[00:00:46] Speaker 06:
OK, the next target case is number 181373, Solo World Americas Incorporated against the United States.

[00:00:55] Speaker 06:
Mr. Braddville.

[00:01:00] Speaker 03:
Mr. Braddville, don't let me take up too much of your time here, but I want to start with a fun question, which is the CIT made a non-market economy determination.

[00:01:14] Speaker 03:
Do you agree with the finding?

[00:01:17] Speaker 03:
Why or not?

[00:01:17] Speaker 03:
Was it appropriate or not?

[00:01:19] Speaker 03:
And you can do that briefly.

[00:01:22] Speaker 00:
Your honor, we agree that China is a non-market economy, was in this case, and remains a non-market economy.

[00:01:29] Speaker 00:
Yes, your honor.

[00:01:30] Speaker 00:
May it please the court, Tim Brightbill, Wiley-Ryne, on behalf of Solar World Americas.

[00:01:35] Speaker 00:
Commerce has made two decisions with respect to factors of production in this case.

[00:01:39] Speaker 00:
Both are unsupported by substantial evidence, and in fact,

[00:01:42] Speaker 00:
They're flatly contradicted by compelling record evidence.

[00:01:46] Speaker 00:
And as a result, the anti-dumping margin is not calculated as accurately as possible.

[00:01:50] Speaker 03:
At JA4, the CIT said you also challenged commerce's surrogate financial ratio calculation, including a certain sum tax sales made to an affiliate and use of factor.

[00:02:06] Speaker 03:
Have you abandoned those arguments on appeal?

[00:02:08] Speaker 00:
Yes, Your Honor, we're only challenging these two surrogate value issues.

[00:02:11] Speaker 03:
It's purely a housekeeping question.

[00:02:14] Speaker 03:
I want to know how narrow we are.

[00:02:16] Speaker 00:
Absolutely.

[00:02:16] Speaker 00:
Thank you.

[00:02:18] Speaker 00:
These surrogate values are particularly important for a product such as solar panels, a high-cost technology using cutting-edge manufacturing inputs.

[00:02:26] Speaker 00:
A mistake in valuing the components means that the product will be substantially misvalued in the anti-dumping calculation.

[00:02:32] Speaker 03:
In the blue brief at 17, you argue

[00:02:35] Speaker 03:
that commerce is, I'm quoting you, is required to abide by the statutory provisions of HESUS and that commerce's failure to do so renders this case contrary, renders its determination contrary to law.

[00:02:54] Speaker 03:
What authority supports the position that commerce is bound by these provisions?

[00:03:00] Speaker 03:
I mean, number one, you sort of back away from that within your brief.

[00:03:05] Speaker 03:
And number two, in Downhill Pike, we explained that commerce is not required to engage in classification.

[00:03:13] Speaker 03:
Why doesn't Downhill Pike foreclose your arguments?

[00:03:16] Speaker 00:
Your Honor, what the statute says is that the provisions of the harmonized tariff schedule shall be considered to be statutory provisions of law for all purposes.

[00:03:25] Speaker 00:
So you're right.

[00:03:28] Speaker 00:
I find that language clear.

[00:03:31] Speaker 00:
We're not arguing that

[00:03:35] Speaker 00:
You can't have it both ways.

[00:03:36] Speaker 00:
I mean... Well, we're just saying for this particular case, those HTS provisions and the definition of a profile have to be, have to be, have to guide commerce's decision as to what is the most appropriate... And when you say have to, you mean that down-hole pipe doesn't apply?

[00:03:57] Speaker 00:
No, Your Honor, what I'm saying, I mean, what we're arguing is there was not substantial evidence here that the decisions were unreasonable.

[00:04:04] Speaker 00:
We're not saying that the HTS dictates, but we're saying that the definition in the harmonized tariff schedule is such compelling evidence, among with the other forms of evidence, that there isn't substantial evidence to support what Commerce did in this case.

[00:04:21] Speaker 00:
So Commerce does have discretion.

[00:04:25] Speaker 00:
in the selection of surrogate values, but it has to calculate the dumping margin as accurately as possible.

[00:04:30] Speaker 03:
At page 18, you criticize commerce for rejecting your argument about the presence of corners in Ying Li's aluminum frames as speculation.

[00:04:41] Speaker 03:
Yes.

[00:04:41] Speaker 03:
But then you say casting, centering, and further working profiles do not necessarily involve altering the cross-section of the profile.

[00:04:50] Speaker 03:
So aren't you also relying on speculation when you say not necessarily?

[00:04:56] Speaker 03:
And why are the presence of some corners different?

[00:04:59] Speaker 00:
We know for these products, for solar aluminum frames, that they are not, they do not have a uniform cross-section along their entire length because of the corners.

[00:05:09] Speaker 00:
We know from the evidence that is on the record from the photographs that these do not meet the definition of a profile.

[00:05:17] Speaker 03:
Are you saying there that the processing steps to manufacture Yingley's aluminum frames

[00:05:23] Speaker 03:
quote, are performed by different companies and add significant value.

[00:05:27] Speaker 03:
Where's the support for that?

[00:05:28] Speaker 03:
In the record, I couldn't find it.

[00:05:31] Speaker 00:
Your Honor, I believe, I believe Ying Li made those points in its questionnaire responses.

[00:05:36] Speaker 00:
So I'm looking at pages 18 and 19 of our brief that cite the Ying Li questionnaire response.

[00:05:45] Speaker 00:
I don't have the appendix open.

[00:05:46] Speaker 00:
I can double check.

[00:05:47] Speaker 00:
But it's the appendix sites.

[00:05:48] Speaker 00:
Yeah, do that when you're sitting down.

[00:05:50] Speaker 00:
All right.

[00:05:50] Speaker 00:
Thank you.

[00:05:52] Speaker 00:
So these frames are not uniform along their entire length, so you have that conflict with the harmonized tariff schedule.

[00:05:59] Speaker 00:
They're converted from profiles, and commerce needs to follow these definitions, which it did not in this case, despite acknowledging the distance of the corners.

[00:06:12] Speaker 00:
Meanwhile, while the definition does allow for some further working of the profile, the processing cannot be so extensive as to result in the profile assuming the character of an article or a product of other headings.

[00:06:24] Speaker 00:
And the information submitted by Ying Li, which is business proprietary, shows the detailed production process steps that make these aluminum frames a finished product, not a semi-finished product.

[00:06:37] Speaker 00:
It's similar to... Well, the other evidence on the record is

[00:06:41] Speaker 03:
to select a surrogate value for aluminum frames came from the TIE HDS heading.

[00:06:49] Speaker 03:
Even if Ying Li's frames are slightly more processed, why does that demonstrate that TIE heading 7616 is more appropriate than TIE heading 7604?

[00:07:02] Speaker 00:
Well, I think the most compelling evidence on that, Your Honor, is the two customs rulings that classify these frames under

[00:07:10] Speaker 00:
under 76.

[00:07:12] Speaker 03:
And again, you're just going to tell me when I say are they binding, you're going to say no, it's just evidence.

[00:07:18] Speaker 00:
It's unusually persuasive evidence because the first one, both of these... Well, you find it unusually persuasive.

[00:07:25] Speaker 00:
I'm sorry, Your Honor.

[00:07:27] Speaker 00:
You find it unusually persuasive.

[00:07:29] Speaker 00:
I mean, I think everybody appreciates evidence.

[00:07:31] Speaker 00:
When a Chinese company requests for a classification of an aluminum solar frame and

[00:07:37] Speaker 00:
Commerce and Customs and Border Protection issues two rulings, and in both cases they say it's a more advanced product.

[00:07:45] Speaker 00:
It's either 76-1699 or it's even more advanced, which would be 85-4190.

[00:07:50] Speaker 00:
They've twice concluded that HTS 7604 was inappropriate for aluminum frames and that the heading reflected a more, that a more sophisticated product was required.

[00:08:03] Speaker 00:
That's why we called it uniquely dispositive evidence of the correct classification.

[00:08:09] Speaker 00:
Now, Commerce also claimed that 76-1699 is a basket category, but that basket category includes finished goods, not semi-finished goods.

[00:08:21] Speaker 00:
And a profile under 7604 is a semi-finished goods.

[00:08:25] Speaker 00:
You deal with steel products all the time.

[00:08:27] Speaker 00:
It would be like using a classification for a steel billet instead of a finished steel product.

[00:08:33] Speaker 03:
Speaking of such things, would you address the semi-finished polysilicon ingots and blogs?

[00:08:44] Speaker 03:
Sure.

[00:08:44] Speaker 03:
In the blueprint at 29, if you argue commerce, I'm putting in the word commerce, could have used a different methodology to calculate a surrogate value for semi-finished polysilicon inputs by taking the price of raw

[00:09:03] Speaker 03:
polysilicon and adjusting it based on Ying Li's production process.

[00:09:09] Speaker 03:
What precedent supports the proposition that commerce was required to employ a different methodology?

[00:09:16] Speaker 03:
Do you argue that it was an unreasonable application of the statute?

[00:09:22] Speaker 00:
Your Honor, I would say the authority is, if you look at the Jinan-Yipin case of the Court of International Trade, commerce cannot select a surrogate value by default.

[00:09:32] Speaker 00:
And here,

[00:09:33] Speaker 00:
they selected a surrogate value by default.

[00:09:35] Speaker 03:
Well, they rejected your methodology because, I'm quoting, our respondents' market economy purchase prices are proprietary information, i.e.

[00:09:44] Speaker 03:
not publicly available, and not necessarily representative in its industry-wide prices available.

[00:09:51] Speaker 03:
Why doesn't that constitute a reason and explanation for what they did as opposed to what you wanted them to do?

[00:09:57] Speaker 00:
Well, we offered

[00:09:58] Speaker 00:
We offered several alternatives for what they could have done, and we understand that the market prices were business proprietary, although they do show that the actual pricing of these products is several times greater than the value that was used for the raw material.

[00:10:15] Speaker 00:
But there were other methods that commerce also could have done, which was to take the polysilicon value and increase it for all of the additional

[00:10:27] Speaker 00:
materials used in turning the polysilicon rock into a finished crystal that can be then made into a solar wafer.

[00:10:35] Speaker 03:
But you're asking commerce to disregard normal methodology, right?

[00:10:39] Speaker 03:
So don't you bear the burden?

[00:10:42] Speaker 00:
We felt like we met the burden by showing the disparity and by the fact that they again used a raw material value to value a more finished product.

[00:10:53] Speaker 05:
What about where they said they accounted for the cost of the additional processing required to manufacture the ignits and blocks?

[00:11:01] Speaker 00:
Your Honor, they said that it was perhaps that it was accounted for in the company's overhead, but there's no dispute that there are additional manufacturing inputs when you take the polysilicon rocks and melt them into an ingot.

[00:11:18] Speaker 00:
You add additional inputs as well, and commerce is

[00:11:21] Speaker 00:
Regular methodology is to account for any input introduced into the manufacturing process at any step.

[00:11:27] Speaker 00:
So they don't call it just overhead.

[00:11:29] Speaker 00:
They, they, they would attach a surrogate value to every input added in, and they failed to do that in this case.

[00:11:37] Speaker 00:
So again, this would be like using scrap or iron ore to value a steel billet, which is, is inappropriate.

[00:11:46] Speaker 00:
It's never accurate to value a manufacturing input

[00:11:50] Speaker 00:
using a raw material surrogate value.

[00:11:54] Speaker 00:
Unless there are other questions, I'll hold some time for rebuttal.

[00:12:01] Speaker 06:
Okay, we'll save you rebuttal time.

[00:12:09] Speaker 04:
Thank you.

[00:12:12] Speaker 04:
Good morning, Your Honors.

[00:12:13] Speaker 04:
May it please the Court?

[00:12:18] Speaker 03:
Solar World's arguments do not show that... In the blue brief at 29... Nice to see everybody again.

[00:12:28] Speaker 03:
In the blue brief at 29, Solar World argues commerce could have used a methodology in which it started with price of raw polysilicon and adjusted it based on Engley's production process.

[00:12:41] Speaker 03:
Mr. Breitbeil was just addressing.

[00:12:43] Speaker 03:
Are you aware of any instance in which commerce has employed

[00:12:48] Speaker 03:
a methodology similar to that requested by Solar World, and under what circumstances did it?

[00:12:56] Speaker 04:
I am not aware of any circumstance in which Commerce has done that.

[00:13:01] Speaker 04:
I couldn't find anything.

[00:13:04] Speaker 04:
And nonetheless, Commerce still entertained the argument that Solar World made and found that on the record of these facts there wasn't any reason to depart from its usual practice.

[00:13:16] Speaker 04:
commerce doesn't abuse its discretion or when it declines to adopt an alternate methodology and follows its normal practice.

[00:13:26] Speaker 04:
So we're not aware of any situation, but commerce did explain why, particularly on the facts of this case, where actually most of the ingots and blocks that were consumed by Inley were self-produced.

[00:13:41] Speaker 04:
It made sense that those manufacturing costs, I mean, the court can look at the proprietary

[00:13:47] Speaker 04:
I think it's on page 24 of being released.

[00:13:48] Speaker 04:
It's a very small percentage of the ingots and blocks that were purchased as opposed to self-produced.

[00:13:55] Speaker 04:
So particularly in that circumstance, it seems reasonable that the normal manufacturing overhead that was already accounted for in the factor production buildup could reasonably serve.

[00:14:10] Speaker 04:
And Commerce acknowledged this is an imperfect fit, but that's okay given what

[00:14:17] Speaker 05:
limited available information was on the record, and neither party... Do I remember correctly that neither party provided any other surrogate value approximation?

[00:14:27] Speaker 04:
That is correct, Your Honor, and that is why Commerce used the world market value for Palo Silco.

[00:14:31] Speaker 04:
Neither party suggested that there was an alternate surrogate value for ingots and blocks.

[00:14:36] Speaker 04:
Certainly had that been on the record, Commerce would have been obligated to consider that, but given that there was essentially an absence of information

[00:14:44] Speaker 04:
for that particular, to value that particular factor.

[00:14:48] Speaker 04:
Commerce went with what was on the record and found that that was reasonable given the circumstances that we have here.

[00:14:54] Speaker 04:
But even an imperfect choice does not mean that the decision is not supported by substantial evidence.

[00:15:01] Speaker 04:
And similarly with the aluminum frames, Commerce's decision that 7604 representing aluminum rods and profiles, even if SolarWorld is correct,

[00:15:14] Speaker 04:
that frames cannot be classified for tariff purposes under that HTS category.

[00:15:20] Speaker 04:
That doesn't mean that Commerce's determination that that was more similar than the basket category that contained nails and knitting needles and bodkins and all number of other disparate products, that that was not the better choice.

[00:15:35] Speaker 04:
And we think that is certainly one of those quintessential surrogate value determinations that Commerce makes.

[00:15:43] Speaker 04:
And its reasoning is sound, and it's a reasoning that has been consistent in how commerce has treated aluminum frames in both the solar cell and the solar product proceedings.

[00:15:54] Speaker 04:
And so for those reasons, we would respectfully request that the court.

[00:15:58] Speaker 03:
Don't sit down yet.

[00:16:00] Speaker 03:
OK.

[00:16:00] Speaker 03:
I probably shouldn't even ask the government whether it agrees with the NME determination, because of course it made it.

[00:16:06] Speaker 03:
But do you have any comment on that?

[00:16:07] Speaker 03:
Because I'm going to ask you and leave that out.

[00:16:10] Speaker 04:
I don't have any comment on that.

[00:16:11] Speaker 04:
The particular party who made that challenge before the CIT did not appeal that determination.

[00:16:16] Speaker 04:
Right, right.

[00:16:17] Speaker 04:
So we would certainly believe that the trade court reached the correct decision on that.

[00:16:27] Speaker 06:
Let's see you sharing your time with Mr. Higgins.

[00:16:39] Speaker 03:
So Mr. Higgins, address my housekeeping question first.

[00:16:44] Speaker 03:
At JA 13, the CIT made a determination on the continuing viability of NME status.

[00:16:55] Speaker 03:
Do you take issue with that finding?

[00:16:56] Speaker 02:
For purposes of this case, no.

[00:17:02] Speaker 02:
Go ahead.

[00:17:03] Speaker 02:
I think I'm content to rest on the briefs unless you have any particular questions.

[00:17:09] Speaker 03:
In the red brief at 17, you argue that the picture on the record of the cross-section of Ying Li's aluminum frames showed that it's uniform across its entire length.

[00:17:23] Speaker 03:
And you cite to J.H.

[00:17:25] Speaker 03:
20124-25, which is a transcript of the CIT proceeding.

[00:17:34] Speaker 03:
You recognize that that's not record evidence before commerce, and we can't base a substantial evidence analysis on that.

[00:17:41] Speaker 03:
That's correct.

[00:17:42] Speaker 03:
That's correct.

[00:17:44] Speaker 03:
You also cite to 2663, which is a picture.

[00:17:50] Speaker 03:
But how do we know from that picture that the cross-section is uniform?

[00:17:54] Speaker 03:
And you have the presence of a corner, but does that necessarily mean that the cross-section is not uniform?

[00:18:03] Speaker 01:
I think the definition of uniform cross-section is not clear based on the record evidence.

[00:18:14] Speaker 01:
However, these frames are, they are, after the processing, they do not waver.

[00:18:20] Speaker 01:
They are straight.

[00:18:20] Speaker 01:
They are very similar to profiles.

[00:18:22] Speaker 01:
They're much more similar to a profile that's described in HDS 7604 than they are to the random grab bag of items found in 7616.

[00:18:30] Speaker 01:
I sort of got an effectively uniform flavor out of it.

[00:18:35] Speaker 01:
Right.

[00:18:36] Speaker 01:
Right.

[00:18:37] Speaker 01:
Right.

[00:18:37] Speaker 01:
Yeah.

[00:18:38] Speaker 01:
They're certainly very different from the random products that are found in the HDS code suggested by the appellant, including

[00:18:50] Speaker 01:
vodkins, aluminum wire, staples, tacks, those sorts of things.

[00:18:54] Speaker 01:
Those certainly are not Ying Li's frames.

[00:18:59] Speaker 01:
Thank you.

[00:19:03] Speaker 06:
Thank you.

[00:19:03] Speaker 06:
Thank you.

[00:19:04] Speaker 06:
Thank you, Mr. Higgins.

[00:19:08] Speaker 06:
Mr. Brightbilt.

[00:19:15] Speaker 00:
Your Honors, I wanted to return to one other point on the aluminum frames, which is that we also have a failure of Commerce to consider an important aspect of the problem here.

[00:19:25] Speaker 03:
Evidence that detracts from the problem?

[00:19:28] Speaker 00:
A failure to consider important evidence detracting from their decision, which were the multiple customs rulings classifying unfinished aluminum articles under HTS 7604, the profile heading.

[00:19:42] Speaker 00:
And in fact, Commerce said this question

[00:19:45] Speaker 00:
is not relevant to our decision.

[00:19:48] Speaker 00:
We strongly disagree.

[00:19:49] Speaker 00:
It's extremely relevant.

[00:19:50] Speaker 00:
And again, there were three decisions that addressed products that were profiles and aluminum profiles, and all found that these were properly classified under 7604, that these were unfinished articles, not finished articles, and therefore they should be classified in that 7604 category.

[00:20:15] Speaker 00:
Commerce at the very least needed to consider that evidence, and particularly when the courts have said that product specificity is important and that these are specific rulings addressing the exact products that Commerce is trying to consider as part of its determination.

[00:20:38] Speaker 00:
With regard to counsel's argument as far as which product is more similar, again, I would just point out that the

[00:20:45] Speaker 00:
All of the items in Category 76-16 are finished articles.

[00:20:51] Speaker 00:
We understand it's a wide variety of things, but they're all finished goods.

[00:20:54] Speaker 00:
And instead, Commerce chose to value this as an unfinished profile, which substantially undervalues that product.

[00:21:07] Speaker 03:
As far as.

[00:21:13] Speaker 00:
On ingots and blocks, I would just point out, Your Honor asked if there was any other alternative on the record.

[00:21:18] Speaker 00:
We did explain how commerce could have done the calculation.

[00:21:21] Speaker 00:
We didn't provide the calculation itself.

[00:21:25] Speaker 00:
We explained how commerce could have done it.

[00:21:27] Speaker 05:
We gave them a roadmap to do it.

[00:21:28] Speaker 05:
You gave a methodology which I heard the government to say had never actually, the government's knowledge had not actually been used before.

[00:21:38] Speaker 05:
Is that the methodology you're referring to?

[00:21:40] Speaker 00:
Yes, we suggested they could take either the market economy price or the raw material price that they used and adjust it to reflect the fact that it was a much more sophisticated product.

[00:21:52] Speaker 06:
Thank you very much.

[00:21:59] Speaker 03:
It's just, I have to say to the council, it's just fun to see everybody from my old home town, so to speak.

[00:22:05] Speaker 06:
Thank you.