[00:00:30] Speaker 05:
OK, we've got a lot of advocates for one case, but you want to tell us, so we'll have straight in our mind what the split is here, if there's a split according to issues.

[00:00:43] Speaker 03:
Yes, sir.

[00:00:43] Speaker 03:
Good morning.

[00:00:44] Speaker 03:
Good morning, sorry.

[00:00:45] Speaker 03:
May it please the court.

[00:00:46] Speaker 03:
I'm David Schwartz with Thompson-Hine.

[00:00:49] Speaker 03:
I'm here with my colleague Michelle Lee.

[00:00:50] Speaker 03:
I'm going to have six minutes in this affirmative presentation.

[00:00:53] Speaker 03:
She'll have four minutes.

[00:00:55] Speaker 03:
She'll be addressing the bona fide sale issue only, and I'll be addressing the other issues.

[00:01:05] Speaker 05:
Please proceed.

[00:01:07] Speaker 03:
May it please the court.

[00:01:08] Speaker 03:
Again, I'm David Schwartz, Thompson-Hine.

[00:01:10] Speaker 03:
I'm here with my colleague, Michelle Lee.

[00:01:11] Speaker 03:
We're here to represent the opponent, Geospecialty Chemicals, and asking this panel to determine that the CIT's decision in this matter was unsupported by substantial evidence and not in accordance with law as to all issues we've raised on appeal.

[00:01:23] Speaker 03:
All the issues on appeal depend on whether commerce has substantial evidence to support each of its findings, evidence that a reasonable mind might accept as adequate to support a conclusion.

[00:01:32] Speaker 03:
This requires commerce to examine the record

[00:01:34] Speaker 04:
Can you clarify for me because you toss out the regular standard review of substantial evidence and not in accordance with law, but our standard review on those two are very different obviously.

[00:01:44] Speaker 04:
One's de novo, one's substantial evidence.

[00:01:46] Speaker 04:
Is there anything in here that's legal or is this all substantial evidence?

[00:01:51] Speaker 03:
For us, the legal standard to follow is whether there's a rational connection between the facts and the choice made.

[00:01:58] Speaker 04:
OK, but that's a different standard altogether, too, and that's another highly differential.

[00:02:01] Speaker 04:
I'm just trying to get at, do you have a legal argument that we get a review de novo?

[00:02:06] Speaker 04:
I didn't see one, but if you think there's something purely legal that we're going to review de novo, tell me, otherwise I'll proceed and assume that all of your arguments are either under substantial evidence or arbitrary and capricious.

[00:02:19] Speaker 04:
That's correct.

[00:02:23] Speaker 03:
OK.

[00:02:23] Speaker 03:
First, I'd like to address the by-product offset issue.

[00:02:27] Speaker 03:
A by-product offset, as you know, is an adjustment to normal value.

[00:02:31] Speaker 03:
A party may receive a by-product offset if it satisfies its burden of providing relevant information, showing that there was a quantity of by-product generated during the period of review and that the by-product had commercial value.

[00:02:41] Speaker 03:
Baoding only provided evidence of its by-product sales and its inventory records of the quantity sold through inventory out slips.

[00:02:47] Speaker 03:
Baoding admitted that it failed to track the quantity of its by-products generated during the POR.

[00:02:52] Speaker 03:
In American Tupular Products, where Judge Lurie wrote the opinion back in 2017,

[00:02:57] Speaker 02:
Mr. Schwartz, whether I wrote the opinion doesn't matter.

[00:03:01] Speaker 02:
We're speaking to the court.

[00:03:02] Speaker 02:
And may I also say you're just reading from the text very fast.

[00:03:07] Speaker 02:
It might be more useful for you to just state to us the key points of error from the trial court.

[00:03:15] Speaker 03:
I will, Your Honor.

[00:03:18] Speaker 03:
The case American Tubular Products pointed out that commerce reason for denying a byproduct offset was because there was no proof that the byproduct was generated, was made during the POR.

[00:03:31] Speaker 03:
The CIT and the underlying proceeding for American Tubular Product also pointed out that the existence of a yield loss ratio alone does not replace the requirement of showing that the byproduct must be generated from the production of the goods during the POR.

[00:03:44] Speaker 03:
Here, we don't have any proof that the

[00:03:47] Speaker 03:
by-product was generated during the POR.

[00:03:51] Speaker 03:
The CIT provided support, which Commerce didn't provide in the underlying decision, that the Baoding demonstrated that there was a yield loss ratio that demonstrated that what they sold matched up with what they produced of the subject merchandise.

[00:04:10] Speaker 03:
However, there's no record of what was sold of the by-product

[00:04:15] Speaker 03:
was in fact generated during the POR.

[00:04:18] Speaker 03:
We don't know whether or not that by-product was in inventory prior to the POR.

[00:04:22] Speaker 03:
We don't even know if it was purchased from a third party and placed in inventory prior to the POR.

[00:04:28] Speaker 03:
There is no record that what was sold as a by-product was in fact generated during the POR.

[00:04:34] Speaker 03:
That's the key.

[00:04:35] Speaker 05:
The factual issue is that the commerce relied on, and this is what the CIT said I guess, it did provide inventory records to support the quantity sold.

[00:04:50] Speaker 05:
So the question is, is there substantial evidence to support

[00:04:54] Speaker 05:
or to support the commerce's weighing of what the inventory records do or do not support.

[00:05:04] Speaker 05:
That's pretty in the weeds for an appellate court on review, is it not?

[00:05:09] Speaker 03:
Well, I think it's clear cut in that all we have in terms of inventory records are out slips.

[00:05:16] Speaker 03:
And the outslips just show what was taken out of inventory.

[00:05:18] Speaker 03:
It doesn't show when the byproducts went into inventory.

[00:05:21] Speaker 03:
And that's the key issue.

[00:05:22] Speaker 03:
That's one of the key issues that determines whether or not a byproduct offset can be granted, is whether or not the product was generated during the period of review.

[00:05:32] Speaker 03:
We have no information, Congress relies on no information

[00:05:35] Speaker 03:
to demonstrate that the by-product was generated during the POR.

[00:05:39] Speaker 03:
The inventory record that you reference, again, is an outslip.

[00:05:42] Speaker 03:
It could have been sitting in inventory for years.

[00:05:45] Speaker 03:
We have no record that it was actually generated during the POR and put in inventory during the POR.

[00:05:52] Speaker 03:
If I may move on, alternatively,

[00:05:54] Speaker 03:
Alternatively, if the court determines that a by-product offset should still be granted, we want to point out that the recalculation in the remand redetermination by commerce is wrong and needs, for no other reason, needs to be remanded and to be recalculated.

[00:06:11] Speaker 04:
Did you make that argument to the CIT after remand?

[00:06:14] Speaker 03:
We didn't have the opportunity.

[00:06:16] Speaker 03:
After the remand redetermination, the first time we had the opportunity to even argue it would be here before you all.

[00:06:23] Speaker 05:
But why didn't you include it in your comments on the remand redetermination?

[00:06:28] Speaker 03:
Well, we had no reason to predict that they were going to be making a mistake.

[00:06:32] Speaker 04:
Wait, so after the commerce made,

[00:06:36] Speaker 04:
The new determination on remand you had no opportunity once it went back up to the CIT to suggest error or anything like that.

[00:06:46] Speaker 04:
That's our that's our position is really odd.

[00:06:49] Speaker 04:
I mean.

[00:06:50] Speaker 04:
So the CIHT, just Rubber Stamp Commerce, is remand determination without any input from the parties?

[00:06:58] Speaker 05:
That's my recollection.

[00:07:00] Speaker 05:
Just to follow up, you made comments on the remand determination.

[00:07:05] Speaker 05:
Wasn't that following the calculation of the offset cap?

[00:07:09] Speaker 03:
That's not our recollection, no.

[00:07:13] Speaker 05:
Well, we can ask the other side if they have a different view.

[00:07:17] Speaker 03:
I'd like to move on to a second issue, and that has to do with the three-part product comparability test that the department uses.

[00:07:25] Speaker 05:
I'll just alert you already in your either rebuttal time or in your friend's time, so just to alert you to that.

[00:07:32] Speaker 03:
Okay, I'll yield the rest of my time to my colleague.

[00:07:40] Speaker 06:
May I please the court here to address only the bonafide issue.

[00:07:46] Speaker 06:
So for this review, Boudin had already been in the U.S.

[00:07:49] Speaker 06:
market for 10 years.

[00:07:50] Speaker 06:
It had a long-standing record of shipment volume, shipment price, and regular customers.

[00:07:55] Speaker 06:
Boudin's single sale in this review, however, departed from its last 10 years of U.S.

[00:08:00] Speaker 06:
sales.

[00:08:01] Speaker 06:
It was sold at a normally low amount compared to volumes in each of the last 10 years.

[00:08:07] Speaker 06:
It's delivered price is inclusive of 454% anti-drug agents.

[00:08:11] Speaker 05:
What is it that they did, commerce, CIT, party, that wasn't consistent with sort of the benchmarks that the commerce uses?

[00:08:23] Speaker 05:
I mean, this was...

[00:08:24] Speaker 05:
This may have been a little unusual, but they look at the various factors, and one of them is an arm's length transaction, and they concluded this was.

[00:08:34] Speaker 05:
So what can you point to as the error here in terms of the consideration?

[00:08:39] Speaker 05:
Are you saying you could never use this because it was different than what they did the other 10 years?

[00:08:46] Speaker 06:
No, it was that the text here is that so the commerce can look into a number of factors.

[00:08:54] Speaker 06:
I'll speak to the commercial realities here.

[00:08:56] Speaker 06:
All we are pointing here is that records show that this cell doesn't reflect, is not representative of any commercial reasonableness, which commerce failed to adjust in both in each of the quantity factor, price factor, profit factor.

[00:09:13] Speaker 06:
And I understand that commerce decision

[00:09:15] Speaker 06:
that it was an Amsterdam transaction.

[00:09:18] Speaker 06:
That component's conclusions actually was premised on erroneous findings on both the price and profit factors, which I'm going to address one by one here.

[00:09:29] Speaker 06:
So in the last 10 years, when he departed from the last 10 years of US sales, which is important here because the task here is that, and there is no dispute in this case, that if the rate of evidence indicates a sale, a sale is not typical of normal business practices.

[00:09:45] Speaker 06:
or artificially structured to be commercially unreasonable, then it is not bona fide.

[00:09:51] Speaker 06:
And this is what we have here.

[00:09:54] Speaker 06:
The last 10 years of bounding cells reflect bounding's normal business practices.

[00:09:59] Speaker 06:
And that's why it's important that bounding single cell here departed from its last 10 years cells reflects that it's not typical of normal business practices.

[00:10:08] Speaker 06:
And the term that Commerce and CIT both agreed on is that this cell is not historically

[00:10:15] Speaker 06:
The text is not whether it's historically typical.

[00:10:21] Speaker 06:
It's whether it's typical of normal business practices.

[00:10:24] Speaker 06:
And normal by the Canberra dictionary means that it's usual or ordinary sales.

[00:10:31] Speaker 06:
So it is not rational for commerce to bypass the last 10 years normal business of a building and just rely on a text sale 10 years ago when building

[00:10:42] Speaker 06:
Establish its own margin and just begin to enter the US market.

[00:10:46] Speaker 02:
Is this all a question of fact?

[00:10:48] Speaker 06:
It is a question in fact.

[00:10:51] Speaker 06:
So we do not disagree that the standard here is that commerce decision is not supported by substantial evidence.

[00:10:58] Speaker 06:
But what we are saying here is that commerce did not provide a rational explanation between the choices made and the facts that are excited.

[00:11:06] Speaker 06:
Particularly when commerce, many of the factors that commerce find was not

[00:11:14] Speaker 06:
So that's another issue.

[00:11:17] Speaker 05:
That's a separate issue, which is whether or not the numbers we were looking at should have included the duties from the previous years.

[00:11:34] Speaker 02:
It is not another...

[00:11:36] Speaker 05:
Everybody on the other side said no, those numbers should not include those previous duties.

[00:11:43] Speaker 05:
Am I understanding what the state of the record is?

[00:11:47] Speaker 06:
Well, in fact, that standard is not what Commerce said, not what the court said.

[00:11:54] Speaker 06:
So the inclusion of the anti-dumping duties is actually what the other side said they never include.

[00:12:00] Speaker 06:
So Commerce, in its decision, they say we exclude the duties.

[00:12:04] Speaker 06:
Because we do not include duties in our price analysis without referencing any precedent.

[00:12:10] Speaker 06:
It was unclear what price analysis Commerce was referencing in its decision memorandum.

[00:12:15] Speaker 06:
But regardless, that is not Commerce practicing either the bona fide sales price analysis or in its dumping calculation.

[00:12:24] Speaker 05:
The government argues, I think, on this particular point that the argument is waived, that it wasn't raised below.

[00:12:33] Speaker 05:
Is it your position that this argument was raised below?

[00:12:36] Speaker 06:
we disagree with that because the government decided to lower steel.

[00:12:41] Speaker 06:
In lower steel it's different because in that case the party who waived the argument because they raised an entire new issue.

[00:12:50] Speaker 06:
Here we are arguing some interdependent factors analysis which cannot be separated from one or the other.

[00:12:58] Speaker 05:
Well if the argument is that the numbers were wrong on the question of whether or not

[00:13:03] Speaker 05:
You should use the existing anti-dumping duties when you're looking at the numbers.

[00:13:10] Speaker 05:
Was that argument made below?

[00:13:12] Speaker 05:
The same disagreement you have now with the way they did it existed below.

[00:13:17] Speaker 05:
Did you make that argument below that it's not consistent with practice or existing law to calculate that?

[00:13:25] Speaker 06:
So even the government here admits that we made a similar argument.

[00:13:31] Speaker 06:
And they never argued that we exhausted our administrative remedies because we made that argument.

[00:13:38] Speaker 06:
Because we made a similar argument that the price is abrasionally high after inclusion of the anti-dumping duties, abrasionally low without including the anti-dumping duties, and that also affects the profit analysis.

[00:13:50] Speaker 06:
And that is shown in the appendix in our case brief before commerce.

[00:13:56] Speaker 05:
Well, you're into your lead, but I'm not sure we've lost a little, I've lost track of exactly how much time, but why don't we hear from the other side and maybe serve their numbers with time.

[00:14:19] Speaker 01:
Good morning, Your Honors.

[00:14:20] Speaker 01:
May it please the Court, Josh Curlin on behalf of the United States in this proceeding, and I'll seek to take the issues in the order they were raised by the appellants.

[00:14:31] Speaker 01:
As a general matter, this Court should affirm each of the four determinations by the Department of Commerce that are on appeal here.

[00:14:38] Speaker 01:
Because each is supported by substantial evidence and otherwise in accordance with law.

[00:14:43] Speaker 01:
We agree that these are purely factual matters.

[00:14:48] Speaker 01:
And in that sense, there's an extremely deferential standard.

[00:14:51] Speaker 01:
And courts have continually recognized that quote unquote, mere disagreement with the agency's determination is not a basis.

[00:14:58] Speaker 05:
Well, let me ask you about this bona fide sale issue.

[00:15:01] Speaker 05:
OK.

[00:15:01] Speaker 05:
Is there some requirement in the standards?

[00:15:04] Speaker 05:
And I know there are a bunch of standards, and you weigh all of them.

[00:15:08] Speaker 05:
Doesn't a determination of whether it was a bonafide sale involve some sort of look back into the historical customers and historical sales, etc., etc.

[00:15:21] Speaker 05:
And if that's one of the factors or what it is you should do, I find it a little questionable, this arm's length transaction thing, because it seems like, yeah, maybe

[00:15:35] Speaker 05:
It is an arms-like transaction as to how you define that, but this seemed like a different kind of transaction than anything that had been done historically.

[00:15:45] Speaker 05:
And is that not an appropriate factor for a bona fide sale?

[00:15:50] Speaker 01:
Your Honor, I think Your Honor is correct that as part of the totality of the circumstances test, commerce does look at exactly those type of issues.

[00:16:00] Speaker 01:
And I think it's ultimately reflected in the party's briefing on the quantity issue.

[00:16:05] Speaker 01:
Commerce looked back at recent sales.

[00:16:08] Speaker 01:
It did not fail to take account of the fact that the appellants here argued that there were a lot larger sales in the past decade or so.

[00:16:16] Speaker 05:
And the purchaser in this was a single purchaser who was kind of a mom and pop store operating out of a personal home and this was the only product that he had ever purchased.

[00:16:29] Speaker 05:
I mean this is quite an unusual sale.

[00:16:33] Speaker 01:
I don't think that's quite correct.

[00:16:34] Speaker 01:
I think that they had a pre-existing business relationship.

[00:16:37] Speaker 01:
But the context here is that the importing had effectively shut down because of this enormously high cash deposit duty rate.

[00:16:44] Speaker 01:
And so there was evidence of more recent sales.

[00:16:47] Speaker 01:
Commerce also looked back to what it considered, correctly by the way,

[00:16:51] Speaker 01:
an analogous circumstance that occurred in the 2003-2004 Administrative Review, which was this importer Bao Ding's attempt to enter the market for the first time and establish its rate, which is an analogous context to what was going on here when sales had shut down and it was looking to re-enter the market and establish its rate.

[00:17:11] Speaker 01:
And so commerce in looking at that, and all of this evidence was on the record, it didn't fail to consider what Gio argued, but it said in these circumstances,

[00:17:21] Speaker 01:
It's a commercially reasonable quantity for them to make a single sale in order to establish a rate.

[00:17:26] Speaker 01:
Not a lot of importers are going to want to do 10,000 ton imports at a 450% cash deposit rate.

[00:17:37] Speaker 01:
On top of the fact that they had done this size sale before in similar circumstance, there was additional record evidence that we discussed at page 33 of our brief from both Baoding and its importer discussing why this size sale was a commercially reasonable sale

[00:17:59] Speaker 01:
in the circumstances.

[00:18:02] Speaker 01:
I have the record sites for that.

[00:18:04] Speaker 01:
Again, we cited these quotes at page 33 of our brief.

[00:18:07] Speaker 01:
It's page 11941 of the record.

[00:18:10] Speaker 01:
We're also at 7080 of the record and 12011 of the record.

[00:18:16] Speaker 01:
And just to paraphrase what's being said there, they're all essentially saying, look, in this market under these circumstances, it's not feasible for us to be bringing in large quantities of glycine.

[00:18:27] Speaker 01:
We want to sell in the United States.

[00:18:29] Speaker 01:
We want to show that we are not dumping.

[00:18:31] Speaker 01:
And so we're going to make a single sale akin to the type of test sale.

[00:18:34] Speaker 02:
What about the use of booties financial ratio?

[00:18:40] Speaker 02:
The compound here is glycine.

[00:18:42] Speaker 02:
It's an amino acid.

[00:18:44] Speaker 02:
Goudy doesn't make amino acids.

[00:18:47] Speaker 01:
That's correct.

[00:18:47] Speaker 01:
Goudy does not make amino acids.

[00:18:49] Speaker 01:
But what commerce is looking for in choosing a financial statement is a manufacturer who has essentially a comparable or similar process.

[00:19:00] Speaker 01:
And so looking at the record here, commerce determined that

[00:19:02] Speaker 01:
Booty's products and process which are like Boudin food additives and other chemicals to be added to foods like sweeteners to be added to foods and pharmaceuticals are considerably more similar to what Boudin does than the three pharmaceutical companies that the appellants offered who have kind of highly advanced high value products and even though Booty does not produce amino acids it is producing very similar products under

[00:19:32] Speaker 01:
under a very similar manufacturing process.

[00:19:36] Speaker 02:
Is that a fact's question?

[00:19:38] Speaker 01:
It's absolutely a facts question and commerce here evaluated the information about the production process that was listed in the booty financial statement indicating first of all that a large, I think the trial court quoted at least a third of its production were of sweeteners that are of the same essentially variety as glycine.

[00:20:03] Speaker 01:
There's an issue that I don't think Your Honor has mentioned, but it gets to Your Honor's point.

[00:20:08] Speaker 01:
There's an issue in the briefing about they say, well, booty's largest product is tapioca starch, and that doesn't involve chemical reactions.

[00:20:16] Speaker 01:
And we say in response to that, and we quoted record evidence to this effect, that actually bounding itself said that most of its production was of food-grade glycine rather than technical-grade glycine, and the process for food-grade glycine as well does not involve chemical reactions.

[00:20:32] Speaker 02:
What about the failure to update the value of the ammonium chloride offset resulting from the change in the form of ammonia?

[00:20:43] Speaker 01:
Right.

[00:20:43] Speaker 01:
So on both of these issues, because I know our time is short, I'm going to get into the weeds, but I can tell you at a headline level, the arguments that appellants raise on both of these issues, both say, hey, commerce in the 2010-2011 review did something that is consistent with what we're asking for here.

[00:21:01] Speaker 01:
and the punch line from the headline is that in two separate decisions those determinations were challenged both were remanded and on remand in both cases commerce decided the opposite and did the same thing that it did in this review here so in particular on the

[00:21:18] Speaker 01:
On the liquid ammonia issue, commerce went back and looked at the record and said, in fact, actually, this stuff really is anhydrous ammonia, not the aqueous ammonia that plaintiffs argue.

[00:21:32] Speaker 01:
Similarly, in this Bao Ding Mentang case, by the way, neither of these decisions have been appealed, and in fact, on the liquid ammonia issue, Geo didn't even comment, essentially acquiesced to the decision.

[00:21:44] Speaker 01:
First of all, I know it's not controlling authority, but there's an extremely persuasive analysis from the trial court at pages 1340 to 1345 cited in our brief about why these pharmaceutical companies' production process is not at all like

[00:22:01] Speaker 01:
Baoding's production process.

[00:22:03] Speaker 01:
And in that case, because it didn't even have something as similar as Booty, commerce settled on, rather than the pharmaceutical companies, a producer of urea, which is even further maybe different.

[00:22:17] Speaker 01:
The regulation here requires not identical, but comparable.

[00:22:23] Speaker 04:
Could you address the by-product recalculation point?

[00:22:28] Speaker 04:
Sure.

[00:22:28] Speaker 04:
I think you said that you thought that was waived.

[00:22:30] Speaker 04:
Your friend said they didn't have an opportunity to raise that below, which frankly seems kind of odd to me.

[00:22:36] Speaker 04:
I thought that at least at the agency stage you had an opportunity to comment on the remand results, even if the trial court didn't invite further briefing.

[00:22:46] Speaker 01:
That's correct.

[00:22:47] Speaker 01:
We disagree with a couple of things that the appellants said in their remarks on that issue.

[00:22:51] Speaker 01:
Dealing with the waiver issue first.

[00:22:54] Speaker 01:
Yes, they had opportunities, and as far as we're concerned, we outlined two or three opportunities.

[00:22:59] Speaker 01:
The most significant of which are, first of all, yes, of course there's the trial court.

[00:23:04] Speaker 01:
There was remand comments briefing before the trial court.

[00:23:06] Speaker 01:
But even before that, before the Department of Commerce, as Your Honor as well know, the way these remands work is that the Department of Commerce issues a draft remand, preliminary results of the remand, and then the parties have an opportunity to comment on that draft remand results before the final.

[00:23:22] Speaker 04:
And that draft remand result... Did that draft remand result, that included the switch from the one type of ammonia to another, which should have implicated

[00:23:32] Speaker 04:
That's precisely right.

[00:23:35] Speaker 01:
We confirmed that during Planner's remarks.

[00:23:37] Speaker 01:
And that document starts at page 7531 of the administrative record.

[00:23:43] Speaker 01:
And so they had multiple opportunities.

[00:23:45] Speaker 01:
I mean, frankly, given the advocacy for the anhydrous ammonia, they really had an opportunity even in the original proceeding before commerce.

[00:23:53] Speaker 01:
But we don't need to go there.

[00:23:53] Speaker 01:
This court's decision in Nanyang, which collected a number of cases, talks about how arguments are waived under those circumstances and that's precisely what's going on here.

[00:24:02] Speaker 01:
We also disagreed with one fact.

[00:24:06] Speaker 04:
If you had done the recalculation, do you think it would have made any difference in the results here?

[00:24:10] Speaker 04:
Would it have increased normal value?

[00:24:12] Speaker 01:
You know, because it has not been presented to commerce in any way, shape or form, I just cannot, I can't speculate.

[00:24:18] Speaker 01:
There's one important piece of evidence that we need to cite here.

[00:24:24] Speaker 01:
We disagreed with appellant's arguments that it's not accurate to say that the evidence supporting the byproduct offset was just sales or inventory out slips.

[00:24:36] Speaker 01:
In particular, commerce, the key evidence on this appears at pages 88

[00:24:41] Speaker 01:
15 to 88, 16 of the record.

[00:24:45] Speaker 01:
That's a narrative and the accompanying exhibits are at pages 88, 38 to 88, 42 of the record.

[00:24:53] Speaker 01:
Those documents are where Bao Ding documented not its sales, but its production of byproducts during the period of review.

[00:25:03] Speaker 01:
And so the claim on this issue is not just that this evidence doesn't exist, but that when the trial court cited this evidence, it was citing something that Commerce had never cited before.

[00:25:14] Speaker 01:
And we disagree with that as well.

[00:25:16] Speaker 01:
Commerce cited the evidence in its issues and decision memorandum at pages 7424, note 40, which is a very long footnote, but it kind of catalogs a lot of the evidence, including this evidence, as well as 7425, note 49.

[00:25:32] Speaker 01:
I know that was a lot of appendix page numbers, but to step back, what that evidence signifies is that what Bouding explains, and what Congress accepted reasonably, is that even though Bouding didn't keep production records, the production of byproducts as a result of the chemical reactions involved in glycine is a matter of chemical formulas and mathematical determination.

[00:25:59] Speaker 01:
Rather than estimating or speculation, it's a matter of math that when you produce glycine, here's the amount of byproduct you get.

[00:26:08] Speaker 01:
Bowding provided documentation that commerce ultimately found sufficient to say, yes, we produced this amount of glycine during the review, and yes, we also sold off the glycine during the review.

[00:26:22] Speaker 01:
I see my time is running short.

[00:26:25] Speaker 01:
We've cited, I think in significant detail, all of the evidence on the by-product issue in our brief, including the inventory out slips and the customer lists and so on and so forth.

[00:26:36] Speaker 01:
But at the end of the day, Commerce looked at this evidence and found it reasonable that this

[00:26:42] Speaker 01:
It had no evidence based on the way everything matched up to suggest that this was somehow taken out from inventory at an earlier period or something like that.

[00:26:54] Speaker 01:
And that's the type of determination that this court leaves to the expert fact finder, which is commerce.

[00:27:01] Speaker 01:
Mere disagreement with that kind of weighing of the record evidence is not an appropriate basis to overturn commerce's determination.

[00:27:07] Speaker 01:
Thank you.

[00:27:19] Speaker 00:
Hello, may it please the court?

[00:27:20] Speaker 00:
I'm Ron Whistler, with the law firm of Fox Rothschild, and I represent Baoding Med Con.

[00:27:28] Speaker 00:
I'm only here to discuss the ammonia issue, the anhydrous ammonia issue, and in our view, the administrative record clearly

[00:27:41] Speaker 00:
supports the commerce's decision that the company used anhydrous ammonia and not ammonia in aqueous solution.

[00:27:53] Speaker 00:
The briefing provided the precise pages where we provided this information.

[00:27:59] Speaker 00:
It was in the initial section D response.

[00:28:03] Speaker 00:
We provided the chemical formula, which is NH3 for ammonia.

[00:28:08] Speaker 00:
We provided the purity level, which was 99.8%.

[00:28:13] Speaker 00:
And these are consistent with anhydrous ammonia and aqueous ammonia has a different chemical formula and obviously since it's mixed with water it's of a low purity.

[00:28:33] Speaker 00:
So the administrative record is clear.

[00:28:36] Speaker 02:
Aqueous ammonia is ammonium hydroxide.

[00:28:39] Speaker ?:
Yes.

[00:28:40] Speaker 00:
NH4OH Plus different chemical, different chemical formula, different charity.

[00:28:50] Speaker 00:
So I think the administrative record is pretty clear about that.

[00:28:54] Speaker 00:
And just the second point I want to make.

[00:28:57] Speaker 00:
Pellen's argument basically is that in the 2010-2011 case, the Department of Commerce found that Baoding used aqueous ammonia.

[00:29:06] Speaker 00:
However,

[00:29:08] Speaker 00:
The 2010-2011 case was on appeal and subsequent to the decision in the initial decision in this case, the court came out with the determination and determined that in fact Bao Ding Men Tong did use anhydrous ammonia in the previous review.

[00:29:31] Speaker 00:
Thank you.

[00:29:43] Speaker 03:
Your Honor, David Schwartz for the Appellant Geospecial Chemicals.

[00:29:47] Speaker 04:
My colleague Michelle Lee will be addressing the waiver of the recalculation for the by-product offset, and she will also be addressing... I know you want to further address it, but since your name is on the letter, you did file a comment on the draft remand results, didn't you?

[00:30:07] Speaker 03:
If my name is on that letter, then I did file... Do you have the appendix?

[00:30:12] Speaker 03:
It's 7556.

[00:30:12] Speaker 03:
I don't... I mean, you don't have the appendix?

[00:30:15] Speaker 03:
I have it at my desk.

[00:30:16] Speaker 03:
I don't have it at my desk.

[00:30:18] Speaker 03:
Can I allow my colleague to address that?

[00:30:19] Speaker 03:
Sure.

[00:30:19] Speaker 04:
I mean, it's a little more appropriate for you to do it since you signed the letter, but sure.

[00:30:25] Speaker 03:
I want to address first the three-part test for the product comparability issue.

[00:30:30] Speaker 03:
We find that it's unreasonable because there is no rational connection between the facts and the choice.

[00:30:35] Speaker 03:
Departement in the end chose Booty.

[00:30:37] Speaker 03:
Booty, to be clear, is a tapioca starch manufacturer.

[00:30:41] Speaker 03:
Two thirds of its production is devoted to that.

[00:30:43] Speaker 03:
It's not even a chemical.

[00:30:45] Speaker 03:
The point that the government made was that food, great glycine, is not produced from a chemical reaction.

[00:30:51] Speaker 03:
Of course it's produced from a chemical reaction.

[00:30:53] Speaker 03:
There's plenty of information on the record demonstrating that it's produced from a chemical reaction between MCAA and liquid ammonia.

[00:31:00] Speaker 03:
The point here is factually the department

[00:31:04] Speaker 03:
when they applied the three-part test, took such wide latitude with the application of the three-part test to render it almost meaningless.

[00:31:11] Speaker 03:
They're supposed to look at the physical characteristics and uses of production processes.

[00:31:17] Speaker 02:
While BooBoo does a lot of tapioca work, doesn't it also run chemical, carry out chemical reactions?

[00:31:28] Speaker 03:
I don't believe the segment involving tapioca starch involves chemical reactions.

[00:31:35] Speaker 03:
In other parts of its business.

[00:31:35] Speaker 03:
There is less than one third of the business that does involve a product involving chemical reactions.

[00:31:40] Speaker 03:
One third is substantial.

[00:31:43] Speaker 03:
Well, I guess I would respectfully disagree.

[00:31:45] Speaker 03:
One-third is less than two-thirds, and it's less than half.

[00:31:49] Speaker 03:
And I would demonstrate that when you're looking at companies that we had on the record that, in fact, the department had used in the past and other prior proceedings that make, actually, amines and amino acids used in pharmaceutical products, that that's much more comparable.

[00:32:02] Speaker 03:
If any reasonable person would say that's much more comparable to glycine.

[00:32:06] Speaker 03:
In fact, glycine,

[00:32:09] Speaker 03:
to be clear, is not only amino acid that can be used in pharmaceutical products, glycine actually can be used as a pharmaceutical end product, and that's on the record as well.

[00:32:20] Speaker 03:
So to say that it takes a great stretch of imagination to say that the booty product line, which is primarily tapioca starch, is in any way comparable, I think strains is quite a stretch indeed.

[00:32:38] Speaker 03:
I did want to just address the issue regarding liquid ammonia.

[00:32:44] Speaker 03:
I just simply wanted to point out that the only two times that the government has ever verified on-site Baoding, they found both times that it was aqueous ammonia and not a hydrous ammonia, regardless of what the legal reasons might have been for the ammonia that was to be overturned.

[00:33:02] Speaker 03:
As a factual record, the only time Congress has entered the premises at Baoding in review of the 2003-2004 review and the 2010-2011 review, both times, those only times, they came away saying that the liquid ammonia input is in fact aqueous ammonia.

[00:33:26] Speaker 06:
Your Honor, first I want to address the waiver argument really quick.

[00:33:30] Speaker 06:
So my friend, our friend just saying that we do have opportunity and he explained the process.

[00:33:36] Speaker 06:
There is a final draft, the women's draft results and Mr. Schwartz comment on it and then they get the women's redetermination out.

[00:33:45] Speaker 06:
And the women only were limited to two issues.

[00:33:48] Speaker 06:
which did not include the by-product offset issue.

[00:33:52] Speaker 06:
So commerce did not make the surrogate value recalculation until it's remand determination in a spreadsheet.

[00:33:59] Speaker 04:
So that was not the... But didn't the remand results and the draft remand results, isn't that where they change from the one chemical compound to the other?

[00:34:10] Speaker 06:
Yes.

[00:34:11] Speaker 04:
So if you had an argument that that change, even though the by-product wasn't raised, if you had an argument that that change

[00:34:18] Speaker 04:
would have required a recalculation in the byproduct, why weren't you required to exhaust it in commerce?

[00:34:24] Speaker 06:
Because we assume when they change the liquid, the liquid ammonium silicate value, they would change everything.

[00:34:33] Speaker 04:
But that's precisely what you need to exhaust.

[00:34:36] Speaker 04:
If you're making that assumption and they didn't do it,

[00:34:39] Speaker 04:
You need to tell them you've got to do this for everything.

[00:34:42] Speaker 06:
Your Honor, we respectfully disagreed.

[00:34:44] Speaker 06:
Our hands are tied to only the two only women issues.

[00:34:48] Speaker 06:
So that's why our comments only addressing the two women issues.

[00:34:53] Speaker 06:
And then I want to, and in fact, the spreadsheet where the circuit values recalculation that reflects the new calculation was not even issued on to the women with determination.

[00:35:06] Speaker 06:
So we did not have any opportunity to see the mistake from commerce.

[00:35:10] Speaker 06:
And it's not our duty to expect every single, to exhaust every single possible potential mistake from commerce side.

[00:35:17] Speaker 06:
That's my argument.

[00:35:18] Speaker 06:
And I want to just go ahead and address one point that our friend made that regarding the bona fide issue.

[00:35:28] Speaker 06:
So Josh mentioned that page 33 of their brief mentioned a lot of evidence about why Daudeng did the small volume for the single cell during the peer review.

[00:35:42] Speaker 06:
That was a post-heart justification.

[00:35:44] Speaker 06:
None of those record evidence have been cited.

[00:35:47] Speaker 06:
and analyzed by commerce when they made the decision.

[00:35:51] Speaker 06:
And also commerce, there are plenty of fallacies in commerce reasoning in the bona fide issue.

[00:35:57] Speaker 06:
Commerce, so I think our friend tried to raise up that it's okay to make a test cell to determine the margin.

[00:36:05] Speaker 06:
There is no commercial justification for that.

[00:36:08] Speaker 06:
Even here we treat it as a purported test cell.

[00:36:13] Speaker 06:
So the CIT, the lower court has made it clear in Hebei New Donghua that even under the tax cell, comments should not overlook any other evidence that suggests that non-commercial reasonableness here.

[00:36:32] Speaker 06:
There is one final comment, which is that the motive for bounding to make the sale to decrease the anti-dumping duty deposit rate in this review is explicit.

[00:36:49] Speaker 06:
And actually Baoding is the person who requested the review.

[00:36:55] Speaker 06:
So Commerce CIT actually made it really clear, and I'm going to read it again here.

[00:37:01] Speaker 05:
Well, why don't you give us the site?

[00:37:03] Speaker 05:
You do not need to do it.

[00:37:04] Speaker 05:
Sure.

[00:37:05] Speaker 05:
I assume the site is in your grade.

[00:37:07] Speaker 06:
So the site will be Hebei Liu Donghua at the case at 1342.

[00:37:14] Speaker 05:
Thank you.

[00:37:14] Speaker 05:
We thank both sides for cases submitted.

[00:37:15] Speaker 05:
That concludes our proceedings.