[00:00:00] Speaker 00: First case for argument this morning is 151054 NANYA Plastics Corporation versus United States. [00:00:09] Speaker 00: Mr. Koenig, whenever you're ready. [00:00:16] Speaker 03: Thank you, Your Honor. [00:00:18] Speaker 03: I'm Peter Koenig with Squire Patent Box representing NANYA. [00:00:22] Speaker 03: Basically, in this case, the Department of Commerce supplied adverse facts available to non-YAF for not responding to a dumping margin questionnaire. [00:00:32] Speaker 03: And the adverse, and I think it's, the adverse facts available, I think the law is pretty accepted for this decision. [00:00:41] Speaker 03: It should be based, it has to be based on commercial reality and non-abhorrent. [00:00:48] Speaker 03: We believe that it's the... You said that's pretty accepted? [00:00:50] Speaker 03: Okay. [00:00:52] Speaker 04: Let's start with some stuff, Mr. Connell. [00:00:56] Speaker 04: Okay, sure, yeah. [00:00:57] Speaker 04: Number one, your reference to other popular, quote, popular statistics methodologies, the Hample identifier test, and the Box and Whisker plot, where's that in the record that you raised it before the court beloved? [00:01:12] Speaker 03: We stated in our brief that it's not. [00:01:14] Speaker 03: That's just a, we were... So why should we consider them? [00:01:18] Speaker 04: Given that you didn't exhaust them before Commerce or the Court of International Trade. [00:01:23] Speaker 03: Yeah, actually we believe it's the burden of proof of Commerce, which we will just focus on that. [00:01:30] Speaker 03: The burden of proof of Commerce to show... Well, we shouldn't consider them, in other words. [00:01:34] Speaker 04: Correct. [00:01:34] Speaker 04: Okay. [00:01:35] Speaker 04: Fine. [00:01:36] Speaker 04: Let's start with Commerce's interpretation of 19 U.S.C. [00:01:39] Speaker 04: 1677 E.B. [00:01:40] Speaker 04: 4. [00:01:43] Speaker 04: The highest transaction-specific margin is as adverse facts available. [00:01:47] Speaker 04: Your arguments contain a common theme that Commerce impermissibly interpreted the statute when it determined the phrase any other information placed on the record permitted the agency to use Shin Kong's highest transaction-specific margin as adverse facts available. [00:02:10] Speaker 04: But you don't analyze Commerce's interpretation against the operative Chevron framework. [00:02:16] Speaker 04: Past decisions of this court and the Court of International Trade suggest that we should consider your arguments waived. [00:02:26] Speaker 04: USV, Great American Insurance Company, for instance. [00:02:30] Speaker 04: It's well established that arguments that are not appropriately developed in a party's briefing can be deemed waived. [00:02:39] Speaker 04: Why shouldn't we reach the same conclusion in this case on that issue? [00:02:43] Speaker 03: Well, our specific appeal is that commerce's decision says that the AFA should be non-aborate. [00:02:51] Speaker 03: And so we're going on, is there substantial evidence that it's non-aborate? [00:02:57] Speaker 03: So that's our... So your answer is it should be waived, in other words. [00:03:02] Speaker 03: We're not making a statutory argument, correct. [00:03:05] Speaker 03: Okay. [00:03:07] Speaker 04: You contend that various statistical methods demonstrate that commerce's interpretation of [00:03:13] Speaker 04: USC 1677 EB1 or I'm sorry EB is unlawful. [00:03:22] Speaker 04: What legal authority requires commerce to consider those methods when interpreting the statute? [00:03:27] Speaker 04: Give me some case authority. [00:03:28] Speaker 03: Our specific argument is the methodology commerce does use has to be supported by substantial evidence and that's where we're limiting it to that narrow argument. [00:03:41] Speaker 04: You contend that [00:03:42] Speaker 04: 1677EB, the commerce interpretation of it, is impermissible because it relies solely on deterrence. [00:03:54] Speaker 04: Is that fair to say? [00:03:56] Speaker 04: Correct. [00:03:59] Speaker 04: In other words, you didn't submit any information to commerce. [00:04:09] Speaker 04: You just rely on that interpretation. [00:04:12] Speaker 04: The trade court observed that in contesting the 74.34% rate that commerce select is adverse facts available, you didn't analyze your own data against pro-offered statistical methods, only shingongs. [00:04:37] Speaker 04: Why did you fail to incorporate your own data in the analysis? [00:04:41] Speaker 03: Well, the commerce was relying on the Shinkong. [00:04:44] Speaker 03: And if you're going to rely on that, commerce itself has a burden to show that their methodology is supported by the Shinkong. [00:04:53] Speaker 03: But you didn't bring in your own debt at all, did you? [00:04:56] Speaker 03: Well, actually, from the prior review, we did. [00:04:58] Speaker 03: And there's its sight from the prior review. [00:05:03] Speaker 04: So you incorporated it into your analysis? [00:05:07] Speaker 03: Not in the brief before this court. [00:05:10] Speaker 03: So again, we're just focused on whether a commerce decision is supported by substantial evidence. [00:05:16] Speaker 03: And we're focused on the, the commerce relied on a continuum standard to do so. [00:05:24] Speaker 03: And based on that standard alone and the data commerce used, we believe that the decision was not supported by substantial evidence. [00:05:34] Speaker 02: But there was substantial evidence. [00:05:38] Speaker 02: sailed by Shenzhen Kong. [00:05:42] Speaker 03: The substantial evidence? [00:05:45] Speaker 03: Well, if you go by Shenzhen Kong and you look, and commerce says if there's a continuum of dumping margins, each in significantly greater than the prior one, then the highest one is supported. [00:05:59] Speaker 03: But if you look at the commerce's own data on the dumping margins, there is not a continuum. [00:06:05] Speaker 03: there's in fact a significant jump. [00:06:08] Speaker 02: Why does there have to be a continuum? [00:06:10] Speaker 03: Why does there have to be? [00:06:12] Speaker 03: Well, that's how commerce, well, that would be my question to commerce. [00:06:16] Speaker 03: What's the standard they're applying? [00:06:18] Speaker 03: Because they're saying that it has to be non-adverent, the dumping margin, and they introduce the continuum test. [00:06:24] Speaker 03: And if you go based on this continuum test, then for one, they don't define then what they mean by it as far as what is a significant cap. [00:06:33] Speaker 03: If you look at statutory measures of what is a significant gap, like 0.5% or 3%, and if you go based on those are the only standards we see in a statute, Commerce could offer another standard, but they have not. [00:06:47] Speaker 00: Well, you're not suggesting Commerce is required to use the average margin at the most frequent margin, right? [00:06:53] Speaker 00: Correct. [00:06:54] Speaker 00: So Commerce picked a few of the margins that were close to the chosen rate, and it [00:07:02] Speaker 00: that's how it justified the highest transaction specific rate. [00:07:05] Speaker 00: What's wrong with that? [00:07:06] Speaker 00: I'm having a trouble as I think my colleagues are in figuring out why is a matter of law. [00:07:13] Speaker 00: Are you arguing as a matter of law they used improper calculations? [00:07:19] Speaker 03: Because they didn't apply a standard and they didn't articulate a standard or apply it. [00:07:23] Speaker 00: What standard are they required to apply? [00:07:26] Speaker 00: I mean, they picked the number, they justified it, they compared it to the other calculations because you didn't offer up any evidence of your own. [00:07:35] Speaker 00: What else were they supposed to do? [00:07:37] Speaker 03: If you're going to say that what you're doing is that there's a continuum, [00:07:45] Speaker 03: that you have to provide some standard for what is a continuum, because otherwise, the way it's been applied here, we would argue, is basically, you put down some data and you say the highest one is the right one. [00:07:58] Speaker 03: That's not a standard. [00:08:00] Speaker 03: Obviously, in any case, there's going to be a continuum. [00:08:04] Speaker 03: But what do you mean by that? [00:08:07] Speaker 03: Here, the dumping margins were fairly close, and then they started to jump up. [00:08:14] Speaker 03: in commerce just said well that's a continuum. [00:08:18] Speaker 03: You've got to apply some type of standard. [00:08:21] Speaker 02: The basic fact is that your client didn't cooperate. [00:08:25] Speaker 03: Correct. [00:08:26] Speaker 03: They did not answer the questionnaire. [00:08:28] Speaker 04: 1677 EC is the corroboration portion of the statute. [00:08:34] Speaker 04: It seems to me the statute pretty unambiguously contrasts information obtained in the course of a review, that is to say primary. [00:08:45] Speaker 04: information with secondary information. [00:08:48] Speaker 04: Would you agree with that? [00:08:51] Speaker 04: Correct. [00:08:52] Speaker 04: Okay. [00:08:54] Speaker 04: But it also suggests, the statute does, that the former, that is primary information, does not need to be corroborated when it's used by commerce. [00:09:06] Speaker 04: My reading of the government's brief is that it believes the trade court error [00:09:12] Speaker 04: when it held that the agency needs to corroborate primary information. [00:09:18] Speaker 04: You didn't analyze the statute against the Chevron framework. [00:09:23] Speaker 04: Do you have a position on what the statute actually requires? [00:09:31] Speaker 04: Primary versus secondary. [00:09:34] Speaker 03: We hear we're talking about the current administrative review where they used information from that, so corroboration doesn't even [00:09:42] Speaker 03: you know, come into play for the current administration. [00:09:45] Speaker 03: So you would agree with the government that corroboration wasn't required? [00:09:49] Speaker 03: Not for, not for the, yeah, correct, for the, uh, using the Shing Kong. [00:09:53] Speaker 00: Right. [00:09:56] Speaker 00: Well, you're into your rebuttal. [00:09:57] Speaker 00: Do you want to sit down here for the government and save the rest of your rebut, time for rebuttal? [00:10:03] Speaker ?: Okay. [00:10:03] Speaker ?: Thank you. [00:10:13] Speaker 05: Thank you, Your Honors. [00:10:14] Speaker 05: May it please the court? [00:10:16] Speaker 05: As noted in this administrative review, NANYA refused to cooperate. [00:10:21] Speaker 05: The Commerce Department looked at the record to find what was the highest weighted average dumping margin in this segment, any previous segment, or the investigation. [00:10:31] Speaker 05: And they determined that the highest calculated weighted average dumping margin was NANYA's own cooperative margin from the immediately prior segment. [00:10:40] Speaker 05: the Commerce Department determined that assigning NANYA its own cooperative rate would not be appropriate as an adverse facts available rate. [00:10:48] Speaker 00: Are you talking about the earlier review, the earlier 99% or whatever the number was? [00:10:53] Speaker 05: No, their weighted average margin was 18.3% and I'm just explaining why they went to transaction specific margins instead of applying a prior weighted average margin. [00:11:06] Speaker 05: In the prelim, as Your Honor noted, [00:11:08] Speaker 05: The Commerce Department selected a 99% transaction-specific margin that was calculated for NANYA in the prior segment. [00:11:16] Speaker 05: In its case brief to the Court of International Trade, NANYA argued that Commerce should look to the current review, the current segment, and use the information there. [00:11:26] Speaker 05: And that's what Commerce did in the final. [00:11:28] Speaker 05: They applied the highest transaction-specific margin for SHINCON [00:11:32] Speaker 05: in the current review. [00:11:34] Speaker 00: Is there any objective standard that exists for determining whether or not there's a particular margin, it's just an outlier? [00:11:42] Speaker 05: The Commerce Department, there's no specific standard. [00:11:48] Speaker 05: This court in DeCecho granted Commerce the discretion in choosing the sources and facts to rely on to support an adverse facts available rate. [00:11:56] Speaker 05: If you're asking about the specific tests that were cited in Nanya's brief, [00:12:02] Speaker 05: Those tests are tests to determine whether the individual observations are different than the average or median calculated margin for SYNCON. [00:12:13] Speaker 05: So in other words, these are tests that are saying whether 74%... Yeah, but I want to know what the government's test is. [00:12:18] Speaker 00: I mean, your position is you're not required or compelled to use the average. [00:12:23] Speaker 00: Right. [00:12:23] Speaker 00: Right. [00:12:24] Speaker 00: But what standard do you use? [00:12:26] Speaker 00: I mean, you picked one number and how do you know that number isn't necessarily [00:12:30] Speaker 00: an outlier. [00:12:31] Speaker 00: What's the standard? [00:12:32] Speaker 05: The commerce looks to see whether it's supported by substantial evidence. [00:12:36] Speaker 05: What is supported by substantial evidence? [00:12:38] Speaker 05: The selected transaction specific margin. [00:12:43] Speaker 05: So here the commerce department determined that this was supported by substantial evidence because it was a calculated rate on the review. [00:12:51] Speaker 05: It was the same review, it was a company selling the same merchandise. [00:12:54] Speaker 05: It wasn't significantly higher than the other calculated dumping margins. [00:12:59] Speaker 05: it would fall within the mainstream of margins. [00:13:02] Speaker 05: It was not the result of an aberrational transaction and they looked at the weight, the quantity in the shipment to see whether it was within the normal range of quantity, whether it was, I mean it's all subject merchandise, but they looked to see if it was specifically different in the factors that are considered in the condom analysis. [00:13:24] Speaker 05: and determined that this was not an aberrational transaction and it was appropriate to use. [00:13:37] Speaker 05: Nanya makes a number of allegations regarding the transaction that it was aberrational because it was a small quantity, but part of that is just a function of how many transactions there are in the entry. [00:13:53] Speaker 05: a thousand transactions, the average transaction is going to be a tenth of a percent. [00:13:59] Speaker 04: Your brother, Mr. Koenig, seems to agree with the government's position, that does agree with the government's position, that the Court of International Trade erred in requiring corroboration of primary information. [00:14:14] Speaker 04: You want to say anything about that, or are you just going to leave it to your brief? [00:14:17] Speaker 05: We'll just leave that to our brief, Your Honor. [00:14:23] Speaker 01: What about your friend repeated, they talked about a continuum. [00:14:27] Speaker 01: So what is the context of that? [00:14:32] Speaker 05: Yes, Mr. Koenig objects to the Commerce Department's citation that this rate was part of a continuum. [00:14:40] Speaker 05: And I guess the best evidence that this was part of a continuum, I just cite page four, this is business proprietary information. [00:14:50] Speaker 05: But I would note that at the bottom, the footnote at the bottom of page 41 continuing on to page 42, it shows the highest rates that were calculated for NANYA in the prior segment and Commerce chose the 99% rate as being an appropriate rate. [00:15:08] Speaker 05: There are rates higher than that that the Commerce Department did not select because they felt that 99 was the appropriate rate and was non-apparational. [00:15:21] Speaker 04: Where are you on the record on that? [00:15:24] Speaker 05: It's a footnote in our brief at the bottom of page 41, wrapping on to page 42. [00:15:29] Speaker 05: Gotcha. [00:15:30] Speaker 04: Okay. [00:15:30] Speaker 05: And it's in the appendix at page 131 of the appendix. [00:15:34] Speaker 05: Okay. [00:15:36] Speaker 05: Gotcha. [00:15:37] Speaker 05: Thank you. [00:15:37] Speaker 05: If the panel has no further questions, we simply ask that you sustain the opinion of the Court of International Trade. [00:15:45] Speaker 05: Thank you. [00:15:47] Speaker 05: Oh, really? [00:15:47] Speaker 05: Even the part you want reversed? [00:15:50] Speaker 05: Affirm, sorry. [00:15:55] Speaker 03: I think we pretty much stated our position, so unless there are any questions. [00:16:04] Speaker 00: Thank you. [00:16:08] Speaker 00: We thank both counsel and the cases submitted.