[00:00:00] Speaker 04:
China Kingdom Beijing Court versus United States.

[00:01:02] Speaker 04:
Okay, Ms.

[00:01:03] Speaker 04:
Shao.

[00:01:08] Speaker 04:
Please, again.

[00:01:11] Speaker 04:
Pardon me?

[00:01:16] Speaker 04:
I can't understand you.

[00:01:17] Speaker 04:
Would you go to the podium, please?

[00:01:32] Speaker 03:
Your Honor, Ying Chaoxiao of Li Anxiao, attorney is counsel to plaintiffs.

[00:01:40] Speaker 03:
OK.

[00:01:45] Speaker 03:
Should I start?

[00:01:46] Speaker 04:
Should she start?

[00:01:51] Speaker 03:
Yes, please.

[00:01:52] Speaker 03:
I presume that the court is familiar with the background facts, so I'm not going to repeat.

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I started from the issues.

[00:02:02] Speaker 03:
for this court.

[00:02:04] Speaker 03:
The issue is whether the US Court of International Trade, the trial court, correctly upheld a US Department of Commerce decision in the final result of freshwater crawfish tail meat, POR 13-14.

[00:02:26] Speaker 03:
In its decision, Commerce rejected the two Thai financial statements

[00:02:31] Speaker 03:
and used annual reports of a thousand African... Okay, I have some questions for you.

[00:02:39] Speaker 01:
Normally, I wouldn't be asking you.

[00:02:41] Speaker 01:
I'd be asking the Crawfish Processors Alliance, but they're not here, and they raised a jurisdictional question.

[00:02:50] Speaker 01:
So I'm going to let both you and the government address this if you can.

[00:02:56] Speaker 01:
They argue the CIT lacked jurisdiction over the circuit financial ratio issue.

[00:03:02] Speaker 01:
because of an exhaustion of remedies question.

[00:03:07] Speaker 01:
Is the requirement to exhaust remedies jurisdictional?

[00:03:12] Speaker 03:
I don't think so.

[00:03:24] Speaker 03:
May I have my computer, please?

[00:03:26] Speaker 01:
Sure.

[00:03:29] Speaker 01:
And you might as well look at it in light of boomerang tube

[00:04:11] Speaker 03:
As noted in the U.S.

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Court of International Trade Judgment, the government clarified that it was not asserting the doctrine of administrative exhaustion against the administrative review of plaintiff because commerce had examined surrogate value joint pay for both reviews, relying on the

[00:04:40] Speaker 01:
Are you aligning your argument with the government on this?

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In other words, do you believe there was jurisdiction in the CIT?

[00:04:55] Speaker 03:
All right.

[00:04:58] Speaker 01:
I'll ask the government to further develop.

[00:05:04] Speaker 03:
I'm sorry?

[00:05:10] Speaker 03:
the exhaustion doctrine?

[00:05:14] Speaker 04:
I think he's suggesting that you can continue with your argument on the merits.

[00:05:25] Speaker 03:
The issue is whether the US Court of National Trade, the trial court, correctly upheld the US Department of Commerce decision in the final result of freshwater crawfish tail meat PUR 1314.

[00:05:40] Speaker 03:
In its decision, the Commerce rejected two Thai financial statements.

[00:05:47] Speaker 01:
But Commerce found the Oceana report was contemporaneous with the 2013-2014 period of review.

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The Thai financial statements were not contemporaneous because they were from 2012.

[00:06:01] Speaker 01:
In Albemarle Corps, we recognized the statutes manifest

[00:06:10] Speaker 01:
preference for contemporaneity in periodic administrative reviews.

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Does this preference for contemporaneity support Commerce's selection of Oceana?

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The Commerce selected financial statements.

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There are other more important requirements than the contemporaneity's nature.

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Contemporaneous problem can be easily corrected by adding the inflation ratios.

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But the flaws the Oceania report has was impossible.

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You can't correct it.

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So our argument is that Oceania's report is unusable.

[00:07:04] Speaker 03:
It cannot use it for a major problem with it.

[00:07:11] Speaker 01:
Are you talking about your argument about the lack of breakdown of raw material cost?

[00:07:16] Speaker 03:
Yes.

[00:07:19] Speaker 01:
The CIT found no party, including Hongdae, exhausted the possible misallocation of overhead expenditure argument.

[00:07:30] Speaker 01:
Where in your opening brief do you challenge the CIT's finding?

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of failure to exhaust.

[00:07:35] Speaker 01:
And if not, why haven't you waived that argument?

[00:07:41] Speaker 03:
I'm sorry.

[00:07:42] Speaker 03:
I did not get your question.

[00:07:46] Speaker 01:
OK.

[00:07:47] Speaker 01:
As I said in the blue brief at 16, you argue unreliability for a lack of breakout of raw material costs.

[00:07:57] Speaker 01:
But the court below found that no party, including your client, exhausted

[00:08:03] Speaker 01:
the possible misallocation of overhead expenditure argument.

[00:08:08] Speaker 01:
Where in your opening brief do you challenge the CIT's finding of a failure to exhaust?

[00:08:13] Speaker 01:
Because I didn't see it.

[00:08:14] Speaker 01:
And if not, why haven't you waived that argument?

[00:08:17] Speaker 03:
We did not waive that argument.

[00:08:21] Speaker 01:
OK, where is it in your blue brief?

[00:08:25] Speaker 03:
In our opening brief, we argue that the Oceana's report

[00:08:33] Speaker 03:
is unusable because it does not have separately.

[00:08:39] Speaker 03:
And that was the issue.

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And later, when we argue about the cost of sale, there was a detailed support argument for that issue.

[00:08:50] Speaker 03:
So we raised that issue in our briefing, in our opening brief.

[00:08:55] Speaker 01:
OK, let me try another question.

[00:08:57] Speaker 01:
In the gray brief, in the reply brief, you assert without citation

[00:09:04] Speaker 01:
that, I'm quoting, agency precedent establishes that the department rejects the choice of integrated financials to value the financial ratios of non-integrated respondents.

[00:09:18] Speaker 01:
What agency precedent supports this?

[00:09:22] Speaker 01:
Because you didn't cite any authority in that statement.

[00:09:47] Speaker 01:
I'm looking at page five and I don't see any citation.

[00:10:00] Speaker 01:
It's the bottom of the page and runs over to six.

[00:10:03] Speaker 01:
And the next sentence begins following such precedent.

[00:10:07] Speaker 01:
But there's no citation to any precedent.

[00:10:31] Speaker 01:
I was hoping you could give me some at oral argument.

[00:10:41] Speaker 01:
If we disagree with you regarding the surrogate financial ratio issue, do you concede that your argument about recalculating ocean flavors separate rate is moot?

[00:11:02] Speaker 03:
I'm sorry.

[00:11:03] Speaker 01:
Can you repeat that?

[00:11:04] Speaker 01:
OK.

[00:11:06] Speaker 01:
If we disagree with you regarding the surrogate financial ratio issue, do you agree with me that your argument about recalculating ocean flavors separate rate would be irrelevant?

[00:11:23] Speaker 01:
It wouldn't apply anymore?

[00:11:26] Speaker 03:
That's agree.

[00:11:32] Speaker 03:
Can I continue?

[00:11:33] Speaker ?:
Sure.

[00:11:49] Speaker 03:
Our argument is that the USCIT's decision to uphold the commerce final determination was not approved.

[00:12:01] Speaker 03:
supported by the substantial evidence in the record and was not in accordance with law, and thus should be reversed by this court.

[00:12:11] Speaker 03:
19 U.S.C.

[00:12:12] Speaker 03:
1677.

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B, bracket C, close bracket, bracket one, close bracket, requires that the commerce to evaluate the factors of production

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in a non-market economy based on the best available information.

[00:12:32] Speaker 03:
The purpose of this statute, statutory provision, is to determine anti-dumping margins as accurately as possible.

[00:12:43] Speaker 03:
Quotes cited from shape proof assembly components versus US.

[00:12:49] Speaker 03:
It's Appendix 651 through 652.

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So the best available information is the information based on which... Ms.

[00:13:02] Speaker 02:
Shao?

[00:13:02] Speaker 03:
Yes.

[00:13:04] Speaker 02:
When it came to the Thai financial statements, there was clearly a distortion there.

[00:13:10] Speaker 02:
Those companies were receiving government subsidies.

[00:13:12] Speaker 03:
Yes.

[00:13:13] Speaker 02:
So the commerce went to an alternative surrogate, the Oceana report from South Africa.

[00:13:21] Speaker 02:
What were the defects in your view with that report that made that report less reliable than the distortion with the Thai financial statements?

[00:13:34] Speaker 03:
Okay.

[00:13:36] Speaker 03:
Commerce has to balance the two, you know, choose the best.

[00:13:40] Speaker 02:
Right.

[00:13:40] Speaker 02:
So what was the problem with the Oceana report?

[00:13:42] Speaker 03:
Oceana report, as we stated in our argument, it does not have a specific line

[00:13:51] Speaker 03:
for raw material and labor.

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Raw material is the most important cost in the production of this product.

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And the lack of an accurate amount or value of labor.

[00:14:10] Speaker 03:
We don't know how the commerce calculates the overhead.

[00:14:13] Speaker 03:
The overhead is one of the three ratios, financial ratios in a surrogate normal value.

[00:14:21] Speaker 03:
And the government, I'm sorry, commerce calculate the overheads by using the cost of sale as the raw material labor and energy to calculate overhead.

[00:14:39] Speaker 03:
But cost of sale contains a component of overhead.

[00:14:45] Speaker 01:
Where did you present that below?

[00:14:48] Speaker 03:
I'm sorry?

[00:14:49] Speaker 01:
Where did you present that?

[00:14:51] Speaker 01:
misallocation of overhead expenditures argument below.

[00:14:55] Speaker 01:
Show us in the record, because this is why I was trying to get to with you before.

[00:15:02] Speaker 01:
In the CIT's opinion, the judge says, Weishen did not present to commerce in the first instance its argument about possible misallocation of overhead expenditure, inflation of the amount for raw materials by some amount

[00:15:21] Speaker 01:
unspecified amount for the cost of goods purchased for trading, or the incomparability of Oceana Group's business and production experiences.

[00:15:32] Speaker 01:
Weishen certainly had noticed that commerce might rely on the Oceana report.

[00:15:38] Speaker 01:
And it says, well, Weishen sought to rebut CPA's argument.

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It did not take an opportunity to raise all the arguments they now raise to this court.

[00:15:52] Speaker 01:
And then the court cited to boomerang tube, to which I referenced before, rejecting appellant's attempt to raise arguments that had not been exhausted before the agency.

[00:16:08] Speaker 01:
So my question is, how do we get to even hear this argument?

[00:16:14] Speaker 03:
OK.

[00:16:15] Speaker 03:
The trial court, the CIT, in its judgment, is clearly stated.

[00:16:22] Speaker 03:
that the government clarified that it was not asserting the doctrine of administrative exaustion against the Anti-Democracy Review.

[00:16:35] Speaker 03:
So this court should respect that decision and not raise the doctrine of exaustion.

[00:16:47] Speaker 04:
OK, well, we're pretty much out of time here.

[00:16:51] Speaker 04:
Couple minutes of rebuttal.

[00:16:56] Speaker 04:
You need to sit down now.

[00:16:58] Speaker 04:
You need to sit down now.

[00:16:59] Speaker 04:
Your time is expired.

[00:17:02] Speaker 04:
You should sit back at the council date.

[00:17:20] Speaker 04:
Ms.

[00:17:20] Speaker 04:
Finnan.

[00:17:28] Speaker 00:
May I please support Plaintiff of Palance, China Kingdom, Dian Aquatic, and Ocean Shenzhen.

[00:17:34] Speaker 04:
To what extent are you relying on administrative exhaustion, lack of administrative exhaustion?

[00:17:40] Speaker 00:
So there's two issues with the existing exhaustion administrative remedies argument.

[00:17:45] Speaker 00:
And it is where the government departs from intervener in terms of arguments.

[00:17:51] Speaker 00:
At the trial court, at the trial court and here, the United States government took the... Do you view exhaustion as being a non-jurisdictional issue?

[00:18:00] Speaker 00:
No, I believe it is a jurisdictional issue.

[00:18:02] Speaker 04:
It is a jurisdictional issue?

[00:18:03] Speaker 01:
It is a jurisdictional issue, but it's... What case says it's a jurisdictional issue?

[00:18:07] Speaker 01:
And how do you deal with boomerang two?

[00:18:10] Speaker 00:
Well, it's a jurisdictional issue, but it's fact dependent, right?

[00:18:14] Speaker 00:
The statute... No, no.

[00:18:14] Speaker 04:
The question is whether it's waivable.

[00:18:16] Speaker 04:
Is it a jurisdictional issue?

[00:18:19] Speaker 00:
It's applicable.

[00:18:20] Speaker 00:
Whether we call it wavable or applicable in appropriate circumstances, the statute provides the exhaustive image.

[00:18:25] Speaker 04:
Is it jurisdictional in the sense that it is not wavable?

[00:18:30] Speaker 00:
Yes, it's not wavable.

[00:18:32] Speaker 04:
It is not wavable?

[00:18:33] Speaker 04:
What case says that?

[00:18:34] Speaker 01:
Boomerang tubes are the exact opposite.

[00:18:39] Speaker 00:
I'm sorry, I'm not following your... Okay.

[00:18:51] Speaker 01:
Let me quote.

[00:19:02] Speaker 01:
This is from United States v. NITIC.

[00:19:07] Speaker 01:
We have explicitly held that exhaustion is not strictly a jurisdictional requirement, and therefore the CIT may waive the requirement at the court's discretion.

[00:19:17] Speaker 00:
Well, then I correct myself.

[00:19:20] Speaker 01:
It is not jurisdictional.

[00:19:21] Speaker 01:
OK.

[00:19:22] Speaker 00:
It is under statute applicable when appropriate.

[00:19:25] Speaker 04:
So did you waive the suggestion that this issue of exhaustion with respect to the two separate proceedings was not something the government wanted to assert?

[00:19:43] Speaker 00:
That is correct.

[00:19:45] Speaker 04:
What about with respect to the overhead issue?

[00:19:49] Speaker 00:
With respect to the overhead issue, there was a failure to exhaust.

[00:19:52] Speaker 04:
Did you raise that?

[00:19:53] Speaker 00:
At the CIT, yes, we did.

[00:19:56] Speaker 04:
And are you still arguing that?

[00:19:57] Speaker 00:
Yes, we are.

[00:19:59] Speaker 00:
OK.

[00:19:59] Speaker 00:
So we took the position that there was no failure to exhaust with respect to any distinction between the new shipper review and the administrative review, because Commerce had effectively treated the two reviews at the administrative level as not just aligned, but combined for all intents and purposes, it issued one opinion

[00:20:18] Speaker 00:
It issued its orders combined of both proceedings.

[00:20:21] Speaker 00:
So we took the position at the Court of International Trade that it was not appropriate to argue an exhaustive administrative remedies with respect to any distinctions between a new shipper review and the administrative review.

[00:20:32] Speaker 00:
That said, exhaustive administrative remedies is still a requirement with respect to subject-specific arguments.

[00:20:39] Speaker 00:
And so we did argue the exhaustion issue with respect to the double counting of manufacturing overhead,

[00:20:46] Speaker 00:
differences in production processes.

[00:20:48] Speaker 01:
And it hadn't been raised.

[00:20:52] Speaker 00:
Right, because those arguments had not been raised at the administrative level by any party.

[00:20:57] Speaker 00:
Weishin Hangda, who was a plaintiff below and not an appellant here, had raised only one, in relevant part only one, argument with respect to the Oceana report, which was the alleged basket cost of sales.

[00:21:11] Speaker 00:
And so with respect to that argument, that argument, there was no failure to exhaust.

[00:21:15] Speaker 00:
which is the Court of International Trade appropriately found and what brings us here now.

[00:21:23] Speaker 00:
With respect to Commerce's determination, this court refutes de novo.

[00:21:27] Speaker 00:
We believe that substantial evidence does support Commerce's finding that the Oceana report from South Africa was the best available information on which to measure surrogate financial ratios.

[00:21:39] Speaker 01:
You're weighing contemporaneous nature versus other factors?

[00:21:45] Speaker 00:
Yes, we are.

[00:21:46] Speaker 00:
And with regards to plaintiff-appellant's argument that commerce made that determination into too much of a summary basis without a reasoned decision, we have taken issue with that as we explained in our brief.

[00:22:03] Speaker 00:
Commerce did not summarily reject the tie statements on the mere basis of export, kind of available export subsidies.

[00:22:11] Speaker 00:
It also found that those Thai statements were not contemporaneous with the period of review by approximately eight months.

[00:22:16] Speaker 00:
And it further found that relying on those Thai statements, it could do so, but it would require commerce to depart from its normal methodology in valuing the overhead ratio.

[00:22:27] Speaker 00:
In contrast, when compared to the Oceana report from South Africa, South Africa was also a significant producer of comparable merchandise, as was Thailand.

[00:22:38] Speaker 00:
So it met that basic criteria.

[00:22:41] Speaker 00:
And then the South Africa report was contemporaneous with the peer review.

[00:22:46] Speaker 00:
It was not tainted by counter-available subsidies.

[00:22:49] Speaker 02:
What about this cost of sales category that didn't sufficiently disaggregate the cost of sales into all these little subcategories that the other side is pointing out?

[00:23:02] Speaker 00:
So that was plaintiff's argument.

[00:23:04] Speaker 00:
The record disputes it to some extent, and that's at Appendix 704.

[00:23:10] Speaker 00:
There is a spreadsheet that outlines Oceana reports expenses.

[00:23:16] Speaker 00:
And what it does is it has a cost of sales basket category, which includes materials, labor, and expenses.

[00:23:22] Speaker 00:
But further down on the spreadsheet, it breaks out materials and labor and expenses and energy, excuse me, and provides that energy is zero.

[00:23:31] Speaker 00:
But even so factually, I don't think the allegation is factually correct.

[00:23:35] Speaker 00:
I mean, the statement does say zero for energy, but there is that breakout in the financial statement.

[00:23:40] Speaker 00:
But even if there were not that breakout, Commerce found that any weakness in disaggregation in materials, labor, and expenses was not material for their purposes in the overhead ratio, because the overhead ratio equals total cost of overhead divided by materials plus labor plus expenses, plus energy.

[00:24:04] Speaker 00:
Even if energy is not disaggregated from labor and material, it doesn't ultimately matter for Commerce's

[00:24:09] Speaker 00:
calculation purposes, because those three values are added together in a denominator for the overhead ratio.

[00:24:15] Speaker 00:
So even to the extent it was or could be a weakness, it wasn't a material one and wasn't as bad relative to the non-contemporaneous export subsidy tainted material in the Thai financial statements.

[00:24:31] Speaker 04:
OK.

[00:24:31] Speaker 04:
Anything else?

[00:24:32] Speaker 00:
Nope.

[00:24:32] Speaker 00:
I'm also penalizing for the questions.

[00:24:34] Speaker 00:
We ask that this court sustain Commerce's determination and affirm the draft

[00:24:38] Speaker 04:
OK, thank you, Ms.

[00:24:39] Speaker 04:
Bennett.

[00:24:41] Speaker 04:
Michelle, you have two minutes.

[00:24:53] Speaker 03:
In weighing of the two sets of financial documents, the Oceana's annual report, the flaw of the annual report

[00:25:08] Speaker 03:
It's much, much more than the floor with the Thai financial statements.

[00:25:17] Speaker 01:
Well, that's a matter of opinion, though, isn't it?

[00:25:21] Speaker 03:
That's our argument.

[00:25:24] Speaker 03:
OK.

[00:25:26] Speaker 03:
Yeah, because the separate line for raw material and the labor is very important.

[00:25:38] Speaker 03:
commerce calculate the ratio as I described in the bill.

[00:25:43] Speaker 03:
That's fatal because it's against the law for the accuracy of financial ratio normal value.

[00:25:53] Speaker 03:
And for the floors as government pointed out with high financial statements, one is the contemporaneousness.

[00:26:06] Speaker 01:
Doesn't the agency have discretion

[00:26:08] Speaker 01:
to weigh the accuracy of one source against the accuracy of another source and factor in the competing problems with each?

[00:26:21] Speaker 03:
Yes.

[00:26:22] Speaker 03:
Yes, Your Honor.

[00:26:24] Speaker 03:
They did.

[00:26:25] Speaker 03:
But they have to do it according to the law.

[00:26:29] Speaker 03:
They can't just do it anyway as to what they will to do.

[00:26:34] Speaker 03:
There must be a guidance from the law, from a statute,

[00:26:38] Speaker 03:
And statute says that first, you have to use the documents or the information to make a decision as accurate as possible.

[00:26:52] Speaker 03:
So that's one.

[00:26:53] Speaker 03:
And the other is that the policy of the commerce

[00:27:02] Speaker 03:
to prefer to use separate lines for materials and labor and instead of comprehensive cost of sales and the double calculate the overhead has cost a higher dumping rate and a dumping duty rate for our clients, for the plantations.

[00:27:30] Speaker 03:
Yes, they have a discretion, but under the guidance of the law It's not a free will okay.

[00:27:38] Speaker 04:
Thank you.

[00:27:38] Speaker 04:
I think we're out of time Thank you.

[00:27:40] Speaker 04:
Thank both counsel the case is submitted