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Magnesia Carbon Brick Importer Accuses Commerce of Unlawfully Expanding AD/CVD Scope

The Commerce Department unlawfully expanded the scope of antidumping and countervailing duty orders on magnesia alumina carbon bricks (MAC bricks) from China in a covered merchandise inquiry during an Enforce and Protect Act remand investigation regarding Fedmet's importation of MAC bricks, Fedmet argued in a June 12 complaint at the Court of International Trade (Fedmet Resource Corporation v. U.S., CIT # 23-00117).

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The AD/CVD orders were originally imposed on Magnesia Carbon Bricks (MCBs), a type refractory brick used in steelmaking to line the walls of steel furnaces and ladles. According to Fedmet, the petitioner, Resco Products, attempted to cover only MCBs and never intended to cover MAC bricks. Resco reaffirmed the exclusion of MAC bricks from the scope in several communications with Commerce over the next few years, Fedmet said.

Despite the "express exclusion of MAC bricks" from the petitions and from the AD/CVD investigations, the final scope language from the 2009 investigation defined the subject merchandise as chemically-bonded refractory bricks composed of 70% or more magnesia and carbon, which included the MAC bricks currently at issue.

Fedmet requested a scope ruling in 2011, where it described its MAC bricks as containing 8% to 15% aluminum oxide. Resco opposed Fedmet’s scope ruling request, arguing that there was no such thing as a "MAC brick" and accused Fedmet of attempting to circumvent the scope by creating a new product. After "protracted litigation," the U.S. Court of Appeals for the Federal Circuit found that Fedmet’s MAC bricks were outside the scope of the MCB Orders. Commerce issued an amended scope ruling in 2015, which excluded all MAC bricks from the scope.

In 2019, the Magnesia Carbon Bricks Fair Trade Committee, including its member Resco, filed an EAPA allegation that claimed Fedmet had entered subject MCBs from China by falsely declaring them as excluded MAC bricks. CBP ultimately determined that Fedmet had entered MCBs as MAC bricks and had failed to pay the applicable AD/CVD duties. CBP stuck with its decision in a 2021 administrative review.

Fedmet then filed suit at the CIT. CBP asked for and was granted voluntary remand and made a covered merchandise referral to Commerce. During the referral, Fedmet said that it raised the issues of Commerce's testing methods and argued that because the Federal Circuit had excluded all MAC bricks, any that were found to be within the scope would be an "unlawful expansion" of the scope. At the end of the referral, Commerce found that 2 of the 11 tested bricks were within scope. Fedmet then sued again, opening the current action.