[00:00:11] Speaker 04: The next case for argument is 18-1109, BMW of North America versus United States. [00:01:03] Speaker 03: I think we're ready to proceed. [00:01:04] Speaker 03: Good morning. [00:01:05] Speaker 01: Thank you. [00:01:05] Speaker 01: Good morning, Your Honors. [00:01:06] Speaker 01: May it please the Court? [00:01:08] Speaker 01: I'm here today on behalf of Plaintiff Appellant, BMW of North America LLC. [00:01:14] Speaker 01: We've raised two issues on appeal before this Court, the rate issue and the revocation issue. [00:01:20] Speaker 01: On the rate issue, if the only fact that matters in this case is that BMW failed to respond to a quantity and value questionnaire, and that permits commerce to impose any rate [00:01:32] Speaker 01: then this court should affirm the Court of International Trade's decision and the Commerce's decision on remand. [00:01:40] Speaker 01: However, it is BMW's position that commerce was required by law to consider the specific record of this case. [00:01:49] Speaker 05: Just to clarify what you mean by that, because your conduct, even though there's no dispute, an AFA rate was justified, right? [00:01:59] Speaker 04: That's correct. [00:01:59] Speaker 05: So it's a question of what [00:02:01] Speaker 05: Where we are on a range, you suggest there's a range between more benign misconduct or negligence, and then something much worse. [00:02:11] Speaker 05: So are you suggesting that there's a sliding scale based on the problems, how bad the conduct was, and therefore that's what ought to be applied? [00:02:23] Speaker 05: And then on review, then we also apply the sliding scale to evaluate it? [00:02:30] Speaker 01: Your Honor, yes. [00:02:32] Speaker 01: What our position is is that the courts are required to consider, and commerce was required to consider, what degree of deterrence was warranted based on the record of this case. [00:02:44] Speaker 01: And that's what commerce failed to do. [00:02:46] Speaker 01: So it needs to consider what the deterrence factor in a case needs to be. [00:02:51] Speaker 01: And it's not permissible under the law to treat a respondent who acted in bad faith, who was fraudulent, who [00:03:00] Speaker 05: This wasn't the extreme. [00:03:02] Speaker 05: This wasn't the ultimate highest, right? [00:03:05] Speaker 01: No, this was inadvertent omission. [00:03:07] Speaker 01: So in this case, this was not a case of providing false information. [00:03:12] Speaker 01: It was not a case of BMW engaging in gamesmanship. [00:03:17] Speaker 01: It was BMW inadvertently missing [00:03:20] Speaker 01: one deadline for quantity and value questionnaire. [00:03:23] Speaker 07: Can I ask you a question? [00:03:24] Speaker 07: Yes, absolutely. [00:03:25] Speaker 07: Which version of 1677E are you relying on? [00:03:28] Speaker 07: As I understand it, that statute has been modified, effective in 2015, to require what you're asking for, which is where there's going to be the highest rate or margin. [00:03:43] Speaker 07: I guess it says you have to do an evaluation by the administrative [00:03:47] Speaker 07: authority of the situation that resulted in the administering authority using an adverse inference and selecting among the facts otherwise available. [00:03:55] Speaker 07: I think that's really what you're relying on here, but I'm not sure if this is the version of the statute that applies in this case. [00:04:02] Speaker 01: So we believe that the TPEA, the Trade Preferences Extension Act, which modified, which enacted the new legislation, we believe that that does not apply to this case. [00:04:11] Speaker 01: In the remand results, the department stated that it considered the remand results [00:04:15] Speaker 01: to be a new determination, and therefore the standards created under the TPEA should apply. [00:04:21] Speaker 01: And those standards, those legislative changes concerning commercial, basically the TPEA put into place provisions saying that commercial reality did not need to be considered when considering what rate to apply. [00:04:34] Speaker 01: And it said that commerce is no longer required to consider what the rate for a cooperating respondent would have been. [00:04:44] Speaker 01: as a result of the TPEA. [00:04:46] Speaker 01: We believe that the previous version of the statute applies in this case. [00:04:50] Speaker 01: And we believe this court's decision in ad hoc shrimp speaks to this issue. [00:04:54] Speaker 01: In ad hoc shrimp, this court decided that you can't apply the TPEA retroactively. [00:05:00] Speaker 01: And the trade court found in fresh garlic that that decision applies also to decisions on remand. [00:05:06] Speaker 01: Because on remand, you're looking at a decision that occurred prior to the TPEA. [00:05:11] Speaker 07: However, [00:05:12] Speaker 07: understanding my question. [00:05:14] Speaker 07: I think I'm trying to say that I think the version of 1677E, maybe you're, I'm not sure if you're addressing 1677E or not, but I think the version that became effective in June 29, 2015 is actually beneficial to you, and I want to know if you think it applies or not. [00:05:35] Speaker 01: So I think either prior to the pre-TPEA or post-TPEA, both versions of the statute, I think BMW would prevail. [00:05:42] Speaker 01: Because under the TPA- So I just want to know which one applies. [00:05:45] Speaker 01: I'm sorry. [00:05:46] Speaker 01: The prior version applies. [00:05:47] Speaker 01: As a matter of law, the prior version of applies. [00:05:49] Speaker 01: However, we do think if this court decides- You think it regardless. [00:05:53] Speaker 01: Yeah, because there is language, even in the current version of the TPA, that says that commerce was considered based on an evaluation by the administering authority of the situation that resulted in using adverse facts available. [00:06:04] Speaker 06: But that's only in circumstances where they end up with the absolute highest rate. [00:06:08] Speaker 01: That's based on any rate that's selected under the statute. [00:06:14] Speaker 01: And however, even under the pre-TPA version, the legislative history and the case law of this court says that Congress must select the most probative rate weighing all of the record facts and finding what rate is required to deter future noncompliance. [00:06:32] Speaker 01: And that's where we think that this case, where it really comes down to. [00:06:35] Speaker 07: Can I ask you something when you're talking about deterring future non-compliance? [00:06:39] Speaker 07: Is that by the particular party? [00:06:41] Speaker 07: Would that be future non-compliance by BMW or would it be future non-compliance by everybody who might be similarly situated? [00:06:47] Speaker 01: It should be future non-compliance to BMW because if BMW was being held as an example to every other party, that is prima facie punitive. [00:06:55] Speaker 01: How is that not punitive to hold BMW? [00:06:57] Speaker 01: The purpose of the anti-dumping duty law is to be remedial, not punitive. [00:07:02] Speaker 01: That's been established, long established by [00:07:05] Speaker 01: this court's precedence. [00:07:08] Speaker 01: So if BMW is being held as an example for other parties, then that's punitive. [00:07:13] Speaker 07: However, is that the key language that you're relying on in our case law is the idea that it shouldn't be punitive? [00:07:20] Speaker 01: And also the fact that in the there's also language that in the legislative history of the AFA provisions, that commerce is required to consider all evidence on record, weighing the record to determine [00:07:32] Speaker 01: that which is most probative of the issue under consideration. [00:07:36] Speaker 07: That's not expressing the statute. [00:07:38] Speaker 07: You're taking that out of the legislative history, correct? [00:07:41] Speaker 07: Yes. [00:07:41] Speaker 01: But part of the statutory scheme is, very basically, the decision has to be based on substantial evidence on that record. [00:07:49] Speaker 01: And we believe that that's where this decision fails. [00:07:52] Speaker 01: We asked the court to consider the following facts. [00:07:54] Speaker 01: The rate applied here of 126.44%, which was calculated on remand, [00:08:00] Speaker 01: is 88 times higher than the rate applied against every other respondent in this segment of the proceeding. [00:08:08] Speaker 01: The department itself recognized in the preliminary results of this case that all calculated rates in prior segments under the history of this order, not involving the use of zeroing, were zero. [00:08:22] Speaker 01: In fact, BMW itself received a 0% rate in the German ball bearings rate review case for the similar review period. [00:08:30] Speaker 01: And it was the same team at the Department of Commerce working on all of these cases. [00:08:33] Speaker 01: That demonstrated that BMW was not engaged in gamesmanship that required some kind of deterrent rate. [00:08:40] Speaker 06: Well, what do we do with the fact that Commerce did, after remand, cut the rate in half? [00:08:47] Speaker 06: I mean, it doesn't appear that they didn't consider it at all. [00:08:52] Speaker 06: They still felt that there was some need for deterrence, right? [00:08:57] Speaker 01: They did cut the rate in half, but they still did not support their decision with substantial evidence on the record and what they were required to by the legislative history and the case law. [00:09:07] Speaker 06: But Commerce said that the rate they chose represented a transaction-specific dumping margin corresponding to actual transactions during the relevant time period. [00:09:18] Speaker 06: Why isn't that enough? [00:09:20] Speaker 01: So what Commerce did is it [00:09:22] Speaker 01: It picked a number. [00:09:23] Speaker 01: It picked a number. [00:09:24] Speaker 01: It recited several facts in trying to support that number. [00:09:27] Speaker 01: However, why that model? [00:09:29] Speaker 01: Why that transaction? [00:09:30] Speaker 01: Why that range? [00:09:31] Speaker 01: Why did it settle on that number? [00:09:33] Speaker 01: And commerce doesn't provide an explanation for that. [00:09:36] Speaker 01: And more importantly, what it doesn't provide an explanation is, why did BMW require a deterrence rate that was more than double the rate it would have received had it simply not requested its own administrative review? [00:09:48] Speaker 01: BMW, this is not a case. [00:09:50] Speaker 01: such as others that have appeared before this court. [00:09:53] Speaker 07: So is it your view then? [00:09:54] Speaker 07: I'm sorry? [00:09:54] Speaker 07: It can't be that when adverse facts are inferred, that the party that didn't respond gets to have a rate that's lower than the rate it would have had had it not asked for review, right? [00:10:08] Speaker 01: Well, no, not lower than. [00:10:09] Speaker 01: But I think commerce is required to consider, based on the party's actions, what rate was warranted. [00:10:18] Speaker 01: In cases, for example, before this court, [00:10:20] Speaker 01: where a party has already been received an AFA rate before the department. [00:10:26] Speaker 01: And then in a subsequent review, it still does not provide information, and it still does not participate, and it still warrants adverse facts available. [00:10:34] Speaker 07: Your view is that it should be somewhere above 54.27, but below 126. [00:10:38] Speaker 07: No. [00:10:38] Speaker 01: Actually, our position is that BMW didn't deserve a rate any higher than 54%. [00:10:47] Speaker 06: If it's... [00:10:50] Speaker 06: true, then your theory is we can ask for a separate evaluation, we can choose not to cooperate, and then whatever everybody else gets who does cooperate, that's what we should get. [00:11:02] Speaker 01: No, I'm sorry. [00:11:03] Speaker 01: 54% was not the rate that was what everybody who cooperated got. [00:11:07] Speaker 01: Everybody else got 1.43%. [00:11:09] Speaker 07: But the parties who didn't request administrative review, I thought that they got 54.27%. [00:11:17] Speaker 07: Am I wrong? [00:11:18] Speaker 01: Yes, exactly. [00:11:19] Speaker 01: So for parties who did not request administrative review, they got 54.27%. [00:11:22] Speaker 07: So why should BMW get 54.27%? [00:11:26] Speaker 07: They asked for a review but then didn't cooperate. [00:11:31] Speaker 01: Well, but it's not that they didn't cooperate. [00:11:33] Speaker 07: I understand. [00:11:34] Speaker 07: A mistake was made. [00:11:35] Speaker 01: Right. [00:11:36] Speaker 07: I understand. [00:11:37] Speaker 07: But nonetheless, they asked for a review. [00:11:39] Speaker 07: Why would they get something? [00:11:40] Speaker 07: Why would they get 54.27%? [00:11:42] Speaker 01: They did request review. [00:11:46] Speaker 01: But in this case, the inadvertent omission of, if the issue is what deterrence is required, wasn't it enough deterrence to just simply not give BMW the benefit of the review it had requested? [00:11:58] Speaker 01: BMW had nothing, and this is also language in the SAA. [00:12:02] Speaker 01: The SAA says that one of the things that commerce is required to consider in the legislative history is that commerce should consider the extent to which a non-cooperative party [00:12:15] Speaker 01: benefited from its lack of cooperation. [00:12:19] Speaker 01: That's in the statement. [00:12:21] Speaker 01: In fact, it will consider the extent to which a party may benefit from its own lack of cooperation. [00:12:26] Speaker 01: That's exact language from the SAA. [00:12:29] Speaker 01: Here, BMW had nothing to gain from not cooperating. [00:12:33] Speaker 01: It was an inadvertent omission. [00:12:36] Speaker 01: They wanted the administrative review. [00:12:37] Speaker 01: They had gotten a zero percent in the parallel German proceeding. [00:12:41] Speaker 01: There was a gap of two and a half years. [00:12:43] Speaker 01: that occurred between the initiation of this case and when it got reinstated. [00:12:48] Speaker 01: And as a result of that gap, they missed a deadline. [00:12:53] Speaker 01: And they weren't engaging in gamesmanship. [00:12:56] Speaker 01: And so if you look on the record of this case, it's our position that anything higher than 1.43%, but no higher than 54%, would have been deterrent enough. [00:13:06] Speaker 01: And that's especially the case here. [00:13:09] Speaker 01: The order, in fact, shortly, just a few months after reinstatement, the order in this case was actually revoked as a result of a subsequent sunset review. [00:13:18] Speaker 01: So the order was revoked. [00:13:19] Speaker 01: So what is the deterrence factor here? [00:13:21] Speaker 01: There are going to be no further review periods in this case where BMW would have then participated again. [00:13:30] Speaker 01: So what was the future deterrence that they were trying to prevent here for BMW by imposing a rate that was double [00:13:37] Speaker 01: double what it would have gotten had it simply not requested its own administrative review. [00:13:43] Speaker 03: Thank you. [00:13:46] Speaker 01: May I just wrap up? [00:13:51] Speaker 01: There's just one other issue that we brought on appeal, which is the revocation issue, and we'll address this more on rebuttal. [00:13:57] Speaker 01: But we believe that the statute imposes a requirement that a review may only be conducted if a request for such a review has been received. [00:14:07] Speaker 01: And we are appealing the department's unlawful reinstatement of the administrative review without following the proper process under the law. [00:14:15] Speaker 01: Thank you, Your Honors. [00:14:25] Speaker 02: Good morning, Your Honors. [00:14:26] Speaker 02: May it please the court? [00:14:30] Speaker 02: BMW concedes that an application of an adverse inference was warranted in this case based upon [00:14:36] Speaker 05: So can we just get to what we were talking about with your friend on the other side, which is do you think there's a statutory or some other obligation for one, the legal standard? [00:14:49] Speaker 05: Do you have to take into account whether or not this was punitive or whether there was some remedial value to picking a rate? [00:14:58] Speaker 05: And two, are you required to articulate the basis for achieving that, the purposes of review? [00:15:07] Speaker 02: Certainly, we do not dispute that the purpose of AFA is not to be punitive, but it is to impose or to promote a deterrent effect. [00:15:18] Speaker 02: And that's not just for the particular respondent or the particular counsel, but it also, of course, serves as an example to other respondents and other counsel. [00:15:28] Speaker 06: But shouldn't there be some articulation of why, in this particular case, in these particular circumstances, this number serves that effect? [00:15:36] Speaker 02: No, we don't believe that the statute requires commerce to do so. [00:15:40] Speaker 02: Once commerce has determined, and that is within its discretion, to determine what to apply, an adverse inference, it's practice, what is statutorily required is for it to pick, in this instance, when it's using primary information, the number certainly has to not be aberrational. [00:16:01] Speaker 07: So you don't have to worry about corroboration. [00:16:02] Speaker 02: We do not have to worry about corroboration. [00:16:04] Speaker 07: What about punitive? [00:16:05] Speaker 07: Whether it's punitive. [00:16:06] Speaker 06: How are we supposed to review it? [00:16:10] Speaker 06: How are we supposed to review whether or not it falls into that punitive category when there's no explanation for it? [00:16:18] Speaker 02: Well, one way we can do that is to look at what this court has done in the past, which is, of course, if the number is aberrational, if it doesn't bear any, for example, [00:16:35] Speaker 07: Are you saying aberrational and punitive have the same meaning? [00:16:38] Speaker 02: No. [00:16:39] Speaker 02: Let me clarify here. [00:16:40] Speaker 02: No, I don't believe that. [00:16:41] Speaker 02: I think if a number was aberrational, that could indicate a punitive intent. [00:16:48] Speaker 02: And certainly commerce should not rely upon aberrational data where there's other data that's available. [00:16:55] Speaker 02: And that's the problem that commerce solved here on remand. [00:16:59] Speaker 07: Right. [00:16:59] Speaker 07: But how did commerce address whether it was punitive? [00:17:05] Speaker 02: BMW's primary argument here is it's punitive because it's too high, and it's higher than the cooperative respondents got or the all other rate respondents got. [00:17:16] Speaker 02: And this court has said in ad hoc shrimp and in other cases that simply because the rate is higher, even higher orders matter to you. [00:17:26] Speaker 07: That's not really addressing the question. [00:17:28] Speaker 07: It's not. [00:17:29] Speaker 07: I mean, I understand that BMW here is saying something [00:17:32] Speaker 07: They think that they should have the same rate that they would have had. [00:17:34] Speaker 07: They not request review. [00:17:36] Speaker 07: I'm not sure about that. [00:17:37] Speaker 07: But what about something in between that amount and 126? [00:17:40] Speaker 07: And why isn't there some discussion of that in Commerce's opinion? [00:17:47] Speaker 02: It certainly would have been within Commerce's discretion to pick another rate. [00:17:51] Speaker 02: At the time, and again, this is pre- you know, Commerce's practice was and it's stated practice, it's established practice was to select the highest [00:18:02] Speaker 02: either the highest petition rate or the highest transaction-specific rate as the AFA rate. [00:18:09] Speaker 07: Without considering the reason why the party didn't comply with Commerce's request for information? [00:18:19] Speaker 02: Yes, and I think actually it is worth pointing out the facts of this case. [00:18:22] Speaker 02: Even if you accept the premise that BMW is putting forward that Commerce is required to consider, the facts here are not helpful. [00:18:30] Speaker 02: to BMW. [00:18:32] Speaker 05: I'm really not understanding what this discussion is about. [00:18:35] Speaker 05: Is it the government's view that it does or does not have to pick a rate that's not punitive? [00:18:42] Speaker 02: Commerce cannot pick a rate that's punitive. [00:18:45] Speaker 05: And what is the government's view as to how we review whether or not that is the case? [00:18:52] Speaker 05: Does it there have to be some articulation by commerce as to why they picked that that indicates to us that it was [00:19:00] Speaker 05: warranted and not punitive? [00:19:04] Speaker 02: I think commerce did so in this particular case. [00:19:07] Speaker 02: If the court looks at the remand re-determination, although commerce doesn't use those particular words. [00:19:21] Speaker 02: Sorry, it's this page. [00:19:23] Speaker 05: 1575? [00:19:28] Speaker 05: Yeah. [00:19:32] Speaker 02: Essentially, what Commerce did was look at- Line outside. [00:19:36] Speaker 02: Sorry. [00:19:50] Speaker 02: Well, I'm relying primarily on pages 1580 and 1581 where Commerce- Right. [00:19:57] Speaker 05: Okay, so it starts at 1575. [00:19:58] Speaker 05: That's the document. [00:19:59] Speaker 02: That's the document. [00:20:00] Speaker 02: Yes, I'm trying to. [00:20:04] Speaker 02: what Commerce did was to identify a transaction, not even the highest transaction-specific margin, but a transaction-specific margin from a cooperating respondent during the period of review. [00:20:19] Speaker 02: And it went through some analysis about why it was convinced that that number had, and I don't want to use the word probative value because that refers to corroboration, [00:20:33] Speaker 07: why that number was a reasonable number and why that number... It seems to me, I'm looking at page 1580, and this again is really talking about whether it was aberrational. [00:20:44] Speaker 07: It has nothing to do with whether it was punitive. [00:20:49] Speaker 05: Well, it goes on. [00:20:50] Speaker 05: Are you referring to the rest of it? [00:20:51] Speaker 05: Because it keeps going on, starting the next paragraph. [00:20:55] Speaker 05: The government is explaining why you picked that number, right, or not? [00:20:59] Speaker 02: Right. [00:21:00] Speaker 07: Which part do you think [00:21:02] Speaker 07: addresses whether it was punitive or not. [00:21:05] Speaker 02: The fact that Commerce went through the analysis to explain why that particular number it was selecting had some basis in reality. [00:21:17] Speaker 02: And I know that sounds a lot like a reality. [00:21:19] Speaker 07: So because it's not aberrational, it's not punitive? [00:21:22] Speaker 02: I mean, because it's... Well, but also specifically because we're talking about a rate of a cooperative respondent during this period of review [00:21:31] Speaker 02: This is a real number. [00:21:32] Speaker 02: It's not a petition rate. [00:21:33] Speaker 02: It's not a rate from 20 years ago. [00:21:35] Speaker 02: It's a rate. [00:21:36] Speaker 06: When she said it had some correspondence to reality, that's kind of a loose standard, isn't it? [00:21:44] Speaker 02: Well, I guess I could say it more strongly. [00:21:49] Speaker 02: It was an actual transaction-specific calculated margin. [00:21:53] Speaker 06: Assuming we accept the proposition that once you get an AFA rate, it's going to be higher than the cooperating respondents. [00:22:00] Speaker 06: I don't really understand why or see any place where commerce said why it should be higher than those who didn't seek review. [00:22:09] Speaker 06: Because commerce had to look at the facts and set a number for those even without their involvement. [00:22:18] Speaker 06: And so how could commerce find a number for those and conclude that that number is different necessarily than the number for BMW? [00:22:29] Speaker 02: What we're referring to is the difference between 54% and 126%. [00:22:42] Speaker 02: Right. [00:22:46] Speaker 02: Well, what we're talking about is, again, a deterrence value to asking commerce to review the party and then not [00:22:58] Speaker 02: withdrawing and then not participating and simply not participating in the first place. [00:23:03] Speaker 06: But the deterrence value, why wouldn't the difference between the cooperating respondents and those who didn't even seek review, why wouldn't that be enough to deter them from going down that road? [00:23:20] Speaker 02: Well, because then there's no incentive to cooperate. [00:23:23] Speaker 06: Well, 4% or 1.43 or whatever is pretty big incentive to cooperate, right? [00:23:32] Speaker 06: Versus 54%. [00:23:35] Speaker 02: Yes, although, of course, the party, BMW didn't know that that would be the rate. [00:23:41] Speaker 02: But what we're talking about are parties for which review was not requested. [00:23:47] Speaker 02: And so they were never under any obligation to cooperate. [00:23:51] Speaker 06: So the deterrence in your mind is not just to deter someone from failing to cooperate, but deter them from ever even asking for a review. [00:23:59] Speaker 02: No, no, absolutely not. [00:24:00] Speaker 05: No, it's from failing to cooperate if they've asked for a review. [00:24:05] Speaker 02: Right. [00:24:05] Speaker 02: I mean, once they've asked and commerce has accepted their request for a review, then they are under an obligation to cooperate to the best of their ability, which they can see that they did not do in this circumstance. [00:24:19] Speaker 07: I flipped ahead a few pages. [00:24:21] Speaker 07: You might want to look at JA 1590. [00:24:24] Speaker 07: There is a discussion a little bit here about whether this would be punitive and inconsistent with BMW's level of culpability. [00:24:43] Speaker 07: Did you want to address that? [00:24:44] Speaker 02: Thank you, Your Honor. [00:24:45] Speaker 02: Thank you for pointing that out. [00:24:48] Speaker 02: So yes, Congress did address BMW's concern that it would be their argument about punitive. [00:24:56] Speaker 07: My only concern here is they mention the argument, but then they just say it appears BMW is seeking to re-litigate the Department's determination to apply facts available. [00:25:05] Speaker 07: So I'm not sure what that means. [00:25:07] Speaker 07: If that means that they think, oh, we're going to apply adverse facts available, it should be punitive, so therefore we can just rely on something that's not aberrational. [00:25:18] Speaker 02: I think the parameters of, and I guess the flip to the next page, 1591, how commerce addressed that question is simply assigning BMW a rate that is higher than it would have obtained. [00:25:35] Speaker 07: But there's a big difference between 54.27 and 126. [00:25:39] Speaker 07: Why wasn't that considered? [00:25:42] Speaker 07: I mean, I understand you can't second guess commerce right now. [00:25:45] Speaker 07: I'm just wondering. [00:25:46] Speaker 07: I mean, are those the only two options that Commerce had? [00:25:55] Speaker 02: Conceivably, no. [00:25:55] Speaker 02: Those were not the only options. [00:25:57] Speaker 02: I mean, there was a number of margins that were within. [00:26:02] Speaker 02: If Commerce was, as it did here, to rely upon one of a higher transaction-specific margin. [00:26:10] Speaker 02: I think the problem is here, what Commerce's [00:26:16] Speaker 02: Determination is being reviewed for substantial evidence. [00:26:18] Speaker 02: Is there substantial evidence that this, and what this court said in Nanyal Plastics is if this number is correct as a factual matter, if there's no reason to believe that it's aberrational based on the record, which commerce... But in that case of Nanyal and all the other cases that are cited in the briefs, this is where somebody actually didn't respond on purpose or was fraudulent, right? [00:26:41] Speaker 02: There's... No, I mean... No? [00:26:43] Speaker 02: Nanya did not involve. [00:26:44] Speaker 02: I don't believe it involved. [00:26:47] Speaker 02: You think that was just mistaken failure to respond as well? [00:26:50] Speaker 02: I don't remember exactly what the facts were. [00:26:53] Speaker 02: But honestly, Your Honor, most of the time it is negligence. [00:26:58] Speaker 02: It's not the facts of Papier-Fabrique when there's actually a fraudulent operation going on. [00:27:04] Speaker 02: Most of the time it is a party's failure to act to the best of its ability, which is all the statute [00:27:11] Speaker 05: I'm really trying to understand how much the government thinks it has to say or not say. [00:27:17] Speaker 05: Is it your position that just based on what we're reading in 1590 and 1591 that BMW here was arguing in the alternative it should have been one either at least one point as it did here 1.3 percent or 54 percent and this so this response [00:27:38] Speaker 05: is to why, no, it shouldn't have been those. [00:27:42] Speaker 05: Those were too low. [00:27:43] Speaker 05: And that that was BMW's only challenge, so that the Commerce Department didn't have to go the extra step and then talk about the difference between 54 and 126. [00:27:53] Speaker 02: I think that's fair to say, Your Honor. [00:27:56] Speaker 02: I also think that this just isn't, you know, Commerce selects a rate. [00:28:04] Speaker 02: It has a practice [00:28:05] Speaker 02: that the parties know that it will generally select the highest transaction-specific rate or a prior rate. [00:28:15] Speaker 02: So that's a known quantity and to sort of second-guess whether it's 50%. [00:28:18] Speaker 05: So your view is that that means it's not punitive. [00:28:21] Speaker 05: I mean, that's what we're struggling with. [00:28:22] Speaker 05: Or how do we know what your rationale is for the fact that it's not punitive? [00:28:28] Speaker 05: So you're responding to my question. [00:28:32] Speaker 05: The question is, I don't know what to do with that. [00:28:34] Speaker 05: to say that parties generally know that we're going to pick the highest rate. [00:28:38] Speaker 05: And therefore, that's not punitive. [00:28:40] Speaker 05: That's just the way we do things, the deterrence effect. [00:28:44] Speaker 05: What are we supposed to do with that analysis? [00:28:46] Speaker 02: Well, again, I think that the notion that commerce is not to apply a punitive rate is not a statutory requirement. [00:28:55] Speaker 02: We acknowledge that. [00:28:55] Speaker 02: But I think that it's shorthand for the commerce has to pick a number that is [00:29:02] Speaker 05: What is the statutory requirement? [00:29:04] Speaker 02: The statutory requirement, as it is here, is when it selects from, it may select any rate so long as it, and when it is, when Congress is relying upon primary information, that's it. [00:29:21] Speaker 02: It can select any rate. [00:29:22] Speaker 06: Well, there's plenty of case law that says it can't be punitive, but not just from us, right? [00:29:26] Speaker 06: I mean, the fact that it can't be punitive is well established in the law. [00:29:32] Speaker 02: Yes. [00:29:34] Speaker 02: We would respectfully submit that where commerce identifies a rate that is, as it did here, you know, commerce confirmed for itself and the trial court affirmed that it was a number that was not aberrational and as the trial court found not punitive, that decision should be suspended. [00:30:06] Speaker 03: May I please the court? [00:30:26] Speaker 00: I'm not entirely sure that the court wants to hear about what essentially was BMW's fallback argument, which was that the [00:30:34] Speaker 00: process that was followed by the agency was not lawful, that the agency should have, in fact, done over its initiation of the review altogether and, you know, publish a notice of opportunity to request a review and sort of reinitiate what it had already done before, but do it again. [00:30:55] Speaker 06: I mean, she did mention it at the end, but I think, you know, her point is that [00:31:04] Speaker 06: There's a lot of large corporations out there that have a lot of things to do, and when commerce tells them this isn't going on anymore, how can they just reinitiate without telling us? [00:31:15] Speaker 00: Well, I think the answer would be that we spend a lot of time in our brief talking about the language that was used in the revocation notice. [00:31:31] Speaker 00: It might seem petty, but of course, [00:31:33] Speaker 00: Commerce does have terminology that it uses when it stops a review. [00:31:38] Speaker 00: It uses the term rescission, or it gets to final results, obviously. [00:31:43] Speaker 00: In both cases, substantively what that means is that Commerce has made a decision about what the rates will be that will apply to the entries that were the subject of the review. [00:31:54] Speaker 00: Now, with this revocation notice, it obviously didn't decide on any rates, and also at the end of the notice, it says while all of this remains suspended, [00:32:04] Speaker 00: So obviously there was unfinished business. [00:32:06] Speaker 00: So the notice on its face tells you that, well, something will still need to be done in the future, because these reviews are there, but they haven't been decided. [00:32:18] Speaker 00: And we're holding the entries in abeyance until we do. [00:32:21] Speaker 00: So the notice itself, to me, is clear, regardless of, you know, you don't even have to worry about [00:32:29] Speaker 00: whether the word rescission was used or not used. [00:32:31] Speaker 00: Is it the word discontinue or some other word? [00:32:34] Speaker 00: Should they have used the word stay? [00:32:36] Speaker 00: Well, who knows. [00:32:37] Speaker 00: But in its substance, it is clear because there are things that are left undone in the notice. [00:32:46] Speaker 00: So then the remaining issue would then be, okay, when Commerce in 2013 came up with a new notice that resumed the reviews, [00:32:59] Speaker 00: Is there something wrong with that? [00:33:01] Speaker 00: And the argument that was offered by BMW was that the agency, that there was something wrong with that because they seem to make two arguments, or mainly two arguments. [00:33:17] Speaker 00: One of them was that the statutory deadlines had been exceeded. [00:33:24] Speaker 00: And of course, for [00:33:27] Speaker 00: issues of the preliminary results, which is true. [00:33:30] Speaker 00: But as the case law makes quite clear, these deadlines, if they are exceeded, that doesn't deprive Commerce from, when it has a chance to do it, to fulfill its statutory obligations and do something different. [00:33:48] Speaker 00: So yes, the deadline has been exceeded. [00:33:51] Speaker 00: The Camira case, which the government cited as obviously very appropriate, but I [00:33:57] Speaker 00: it is BMW argues while in Kimira, the court talks about prejudice. [00:34:05] Speaker 00: Is there some prejudice to the party because of the delay? [00:34:13] Speaker 00: There's a crucial distinction in our case with Kimira. [00:34:18] Speaker 00: Yes, there was a delay to BMW, but it was not the result of any action that commerce took. [00:34:24] Speaker 00: It was the result of the BMW's [00:34:27] Speaker 00: I guess misunderstanding of the first notice, and then it's failure to act on the second notice, or not having seen the second notice, or whatever. [00:34:38] Speaker 03: So I think we're going to have to conclude. [00:34:40] Speaker 03: We're way beyond our time. [00:34:43] Speaker 00: All right. [00:34:44] Speaker 00: Thank you, Your Honor. [00:34:44] Speaker 00: Thank you. [00:34:56] Speaker 01: Your Honor, the government's argument is essentially that under the statute, it can use any rate it wishes if it's based on a primary source. [00:35:06] Speaker 01: And that simply cannot be the case. [00:35:09] Speaker 01: If that were the case, then the Department of Commerce could pick a rate of 500% or 1,000%. [00:35:15] Speaker 01: And there would be no check to ensure that the rate that's imposed is not punitive. [00:35:21] Speaker 01: There has to be some standard to ensure that a rate is not punitive. [00:35:25] Speaker 01: And we think that that standard is to ensure that the rate is warranted by the deterrence that's required under the particular facts of the particular case. [00:35:35] Speaker 01: And that's what Commerce did not do in its remand results of this case. [00:35:39] Speaker 01: In this case, in its remand results, the rate of 126% was applied. [00:35:44] Speaker 01: It was, for all intents and purposes, an arbitrary number. [00:35:49] Speaker 01: The Department of Commerce recited several reasons why it fell within a certain range and why it may not have been aberrational, but it didn't explain to us why that rate, why that level of deterrence, why did it have to impose a rate of more than double what BMW would have gotten had it simply not requested its own administrative review. [00:36:09] Speaker 01: And we're not saying that the court or the department is required to pick a certain number, but it is required to base its decision [00:36:17] Speaker 01: on the record of that case, find the rate that is most probative, ensure that it's not punitive, and determine what deterrence is required. [00:36:25] Speaker 01: In this case, there was no deterrent factor really required because this order had already gone away. [00:36:31] Speaker 01: There were going to be no future review periods. [00:36:34] Speaker 01: BMW was not going to be engaging in another review. [00:36:37] Speaker 01: And if the motive here was to use BMW as an example for other parties, then that's prima facie punitive. [00:36:46] Speaker 01: BMW being used as an example to make sure that other parties and other proceedings and other cases comply is punitive for BMW, and it's not tied to BMW's own actions on the record of this case. [00:37:00] Speaker 01: The legislative history and the statutory scheme require that commerce look at the whole record and that its decision is based on substantial evidence. [00:37:08] Speaker 01: And I see that I'm going into... [00:37:11] Speaker 01: You've exceeded your time. [00:37:12] Speaker 01: I've exceeded my time. [00:37:13] Speaker 01: So if you have a final thought. [00:37:14] Speaker 01: Yeah, and the final thought on revocation. [00:37:16] Speaker 01: We do feel that the statute is clear. [00:37:18] Speaker 01: No gap filling is required. [00:37:20] Speaker 01: The order was revoked. [00:37:22] Speaker 01: The review was terminated. [00:37:23] Speaker 01: And 1675A says that a review must be conducted only if a request for the review has been received. [00:37:30] Speaker 01: And that's particularly the case in this situation where a gap of two and a half years had passed. [00:37:35] Speaker 01: And it was procedurally irregular. [00:37:37] Speaker 05: Thank you, Your Honor. [00:37:38] Speaker 05: Thank you. [00:37:38] Speaker 05: We thank both sides in the cases.