[00:00:00] Speaker 06:
And we have three argued cases before the court today.

[00:00:05] Speaker 06:
But before we get to that, we have one of the more pleasant opportunities that this court gets to go through, which is that I understand that Judge Raina has a motion that he would like to make to the court.

[00:00:23] Speaker 00:
Yes, I move for the admission of Clinton R-South to be a member of our distinguished court.

[00:00:35] Speaker 00:
You know, Clint, they say that time flies when you're having fun.

[00:00:40] Speaker 00:
But here at the Federal Circuit, we say time flies when you're working hard.

[00:00:46] Speaker 00:
And time sure must have flown fast for you this past year as you served as my clerk.

[00:00:52] Speaker 00:
Your work ethic is exemplified by your excellent work product.

[00:00:57] Speaker 00:
And I know that before me stands an attorney who will be an excellent practitioner and member of our bar.

[00:01:08] Speaker 00:
Thank you so much for your work, my chambers, and everything you've done for our court.

[00:01:17] Speaker 06:
We now need to take this under advisement.

[00:01:21] Speaker 05:
I completely agree.

[00:01:25] Speaker 06:
Clint, I'm also familiar with all the great things that you have done for the court and how well you have worked with my clerks over the years.

[00:01:32] Speaker 06:
So I think that Judge Chen and I have unanimously agreed that you should be admitted to the bar.

[00:01:43] Speaker 02:
You saw him swear or affirm that you will support yourself as an attorney and counselor of this court, a rightly important law, and that you will support the Constitution of the United States of America.

[00:01:54] Speaker 04:
I do.

[00:01:55] Speaker 02:
Welcome to the bar of the United States Court of Justice.

[00:02:02] Speaker 06:
Okay, the first case before the court, Mark David versus United States, 15-1276, an appeal from a decision of the Court of International Trade.

[00:02:15] Speaker 06:
Mr. Schafer, you want to save five minutes for rebuttal?

[00:02:19] Speaker 04:
At least I'm hopeful I'm going to be briefed in my affirmative argument, Your Honor.

[00:02:24] Speaker ?:
Okay.

[00:02:26] Speaker 04:
Thank you all, and may it please the court.

[00:02:28] Speaker 04:
My name is Alex Schaefer of the law firm of Crollin-Mooring here on behalf of the Mark David Division of Baker, Knappen, Tubbs.

[00:02:36] Speaker 04:
With the court's indulgence, I think I'm going to dispense with a lot of the usual throat clearing and background and just get to what I think is the 800-pound gorilla in the room.

[00:02:45] Speaker 04:
We have a case about the corroboration, or lack thereof, of a PRC-wide rate.

[00:02:51] Speaker 04:
If I were sitting where you are sitting, which I appreciate is not an exceptionally likely turn of events, but if I were, I think I would ask, Listen Schaefer, is there anything left of your case in light of our decision in the Shrimp case just days ago?

[00:03:03] Speaker 04:
And the point that I want to make is that I feel quite strongly that the answer to that is yes.

[00:03:09] Speaker 04:
And I'd like to share why I think that.

[00:03:13] Speaker 04:
In that case, here's how the court characterized what the Commerce Department did.

[00:03:19] Speaker 04:
The court said, commerce found that by quantity, the condoms accounting for a significant volume of merchandise under consideration were sold at prices that resulted in margins which exceed the 112% margin that was at issue in that case.

[00:03:33] Speaker 04:
A little bit later on, the court said, commerce reasonably relied on the significant volume of sales by the largest cooperating exporter in the review that they were using as corroboration for the margin that they calculated.

[00:03:49] Speaker 04:
And the point that I want to make is what a stark contrast to the fact that we have on the record in this case, where there's nothing in the way of quantification of the sales that they used from this 2009 review to corroborate the rate that was ultimately applied.

[00:04:03] Speaker 04:
What they say is they've got a rate that they calculated for a new shipper 10 years ago.

[00:04:08] Speaker 04:
And then in the 2009 review, they say, well, there was an exporter.

[00:04:13] Speaker 04:
And we look at their sales database.

[00:04:16] Speaker 04:
And that 216 is, the phrase that they use is, within the range of margins.

[00:04:22] Speaker 04:
In other words, there's some sale or sales somewhere in there that were as high as 216%.

[00:04:26] Speaker 04:
Now I would note, that exporter got a margin of 42% in that review.

[00:04:32] Speaker 04:
So there could have been a lot of sales in the neighborhood of 216%.

[00:04:37] Speaker 04:
So I submit that mathematically, it's exceedingly unlikely that there was a significant quantity of sales on a condom-by-condom basis at those levels.

[00:04:45] Speaker 06:
But the fact is we don't know.

[00:04:47] Speaker 06:
I'm having a problem with your whole proposition that there has to be the kind of corroboration you're talking about where what we're dealing with here is a PRC-wide entity rate.

[00:05:00] Speaker 06:
I mean, the case law that you cite even

[00:05:03] Speaker 06:
bearing seems to stand for the opposite proposition that you cited for it.

[00:05:08] Speaker 06:
I mean, it specifically says that when you're talking about a PRC-wide entity rate, that there is no need to individually corroborate that rate.

[00:05:24] Speaker 04:
Well, I don't know if there's need to individually corroborate the rate, but there still needs to be something to support.

[00:05:28] Speaker 04:
And it seems to me, when you have a situation whereas here, the rate that they're coming up with is five times what the worst margins are for cooperating respondents.

[00:05:38] Speaker 04:
Now, I understand the court has said over and over again, look, we're not going to treat non-cooperating respondents the way we would if they were cooperating.

[00:05:44] Speaker 04:
Fair enough.

[00:05:45] Speaker 04:
But the cooperating respondents who are getting the roughest margins are getting margins on the order of 42%.

[00:05:51] Speaker 04:
And so if it's going to be commerce's position that all of those respondents are selling at somewhere between 20% and 42%, everybody else is selling at 200 plus, 216%.

[00:06:01] Speaker 04:
It would seem to me there has to be some corroborative basis for that.

[00:06:06] Speaker 04:
I mean, when you treble the worst margins that people are getting, you're still not even close to the number that they're applying here.

[00:06:12] Speaker 04:
and what they've offered as support for the proposition that this is what the PRCY identity is up to in the background is some presumably insignificant volume of sales from a sales database that's already four years old.

[00:06:25] Speaker 00:
Kelser, are you arguing that the information relied on by commerce is inaccurate or flawed, or that it's simply just not sufficient?

[00:06:35] Speaker 00:
That's imperfect.

[00:06:36] Speaker 04:
Well, I'm not sure what your honor means by inaccurate.

[00:06:39] Speaker 04:
I would accept, not being on the APO of that 2009 review, I have no way to validate what they found in that sales database.

[00:06:46] Speaker 04:
But I would accept for these purposes that that number probably appears somewhere in there.

[00:06:50] Speaker 04:
But the question is, how meaningful is that?

[00:06:52] Speaker 04:
It couldn't possibly have been a significant number of sales.

[00:06:55] Speaker 04:
It's for one exporter who, again, got a 42% margin.

[00:06:59] Speaker 04:
To link that and say, based on the presence of that outlier sale in that database, we can presume that that's what the PRC white entity is doing.

[00:07:07] Speaker 04:
It just seems to me a bridge too far.

[00:07:09] Speaker 04:
So I would, to answer your question, I would say it's insufficient.

[00:07:11] Speaker 06:
Isn't that what ad hoc shrimp says?

[00:07:13] Speaker 06:
That it is presumed.

[00:07:15] Speaker 06:
absent some rebuttal.

[00:07:17] Speaker 06:
And the rebuttal evidence that you're giving us is that certain cooperating entities got different individual rates.

[00:07:23] Speaker 06:
But that doesn't have anything to do with the PRC-wide entity rate.

[00:07:28] Speaker 04:
I guess I beg to differ, Your Honor.

[00:07:31] Speaker 04:
I think it does have something to do with it, not in the sense that those rates should be a proxy for what the PRC-wide rate ought to be.

[00:07:39] Speaker 04:
But with a delta like this, there has to be some explanation for the divide.

[00:07:44] Speaker 04:
It cannot be that they calculate 216% in 2004 or whenever it was that they cook it up and then use it in perpetuity with the support being, well, a sale in a database for an exporter is enough.

[00:07:59] Speaker 04:
I don't think even ad hoc shrimp goes that far.

[00:08:00] Speaker 06:
There's no burden on commerce.

[00:08:03] Speaker 06:
to prove that.

[00:08:04] Speaker 06:
All commerce has to say is that we have this rate that was established from real numbers from a cooperating entity, and that that rate remains presumptively the PRC-wide rate, absent rebuttal evidence.

[00:08:19] Speaker 06:
And because there's been no cooperation and no evidence as to why that rate no longer would be good, I don't know where you can take us.

[00:08:28] Speaker 04:
Well, I don't think that is all that they're required to do, Your Honor.

[00:08:32] Speaker 04:
I guess that's where I differ.

[00:08:33] Speaker 04:
First of all, when you say that rape, again, not to bang away at this, but that wasn't a rape for anybody.

[00:08:41] Speaker 04:
That was a margin on some small number of sales.

[00:08:45] Speaker 04:
And I think that's important.

[00:08:47] Speaker 04:
But more to the point, I don't think even Ad Hoc Shrimp says that is presumptively anything.

[00:08:55] Speaker 04:
it says, at base, that there still has to be some level of corroboration.

[00:09:00] Speaker 04:
Now, in ad hoc shrimp, they had some meaningful quantum of sales.

[00:09:04] Speaker 04:
And they said, we can reasonably infer that the fact that this is a major exporter, and the fact that this is a significant amount of sales, and in fact that there are margins well above this rate within that significant number of sales, that's a fair proxy for what the PRC white entity is doing.

[00:09:19] Speaker 04:
We don't have anything like that.

[00:09:23] Speaker 00:
So is part of your problem that they went back too far, that instead of going back to 2004, maybe commerce should have used data from 2008 and other reviews?

[00:09:34] Speaker 04:
Well, I think there were a lot of things that they could have done.

[00:09:38] Speaker 04:
My impression, to me, I think,

[00:09:40] Speaker 04:
What they ought to do, what they always ought to do, is start with some commercially reasonable rate that's supported by something.

[00:09:47] Speaker 04:
And then add some incentive in.

[00:09:49] Speaker 00:
Well, they went back and they went back to the 2005 New Shipper Review and then they used verified sales.

[00:09:57] Speaker 00:
These are verified sales from that particular review period because there were no cooperating respondents after that.

[00:10:07] Speaker 00:
Wouldn't substantial evidence support that?

[00:10:10] Speaker 00:
that reasoning by Thomas?

[00:10:12] Speaker 04:
Again, I don't think so.

[00:10:13] Speaker 04:
I think that there's got to be a little more of a showing when you have this sort of a delta, and given this passage of time.

[00:10:19] Speaker 04:
And I'm aware of the precedent that suggests that the length of time by itself isn't dispositive.

[00:10:24] Speaker 04:
But I'd say that time coupled with the results on the record that we're seeing.

[00:10:28] Speaker 04:
There's nothing innately wrong with going back four, and five, and seven, and 10 years to look at a rape, particularly where you have a couple of review periods without cooperating respondents.

[00:10:37] Speaker 00:
How would you characterize ad hoc shrink?

[00:10:39] Speaker 00:
What effect has that decision had on your blue brief?

[00:10:43] Speaker 04:
Well, frankly, in some ways, it's not super helpful.

[00:10:51] Speaker 04:
But what I think it does is if nothing else, there was some math done.

[00:10:59] Speaker 04:
Elementary school principals, there was some work shown.

[00:11:03] Speaker 04:
in ad hoc shrimp.

[00:11:04] Speaker 04:
There was some quantitative analysis that said, here's what's going on with these sails, and here's why we're doing it.

[00:11:09] Speaker 04:
In this case, they had a rate that they liked, and they went hunting around for some basis to support it.

[00:11:15] Speaker 04:
And the gruel is very, very thin.

[00:11:17] Speaker 06:
But did you ever argue below that the original rate was calculated based on too low of a sails?

[00:11:25] Speaker 06:
I mean, as I read your briefs and, you know,

[00:11:28] Speaker 06:
There's a little bit troubling because you cite cases for propositions they don't really stand for.

[00:11:33] Speaker 06:
But you simply made the argument that they had to make an individualized rate corroboration as it related to your company, your client.

[00:11:42] Speaker 06:
So I don't see you ever questioning the original determination that that was a PRCY entity rate.

[00:11:49] Speaker 04:
Which original determination, Your Honor?

[00:11:51] Speaker 04:
Because we certainly did.

[00:11:52] Speaker 06:
The original number that they chose.

[00:11:55] Speaker 04:
Well, you mean from the 2004 review?

[00:11:59] Speaker 06:
Yes.

[00:12:00] Speaker 04:
Well, I'm not sure how we could challenge that without having been on the record of that review.

[00:12:05] Speaker 06:
But I mean, now you're telling us that we should go back and say, because of ad hoc shrimp, that it wasn't based on enough sales.

[00:12:12] Speaker 04:
Well, again, that's the 2009 review.

[00:12:16] Speaker 04:
And they cited that decision memo and included it on the record of this.

[00:12:20] Speaker 04:
And yeah, that is what I'm arguing.

[00:12:23] Speaker 04:
They said, the 2004 review gave us the number.

[00:12:28] Speaker 04:
That's not what they used as corroboration.

[00:12:30] Speaker 04:
They said, the 2009 review is the corroborative review.

[00:12:35] Speaker 04:
And that's the one where the decision memo says it's within the range of margins.

[00:12:39] Speaker 04:
And it doesn't say anything more than that.

[00:12:41] Speaker 05:
I don't understand what the principle of law is you want us to adopt.

[00:12:47] Speaker 05:
combined with ad-hoc shrimp to me completely foreclosed your case.

[00:12:52] Speaker 05:
So what is the wiggle room left that is still open for you to ask for some

[00:13:03] Speaker 05:
I don't know, recalibration of those opinions.

[00:13:05] Speaker 05:
What is the rule of law you want us to apply?

[00:13:08] Speaker 05:
You think commerce should have done some kind of extra corroboration, but you didn't qualify for a separate rate.

[00:13:17] Speaker 05:
So I don't understand what is the rule of law you want us to adopt.

[00:13:21] Speaker 04:
What is the rule of law you want us to adopt?

[00:13:23] Speaker 04:
that the PRC-wide rate, whether applied in the context of adverse facts available or just applied by the PRC-wide rate, needs to be corroborated meaningfully.

[00:13:33] Speaker 04:
And it's our position that that wasn't done here.

[00:13:36] Speaker 04:
Both Dongtai Peek Honey and Ad hoc Shrimp say that.

[00:13:39] Speaker 04:
Dongtai Peek says, look, you respondent are trying to get us to use your data, but you didn't cooperate.

[00:13:44] Speaker 04:
You can't do that.

[00:13:46] Speaker 00:
But if that country-wide rate was based on verified data and then also on a shipper review, and this is a cooperating respondent, why isn't that sufficient corroboration?

[00:14:02] Speaker 04:
Because verified data, there are... Verified sales data.

[00:14:09] Speaker 04:
Because a given sale can be an outlier.

[00:14:12] Speaker 04:
The fact that, you know, if you get a de minimis margin,

[00:14:15] Speaker 04:
notwithstanding that you had one sale in your sale database, the margin on which was 200%.

[00:14:21] Speaker 04:
There's no way that 200% is representative of even what you're doing.

[00:14:24] Speaker 00:
But the sale was verified.

[00:14:26] Speaker 00:
And one sale can set a dumping margin, right?

[00:14:29] Speaker 04:
It can, but it didn't for that exporter.

[00:14:33] Speaker 04:
I mean, this is the leap that gives us so much trouble.

[00:14:37] Speaker 04:
That sale, or whatever quantum of sales that it was, wasn't even representative of what that company was doing.

[00:14:44] Speaker 04:
And so I'm baffled how it can be representative of what the PRC white entity is doing.

[00:14:47] Speaker 06:
Tell us what you think meaningful corroboration would look like.

[00:14:51] Speaker 04:
Well, for example, one way to do it would be to say, look.

[00:14:57] Speaker 04:
I'm just sort of going off the cuff.

[00:14:59] Speaker 04:
But one way to do it would be to say, the worst margin that anybody's gotten in the last five reviews is 43%.

[00:15:05] Speaker 04:
We're doubling that to provide incentive for people to cooperate.

[00:15:10] Speaker 04:
That's far worse than anybody has done.

[00:15:14] Speaker 04:
It's tied to a rational number, meaning the margins that actual companies are getting in ongoing reviews.

[00:15:20] Speaker 04:
And it has a built-in incentive to... But there's no commercial reality in your example.

[00:15:26] Speaker 00:
You just want us to pull a number out of the air and double it, or not out of the air.

[00:15:30] Speaker 00:
You want us to get a number, in this case, based on, and then just simply double it.

[00:15:37] Speaker 04:
Well, but that's exactly what the precedent suggests.

[00:15:39] Speaker 04:
The precedent suggests that you start with some sort of commercially reasonable, verifiable number, and then you add in an incentive to incentivize cooperation.

[00:15:48] Speaker 00:
Isn't that what happened here?

[00:15:49] Speaker 00:
I mean, they started with a verified number, sales data.

[00:15:53] Speaker 00:
Actually, there was no multiplication after that.

[00:15:57] Speaker 00:
That sale reflects commercial reality.

[00:16:02] Speaker 04:
Again, I take issue with that, Your Honor.

[00:16:04] Speaker 04:
I don't see that it does.

[00:16:05] Speaker 04:
I don't see how a sale of some margin in the neighborhood of 216% reflects commercial reality when even the seller had an actual overall margin of 42%.

[00:16:18] Speaker 04:
I don't know whose commercial reality that represents.

[00:16:20] Speaker 06:
OK, I'll give you two minutes for rebuttal.

[00:16:24] Speaker 04:
Thank you, ma'am.

[00:16:33] Speaker 03:
May it please the court?

[00:16:34] Speaker 06:
Obviously, we have one area to focus on, right?

[00:16:37] Speaker 06:
They've narrowed their argument.

[00:16:39] Speaker 06:
They've focused on one thing.

[00:16:40] Speaker 06:
So let's just focus on the corroboration.

[00:16:42] Speaker 03:
Indeed.

[00:16:43] Speaker 03:
The court should affirm because Commerce corroborated the China-wide AFA rate.

[00:16:49] Speaker 03:
using the most current verified data available.

[00:16:54] Speaker 03:
The statute supplies the standard.

[00:16:56] Speaker 03:
It's not meaningful corroboration, which suggests a subjective inquiry.

[00:17:01] Speaker 03:
The statute, 1677E sub C, requires corroboration by commerce to the extent practicable.

[00:17:11] Speaker 03:
And commerce complied.

[00:17:13] Speaker 06:
Well, it at least means economic reality, right?

[00:17:16] Speaker 03:
It means to the extent practicable, which has to do with using the information that is reasonably available to Commerce at the time.

[00:17:25] Speaker 03:
And here, there was no cooperating respondent in either the 2011 review or the 2010 review.

[00:17:32] Speaker 03:
So Commerce looked back to the most recent reviews in which there was cooperative respondent data verified on the record that was in 2008 and 2009.

[00:17:44] Speaker 03:
And commerce found, and this is set forth in the 2009 preliminary results and the 2008 final results that are cited in our brief, that commerce relied upon a substantial number of sales

[00:18:02] Speaker 03:
and a substantial percentage of sales from cooperating respondents in the same industry as Mayoji to corroborate the 216 rate.

[00:18:13] Speaker 03:
Specifically, to respond to the argument that was presented to you, Commerce relied upon a large number of transactions that were above 216 in looking at the transaction-specific margins from those cooperating respondents in those two reviews.

[00:18:32] Speaker 03:
And in addition, commerce relied upon a substantial percentage of sales.

[00:18:37] Speaker 03:
So we have the exact same circumstances that, Judge Raina, were present in your decision in ad hoc shrimp.

[00:18:48] Speaker 03:
A substantial number of transactions, a substantial percentage of sales from cooperating respondents in the same industry as

[00:19:00] Speaker 00:
The part that was just a correction the ad hoc shrimp case was not not minded.

[00:19:04] Speaker 06:
It was a court decision the decision of the entire court Okay, indeed your honor Show me where in the record it says that Commerce relied on substantial numbers of sales above the 216% Your honor that that is in the Federal Register notices from the

[00:19:27] Speaker 03:
2009 review and the 2008 reviews.

[00:19:30] Speaker 03:
I don't believe those are in the joint appendix, but we'd be happy to provide those.

[00:19:36] Speaker 03:
They're readily available.

[00:19:38] Speaker 06:
Also, if the court... Because you don't say that in your brief.

[00:19:42] Speaker 03:
We cite the 2009 figure.

[00:19:47] Speaker 00:
But you disagree that there was a single cell and that single cell was an outlier cell?

[00:19:52] Speaker 03:
Absolutely, Your Honor.

[00:19:54] Speaker 03:
If the court wishes us to provide the specifics, those are confidential.

[00:20:02] Speaker 03:
But we'd be happy to file those under seal.

[00:20:04] Speaker 06:
But what we do have is- Well, I do find it kind of surprising that the way you argued this in your brief was not anything like you just said.

[00:20:11] Speaker 06:
What you said is that you relied on a large number of transaction-specific margins

[00:20:18] Speaker 06:
And you found that the transaction-specific dumping margins relied upon were not unusually high or otherwise inappropriate.

[00:20:26] Speaker 06:
That's all you said.

[00:20:27] Speaker 03:
Your Honor, I would refer Your Honor to pages 23 to 24 of our party.

[00:20:31] Speaker 03:
That's where I am.

[00:20:33] Speaker 03:
At the very last sentence on 23 during the 2009 review, Commerce relied upon a large number of transaction-specific margins.

[00:20:43] Speaker 06:
Yeah, but you don't ever say that substantial numbers of those were above the 216%.

[00:20:50] Speaker 06:
And I never understood that from your briefs.

[00:20:59] Speaker 03:
Your Honor, we also have the

[00:21:02] Speaker 03:
We're citing on page 24 to the 2009 preliminary results which disclose that

[00:21:09] Speaker 03:
The transaction-specific dumping margins used to corroborate the AFA rate were sufficient in number, both in terms of the number of sales and as a percentage of total sales quantity.

[00:21:20] Speaker 03:
And Your Honor, if the Court wishes to have the specific numbers, if you order us to provide it, we'd be happy to give you those numbers.

[00:21:28] Speaker 03:
I'm very comfortable in saying that they were a large number of transactions and a substantial volume of sales.

[00:21:38] Speaker 06:
I guess I'm just confused why this is such a critical part of your argument, because it seems to be, as it relates to corroboration, you wouldn't have provided that information to us in the first instance.

[00:21:47] Speaker 03:
Your Honor, that issue was not squarely litigated in the trial court, and we did not anticipate

[00:21:58] Speaker 03:
That being the focal point here today, but again your honor.

[00:22:01] Speaker 00:
We're well David in the blue roof Comes on pretty strong that what commerce did is that the cherry picked a number?

[00:22:10] Speaker 00:
and relied on a single transaction.

[00:22:13] Speaker 00:
I mean, you reading that, have you argued, no, there was significant sales or substantial sales?

[00:22:20] Speaker 03:
We did, Your Honor, on 23 and 24 of our brief.

[00:22:23] Speaker 00:
I see that, but you just say it.

[00:22:24] Speaker 00:
You don't give us any support for it.

[00:22:29] Speaker 03:
Well, it wasn't in the trial court record.

[00:22:32] Speaker 03:
And so we are somewhat conservative in putting together the appendix.

[00:22:39] Speaker 03:
In response to a factual assertion, I'm telling you what the facts are.

[00:22:43] Speaker 00:
The argument here is that the Federal Register notice with respect to those particular reviews will alert us to the fact that substantial sales were reviewed.

[00:22:53] Speaker 03:
That's correct, Your Honor, both in terms of the sheer number of transactions as well as the percentage of sales.

[00:23:01] Speaker 00:
We don't doubt the Federal Register, but we kind of like to see the underlying data in these type of cases, especially when these type of issues are involved.

[00:23:11] Speaker 03:
I understand, Your Honor, we'd be happy to supplement the appendix if the Court wishes us to do so.

[00:23:17] Speaker 06:
We'll let you know if we think that's appropriate.

[00:23:20] Speaker 03:
Here, Commerce found that the China-wide AFA rate was relevant.

[00:23:24] Speaker 03:
because it was based on a previously calculated rate for a cooperative respondent named Kunyu, which was operating in the same industry as Meiji.

[00:23:34] Speaker 03:
And Commerce found that the China-wide AFA rate was reliable for three reasons.

[00:23:41] Speaker 03:
It was based on verified sales and cost data from the 2005 New Shipper Review.

[00:23:47] Speaker 03:
Secondly, it was corroborated using verified data from cooperating respondents in the 2008 and 2009 reviews.

[00:23:56] Speaker 03:
And there was no current record evidence, none put on the record by Mark David, that called the continued viability of that rate into question.

[00:24:07] Speaker 03:
This case, Judge Chen, as you observed,

[00:24:12] Speaker 03:
Dongtai Peekhoney and Adhok Shrimp do completely foreclose Mark David's case here.

[00:24:21] Speaker 03:
In those two cases, which are strikingly similar to this one, the court sustained commerce's selection of a China-wide AFA rate

[00:24:30] Speaker 03:
based on a previously calculated rate when there was no current record evidence that indicated the rate lacked probative value.

[00:24:39] Speaker 03:
The only thing that Mark David points to as suggesting that there is a lack of probative value in the AFA rate is cooperative respondent rates.

[00:24:51] Speaker 03:
But those are apples and oranges.

[00:24:53] Speaker 03:
Those cooperative respondents have separate rate status.

[00:24:56] Speaker 03:
They are not even part of the China-wide entity.

[00:25:00] Speaker 03:
And in ad hoc shrimp, the court held that the rates calculated for separate rate respondents have, quote, little bearing, unquote, on the China-wide AFA rate.

[00:25:13] Speaker 03:
And indeed, this court has long recognized that AFA rates are typically higher than those rates for cooperators.

[00:25:22] Speaker 03:
Because Commerce corroborated the China-wide AFA rate

[00:25:28] Speaker 03:
to the extent practicable, based upon the most current verified data available, the court should affirm.

[00:25:35] Speaker 03:
Thank you.

[00:25:36] Speaker 05:
What if there hadn't been any attempt to corroborate or verify during the 2008-2009 periods of review?

[00:25:44] Speaker 05:
Would this case come out differently, in your view?

[00:25:50] Speaker 03:
To the best of my recollection, I would say no, Your Honor, because again, it's to the extent practicable, commerce needs to corroborate.

[00:25:57] Speaker 03:
I believe in Dongtai Peak honey, there was no transaction-specific margin data available.

[00:26:05] Speaker 03:
And nonetheless, the court sustained based upon the reliance on a previously calculated rate for a respondent in the same industry.

[00:26:15] Speaker 03:
So if the information is there to use,

[00:26:19] Speaker 03:
The cooperative respondent data is there to use to corroborate.

[00:26:24] Speaker 03:
Commerce would prefer to be able to do that analysis.

[00:26:27] Speaker 03:
But it's not always, as a practical matter, going to be available.

[00:26:31] Speaker 03:
And so commerce necessarily must rely upon what is available in a particular case.

[00:26:40] Speaker 06:
OK, thank you.

[00:26:41] Speaker 03:
Thank you.

[00:26:54] Speaker 01:
Good morning, Your Honors.

[00:26:56] Speaker 01:
May it please the court, my name is Lee Smith.

[00:26:58] Speaker 01:
I'm with King & Spalding, and I represent the American Entrepreneurship Manufacturers Committee for Legal Trade.

[00:27:02] Speaker 06:
Can you speak up a little bit, sir?

[00:27:03] Speaker 06:
Yes, ma'am.

[00:27:04] Speaker 01:
I would just like to clarify one point.

[00:27:07] Speaker 01:
That the 216% rate was for 2005 cooperating verified respondent without any adverse inferences.

[00:27:16] Speaker 01:
And that rate was corroborated in 2008 and 2009 reviews.

[00:27:19] Speaker 01:
The cooperation

[00:27:21] Speaker 01:
Cooperation looks at transaction specific rates at or above the 216% rate.

[00:27:27] Speaker 01:
That's commonly commerce's cooperation methodology.

[00:27:31] Speaker 01:
Moreover, commerce does not need to look at a substantial number of sales to corroborate the rates, as this court has held.

[00:27:38] Speaker 06:
Well, the government just argued there were a substantial number of sales.

[00:27:42] Speaker 01:
There were.

[00:27:42] Speaker 01:
That is correct.

[00:27:43] Speaker 01:
But that is above and beyond what we believe is necessary.

[00:27:46] Speaker 06:
OK.

[00:27:46] Speaker 06:
But in this case, those substantial number of sales did not reflect anything above the 216 rate.

[00:27:53] Speaker 06:
In other words, not a substantial number above the 216 rate.

[00:27:57] Speaker 01:
In the 2008 review, just to quote the Federal Register notice, Commerce found that commercial reality

[00:28:07] Speaker 01:
The rates used to corroborate were sufficient in number both in terms of number of sales and percentage of total quantity that were at the 216% rate.

[00:28:19] Speaker 01:
In 2009, Commerce, to quote the Federal Register,

[00:28:22] Speaker 01:
found that the 216, the data used to corroborate the 216 rate, those data are, quote, based on real transactions that occurred during the POR inception verification by the department.

[00:28:33] Speaker 01:
So it was numerous transactions in both 2008 and 2009 to corroborate this 216% rate that was calculated in 2005.

[00:28:42] Speaker 06:
And the 216 rate, the transactions, those were not with cooperating entities.

[00:28:49] Speaker 06:
They were not with cooperating entities.

[00:28:52] Speaker 01:
That was based on a cooperating entity that was verified.

[00:28:56] Speaker 06:
In 2009?

[00:28:56] Speaker 01:
In 2009, yes.

[00:28:59] Speaker 01:
Those were calculated rates for cooperating entities in 2009.

[00:29:02] Speaker 01:
What Commerce did was looked at the total amount of sales and looked at transaction-specific margins to determine whether or not there were margins above the 216% rate.

[00:29:15] Speaker 01:
And it found that there were more than one, at least more than one,

[00:29:19] Speaker 01:
transaction-specific margins above the 216% rate.

[00:29:24] Speaker 06:
OK.

[00:29:26] Speaker 01:
If there are no other questions, Your Honors, I'll cede my time.

[00:29:29] Speaker 01:
Thank you.

[00:29:34] Speaker ?:
OK.

[00:29:37] Speaker 04:
OK.

[00:29:39] Speaker 04:
Just one final point, Your Honor.

[00:29:41] Speaker 04:
I'm looking at the decision memo from the 2009 review that Commerce Plan 2 is corroborating the rates that they apply.

[00:29:47] Speaker 04:
And this is what it says.

[00:29:49] Speaker 04:
In this case, the department found that the 216.01% rate fell within the range of the transaction-specific margins calculated for HuaFeng.

[00:29:58] Speaker 04:
Further, we found that the transaction-specific dumping margins relied on for corroboration were not unusually high or otherwise inappropriate.

[00:30:05] Speaker 04:
No quantum at all.

[00:30:06] Speaker 04:
So if the Federal Register notice says large numbers or significant quantities or whatever it is that it says, it didn't come from the decision memo.

[00:30:13] Speaker 04:
And it was the decision memo that they pointed to as corroborating the position that they were taking.

[00:30:16] Speaker 00:
Well, assuming there's more than one cell, and that's what I mean by numerous cells, whatever it is, the language you read.

[00:30:25] Speaker 00:
And Commerce is looking at whether the 216 rate is corroborated or not.

[00:30:33] Speaker 00:
And based on verified cells from voluntary respondents,

[00:30:38] Speaker 00:
It determines that it falls within the range of those transactions.

[00:30:43] Speaker 00:
Isn't that sufficient corroboration?

[00:30:45] Speaker 00:
Or isn't that substantial evidence of sufficient corroboration?

[00:30:49] Speaker 04:
I don't believe that it is, Your Honor.

[00:30:50] Speaker 04:
Again, I don't see that whether it's one sale or three sales,

[00:30:56] Speaker 04:
that the fact that there are sales in a database for a company who gets a margin of 42%, the fact that there are sales in that company's database that are much higher than that, I don't think that's probative of anything.

[00:31:08] Speaker 04:
Again, it's not even probative of what that company is doing.

[00:31:11] Speaker 00:
I'm baffled how it could be probative.

[00:31:13] Speaker 00:
It's probative that sales are being made at that rate.

[00:31:16] Speaker 04:
Well, but sales presumably are also being made at a rate of zero based on that same analysis.

[00:31:20] Speaker 00:
But you're looking for an AFA rate.

[00:31:22] Speaker 00:
You're looking to fill in the sales data of a non-cooperating or non-responding responder.

[00:31:32] Speaker 04:
Right, but that's different than just hunting around for the biggest number that's ever been calculated for anybody, because otherwise that's what they would be allowed to do.

[00:31:40] Speaker 06:
Let me ask you this.

[00:31:40] Speaker 06:
The government says it was surprised by the fact that you raised this corroboration issue in this fashion on this appeal, because you didn't really argue it that way below.

[00:31:51] Speaker 06:
Is that true?

[00:31:52] Speaker 04:
Well, I think we've always argued that it needed to be corroborated, and the corroboration using this 2009 decision memo was insufficient.

[00:32:02] Speaker 04:
The question of the volume and the, to be clear, we've always said that this small quantum of sales from this 2009 data wasn't sufficient to corroborate anything.

[00:32:15] Speaker 04:
That's been our position throughout.

[00:32:19] Speaker 06:
When you say the small quantum of sales, you're saying the small quantum of sales that reflected rates above 216.

[00:32:26] Speaker 04:
At or above, right.

[00:32:27] Speaker 04:
In the neighborhood.

[00:32:28] Speaker 06:
Because they did look at a lot of sales.

[00:32:29] Speaker 06:
They just only had a few above 216.

[00:32:32] Speaker 04:
Right.

[00:32:33] Speaker 04:
In focusing on the quantum of those, and to my view, the insignificance of those, I think that's largely a reaction to the ad hoc shrimp case.

[00:32:46] Speaker 04:
Because to me, that was a key difference.

[00:32:50] Speaker 04:
And so I'm addressing that, I guess, slightly differently.

[00:32:54] Speaker 04:
But the larger point was always that that data wasn't probative even of what that exporter was doing, let alone what the entity was doing.

[00:33:00] Speaker 06:
OK.

[00:33:01] Speaker 06:
Anything more?

[00:33:03] Speaker 06:
Thank you.

[00:33:04] Speaker 03:
Thank you.

[00:33:05] Speaker 03:
Excuse me.

[00:33:06] Speaker 03:
We would respectfully request an opportunity to just submit a supplemental appendix with the actual information so that there's no factual question about the number of sales.

[00:33:18] Speaker 06:
Okay, we'll let you know if we want that and we'll put out an order requesting it.

[00:33:22] Speaker 03:
Thank you.

[00:33:22] Speaker 06:
Okay.

[00:33:24] Speaker 06:
All right.