[00:00:00] Speaker 00: The next case for argument is 22-2079, Wimco versus United States. [00:00:08] Speaker 01: Good morning, Your Honor. [00:00:10] Speaker 01: May it please the Court. [00:00:12] Speaker 01: This is a case concerning the jurisdiction of the United States Court of International Trade. [00:00:17] Speaker 01: And particularly the basis of jurisdiction on which the court may consider a challenge to an assessment of duties, which is claimed to be an unconstitutional excessive fine in violation of the eighth amendment. [00:00:32] Speaker 01: Our client, Rimcoe, was charged with anti-dumping and countervailing duties in aggregate amounts of up to 688%. [00:00:40] Speaker 01: These rates had been set by the commerce department. [00:00:45] Speaker 01: on the basis of adverse facts available against certain Chinese producers. [00:00:51] Speaker 01: Our client was not involved in that. [00:00:53] Speaker 01: Our client is purely an importer. [00:00:56] Speaker 03: When customs assess the duties... Is there anything that prevents your client from participating in the administrative reviews of these anti-dumping and countervailing duties? [00:01:05] Speaker 01: Yes, two things, Your Honor. [00:01:07] Speaker 01: First of all, it would have been futile. [00:01:09] Speaker 01: No, no. [00:01:10] Speaker 03: I don't want to talk about futility yet. [00:01:12] Speaker 03: Doesn't the statute allow the importer to participate in the reviews? [00:01:16] Speaker 01: It allows the importer to participate. [00:01:18] Speaker 01: By the time the assessment was made on our client, however, the administrative review, which set those rates, had passed. [00:01:26] Speaker 00: Now, the only- They renew it every year. [00:01:29] Speaker 01: They do. [00:01:30] Speaker 01: And your client would be an interested party that would be allowed to... We would be an interested party, but we would have no information to contribute. [00:01:40] Speaker 02: Our challenge is purely... You don't claim that you lacked some legally required notice of the opportunity to participate in the 1675 review. [00:01:51] Speaker 01: We don't claim that we lacked the notice of the opportunity. [00:01:55] Speaker 01: What we're claiming [00:01:56] Speaker 01: is that we did not have a remedy in front of the agency. [00:02:01] Speaker 01: That could be the subject. [00:02:02] Speaker 02: Right. [00:02:03] Speaker 02: And the reason is that what do you think? [00:02:05] Speaker 02: Commerce would not have addressed the Eighth Amendment issue on the merits? [00:02:09] Speaker 01: Correct. [00:02:09] Speaker 02: So why would you think that it is somehow more likely that customs would? [00:02:20] Speaker 02: Customs would not. [00:02:22] Speaker 02: So either way, in your view, you have to get to the trade court. [00:02:28] Speaker 01: Yes. [00:02:28] Speaker 01: And customs is the party. [00:02:31] Speaker 02: And 1581C gives you a route to do that by participating in the police review. [00:02:40] Speaker 03: It does not, Your Honor. [00:02:42] Speaker 03: Wait, I don't understand that. [00:02:43] Speaker 03: If you went to the review and you told commerce, these rates are excessive, that they're in excess of what the statutes and regulations allow, but they also violate the Eighth Amendment, do you think commerce wouldn't address those arguments? [00:02:57] Speaker 01: I think commerce would not address the argument. [00:03:00] Speaker 03: It would address the former, obviously, about whether they're in excess of what the regulations and statutes allow, right? [00:03:08] Speaker 01: There is no longer any basis to challenge an AFA determination as excessive. [00:03:13] Speaker 01: This is because Section 502 of the Trade Preferences Extension Act in 2015 provides that commerce has no obligation to make certain estimates or address certain claims. [00:03:27] Speaker 01: Now, formerly, the rule [00:03:29] Speaker 03: I don't understand this argument at all, because we get these AFA cases all the time where the parties involved are saying the adverse facts rate is too high. [00:03:40] Speaker 03: And we routinely send them back to commerce to look at it and say, is this punitive versus not punitive? [00:03:50] Speaker 03: And why couldn't you have done that here and said these rates are punitive? [00:03:56] Speaker 01: Because in section 502 of the Trade Preferences Extension Act, Congress said that commerce has no obligation to make certain estimates or address certain claims. [00:04:09] Speaker 03: Before the 2015 amendment... Are you saying that means that the court and us no longer have the authority to review commerce's assessment of rates under adverse facts? [00:04:23] Speaker 03: That's not what that statute means. [00:04:25] Speaker 01: I think it does, your honor. [00:04:26] Speaker 03: Let's just assume you're wrong. [00:04:29] Speaker 03: I don't want to debate that. [00:04:31] Speaker 03: I think you're wrong. [00:04:32] Speaker 03: Let's move on. [00:04:33] Speaker 03: Why couldn't you have made this to commerce? [00:04:40] Speaker 03: I assume your argument is really that the Chinese exporters will refuse to provide the documentation again, and you have no control over them, so you're still going to end up with that AFA rate. [00:04:52] Speaker 01: Well, that's correct. [00:04:53] Speaker 03: So what? [00:04:54] Speaker 03: You're the one choosing to buy from these exporters that don't participate in the process and end up with a high rate. [00:05:01] Speaker 01: Well, in our case, we purchased from one of those producers. [00:05:06] Speaker 01: We purchased from another producer that was assigned the 688% as a China wide rate and was not in fact the party that had defaulted. [00:05:14] Speaker 01: But the fact of the matter is, this is a constitutional challenge. [00:05:18] Speaker 01: And there is no more statutory challenge to an AFA rate as being excessive. [00:05:24] Speaker 00: I never heard an answer to Judge Toronto's question. [00:05:26] Speaker 00: I think it was his question. [00:05:28] Speaker 00: And why does customs have more authority or ability to assess or evaluate the constitutional question than commerce was? [00:05:36] Speaker 01: I don't think that they do have any more competence, but they are the agency that assesses the duty and inflicts the constitutional injury on our clients. [00:05:48] Speaker 00: They assess it, but don't you construe it as, is it not a ministerial act for them to assess the duty that a commerce has come up with? [00:05:57] Speaker 01: It may be. [00:05:57] Speaker 01: It's a ministerial act, Your Honor, but a protest takes up all findings and determinations entering into the liquidation process. [00:06:05] Speaker 03: But you know there's that precedent that says that when Cussons makes a ministerial act, it doesn't come under the protest jurisdiction. [00:06:15] Speaker 01: That's why we packaged our case. [00:06:17] Speaker 01: so that it met the jurisdictional requirements, both for 1581A protest jurisdiction, or if the trade court concluded this was not protested. [00:06:27] Speaker 03: I don't understand why you didn't package your case under C. You would be here. [00:06:30] Speaker 03: You'd still probably lose, but you'd be here. [00:06:33] Speaker 01: Again, I don't think so, because first of all, the administrative agency is not a proper place to raise a claim of constitutionality. [00:06:42] Speaker 01: Number two, the trade court. [00:06:45] Speaker 03: Yes, but there is the principle that if the issue can be resolved on non-constitutional grounds, then the constitutional issues are to be avoided. [00:06:55] Speaker 03: And if you think that the AFA rate is punitive and not remedial, then there's plenty of precedent to say that you can get it there. [00:07:05] Speaker 03: In fact, our case law and the Court of International Trades case law makes clear that these rates are not meant to be punitive. [00:07:12] Speaker 03: They're meant to be remedial. [00:07:13] Speaker 03: And so you could have solved it on a non-constitutional graph. [00:07:17] Speaker 03: I understand practically your client's problem. [00:07:20] Speaker 03: You're not going to get a resolution because the Chinese exporters are not going to participate. [00:07:24] Speaker 03: And commerce is going to say, we don't have any other information except to impose the AFA rate. [00:07:30] Speaker 03: But at least you would have gone through the right jurisdictional process. [00:07:34] Speaker 01: Again, I don't think so. [00:07:36] Speaker 01: I think Section 502 of the Trade Preferencing... Can you just set that aside? [00:07:41] Speaker 03: We can read that, but I don't think that that says what you think it says. [00:07:45] Speaker 03: Well, it says they are under no obligation to make certain... Okay, you don't keep arguing this place, but I told you to set it aside and move on. [00:07:52] Speaker 03: If I determine when I go back and look at this that I agree, we'll write it that way, but right now, you're wasting your time. [00:08:00] Speaker 03: So here is my question is, if [00:08:04] Speaker 03: Commerce sets rates under the AFA that have to be remedial, as required by the statute and by our precedent, and are punitive. [00:08:13] Speaker 03: How could those ever possibly be an Eighth Amendment violation? [00:08:19] Speaker 01: Your Honor, the prior law, well, first of all, a calculated rate would never be an Eighth Amendment violation. [00:08:26] Speaker 01: This is a calculated rate. [00:08:27] Speaker 03: It's just an AFA calculated rate. [00:08:29] Speaker 01: No, it's not a calculated rate. [00:08:30] Speaker 01: It's an assigned rate. [00:08:31] Speaker 01: It's not calculated based on information. [00:08:33] Speaker 03: And we don't need to quibble about terminology. [00:08:35] Speaker 03: Is there some notion that AFA, the AFA statute and regulation supporting it are itself unconstitutional or making a facial challenge to it? [00:08:44] Speaker 01: Not a facial challenge. [00:08:46] Speaker 01: A challenge as applied in this case. [00:08:49] Speaker 01: The facial challenge says, the statute says, [00:08:53] Speaker 01: that commerce is not required for purposes of the statute or any other purpose to estimate what a counter-available rate or subsidy would have been had the party cooperated or demonstrate that the counter-available subsidy... That's the point of adverse facts. [00:09:09] Speaker 03: They didn't cooperate. [00:09:10] Speaker 03: So they can use the methodology for adverse facts to come up with the highest rate that's remedial and not punitive. [00:09:18] Speaker 03: that's consistent with our case law. [00:09:20] Speaker 03: How is a rate that's consistent with our case law and the statute ever an Eighth Amendment violation? [00:09:27] Speaker 01: That has to be determined by a court. [00:09:29] Speaker 01: The test was set out by the Supreme Court in 1903 in the case of Hellwood versus United States. [00:09:36] Speaker 01: And what it said there is, first of all, you need to have a judicial determination of something being unconstitutional. [00:09:41] Speaker 01: The agency's determination is insufficient. [00:09:45] Speaker 01: And the court there held, [00:09:47] Speaker 01: that if the amount is so large in proportion to the value of the merchandise imported, to show beyond doubt that it was some imposed not in fact as a duty on an imported article, but as a penalty and nothing else, then it violates the Eighth Amendment. [00:10:02] Speaker 03: Now, Congress has- But it's a proper AFA rate. [00:10:08] Speaker 03: and it complies with our case law that says it has to be remedial and not punitive, then it is not an excessive penalty. [00:10:16] Speaker 03: It is a proper remedial rate. [00:10:19] Speaker 01: Well, that's not with this Court's case. [00:10:22] Speaker 03: You think something that is a proper AFA rate that's remedial and not punitive could nonetheless be so punitive that it violates the Eighth Amendment? [00:10:31] Speaker 01: It's not punitive in violation of the statute, but it can be punitive in violation of the Constitution. [00:10:36] Speaker 01: It can be an excessive fine. [00:10:39] Speaker 03: That sounds to me like you're saying that Congress gave commerce unconstitutional authority. [00:10:45] Speaker 01: Congress gave commerce immunity from having to consider arguments that AFA rates, no matter how set, are too high. [00:10:53] Speaker 01: They deprived us of a statutory remedy. [00:10:56] Speaker 01: Our only remedy left is to say this is unconstitutional. [00:11:01] Speaker 01: And this court's 2016 decision in the Nannyaw Plastics Court case [00:11:06] Speaker 01: Said that, you said that the court said that commerce no longer has to consider challenges to these AFA rates, but it is constrained in setting AFA rates by constitutional concerns. [00:11:21] Speaker 01: And this is the problem. [00:11:23] Speaker 01: If you said, let's go to commerce. [00:11:24] Speaker 03: What was the jurisdictional basis for that case? [00:11:28] Speaker 01: For? [00:11:29] Speaker 03: For the case you decided to us. [00:11:32] Speaker 03: It came up in C. [00:11:34] Speaker 03: So if you can make that argument in that case in C, why can't you make it in this case in C? [00:11:40] Speaker 01: Again, because I think that section 502 says that commerce is under no obligation to make certain estimates or address certain claims. [00:11:49] Speaker 01: There's a separation of powers. [00:11:52] Speaker 03: What you just read to us said they're under no obligation, but they have to do it within constitutional bounds. [00:11:57] Speaker 03: So at least the court in that case seemed to believe that they have the authority to second-guess commerce's determination for constitutional reasons in a C case. [00:12:08] Speaker 01: Well, here's the problem. [00:12:10] Speaker 01: It's a separation of powers problem. [00:12:12] Speaker 01: Congress said to commerce, you're not obligated to address certain claims. [00:12:19] Speaker 01: So if I make a claim to commerce that this is an excessive rate, unconstitutionally so or otherwise, they're under no obligation to address it. [00:12:29] Speaker 01: And judge, why not? [00:12:30] Speaker 03: They're under no obligation to determine whether it approximates an actual margin. [00:12:34] Speaker 03: But they are under an obligation to comply with the AFA statute and regulations. [00:12:40] Speaker 01: Right, but the AFA statute now divorces them from reflecting the alleged commercial reality of the interested party. [00:12:47] Speaker 00: Can I ask you one other question before your time runs out? [00:12:50] Speaker 00: Sure. [00:12:51] Speaker 00: Do you think that Mitsubishi has any bearing here, and does it not control, and would we not have to take it en banc and reverse it in order to fine for you in this case? [00:13:02] Speaker 01: I don't think that Mitsubishi controls because it predates the enactment of Section 502. [00:13:08] Speaker 01: But again, to the separation of powers, this is what Judge Barnett said in the court below. [00:13:13] Speaker 01: Well, if I didn't like the constitutional decision or the determination that commerce made under C, I could send it back to them and say, make a different determination. [00:13:22] Speaker 01: My response is, no, you can't. [00:13:25] Speaker 01: Because Congress has said that commerce may not be required to address certain claims. [00:13:33] Speaker 01: And the judiciary branch can't overstep that. [00:13:36] Speaker 01: That's why we have brought this claim, not through commerce, but through customs, the assessing agents. [00:13:42] Speaker 03: Can I just ask one more time? [00:13:44] Speaker 03: That sounds like you're making a constitutional challenge to that statute. [00:13:50] Speaker 03: That commerce has been given too much authority, and that it can set excessive rates. [00:13:56] Speaker 03: If commerce is assessed in a... That doesn't sound like the right reading in that statute. [00:13:59] Speaker 03: And aren't we obligated to read a statute in a manner that makes it constitutional? [00:14:04] Speaker 01: I'm not saying the statute is unconstitutional facially. [00:14:09] Speaker 01: I'm saying, as applied in this case, it yielded a rate which was an Eighth Amendment excessive fine. [00:14:16] Speaker 03: Let's say you had gone through the C process and commerce had said, this is consistent with our AFA statutes and regulations. [00:14:25] Speaker 03: It's a remedial rate. [00:14:27] Speaker 03: It's the highest remedial rate we can oppose, but it's not punitive. [00:14:31] Speaker 03: Could that nevertheless be an Eighth Amendment violation? [00:14:38] Speaker 01: If it's excessive, the question of punitive versus remedial isn't the issue here. [00:14:43] Speaker 03: That's what it means to be an Eighth Amendment excessifying, that it's overly punitive. [00:14:48] Speaker 01: Well, this is. [00:14:50] Speaker 01: I mean, this statute allows the agency to deem rates without regard to considerations of commercial reality. [00:14:58] Speaker 01: That's remarkable in itself. [00:15:01] Speaker 01: But what if the court, what if we went to commerce under C and said, isn't this unconstitutional? [00:15:09] Speaker 01: And commerce would say, we don't have to address that. [00:15:13] Speaker 03: And then you go to the courts and you say it's unconstitutional and the courts address it. [00:15:17] Speaker 03: This happens all the time in cases where there is an administrative layer review where you have a constitutional challenge. [00:15:24] Speaker 03: You can bring it to the administrative body, and even if they can't hear it, you can bring it to the [00:15:30] Speaker 03: to the courts. [00:15:32] Speaker 03: We have case law on this from other administrative bodies. [00:15:35] Speaker 01: But that's the point, Your Honor. [00:15:37] Speaker 01: If they don't have to listen to it, then that remedy is futile. [00:15:43] Speaker 03: No. [00:15:43] Speaker 03: A case law in fact says the opposite in some cases, that you still need to bring it because there may be facts that can be developed by the administrative body that would aid the reviewing court in making that constitutional challenge. [00:15:56] Speaker 01: In a particular case, but our claim- Why is this not one of them? [00:16:00] Speaker 03: We need to know what the facts are that makes this an excessively punitive fine that it violates the Eighth Amendment. [00:16:07] Speaker 03: And we can't do that as a court. [00:16:09] Speaker 03: Congress has to do it. [00:16:10] Speaker 01: Our client's an importer. [00:16:12] Speaker 01: It doesn't have any information about the foreign shipper. [00:16:15] Speaker 01: It has no information to break. [00:16:17] Speaker 01: If there were a basis to resolve this, except on the constitutional issue, [00:16:22] Speaker 01: then yeah, present it to the agency, and the agency will try to decide it under constitutional avoidance. [00:16:29] Speaker 02: What kind of factual inquiry, including discovery, do you think would be available in the trade court that would bear on this question? [00:16:42] Speaker 01: If the trade court took the case up under 1581A, it would be decided on a de novo record. [00:16:49] Speaker 01: It would be decided what? [00:16:50] Speaker 01: De novo. [00:16:51] Speaker 02: The parties would put their evidence. [00:16:53] Speaker 02: So at that point, you think you could get information from the Chinese producers or exporters from which you buy? [00:17:04] Speaker 01: No. [00:17:05] Speaker 01: What we would do is we would put on the record the way the commerce calculated its rates in these cases and argue that the rates in quantity are just so large and so offensive [00:17:18] Speaker 01: as to violate the eighth amendment. [00:17:20] Speaker 03: But those rates and all the calculations are already on the record from the C proceedings. [00:17:24] Speaker 03: You're more likely to get information from the Chinese companies if you go from commerce. [00:17:28] Speaker 03: Perhaps in a review, they can go back to China and say, you're a mandatory respondent, you're a mandatory respondent. [00:17:34] Speaker 03: Maybe they'll get a response. [00:17:35] Speaker 03: Who knows? [00:17:36] Speaker 03: Probably not, actually. [00:17:37] Speaker 03: But commerce has the authority to go to China and ask for information. [00:17:41] Speaker 03: Does the trade court have the authority to get information from China? [00:17:45] Speaker 01: No, and I don't think the trade court has to get any other authority from China. [00:17:49] Speaker 01: Trade court has to ask how did these huge margins exist and then apply the test in Helwig. [00:17:54] Speaker 03: We know how they exist. [00:17:56] Speaker 03: Commerce did an AFA calculation under its authority and it could have, and review could have been sought in the court of international trade in here. [00:18:04] Speaker 01: Well, here's what, here's what commerce did in fact on the countervailing duty side. [00:18:08] Speaker 01: They determined all 45 programs from China ever determined to be countervailed. [00:18:13] Speaker 03: Do you think these cases are, are extraordinary, somehow unusual for anti-dumping counterbail duty cases from China? [00:18:21] Speaker 03: And that these rates are extraordinary because they're not. [00:18:24] Speaker 03: I see these cases all the time. [00:18:26] Speaker 01: Right. [00:18:27] Speaker 01: Okay. [00:18:27] Speaker 01: But again, the foreign producer is not the one paying the duty. [00:18:32] Speaker 01: The foreign producer is not the one with prudential standing to challenge this as unconstitutional. [00:18:39] Speaker 01: Yeah, it happens all the time. [00:18:41] Speaker 01: Should it? [00:18:42] Speaker 01: Our client is here saying, no, this rate is too high. [00:18:46] Speaker 01: Commerce took all 45 programs they've ever determined to be counter available and determined that these foreign shippers benefited from every one of them. [00:18:54] Speaker 01: The program for domestically owned companies, the program for foreign owned companies, the one for companies in the South, the one for companies in the North. [00:19:02] Speaker 01: That's how they came up with the rate. [00:19:05] Speaker 01: And it's up to a judge, a court of international trade, not to an agency, but to an article three judge [00:19:13] Speaker 01: to make the determination of whether that rate offends the Constitution. [00:19:17] Speaker 00: And you say that it can only get to the CIT through the customs, through a challenge to customs as opposed to commerce, that that's a determining factor in that regard? [00:19:29] Speaker 01: Well, this court's jurisprudence has said that you can raise a constitutional issue under the residual jurisdiction. [00:19:37] Speaker 03: Only when no other provision is available. [00:19:41] Speaker 01: Right. [00:19:41] Speaker 01: Well, in the Swisher case, [00:19:43] Speaker 03: You know what? [00:19:45] Speaker 03: Sorry, I'm over time. [00:19:47] Speaker 03: The Swisher is a harbor maintenance tax case. [00:19:49] Speaker 03: The harbor maintenance tax was an extraordinary situation that didn't fit in with the normal taxes levied by either customs or commerce and the court struggled to find where jurisdiction [00:20:01] Speaker 03: lied to challenge it because it didn't in itself say what the jurisdictional method was. [00:20:06] Speaker 03: So Swisher, I find, in opposite. [00:20:08] Speaker 03: We're talking about anti-dumping and countervailing duties. [00:20:11] Speaker 03: And there is a comprehensive administrative and legal structure in the courts to review those. [00:20:17] Speaker 03: And you're trying to go around that for what is unclear to me reasons. [00:20:23] Speaker 01: Well, we're doing it because Section 502 makes our 1581C remedy futile. [00:20:29] Speaker 01: And that's clear. [00:20:31] Speaker 01: So I'm way over my time, Your Honors. [00:20:33] Speaker 00: We'll rebuttal. [00:20:35] Speaker 01: Thank you so much. [00:20:47] Speaker 03: Good morning. [00:20:47] Speaker 04: Good morning, Your Honors. [00:20:48] Speaker 04: May it please the court? [00:20:50] Speaker 03: Can you make some sense of this argument that commerce can't address his argument because of the statutory exclusion? [00:20:58] Speaker 04: I don't think it's accurate. [00:21:00] Speaker 04: It says that commerce is not required. [00:21:03] Speaker 04: Commerce is entitled to listen to... There was an opportunity for this particular importer to be heard on the first review, and they chose not to come in. [00:21:13] Speaker 04: They could have come in and said, I have more information. [00:21:16] Speaker 04: It may not be from the people in China, but I have from other countries. [00:21:19] Speaker 04: I have from other... I have a confidential informant. [00:21:23] Speaker 04: Whatever, whatever they want to place in front of commerce. [00:21:27] Speaker 04: But this court, as Your Honor has noted, has said time and again, the best place to go is to go to the agency with expertise in setting these rates. [00:21:36] Speaker 04: If the importer believes these rates are so offensive as to offend the Eighth Amendment, the only way you're going to offend the Eighth Amendment is to be disproportionate. [00:21:46] Speaker 04: The question is, disproportionate to what? [00:21:49] Speaker 00: So you have... Is it the government's view that commerce could make a determination if raised as to whether or not there's a constitutional Eighth Amendment violation here? [00:22:00] Speaker 04: Your Honor, if an argument that that rate that was set is offensive to the Constitution because it is disproportionate from this set of facts, yes. [00:22:10] Speaker 04: Then commerce, and really what it kind of devolves down to, is this case is truly a case about, I hate the rates, they're too high. [00:22:19] Speaker 04: We'll give commerce more information and let them give you lower rates. [00:22:23] Speaker 02: I guess I want a more direct answer. [00:22:25] Speaker 02: I thought your brief was not direct in answering the question. [00:22:32] Speaker 02: Would commerce, if presented with a challenge that the rates are unconstitutionally high, [00:22:41] Speaker 02: say, address that on the merits. [00:22:44] Speaker 02: And I don't want you to say, well, the Eighth Amendment is really equivalent to the non-punitive aspect of 1677E, and it would address that, and so it would indirectly address it. [00:22:56] Speaker 02: Would it give an answer? [00:22:57] Speaker 02: We conclude there is no Eighth Amendment violation here or not. [00:23:04] Speaker 04: Your Honor, I believe that it could. [00:23:07] Speaker 04: But obviously, it's not. [00:23:09] Speaker 03: Really? [00:23:09] Speaker 03: I'm really surprised to hear that from the Justice Department, that they think the agency can make a constitutional determination. [00:23:17] Speaker 04: Well, I mean, it's not going to be a binding determination. [00:23:20] Speaker 04: But it can be that we acknowledge that you're bringing this in under the eighth amendment. [00:23:24] Speaker 03: Wouldn't they just say, [00:23:27] Speaker 03: Yes, we've looked at these, and these rates are punitive and therefore not consistent with the AFA statute, and therefore lower the rates to what they consider the highest possible remedial measure. [00:23:38] Speaker 04: Yes, because, Your Honor, I think that obviously the agency is focused on setting rates. [00:23:43] Speaker 04: It's not focused on making constitutional determinations. [00:23:47] Speaker 04: And the reason this court has said. [00:23:49] Speaker 03: I think the only way his argument makes any sense is that there are a rate that is remedial, not punitive, under the statute. [00:23:56] Speaker 03: but is still unconstitutional under the Eighth Amendment. [00:24:02] Speaker 03: Is there any possibility of a rate that is remedial and not punitive, but nonetheless violates the Eighth Amendment? [00:24:10] Speaker 00: No. [00:24:11] Speaker 00: I don't think that there is. [00:24:12] Speaker 00: Well, can I just go back to this question? [00:24:15] Speaker 00: Do you have a view from the Justice Department as to whether or not commerce could make a decision on the constitutional claim? [00:24:24] Speaker 00: And if your answer is you don't know or you don't think it could, would that preclude the CIT from adjudicating the constitutional claim when it's reviewing what commerce did? [00:24:36] Speaker 04: I don't know and I don't think it would for the agency, but I also think that a case that's set up properly, jurisdictionally, through C, the CIT can weigh in on whether or not that rate [00:24:51] Speaker 04: is possibly violative of the Eighth Amendment. [00:24:55] Speaker 04: But I know that the CIT would first turn, because every federal court first turns to the facts. [00:25:02] Speaker 04: If there's a way to avoid a constitutional issue, we go to the facts. [00:25:07] Speaker 04: And if the facts of the case are that it is remedial, [00:25:10] Speaker 04: If it is remedial, then it per se can't be punitive. [00:25:14] Speaker 04: And if it's not punitive, it's not under the Eighth Amendment. [00:25:17] Speaker 02: I don't have 1677E in front of me, but subsection B is not a mandate, is it? [00:25:27] Speaker 02: Or is there some discretion about? [00:25:38] Speaker 02: This is the adverse facts available. [00:25:41] Speaker 02: A is, don't throw away the case. [00:25:45] Speaker 02: If you don't have enough facts, decide it. [00:25:47] Speaker 02: And then B says, if there's been sufficiently bad cooperation, then is the word may, shall, whatever it is, use the worst facts that there are. [00:26:05] Speaker 04: It says it may. [00:26:07] Speaker 02: Commerce may use any reasonable method to establish. [00:26:10] Speaker 02: So why if it says may, and I'm still not quite sure of your answer. [00:26:17] Speaker 02: I thought, and this is what I kind of, why would commerce, if presented with an argument that this is not only [00:26:37] Speaker 02: punitive and not remedial. [00:26:38] Speaker 02: And Commerce then says, no, I don't really think it's punitive. [00:26:42] Speaker 02: I think it is kind of remedial. [00:26:43] Speaker 02: But he also is arguing, well, if that's what you think, then we also think it's an eighth amendment violation. [00:26:51] Speaker 02: Why would Commerce not have the authority to say, we're going to look at the constitutional standards and if we conclude [00:27:01] Speaker 02: that the constitutional standards are such as to make this unconstitutional. [00:27:09] Speaker 02: We will exercise our discretion not to, as applied, violate the constitution. [00:27:14] Speaker 04: Well, I think that if commerce concludes its remedial, [00:27:19] Speaker 02: then I think that takes the Eighth Amendment issue off the table because... That's a merits argument about the Eighth Amendment, and we do not have briefing about whether the Eighth Amendment goes beyond what would be considered remedial under 1677EB. [00:27:35] Speaker 02: We have to assume that there is a possibility, because we do not have a merits analysis of the Eighth Amendment here, [00:27:44] Speaker 02: And I'm just trying to figure out whether commerce would have the authority to exercise its discretion in light of a, by assumption, a persuasive analysis of why the Eighth Amendment would make this particular number too high. [00:28:03] Speaker 04: I don't think that commerce has that expertise. [00:28:07] Speaker 04: It's going to look at the facts provided with respect to the rates that it's setting. [00:28:15] Speaker 02: What would be the reason that commerce would not have authority to follow the Constitution in exercising discretion? [00:28:21] Speaker 04: Well, I don't think it is making constitutional determinations. [00:28:24] Speaker 04: I think it's acting within the scope of the constitution. [00:28:27] Speaker 04: That's a merits. [00:28:28] Speaker 02: I think you just made a merits point about what the constitution, the eighth amendment requires. [00:28:34] Speaker 02: I want to assume that this would be an eighth amendment violation. [00:28:40] Speaker 02: And you're saying Congress is obliged to ignore that in exercising its discretion. [00:28:47] Speaker 02: I think that- I think initially you said, no, it could do that. [00:28:52] Speaker 02: And I'm trying to understand, because then there was a colloquy with Judge Hughes about Justice Department really doesn't say that very much. [00:28:59] Speaker 02: This is sort of surprising, something like that. [00:29:01] Speaker 02: And I'm trying to understand why the commerce would say, we will blind ourselves to the constitutional requirement because we just don't have authority to do that. [00:29:13] Speaker 04: Well, I don't think that they would, but I think there's a compression and convergence, because the Eighth Amendment requires disproportionality so extreme as to be punitive. [00:29:26] Speaker 02: But now we're talking about an analysis of what the Eighth Amendment requires. [00:29:32] Speaker 02: I think for these purposes, at least for purposes of my question, I want to assume [00:29:37] Speaker 02: that there is an argument, not facially ridiculous, that the Eighth Amendment, in fact, might require something more than the non-punitive but remedial constraint on 1677E. [00:30:00] Speaker 04: So I think in a situation like that, I think that commerce can consider the constitutional argument. [00:30:07] Speaker 04: But I think that what happens with commerce is that once it's made the determination that the facts that it has before it, [00:30:14] Speaker 04: don't warrant that the rate is too high and that that rate is actually appropriate, then it would not be able to find a constitutional problem because it's setting it within the construct of its own statutes. [00:30:29] Speaker 04: It's following its own statutes, and it's finding it remedial and not punitive. [00:30:33] Speaker 04: What it does do [00:30:35] Speaker 04: is at least provides a setup of factual information to allow the constitutional issue to be heard. [00:30:43] Speaker 04: Because, like I said, I think there's a merger that will occur at commerce. [00:30:46] Speaker 04: If the rate is punitive, then whoever is complaining is showing commerce through some facts. [00:30:55] Speaker 04: This is just simply punitive. [00:30:57] Speaker 04: We need facts here, because there has to be a comparison to have disproportionality. [00:31:03] Speaker 04: And that's the real problem under the Eighth Amendment. [00:31:06] Speaker 04: This is why the 1581 C jurisdiction is so critical here, because we need commerce in the first instance to have an opportunity to hear things that fall within its expertise. [00:31:18] Speaker 04: There may be additional information that wouldn't typically show up, because [00:31:23] Speaker 04: The information that Congress can hear is beyond just what other petitioners or AFA or anything. [00:31:30] Speaker 04: There could be a confidential informant. [00:31:32] Speaker 04: There could be comparisons to other countries. [00:31:35] Speaker 04: I don't know. [00:31:35] Speaker 04: There could be something that moves commerce. [00:31:37] Speaker 04: We don't know here, though, because no one tried. [00:31:40] Speaker 04: And that's the sticking matter here. [00:31:43] Speaker 00: So are you telling Judge Toronto in response to his question that yes? [00:31:47] Speaker 00: Commerce would evaluate based on the facts and based on the record it ascertains whether or not it was consistent with the statute, but then it would also be able to and reach and therefore because we think the two coincide, but do an analysis under the Eighth Amendment as well. [00:32:08] Speaker 04: I think, yes, I think it's implicit. [00:32:10] Speaker 04: And I think if the rates are so high as to be disproportionate to the facts in the case, then what we've done is we've felt we have fallen into the Eighth Amendment realm. [00:32:23] Speaker 04: We're trying to avoid a constitutional issue every time we can, if we can. [00:32:28] Speaker 04: So if you provide sufficient facts to convince commerce, these rates are too high and therefore they're punitive and they're not remedial like they're supposed to be under the statutes that you follow. [00:32:39] Speaker 03: So if under this AFA determination, commerce looks to the highest rates available, they still can say, and based upon challenges, we're not going to adopt those because here it would be overly punitive. [00:32:53] Speaker 03: They don't have the discretion to pick the highest rate and have it not be reviewable. [00:33:00] Speaker 03: It has to still be non-punitive and remedial, even if the statute permits a previously assessed high rate. [00:33:07] Speaker 03: Theoretically, it still has to conform with this remedial, not punitive thing, which I assume you think is [00:33:15] Speaker 03: is underlined by the Eighth Amendment. [00:33:17] Speaker 03: At least that's the way some of the court cases have talked about it. [00:33:20] Speaker 04: Right. [00:33:20] Speaker 04: I think that it lays. [00:33:22] Speaker 04: Once you get beyond the remedial and get into punitive, the overlay is the Eighth Amendment. [00:33:27] Speaker 04: I mean, they're occurring simultaneously. [00:33:29] Speaker 04: So if commerce ignores whatever is brought into it, and that rate is set, and the importer believes it's simply too high, [00:33:39] Speaker 04: It now has set itself up to be heard by a court, who can then conduct a full constitutional analysis of the information that's before it, and see whether it disagrees with Congress's analysis that it is remedial and not punitive. [00:33:55] Speaker 03: The court would first look to see whether it is punitive under the statute before reaching the Eighth Amendment issue. [00:34:02] Speaker 04: Absolutely. [00:34:03] Speaker 04: Absolutely. [00:34:04] Speaker 02: And all of that would be a perfectly good reason to say that [00:34:09] Speaker 02: even this claim, even if commerce would say, I'm not going to pay attention to the Eighth Amendment, why the 1581C process is, of course, the process to pursue. [00:34:22] Speaker 02: Can I ask you an unbelievably mundane question? [00:34:26] Speaker 02: Sorry. [00:34:26] Speaker 02: So I'm trying to pinpoint the date on which the instructions to liquidate was issued. [00:34:36] Speaker 02: CIT cites to, I think it's paragraphs 18 and 29 of the complaint, which say that the date was July 29, 2019. [00:34:46] Speaker 02: I don't quite, I think maybe it should be 2020. [00:34:52] Speaker 02: I think it should be 2020 for, I mean, I think there were- Because it was after the May 1st decision. [00:34:57] Speaker 02: Correct. [00:34:58] Speaker 02: Or I mean, after the decision not to institute the 1675 proceeding. [00:35:02] Speaker 04: Right. [00:35:02] Speaker 04: It's the one year, the month is May of 2020. [00:35:07] Speaker 02: Right. [00:35:07] Speaker 04: You have until the 31st of May to come in. [00:35:10] Speaker 04: And then if you don't, after the 31st of May, then the instructions go out to... OK, so those two, July 29th, 2019, the complaint should be 2020. [00:35:18] Speaker 04: I think it's 2020. [00:35:19] Speaker 04: OK. [00:35:20] Speaker 02: I told you it was mundane. [00:35:22] Speaker 04: No, nothing is mundane, right? [00:35:24] Speaker 04: I mean, you make sure you get the facts right. [00:35:26] Speaker 00: Anything further? [00:35:27] Speaker 04: But if Your Honors have no further questions, the trial court should be affirmed because it's analysis that the proper approach here is to go to commerce first through a C action and then come to the CIT to be heard is appropriate. [00:35:41] Speaker 04: Thank you very much, Your Honor. [00:35:44] Speaker 00: Thank you, Your Honors. [00:35:59] Speaker 01: The contention here is that a company that's been hit with an assessment that is already unconstitutional, that has claimed to be unconstitutional, perfected assessment, has some obligation to go back to the government and ask for a less excessive assessment. [00:36:19] Speaker 01: I know of no constitutional precedent which requires that. [00:36:24] Speaker 01: Now, as my learned colleague indicated, and as the lower court said, [00:36:29] Speaker 01: Commerce, they're experts in anti-dumping law. [00:36:31] Speaker 01: They're not experts in constitutionality. [00:36:34] Speaker 01: Agencies generally do not have the capability to assess the constitutionality of their own acts. [00:36:41] Speaker 01: And now what would happen if we went through a C proceeding and then presented our arguments to the court of international trade in a C proceeding? [00:36:49] Speaker 01: The CIT applies a deferential standard of review based on a record before the agency. [00:36:56] Speaker 01: Substantial evidence. [00:36:57] Speaker 01: Well, that's not how constitutional questions ought to be addressed. [00:37:02] Speaker 03: Well, they don't apply a deferential standard to legal issues. [00:37:06] Speaker 01: Not on a legal issue, but... This is a legal issue. [00:37:11] Speaker 03: Why would you think the CIT would defer to the Commerce Department on whether a certain rate is unconstitutional? [00:37:17] Speaker 01: Your Honor, why require us to go through Commerce at all? [00:37:19] Speaker 03: Because you might get a resolution that doesn't require addressing the constitutional issue. [00:37:24] Speaker 03: And that's a fundamental precept across all courts and all kinds of constitutional issues. [00:37:30] Speaker 03: That if you can avoid the constitutional issue and get the relief you need without addressing it, you do. [00:37:37] Speaker 03: So if you had went to Commerce, I know your problem is, practically speaking, this is never going to happen, but that doesn't solve your jurisdictional problem. [00:37:47] Speaker 03: If you had gone to Commerce, you had presented them sufficient information and you said, this AFA rate is punitive, and Commerce had said, yes, I agree, we're lowering this rate, that would get you the relief without having to address the constitutional question, right? [00:38:02] Speaker 01: Again, the constitutionality is not really within Commerce's expertise. [00:38:06] Speaker 03: You didn't answer my question. [00:38:08] Speaker 01: If you say as a practical matter, as a practical matter, we're an importer. [00:38:14] Speaker 03: We have no information about the... As a practical matter, your complaint here is with the anti-dumping and countervailing duty laws in the first place, and the fact that they set up these very high AFA rates. [00:38:26] Speaker 03: But that's Congress's decision, and unless the statutes that Congress enacted are facially unconstitutional, then I think you have a problem. [00:38:34] Speaker 01: Well, it's also Congress's decision in section 502 to say the agency need not consider these arguments. [00:38:41] Speaker 01: It's entirely possible we participate in a 592 in an annual review. [00:38:47] Speaker 01: Congress would say we're not going to talk about the rate being excessive because we don't have to. [00:38:51] Speaker 01: And then there's nothing for the court to review. [00:38:53] Speaker 03: If commerce said we don't have to discuss whether this rate is punitive versus remedial, they would get a remand from the Court of International Trade because the case law requires them to look at it. [00:39:03] Speaker 03: If your argument was this rate doesn't approximate commercial realities, that's correct. [00:39:09] Speaker 03: That's what 502 doesn't require commerce to do. [00:39:12] Speaker 03: But commerce is still required. [00:39:14] Speaker 03: to determine whether it's remedial or punitive. [00:39:17] Speaker 03: And if that's what you come in and say is that this is overly punitive, then commerce has to make a determination. [00:39:23] Speaker 01: If commerce doesn't have data from the producer, how can they make that determination? [00:39:29] Speaker 01: Because they don't know what dumping rate exists. [00:39:32] Speaker 01: They don't know what subsidy rate exists. [00:39:34] Speaker 01: They don't have the information. [00:39:36] Speaker 01: So they're deeming something to have happened. [00:39:39] Speaker 01: You believe that the Chinese government pays $4.50 in subsidies for every dollar worth of steel wheel exported? [00:39:47] Speaker 01: If that's the case, we're all in the wrong business here. [00:39:50] Speaker 01: So this is a multi-confiscatory rave. [00:39:53] Speaker 01: I think on its face, it can be found to be unconstitutional. [00:40:00] Speaker 01: But if we develop facts before the CIT, let's compare this rave [00:40:05] Speaker 01: with other rates that were calculated from Chinese companies, see how they compare. [00:40:10] Speaker 01: Because if you're telling us that a multi-confiscatory rate equal to nearly seven times the value of the goods imported is remedial, I don't think that's going to stand up. [00:40:22] Speaker 01: And I think the lower court needs to review that and not under 1581C. [00:40:26] Speaker 01: Thank you. [00:40:27] Speaker 00: We thank both sides. [00:40:28] Speaker 00: The case is submitted.