[00:00:00] Speaker 00: Good morning, ladies and gentlemen. [00:00:07] Speaker 00: All you make software devices must be turned off. [00:00:12] Speaker 00: Please take your cell phone. [00:00:14] Speaker 00: Make sure your cell phone is turned off. [00:00:17] Speaker 00: All your devices must be turned off. [00:00:18] Speaker 00: Please take your cell phone. [00:00:27] Speaker ?: I don't know if that's the right word, but it's a good one. [00:00:57] Speaker 06: I'm sorry, I'm sorry. [00:01:26] Speaker ?: Okay. [00:02:02] Speaker ?: . [00:02:31] Speaker ?: . [00:02:31] Speaker ?: . [00:02:38] Speaker ?: I'm sorry. [00:03:11] Speaker ?: and you are in touch with them. [00:03:39] Speaker 06: Thank you. [00:04:27] Speaker 06: The United States Board of Buildings in the Federal Park is now open and in session. [00:04:43] Speaker ?: I'll take the United States on the floor. [00:04:43] Speaker ?: Thank you. [00:04:44] Speaker ?: Be seated. [00:04:45] Speaker 05: And good morning, everyone. [00:04:46] Speaker 05: The first argued case this morning is number 141744, Borosan-Manisman-Borosanui, against the United States, Ms. [00:04:57] Speaker 05: Mendoza. [00:05:03] Speaker 03: Good morning. [00:05:04] Speaker 03: May I please support? [00:05:05] Speaker 03: My name is Julie Mendoza, and I'm appearing on behalf of Plaintiff Appellant Forosan-Manisman. [00:05:12] Speaker 03: I plan to use 12 minutes of my time for my affirmative presentation and reserve three minutes for rebuttal by my partner, Don Cameron. [00:05:21] Speaker 03: In this case, the Commerce Department unlawfully applied targeted dumping methodology to Borisan in the 2010-2011 review. [00:05:30] Speaker 03: Despite uncontested record evidence, the Borisan increased its U.S. [00:05:35] Speaker 03: prices after February to account for the increase in cost of raw materials. [00:05:40] Speaker 03: As record evidence confirms, raw materials constituted a very high percentage of the total cost of the product under consideration and therefore it was economically sensible for Borisan to increase its prices. [00:05:54] Speaker 05: Do you think they should have done it shipment by shipment? [00:05:58] Speaker 03: No, I believe, Your Honor, that the Commerce Department should have used the average to average methodology in comparing their prices and not resorted to the target dumping provision as an exception because I believe that they could not meet the requirements of the targeted dumping provision. [00:06:14] Speaker 02: Well, is that really what you argued? [00:06:17] Speaker 02: Is it that they should use average to average, or are you saying that in using the methodology they use, they still have an additional step that they have to undergo? [00:06:28] Speaker 03: No, Your Honor, actually our argument is that commerce proceeded under 19 CFR 351.414C1, which provides that in both investigations and reviews, the Commerce Department will use average to average methodology. [00:06:43] Speaker 03: In our case, they also said that in the event that they find that there is targeted dumping, they would resort to the A to T methodology. [00:06:52] Speaker 03: And therefore, commerce's decision to resort to the A to T methodology depends on whether or not [00:06:58] Speaker 03: they were lawfully applied their targeted dumping provision. [00:07:01] Speaker 03: Otherwise, they had to use the ADA methodology, which we believe is accurate. [00:07:05] Speaker 03: Our margin was zero with ADA. [00:07:06] Speaker 03: So you're saying they can't get to a targeted dumping determination, though, until they consider the raw material price increases? [00:07:14] Speaker 03: No. [00:07:15] Speaker 03: I think what I'm trying to say, Your Honor, is that once they start with the premise that they should use the average to average methodology, Commerce then said, [00:07:24] Speaker 03: Only in the event that we find that the requirements of 1677F1D1B, i.e. [00:07:31] Speaker 03: the targeted dumping provision, only if those requirements are met will we then use the A to T methodology. [00:07:39] Speaker 04: In your view, 1677F1D requires reasons. [00:07:46] Speaker 03: No, Your Honor, not actually reasons. [00:07:49] Speaker 03: I believe what our position is, is that in this case, because we presented unconvertible evidence, which Congress did not dispute, that in fact the price increase was fully explained by the changes in the cost, [00:08:04] Speaker 03: As a consequence, that evidence went directly to the question of whether there was targeted dumping. [00:08:09] Speaker 04: Well, the statute speaks in terms of reasons why one and two may not explain the price difference. [00:08:20] Speaker 04: Aren't you saying that given the cost of the product, that's why one and two can't explain it? [00:08:31] Speaker 03: Well, yes, in part. [00:08:33] Speaker 03: What we're saying is that with respect to the requirement that commerce find a pattern of price differences, the first test. [00:08:41] Speaker 03: We believe, and it goes on to say in the FAA, i.e. [00:08:45] Speaker 03: targeted dumping may be occurring. [00:08:48] Speaker 03: We believe that because we presented evidence that in fact targeted dumping was not occurring, in fact this was simply a matter of pricing in order to take into account increasing raw material prices and to avoid dumping, that that requirement was not met. [00:09:03] Speaker 03: Moreover, commerce's test, that is can the normal [00:09:08] Speaker 03: methodology, i.e. [00:09:10] Speaker 03: average to average, take into account this pattern, we believe the answer to that question should have been yes, because it did not constitute targeted dumping and therefore commerce had no basis for resorting to an exceptional methodology. [00:09:25] Speaker 03: insert essentially requirements that the pattern of price differentials be unexplained by other variables? [00:09:31] Speaker 03: No, Your Honor. [00:09:32] Speaker 03: I think what we're saying is that Congress didn't just say that there had to be significant price differences in the SAA. [00:09:37] Speaker 03: They said IE, targeted dumping, may be occurring. [00:09:41] Speaker 03: and therefore we believe that commerce must look at the question of whether targeted dumping is occurring. [00:09:47] Speaker 03: The problem is that when they move to step two and they say can the normal methodology take into account the targeted dumping or take into account the pattern of prices that we see, commerce simply [00:10:02] Speaker 03: doesn't even look at whether they're targeted dumping. [00:10:04] Speaker 03: In fact, they say, oh, this provision has nothing to do with targeted dumping. [00:10:08] Speaker 03: And they say, we're just going to look and see what the results are. [00:10:10] Speaker 02: Right. [00:10:10] Speaker 03: So I think your answer to my question actually was yes, that the price differentials have to be unexplained by something other than targeted dumping. [00:10:18] Speaker 03: Yes, correct, Your Honor. [00:10:19] Speaker 03: I'm sorry. [00:10:19] Speaker 02: So then if that's the case, you present one potential variable. [00:10:24] Speaker 03: Do you believe that it's Congress's obligation to consider all variables, or is there kind of a burden shifting going on here that only if something's presented to commerce? [00:10:35] Speaker 03: In the latter, Your Honor. [00:10:36] Speaker 03: I mean, in other words, we don't believe that commerce has to go out and look for the reasons or have an affirmative duty to do that. [00:10:42] Speaker 03: However, commerce does have an obligation to look at reasons that are documented in the record that would explain the variation in prices and therefore would confirm that there's no targeted dumping. [00:10:53] Speaker 03: So in most cases, if there's no positive evidence presented by a party with respect to why the pattern exists as it does, then commerce would have the right, we can see, to proceed to find that there is targeted dumping. [00:11:08] Speaker 03: But when a party has presented affirmative evidence based on objective criteria, then commerce does have an obligation to examine whether that could still be considered targeted dumping. [00:11:20] Speaker 03: But the statute itself simply [00:11:23] Speaker 03: speaks in terms of a price differential, correct? [00:11:25] Speaker 03: Yes, it does, Your Honor. [00:11:26] Speaker 03: So do we have an ambiguity that kicks us back to Chevron? [00:11:31] Speaker 03: Well, Your Honor, I believe that under Timex, your Timex decision, that in essence what you said was that not only do we look at the language of the statute, and this is particularly true at the SAA because Congress voted on it and adopted it as a [00:11:47] Speaker 03: accepted the definitions therein as a definitive interpretation of what it meant by the law. [00:11:54] Speaker 03: So I think you have to read those together under any standard, Chevron 1 or Chevron 2. [00:12:05] Speaker 03: I think that part of the issue here really goes down to the point that commerce's position is basically that targeted dumping and targeting has nothing to do with this provision. [00:12:17] Speaker 03: In fact, before the lower court, the government was specifically asked whether they believe that significant price differences equal targeted dumping. [00:12:28] Speaker 03: And they specifically said no. [00:12:30] Speaker 03: They said that targeting dumping has nothing to do with this exceptional provision. [00:12:35] Speaker 03: And we find that to be a rather remarkable statement, given the fact that the SAA itself says that targeted dumping, that this is an exception for targeted dumping. [00:12:47] Speaker 03: And I can give you that site, but it's, they specifically, yeah. [00:12:54] Speaker 03: So we believe that the fundamental problem here, in addition to the problem we've discussed, is that when commerce gets to step two, their rationale for why they find that the differences are significant is simply that it results in a different result. [00:13:12] Speaker 03: I mean, in other words, the dumping margin is different under a methodology that compares average to average versus average to transaction. [00:13:20] Speaker 03: What I submit is that that difference has nothing to do with price changes. [00:13:26] Speaker 03: In other words, when you do the dumping calculation on any dumping database and you use those two methodologies, they're going to yield different results. [00:13:36] Speaker 03: One, because of what the court said and observed in the Beijing-Taiwan case, which is that averaging versus transaction to transaction mathematically leads to a different result. [00:13:48] Speaker 03: But there's an additional reason. [00:13:49] Speaker 03: which is that commerce, when they use average to average, they don't zero. [00:13:53] Speaker 03: They take into account negative margins. [00:13:57] Speaker 03: When they use the average transaction methodology, they do not. [00:14:02] Speaker 03: They do not consider negative margins. [00:14:04] Speaker 03: As a consequence, you almost always get a difference in results. [00:14:08] Speaker 03: So we don't understand why that test can satisfy Congress's specific requirement that the Commerce Department establish and explain [00:14:19] Speaker 03: why the normal methodology cannot take into account this pattern of price differences that they're observing. [00:14:31] Speaker 03: We believe that under commerce's methodology of using A to T, what they have done is to improperly inflate the margin. [00:14:39] Speaker 03: They've amplified the margin. [00:14:41] Speaker 03: In other words, it's a truism that if you do it under one methodology, you get one result, another methodology, and you get another result. [00:14:47] Speaker 03: But the question is, which one is accurate? [00:14:50] Speaker 03: And I'd refer the court to Judge Rustani's decision in Borden, where she refers to several reports, one by the Congressional Budget Office, which concluded that transaction-specific price comparisons are statistically biased toward finding a dumping margin. [00:15:10] Speaker 03: and that when in fact the actual margin is small and you apply the average transaction methodology, what you're doing is creating a bias in favor of margins and you're amplifying the margins themselves. [00:15:25] Speaker 03: So where are you getting this in the statute itself, the requirement that Congress has an obligation to discern the reasons for the price differential? [00:15:35] Speaker 03: In the essay, Your Honor. [00:15:36] Speaker 03: OK, so you're saying that [00:15:38] Speaker 03: that the SAA actually requires this? [00:15:42] Speaker 03: Yes, Your Honor. [00:15:43] Speaker 03: In fact, there's a two-part test in the SAA. [00:15:47] Speaker 03: And Commerce, in fact, admits as much. [00:15:55] Speaker 03: Commerce does not dispute this point. [00:16:01] Speaker 03: It says on page [00:16:09] Speaker 03: I think it's 833, Your Honor. [00:16:11] Speaker 03: It says, new section 77A D1B provides for a comparison of average normal values to situations where an average to average or transaction to transaction methodology cannot account for a pattern of prices that differ significantly, i.e. [00:16:26] Speaker 03: where targeted dumping may be occurring. [00:16:29] Speaker 03: Before relying on this methodology, however, commerce must establish and provide an explanation [00:16:36] Speaker 03: why it cannot account for such differences through the use of an average-to-average transaction methodology. [00:16:41] Speaker 03: But it doesn't say that, well, first of all, it does refer to the fact that targeted dumping may be occurring. [00:16:48] Speaker 03: So they don't have to make a formal determination that it is occurring. [00:16:53] Speaker 03: And when you say that commerce has an obligation to provide an explanation, their explanation is simply to say why the use of an average-to-average [00:17:06] Speaker 03: or transaction-to-transaction comparison doesn't account for it. [00:17:10] Speaker 03: I don't see that saying that they have to consider all possible variables that would account for the price differential. [00:17:18] Speaker 03: Well, I think if you read in context, Your Honor, I'd suggest that the IE, where targeted dumping may be occurring, is suggesting that if you observe this pattern of significant price differences, it may be the situation that targeted dumping is occurring. [00:17:36] Speaker 03: So what we're saying is that finding this pattern is simply a precondition to then look at whether targeted dumping may be occurring. [00:17:48] Speaker 03: And that this subsequent test, this sort of additional requirement Congress has imposed due to the exceptional methodology restrictions, basically is saying that, yes, you have to determine whether it's necessary. [00:18:02] Speaker 03: Because if you don't determine whether it's necessary, [00:18:05] Speaker 03: The question could be that you're simply amplifying the margin. [00:18:07] Speaker 03: I mean, if they're not engaging in targeted dumping, there's nothing to unmask. [00:18:12] Speaker 03: There's nothing to determine there. [00:18:15] Speaker 02: Your argument's a little bit circular, though, because in order to get to this, the legislative history that Congress was supposedly implementing, or the discussion of what they were supposedly implementing, we have to find that the statute's ambiguous. [00:18:30] Speaker 02: If we find that the statute's ambiguous, then we're kicked right back to Chevron. [00:18:33] Speaker 02: Are we not? [00:18:34] Speaker 03: No, Your Honor, I believe that the SAA is part, in Timex, the court said that even under Chevron 1, you do not look solely to the words of the statute, but you also consider the legislative history. [00:18:49] Speaker 03: And what we're suggesting is that, and under the presence of this court, that it has always read the SAA in conjunction with the law. [00:18:57] Speaker 03: in determining whether or not something is plain from the words of the statute, that the court doesn't just say, oh, it's nothing in the statute. [00:19:06] Speaker 03: We throw up our hands. [00:19:07] Speaker 03: We don't look at any legislative history. [00:19:09] Speaker 03: Even under Chevron 1, we also look at the legislative history. [00:19:13] Speaker 03: And the FAA is a very special kind of legislative history because of Congress's statements in the context of approving it, to be the definitive statement of their interpretation of the law. [00:19:27] Speaker 05: uh... and i think you're getting some time yet and i think i think uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... uh... [00:19:57] Speaker 08: The concept of dumping connotes a practice whereby a company sells goods in the US at a lower price than fair value in its home market. [00:20:08] Speaker 05: We understand the concept, but how about this particular case? [00:20:12] Speaker 08: Well, the crux of this case is that the concept of targeted dumping is just doing the same thing to a particular purchaser, region, or time period. [00:20:22] Speaker 08: And the issue here is that Orison's case [00:20:26] Speaker 08: is built on an incorrect presumption that that concept of targeted dumping also entails an intentionality component, that it has to be purposeful behavior to a customer region or time period, despite their protest to the contract. [00:20:40] Speaker 08: And I have a couple record citations that demonstrate this from the very beginning of this proceeding, and I'm particularly looking at page JA 2856 of the record and 3148 of the record, which are Orson's initial responses to [00:20:55] Speaker 08: the allegations of targeted dumping, where Borisan said, by definition, the concept of targeting indicates an affirmative or conscious effort. [00:21:06] Speaker 03: At least in their brief, they've sort of backed off of this intentionality concept. [00:21:11] Speaker 02: And their argument is that if there's a rational business purpose behind the price differential, then it's not dumping. [00:21:20] Speaker 08: I understand that, Your Honor, although I would disagree slightly. [00:21:23] Speaker 08: I think what Borisons has done is effectively use the word targeting synonymously for the idea of purpose or intentionality. [00:21:30] Speaker 08: So they say, as long as you define targeting as purposeful behavior, and remember, it's not just called dark targeted dumping. [00:21:35] Speaker 08: I mean, this was put in Union's deal at note three. [00:21:37] Speaker 08: referred to the concept of targeted or mass dumping. [00:21:41] Speaker 02: And I don't want to belabor the quote. [00:21:42] Speaker 02: What's your response to the notion that all they're doing is saying that targeted dumping really means an unexplained price differential. [00:21:51] Speaker 03: And in this case, it's explained by business purposes. [00:21:55] Speaker 08: Right. [00:21:55] Speaker 08: Well, I think I have a legal response and a factual response. [00:22:01] Speaker 08: The legal response is when you look right at the FAA in the first paragraph, [00:22:06] Speaker 08: And I'm looking at the copy of the FAA that's actually attached to Helen's reply brief. [00:22:11] Speaker 08: You know, the FAA speaks to targeted dumping. [00:22:15] Speaker 08: This is page 842, and the paragraph has targeted dumping in quotes. [00:22:20] Speaker 08: And it says, in such situations, the exporter may sell at a dump price to particular customers or regions, while selling at a higher price to other customers. [00:22:30] Speaker 08: So again, the whole concept is nearly defined by a pattern of price differences where there's a significant difference to particular customer regions or time periods. [00:22:39] Speaker 08: And that's plainly what's in the statute. [00:22:44] Speaker 08: So this notion that there may be legitimate commercial reasons or other reasons why there was a pattern of price differences to a particular customer region time period that also results in a meaningful difference between the A to A and the A to T methodology [00:23:00] Speaker 08: isn't part of the statute and it isn't part of the FAA either. [00:23:04] Speaker 08: To maybe clarify one point that's been slightly confusing, when the statute refers to the fact that targeted dumping may be occurring, what it's referring to is the fact that the test that is laid out in the statute are simply the prerequisites for commerce applying the A to T methodology. [00:23:22] Speaker 08: And it's the A to T methodology that then allows one to determine whether there is targeting or mapped dumping occurring. [00:23:30] Speaker 03: All right. [00:23:30] Speaker 03: Well, several paragraphs down in the essay where the section is that your friend on the other side cited, there's a reference to that commerce having to explain why the average to average or transaction to transaction comparison can't account for the difference. [00:23:48] Speaker 02: I mean, what are they explaining? [00:23:51] Speaker 02: I mean, you're just saying it doesn't show it. [00:23:53] Speaker 02: It doesn't, as a matter of math, show it. [00:23:56] Speaker 02: But that doesn't mean, what does it count mean? [00:24:00] Speaker 08: Well, there are, I think, a couple different ways. [00:24:03] Speaker 08: First of all, when it says Congress will look at this on a case-by-case basis, what it's talking about is the fact that here one had a 3% difference between [00:24:13] Speaker 08: A to A and the A to T methodology and it crossed what the courts have called the de minimis threshold, where on the one hand with the A to A methodology you're not identifying dumping and with the A to T because, and this is the factual component of my point earlier, because it turns out at the end of the day the vast majority of these sales in February 2010 that were identified by Commerce's targeted dumping analysis or massed dumping analysis turned out to be sales that were dumped. [00:24:42] Speaker 08: That is, the vast majority of the sales that were [00:24:46] Speaker 08: caught by commerce's statistical methodology were also sales that were sold in the US at less than their price in the home market. [00:24:55] Speaker 08: When you apply that A to T methodology, that masking by the non-dump sales is pulled back and you get a dumping rate. [00:25:03] Speaker 08: And so commerce, in its general practice, has said, if it crosses the de minimis threshold, that is a meaningful difference. [00:25:10] Speaker 08: But it's on a case-by-case basis, because as the SAA says, there's a difference between going from 3% [00:25:16] Speaker 08: a 0% to 3% and going from, for example, 150% to 153%, that wouldn't be a meaningful difference. [00:25:23] Speaker 02: I mean, all of this, there's a lot of math in all of this. [00:25:28] Speaker 02: So what is a meaningful difference? [00:25:30] Speaker 02: What is the threshold? [00:25:32] Speaker 08: Well, in this case, it's the fact that it crossed the de minimis threshold. [00:25:35] Speaker 02: I know, but you never define what that de minimis threshold is. [00:25:38] Speaker 02: That's what I'm trying to figure out. [00:25:40] Speaker 02: Is it 0.4% versus 0.6%? [00:25:43] Speaker 08: No, Your Honor. [00:25:45] Speaker 08: It's statutorily defined as 0.5%. [00:25:48] Speaker 08: And there's been quite a bit of litigation at the CIT on this issue. [00:25:53] Speaker 08: Commerce, I think initially, was a little... Commerce is always leery about using numbers in its issues in decision memorandum because you have BPI issues and things of that nature. [00:26:04] Speaker 08: But on page 37, 36 of the record, you have the final results of commerce's analysis. [00:26:11] Speaker 08: And it's saying, look, here it's 0, and here it's 3.55%. [00:26:14] Speaker 08: And we've had some plaintiffs argue that, well, what if it was 0.4 and it went to 0.6? [00:26:19] Speaker 08: And the CIT has ruled, like, that's not the case in front of us. [00:26:23] Speaker 08: Clearly, if it's going from 0 to 3.5%, that's a meaningful difference, because the A to A methodology isn't revealing dumping. [00:26:29] Speaker 08: And the A to T is. [00:26:30] Speaker 08: But it's important here to note that it really [00:26:34] Speaker 08: is something going on. [00:26:36] Speaker 08: This is at page, I'm sorry, 3724 of the record and 3660 of the record, where it's in black and white. [00:26:45] Speaker 08: The portion of the overall year's sales that were in February 2010 were a significant portion of sales. [00:26:51] Speaker 08: And at 3724, it indicates the number of those targeted, the percentage of those targeted sales that turned out to be sold at less than fair value. [00:27:00] Speaker 08: And the overwhelming majority of those sales were sales that were dumped. [00:27:04] Speaker 08: So commerce isn't simply applying a mechanical statistical test. [00:27:07] Speaker 08: It's identifying a pattern of price differences. [00:27:10] Speaker 03: So by not providing any guidance on what constitutes a meaningful difference. [00:27:14] Speaker 03: I mean, on a case by case basis, you're just saying we sort of know it when we see it. [00:27:17] Speaker 02: When we get the numbers, we'll tell you if you fail. [00:27:20] Speaker 08: Well, it's not true, Your Honor. [00:27:22] Speaker 08: Actually, as commerce's practice has developed, for example, [00:27:25] Speaker 08: Today, commerce has indicated that a meaningful difference would be crossing the minimum threshold, which has happened in a number of cases, and that's what happened here. [00:27:33] Speaker 08: Commerce has also indicated, as it's moved to a differential pricing model, that a difference of greater than 25% if you're not crossing the minimum threshold would constitute a quote-unquote meaningful difference. [00:27:44] Speaker 08: But we don't have that here because it's about the minimum threshold. [00:27:47] Speaker 08: Also, it's important to note that it's certainly not a truism that you always get a different result between the A to A methodology. [00:27:54] Speaker 08: and the A to T methodology. [00:27:56] Speaker 08: In particular, we cited two instances where commerce found a pattern of price differences that satisfied the first prong of the statute that passed the nails test. [00:28:09] Speaker 08: But then when commerce went to look at whether there was a meaningful difference between the A to A methodology and the A to T methodology, it determined there was not one, because essentially you got very similar results with the two, because unlike this case, [00:28:22] Speaker 08: you didn't have targeted dumping going on where the sales that passed the nails test resulted in a margin from unmasking by not averaging it with other sales. [00:28:34] Speaker 08: We cited those cases at page 40 of our brief. [00:28:37] Speaker 08: Those were the polyethylene film from China cases, which is 78 Fedreg 35 247 at issue eight. [00:28:46] Speaker 08: And also the carbon and alloy steel wire from Mexico case, which is at 78 Fedreg [00:28:52] Speaker 08: 28198 comments three and four. [00:28:55] Speaker 08: And I'm sorry, for that first one is issue eight, note 108. [00:28:58] Speaker 08: Those were both cases where you had companies that passed the nails test and there was a pattern of price differences, but ultimately because there was no meaningful difference between the A to A and the A to T methodologies, Congress determined that it was not appropriate to go on and apply the A to T methodology as the official [00:29:15] Speaker 08: methodology for the review and therefore seek to unmask targeted dumping. [00:29:21] Speaker 08: But the reason that the statute says, the essay says may, is because until you actually go and apply it and granted commerce methodology cuts to the chase a little bit by using it as a meaningful difference test as well, you really haven't identified targeted dumping, you're just looking at the pattern of US prices. [00:29:41] Speaker 08: A couple of very quick points, and we have made a Chevron 1 argument, and the issue there is this court should follow what it did in Nippon's deal where a party made a very similar argument about intentionality. [00:29:52] Speaker 08: And the court said, look, the statute clearly does not say that. [00:29:55] Speaker 08: Congress could certainly choose to look at those issues, but it's certainly not required. [00:29:59] Speaker 08: And so under Chevron step one, the statute doesn't require it. [00:30:03] Speaker 08: The other thing is on the issue about whether this is fair or whether it leads to an absurd result on their Chevron step two. [00:30:09] Speaker 08: That's clearly not the case for several reasons. [00:30:12] Speaker 08: First, because the FAA, the statute authorizes this methodology, and the FAA assumes that this will be the normal methodology in reviews, because at the time this was the normal methodology, the A to T methodology in reviews. [00:30:24] Speaker 08: Second, it's fair because it turns out at the end of the day, even if the pattern has something to do with cost differentials, of course, on raw material costs, the vast majority of the sales in this targeted time period were dumped. [00:30:39] Speaker 08: They were sold at less than fair value in the United States. [00:30:42] Speaker 08: And finally, it's fair because this is consistent with the overall concept of dumping. [00:30:46] Speaker 08: The domestic industry is no less entitled to a remedy for dumping because there are good commercial reasons for a party doing it. [00:30:54] Speaker 08: Dumping in general is not about intentionality. [00:30:56] Speaker 08: It's about pricing discrimination that affects the domestic industry. [00:30:59] Speaker 08: And that's no less true with targeted dumping than regular generic dumping. [00:31:03] Speaker 08: We ask that the court sustain the judgment of the court. [00:31:05] Speaker 05: Okay. [00:31:06] Speaker 05: Thank you. [00:31:11] Speaker 05: Ms. [00:31:11] Speaker 05: Hillman, are you going to tell us how to find a meaningful difference? [00:31:15] Speaker 01: Yes, Your Honor, I'd be delighted to. [00:31:18] Speaker 01: What you have before you, I think, is the classic case that fits what the statute is designed to do. [00:31:23] Speaker 01: What happened in this case is that Borison concentrated a significant portion of its sales in the single month of February. [00:31:32] Speaker 01: And the overwhelming majority of those sales were made at dumped prices. [00:31:38] Speaker 01: So now what Borison wants you to do is to force the Commerce Department to average [00:31:43] Speaker 01: those heavily concentrated dumps sales [00:31:46] Speaker 01: over the sales in all of the rest of the period of the investigation in order to wash out or mask the meaningful difference that you are exactly asking about Judge Newman. [00:31:58] Speaker 01: That's what they want to do. [00:31:59] Speaker 01: They want to allow those other sales later on to cover up the fact that they engaged in this significant amount of dumping concentrated in the month of February. [00:32:10] Speaker 01: And what the statute is clearly saying, and the statute was set up to address exactly this situation, [00:32:16] Speaker 01: is all that commerce is required to do is to find is there a pattern of significant differences between the export prices in the month of February versus the rest of the month. [00:32:29] Speaker 01: That's exactly what they did. [00:32:30] Speaker 01: Are those price differences significant? [00:32:32] Speaker 01: Yes. [00:32:33] Speaker 01: Then what commerce does is analyze what would be the dumping margin. [00:32:39] Speaker 01: if you do it on this weighted to transaction basis so that you can account for this concentration of highly dumped imports versus what would be the margin if you average it out over all of the others and balance those concentrated dump sales with something later on in the period that might be a higher price. [00:32:58] Speaker 01: That's exactly what commerce did. [00:33:00] Speaker 02: But the argument is that there's nothing going on other than math then. [00:33:06] Speaker 02: In other words, [00:33:07] Speaker 03: You're saying as long as there's some price differential at some period of time, then we can immediately bounce out of the average to average or transaction to transaction methodology. [00:33:19] Speaker 02: Their argument at least is, okay, let's start with a math and see if there's price differential, but then let's see if that price differential actually does reflect dumping rather than jumping to the end conclusion that it's necessarily dumping. [00:33:33] Speaker 01: What I think it requires is again, before you can even go down this road, you have to identify, is there a pattern? [00:33:40] Speaker 01: Yes or no? [00:33:41] Speaker 01: And that's a straightforward question. [00:33:43] Speaker 01: It doesn't require intent or anything as they would suggest. [00:33:46] Speaker 01: Straightforward, is there a pattern? [00:33:48] Speaker 01: yes or no, then is that pattern significant? [00:33:51] Speaker 01: So again, Commercen engages in an analysis about whether those differences in price are significant. [00:33:57] Speaker 01: On both of those, again, here unequivocally the answer was yes, and Borson is really not contesting that basic part of the test. [00:34:04] Speaker 01: Then you get to the does it make any difference, whether you apply an averaging methodology or whether you apply a weighted to transaction methodology. [00:34:14] Speaker 02: So there is no step [00:34:16] Speaker 02: to say what accounts for the price difference. [00:34:19] Speaker 02: That's my question. [00:34:21] Speaker 01: In other words, you're basically answering my other question, yes, but it's all just math. [00:34:27] Speaker 01: Well, there is no requirement in the statute to show why are there price differences. [00:34:33] Speaker 01: There's no intent. [00:34:34] Speaker 01: Right, that's the heart of the question. [00:34:36] Speaker 01: The statute does not require any showing of an intention. [00:34:39] Speaker 01: to target or an intention. [00:34:43] Speaker 01: Again, what happened here was the dumping was already occurring. [00:34:46] Speaker 01: So whether or not prices changed as a result of changes in cost doesn't change the fact that they were dumping. [00:34:54] Speaker 01: So they started out with export prices below home market prices. [00:34:59] Speaker 01: If then costs come along and increase, you increase both of the prices. [00:35:03] Speaker 01: That does not change the fact that they are dumping. [00:35:07] Speaker 01: And the fact that costs may or may not have increased does not excuse Morrison's obligation not to dump. [00:35:17] Speaker 01: So whether or not the price has changed for any reason doesn't change the fact that they are not permitted to dump. [00:35:22] Speaker 01: They are under a dumping order, and they're not allowed to continue to dump. [00:35:28] Speaker 01: And they're not allowed under the statute to allow the averaging to hide the dumping that is occurring, that did occur in the month of February. [00:35:38] Speaker 05: Okay. [00:35:39] Speaker 05: Thank you, Ms. [00:35:40] Speaker ?: Schellman. [00:35:41] Speaker ?: Thank you. [00:35:44] Speaker 05: Mr. Cameron. [00:35:57] Speaker 07: Your Honor, thank you very much. [00:35:58] Speaker 07: I appreciate the time. [00:36:03] Speaker 07: The government refers to meaningful difference. [00:36:06] Speaker 07: There's a lot of discussion here about, well, if it's over to minimus, then it's meaningful difference. [00:36:11] Speaker 07: And therefore, we can go to A to T. I would refer you to the statute and to the SAA. [00:36:20] Speaker 07: The meaningful difference that he then defines is over to minimus. [00:36:25] Speaker 07: You're not going to find that in the statute or the SAA. [00:36:27] Speaker 07: The statute's not talking about any [00:36:30] Speaker 07: dividing line there. [00:36:32] Speaker 07: It says examine and explain. [00:36:35] Speaker 07: And the one thing that's clear from the statute and the SAA is that you can use A to T, average to transaction, only if you determine that there is a pattern of pricing and that it can't be taken in count of in the normal course of business using average to average. [00:36:57] Speaker 07: So if you can't [00:36:59] Speaker 07: Take that into account if you can't explain it. [00:37:01] Speaker 07: If examining under A to A, that's fine. [00:37:05] Speaker 07: But just saying, well, you know, I did it by average to transaction, and it resulted in over de minimis, and therefore because I had a pattern, automatically that puts me in, I've given myself the excuse, by the way, to get the average to transaction, which is where I started. [00:37:24] Speaker 07: This is very circular, and it puts the, [00:37:27] Speaker 07: These guys have said in their briefs constantly that we've put the cart before the horse, because we've said you actually have to find targeted dumping before you use average transaction. [00:37:36] Speaker 07: And the answer is, it's absolutely right. [00:37:39] Speaker 02: Well, the statute does. [00:37:41] Speaker 02: I mean, I know I gave the other side a hard time about math, but I'm giving you a hard time, too. [00:37:46] Speaker 02: I mean, the statute does contemplate that there needs to be some mechanism to make this determination. [00:37:54] Speaker 02: And average to average doesn't account for a concentrated period of time. [00:37:58] Speaker 07: Fair enough. [00:37:59] Speaker 07: But this is where I think it is useful to look at what Judge Rustani was discussing in Borden. [00:38:06] Speaker 07: I understand it's not precedent, but it's interesting. [00:38:09] Speaker 07: Because she's discussing the tension that existed in developing this statute. [00:38:14] Speaker 07: The tension between the amplification of margins through using average to transaction with zeroing, or [00:38:23] Speaker 07: masking dumping. [00:38:24] Speaker 07: And what she said is, you know, in the end, they came out in favor of reducing the amplification of dumping. [00:38:32] Speaker 07: That's the reason this is the exception and not the rule. [00:38:35] Speaker 07: So yes, there has to be a test, but that's what the examination is. [00:38:40] Speaker 07: I would suggest to you that what we're suggesting is not revolutionary. [00:38:45] Speaker 07: If you look at Borden, if you look at that Kelso OI, and if you look at the Beijing case that my colleague referred to, they all refer to the fact that, well, there can be other explanations for significant price differences. [00:39:03] Speaker 07: And what are they? [00:39:06] Speaker 07: And there may be significant price differences that are not targeted dumping. [00:39:11] Speaker 07: And if those significant price differences aren't targeted dumping, [00:39:15] Speaker 07: then they're not supposed to be using this exception. [00:39:18] Speaker 07: So that is our position, Your Honor, that this is an exception to the rule. [00:39:23] Speaker 07: And that's the reason that it says examine and explain. [00:39:27] Speaker 07: And when you have those cost differences and you can't explain it, then that has to be taken into account. [00:39:32] Speaker 07: And they can't just say, I'm not going to look at it. [00:39:34] Speaker 05: Thank you very much. [00:39:35] Speaker 05: We appreciate your time. [00:39:36] Speaker 05: Thank you, Mr. Cameron. [00:39:37] Speaker 05: Thank you all. [00:39:38] Speaker 05: The case is taken under submission.