[00:00:01] Speaker 01: Good morning. [00:00:02] Speaker 01: Our first case day, 2015-1233, down hole pipe and equipment versus CIBC. [00:00:13] Speaker 01: Is it Chagrin? [00:00:14] Speaker 00: Chagrin. [00:00:15] Speaker 01: Chagrin. [00:00:16] Speaker 01: OK. [00:00:16] Speaker 01: Please proceed. [00:00:21] Speaker 04: Good morning, Your Honors. [00:00:22] Speaker 04: May it please the Court. [00:00:23] Speaker 04: I'm Roger Chagrin on behalf of the Appellant's Vam Drilling et al. [00:00:30] Speaker 04: One thing is clear at the outset of this argument, and that is that the appellants and the Appellee International Trade Commission are in complete agreement that the original affirmative threat of injury determination by the ITC was, and I quote from footnote five of the ITC's brief to the court on page 27, the commission agrees with appellants that the original determination also was supported by substantial evidence. [00:00:59] Speaker 04: Therefore, the only things that we and the appellee ITC disagree about are the two issues before this court. [00:01:08] Speaker 04: First, did the court below find that the affirmative threat determination by the ITC was unsupported by substantial evidence? [00:01:19] Speaker 04: And whether by doing so, was that reweighing of the evidence incorrect under the standard of review? [00:01:27] Speaker 04: And did the court [00:01:29] Speaker 04: also violate the standards of review established by this court in NIP on an NSK by completely failing to even review the record as a whole to determine whether the record as a whole supported the commission's determination. [00:01:43] Speaker 06: Hypothetically, a CIT decision reversed certain fact findings for lacking substantial evidence. [00:01:53] Speaker 06: And then for completely different fact findings the commission made, the CIT said, [00:01:59] Speaker 06: that it needed more explanation and therefore was, I guess, vacating those findings and seeking more explanation to understand the reasoning underlying those fact findings. [00:02:12] Speaker 06: And what do you think our standard of review should be for a CIT decision like that? [00:02:18] Speaker 04: Then clearly, Your Honor, it should be the Nippon NSK standard of review. [00:02:22] Speaker 04: In fact, that's almost exactly what happened. [00:02:24] Speaker 06: But Nippon didn't rule on that particular kind of fact pattern. [00:02:28] Speaker 04: No, NSK did. [00:02:29] Speaker 04: Nippon, in fact, was almost identical to this case. [00:02:33] Speaker 04: In the Nippon case, Judge Rastani said, I reviewed all the data on underselling, and I believe the commission is completely wrong, and I'm sending this back to you, and you better do it the way I tell you to do it. [00:02:45] Speaker 04: And this court said, you know, you shouldn't be reweighing the evidence. [00:02:50] Speaker 04: But even if you're correct, you still didn't look at the decision as a whole. [00:02:54] Speaker 04: Look at all these other facts that the court did. [00:02:56] Speaker 06: I don't follow how that reconciles with [00:02:58] Speaker 06: Taiwan semiconductor though, which says in those instances when the CIT remand certain fact findings back to the commission for further explanation so that the CIT can do meaningful review, then it is our duty to review that decision, that choice by the CIT for abuse of discretion. [00:03:19] Speaker 06: So under my fact pattern, what we have in my hypothetical is a hybrid case, don't we? [00:03:26] Speaker 04: Yes, and to answer your question, Your Honor, I think in the hybrid case, then you should be applying the standard view of Nipon and NSK. [00:03:35] Speaker 03: But in Nipon and NSK, in both of those cases, what the CIT did was send it back and say, you must make a negative injury finding or reopen the records. [00:03:48] Speaker 03: In this case, what the court said is there's a couple of facts that I don't think are supported by substantial evidence. [00:03:54] Speaker 03: It appears that you relied heavily on those facts. [00:03:56] Speaker 03: Go back and look at this again. [00:03:58] Speaker 03: Maybe in reweighing, you'll still conclude that there should be a negative injury determination, but the court didn't direct entry of that determination. [00:04:08] Speaker 04: No, I would agree. [00:04:09] Speaker 04: But as you said, Your Honor, and I know you wrote the decision in NSK here, the court clearly said, [00:04:16] Speaker 04: as to what the court said was the integral part of the commission's affirmative determination. [00:04:22] Speaker 04: The court said in its conclusion, in its holding, that I have reviewed the ITC purchaser's questionnaire submitted by the domestic purchasers that the ITC considered large. [00:04:36] Speaker 04: The court concludes that substantial evidence does not support two findings made by the commission and two general conclusions the ITC reached on the basis of these two findings. [00:04:45] Speaker 04: I don't think the court was just saying, and he finished by saying, from these erroneous findings, the ITC reached the unsupported conclusion. [00:04:55] Speaker 06: I don't know how... Probably looking at part of the CIT decision, though. [00:04:58] Speaker 06: There was another part of the CIT decision where the CIT judge made it crystal clear that for other findings, unrelated to the findings you just quoted, the CIT judge said, I need more. [00:05:12] Speaker 06: I need more explanation. [00:05:13] Speaker 06: and remanded on that. [00:05:14] Speaker 04: And as I say, Your Honor, those were very minor. [00:05:17] Speaker 04: If you, reading as I know you have, the overall decision of the court, you have 10 or 12 pages saying, these are all the reasons when I reweigh the evidence, then on the main part of your determination, I find that it's not supported by substantial evidence. [00:05:34] Speaker 04: And by the way, on two minor things that are completely incidental to their decision, [00:05:39] Speaker 04: I think that I'd like you to explain this more. [00:05:42] Speaker 06: And what concerns me as someone who practices... The finding that there was a substantial market share by the importers over the period of investigation that's minor, as well as the ramp up of inventory. [00:05:55] Speaker 06: That's another minor finding. [00:05:57] Speaker 06: I don't think those are minor findings. [00:05:58] Speaker 04: I would say in the context of the decision, because it was all about choosing periods. [00:06:03] Speaker 04: So it was, well, you find that they're substantial. [00:06:07] Speaker 04: when the majority looks at the first half of 10 compared to the second half of nine versus the minority finding comparing the first half of nine to the first half of 10, that was a question of which period someone should choose. [00:06:22] Speaker 04: And please explain to me further how this interacts with your determination on how substantial the imports are. [00:06:28] Speaker 01: I guess one thing I don't understand is your argument presupposes an all or nothing approach to review in this case. [00:06:36] Speaker 01: I mean, we get lots of [00:06:38] Speaker 01: decisions where they are multifaceted by lots of different courts. [00:06:43] Speaker 01: And we apply the appropriate standard of review to each separate decision that's made within those opinions. [00:06:49] Speaker 01: So why wouldn't you be right about the first 20 pages of the opinion, which is something that would warrant de novo review, where we step into the shoes of the CIT and look for substantial evidence. [00:07:01] Speaker 01: but potentially wrong to suggest that that standard would apply to the second half of the opinion. [00:07:07] Speaker 01: It's not even a half. [00:07:08] Speaker 01: It's really the last four pages, which asks for more explanation. [00:07:12] Speaker 01: And why aren't we reviewing that for separately for an abuse of discretion? [00:07:15] Speaker 01: Aren't they two discrete issues? [00:07:17] Speaker 04: Yes, your honor. [00:07:18] Speaker 04: Don't don't misinterpret. [00:07:18] Speaker 04: I'm not arguing for all or nothing. [00:07:20] Speaker 04: It is in fact the appellees who argue for all or nothing. [00:07:24] Speaker 04: They say because the latter part of the decision sprinkles some of the dust of [00:07:30] Speaker 04: diamond saw blades or Taiwan semiconductor and says, I'm sending this back for further consideration that this court should look at the entire decision. [00:07:39] Speaker 04: based only on Taiwan Semiconductor and Diamond Sawblades Abusive Discretion. [00:07:44] Speaker 01: But just to be clear, your argument is not that we have to look at the entire decision for substantial evidence. [00:07:49] Speaker 01: You're comfortable with the idea that we could look at these discrete and different determinations by the court and apply what we think are the appropriate standards to each. [00:07:58] Speaker 04: Entirely comfortable, Your Honor. [00:07:59] Speaker 03: I believe that you can look at it in part as... In fairness, Diamond Sawblades does support the proposition that you really are supposed to fall within one pocket or the other, whether we [00:08:10] Speaker 03: ultimately agree with that, it seems to say that over a pretty vigorous dissent. [00:08:15] Speaker 04: And that's what troubles me. [00:08:16] Speaker 04: I really believe that the dissent was correct, but that I'm very concerned that this court does not overrule two absolutely critical decisions, the entire practice of injury determinations before the ITC, which are Nippon and NSK, which say in these incredibly complicated cases, [00:08:40] Speaker 04: We have to defer to the commission to weigh all this evidence. [00:08:45] Speaker 04: They're getting these hundreds of questionnaire responses. [00:08:48] Speaker 04: It's being whittled down by their staffs. [00:08:51] Speaker 04: They have an eight or 10 hour hearing with all these witnesses for all this examination. [00:08:55] Speaker 04: And we can't allow the CIT judges to become the seventh commissioner in every case. [00:09:02] Speaker 04: So what I don't want to see as a practitioner besides arguing this individual case is that any CIT judge says, [00:09:10] Speaker 04: Gee, I don't have to worry about review from the appellate court if I just sprinkle some magic dust of Taiwan semiconductor and diamond saw blades as long as somewhere I say I'm sending this back for reconsideration. [00:09:27] Speaker 06: Okay, so you agree that on the fact findings that were amended for further explanation when it came to substantial market share and ramp up of inventories, [00:09:35] Speaker 06: we should be reviewing the CIT's decision for remand on those two fact findings for an abuse of discretion, right? [00:09:41] Speaker 00: I agree with that. [00:09:41] Speaker 06: Okay, now we go to whether there was substantial evidence to support the Commission's finding that there was some kind of breakthrough in the sales to large purchasers, large domestic purchasers. [00:10:00] Speaker 06: What was wrong with the CIT's finding when it concluded that [00:10:05] Speaker 06: the commission, the administrative record lacks substantial evidence to support that. [00:10:09] Speaker 04: It completely reweighed the evidence. [00:10:11] Speaker 04: I would make two points. [00:10:12] Speaker 04: First, in the commission's determination, at the preliminary phase where it did not have purchaser questionnaires, it relied on the sworn testimony of counsel here today on behalf of the Palis, Ms. [00:10:26] Speaker 04: Chen, that there was attenuated competition because [00:10:30] Speaker 04: the importers of Chinese drill pipe could not sell the largest US purchasers, that all of the largest US purchasers had multi-year contracts with domestic producers. [00:10:42] Speaker 06: Is there evidence in the record that three of the eight large purchasers in fact did purchase the imported pipe in 2007? [00:10:50] Speaker 04: Yes, and that of course came out later as part of the final determination. [00:10:55] Speaker 06: Now that the question is, and here's where the court really... And in 2010, how many large purchasers purchased pipe? [00:11:03] Speaker 06: An imported pipe? [00:11:05] Speaker 04: I believe that it was roughly the same number. [00:11:07] Speaker 06: It was roughly one. [00:11:09] Speaker 06: Yes, however, it happened to have been... And it was not for money, it was some kind of pipe swap. [00:11:14] Speaker 04: Now, that would be reweighing the evidence, because in fact, what three of the commissioners said was that the combination of a sale and swap [00:11:23] Speaker 04: to the largest purchase in the United States, which the second largest U.S. [00:11:27] Speaker 04: producer testified at the hearing that that had been their largest customer for years. [00:11:33] Speaker 04: And the loss of that single largest customer led them to lay off a third of their workforce. [00:11:39] Speaker 04: And yet the commissioners and the minority said, well, we don't really look at that as a sale because there was a swap involved. [00:11:46] Speaker 04: And the court said, yeah, I agree with those. [00:11:49] Speaker 04: commissioners and minority. [00:11:51] Speaker 04: And I would say that's free-weighing the evidence. [00:11:53] Speaker 06: Was there a scintilla of evidence to support the three commissioners' conclusions that this gigantic... Well, how do you explain that there was some kind of breakthrough against a prior major limitation to access to large purchasers when, at the beginning of the period investigation, there were three large purchasers buying this imported pipe [00:12:17] Speaker 06: And then by the end of the period of investigation, there was only one. [00:12:21] Speaker 04: I would say that the terms large and small are just terms. [00:12:25] Speaker 04: The question is, when in among the large, quantities involved are significant, i.e. [00:12:33] Speaker 04: an analysis of those quantities. [00:12:35] Speaker 04: So if at the beginning of POI, three of the largest purchasers were buying minuscule amounts of product, they may have... Minuscule? [00:12:43] Speaker 06: I don't know. [00:12:43] Speaker 04: Yeah, I mean, they were relatively small purchases at the beginning, but at the end... 10 million is miniscule? [00:12:48] Speaker 04: The purchases by the largest purchasers, yeah, in this market. [00:12:52] Speaker 06: In 2007? [00:12:52] Speaker 04: Yeah, in the size of a billion dollar market, that's not really tremendous. [00:12:59] Speaker 04: But at the end, we're talking about the largest purchaser buying their entire annual needs from a Chinese importer instead of from the second largest domestic producer. [00:13:10] Speaker 04: And the commissioners and the majority who heard all the evidence, who waited, said, I find that this means that these Chinese importers can access the market. [00:13:21] Speaker 04: Then they combined it with the record as a whole. [00:13:23] Speaker 01: I'll put your well into your rebuttal time. [00:13:25] Speaker 01: You want to save some? [00:13:26] Speaker 01: I would like to save it. [00:13:27] Speaker 01: Thank you, Your Honor. [00:13:41] Speaker 05: Morning, Your Honor. [00:13:42] Speaker 05: May it please the court. [00:13:43] Speaker 05: My name is David Goldfein. [00:13:44] Speaker 05: I'm appearing here today on behalf of the U.S. [00:13:47] Speaker 05: International Trade Commission. [00:13:50] Speaker 05: I'd like to take issue with a couple of points that Mr. Shagan raised regarding the standard of review. [00:13:56] Speaker 05: He's relying on NSK and Nippon GOES. [00:14:00] Speaker 05: However, those cases were clearly distinguishable from the facts here. [00:14:05] Speaker 05: They involved a two-option remand, and this case doesn't at all. [00:14:09] Speaker 06: So, um, you're urging that we review the CIT decisions for an abuse of discretion when it came, comes to the 2013 CIT decision. [00:14:19] Speaker 06: Is that right? [00:14:21] Speaker 06: Yes. [00:14:21] Speaker 06: The original, uh, uh, CIT decision. [00:14:24] Speaker 06: What about the fact finding by the commission that the CIT rejected is lacking substantial evidence. [00:14:32] Speaker 06: Right. [00:14:33] Speaker 06: Well, why wouldn't you be urging that we should review that fact finding? [00:14:38] Speaker 06: for lack of substantial evidence as well standing in the shoes of the CIT. [00:14:42] Speaker 06: I would have expected the ITC to be really strongly urging that. [00:14:47] Speaker 05: Well, we don't believe on our reading of the remand instructions from Chief Judge Stansu are that on all three issues he remanded for more equity. [00:14:55] Speaker 06: What if you read it the way I read it? [00:14:58] Speaker 05: Okay, well. [00:14:58] Speaker 06: Which is that the CIT Judge Stansu specifically made [00:15:05] Speaker 06: a determination that that fact finding by the commission should be rejected for lacking substantial evidence in the administrative record. [00:15:13] Speaker 06: Under that understanding, what is the ITC's position on standard of review? [00:15:18] Speaker 05: Okay. [00:15:19] Speaker 05: Well, I would like to say before I answer that the Chief Judge Stanton was very clear on those two findings that he found impermissible. [00:15:26] Speaker 05: He said three times here that he was not [00:15:29] Speaker 05: precluding the commission from reconsidering those or any other findings. [00:15:32] Speaker 05: That's on his opinion on CA-22, that's in his first opinion. [00:15:37] Speaker 05: It's in his second opinion at CA-56-57, and then it's in his third opinion at 22-09. [00:15:42] Speaker 05: So he said three times, I'm not precluding the ITC from reconsidering any findings. [00:15:47] Speaker 01: And on CA-19, he says, it's apparent from the views of the commissioners, these erroneous findings on warranty and exclusion for importancy from the threat determination [00:15:55] Speaker 01: The commission must reconsider that determination on the whole in the absence of these findings and conclusions. [00:16:03] Speaker 06: On page five of the 2014 opinion, Judge Stansu says in down hole pipe one, his first decision, the court concluded that the contested determination relied in part on two factual findings that were not supported by substantial evidence on the administrative record and also directed the commission to provide [00:16:20] Speaker 06: further explanation with respect to other aspects of the affirmative threat determination. [00:16:24] Speaker 01: Is it possible you want to revisit your assertion that his opinion is clear? [00:16:29] Speaker 05: I didn't say his opinion was clear. [00:16:30] Speaker 01: I thought you said his opinion. [00:16:31] Speaker 01: I'm sorry. [00:16:32] Speaker 05: I said on two issues, they're clearly on their face. [00:16:35] Speaker 05: The inventories and the subject imports are clearly on the subject market share. [00:16:38] Speaker 05: On the third issue, it could have been perhaps more clear, but his last word, my main point is his last word, particularly when he denied reconsideration, was he was not [00:16:47] Speaker 05: including the ITC from reconsidering any fines, including the two he had disallowed. [00:16:53] Speaker 05: So that was his last word. [00:16:54] Speaker 03: So you're saying that you believe that the ITC could have ultimately come to the same conclusion again, just supporting it with more evidence? [00:17:03] Speaker 05: Yes. [00:17:04] Speaker 03: Even as to those two facts. [00:17:06] Speaker 05: He said on page 22.09, the appendix, in his last opinion, reconsideration, in this case, the court did not assign weight to the various pieces of evidence [00:17:18] Speaker 05: supporting an affirmative threat determination or the various other pieces of evidence detracting from such a determination, the court appropriately left that task to the ITC on remand. [00:17:27] Speaker 06: What if we disagree with you? [00:17:30] Speaker 06: What if we disagree with you? [00:17:31] Speaker 06: Okay. [00:17:32] Speaker 06: Then what's the standard of review? [00:17:33] Speaker 05: Well, then the standard of review, it's still abuse of discretion because clearly at least on two other issues, [00:17:41] Speaker 05: I'm talking about this one. [00:17:42] Speaker 05: Right, but you wouldn't need to reach this one. [00:17:44] Speaker 05: If one of the grounds was proper for the remand, you wouldn't need to decide this third ground at all. [00:17:50] Speaker 06: But if you wanted to... I don't understand that at all. [00:17:53] Speaker 05: If one of the grounds... Mr. Chagrin, we would submit, has not demonstrated that at least two grounds here were abusive. [00:18:02] Speaker 05: or an abuse of discretion. [00:18:03] Speaker 05: He hasn't demonstrated that. [00:18:04] Speaker 05: So the case with the remand was coming back to the commission. [00:18:08] Speaker 05: Both of those grounds were dropped. [00:18:10] Speaker 01: But if we were to view the remand as coming back to the commission, but preventing them from reconsidering the fact findings that the CIT has decided are not supported by substantial evidence. [00:18:24] Speaker 01: So you have to, on remand, give us more explanation on these issues. [00:18:28] Speaker 01: And reconsider your threat determination. [00:18:30] Speaker 01: And you may not consider these two fact findings because they're not supported by substantial evidence. [00:18:34] Speaker 01: I know that's not the way you think we should read the opinion, but presuming that we do, accept it as a hypothetical, if you will. [00:18:40] Speaker 01: Assuming that's the way we read it, isn't there a real problem here? [00:18:44] Speaker 01: Because how in the world, then, could we possibly affirm the current CIT decision if we think the commission was forced to look at this [00:18:54] Speaker 01: issue and affirmatively forced to exclude from their consideration certain things that maybe they should have been allowed to include. [00:19:02] Speaker 05: Well, if he were directing, he didn't... I know you don't think he did. [00:19:07] Speaker 01: I said assume it as a hypothetical because I don't want you to keep arguing with me about something that we're never going to agree on. [00:19:14] Speaker 01: Assume that I don't agree with your argument, which I don't. [00:19:18] Speaker 01: Assume that you can treat it as a hypothetical. [00:19:22] Speaker 05: So the hypothetical, the other two grounds were proper. [00:19:27] Speaker 05: And so it was one of, as long as one of those grounds is proper, it's coming back to the commission. [00:19:32] Speaker 01: But now it's coming back to the commission and they're being forced to reevaluate the determination and not allowed under my hypothetical to consider certain things that they found highly relevant and in fact, dispositive before. [00:19:46] Speaker 01: And if I think that decision was wrong, [00:19:49] Speaker 01: then how in the world could I affirm the current one because they had to make it with their arm twisted behind their back crying uncle? [00:19:55] Speaker 06: I'm so intrigued here because let's assume for the moment that the Commission made 20 independent fact findings and let's assume that the CIT determined that 19 of those fact findings are not supported by substantial evidence but the 20th one needs further explanation so that it gets remanded back. [00:20:15] Speaker 06: You representing the Commission [00:20:16] Speaker 06: do not want us to give deferential review to those 19 fact findings and look at that anew under the substantial evidence standard, you would prefer this court to review the CIT's choice to send that case back to the commission on an abuse of discretion standard. [00:20:38] Speaker 06: I find that really striking. [00:20:39] Speaker 05: Well, in the hypothetical you've just laid out there, that's [00:20:43] Speaker 05: completely different from okay so then you agree then then those 19 fact findings in my hypothetical we should be reviewing the Commission's findings there for substantial evidence I would I without seeing the you know particular facts in that case it's a question of law we're talking about right now right well what that we're just talking about a legal question right now not a record question well what one issue it would you know if the one issue that was remanded for more explanation was a [00:21:10] Speaker 05: a critical issue to the case, you could argue that that would be an abuse of discretion. [00:21:17] Speaker 05: For the whole thing? [00:21:19] Speaker 06: For the whole case? [00:21:21] Speaker 05: Well, I don't think, without getting too much into hypotheticals on that, that the record here is clearly not that record. [00:21:33] Speaker 03: Let me see if I can follow what [00:21:36] Speaker 03: your argument here. [00:21:37] Speaker 03: You say in the footnote that you think the first determination was supported by substantial evidence. [00:21:42] Speaker 00: Yes. [00:21:42] Speaker 03: And would that include the two factual findings that the CIT did? [00:21:47] Speaker 05: Yes, we believe they were supported by substantial evidence. [00:21:48] Speaker 05: We would have referred he didn't remand the case, but we think under an abusive discretion standard, it's not for the commission to overturn the judgment. [00:21:56] Speaker 05: We may reasonably disagree with them on those two issues, but it's not [00:21:59] Speaker 05: given the standard here is abusive discretion, it's not for us to overturn, you know. [00:22:04] Speaker 03: And so once it was remanded, you think that there was enough flexibility that the ITC could have come back with the same conclusion that it had come with in the first instance, that in fact there was a material injury or threat of material injury finding, and you think they could have [00:22:22] Speaker 03: supported that had they chosen to do so. [00:22:24] Speaker 05: Yeah, and in fact that's exactly what happened here because the two commissioners who, when they maintained their, in the now dissent, they basically further explained everything and took out those pieces. [00:22:40] Speaker 03: So it was really just [00:22:42] Speaker 03: a fortuity of the fact that the personalities changed on the commission. [00:22:46] Speaker 05: It was due to, yeah, right, the composition of the commission changed. [00:22:51] Speaker 06: How often does the composition of the commission change? [00:22:54] Speaker 06: I mean, right here, and I've been reading other opinions where it seems like on remands, the composition changes and then it seems to drive a different outcome. [00:23:04] Speaker 06: I'm getting a little lost. [00:23:06] Speaker 05: What's the term of a commissioner? [00:23:09] Speaker 05: A commissioner term is nine years of... But they're staggered, right? [00:23:13] Speaker 05: They're staggered, yeah. [00:23:14] Speaker 05: And so it's very... This happens fairly infrequently. [00:23:17] Speaker 05: I mean, you can count a small handful of cases we're talking about. [00:23:21] Speaker 05: I think if you're talking... If you're looking at Alltex, T1 semiconductor, and GOES, those were changed outcomes. [00:23:28] Speaker 06: It's diamond saw blade as well. [00:23:30] Speaker 05: Yes, and that was composition, but that does happen, but that's... [00:23:35] Speaker 05: We were presuming good faith in the remand process and part of the CIT judge here and you know, the case came back legitimately to the commission. [00:23:44] Speaker 06: Just to sum up, it's your position that when it comes to what I'll call a hybrid situation, where a CIT court determines that some findings are not supported by substantial evidence, other findings need to be remanded for further explanation. [00:24:01] Speaker 06: In that kind of hybrid situation, [00:24:05] Speaker 06: you urge that we review all of those choices made by the CIT court for an abusive discretion. [00:24:14] Speaker 05: Is that your...? [00:24:16] Speaker 05: No, I didn't mean to convey that impression. [00:24:19] Speaker 05: It's a per se rule. [00:24:19] Speaker 05: And the commission addresses each case on its facts. [00:24:24] Speaker 05: In this case, we don't believe this is a hybrid situation. [00:24:27] Speaker 05: If you believe it's a hybrid situation, [00:24:29] Speaker 05: in a hybrid situation, you would still have to one, by definition, one or two of those issues would have come back legitimately to the commission. [00:24:37] Speaker 05: And therefore the commission would have had, you know, the new commissioners would have looked at the record as they did and reached a new determination. [00:24:44] Speaker 05: So even in a hybrid situation, as long as the case is legitimately coming back to the commission, he hasn't shown that every... But the appellants have appealed the original [00:24:53] Speaker 06: a CIT decision. [00:24:55] Speaker 06: So we're reviewing that. [00:24:57] Speaker 01: I understand that. [00:24:57] Speaker 01: And your view is that the fact findings, the two original fact findings are supported by substantial evidence. [00:25:03] Speaker 01: So why don't you take a minute, if you will please, and tell me why. [00:25:07] Speaker 01: Judge Chen was asking the appellant several questions about those fact findings and whether they were supported by substantial evidence. [00:25:15] Speaker 01: Could you tell me your thoughts on that please, or the commission's thoughts on why they in fact were? [00:25:20] Speaker 05: Yes, we largely agree with Mr. Shager on that. [00:25:22] Speaker 05: As to the large customers, the commission, and it's laid out in the dissent, in the now dissent opinion, remember the commissioners, the commission, and it's also in the majority opinion. [00:25:32] Speaker 05: It's on pages 37, 38 of the original opinion. [00:25:35] Speaker 05: We're talking about one paragraph here. [00:25:37] Speaker 05: The large purchasers, Chief Judge Stansu basically attributed a fine to the commission that the commission never made. [00:25:43] Speaker 05: When the commission was talking about change to large customers, it was talking about [00:25:48] Speaker 05: the difference between what happened in the preliminary phase of the investigation and the final phase of the investigation. [00:25:53] Speaker 05: Those are two different investigations, two different records, and when we talked about a breakthrough, we were talking about in the preliminary phase, the respondents had put forward evidence that subject imports were limited to sales to smaller customers. [00:26:08] Speaker 05: That changed in the final phase, and the paragraph on page 37, 38 of the opinion laid that out. [00:26:15] Speaker 01: I definitely understand the argument about [00:26:17] Speaker 01: the commission's belief that the CIT judge misunderstood the nature of one of the fact-finding. [00:26:23] Speaker 01: What about the other one? [00:26:25] Speaker 05: The other one, as far as breaks from the prior limitation, yes, that was the reweighing, essentially, we'd say, what he was doing there. [00:26:33] Speaker 05: He was looking at the questionnaires that were submitted, and the commission, for its breakthrough finding, was relying on market share data and volume data. [00:26:41] Speaker 05: So basically, that showed, as those commissioners were looking at it, the market share [00:26:47] Speaker 05: was increasing in the second half, 29, the first half, 2010, and the volumes were increasing. [00:26:52] Speaker 05: Chief Judge Stanton reweighed that evidence and looked at the questionnaire data, including, I might add, on this one key transaction in the case, the sale in interim 2010. [00:27:03] Speaker 05: And basically, we would say he was reweighing there. [00:27:09] Speaker 05: So it wasn't so much he didn't attribute a fine to us, we didn't make, he was just reweighing. [00:27:13] Speaker 06: Where in the IPC's decision [00:27:16] Speaker 06: When it talked about a breakthrough through a major prior limitation, does the ITC decision make clear that that limitation was contemplating limitations on market share or volume of sales rather than access to large purchasers? [00:27:37] Speaker 05: Yeah, if you give me one minute, I can turn to the opinion. [00:27:43] Speaker 06: I read this portion of the ITC decision referring to limitation on access to large purchases. [00:27:56] Speaker 05: He does discuss market share. [00:27:59] Speaker 05: I mean, sorry, the commission does discuss market share. [00:28:01] Speaker 05: Yeah, in other places. [00:28:03] Speaker 05: What's that? [00:28:03] Speaker 06: In other places. [00:28:05] Speaker 05: Well, I think it's in the volume discussion there. [00:28:08] Speaker 05: I mean, that's where we're discussing it. [00:28:10] Speaker 05: You may not have been in the exactly where you're looking, but you'll find it in the volume analysis. [00:28:15] Speaker 01: Mr. Goldfein, I think that we need to give Ms. [00:28:17] Speaker 01: Chen a few minutes. [00:28:19] Speaker 01: We went substantially over with you. [00:28:21] Speaker 01: So Ms. [00:28:22] Speaker 01: Chen, if you have... [00:28:25] Speaker 01: different issues you would like to touch on since we went so far over with Mr. Goldfine. [00:28:30] Speaker 01: I have to make it even for him. [00:28:31] Speaker 01: The longer you stand there, the more he's going to get in rebuttal. [00:28:34] Speaker 00: Certainly. [00:28:34] Speaker 01: So only try to limit yourself to additional or different issues and not just retread the same ground. [00:28:40] Speaker 02: Yes. [00:28:41] Speaker 02: Thank you, Your Honor. [00:28:42] Speaker 02: May it please the court, Irene Cha, on behalf of Appellee Downhole Pipe and Equipment. [00:28:47] Speaker 02: I wanted to point out a couple of issues here with regard to Judge Stansu's remand opinion. [00:28:53] Speaker 02: Unlike the trade court nip on an SK, Judge Sanser did not direct any particular outcome. [00:28:58] Speaker 02: In Diamond Sawblades, the court stated, this court stated, quote, simply using the word substantial evidence is not dispositive. [00:29:06] Speaker 02: The deciding factor in determining what standard of review applies is whether the record before the Court of International Trade needed further explanation in order for the court to properly evaluate the agency's action. [00:29:19] Speaker 03: Here the- What if those two findings that he said [00:29:23] Speaker 03: they couldn't rely upon anymore. [00:29:26] Speaker 03: What if those were the critical findings upon which the ITC relied? [00:29:31] Speaker 02: Well, we would submit that they were not the critical findings that the ITC relied on. [00:29:35] Speaker 02: The ITC had four different sub-findings for its likely adverse volume effects. [00:29:40] Speaker 02: This sub-finding regarding a breakthrough of a prior limitation sales to large US purchasers was one of those sub-findings. [00:29:48] Speaker 02: And it's apparent that the record needed further explanation, regardless of what Judge Stansu said. [00:29:54] Speaker 02: The CIT saw, based on the language, which was a reasonable reading, that there was no breakthrough in 2010 based on the record evidence. [00:30:04] Speaker 02: The remand dissent clarified that the actual breakthrough occurred in 2007, which, if you read the opinion, the original determination, you can't discern that from what the original [00:30:18] Speaker 06: I'll ask what I keep asking. [00:30:21] Speaker 06: What if we disagree? [00:30:23] Speaker 06: What if we disagree and we read the CIT decision as clearly concluding that there was no substantial evidence in this record to support this fact finding about a breakthrough against the major prior limitation, and the CIT took away from the commission on remand, even considering that as a potential factor to support a threat to a domestic industry? [00:30:47] Speaker 06: What is their standard for review in a situation like this, which I'm referring to for now as a hybrid situation? [00:30:54] Speaker 06: Do we look at that anew and review that particular finding by the commission for substantial evidence and then look at the remand of the other factors for an abuse of discretion by the CIT? [00:31:06] Speaker 02: No, Your Honor. [00:31:07] Speaker 06: Why not? [00:31:08] Speaker 02: As clear in Taiwan Semiconductor and Diamond Sawblades, the court in those cases took issue with several findings, and in some cases, [00:31:16] Speaker 02: They, for example, in Diamond Sawblade, there's an attenuated competition finding. [00:31:20] Speaker 02: The court referred to that as potentially incorrect. [00:31:23] Speaker 02: The court also took issue with the price volume of that finding. [00:31:26] Speaker 06: Are you saying that you read Diamond Sawblade as identifying a hybrid situation like I'm identifying here? [00:31:34] Speaker 06: Because the way I read Diamond Sawblade, the majority said that all of those fact findings were being sent back by the CIT for further explanation. [00:31:43] Speaker 06: Now the dissent in Diamond Sawblade saw it differently. [00:31:47] Speaker 06: The dissent saw Diamond Sawblade in the same way that I'm seeing this case today. [00:31:52] Speaker 02: Well, we submit this is not a hybrid situation. [00:31:56] Speaker 02: The bottom line is the court in Diamond Sawblade is also here. [00:31:58] Speaker 06: What if it is? [00:31:59] Speaker 06: Hypothetically, what if it is? [00:32:01] Speaker 06: What's the standard of review? [00:32:02] Speaker 02: The bottom line is the court could not evaluate the entire determination until these issues were resolved. [00:32:09] Speaker 02: And the court, with regard to the prior breakthrough, there was clearly a lack of clarity. [00:32:14] Speaker 02: So regardless of whether you call it substantial evidence or we find that this is not supported by substantial evidence, the bottom line is the court needed further explanation. [00:32:22] Speaker 02: It needed more clarity in all of these issues. [00:32:24] Speaker 02: And that was the case in Diamond Sawblades, in Taiwan Semiconductor, and in this case. [00:32:29] Speaker 02: So I take it that you don't. [00:32:31] Speaker 03: that regardless of the standard of review, you don't agree with the ITC that the first determination was supported by substantial evidence? [00:32:39] Speaker 03: We don't agree. [00:32:40] Speaker 03: Okay. [00:32:41] Speaker 03: And as to the, you've already explained why, at least as to the one point, even the dissent later explained that it had to give more evidence to justify what it was saying. [00:32:52] Speaker 03: What about the other findings? [00:32:53] Speaker 02: The other findings were clearly needed further explanation. [00:32:57] Speaker 02: the inventories as well as the share of substance imports over the POI. [00:33:02] Speaker 02: And that was also permissible under, you know, Judge Sansu needed clarity on those issues as well. [00:33:09] Speaker 02: And I would go back to the prior breakthrough. [00:33:12] Speaker 02: The issue here is the commission was never forced to completely drop that finding. [00:33:18] Speaker 02: In fact, in the remand dissent, the commission revisited it. [00:33:23] Speaker 02: Judge Sansu did not say you cannot [00:33:26] Speaker 02: absolutely come back with that finding at all. [00:33:30] Speaker 02: So you're free to revisit all of your findings on remit. [00:33:34] Speaker 03: So when he said, look, reweigh in the absence of these findings, you're saying that they could reweigh making the same findings again with better evidence? [00:33:46] Speaker 02: Well, at that point, if they had other evidence on the record, they could come back and [00:33:51] Speaker 01: What about the same evidence? [00:33:53] Speaker 01: Forget additional evidence. [00:33:55] Speaker 01: What could they have made the same finding on the same evidence? [00:33:59] Speaker 01: Well, if they'd come back with the same evidence and they'd further explain the other evidence, and Judge Stanza said, well, I don't find that this entire decision... So you think, wait, you think the ITC understood itself to be able to come back on these two findings with the identical evidence and use those to support its [00:34:20] Speaker 02: Well, I think that it had to give at least further explanation on that finding. [00:34:28] Speaker 02: It was clear from the record there was confusion. [00:34:30] Speaker 02: CIC saw no breakthrough, remand dissent, came back with additional explanation saying that the breakthrough occurred in 2007. [00:34:38] Speaker 02: If the commission had thought they could not come back with that finding at all, they would have not even tried to explain that. [00:34:48] Speaker 01: And as to the... Well, you're over your prime, so we need to hear from the appellant. [00:34:55] Speaker 01: We'll restore your full five minutes of rebuttal. [00:34:57] Speaker 01: That doesn't make it exactly even. [00:34:59] Speaker 01: If you need to go longer, you can, but hopefully you won't. [00:35:04] Speaker 04: Thank you, Your Honor. [00:35:04] Speaker 04: I'll be very quick. [00:35:05] Speaker 04: I would just make two points of rebuttal. [00:35:08] Speaker 04: First, that I would completely disagree with some of the arguments from appellees about what the court did in its original remand. [00:35:17] Speaker 04: It, in fact, very similar to NIP on an NKK, short of ordering, going negative. [00:35:24] Speaker 04: The language in the remand order itself says the court directs the ITC to reconsider its affirmative threat determination on the whole, absent those findings and conclusions. [00:35:36] Speaker 04: So it invalidated the decisions on these two key facts that it found were unsupported by substantial evidence and said to the ITC, [00:35:45] Speaker 04: you reconsider this decision, but you can't rely on these two things. [00:35:49] Speaker 03: But why did the dissent then come back and say, well, we'll give you more explanation and more data and in fact clarify what was clearly a confusing point in their original opinion? [00:36:02] Speaker 04: And that's unfortunate, but I know what would have happened if the dissent was actually just a new majority and they came back with that opinion, we would be just like Nippon. [00:36:10] Speaker 04: Then the judge below would say, [00:36:12] Speaker 04: I told you not to do this, so now I'm directing you to go to negative. [00:36:16] Speaker 04: That's exactly what happened in Nippon, where the court said, look, on this underselling, you don't have it right. [00:36:22] Speaker 04: I want you to do this again. [00:36:23] Speaker 04: And the majority came back and said, no, here's the way we're explaining the underselling. [00:36:29] Speaker 03: But if they didn't even say that, that that's where it would have ended up in Nippon. [00:36:31] Speaker 03: But I've seen plenty of cases where the CIT had said, I don't think your facts are supported by substantial evidence. [00:36:37] Speaker 03: And later, they come back with more evidence. [00:36:39] Speaker 03: And the CIT says, OK, you got me. [00:36:41] Speaker 03: I agree now. [00:36:42] Speaker 03: Not every judge is as firm in their view as the judge of Nippon and NSK. [00:36:50] Speaker 04: Well, this judge seemed very firm in his view, didn't he? [00:36:53] Speaker 03: And it seems here that when the court says... But the government's correct though that in his final opinion, he said, go back and just tell me everything. [00:37:03] Speaker 04: Well, I think in his decision, his first decision, he said, absent those findings and conclusions, he's telling them it's [00:37:11] Speaker 04: It's invalidated. [00:37:12] Speaker 04: I think given the severity of his remand language, the idea that he would have just said, oh, well, thank you very much, but we wouldn't be in a different position today. [00:37:25] Speaker 04: So I do believe in the end, this court's going the right way in terms of saying, we have a substantial evidence ruling here. [00:37:33] Speaker 04: We have to treat it de novo. [00:37:35] Speaker 04: We have to determine two things, I believe under NIP on an NSK. [00:37:39] Speaker 04: which is why this case is so different from Taiwan Semiconductor and Diamond Sawblades. [00:37:45] Speaker 04: I mean, Diamond Sawblades didn't invalidate. [00:37:48] Speaker 01: Okay, but suppose that we agree with you that the first two determinations, well, let's say one and a half, because everybody admits that one of the things the CIT analyzed, it didn't look at correctly, right? [00:38:01] Speaker 01: It was sort of misunderstood. [00:38:02] Speaker 01: So suppose that the CIT's decision on the first two [00:38:08] Speaker 01: where it said they weren't supported by substantial evidence is erroneous. [00:38:12] Speaker 01: There were still these additional issues that were part of the threat determination upon which the CIT decided it needed more explanation in the APA sense in order to review you and look at this contrary evidence. [00:38:28] Speaker 01: You took this one period of time snapshot, but if you took this other period, I don't understand. [00:38:32] Speaker 01: And then in the other issue, they point out that the dissenters show [00:38:37] Speaker 01: You know, no significant increase in inventories. [00:38:40] Speaker 01: By looking at this one chart, you cite the other chart, but what you failed to do, and the APA requires every agency to do this, is to address all the arguments, right? [00:38:48] Speaker 01: Like really, you have to address everything. [00:38:50] Speaker 01: So what if that doesn't feel like an abuse of discretion on those factual points? [00:38:55] Speaker 01: Where are we now? [00:38:57] Speaker 01: I think probably we're at a place that you'd agree with, which is maybe we can't affirm, maybe if that's the case, we can't affirm the current decision because [00:39:07] Speaker 01: When it went back to the commission, they were told not to include these things. [00:39:11] Speaker 01: But we, but maybe the remand order is itself. [00:39:14] Speaker 01: Okay. [00:39:14] Speaker 01: Because the use of discretion. [00:39:15] Speaker 01: So what, where do we end up? [00:39:17] Speaker 01: How do we handle this case? [00:39:18] Speaker 01: If that's where we are? [00:39:19] Speaker 04: Well, that's where I believe that you send the case back and you say, we can't affirm because you made these mistakes on substantial evidence. [00:39:27] Speaker 04: And I do believe in this is where there's tension and you could see a lot of that tension in some of these later decisions after nip on an NSK. [00:39:35] Speaker 04: And that is. [00:39:36] Speaker 04: I believe NIPA and NSK stand for, even if you find any substantial evidence issues, before you send it back to the commission, tell us that you've looked at the record as a whole. [00:39:50] Speaker 04: And I find in this initial 22-page decision that the court never said, let me see if the record as a whole, let me see if the other things you relied upon are enough. [00:40:00] Speaker 04: And I believe that's the differential standard that this court has always had. [00:40:04] Speaker 03: But you haven't said in fact what the court did and said, I need more explanation on these other factors. [00:40:10] Speaker 04: Only on the other factors. [00:40:11] Speaker 04: But at the heart of this decision, I don't, I don't even think you can have a change other than the change of the members of the commission. [00:40:18] Speaker 01: I don't think on the... You can't possibly be asking the three of us to do that now in the first instance, are you? [00:40:26] Speaker 01: Are you suggesting that now our role is to look at all the record evidence as a whole in the first decision and see if it's supported when you admit the CIT didn't do that? [00:40:36] Speaker 04: No, I'm saying that you should send it back until the Court of International Trade is supposed to look at the record as a whole. [00:40:45] Speaker 04: It's supposed to look at the Commission's determination [00:40:48] Speaker 04: before it sends a case back when it finds that one item is not supported by substantial evidence. [00:40:55] Speaker 04: I believe Nipon in this case squarely. [00:40:58] Speaker 03: But even if the court had articulated that it was doing that, it still would have remanded because it needed more information on specific items. [00:41:08] Speaker 03: And we look at that for an abuse of discretion. [00:41:10] Speaker 03: And as the government points out, once they get it on remand, they can do whatever they want. [00:41:15] Speaker 04: It could have, on the other hand, I believe that, you know, and this was not the case in Diamond Sawblades or Taiwan Semi Dugter, if the court says, gee, I find there's some areas where there might be further explanation. [00:41:28] Speaker 04: But you know what? [00:41:29] Speaker 04: I'm still going to look at this decision based on the record as a whole. [00:41:34] Speaker 04: And I can find that there's enough here, given the deferential standard. [00:41:38] Speaker 04: There's enough here that it supports your decision. [00:41:40] Speaker 01: So are you saying that we should look at this decision and the explanation part, which begins at the bottom of 19 and only spans about three pages, because the first 19 pages are all about the substantial evidence review? [00:41:52] Speaker 01: Are you saying if we agree with you on that first part, we should look at the second part as a moreover? [00:41:59] Speaker 01: Or at a minimum, we should at least look at it as we're not certain that the court would have remanded for more explanation if it had gotten the first part right. [00:42:08] Speaker 01: We don't have to tell the CIT what it has to do, but tell it to take a fresh look in light of this and make its own assessment in the first instance. [00:42:18] Speaker 04: Yes, based on the record as a whole. [00:42:21] Speaker 04: That's correct. [00:42:22] Speaker 04: Thank you, Your Honor.