[00:00:03] Speaker 01: Good morning, everyone. [00:00:05] Speaker 01: The first case this morning is Shackler Group USA against the United States. [00:00:11] Speaker 02: Good morning, Your Honors. [00:00:24] Speaker 02: May it please the Court. [00:00:30] Speaker 02: The issue presented for consideration this morning is whether the petition support provision of the CDSOA is impermissibly retroactive under the Fifth Amendment due process clause within the context of the anti-friction bearings anti-dumping orders. [00:00:52] Speaker 00: On the threshold question of retroactivity, you spent a lot of time in your brief on Princess Cruises and the Landgraf analysis. [00:00:59] Speaker 00: Doesn't that only apply when there's some ambiguity about whether it's retroactive? [00:01:04] Speaker 00: I mean, it's clearly retroactive on its face, correct? [00:01:08] Speaker 02: Yes, it is, Your Honor. [00:01:09] Speaker 02: It is. [00:01:09] Speaker 02: You're referring to Landgraf and progeny. [00:01:12] Speaker 00: Yes. [00:01:12] Speaker 02: I mean, why are we even going down that? [00:01:14] Speaker 02: Yes, I agree. [00:01:15] Speaker 02: But those cases did not involve a constitutional challenge. [00:01:21] Speaker 00: I understand that. [00:01:21] Speaker 00: But you go into that analysis for purposes of assessing retroactivity. [00:01:26] Speaker 00: But I don't think there's any debate that it's retroactive, is there? [00:01:29] Speaker 02: I do, Your Honor. [00:01:30] Speaker 02: I still think it's relevant. [00:01:34] Speaker 02: Those cases and the principles that they discuss regarding retroactivity still have applicability. [00:01:44] Speaker 02: I do agree that there is a difference. [00:01:49] Speaker 00: You agree that it's unambiguously retroactive on its face, right? [00:01:53] Speaker 00: Yes. [00:01:53] Speaker 00: And I don't think your opponents really disagree with that, do they? [00:01:58] Speaker 02: They do not. [00:02:00] Speaker 00: All right, so let's discuss whether it's okay to be retroactive. [00:02:05] Speaker 00: Correct, whether it's impermissibly retroactive. [00:02:09] Speaker 02: So the underlying anti-dumping orders here, and I think this is important as you will see, were promulgated in May of 1989. [00:02:22] Speaker 02: The petition was filed in March of 1988. [00:02:25] Speaker 02: The ITC conducted its final injury determination [00:02:30] Speaker 02: in March of 1989, and anti-dumping duty orders were imposed in May of 1989 on three classes of kinds of merchandise. [00:02:41] Speaker 02: As an aside, there were three other classes of kinds of merchandise as to which the ITC decided there was no injury. [00:02:51] Speaker 02: The CIT decision below dismissed Scheffler's claims for failure to state [00:02:59] Speaker 02: Based upon its previous New Hampshire ball bearings decision. [00:03:04] Speaker 06: And upon SKF. [00:03:09] Speaker 02: Yes, Your Honor. [00:03:11] Speaker 02: New Hampshire ball bearings relied on your SKF decision. [00:03:17] Speaker 02: And in your SKF decision, upon which New Hampshire ball bearings was based, you articulated, this court articulated, [00:03:29] Speaker 02: the purposes of the statute. [00:03:33] Speaker 02: And the purposes were actually twofold. [00:03:37] Speaker 02: Number one, to reward injured parties who assisted government enforcement of the anti-dumping laws by initiating or supporting anti-dumping proceedings. [00:03:46] Speaker 02: And number two, to compensate producers injured by dumping. [00:03:52] Speaker 06: retroactive application, quote, directly advances the government's substantial interest in trade law enforcement. [00:04:00] Speaker 06: It did, Your Honor. [00:04:02] Speaker 00: It did. [00:04:04] Speaker 00: So SKF said there was a rational basis for retroactivity. [00:04:07] Speaker 00: Are you saying that because that analysis was done under the protection clause of the First Amendment, that same rational basis can't [00:04:17] Speaker 00: can't be justified under the due process clause? [00:04:20] Speaker 02: I'm saying that, Your Honor, as it relates to this particular order, yes, I am saying that. [00:04:26] Speaker 02: I'm saying that the retroactive aspect has to be viewed in the context of the order as to which Scheffler has applied for reimbursement. [00:04:39] Speaker 00: So you're not saying that you could make the same constitutional challenges that were made in SKS? [00:04:43] Speaker 00: I cannot. [00:04:44] Speaker 02: I cannot, and you would not hear it. [00:04:47] Speaker 02: All right. [00:04:48] Speaker 02: But in this case, Your Honor, the intervener Timken did move for summary disposition of this case based upon your decision in SKF. [00:05:00] Speaker 02: You denied that motion. [00:05:03] Speaker 02: Clearly, because, I think, because this raises a different constitutional challenge, albeit under the Fifth Amendment, as was equal protection in the SKF case. [00:05:16] Speaker 02: So I think this is different. [00:05:18] Speaker 02: And yes, there is a retroactive aspect. [00:05:22] Speaker 02: And yes, my opponents do agree, because the retroactive aspect attaches new legal consequences to past actions. [00:05:31] Speaker 02: So it is retroactive. [00:05:32] Speaker 02: Question then becomes, is it impermissibly retroactive? [00:05:36] Speaker 00: So for the due process clause, what do you need? [00:05:39] Speaker 00: Do you need a protected property interest? [00:05:42] Speaker 02: Yes. [00:05:42] Speaker 00: And what is your protected property interest here? [00:05:44] Speaker 00: I mean, you don't have a protected property interest in the law. [00:05:47] Speaker 02: Yes, Your Honor. [00:05:50] Speaker 02: I understand my opponent's argument regarding protected property. [00:05:56] Speaker 02: I'm trying to understand yours. [00:05:58] Speaker 02: My position would be that Scheffler's applications for bird money, and it's right to bird money, still up in the air here. [00:06:12] Speaker 02: is a sufficient property interest to enable it to proceed onto this basis. [00:06:17] Speaker 06: A prospective retroactive right? [00:06:19] Speaker 06: Yes. [00:06:20] Speaker 02: Yes, Your Honor. [00:06:23] Speaker 02: That's my position. [00:06:26] Speaker 02: To the same extent as any other applicant. [00:06:29] Speaker 01: What is at stake here, roughly? [00:06:32] Speaker 01: What is the amount that you believe would be shared out of your position? [00:06:40] Speaker 02: Your Honor, we've [00:06:41] Speaker 02: We've indicated in our brief that, and it's a matter of public record, that the Timken companies, including Timken and Torrington and MPB, have collected almost 3 quarters of a billion dollars under this statute. [00:07:04] Speaker 02: Much of it in the early years, but some of it in the later years as well. [00:07:11] Speaker 02: It would depend upon the extent to which our clients qualifying expenditures related to the qualifying expenditures of all companies that applied under the same dumping orders. [00:07:26] Speaker 00: Well, clearly you don't satisfy the tax of the statute, right? [00:07:33] Speaker 02: We do not. [00:07:34] Speaker 00: All right. [00:07:35] Speaker 00: So is your protected property interest in making sure that your competitors who do satisfy the tax of the statute don't get money? [00:07:42] Speaker 02: Uh, no, your honor, because we do have, we have applied, we have been rejected. [00:07:46] Speaker 02: That's why we're in court. [00:07:48] Speaker 02: And my position is we have a property interest to protect in those funds. [00:07:56] Speaker 00: Okay. [00:07:56] Speaker 00: I'm still, I'm struggling to understand what your property interest is. [00:08:00] Speaker 02: If, if my, if Timken has a property interest in acquiring bird money reimbursement. [00:08:10] Speaker 02: And I would say that it absolutely does. [00:08:13] Speaker 02: Everybody has an interest in getting money. [00:08:15] Speaker 02: It's a property interest. [00:08:16] Speaker 02: Now, in my client's case, it's a prospective property interest. [00:08:19] Speaker 02: And perhaps it's an inchoate property interest, but it's nevertheless a property interest, cognizable under the Fifth Amendment to Process Clause. [00:08:35] Speaker 02: So we have, I hope I've answered your question, Your Honor. [00:08:39] Speaker 01: Well, enough, yes. [00:08:40] Speaker 02: So I don't know exactly how much we're talking about, but it is a substantial sum over the course of multiple years. [00:08:50] Speaker 02: Um, impermissibly retroactive. [00:08:56] Speaker 02: Well, we have rational purposes. [00:08:59] Speaker 02: SKF decided that the purpose of the Bird Amendment was rational. [00:09:03] Speaker 02: Our position is, yes, you have rational purposes, but those rational purposes are not furthered by rational means. [00:09:11] Speaker 02: That was also articulated in the SKF case. [00:09:14] Speaker 02: Rational purpose furthered by rational means. [00:09:17] Speaker 02: The position is that the petition support provision as applied in this case is not rational for the following reason. [00:09:34] Speaker 02: The answers to why it's not are temporal, related to time, timing, [00:09:41] Speaker 02: relating to these qualifying expenditures and relating to the question of injury. [00:09:49] Speaker 02: The period of investigation under these anti-dumping orders was 1985 to September of 1988, when injury was found. [00:09:58] Speaker 02: The anti-dumping orders, as I mentioned earlier, were promulgated May 15, 1989. [00:10:03] Speaker 02: The CDSOA was enacted 11 to 12 years later. [00:10:10] Speaker 02: and provided for the reward and compensation of injured domestic producers who supported the petition or initiated the petition. [00:10:20] Speaker 02: The qualifying expenditures also in the statute, which form the basis of the award, are those incurred after May 15, 1989. [00:10:32] Speaker 02: That is to say, after the date the dumping orders went into effect. [00:10:37] Speaker 02: Given reasonable temporal proximity, [00:10:40] Speaker 02: between the date of the AD orders and the implementation of the CDSOA, the reasonable conclusion is that these qualifying expenditures bear some reasonable relation to the injury that was suffered. [00:10:57] Speaker 02: These qualifying expenditures were incurred 11 to 12 years before. [00:11:05] Speaker 02: And over that entire period, [00:11:09] Speaker 02: These, we say, are too remotely connected to the injury and bear no reasonable relation to it. [00:11:16] Speaker 02: Timken Tarrington and its affiliate MPB had qualified expenses of over $2 billion over that period, which explains why and how they received the lion's share of the money. [00:11:35] Speaker 00: I'm still totally out of luck. [00:11:36] Speaker 00: So your claim [00:11:38] Speaker 00: is it the violation of due process to you, to your client, to have Timpkins and the other claimants qualify under the statute for payment? [00:11:52] Speaker 02: They qualify. [00:11:53] Speaker 02: The question is, is the petition support provision, which disqualifies my client, unconstitutional because it's impermissibly... Nobody was qualified before the statute was passed, right? [00:12:08] Speaker 00: So it's not like there was this right that existed. [00:12:11] Speaker 00: Everybody was anticipating this money. [00:12:13] Speaker 00: And then the statute was passed and said, oh, now we're only going to give it to X. When the statute was put in place for distribution, the limitations were in the original statute, right? [00:12:23] Speaker 00: They were. [00:12:25] Speaker 00: OK. [00:12:25] Speaker 00: So where is your vested right? [00:12:31] Speaker 02: Again, Your Honor, I apologize for having to repeat. [00:12:33] Speaker 02: Can I try? [00:12:34] Speaker 06: Isn't it what you're saying? [00:12:36] Speaker 06: Isn't it what you're saying? [00:12:39] Speaker 06: that because your client was put in an adverse position in its competitive ability against Timken and Torrington, it impacted your rights. [00:12:52] Speaker 06: It did. [00:12:53] Speaker 06: Yes. [00:12:54] Speaker 06: Is that your argument? [00:12:55] Speaker 02: That's one of our arguments and it appears in our brief. [00:13:01] Speaker 02: But I happen to think the better argument is that we have a right, that we have a property right in these funds until you say we don't. [00:13:09] Speaker 00: And the reason it's a better argument is because being put at a competitive disadvantage is not a constitutionally protected property interest, right? [00:13:20] Speaker 02: I guess that's right. [00:13:21] Speaker 00: Right. [00:13:21] Speaker 00: So that's why I'm trying. [00:13:22] Speaker 00: I understood what I thought was your argument, and then you backed away from it here today. [00:13:27] Speaker 00: So now I'm trying to understand what is your counter-argument. [00:13:31] Speaker 01: OK. [00:13:31] Speaker 01: Let's hear from the other side, and we'll save you a rebuttal time, Mr. Bishop. [00:13:35] Speaker 02: Thank you, Your Honor. [00:13:41] Speaker 01: Okay, so let's see. [00:13:44] Speaker 01: Are you Mr. Gallagher? [00:13:51] Speaker 04: I'm not, Your Honor. [00:13:52] Speaker 04: I wish I was. [00:13:52] Speaker 04: I'm Mr. Tomlinson for the United States. [00:13:55] Speaker 04: Good morning, Your Honor. [00:13:58] Speaker 04: Martin Tomlinson for the United States. [00:14:01] Speaker 00: You wish you were because he makes more money than government employees? [00:14:05] Speaker 04: Look at him. [00:14:10] Speaker 04: Your Honor, I'd like to pick up directly with something Mr. Schutzman was discussing there, which was this issue of what the appellant's property interest is in this case. [00:14:27] Speaker 04: He specifically articulated that his primary argument, as I understand it, was that in this case Scheffler's property interest is that they filed an application [00:14:37] Speaker 04: They filed an application to be an ADP and receive CDSOA distributions. [00:14:42] Speaker 04: And that is simply not enough. [00:14:44] Speaker 04: That is not a constitutionally protected property interest. [00:14:50] Speaker 04: Under the law, the Supreme Court in the Town of Castle Rock case, if I can find it here, the Supreme Court in the 2005 Town of Castle Rock case specifically says to have a property interest in a benefit, a person must have more [00:15:06] Speaker 04: than an abstract need or desire and more than a unilateral expectation of it, he must instead have a legitimate claim of entitlement to it. [00:15:14] Speaker 01: But that's the constitutional question, isn't it? [00:15:18] Speaker 01: Essentially by analogy to ex post facto laws and a lot of other things which affect a right retroactively that you didn't have until later. [00:15:30] Speaker 01: The basic issues of fairness, I think, are [00:15:35] Speaker 01: being raised here rather than resolving it on, let's say, the technicality of a property interest. [00:15:46] Speaker 01: There is a fundamental imbalance, is there not, in the way this is worked out in practice? [00:15:57] Speaker 04: Your Honor, there's an imbalance insofar as [00:16:01] Speaker 04: The entities, the affected domestic producers who did provide assistance to the ITC in its investigation have been rewarded in accordance with the statute and those domestic producers like Schaeffler that opposed the anti-dumping duty investigation. [00:16:18] Speaker 06: You mean checking a box or not checking a box? [00:16:20] Speaker 06: Let's be clear. [00:16:22] Speaker 06: Assistance, there was no requirement of assistance. [00:16:26] Speaker 06: There was a requirement that you check the support box. [00:16:30] Speaker 06: Well, Your Honor, you could provide assistance, but you didn't have to. [00:16:35] Speaker 04: There's the actual check in the box, and there's providing the other information on the questionnaire. [00:16:41] Speaker 04: That's the assistance, and that's consistent with what this court has held in SKF and Ashley Ferguson. [00:16:47] Speaker 06: Supposing SKF was wrongly decided as far as retroactivity. [00:16:53] Speaker 06: That would impact things, wouldn't it? [00:16:55] Speaker 04: I'm not sure I quite understand. [00:16:57] Speaker 06: SKF says that [00:17:00] Speaker 06: Retroactive application directly advances the government's substantial interest in trade law enforcement. [00:17:06] Speaker 06: If that was wrong, then we'd be on an entirely new playing field, wouldn't we? [00:17:11] Speaker 06: Possibly, yes. [00:17:13] Speaker 06: But that is the decision of this court. [00:17:18] Speaker 06: Unless we take it in bank, yes. [00:17:22] Speaker 04: That's correct. [00:17:23] Speaker 04: But it is important to note that this court in SKF did [00:17:28] Speaker 04: articulate what the legitimate purpose of the CDSLA was, and then upheld the constitutionality of the law under that purpose. [00:17:35] Speaker 04: It's important to note, of course, that SKF also had a First Amendment challenge, which was analyzed under intermediate scrutiny, which is a much more exacting test than the rational purpose test that it applied to the equal protection claim in that case, and that this course should apply to the due process claim that's at issue in this case. [00:17:55] Speaker 00: So we understand the playing field we're on. [00:17:59] Speaker 00: We have SKF. [00:18:00] Speaker 00: This court refused to take it on bank. [00:18:02] Speaker 00: The Supreme Court denied certs. [00:18:03] Speaker 00: So SKF, at least for now, is what the law is. [00:18:07] Speaker 00: Does it matter that this is a due process challenge as opposed to an equal protection or First Amendment challenge? [00:18:15] Speaker 04: Well, the test is different for a due process challenge than a First Amendment challenge. [00:18:18] Speaker 04: There is First Amendment-involved intermediate scrutiny. [00:18:20] Speaker 04: The test that this court should apply to a due process challenge [00:18:23] Speaker 04: is the same as it applied to the equal protection challenge in SKF, which is, is the retroactive application of this statute rationally related to a legitimate governmental purpose? [00:18:34] Speaker 00: Okay, so that's my question. [00:18:36] Speaker 00: Could there be a different purpose analysis that is needed under a due process clause challenge than would be needed under an equal protection clause challenge? [00:18:48] Speaker 04: If we're talking about retroactivity, the only novel [00:18:53] Speaker 04: issue in this case that's different from SKF is, is there a rational purpose to the specific retroactive, specifically looking back to the assistance or non-assistance provided, assistance, excuse me, provided by the Schaeffler in 1988? [00:19:11] Speaker 00: And SCAP was the argument made that it's not just a question of whether the statute on faith, for instance, for purposes of [00:19:22] Speaker 00: of relief would provide a differentiation between those who check the box and do whatever SKF says you have to do and those who don't but that in this particular case because there's such a huge period of retroactivity and the expenditures were so large during that period that the analysis should be different. [00:19:45] Speaker 00: I think that's the argument that your friend on the other side is making. [00:19:51] Speaker 04: I'm not aware of any authority that says that the dollar amount comes into whether or not this is rationally related to a legitimate governmental purpose test. [00:20:01] Speaker 04: In terms of the actual year and scope of the retroactivity, I think it's really important to note that what was before this court in SKF are the same orders that we're talking about here. [00:20:12] Speaker 04: It's the anti-friction bearing orders. [00:20:14] Speaker 04: And SKF, in that case, like Safeware in this case, [00:20:18] Speaker 04: sent in its questionnaire, provided its opposition in 1988, just like Schaeffler did. [00:20:23] Speaker 04: And so factually, this is, it's pretty much on all fours with this. [00:20:26] Speaker 04: And in that case, when this, when this court articulated what the purpose of this statute is, it specifically says the purpose of the Byrd Amendment's limitation of eligible recipients was to reward injured parties who assisted, in the past tense, who assisted government enforcement of the anti-dumping laws. [00:20:43] Speaker 04: And so there, the fact of that case had to, [00:20:47] Speaker 04: almost identical to this case in that SKF opposed the anti-dumping duty investigation in 1988. [00:20:54] Speaker 04: And so this court was hearing facts about the same scope of time that we have here and the exact same duty orders. [00:21:02] Speaker 04: And it held this was a rational, this was a legitimate governmental purpose. [00:21:06] Speaker 04: It was constitutional. [00:21:07] Speaker 04: And then articulating the purpose that it was talking about it in terms of the past tense. [00:21:12] Speaker 01: We don't know whether there was just an omission to check a box. [00:21:16] Speaker 01: or active opposition. [00:21:18] Speaker 01: But nobody has said that there was any active opposition. [00:21:22] Speaker 01: So there is something certainly troubling about passing a law years later, where, as they said, had they known that checking a box could have important financial benefits to them, they might have checked the box. [00:21:42] Speaker 04: Well, they do claim that, Your Honor. [00:21:45] Speaker 04: Obviously there's no way for them to demonstrate that. [00:21:48] Speaker 04: We don't, we don't know what they actually would have done. [00:21:49] Speaker 01: What does it make any difference? [00:21:52] Speaker 01: Would it make any difference? [00:21:54] Speaker 04: It doesn't make any difference to your question, Your Honor. [00:21:56] Speaker 04: I believe that this court decided in SKF pretty clearly what support means and what oppose means in the context of this statute. [00:22:03] Speaker 04: And if it didn't, I think this court reiterated it strongly in the Ashley furniture case and specifically drew a bright line that, that companies like Schaeffler [00:22:13] Speaker 04: that specifically check that box that say oppose are not petition supporters under the meaning of the statute. [00:22:19] Speaker 01: Well, the statute is clear. [00:22:20] Speaker 01: And I don't recall that there was a particular constitutional argument made to us in the past. [00:22:30] Speaker 01: But it's troubling, is it not? [00:22:35] Speaker 04: No, Your Honor. [00:22:35] Speaker 01: Is there no different from an ex post facto law? [00:22:42] Speaker 01: Is it? [00:22:44] Speaker 04: I see I'm out of time if I can answer the question. [00:22:46] Speaker 01: Yes, please help me with that. [00:22:50] Speaker 01: This is where I have a problem. [00:22:52] Speaker 04: Sure. [00:22:52] Speaker 04: It's different than an ex post facto law because we're not looking at so many of the cases in this area and the cases shape for sites, especially some of the coal benefits cases. [00:23:04] Speaker 04: What you're actually talking about there is Congress coming in and passing a law that says, based on what happened years ago, we're going to come in [00:23:14] Speaker 04: and impose an obligation on you and take something from you, you're going to have to pay money into this fund. [00:23:19] Speaker 04: And so there they're specifically, it is an exaction upon these people. [00:23:23] Speaker 04: And even in those cases generally were upheld. [00:23:26] Speaker 04: What we're talking about here, there's been no punishment, no retribution. [00:23:30] Speaker 04: When Schaeffler turned in its questionnaire and opposed this anti-dumping duty investigation, [00:23:36] Speaker 04: It had absolutely no expectation that it was ever going to receive any CPSOA distribution. [00:23:40] Speaker 01: Of course, the statute didn't exist, so they had no expectation. [00:23:43] Speaker 04: That's correct, Your Honor. [00:23:44] Speaker 04: And so to the extent this has upset their expectations, it's only insofar as they did not receive a reward that Congress specifically decided should be reserved for those who were either petitioners or supporters of the petition. [00:24:03] Speaker 04: They haven't lost anything. [00:24:04] Speaker 04: Nothing has been taken from them. [00:24:06] Speaker 04: It's just simply the reward construction of this statute that this court adopted in SKF. [00:24:12] Speaker 04: A reward has been given to entities like the Intervenor. [00:24:15] Speaker 06: Will you agree that they've been deprived of a level playing field? [00:24:22] Speaker 04: We would agree that it has affected the playing field. [00:24:25] Speaker 04: But again, there's nothing to indicate that anything has happened here that wasn't specifically intended. [00:24:31] Speaker 04: by Congress that studied this issue and specifically passed this law in order to reward petitioners and petition supporters. [00:24:38] Speaker 04: And again, I think the law is clear that they have to have a property interest, they have to have a specific entitlement or expectation to something which they have not demonstrated here. [00:24:50] Speaker 01: Okay, let's hear from your colleagues. [00:25:01] Speaker 01: Okay, are you Mr. Stewart or Mr. Gallagher? [00:25:03] Speaker 05: Mr. Gallagher. [00:25:05] Speaker 01: Okay. [00:25:05] Speaker 05: And I can assure you, Your Honor, I really don't think I make more than Mr. Thomas. [00:25:10] Speaker 05: I work for the government, too. [00:25:12] Speaker 05: I'm here on behalf of the International Trade Commission. [00:25:16] Speaker 06: Based on Judge O'Malley... I think he was complimenting you, Your Honor. [00:25:21] Speaker 00: Can I ask a threshold question? [00:25:25] Speaker 00: Oddly, to me, your brief argues that [00:25:28] Speaker 00: that there is no retroactivity. [00:25:30] Speaker 00: Yeah, I knew this was coming. [00:25:33] Speaker 05: You didn't really mean that, right? [00:25:36] Speaker 05: Our argument is that it is not retroactive legislation because it doesn't impose anything on Scheffler. [00:25:47] Speaker 05: It doesn't require them to do anything. [00:25:49] Speaker 05: It's not a fine. [00:25:50] Speaker 05: It's not a tax. [00:25:51] Speaker 00: There's a difference between ex post facto and retroactive. [00:25:57] Speaker 00: Ex post facto means you [00:25:58] Speaker 00: you retroactively impose a penalty, a fine, a criminal sanction. [00:26:05] Speaker 00: Retroactive just means that it does apply to periods of time that relate back. [00:26:10] Speaker 00: And on its face, it relates back, right? [00:26:12] Speaker 05: It relates back that there's no effect from the relating back. [00:26:17] Speaker 00: The purpose... Isn't that why we're here? [00:26:20] Speaker 00: Because there is an effect. [00:26:21] Speaker 00: Because you relate back for purposes of money that you get. [00:26:24] Speaker 05: But the money is, and this goes to [00:26:27] Speaker 05: the money is related to it's a reward for the so you're saying it's a future payment for past activities yes sir and the Congress could justify that easily but and anyone who doesn't qualify is excluded but but they didn't tell him nobody knew until later that's true there was this difference [00:26:55] Speaker 01: That's the problem. [00:26:57] Speaker 05: But what the reward is for, is for assisting the government in the enforcement of policy, trade policy. [00:27:04] Speaker 00: Okay, I'm not buying your lack of rush activity, so let's move to the next argument. [00:27:08] Speaker 05: Yes, ma'am. [00:27:14] Speaker 05: Sorry. [00:27:15] Speaker 05: I was so... You're so ready for that. [00:27:17] Speaker 05: I was so ready for that one, and I figured we would be doing my whole time on that. [00:27:21] Speaker 05: Okay. [00:27:24] Speaker 05: I'm sorry, I'm drawing a blank. [00:27:28] Speaker 05: Okay, so assuming it's retroactive. [00:27:30] Speaker 05: Assuming it's retro. [00:27:31] Speaker 05: There's a rational basis for it. [00:27:33] Speaker 05: I'm sorry, thank you. [00:27:34] Speaker 05: There's a rational basis for it. [00:27:36] Speaker 05: Congress intended to reward parties for assisting in enforcing the trade laws. [00:27:42] Speaker 05: Going back to orders that predate the enactment. [00:27:45] Speaker 05: It makes perfect sense because that's the purpose of it. [00:27:48] Speaker 05: Whether you supported the government, assisted the government in [00:27:53] Speaker 05: An investigation that resulted in an order and you did that activity before enactment or post enactment, it's still the same thing. [00:28:01] Speaker 05: You're still assisting the government in the enforcement of the trade laws. [00:28:05] Speaker 00: How does it really help the government? [00:28:09] Speaker 05: Without industry support for a petition and during the investigation, Your Honor, you wouldn't know whether there was dumping or counterfeiting. [00:28:17] Speaker 06: Well, you can't do it. [00:28:19] Speaker 06: You can't do this statute unless you have sufficient industry support. [00:28:23] Speaker 05: Correct. [00:28:24] Speaker 05: And you can't make your analyses without industry participation. [00:28:29] Speaker 00: So without the industry... But the industry often participates and still opposes or doesn't support. [00:28:36] Speaker 00: So the participation alone isn't the end of the inquiry. [00:28:39] Speaker 00: There's got to be something more that the industry is giving you for purposes of your findings. [00:28:47] Speaker 05: Judge Wallach was saying the investigations are going to go forward without sufficient industry support. [00:28:53] Speaker 05: The industry are the ones who bring the petition. [00:28:55] Speaker 05: You have to have sufficient industry support in order to conduct the investigation. [00:28:58] Speaker 05: You need the industry to supply you with the information. [00:29:01] Speaker 05: And it is true that parties will support or oppose for many reasons, some of which may be related to CDOSA, some of which may not. [00:29:09] Speaker 05: And that came up in SKF. [00:29:11] Speaker 05: They could oppose it simply on philosophical reasons. [00:29:14] Speaker 05: Absolutely. [00:29:15] Speaker 05: And we've seen that before. [00:29:18] Speaker 05: the bump counter go over travesty, things like that, where those parties may have been injured anyway, perhaps greatly. [00:29:27] Speaker 05: I see my time is running. [00:29:29] Speaker 01: Thank you. [00:29:34] Speaker 06: This is Mr. Stewart. [00:29:39] Speaker 03: I'm pleased to be here this morning. [00:29:40] Speaker 03: Thank you. [00:29:41] Speaker 03: I just want to address a couple of questions. [00:29:44] Speaker 06: Mr. Sear, I'd like you to answer a question for me. [00:29:46] Speaker 06: Sure. [00:29:47] Speaker 06: Because you were there at the get-go and know the ledge history, who were our initial sponsors in the House and the Senate? [00:29:57] Speaker 03: In the House, it was Congressman Regula. [00:30:02] Speaker 03: And in the Senate, I believe it was Senator DeWine, both from Ohio. [00:30:08] Speaker 00: Is that coincidental? [00:30:11] Speaker 03: No. [00:30:12] Speaker 03: But when the legislation was passed in 2000, there were, I think, 65 co-sponsors in the House and a dozen or more co-sponsors in the Senate had been being looked at for five or six years in terms of the issue. [00:30:31] Speaker 03: To address your issue, Judge Newman, in terms of, quote unquote, whether there's fairness in terms of going back, [00:30:41] Speaker 03: Certainly, the answer can be not in terms of changing a statutory, where there is no statutory entitlement. [00:30:50] Speaker 03: The Supreme Court cases have been very clear on that. [00:30:52] Speaker 03: If you don't have an entitlement, you have a property interest. [00:30:57] Speaker 03: You don't have an entitlement to keep the law the way it is. [00:31:01] Speaker 03: And the fact that the law changes by itself is not an issue that is constitutionally worthy of review. [00:31:12] Speaker 03: uh... second uh... judge wallach you indicated that there was a distortion of the level playing field actually that's the exact opposite of what cds away is intended to try to do uh... in the reward system and the reason that the reason that it didn't have an actual uh... both intended action uh... because if you if you look at the way the law works uh... this court in s k f talked about rewarding people who [00:31:40] Speaker 03: supported the government interest in enforcement of the trade laws. [00:31:44] Speaker 03: But money is only distributed, A, if an order is issued. [00:31:49] Speaker 03: So here there's an order issued. [00:31:52] Speaker 03: And second, if there is a continuation of the unfair trade practice. [00:31:56] Speaker 03: Now, the reason that that's relevant is that the way dumping is calculated in these particular cases, the varying cases, the vast majority of the cases are through related party importers. [00:32:09] Speaker 03: such as the Schaeffer companies, FAG and ENA. [00:32:15] Speaker 03: And where dumping continues, it is because prices in the marketplace have not been allowed to return to the fair value. [00:32:24] Speaker 03: So what you are talking about, and if you look at the findings of Congress in that legislation, you will see that there was a concern that prices might not have been restored. [00:32:34] Speaker 06: But if you have... [00:32:36] Speaker 06: not a group of large producers, but if you have a group of small producers like the crayfish people who were in Shea Sydney, you've got folks who may have just not been able to read the instructions or ignore them, and among those small producers may well skew the field because they're all domestics with no international interest. [00:33:04] Speaker 03: I would not talk about a case that's not before you, but in this case... Well, I am talking, but I'm giving you this as a hypothetical. [00:33:12] Speaker 03: Right, as a hypothetical. [00:33:14] Speaker 03: You could have cases where there would be people who didn't know about the case or who didn't participate in one way or another who might find that they are unhappy about the outcome. [00:33:23] Speaker 03: But that's no different than any trust litigation where people, if they don't sign up for a case, don't get the benefits of the case, et cetera. [00:33:34] Speaker 03: So the other issue that was raised was whether there was active opposition. [00:33:39] Speaker 03: In our brief, we review the active opposition. [00:33:41] Speaker 03: It is truly the case that for our friends at Schaeffer, they were in the exact same position as SKF. [00:33:48] Speaker 03: Active opposition, not simply questionnaire, but active opposition at the Commerce Department, active opposition at the ITC, because in fact, their parent companies were named in the petition. [00:34:00] Speaker 03: There were large dumping margins that were found on many products. [00:34:03] Speaker 03: So they had an economic interest why they, why they wished to oppose, but they were in the exact same position as SKF. [00:34:10] Speaker 03: So it was not. [00:34:11] Speaker 00: Was SKF an as applied challenge or a facial challenge? [00:34:14] Speaker 03: It was both. [00:34:16] Speaker 03: SKF was. [00:34:17] Speaker 00: It doesn't actually say that in the opinion though, does it? [00:34:23] Speaker 03: I believe that they, that they both dismissed the, the facial and then on the as applied. [00:34:31] Speaker 03: But it certainly was argued as both as I recall. [00:34:36] Speaker 03: We were amicus or intervenors in the case. [00:34:41] Speaker 00: Under this burden, did any other industry get the kind of payout that the chicken industry did? [00:34:49] Speaker 03: The information that's been provided is a snapshot at the very beginning of the first few years. [00:34:56] Speaker 03: If you take a look at later years, there are many industries that have [00:35:00] Speaker 03: relatively large distributions if there have been large continued dumping in terms of the imports that are there. [00:35:10] Speaker 03: One of the industries that had pushed hard for the law originally was the steel sector. [00:35:14] Speaker 03: There are literally hundreds of steel orders that are in place. [00:35:19] Speaker 03: Steel, foreign producers tend to stop shipping so there doesn't tend to be continued dumping in those situations and their problem is that they have to go after [00:35:30] Speaker 03: repeat cases that they do. [00:35:32] Speaker 03: But the furniture cases, which were up in Ashley, etc., there were large amounts of money that were involved because there was large amounts of dumping that continued after the order. [00:35:43] Speaker 03: Our clients, I can tell you, would have been much happier and would have had much greater economic returns had the dumping ceased and not continued. [00:35:54] Speaker 03: The reason there are large distributions is that there have been massive amounts of dumping that went on for years and years, including past 2000, that became subject to the distribution. [00:36:06] Speaker 03: But that is the only reason that there's large amounts, because people received large dumping. [00:36:14] Speaker 03: And the domestic industry, people who brought the cases, petitioners like Timken, like Torrenten, like MPB, were denied relief for years. [00:36:25] Speaker 01: Any more questions? [00:36:26] Speaker 03: Thank you. [00:36:26] Speaker 01: Thank you very much. [00:36:28] Speaker 01: Mr. Shetson, you have your full rebuttal time. [00:36:35] Speaker 02: Thank you, Your Honors. [00:36:37] Speaker 02: Just a word about Mr. Stewart's last comment about massive amounts of dumping occurring in years subsequent to the passage of the CDSOA. [00:36:49] Speaker 02: I, too, Judge Wallach was there from the get-go. [00:36:54] Speaker 02: I have some familiarity with this order and what has transpired. [00:36:59] Speaker 02: The dumping margins of the major players in these cases, in Germany, in Japan, in Italy and France, were very, very low as the order matured. [00:37:15] Speaker 02: Initially, yes. [00:37:16] Speaker 02: When this case was first brought, there were massive dumping margins. [00:37:21] Speaker 02: But as time went on, [00:37:25] Speaker 02: These companies adjusted to that. [00:37:27] Speaker 02: And there really wasn't massive amounts of dumping. [00:37:32] Speaker 02: You can check it. [00:37:32] Speaker 02: It's a matter of public record. [00:37:33] Speaker 02: You can look at the rates in the Federal Register. [00:37:36] Speaker 02: They were single digits. [00:37:38] Speaker 02: These are massive companies. [00:37:40] Speaker 02: And although we installed programs to control dumping, you always have some maverick salesmen making some crazy sale and creating a problem. [00:37:51] Speaker 02: But overall, the margins were very low and, of course, [00:37:55] Speaker 02: this situation predated the absence of zero. [00:38:00] Speaker 02: So in the absence of zeroing, there were no margins. [00:38:04] Speaker 02: And this is evidenced by what occurred in the latter years of these orders, all of which, by the way, now are repealed. [00:38:18] Speaker 02: Just to conclude, Judge O'Malley [00:38:26] Speaker 02: our interest, the client's interest, Scheffler's interest in due process was, as I mentioned, but also that the government would not create an anti-competitive market situation without proper notice, without ability to comment. [00:38:48] Speaker 02: This was, in effect, a midnight amendment to an ad bill nobody knew about. [00:38:53] Speaker 02: So that was an interest. [00:38:56] Speaker 02: that the company had, and of course an interest the company continues to have, and Judge Wallach was quite correct that what this did is it created a very uneven playing field. [00:39:10] Speaker 00: But if your argument is that they shouldn't have even passed the statute, wouldn't that be a facial challenge? [00:39:16] Speaker 00: And yet you told us before this is an as applied challenge. [00:39:20] Speaker 02: Yes, because retroactivity, retroactivity [00:39:26] Speaker 02: is, in this particular case, is as applied. [00:39:30] Speaker 02: Yes. [00:39:32] Speaker 02: It's as applied. [00:39:33] Speaker 02: It's not just facial. [00:39:35] Speaker 02: OK. [00:39:35] Speaker 02: Right. [00:39:36] Speaker 02: I don't think I can argue facial because of your SKF decision. [00:39:40] Speaker 02: I would like to, but I don't think I can. [00:39:42] Speaker 00: But isn't competitive disadvantage more an equal protection issue than a due process issue? [00:39:48] Speaker 02: I think not. [00:39:49] Speaker 02: It is an equal protection issue. [00:39:50] Speaker 02: And of course, you've already addressed that in SKF. [00:39:54] Speaker 02: But it's also a due process issue. [00:39:56] Speaker 02: in terms of the retroactive application of the statute. [00:39:59] Speaker 02: And I do tell you, although I'm sure it doesn't matter, and it won't matter for your determination, but had I known representing this company in 1988 and 89 where this was headed, things would have been very different. [00:40:14] Speaker 02: I thank you. [00:40:15] Speaker 06: You would have stopped the law or you would have checked the box. [00:40:18] Speaker 02: Well, had I known about it, certainly we might have mounted some opposition. [00:40:23] Speaker 02: This statute [00:40:25] Speaker 02: created problems on the Hill from the very beginning after it was enacted, as Your Honors know. [00:40:33] Speaker 02: Thank you. [00:40:34] Speaker 01: Okay. [00:40:34] Speaker 01: Thank you. [00:40:35] Speaker 01: Thank you. [00:40:37] Speaker 01: The case is taken under submission. [00:40:38] Speaker 01: Thank you all.