get to any of the K1 factors. [00:08:49] Speaker 04: You don't need to look at the broader historical circumstances. [00:08:52] Speaker 04: Just look at the 50 odd words on a piece of paper and you're done. [00:08:58] Speaker 04: Well, with all due respect, [00:09:01] Speaker 04: That focus on the physical description alone is fatally flawed for two reasons. [00:09:08] Speaker 04: That short paragraph on its own also includes the language known as standard pipe, which has to be given some meaning. [00:09:16] Speaker 04: And as Judge Vaden carefully walked through, he basically said, well, what does standard pipe mean? [00:09:21] Speaker 04: What does the record show standard pipe means? [00:09:24] Speaker 04: And he reviewed it and said, well, this doesn't really answer the question. [00:09:27] Speaker 04: A reference to standard pipe alone doesn't really answer the question. [00:09:31] Speaker 04: Thus, there's ambiguity. [00:09:33] Speaker 04: And Judge Baden also correctly noted that we have certain tariff numbers included in the scope. [00:09:41] Speaker 04: But interestingly, the tariff numbers that would have included dual stencils put aside the reason why or why not. [00:09:48] Speaker 04: But as a factual matter, and again, undisputed fact, because Judge Baden specifically asked [00:09:54] Speaker 04: the parties during his proceeding, do you all agree that if dual stenciled pipe were coming in, it would be under these tariff numbers? [00:10:05] Speaker 04: Everyone agreed. [00:10:05] Speaker 04: No dispute on that fact. [00:10:07] Speaker 04: So on its face, the scope language uses a term standard pipe, which isn't self-evident. [00:10:14] Speaker 04: And second, it excluded the specific tariff numbers that would have included dual stenciled. [00:10:20] Speaker 04: And Judge Vaden, in our view correctly, said, [00:10:24] Speaker 04: This is ambiguous. [00:10:25] Speaker 04: We cannot resolve this question on the four corners of the scope language. [00:10:30] Speaker 04: Thus, he went through the K-1 factors. [00:10:33] Speaker 00: He went through the K-1 factors that we... Can we go to the K-1 factors on the basis that there was further confusion or ambiguity in the order? [00:10:46] Speaker 04: He basically very thoroughly discussed the [00:10:52] Speaker 04: the the two lines of decisions in this court. [00:10:54] Speaker 00: Did he look at the K-1 factors after he made a decision with respect to the scope of the order? [00:10:59] Speaker 04: Yes, he made a decision that in his view the language on its face was not clear. [00:11:05] Speaker 04: He basically said whether he had applied the line of this court's cases that says language alone. [00:11:11] Speaker 00: And he said it's not clear because of the [00:11:14] Speaker 00: terminology commonly referred to? [00:11:18] Speaker 04: He said it's not clear for two reasons. [00:11:19] Speaker 04: The first reason was the use of the language known as standard pipe because he properly asked himself, well, what is standard pipe? [00:11:27] Speaker 04: He went to the definition of standard pipe and found that it didn't answer the question. [00:11:33] Speaker 04: It dealt with issues more than just the physical dimensions of the product. [00:11:37] Speaker 04: But then he also took specific note of the missing term. [00:11:39] Speaker 00: What did he go to for the definition? [00:11:41] Speaker 04: the is the ASTM stand definition is standard setting organization MC yes so he found a beauty he went to the K1 factors and the K1 factors when he went through them do you agree that that if there's a contradiction [00:12:02] Speaker 00: between, let's say, a tariff heading that's set out within the order and the physical description of the subject merchandise that was investigated is now part of the order. [00:12:20] Speaker 00: Which would trump in that situation? [00:12:22] Speaker 04: No. [00:12:22] Speaker 04: It is clear, Your Honor, that... No, no. [00:12:25] Speaker 00: I'm asking you. [00:12:26] Speaker 00: Which one would trump? [00:12:27] Speaker 04: No. [00:12:28] Speaker 04: The language of the order takes precedence over the tariff classification. [00:12:33] Speaker 00: That was our law. [00:12:35] Speaker 00: That was for our second-year students back during the Southern years. [00:12:42] Speaker 00: Yes, Your Honor, that's always been the case. [00:12:44] Speaker 00: It continues to be our students, correct? [00:12:46] Speaker 04: Yes, correct, your honor. [00:12:47] Speaker 04: But there is an important difference that I would emphasize between finding the tariff code to be dispositive. [00:12:54] Speaker 04: The tariff code cannot supersede the language of the scope. [00:12:59] Speaker 04: If the scope language is clear on its face, the tariff codes can't supersede that. [00:13:06] Speaker 04: But that doesn't mean that the tariff codes are not part of the scope and are relevant. [00:13:11] Speaker 04: Our point is simply that the tariff code is relevant. [00:13:13] Speaker 00: Even the order tells us that the tariff codes are included. [00:13:16] Speaker 00: for the convenience of customs. [00:13:20] Speaker 04: Yes, Your Honor. [00:13:21] Speaker 00: The tariff codes under our case law, the use of tariff classifications or the codes within the scope order, they don't have much meaning, do they? [00:13:34] Speaker 04: I would disagree with that, Your Honor, because the reason they're included is not just for the convenience of the party, but that is also part of the scope language. [00:13:43] Speaker 00: No, but they're included for customs purposes. [00:13:47] Speaker 00: That's not the general public. [00:13:48] Speaker 04: No, Your Honor, it's also for purposes of understanding the scope language, because, for example... What does it say in this scope over here? [00:13:56] Speaker 00: No, but for example, Your Honor... Excuse me, doesn't it say that they're there for the convenience of customs? [00:14:02] Speaker 04: Um, that language is included in the 1989 scope language that was rewritten. [00:14:07] Speaker 04: That language was not included in the 1986 scope language. [00:14:12] Speaker 00: You've been around for a while. [00:14:13] Speaker 00: You've seen a lot of scope orders. [00:14:15] Speaker 00: Yes. [00:14:16] Speaker 00: And they include HTS numbers. [00:14:18] Speaker 00: Yes. [00:14:18] Speaker 00: And they also include the language that says that these are not dispositive, that these are included merely for the convenience, not even the authority, but the convenience of customers. [00:14:31] Speaker 00: Is it that? [00:14:33] Speaker 04: See, I guess, Your Honor, I disagree with the premise that the inclusion has no meaning. [00:14:40] Speaker 04: That it's not purely for the convenience of the parties, it's also part of the language. [00:14:46] Speaker 04: This case is a great example, Your Honor, of why it actually does have meaning. [00:14:50] Speaker 04: Not dispositive. [00:14:51] Speaker 04: I agree that the law of this circuit has always been, it's not dispositive. [00:14:56] Speaker 04: But something can be relevant without being dispositive, and this case is a perfect example. [00:15:01] Speaker 04: Because the key point here is not the tariff numbers that were included, [00:15:06] Speaker 04: but rather the tariff numbers that were left out. [00:15:10] Speaker 04: What does that say about the meaning of a scope? [00:15:13] Speaker 04: At a minimum, the combination of known as standard pipe and the exclusion of the tariff numbers that would have included dual stencil pipe, at a minimum that creates ambiguity. [00:15:26] Speaker 04: Once we get ambiguity, we turn to the K-1 factors, and that's where the missing tariff numbers become so important. [00:15:34] Speaker 00: I wanted to ask you precisely this. [00:15:36] Speaker 00: When was it proper for this court to turn to the K-1 factors? [00:15:41] Speaker 00: at any time, or only when there's a nandiguity that's discussed? [00:15:45] Speaker 04: Well, Your Honor, our view is that the line of decision. [00:15:48] Speaker 00: And also, what was the regulation at the time that the decision was made? [00:15:52] Speaker 04: So two answers, Your Honor, because it's a two-part question. [00:15:55] Speaker 04: Our view is the line of this court's decision that basically say the language is more important, but the K-1 factors can sometimes help [00:16:05] Speaker 04: Establish whether the language is in fact clear or not We think that's the better line of cases that we think to put on blinders and not consider the k1 factors at all Is not the preferred rule So we think the other line of cases is more appropriate on the specific question about the regulation and effect of the time at the time [00:16:29] Speaker 04: of this particular decision, the commerce regulation required commerce to consider the K-1 factors. [00:16:36] Speaker 04: Again, not as superseding the language of the scope, but rather the K-1 factors were relevant as part of understanding what is the meaning of the scope. [00:16:45] Speaker 04: And so properly considered. [00:16:48] Speaker 00: At the end of the day, the court will do we have the authority to change the words of the order? [00:16:57] Speaker 04: No, it's clear, Your Honor, that you don't have the authority to change the... You can't rewrite the scope. [00:17:04] Speaker 04: The scope is the scope. [00:17:06] Speaker 04: Your job is to interpret what the scope includes or doesn't include. [00:17:10] Speaker 00: Let me ask you this other question. [00:17:14] Speaker 00: You're arguing that certain merchandise does not fit or fall within the scope of the order. [00:17:20] Speaker 00: Yes. [00:17:21] Speaker 00: And yet, the order itself has no exclusion in it. [00:17:26] Speaker 00: In order for me to say that there's an exclusion, or should be, I have to create some sort of an implied exclusion. [00:17:38] Speaker 00: And to do that, I have to have some sort of an implied inclusion. [00:17:44] Speaker 04: But Your Honor, I guess I wouldn't call... Do you see where I'm headed? [00:17:47] Speaker 04: No, I understand. [00:17:47] Speaker 04: Do you agree with that so far? [00:17:50] Speaker 04: Not really, Your Honor, because in our view, the absence of an express exclusion doesn't mean that the scope language can be read so broadly as to include things that are clearly not within the scope. [00:18:05] Speaker 04: And I say clearly not within the scope for a couple of reasons. [00:18:09] Speaker 04: The first is, [00:18:11] Speaker 04: the missing tariff numbers, while not dispositive, it's a clue. [00:18:16] Speaker 04: And once you get beyond the language and the missing tariff numbers in the language, consideration of the K-1 factors resolves the apparent confusion. [00:18:25] Speaker 04: Because what the K-1 factors teach is that the line pipe and dual stencil pipe was originally included, but then was expressly excluded by petitioners during the original proceeding. [00:18:39] Speaker 04: So it was included and it was taken out. [00:18:42] Speaker 04: And in light of that decision, we have an international trade commission decision about injury that, first, Thailand only talks about standard pipe. [00:18:52] Speaker 04: It excluded any reference to line pipe. [00:18:55] Speaker 04: Line pipe or pipe that would have been both line and standard. [00:19:00] Speaker 00: You're talking about the safeguards decision? [00:19:02] Speaker 04: Not the safeguards decision, Your Honor. [00:19:03] Speaker 04: The original ITC determination [00:19:06] Speaker 04: in 1986 in connection with this particular order. [00:19:09] Speaker 00: So what do we do with what appears to me to be extremely important facts here, and that is that the product that you're seeking to have excluded has the same physical description that's expressed in the order. [00:19:32] Speaker 00: Then second, [00:19:34] Speaker 00: There is no exclusion for the pipe you're talking about. [00:19:39] Speaker 04: Why is that not disposable? [00:19:41] Speaker 04: The product that we believe is not properly included within the scope is product that is not known as standard pipe. [00:19:51] Speaker 00: You're not answering my question. [00:19:53] Speaker 00: I didn't reference to anything as how it's known. [00:19:57] Speaker 00: We're talking about the same physical description. [00:20:01] Speaker 04: Your Honor, the simplest way to appreciate that is the physical description that appellant relies upon would also include line pipe. [00:20:11] Speaker 04: Line pipe also has the same physical dimensions. [00:20:14] Speaker 04: The physical dimensions in this particular scope language are really very, very basic. [00:20:20] Speaker 04: It would include any kind of circular pipe, regardless of the metal. [00:20:25] Speaker 04: Line pipe has very different metal in it, different steel than standard pipe. [00:20:29] Speaker 04: One of the core differences, one of the main reasons why a product qualifies- Does line pipe come in the physical dimensions that- Absolutely, Your Honor, absolutely. [00:20:41] Speaker 04: And you can see that in the original ITC determination. [00:20:43] Speaker 00: What would be the confusion then? [00:20:44] Speaker 00: If you're at customs and you get, one day you get a standard pipe, you look it up and it meets a physical description of the order. [00:20:52] Speaker 00: Next day you get what, well I don't know what it is, it looks like a line pipe. [00:20:56] Speaker 00: You look and it meets a physical description of the order. [00:20:59] Speaker 00: But your honor. [00:21:00] Speaker 00: What's the, what's the problem here? [00:21:03] Speaker 04: When a person enters the product into the US, they have to sign a tariff code. [00:21:08] Speaker 04: There are specific tariff codes for line pipe, and there are specific tariff codes for dual stencil. [00:21:13] Speaker 04: And they are separate from the tariff codes for standard pipe. [00:21:18] Speaker 04: We assume that importers are complying with the rules and regulations. [00:21:21] Speaker 04: They're not intentionally engaging in misrepresentation. [00:21:25] Speaker 04: In this case, we have a situation where the product coming in is physically different than standard pipe. [00:21:33] Speaker 04: It may have the same outer dimensions, but it's physically different in that it is using higher grades of steel, and it is thus qualifying to be certified and stenciled as dual stenciled, both line and standard pipe. [00:21:49] Speaker 04: I would just like to close with the analogy we used in the brief, a two-quart measuring cup versus a one-quart measuring cup. [00:21:57] Speaker 04: But I like the analogy of brown belt and black belt. [00:22:00] Speaker 04: No one would refer to someone holding a black belt as basically being a brown belt. [00:22:05] Speaker 04: It doesn't make sense, even though a black belt necessarily includes the brown belt. [00:22:10] Speaker 04: And that's what we have here, Your Honor. [00:22:12] Speaker 04: We have a product that [00:22:13] Speaker 04: is different, different steel, different certification requirements. [00:22:19] Speaker 04: It happens to function and fit within the kind of broad physical size described in the order. [00:22:27] Speaker 04: But that's why the language of the order known as standard pipe is so important. [00:22:31] Speaker 04: That's why there's ambiguity. [00:22:33] Speaker 04: That's why we get to the K1 factors. [00:22:34] Speaker 04: And that's why with all due respect, we would urge the court to affirm Judge Vaden's very thoughtful decision going through all of these issues. [00:22:42] Speaker 04: Thank you, Your Honors. [00:22:44] Speaker 01: Thank you, counsel. [00:22:46] Speaker 01: Mr. Cotier has some time. [00:22:49] Speaker 02: Thank you. [00:22:49] Speaker 02: I do have some time. [00:22:50] Speaker 02: I'm not going to use all of it. [00:22:51] Speaker 02: But just in general, I'd like to dispute that the product is somehow physically different. [00:22:57] Speaker 02: I think there's evidence that it's exactly the same. [00:23:01] Speaker 02: In particular, in the appendix, it said 40283. [00:23:05] Speaker 02: Counsel for Korean Interest testified. [00:23:07] Speaker 02: in the context of an order that actually did have an exclusion for dual stencil pipe that 70 to 80 percent of the pipe that his clients were importing were used as standing pipe and that just looking at them you can't tell what's what. [00:23:20] Speaker 03: Does this Thailand order encompass line pipe? [00:23:24] Speaker 02: It does not. [00:23:25] Speaker 03: Does line pipe meet these physical descriptions? [00:23:31] Speaker 02: Line pipe can. [00:23:32] Speaker 02: And if line pipe is stenciled only as line pipe, we did try that. [00:23:37] Speaker 02: But we are no longer arguing that. [00:23:40] Speaker 03: But does line pipe have an outside diameter [00:23:44] Speaker 03: 0.375 inches or more, but not exceeding 16 inches of any wall thickness. [00:23:52] Speaker 03: So LinePipe meets all of those descriptions, right? [00:23:54] Speaker 02: There are some requirements for wall thickness that may be a little bit different, but those would not be dual stencil type. [00:24:03] Speaker 03: Right, here it says of any wall thickness in the order. [00:24:07] Speaker 02: I haven't read the API 5L in a while, but I do believe there are some restrictions on wall thicknesses. [00:24:14] Speaker 01: Nothing further. [00:24:16] Speaker 01: Thank you very much.