[00:00:00] Speaker 00: The next case is Dunkirk S&C Company versus the United States and the Wintour Trade Coalition, 2023-14-19. [00:00:14] Speaker 00: Ms. [00:00:15] Speaker 00: Sugama, when you are ready. [00:00:19] Speaker 05: Thank you. [00:00:19] Speaker 05: Good morning, Your Honors. [00:00:20] Speaker 05: May it please the Court, Mackenzie Sugama on behalf of Dunkirk Appellant. [00:00:25] Speaker 05: Our brief set forth the reasons why commerce's determination was unsupported by substantial evidence. [00:00:32] Speaker 05: With the court's permission and subject to any questions, I focused this morning on the main aspects of commerce's errors. [00:00:40] Speaker 05: First, commerce wrongly recalculated Dunkook's steel plate costs by assigning the same steel cost to wind towers that use different types, different amounts, and different specifications of steel. [00:00:54] Speaker 05: Now, wind towers are massive structures. [00:00:58] Speaker 05: They can weigh up to 350 metric tons, and they can be as tall as 150 meters. [00:01:05] Speaker 05: That's about as tall as the Washington Monument, for reference. [00:01:07] Speaker 01: Commerce made a determination that the variance in the cost of steel in the use of the wind towers was timing and not physical characteristics, right? [00:01:21] Speaker 05: Their conclusion is based on an analysis [00:01:24] Speaker 05: that is not complete. [00:01:26] Speaker 05: There were problems with that analysis. [00:01:28] Speaker 05: First, that analysis didn't actually compare the products. [00:01:33] Speaker 01: But that was the analysis they used. [00:01:36] Speaker 05: That was the basis of their decision. [00:01:38] Speaker 01: Now tell us why that was wrong. [00:01:40] Speaker 05: Right, right. [00:01:41] Speaker 05: So it's important to consider that the fact that these are wind towers and that they all have different physical characteristic, quantum characteristics of the finished [00:01:54] Speaker 05: wind towers. [00:01:55] Speaker 05: And by Commerce, by weight averaging all of their steel plate costs, they essentially applied the same steel plate cost to towers that are the shortest, the tallest, and the heaviest. [00:02:10] Speaker 05: All have the same unit cost. [00:02:12] Speaker 01: But Commerce did that because it found that the steel prices in the use of these products [00:02:19] Speaker 01: were affected or impacted by timing factors. [00:02:26] Speaker 05: Right. [00:02:26] Speaker 05: And that conclusion is based on their... Why was that not supported by... That is not supported because that analysis that they had only compared a subset of plate purchases for selected condoms. [00:02:41] Speaker 05: They didn't compare all of the condoms. [00:02:43] Speaker 05: steel plate cost. [00:02:44] Speaker 02: They took representative samples from different sizes and compared them across that, but also from same size to same size, right? [00:02:53] Speaker 05: No. [00:02:54] Speaker 05: So what they compared was the input, the steel plate input characteristics. [00:02:58] Speaker 02: Well, that's what they need to figure out. [00:03:00] Speaker 05: No, their requirement is that they compare the physical characteristics of the finished wind towers. [00:03:07] Speaker 05: not the raw material characteristics. [00:03:10] Speaker 02: But didn't they take different size steel towers and compare the price of the steel input for each of those? [00:03:18] Speaker 02: So they're looking at the steel input price for the different types of towers. [00:03:23] Speaker 05: There's not a correlation between the steel input price and the price of the finished good. [00:03:31] Speaker 05: If you analyze the steel plate cost based on the finished characteristics, [00:03:38] Speaker 02: Is what you're saying that they're looking at the steel input and they're using the price of the steel input and comparing how it factors into the different things. [00:03:53] Speaker 02: Are you suggesting that somehow the manufacturing costs are different for these different sizes and that's what's driving the difference? [00:04:01] Speaker 05: Commerce's analysis shows that the input costs don't vary that much, but they do when you consider the consumption of the steel plate in the finished wind tower. [00:04:12] Speaker 02: I don't understand what that means. [00:04:13] Speaker 02: For example, I think we use the analogy... Are these using different types of steel plate? [00:04:17] Speaker 05: They are using different types of steel plate, but some wind towers might have a lot of plate. [00:04:22] Speaker 05: They might have thin plates. [00:04:23] Speaker 05: They might have thick plates. [00:04:25] Speaker 05: That's why you have to do an analysis of the finished product. [00:04:29] Speaker 02: But they did an analysis based on finished products. [00:04:33] Speaker 02: You just don't like the way they did it, but they looked at different finished wind products, the towers of different sizes, and they compared the underlying steel costs for all of them and determined that the actual size and physical characteristics weren't driving it and the timing was. [00:04:52] Speaker 05: They didn't group their... Let me ask you that. [00:04:54] Speaker 02: If that's what they did, and that's an okay methodology, then that's supported by substantial evidence, right? [00:05:01] Speaker 02: No. [00:05:02] Speaker 05: Their analysis, they compared a subset of plate purchases for only three condoms. [00:05:07] Speaker 02: that doesn't show that the costs... Okay, if you're arguing whether they were exhaustive enough in their comparison, you're going to lose that argument because all they have to show is their methodology was okay and there's some evidence underlying it. [00:05:20] Speaker 02: So if that's your point, I think you need to move on to another point. [00:05:23] Speaker 02: What's wrong with that? [00:05:24] Speaker 02: Hypothetically, if they're looking at this and they pick out the different sized wind towers and they compare [00:05:33] Speaker 02: like to like big towers to big towers, and then also compare big towers to small towers, and they determine that the prices based on all of that are driven by time, not any of the physical characteristics, then why isn't it permissible to average? [00:05:54] Speaker 05: It's not permissible to average because commerce's practice is to disregard the actual cost based on the books and records. [00:06:03] Speaker 05: if the variances in costs are not due to the product's physical characteristics. [00:06:09] Speaker 02: Hypothetical, which is not really hypothetical, it's what Commerce did, is they've determined that the prices aren't due to physical differences, that they're due to time. [00:06:20] Speaker 02: If the prices are due to time, and I know you dispute that, but if they are, is averaging okay? [00:06:27] Speaker 05: Well, they haven't [00:06:29] Speaker 05: ever average before based on the fluctuation of the input cost. [00:06:33] Speaker 02: Answer the question. [00:06:34] Speaker 02: If commerce has properly determined that the steel input prices here were not changes due to physical characteristics or manufacturing, but were due to the time of purchase, is it then OK under the statute for Congress to average? [00:06:53] Speaker 05: No. [00:06:53] Speaker 05: I wouldn't think so, because that unravels the whole concept of having common characteristics. [00:06:59] Speaker 05: Because naturally, in manufacturing, costs are going to change over time based on the timing and when you purchase the input. [00:07:07] Speaker 05: And commerce has specifically set up quantum characteristics to understand how costs might change due to the physical characteristics of the goods. [00:07:16] Speaker 05: and commerce analysis, what they did. [00:07:19] Speaker 02: I still don't understand your question. [00:07:21] Speaker 02: Commerce is allowed, if the price change is not due to physical characteristics or manufacturing, they're allowed to select other prices. [00:07:31] Speaker 02: They don't have to use the actual prices, right? [00:07:35] Speaker 05: If they determine, if there's differences in the books and records, and they determine that those differences are not due to the physical characteristics of the products, [00:07:45] Speaker 02: And then what are they allowed to do if they make that determination? [00:07:50] Speaker 05: Previously, they've been allowed to reallocate costs if it's not due to physical characteristics. [00:07:57] Speaker 05: And never before have they done that based on timing. [00:08:01] Speaker 02: Yes, but if they make all the proper determinations, when you say reallocate costs, does that include averaging? [00:08:08] Speaker 05: I'm sorry, what? [00:08:09] Speaker 02: Does that include averaging? [00:08:10] Speaker 02: When you, if they make all the determinations that they have to make under a statute to determine they're not based upon changes in size and stuff and not due to manufacturing costs, so they're due to something else. [00:08:24] Speaker 02: You said they're allowed to reallocate costs. [00:08:26] Speaker 05: Correct. [00:08:27] Speaker 02: Does that mean averaging? [00:08:29] Speaker 05: Yes. [00:08:30] Speaker 02: Okay. [00:08:30] Speaker 02: Yes. [00:08:31] Speaker 02: So is your beef here not with [00:08:34] Speaker 02: the averaging, it's with their determination that the cost here were due to time, not physical characteristics. [00:08:41] Speaker 05: Correct. [00:08:42] Speaker 05: The substantial evidence was not there to reallocate the cost because they never determined [00:08:50] Speaker 05: that the difference in costs were unrelated to the product's physical characteristics. [00:08:55] Speaker 02: I think they made exactly that determination. [00:08:57] Speaker 02: You don't like that determination, but that's exactly what they did. [00:09:00] Speaker 02: So that analysis... We just couldn't send it back one time to make them make it clear. [00:09:04] Speaker 05: I think we made an analogy in our brief, just saying in a house, you have two by fours or two by six, you have all of these different inputs into a house. [00:09:14] Speaker 05: And within a selected month, those boards might have had the same cost. [00:09:20] Speaker 05: But when you're comparing a big house and a small house, you have to look at the consumption of all of those boards because they have different quantities. [00:09:31] Speaker 05: They might have different thicknesses. [00:09:32] Speaker 01: You have to look at the... Commerce did look at that, did look at those factors and determined that that's not what affects the price of the steel. [00:09:43] Speaker 01: What's affecting the price of the steel is our timing. [00:09:46] Speaker 01: And there are cases. [00:09:48] Speaker 01: Commerce in the past has used sampling methodologies in order to determine, for example, pricing at special holidays, like in the fresh cut flowers cases from Columbia. [00:10:00] Speaker 01: In those cases, Commerce used a sampling methodology in order to address price differences during holidays. [00:10:09] Speaker 05: So in that analysis that Commerce did, [00:10:12] Speaker 05: They have three different condoms, and they're looking at plate purchases in September and plate purchases in May. [00:10:19] Speaker 05: And those don't reflect all of the plate purchases for those condoms. [00:10:23] Speaker 05: That's just a sample for each month. [00:10:26] Speaker 05: It doesn't show all the plate that that condom actually needed to be reviewed. [00:10:29] Speaker 02: What requires them to do such an exhaustive look rather than look at representative samples? [00:10:35] Speaker 05: Because those samples of the inputs don't show the physical characteristics of the end product. [00:10:43] Speaker 05: They didn't actually group the condoms by weight and height. [00:10:46] Speaker 05: We did do that analysis. [00:10:48] Speaker 05: That's on appendix page 2001. [00:10:50] Speaker 05: And we grouped all the condoms by weight. [00:10:55] Speaker 05: So they go from the lightest tower to the heaviest tower. [00:11:00] Speaker 05: And you can see that the shortest tower had the largest variance because it didn't have as much flake to produce. [00:11:10] Speaker 05: And when you're looking at the products, the physical characteristics of the finished products. [00:11:16] Speaker 02: I don't know how that proves that it was because it was the shortest tower and had the most variance, that it was due to height rather than variance in steel cost. [00:11:27] Speaker 02: I mean, it can still be variance in steel cost over time, right? [00:11:30] Speaker 05: Well, it's speculative to say, well, maybe it's timing. [00:11:32] Speaker 02: It's speculative, too. [00:11:34] Speaker 02: This is the whole point. [00:11:35] Speaker 02: Commerce gets a lot of deference here. [00:11:37] Speaker 02: They came up with a methodology that you agree, I think, is theoretically OK under the statute, as long as the evidence supports it. [00:11:45] Speaker 02: And they've done some grouping of these different heights, and they've compared [00:11:50] Speaker 02: I mean, you can say they didn't do it. [00:11:52] Speaker 02: What you're saying is you don't like the way they did it. [00:11:54] Speaker 02: There is evidence that Judge Gordon found, and it's very clear from the briefs, about how they did it. [00:12:00] Speaker 02: And they didn't just look at all the steel for all the different lighthouses all together as one group. [00:12:06] Speaker 02: They grouped into various things and compared them against each other, but also compared the different types of steel. [00:12:14] Speaker 05: They didn't group the condoms together. [00:12:16] Speaker 05: There was three condoms there. [00:12:18] Speaker 05: They weren't grouped together by condom characteristic. [00:12:21] Speaker 05: There was no analysis of the heights or the weights. [00:12:24] Speaker 02: I have a feeling your friends on the other side are going to disagree with you about that. [00:12:28] Speaker 05: Well, just looking at that analysis, it is only a sample of plate purchases. [00:12:33] Speaker 05: There's no grouping. [00:12:34] Speaker 02: If your beef is what they use as sample instead of all the inputs and grouped them together, you're going to lose that too. [00:12:39] Speaker 02: Because there's no reason commerce has to do [00:12:42] Speaker 02: an absolutely exhausted look at every single purchase here. [00:12:47] Speaker 02: They can do a methodology that relies on sampling. [00:12:49] Speaker 05: Of course. [00:12:50] Speaker 05: And their methodology should have used the condom characteristics as a guidepost. [00:12:55] Speaker 05: And they didn't. [00:12:56] Speaker 01: Let's look at the chart on JA73. [00:13:01] Speaker 01: You know which one I'm talking to. [00:13:04] Speaker 01: Why isn't that substantial evidence of cost smoothing? [00:13:09] Speaker 05: Appendix page 73. [00:13:17] Speaker 05: Right, so this is... This is attachment A. Right. [00:13:23] Speaker 01: I will look at this and see this as substantial evidence in support of Commerce's cost smoothing methodology. [00:13:32] Speaker 05: Right, so we have the sample purchases from September and May. [00:13:37] Speaker 05: And they're saying that the prices were the same, although notably, even within May, there is variance. [00:13:45] Speaker 05: And there's a 5% variance of cost in the month of May. [00:13:53] Speaker 05: And the input costs themselves fluctuate, even though Dunkirk's overall steel plate costs also had a variance between 5% to 6%. [00:14:05] Speaker 05: Commerce found that that was so distortive. [00:14:08] Speaker 05: But if the input plate costs vary by 5%, they said that that's identical. [00:14:14] Speaker 00: Counsel, you're mostly through your rebuttal time. [00:14:17] Speaker 00: Do you want to save the rest? [00:14:18] Speaker 05: Oh, yes. [00:14:21] Speaker 00: You have one minute left. [00:14:23] Speaker 00: We'll give you two minutes for rebuttal time. [00:14:25] Speaker 05: OK. [00:14:26] Speaker 05: Thank you, Your Honors. [00:14:30] Speaker 00: Ms. [00:14:30] Speaker 00: Bae, you're going to take 11 minutes? [00:14:35] Speaker 03: Yes, thank you, Your Honor. [00:14:36] Speaker 03: May it please the court? [00:14:38] Speaker 03: The trial court correctly determines that Commerce's findings were reasonable and supported by substantial evidence. [00:14:43] Speaker 03: This court should affirm. [00:14:45] Speaker 03: I'll start, like Ms. [00:14:46] Speaker 03: Sugama did, with the smoothing issue. [00:14:48] Speaker 03: Commerce thoroughly explained and supported, especially in its remand redetermination, its decision to smooth costs or weight average the plate costs across different types of wind towers or condoms to address cost distortions [00:15:03] Speaker 03: because it found that those distortions were not attributable to the physical characteristic differences, but rather to the timing of the purchases. [00:15:12] Speaker 03: In its remand re-determination, Commerce not only further explained its original findings, comparing cost for steel plate inputs across different condoms in September 2018, but it then conducted additional analysis in response to Dungook's comments. [00:15:29] Speaker 03: There it compared four different [00:15:32] Speaker 03: with different physical characteristics and isolated that time variable to only May 2018 and found that even though there were physical differences in the steel plate, there was very little variation in cost. [00:15:45] Speaker 03: Commerce then did the reverse, basically concentrating on one condom with the same type of steel plate input and finding that between May and September 2018, the per unit steel plate cost [00:15:58] Speaker 03: varied even though the physical characteristics were the same. [00:16:01] Speaker 02: So let me make sure I understand you. [00:16:04] Speaker 02: They did two things. [00:16:06] Speaker 02: They looked at a bunch of different, well, four different condoms, and that means different height and weight, whatever, for one specific period of time. [00:16:16] Speaker 02: And they determined there was not very much variance there, or not enough to worry about. [00:16:20] Speaker 02: But then they compared a different time period and compared the same, how many condoms did they use for that? [00:16:28] Speaker 03: So what they did was, as you said, they compared four different condoms in one time period. [00:16:33] Speaker 03: And then in their original determination, they also compared two different condoms in a different time period. [00:16:39] Speaker 03: And then in addition to that, they also compared one condom but across two different time periods. [00:16:45] Speaker 02: So they looked at the same type for the two different time periods. [00:16:49] Speaker 02: And so from that, they were able to determine that [00:16:53] Speaker 02: there was no variation between condoms in a certain time period, but across time periods, looking at the exact same condom, which presumably has the same physical characteristics, which can't be driving differences, that there is a variance based upon the timing of the sales. [00:17:12] Speaker 03: That's exactly what happened. [00:17:13] Speaker 02: Okay. [00:17:14] Speaker 02: And it seems to me that your friend's argument is that you didn't look at enough data. [00:17:20] Speaker 02: that you should have looked at more. [00:17:23] Speaker 02: I mean, is there any requirement that you should have looked at more? [00:17:26] Speaker 02: I mean, is one enough to determine that the same condom across two pricing periods? [00:17:32] Speaker 02: Why didn't you look at more than one condom across two pricing periods? [00:17:36] Speaker 03: Well, I mean, there's a few different answers to that. [00:17:38] Speaker 03: One is, as this court held in tight pineapple, the appellant in that case argued that commerce also focused on a limited sampling, but the court rejected the argument. [00:17:49] Speaker 03: because there was no evidence or any specific arguments that the sampling biased or corrupted commerce's analysis. [00:17:56] Speaker 03: Here also, there's simply nothing on the record that shows, and no specific argument from Dungook that shows that commerce somehow erred in how it did its sampling. [00:18:06] Speaker 03: And also, commerce didn't only use one condom. [00:18:09] Speaker 03: It only used one condom to compare across time periods, but it looked at [00:18:14] Speaker 03: four different condoms when it was isolating for the time variable. [00:18:18] Speaker 03: And then it also looked at two condoms in another scenario where it was isolating for the time variable. [00:18:23] Speaker 02: And for both of those different periods, you determined that there was no pricing difference or no substantial pricing difference across the different condoms. [00:18:33] Speaker 02: So for the time periods, there was no difference driven by physical characteristics. [00:18:39] Speaker 03: Yes, exactly. [00:18:40] Speaker 03: So I think commerce looked at both sides of the same coin, and it found that when neutralizing for time but having different physical characteristics, there was still very little variation in price. [00:18:54] Speaker 03: But when you neutralize for physical characteristics and concentrate only on time, there was a price differential. [00:19:02] Speaker 03: And between those two, commerce certainly reasonably found [00:19:05] Speaker 03: that the cost distortions were not caused by physical characteristics but rather by time and therefore enacted its smoothing practice by weight averaging across condoms. [00:19:17] Speaker 01: So a little bit on a different note, in reaching its constructive value determination, its CV determination, Commerce relied on a common financial statement of the parent company [00:19:32] Speaker 01: And part of that information involved aghast sales to the US and only four months' data. [00:19:45] Speaker 01: Explain to me how that was a reasonable determination by Commerce. [00:19:51] Speaker 03: So Commerce compared, I think, 11 different financial statements. [00:19:56] Speaker 03: The only two that are at issue here are the statement of SSHC, which is the statement that Commerce chose, and the statement of Seya Steele, which Dungook is alleging that they should have chosen. [00:20:08] Speaker 03: Here, Commerce considered four different factors in line with this practice, and I don't think Dungook is [00:20:16] Speaker 03: contesting that those are the factors that commerce can rely on, and it found that the SSHC... These are factors that commerce has developed and has employed as a practice, correct? [00:20:26] Speaker 01: Yes. [00:20:27] Speaker 01: An agency practice. [00:20:28] Speaker 03: Yes. [00:20:28] Speaker 03: And I don't think that Adongo is contesting commerce's practice in that regard. [00:20:33] Speaker 01: I think it's concentrating its argument on... So one of those factors, just to get to the factors, because we don't have a lot of time, is the extent to which the financial data of the surrogate company reflects sales in the home market. [00:20:45] Speaker 01: and does not reflect cells in the United States. [00:20:49] Speaker 01: It seems to me that the data that was used by commerce reflected significant amount of cells to the United States. [00:20:59] Speaker 01: So let's say they violated this particular factor. [00:21:05] Speaker 01: The third one is contemporaneity of the data to the period of investigation. [00:21:10] Speaker 01: Here, there was data available for four months of the period of investigation, correct? [00:21:16] Speaker 03: There was data available for four months in the, say, a steel one, which Commerce elected not to choose, but Commerce explained that because there was only four months rather than an entire year, and of course the period of investigation is an entire year, and so Commerce determined that... So since we know from the prior argument, and your prior arguments on the smoothing of costs, [00:21:40] Speaker 01: Right? [00:21:40] Speaker 01: And your argument that commerce has the discretion to smooth costs and to base its decision. [00:21:48] Speaker 01: Why couldn't it have not done a similar type of methodology in this particular case with respect to the four months of financial data that did fit within the period of investigation? [00:22:01] Speaker 01: Well, I'm not sure exactly how commerce... Why can't it average it over the 12-month period? [00:22:06] Speaker 03: Well, I think that's exactly the problem. [00:22:08] Speaker 03: Commerce found that four months is not a good snapshot of a period in time. [00:22:12] Speaker 03: It's not indicative of a company's realization of profit for an entire year because those four months might not be representative of a full year's worth of profit. [00:22:23] Speaker 03: And because the period of investigation is a full year, Commerce preferred to use a statement that had [00:22:29] Speaker 03: a full year's worth of data. [00:22:30] Speaker 03: So I think the important thing to point out here is that Commerce acknowledged that neither set was exactly perfect. [00:22:38] Speaker 03: One set, the set that Commerce chose, SSHC, [00:22:41] Speaker 03: was somewhat over-inclusive. [00:22:43] Speaker 03: But importantly, it did still reflect sales of comparable merchandise in the home market. [00:22:49] Speaker 03: It still had some of those sales. [00:22:51] Speaker 03: It just also had sales outside of the home market. [00:22:54] Speaker 01: The consolidated data had, what, 92% of the reported amounts did not even relate to wind turbines. [00:23:04] Speaker 01: Yes, but a certain... And also, there were sales to the United States. [00:23:08] Speaker 01: How can you include sales to the US in a CV methodology? [00:23:15] Speaker 03: Because, again, none of these sets of data were perfect, and there were still sales of comparable merchandise within the home market. [00:23:22] Speaker 03: Not all of the sales were to the United States, but again, commerce acknowledged [00:23:26] Speaker 03: that the SSHC financial statement was somewhat overbroad, included sales outside of the home market. [00:23:33] Speaker 03: But it also acknowledged that the SEIA steel financial statement was imperfect as well because of the four months of data. [00:23:41] Speaker 01: And their commerce made a reasonable- In your view, was there anything else that commerce could have done? [00:23:46] Speaker 03: I don't know that commerce could have done anything else reasonable given that there were only the eleven statements on the record. [00:23:54] Speaker 03: It has to select from amongst the statements on the record. [00:23:58] Speaker 03: And I think, importantly, even if commerce could have potentially chosen a different option, it does not render its determination in this particular case unreasonable. [00:24:07] Speaker 03: And I think that's what Judge Gordon at the trial court was trying to get at, which is that even though... [00:24:14] Speaker 01: In view of commerce's agency practice, just basing constructive value on sales to the US, 93% of the data that's used does not even involve the product subject to the investigation. [00:24:30] Speaker 01: And there's other country data that was available at the time. [00:24:34] Speaker 01: How can you say that that's reasonable? [00:24:36] Speaker 03: It's reasonable because it still reflected some sales of comparable merchandise. [00:24:42] Speaker 03: that met the criteria that is one of the four criteria that commerce chooses. [00:24:47] Speaker 01: These are arguments that commerce articulated? [00:24:53] Speaker 01: Commerce, again, did acknowledge that these financial results included other activities than comparable merchandise, but it also says... I understand that it acknowledged that this was odd and not out of its agency practice, but it doesn't explain why it was reasonable. [00:25:12] Speaker 03: Well, it said it was reasonable because it was the only option on the record that still reflected profits on the production and sale of comparable merchandise and also included a full 12-month snapshot of financial data. [00:25:26] Speaker 03: And I think that's what's important. [00:25:28] Speaker 03: Even if commerce's selection of SSHC wasn't perfect, [00:25:31] Speaker 03: SEA Steel also had a very big flaw, and Commerce reasonably determined to find one flaw less important to its determination than the other. [00:25:41] Speaker 03: And this court should not reweigh the evidence to determine that it thinks that having a full year's worth of data is less important than having sales that are solely comparable merchandise within the home market. [00:25:55] Speaker 02: I mean, in your view on this four-part test that you're applying from whatever that case is, [00:26:02] Speaker 02: Your data fails the Pong 2, which is it does reflect sales in the United States. [00:26:11] Speaker 02: But the one they want fails Pong 3, which is it's not contemporaneous. [00:26:16] Speaker 02: And when you don't have perfect data, then you have the discretion as long as it's reasonable. [00:26:22] Speaker 03: Exactly. [00:26:23] Speaker 03: And that's exactly what Judge Gordon reflected in his decision, which is that SEA Steel might not have liked that Commerce chose having a full month's [00:26:32] Speaker 03: full year's worth of data over having sales that are to the United States, but that doesn't render commerce's decision unreasonable. [00:26:40] Speaker 03: I see I'm out of time. [00:26:41] Speaker 03: I'm happy to answer any other questions. [00:26:43] Speaker 03: Otherwise, we please ask that this court affirm. [00:26:46] Speaker 00: Thank you, counsel. [00:26:47] Speaker 00: We'll hear from Ms. [00:26:48] Speaker 00: Dawson. [00:26:57] Speaker 04: Thank you, Your Honor. [00:26:58] Speaker 04: I'm Maureen Thorson of Wiley-Ryne on behalf of the Wind Tower Trade Coalition. [00:27:02] Speaker 04: Just to pick up on the constructed value profit and selling expenses argument, I think it's important to point out that in terms of the four-month financial statements of Seya Steel, wind towers are a product that take a very long time to produce. [00:27:19] Speaker 04: And Don Cook itself stated on the record that it can take upwards of eight months to produce a single wind tower. [00:27:26] Speaker 04: or a wind tower project. [00:27:28] Speaker 04: So this to me at least provides context for the Commerce Department's rationale for saying four months is not enough of a financial statement for us to feel comfortable with for constructed value profit, given how long it takes to produce the particular good that we're examining here. [00:27:49] Speaker 02: They're not producing ball bearings, which they can do a million, however many a day. [00:27:55] Speaker 02: So one month may give you a representative snapshot. [00:27:58] Speaker 02: A wind tower, they may do however many a month. [00:28:03] Speaker 02: It may be very small. [00:28:04] Speaker 04: Correct, Your Honor. [00:28:05] Speaker 02: Let me ask you this, because I assume you're the domestic side, right? [00:28:09] Speaker 02: If commerce had gone the other way, would that have been reasonable? [00:28:13] Speaker 02: I know you would have come in and said no, but do you think that [00:28:16] Speaker 02: If that's for a month period, under this standard, I'm sure you're going to advocate for the other one, but using the proper standard of discretion to commerce, and they determine again it's not a proper fit, and we think in this case it's more important to have similarity of product and no U.S. [00:28:34] Speaker 02: sales rather than contemporaneity. [00:28:36] Speaker 02: Would that satisfy the standard? [00:28:38] Speaker 04: So as your honor points out, hypothetically, yes, the agency does have quite a lot of discretion here. [00:28:44] Speaker 04: And this is very similar to what it does in the surrogate value context in non-market economy cases. [00:28:49] Speaker 04: It's very rare that the agency is going to have surrogate value data sources that are perfect, that are exactly what the doctor called for. [00:28:56] Speaker 04: So they have to do a balancing act between what have we got on this record? [00:29:00] Speaker 04: Well, we have this record that arguably has more profits in Korea of comparable merchandise wrapped up into it. [00:29:08] Speaker 04: but it's only for four months. [00:29:11] Speaker 04: And this is a product that takes a long time to produce. [00:29:14] Speaker 04: We would rather have this full-year financial statement that perhaps, yes, does have some profits and sales in the United States in it, but also does have Korean sales of comparable goods in it. [00:29:27] Speaker 04: So we are comfortable at this point with our choice. [00:29:30] Speaker 04: Had they gone the other way, we'd have a different case, and I'd probably be on the other side of the courtroom. [00:29:36] Speaker 04: The fact that the agency was forced to do a balancing act is not to me indicate that they did something unreasonable here. [00:29:43] Speaker 04: It's just the name of the game when looking at these very distinct different types of financial statements that different parties who want their own way, of course, place before the agency for consideration. [00:29:57] Speaker 04: And just to finish up with the plate cost issue, [00:30:04] Speaker 04: As you've heard, the main thrust of Appellant's argument is that the agency should have been looking at extended plate costs per condom, taking into account the consumption rate. [00:30:16] Speaker 04: I believe they actually did do that, their original analysis and their preliminary decision memorandum. [00:30:22] Speaker 04: at page 1382, I believe, does take that into account. [00:30:26] Speaker 04: But beyond that, to the extent that Don Cook is challenging Commerce's analysis of variations in per ton plate costs across condoms at pages four and eight of its reply brief, it doesn't take into account the additional analysis in the final and remand redeterminations. [00:30:43] Speaker 04: And it also rests its argument on the idea that Commerce was basing its decision [00:30:50] Speaker 04: on an outlier condom. [00:30:52] Speaker 04: Commerce addressed that argument very well at appendix pages 67 and 68. [00:30:57] Speaker 04: And for that matter, the condom that Don Cook characterizes as an outlier is far from the only one that displayed variability under either Don Cook or Commerce's analytical methodology. [00:31:07] Speaker 04: See, I'm out of time here. [00:31:09] Speaker 01: When you say that at the end of the day that the analysis involved here is tracking profit experience to the subject merchandise, [00:31:20] Speaker 04: I'm not sure I understand the question. [00:31:23] Speaker 01: Okay, so let's look at this a different way. [00:31:27] Speaker 01: The statute puts the emphasis on looking at information or financial data that's related to the products under investigation. [00:31:35] Speaker 04: Oh, is this the constructed value profit? [00:31:37] Speaker 04: Yes. [00:31:38] Speaker 04: Okay, sorry, I got a little bit confused. [00:31:40] Speaker 01: Okay, so it's related to the subject merchandise. [00:31:48] Speaker 04: Well, as Don Cook itself has argued, the point is to come up with a proxy or surrogate for the experience of... What does a statute require? [00:32:00] Speaker 04: Does the statute require? [00:32:01] Speaker 01: Yes. [00:32:02] Speaker 04: It requires you to find a constructed value profit for use in determining what's... And it's got to represent the activity financial activity. [00:32:12] Speaker 04: Experience of the respondent. [00:32:13] Speaker 01: Right. [00:32:14] Speaker 01: So if you're using financial data, [00:32:18] Speaker 01: And it does not, 92% of it does not involve. [00:32:22] Speaker 01: It sells data, selling costs, administrative costs. [00:32:28] Speaker 04: Again, that's a flaw, but both of the statements that were put in front of the agency that [00:32:34] Speaker 04: the parties were advocating for had flaws. [00:32:37] Speaker 04: And for that matter, I'd point out, very similar again to the surrogate value context when we look at surrogate value financial statements, you're trying to come up with a statement that reasonably approximates the experience of the subject producer. [00:32:51] Speaker 04: Here, Don Cook itself didn't just produce wind towers. [00:32:56] Speaker 04: They produced other goods. [00:32:57] Speaker 04: They had service activities. [00:32:59] Speaker 04: And they derived a substantial amount of their revenue as a company from sales in the US market, as shown by the fact that they didn't have home market viability and had to go to third country sales. [00:33:11] Speaker 04: Thank you, Your Honor. [00:33:12] Speaker 00: Thank you, Counsel. [00:33:15] Speaker 00: Ms. [00:33:15] Speaker 00: Fugama has a couple of minutes for rebuttal. [00:33:18] Speaker 05: Thank you, Your Honor. [00:33:21] Speaker 05: Our first point on rebuttal is the fact about the long lead types of wind towers. [00:33:28] Speaker 05: But SEA produces steel pipe. [00:33:30] Speaker 05: That is a commodity. [00:33:32] Speaker 05: They're not producing wind towers. [00:33:34] Speaker 05: So that won't be factored into their four months of financial data. [00:33:37] Speaker 05: And their financial data is contemporaneous with the POI. [00:33:42] Speaker 05: It was from September to December of 2018. [00:33:46] Speaker 05: The POI was from July to June. [00:33:49] Speaker 05: 2018 to June 2019, and the 12 months of financial data of the CAO group was the calendar year of 2018. [00:33:59] Speaker 05: So there is no doubt that CAO consolidated statements were contemporaneous. [00:34:06] Speaker 01: And the statute... I'm sorry, that the consolidated statements were what? [00:34:10] Speaker 05: Contemporaneous with the POI. [00:34:12] Speaker 05: The statute does not have a timing requirement at all. [00:34:16] Speaker 05: The statute just requires [00:34:18] Speaker 05: that commerce find an alternative for profits realized in connection with the sale. [00:34:26] Speaker 02: Right. [00:34:26] Speaker 02: The statute doesn't. [00:34:27] Speaker 02: But the pure magnesium test does. [00:34:29] Speaker 02: You're not here arguing that that's the wrong test, are you? [00:34:32] Speaker 05: No. [00:34:33] Speaker 05: But the magnesium test has said they should be contemporaneous. [00:34:37] Speaker 05: And these statements are contemporaneous with the POI. [00:34:42] Speaker 05: And second. [00:34:45] Speaker 02: But only part of the POI. [00:34:48] Speaker 05: They are entirely contemporaneous with the period of investigation. [00:34:52] Speaker 02: But they're not 12 months. [00:34:53] Speaker 02: There's four months. [00:34:53] Speaker 02: I mean, you're not quibbling that 12 months of data is better than four months of data, are you? [00:34:58] Speaker 05: Well, we're calculating ratios. [00:35:00] Speaker 05: So just within that four months, SEA had profit that's four times the amount of revenue that Dunkirk had. [00:35:12] Speaker 05: And to correct something else that opposing counsel said, Dunkhook is primarily a manufacturer of wind towers. [00:35:20] Speaker 05: So that is where they are deriving their revenue from. [00:35:24] Speaker 05: And the SEHA group statements only reflected 7% of their sales revenue reflected sales in Korea of comparable merchandise. [00:35:40] Speaker 05: And as the government noted, [00:35:42] Speaker 05: These were overly inclusive, and they were overly broad. [00:35:48] Speaker 05: And it was not reasonable for commerce to rely on these statements when the consolidated statements on the record met all four of the department's criteria. [00:35:58] Speaker 00: Counsel, as you can see, your time has expired. [00:36:01] Speaker 05: Yes. [00:36:01] Speaker 05: Thank you. [00:36:02] Speaker 00: Thank you both. [00:36:03] Speaker 00: The case is submitted.