[00:00:19] Speaker 07: The next case for this morning is appeal number 15-1402, since hardware versus the United States. [00:01:00] Speaker 08: Mr. Menegas, is it? [00:01:02] Speaker 06: Yes, thank you. [00:01:05] Speaker 08: OK. [00:01:06] Speaker 08: Before we begin your argument, could you, just for housekeeping purposes, give me a road map of how this is going to work? [00:01:15] Speaker 06: Your Honor, that's exactly what I was going to spend my first paragraph explaining in my introduction. [00:01:20] Speaker 06: I'm here on behalf of Foshun Shunde, and we've written a joint brief for them and Sense Hardware, the two mandatory respondents on the appeal. [00:01:28] Speaker 06: With me is my colleague Alexandra Salzman from The Keeper and William Perry of Torsey Whitney who represents Sense Hardware in the underlying dispute and in the litigation before the CIT. [00:01:38] Speaker 06: What I was going to try to do was address two major margin driver surrogate value issues that are common to both companies, the financial statements and the brokerage and handling in my eight minutes. [00:01:49] Speaker 06: I was just going to try to roughly evenly divide that time if I can manage to do that. [00:01:53] Speaker 06: And then I was going to reserve a few minutes for rebuttal [00:01:57] Speaker 08: Two minutes, right? [00:02:00] Speaker 06: Right, a few minutes. [00:02:01] Speaker 06: Actually, I have five. [00:02:02] Speaker 06: Eight for presentation, five for rebuttal. [00:02:04] Speaker 08: Five is rebuttal. [00:02:05] Speaker 06: And then Mr. Perry has three minutes because there are some very specific arguments that were made that since hardware has no standing because they closed the business. [00:02:14] Speaker 06: That was very specific to his client. [00:02:16] Speaker 06: And if those arguments are presented here, he will get off and rebut them. [00:02:20] Speaker 06: If they're not presented here, we'll use the time for survey value rebuttal. [00:02:26] Speaker 07: Does that make sense? [00:02:27] Speaker 07: I hope it does. [00:02:28] Speaker 07: I think it makes sense. [00:02:30] Speaker 07: So we'll just run with it. [00:02:32] Speaker 07: Okay. [00:02:34] Speaker 07: Whenever you're ready. [00:02:35] Speaker 06: May it please the court so I can bypass my first paragraph. [00:02:40] Speaker 06: We will focus on two major margin driver issues, the selection of the surrogate financial statements for the financial ratios and the brokerage and handling. [00:02:50] Speaker 06: So diving right in with the financial statements, [00:02:53] Speaker 06: The department's principle practice, for as long as I've been practicing since 1992 and earlier, has always been to require that financial statements used for the surrogate financial ratios overhead SG&A and profit come from a publicly available source. [00:03:10] Speaker 06: And this is one of the most uninterrupted practices of the department that I've ever seen in my 20 years of doing this. [00:03:18] Speaker 06: And when you [00:03:20] Speaker 06: I want to maybe just walk you very quickly through the history of this litigation because I think it undermines the department's credibility entirely. [00:03:29] Speaker 06: They started in their initial decision by saying that, oh, no problem, the petitioner, the other side, the domestic industry found the statement on the Ministry of Corporate Affairs website. [00:03:40] Speaker 06: For a small fee, we can all go on a computer and get into the Indian Ministry of Corporate Affairs and download publicly available statements. [00:03:47] Speaker 06: Well, that simply wasn't true. [00:03:49] Speaker 06: They never alleged that they got it there, and we put a mountain of evidence on the record that we'd made the effort to do that. [00:03:54] Speaker 06: We did the print screens from the Ministry of Corporate Affairs, all proving that the statement was not completely available from the Ministry of Corporate Affairs. [00:04:02] Speaker 06: The key missing information was the income statement portion of the annual report, and that's where they pull all their financial ratios from. [00:04:09] Speaker 06: All the numbers on that page are used to calculate the financial ratios. [00:04:13] Speaker 06: So the fact that that's not on the Ministry of Corporate Affairs website [00:04:16] Speaker 06: was a critical flaw in the statement. [00:04:21] Speaker 06: And so then next on remand, because the judge noticed all this and said, what's going on? [00:04:26] Speaker 06: They said, oh, no problem. [00:04:28] Speaker 06: The petitioner asked the company and obtained it. [00:04:30] Speaker 06: Well, that is not true either. [00:04:31] Speaker 06: The petitioner never alleged that they asked the company for the statement and they obtained it. [00:04:35] Speaker 06: In fact, we asked the company for the statement, and we sent them an email, and they said, get lost. [00:04:38] Speaker 06: We're not giving you any of our financial statements. [00:04:40] Speaker 07: We're talking about the fifth administrative review here? [00:04:43] Speaker 06: Yes, we're talking about the fifth administrative review. [00:04:45] Speaker 07: The third and the fourth. [00:04:46] Speaker 06: Well, Foch and Shinde was not involved in the third. [00:04:49] Speaker 06: We explained in our rebuttal brief very clearly that all these allegations by the Commerce Department of Foch and Shinde's involvement in all those cases is highly misleading. [00:05:00] Speaker 06: We were not even involved in the third review. [00:05:02] Speaker 06: And in the fourth review, they assigned a total AFA [00:05:05] Speaker 06: So they didn't make a decision about the financial statements. [00:05:07] Speaker 06: It wasn't a focus of the briefing at all. [00:05:10] Speaker 06: And the company was fighting for its life. [00:05:12] Speaker 06: I wasn't their counsel at the time. [00:05:13] Speaker 06: But they said, you had some documents, some production reports you could have given us earlier. [00:05:18] Speaker 06: And they were given in the last supplemental. [00:05:20] Speaker 06: And they said, that's too late. [00:05:21] Speaker 06: We're not going to start with a brand new set of documents underlying your costs. [00:05:25] Speaker 06: And I was hired to go in and use those production documents in AR5 and rescue the company. [00:05:31] Speaker 06: And Commerce came out and verified those [00:05:33] Speaker 06: documents and gave them a margin. [00:05:34] Speaker 06: And that's what we're arguing. [00:05:36] Speaker 06: And so what we're saying is the first time this was ever a legitimate square issue that was focused on insurg value submissions and briefing is in our review, in AR5. [00:05:47] Speaker 06: And there's a very long established principle of administrative law of the Commerce Department that each segment, each individual proceeding, whether it's an investigation or a review or a subsequent review, stands on its own and is based on the record of that segment. [00:06:01] Speaker 06: And so you can't [00:06:02] Speaker 06: to say whatever we did two reviews ago is fine. [00:06:06] Speaker 06: And kind of jumping quite a bit ahead in my outline, if you look at the steel nails from China decision, commerce, you know, we were involved in all those cases and we have some of them coming percolating up behind this in the court. [00:06:18] Speaker 06: Commerce said, they used Ukraine, they wanted to use Ukraine. [00:06:21] Speaker 06: Commerce said, well, this Dino Kermet's financial statement, good for you, it might have been publicly available when you submitted it, but it's not now, we did our job, [00:06:30] Speaker 06: We went and looked for it, and we can't find it. [00:06:33] Speaker 06: So it's not publicly available. [00:06:34] Speaker 06: You lose. [00:06:35] Speaker 06: We're discarding the statement. [00:06:36] Speaker 06: And we're moving to another surrogate country, in fact, because that statement's not publicly available. [00:06:41] Speaker 06: So whether it was publicly available in the past or in a previous review is totally not the point. [00:06:47] Speaker 06: If the Commerce Department is going to be a neutral arbiter of these disputes, it has to do its due diligence when a party has rebutted the presumption of public availability. [00:06:55] Speaker 06: And we did that. [00:06:56] Speaker 06: And we showed the MCA web screenshots that it's not available. [00:07:00] Speaker 06: Commerce didn't bother to check the screenshots like they did in Steel Nails. [00:07:03] Speaker 06: They just said, no problem. [00:07:04] Speaker 06: Because they put it on the record and because you had a chance to comment on it, it's fine. [00:07:08] Speaker 06: Well, then that would obliterate any definition of public availability because there's no such thing as a non-public document. [00:07:14] Speaker 06: All you have to do is put the document on the record and the parties get a chance to comment on it. [00:07:18] Speaker 06: I can put the U.S. [00:07:20] Speaker 06: military's nuclear codes on the record and their public documents because I put them on the record. [00:07:25] Speaker 06: That's no standard at all. [00:07:26] Speaker 06: It's clearly not the standard they applied in steel nails and in steel grates, because those would have been decided differently, and they were endorsed by the CIT. [00:07:35] Speaker 06: I mean, steel grates was in remand at the same time. [00:07:38] Speaker 06: And the CIT, we quote on page 19 of our brief, this is the court saying, commerce and preparing the remand results was presented with the question of determining whether to use the financial statements of a company that produced identical merchandise to steel grating. [00:07:52] Speaker 06: but whose financials were not publicly available or the financial statements of eight companies that produced comparable merchandise, but their statements were available. [00:08:01] Speaker 06: Commerce reasonably chose the latter. [00:08:03] Speaker 06: Commerce in steel grades did its due diligence and said, look, if someone has rebutted the presumption of public availability, the submitter of the information has to go back and establish how they obtain this information and that it's genuine. [00:08:17] Speaker 06: And that really strikes at the heart of the whole issue. [00:08:20] Speaker 06: The whole issue is, [00:08:22] Speaker 06: Is the statement reliable for the calculation of the financial ratios? [00:08:26] Speaker 06: When it's been submitted to a government authority like the Ministry of Corporate Affairs, then it's deemed genuine and reliable. [00:08:33] Speaker 06: This company's name said Infinity Modules Private Limited. [00:08:36] Speaker 06: It's a private limited company. [00:08:38] Speaker 06: Under the Indian Companies Act of 1956, they don't have to publicly disclose their income statement in the Ministry of Corporate Affairs public records. [00:08:49] Speaker 06: They can do it if they want to. [00:08:50] Speaker 06: but they don't have to, and they didn't in this case. [00:08:53] Speaker 06: The other two companies we've argued for, Maxima Limited, that means it's public, and Omax Limited, they're both public companies, they don't say PVT, private limited. [00:09:03] Speaker 06: So even in the name, the presumption is rebutted, but certainly with the MCA screenshots, the presumption is rebutted. [00:09:10] Speaker 06: Commerce should have gone back and said, you've got to offer more, you've got to prove this is legitimate, and they never did. [00:09:16] Speaker 06: When we get verified, I have 20 years of experience, Bill has 30 years of experience, you know what the Commerce Department does in every verification, they look at the financial statement of the Chinese company, they check the chops and the stamps to make sure it's the actual statement that was filed with the government. [00:09:29] Speaker 06: If you can't provide an annual report with those chops on it, they will say it's not reliable and they'll go to your tax filing because the tax filing was filed with the government. [00:09:37] Speaker 06: They need an official source that is 100% reliable. [00:09:41] Speaker 06: They didn't have one in this case. [00:09:42] Speaker 06: And it's inexplicable. [00:09:44] Speaker 06: And for the judge just to say it was on the record, you got to comment, what's the big deal? [00:09:47] Speaker 06: Misses the point that no one can say that this statement is reliable. [00:09:51] Speaker 06: It could have been provided to the petitioner in response to a request to buy the company. [00:09:55] Speaker 06: Hey, we want to buy your company. [00:09:57] Speaker 06: Show us that you're a good, healthy company. [00:09:58] Speaker 06: They could have made up their profit statement, their income statement. [00:10:01] Speaker 06: We have no idea. [00:10:02] Speaker 06: The petitioner's never explained why. [00:10:03] Speaker 06: They had four chances on remand to do it. [00:10:05] Speaker 06: Never offer the information. [00:10:07] Speaker 06: Can I please point you to a footnote in my brief that I want to correct? [00:10:11] Speaker 06: in case there's a misunderstanding. [00:10:14] Speaker 06: At page 26 and 27, we mentioned that there are multiple other years of the financial statements on the record in two footnotes, okay? [00:10:24] Speaker 06: Footnotes seven and eight. [00:10:25] Speaker 06: And I was rereading this thinking, gee, I hope the court doesn't misunderstand this. [00:10:29] Speaker 06: These are other years, other later years of OMAX and Maxima, of the companies we wanted to present. [00:10:37] Speaker 06: What Commerce used was the 0607 infinity. [00:10:41] Speaker 06: there is no such later statement on the record from them. [00:10:45] Speaker 06: And our contemporaneous period is 08, 09. [00:10:48] Speaker 06: So it's two, that's another argument we made that, you know, contemporaneity is one of the criteria and it's critical, especially in this case where this was pre-recession. [00:10:56] Speaker 06: But if this company intended for its statements to be public, why couldn't they get the contemporaneous statements like we got? [00:11:01] Speaker 06: They couldn't even get one year less contemporaneous. [00:11:05] Speaker 06: The only one they were able to recycle was a three year old statement. [00:11:08] Speaker 06: So all of these facts together [00:11:11] Speaker 06: we think present overwhelming evidence that the statement's not public. [00:11:16] Speaker 08: You're into your rebuttal, actually. [00:11:18] Speaker 06: Did you want to say something really briefly about brokerage and handling? [00:11:21] Speaker 06: Yeah. [00:11:21] Speaker 06: There's so much to say. [00:11:22] Speaker 06: Really brief. [00:11:23] Speaker 06: Yeah. [00:11:24] Speaker 01: Well, you had nine pages in the brief to say it. [00:11:27] Speaker 06: I didn't even get off the first page of my outline. [00:11:29] Speaker 06: This is a sea change case. [00:11:31] Speaker 06: For 30 years, Commerce used the detailed, verified reports of Indian companies in dumping cases [00:11:39] Speaker 06: with thousands of lines of programming about their brokerage and handling costs. [00:11:42] Speaker 06: Here, for the first time, they use this doing business report. [00:11:45] Speaker 06: The judge never even addressed our argument. [00:11:47] Speaker 06: He misstated our argument and said, oh, you've got a rate sheet from Hapkak Lloyd. [00:11:51] Speaker 06: That wasn't our argument. [00:11:52] Speaker 06: That was a benchmark that corroborated the actual data of Indian companies. [00:11:57] Speaker 06: I just want to make one more point about Sense Hardware. [00:11:59] Speaker 06: For the first time ever in 30 years, the judge threw them out of the surrogate value discussion in the court. [00:12:06] Speaker 06: I've never seen [00:12:06] Speaker 06: two companies not get the same surrogate value for a commonly used thing. [00:12:11] Speaker 06: And we argued it extensively, so everyone had a chance to consider the issue. [00:12:15] Speaker 06: It was kind of bizarre that he tossed them out of court on the surrogate value for brokerage, and we hope you reverse him on that. [00:12:21] Speaker 06: All right, thanks a lot, Tom. [00:12:25] Speaker 08: Let's hear from the other side here. [00:12:27] Speaker 08: Is it Mr. Eikenson? [00:12:30] Speaker 02: Mr. Snyder, I was just wondering if Mr. Perry was, are you reserving all your time for rebuttal? [00:12:37] Speaker 08: OK, Mr. Snyder? [00:12:38] Speaker 08: Yes, Your Honor. [00:12:43] Speaker 08: OK. [00:12:43] Speaker 08: You'll be speaking for 11, and then Mr. Eikenson will for four minutes. [00:12:49] Speaker 03: Yes, Your Honor. [00:12:50] Speaker 03: I'll try to obviously address everything Mr. Menegas addressed, and also what I believe are some issues that are only relevant to sense hardware, which you haven't heard yet from them. [00:13:06] Speaker 03: Turning first to the financial statements, the issue of public availability, I'll address that first since that was the last issue discussed. [00:13:15] Speaker 03: The practice of the department is the regulations is to normally use publicly available information. [00:13:22] Speaker 03: So the word is normally, it's not a requirement, that's the first point. [00:13:27] Speaker 03: There was a mistake here in the beginning of this proceeding before the trial court, there was a misstatement that these financial statements from [00:13:35] Speaker 03: Infinity Modules were from an Indian website, and that was corrected. [00:13:41] Speaker 03: In fact, as was discussed, these financial statements were acquired by the petitioner of the domestic industry during the third administrative review, put on the record in that review. [00:13:51] Speaker 03: They've been on the record in the third and the fourth review. [00:13:55] Speaker 03: In those reviews, neither party objected or disputed their public availability in those reviews. [00:14:03] Speaker 01: commerce in the past used non-public financial statements? [00:14:07] Speaker 03: There's at least one case that was addressed by the trial court and the parties below, catfish farmers, where there was a proprietary financial statement used as part of the surrogate values. [00:14:20] Speaker 03: But these two cases would be the only ones that you're aware of? [00:14:24] Speaker 03: I don't know of any other cases. [00:14:28] Speaker 03: Here, the Congress's position is these are publicly available. [00:14:32] Speaker 03: That's the square interpretation. [00:14:34] Speaker 03: And that's our position. [00:14:36] Speaker 03: The trial court did make it a point to discuss this issue and say basically that the purpose of the regulation was fulfilled. [00:14:43] Speaker 03: And whether or not they were publicly available, the court didn't have any concerns with the reliability because the financial statements had been [00:14:52] Speaker 03: in the world for a long time and parties had an opportunity to comment and analyze them for a long period of time. [00:14:57] Speaker 01: And they were publicly available according to you, why? [00:15:00] Speaker 03: Because they were obtained as counsel for the domestic industry certified for petitioners certified that it obtained them directly from the company itself. [00:15:12] Speaker 03: during the third period of review, and they were publicly available then. [00:15:16] Speaker 03: That publicly availability hasn't changed. [00:15:19] Speaker 01: Well, public availability doesn't, I suppose, necessarily mean exactly the same thing as I could get it. [00:15:26] Speaker 01: Exactly. [00:15:27] Speaker 01: I could have a friend in the front office of a company who would ship me something in a brown paper bag, and that wouldn't make it publicly available just because I got it. [00:15:39] Speaker 01: So what is your position as to why it really is publicly available as opposed to simply having been procured? [00:15:45] Speaker 03: The most simple is it's a financial statement that is obviously in this record and in other records, and it's not proprietary in these records. [00:15:55] Speaker 03: Whether or not a party wants to attack the veracity or reliability of these financial statements, once they're public, they can be analyzed and they can undermine them. [00:16:05] Speaker 03: That didn't happen here. [00:16:06] Speaker 03: There's nothing suggesting [00:16:08] Speaker 03: that these financial statements are not reliable. [00:16:10] Speaker 03: In fact, for infinity modules as a general matter, it's telling that, and this was discussed in the case below, that in the fourth administrative review, Fosh and Shundy put an infinity modules financial statement on the record, not for the 06 or 07 period, which is being used here, but for a later period of time. [00:16:32] Speaker 03: In response to that, in that review, [00:16:35] Speaker 03: the petitioner put the financial statement that's at issue here. [00:16:38] Speaker 03: So there were two infinity module financial statements at issue there, and no party ever objected to the public availability before. [00:16:45] Speaker 03: It was only in this case, and to just quickly address before I move into why this was the best available information, the only reason we're talking about other periods of review here, which is typically we limit ourselves to this period of review, was because we needed to [00:17:03] Speaker 03: understand where these financial statements came from. [00:17:06] Speaker 03: What was the origin of them? [00:17:07] Speaker 03: And so that was why we did that. [00:17:09] Speaker 03: So to the extent that there's arguments that it was improper to go outside of this period of review, we only did that to trace back the origin of where these financial statements came from, for the public availability prompt. [00:17:21] Speaker 03: It doesn't relate to why these are the best available information because of, for example, contemporaneous nature or whether the [00:17:31] Speaker 03: most comparable product that is at issue. [00:17:36] Speaker 03: For those prongs, the department explained that Infinity, and the evidence supports this, Infinity is a manufacturer of furniture. [00:17:48] Speaker 03: Omax and Maxima, Omax going first, they are primarily not a manufacturer of furniture. [00:17:56] Speaker 03: It's clear that there are [00:17:58] Speaker 03: manufacturing automobile parts primarily. [00:18:00] Speaker 03: 28 of their 29 customers are automobile companies. [00:18:06] Speaker 03: And there was really not a large dispute about that. [00:18:10] Speaker 03: For Maxima, the department found that over a period of time, financial statements that were on the record for this period of review and then for two subsequent years, [00:18:24] Speaker 03: that they had become a trader and reseller and not a manufacturer primarily, and that that was a drastic shift in their business. [00:18:30] Speaker 03: And because they were no longer a manufacturer, or primarily no longer a manufacturer, it wasn't reasonable to rely on them over Infinity Modules, which was a manufacturer. [00:18:43] Speaker 03: And there's appendix sites that I can provide for, but this is all discussed by the trial court as well in the various decisions that are at issue. [00:18:54] Speaker 03: This was the best available information. [00:18:56] Speaker 03: It was publicly available. [00:18:58] Speaker 03: The trial court did comment that even if it wasn't publicly available in an objective standard, the court found that the purpose of the regulation to give parties the opportunity to comment and analyze the financial statements was fulfilled in any event. [00:19:12] Speaker 03: And the regulation doesn't require it to be publicly available. [00:19:15] Speaker 03: And it is the best available information. [00:19:18] Speaker 03: when one compares its comparability to this merchandise. [00:19:23] Speaker 04: Once the information was available in the income statements, was the accuracy of them challenged by your adversary here? [00:19:33] Speaker 03: It was challenged more on the grounds of contemporaneous time frame that it wasn't the exact period of review. [00:19:40] Speaker 04: Or were the numbers challenged? [00:19:42] Speaker 03: In no specific way, no. [00:19:45] Speaker 03: They talk about the Great Recession that occurred in 2008 and that these statements are from 2006-2007. [00:19:53] Speaker 03: That was discussed below at length by the parties in briefs. [00:20:01] Speaker 03: This issue wasn't raised in the opening brief here by the appellants, so we didn't talk about it in our brief. [00:20:09] Speaker 04: Is there a harmless air-hair issue that even if the [00:20:13] Speaker 04: The particular records, once they get out, somehow didn't satisfy the publicly available test. [00:20:21] Speaker 04: Once they're finally looked at, there's no harm. [00:20:23] Speaker 04: Nobody can show that these numbers caused any problem. [00:20:28] Speaker 03: That would be a secondary approach. [00:20:30] Speaker 03: I think that would be a secondary way to affirm. [00:20:34] Speaker 03: Our position is that it's publicly available as a sort of regular meaning of that term. [00:20:40] Speaker 03: and that there's no reason to conclude otherwise. [00:20:42] Speaker 03: But even so, if there's any problem. [00:20:44] Speaker 04: There's no definition in the regulations of what constitutes publicly available? [00:20:49] Speaker 03: There is no definition, Your Honor. [00:20:51] Speaker 03: And with respect to the Steel Nails case that was discussed, in that case, the party that- Something had been printed in a newspaper could be publicly available. [00:21:02] Speaker 03: That's true. [00:21:02] Speaker 03: And of course, parties can [00:21:04] Speaker 03: can attack the reliability of whatever is published in a newspaper. [00:21:08] Speaker 03: But the public availability of it is obvious. [00:21:11] Speaker 01: In your definition of public availability, what would not be publicly available since, by definition, we're talking about something that made its way into the record? [00:21:24] Speaker 03: Well, I think in the catfish farmers case, [00:21:29] Speaker 03: There was a proprietary. [00:21:31] Speaker 03: It was proprietary financial statements that were used. [00:21:34] Speaker 03: I don't know the reason. [00:21:35] Speaker 01: But it was in the record. [00:21:36] Speaker 03: It was in the record. [00:21:37] Speaker 01: And so everybody had an opportunity to comment on it. [00:21:39] Speaker 01: Why doesn't that satisfy your definition of publicly available? [00:21:44] Speaker 01: I'm trying to figure out what your definition is, really. [00:21:47] Speaker 03: Here, this financial statement was never proprietary. [00:21:50] Speaker 03: So in every record that it's ever been in, it's always been a public part of that record. [00:21:55] Speaker 04: Something that was under seal. [00:21:58] Speaker 04: I mean, if it came into the proceedings about the parties, everybody said, well, it's undersea on the on-heel that can see it. [00:22:03] Speaker 04: Are there participants in this room? [00:22:05] Speaker 04: It wouldn't be publicly available. [00:22:07] Speaker 03: And in catfish farmers, the point there was that even though it wasn't publicly available, it was within keeping of the regulation because the word normally, this is normally publicly available. [00:22:18] Speaker 03: It's not a requirement. [00:22:19] Speaker 03: And so if commerce determines that in a specific situation, [00:22:24] Speaker 03: it's necessary to look beyond publicly available information. [00:22:29] Speaker 03: It has to, obviously, articulate why. [00:22:31] Speaker 03: But that happened to catfish farmers. [00:22:35] Speaker 03: But it just demonstrates that you don't always have to use. [00:22:38] Speaker 04: The difficulty of getting access to it. [00:22:39] Speaker 04: Your adversary says that he tried to get this information, and he couldn't get it. [00:22:45] Speaker 04: So if he can't get it at the time in which he wants to get it, it's impairing his ability to deal with the numbers, even if he didn't want to challenge [00:22:55] Speaker 03: Respectfully right they did send an email, but they didn't ask for the correct period of time So there is no clear evidence that they couldn't get the period over for the financial statement That's it being used for that year that they never asked for the correct year But yes, they did ask for financial statements from infinity and we're not unable to get them that's that is correct but that doesn't change the fact that [00:23:22] Speaker 03: The financial statements were obtained from Infinity Modules a few years before. [00:23:26] Speaker 03: It was certified by the Council for the Domestic Industry. [00:23:32] Speaker 03: Who got them before? [00:23:36] Speaker 03: Council for the Domestic Industry. [00:23:37] Speaker 03: I'm not sure if it's the same council that is now here for intervener. [00:23:44] Speaker 03: But I believe it is. [00:23:47] Speaker 03: But those financial statements have been on the record all along. [00:23:50] Speaker 03: And as I said, in the fourth administrative review, there were other financial statements from Infinity Modules that were placed on the record by Fulton Shunde. [00:23:58] Speaker 03: And it just demonstrates that they were using Infinity Modules financial statements for different periods of time themselves that they found were useful. [00:24:08] Speaker 03: So the public availability of Infinity Modules financial statements was never raised before this period of review because here, [00:24:17] Speaker 03: the other prongs, the factors, mainly comparability to the merchandise. [00:24:22] Speaker 03: It was so obvious that infinity modules was the best available information, that the best way to try to attack that was through the public availability prong. [00:24:33] Speaker 03: And the court referred to it as a technicality. [00:24:36] Speaker 03: It's our regulations, that was the court's language, that it was a technicality, that this was really something that was brought up, [00:24:43] Speaker 03: in this period of review to try to knock out these financial statements when they've been around for a long time. [00:24:48] Speaker 08: Senator, you're over your time unless there's any questions. [00:24:52] Speaker 08: Okay, I think we'll hear from your co-counsel. [00:24:56] Speaker 08: Thank you, Your Honor. [00:25:01] Speaker 00: I'm going to please the court. [00:25:08] Speaker 00: I'm Frederick Eikenson, attorney for Petitioner, Home Products and Financials. [00:25:12] Speaker 00: I intended to spend most of my time addressing the jurisdictional issue, which we consider a threshold question, but I would like to just start with, if I may, less than a minute to follow up on this discussion of the Infinity Modules financial statements. [00:25:28] Speaker 00: The Commerce Department used Infinity Modules financial statements in the first review, second review, third review, and in the third review, [00:25:42] Speaker 00: when the most current one available to us then was for the fiscal year ending 2007. [00:25:48] Speaker 00: Now it's put on the record. [00:25:51] Speaker 00: And since Hardware was a party to that case, since Hardware did not question the report at all. [00:25:59] Speaker 00: The report was submitted by me. [00:26:02] Speaker 00: It had an auditor's report. [00:26:04] Speaker 00: The statement was audited. [00:26:06] Speaker 00: It was used. [00:26:07] Speaker 00: No one questioned the veracity of that report. [00:26:12] Speaker 00: And for now, for the appellant to argue that because in the third review, since hardware was an AFA rate, an adverse fax available rate, and therefore its margin was not calculated in a regular way, somehow that makes the statement [00:26:33] Speaker 00: the financial statement irrelevant. [00:26:35] Speaker 00: It's not true, because the financial statements were, they were challenged, they were used rather, in the third review, since Hardwick commented on it, did not question it, and there was another party in the third review for whom the financial statements were used in calculating the margin. [00:26:53] Speaker 00: In the fourth review involving Foshan Shunde, Foshan Shunde took the initiative of putting an Infinity Modules financial statement [00:27:03] Speaker 00: that was not for the period ending 2007 but the period ending 2005. [00:27:08] Speaker 00: It was the earlier financial statement which the Commerce Department had already used and blessed in the first review and also in the second review. [00:27:17] Speaker 00: We responded to Foshan Shande's initiative and said we agree that the Infinity Modules is an appropriate proxy or surrogate producer [00:27:28] Speaker 00: However, there's a more recent statement that you should be using. [00:27:32] Speaker 00: You should use the statement that was just put on the record in the third review. [00:27:37] Speaker 00: Foshan Ashanti's counsel says that Foshan Ashanti had no opportunity to question that, didn't challenge it. [00:27:41] Speaker 00: That's just not correct. [00:27:43] Speaker 00: It is true that at the end of the day on the fourth review, Foshan and Shunde received a very high margin based on adverse facts available. [00:27:51] Speaker 00: But they argued that adverse facts available should not apply. [00:27:55] Speaker 00: Well, if that doesn't apply, that means they're going to get a calculated margin. [00:27:58] Speaker 00: They did not dispute what the financial ratios should be based on. [00:28:03] Speaker 00: And they had every opportunity to question the financial statements that we put in that record. [00:28:10] Speaker 08: So with that, I just wanted to... But this case is the fifth review, and your opposing counsel is saying, you know, that was then, this is now. [00:28:19] Speaker 08: This is an independent new review with its own record. [00:28:23] Speaker 00: Well, all that I'm suggesting to Your Honor is they'd never question the validity of these numbers before. [00:28:32] Speaker 01: Is this part of an estoppel argument or a waiver argument? [00:28:35] Speaker 01: Are you arguing estoppel or waiver? [00:28:38] Speaker 01: Why is it that they're barred now? [00:28:40] Speaker 01: from raising a question that they happen not to have raised in a previous review. [00:28:45] Speaker 00: We're not arguing a stoppable or waiver. [00:28:47] Speaker 01: Then I'm not sure why what they did in a previous review is particularly relevant. [00:28:52] Speaker 00: Well, I mean, it's equivalent to an admission against interest. [00:28:56] Speaker 00: They've never challenged the validity of our numbers, these numbers. [00:29:02] Speaker 00: And now they're raising it. [00:29:04] Speaker 00: The first time they put in Infinity Modules in the fourth review, they put it in for the period ending 2005, which would have generated a very, very low financial ratio number. [00:29:16] Speaker 00: They were content with using it for that purpose. [00:29:19] Speaker 00: When we said, well, Infinity Modules is a good candidate, but you're using the wrong numbers. [00:29:24] Speaker 00: So that kind of changed the way they viewed Infinity Modules. [00:29:28] Speaker 08: Is there an interest that commerce has in trying to use the same measuring stick [00:29:33] Speaker 08: from administrative review to administrative review? [00:29:35] Speaker 00: I don't think so. [00:29:36] Speaker 00: I think that what the Commerce Department determined and what the lower court determined was that there really is no credibility issue surrounding these numbers. [00:29:46] Speaker 00: That I think was the problem. [00:29:49] Speaker 01: I think Judge Chen was asking a different question from the one I think you answered, if I understand your answer. [00:29:54] Speaker 01: I thought the CIT actually said that there was a value to having the same [00:30:03] Speaker 01: the same data source for the different administrative reviews. [00:30:08] Speaker 01: And that was one of the considerations that Judge Gordon weighed, I thought, in saying that using the infinity data was okay. [00:30:17] Speaker 01: Am I mistaken in my understanding of what Judge Gordon said? [00:30:21] Speaker 00: I think he expressed the notion that commerce had some familiarity with infinity modules. [00:30:27] Speaker 01: And that was a factor cutting in favor of using infinity, correct? [00:30:31] Speaker 00: Yeah, I think so. [00:30:32] Speaker 00: I think you said that. [00:30:35] Speaker 00: You've run out of time. [00:30:38] Speaker 00: May I be really brief and discuss the jurisdiction? [00:30:44] Speaker 00: I think it's a critical issue. [00:30:47] Speaker 00: Since hardware, one of the appellants was unquestionably an interested party at the beginning of this litigation. [00:30:53] Speaker 00: It was a manufacturer in China of ironing boards. [00:30:56] Speaker 00: It was an exporter from China of ironing boards. [00:30:59] Speaker 00: and it participated in the administrative review. [00:31:01] Speaker 00: It clearly had standing to sue and it did sue and belonged in court. [00:31:06] Speaker 00: However, it doesn't have standing now because more than three years ago, it stopped producing ironing boards. [00:31:12] Speaker 00: It stopped exporting ironing boards. [00:31:14] Speaker 00: So as a result of that, it really does not have a stake in this litigation. [00:31:20] Speaker 00: There's nothing that this court can do that could make SINZ hardware happy [00:31:24] Speaker 00: where that could make them displeased. [00:31:26] Speaker 00: They are not affected by this. [00:31:28] Speaker 00: And this is almost definitionally an absence of a case or controversy. [00:31:34] Speaker 00: And we think that there's no dispute. [00:31:39] Speaker 04: No possibility that they will be financially harmed in any way whatsoever, regardless of the outcome? [00:31:46] Speaker 00: We see no way that that's true. [00:31:48] Speaker 00: We do not see how they're harmed by the outcome. [00:31:51] Speaker 08: OK, I think we have your argument. [00:31:53] Speaker 08: We need to move on. [00:31:56] Speaker 08: Thanks very much. [00:31:58] Speaker 08: All right. [00:32:01] Speaker 08: We'll add a couple extra minutes for the rebuttal. [00:32:05] Speaker 06: So it's five, five, five. [00:32:13] Speaker 06: May I please record? [00:32:13] Speaker 06: I'll try to be brief. [00:32:15] Speaker 06: And please definitely cut me off so my colleague gets a chance to speak. [00:32:18] Speaker 06: Will do. [00:32:20] Speaker 06: I was really quite shocked that the opposing council could read all of our briefs over four remands and not think we were challenging the reliability of the infinity statement and its ability to be verified and relying on the numbers that were in fact used to calculate the financial ratios that's more than half of our margin. [00:32:35] Speaker 06: And I'll point at least to page 23 of our opening brief that claims we never raised the issue is shocking. [00:32:40] Speaker 06: I'll quote in the middle paragraph, in the middle of that paragraph at the end, there is no official way for the department and the parties to corroborate the data when it is not independently publicly available [00:32:50] Speaker 06: Even now the parties do not know the conditions under which the statement was received and whether the statement is consistent with the official statement privately filed with the MCA as required by law. [00:33:00] Speaker 06: I just want to move on unless you have any questions about the point we were trying to make in hundreds of pages of briefing. [00:33:06] Speaker 06: Now maybe I'll pick up on the point that Mr. Eikenson just finished and Judge Bryson referred to this reliance principle. [00:33:13] Speaker 06: Unfortunately we don't have that luxury in our area of practice because [00:33:17] Speaker 06: There's a special law in non-market cases that says the department shall rely on the best available information on the record of the proceeding for the factors of production. [00:33:28] Speaker 06: Every proceeding has a different factual record and they have to decide what the best available information is on that proceeding. [00:33:35] Speaker 06: It's like if you've made a decision based on, you know, there's a dictum in a decision from two years ago and now you're bound by that dictum in a new case five years later. [00:33:44] Speaker 06: Nothing that happened in the past can govern what is happening here. [00:33:48] Speaker 06: And since Foshen Shunde was fighting for its life under adverse facts, it didn't raise the issue. [00:33:53] Speaker 06: First of all, none of those records and briefs are before this court or on the record before the lower court. [00:33:59] Speaker 06: This is all characterizations. [00:34:01] Speaker 06: But I'm just, I think you can be sympathetic that Foshen Shunde was writing a brief on the major margin impact issue of surviving its data. [00:34:09] Speaker 06: And so the issue of public availability was not joined [00:34:12] Speaker 06: It was not the focus, and the commerce specifically said, we don't have to rule on the financial statements because we're giving the AFA to Ochen Shinde. [00:34:20] Speaker 06: Now, the first time in this review, the issue is joined and we're asking the court to rule. [00:34:25] Speaker 06: And it wasn't the only issue. [00:34:27] Speaker 06: They said that infinity is clearly the best statement. [00:34:30] Speaker 06: Well, that's just wrong because OMAX and Maxima consume cold rolled steel. [00:34:34] Speaker 06: That means they have huge plants that cut huge coils of cold rolled steel [00:34:39] Speaker 06: by length and width and form them into tubes and stamp plates for all different products. [00:34:44] Speaker 06: So if you look at the legs of an ironing table, it's very similar to a handlebar for a motorcycle or a muffler pipe. [00:34:51] Speaker 06: It's pipe that is formed from raw steel. [00:34:54] Speaker 06: Infinity Modules just assembles pre-finished parts into retail office chairs. [00:35:00] Speaker 06: So they're in a completely market sector using completely different production equipment and purchasing completely different raw materials. [00:35:06] Speaker 06: So we don't accept at all that they're comparable. [00:35:09] Speaker 06: And we think the judge completely missed the contemporaneity issue at all. [00:35:13] Speaker 06: He didn't even address it. [00:35:15] Speaker 06: So now, the government counsel said there's no test. [00:35:19] Speaker 01: I'm not sure that's right. [00:35:20] Speaker 01: I seem to recall Judge Gordon's opinion saying, well, yes, contemporaneity is an issue, but it is on balance. [00:35:29] Speaker 01: It isn't a fatal problem. [00:35:31] Speaker 06: Right. [00:35:31] Speaker 06: Public availability is a fatal issue. [00:35:33] Speaker 06: All the other issues are valid. [00:35:34] Speaker 01: But I mean, you just said that he didn't [00:35:35] Speaker 01: address it. [00:35:37] Speaker 06: Well, public availability, you just said it's on the record, so therefore it's public. [00:35:41] Speaker 01: Contemporaneity is what you said he didn't address. [00:35:44] Speaker 06: Right. [00:35:45] Speaker 06: And we don't believe he gave any weight to our argument that the statement was two years old and prior to the Great Depression or the Great Recession. [00:35:52] Speaker 06: Now, they say that there's no test, but of course there is. [00:35:55] Speaker 06: If you read all these cases in the briefs, there's a rebuttable presumption. [00:35:58] Speaker 06: Once it's rebutted, Congress goes back to the party and says, [00:36:01] Speaker 06: prove you found it off the company website, prove you found it from the MCA website, prove it's on a public stock exchange, prove that it's publicly available. [00:36:09] Speaker 06: So there is a test and there are ways to prove that and they didn't adhere to those ways. [00:36:13] Speaker 08: Okay, let's hear from your co-counsel. [00:36:15] Speaker 08: Thank you, Your Honor. [00:36:24] Speaker 05: Your Honors, I just want to address very briefly the jurisdiction issue. [00:36:31] Speaker 05: Make four quick points here. [00:36:33] Speaker 05: First, we believe that the issue of jurisdiction, since hardware, it really, HBI, there's a collateral estoppel here. [00:36:40] Speaker 05: There's an issue preclusion. [00:36:42] Speaker 05: The CAFC now has ruled three times against this argument on jurisdiction. [00:36:47] Speaker 05: In the appeal of the fourth review, the same identical issues, the CAFC ruled against HBI in this issue. [00:36:57] Speaker 05: And then you rule against it. [00:36:59] Speaker 04: What potential harm [00:37:01] Speaker 05: Is your client exposed to either way in this proceeding? [00:37:06] Speaker 05: Well, first, there's two things, several things. [00:37:09] Speaker 05: First, SINCE has a standing and persistent interest in this case because of the impact on its customers, on the importers. [00:37:18] Speaker 05: This is a retroactive nature of the statute. [00:37:23] Speaker 05: The retroactive nature of the statute is that it affects the liability of the US importers and the customers of SINCE Hardware. [00:37:30] Speaker 05: which affects, since hardware. [00:37:33] Speaker 05: And also, since one affects the customers, and that it therefore affects you, how, in what way? [00:37:40] Speaker 05: Because whether you can ship or not, I mean in the future, if these guys are wiped out, these are your customers. [00:37:46] Speaker 05: In the long-term nature of it. [00:37:47] Speaker 04: In the future, any manufacturer of any of these products in an investigation area can show up and say, we want to participate. [00:37:55] Speaker 04: Even though we haven't sold it to anybody that came in the United States. [00:37:59] Speaker 05: Keep in mind one other point here. [00:38:01] Speaker 04: Am I right? [00:38:03] Speaker 04: I'm trying to get a handle on... Not right on one point. [00:38:06] Speaker 05: Well, a foreign manufacturer has standing, but truthfully, the rate is given to the exporter here. [00:38:12] Speaker 05: Since Hardware continues to have a registration, it is an existing company, they are still interested in the case because they have the right to export. [00:38:21] Speaker 05: They're here. [00:38:22] Speaker 04: More importantly. [00:38:23] Speaker 04: It's generally interested in the law that commerce makes in this area because it might affect it in some future case. [00:38:30] Speaker 05: Right. [00:38:30] Speaker 04: It will in future period. [00:38:31] Speaker 04: Every exporter in the ambit would have standing to come in. [00:38:35] Speaker 05: Not just an exporter of the subject merchandise. [00:38:37] Speaker 05: Remember, the whole point is this is an interested party since hardware is because during the review investigation it produced but more importantly it exported and sold. [00:38:48] Speaker 05: ironing tables to the United States. [00:38:49] Speaker 01: So there's money that's been deposited, which if you get a changed rate, I take it somebody gets back, right? [00:38:57] Speaker 05: They either get back or they don't have to pay as much. [00:39:01] Speaker 01: Right, but there is going to be money changing hands if you win this case, put it that way. [00:39:05] Speaker 01: Yes. [00:39:06] Speaker 01: And the question is, is that money directly going into your pocket or is it going into somebody else's pocket? [00:39:14] Speaker 01: And I take what you're saying, it's going to somebody else's. [00:39:16] Speaker 05: It's going to the pockets of the U.S. [00:39:17] Speaker 05: importers, but the U.S. [00:39:18] Speaker 05: importers are the customers of SINCE Hardware. [00:39:21] Speaker 05: And also, going back again, they have a registration and the right to export. [00:39:27] Speaker 08: Okay, we have your argument. [00:39:29] Speaker 08: Okay. [00:39:30] Speaker 08: Thanks very much. [00:39:30] Speaker 08: Thank you. [00:39:31] Speaker 08: Case is submitted.