[00:00:37] Speaker 02: Next case is Zhongxi Rubber versus the United States, 2019-14-21. [00:00:47] Speaker 02: Ms. [00:00:47] Speaker 02: Salzman. [00:00:48] Speaker 01: Yes. [00:00:49] Speaker 01: May it please the court. [00:00:50] Speaker 01: My name's Alexandra Salzman, counsel to the appellant. [00:00:54] Speaker 01: This case arises out of the dismissal of our case before the Court of International Trade due to failure to exhaust administrative remedies, namely the non-filing of an administrative case brief. [00:01:05] Speaker 01: Congress specifically chose not to mandate that exhaustion of administrative remedies. [00:01:09] Speaker 01: It's not an absolute requirement. [00:01:11] Speaker 01: Rather, it's left to the discretion of the court. [00:01:14] Speaker 01: We understand there's a strong interest in normally requiring exhaustion, but the lower court still abused that discretion by treating this discretionary doctrine, purposely discretionary doctrine, as an inflexible black letter law. [00:01:28] Speaker 01: rather than following the intention of considering the full circumstances and the reasons behind the requirement. [00:01:35] Speaker 04: Our case law is pretty clear that if you don't raise a particular issue in a case brief, then you can't raise it on appeal. [00:01:43] Speaker 01: Well, that's the basic principle behind exhaustion. [00:01:46] Speaker 04: And in this case, there was no case brief filed at all. [00:01:49] Speaker 01: That's correct. [00:01:50] Speaker 04: So you have a hard road ahead. [00:01:53] Speaker 01: We knew that we took this client after their former counsel did not file their case brief below, but it was difficult. [00:02:02] Speaker 03: You're trying to argue the futility doctrine, but futility is incredibly narrow. [00:02:09] Speaker 03: Can you tell us circumstances where the CIT has actually approved non-exhaustion because of futility and how they compare here? [00:02:22] Speaker 03: Because I don't know of anything that's even close. [00:02:25] Speaker 01: I would not direct the court to futility in this analysis. [00:02:28] Speaker 01: I would direct the court to pure law and all of the reasons behind the requirement for exhaustion. [00:02:34] Speaker 03: But that's just too much. [00:02:36] Speaker 03: I mean, almost all these trade cases involve legal questions in some sense. [00:02:42] Speaker 03: It has to be connected in some way that it's a legal question that can't be passed on by commerce or it is futile for commerce to pass on otherwise that legal question doctrine would swallow up a huge swath of [00:02:57] Speaker 03: the exhaustion doctrine. [00:03:00] Speaker 03: I mean, the fundamental basis, I know you know you have a very hard case, the fundamental basis is the agency should get to decide the issue in the first instance. [00:03:10] Speaker 03: And I don't see any reason why you shouldn't have presented your arguments here to the agency. [00:03:16] Speaker 01: So the reason that we looked at pure law here and saying it should be a very narrow application here, that we do have a very narrow application, this is not a case [00:03:25] Speaker 01: like a methodological question in anti-dumping or a surrogate value decision where we're applying [00:03:31] Speaker 01: a lot of facts and mixed issues of law and methodology. [00:03:36] Speaker 01: We have a very small set of facts here. [00:03:38] Speaker 01: Zonzi filed. [00:03:39] Speaker 03: Sure, but why shouldn't commerce still get a pass on the propriety of whether it would have allowed to excuse your late submission or not? [00:03:47] Speaker 03: I mean, that seems to be, even if you frame it as a legal question, something that commerce should get a pass on, not the courts for the first time. [00:03:54] Speaker 01: We would argue that they did get a pass at it. [00:03:57] Speaker 03: But not in the case brief. [00:03:58] Speaker 01: Not in the case brief. [00:03:59] Speaker 01: They considered all of the issues in that. [00:04:02] Speaker 01: They based AFA decision on this narrow set of facts. [00:04:06] Speaker 03: They could have changed their mind if you had filed a case brief. [00:04:10] Speaker 01: That's a potential aspect that could have happened. [00:04:13] Speaker 03: Isn't that what dooms your, you know, exception to a disaster argument? [00:04:17] Speaker 03: The pure law. [00:04:17] Speaker 03: They could have changed their mind. [00:04:19] Speaker 02: It's best not to talk while the judge is here. [00:04:22] Speaker 01: I'm sorry. [00:04:23] Speaker 01: It's pure law exception and other exceptions to the exhaustion doctrine. [00:04:29] Speaker 03: Can you give me examples? [00:04:31] Speaker 03: I'm sorry, I keep interrupting you, too. [00:04:33] Speaker 03: But I get to do that. [00:04:35] Speaker 03: Yes, you do. [00:04:36] Speaker 03: Can you give me any example where the trade court has allowed non-exhaustion on a pure legal doctrine that's anywhere close to analogous like this? [00:04:46] Speaker 03: What kinds of examples do you have? [00:04:48] Speaker 01: I mean, sorry. [00:04:50] Speaker 01: Aggro Dutch was our closest case as far as, I mean, that was different because it wasn't an entire case brief. [00:04:55] Speaker 01: It was an aspect of the case brief where they determined that they could still bring an issue that was not raised because it was a pure question of law. [00:05:07] Speaker 03: And here, I mean, we consider this- Was that the case where the commerce reasoning came up, though, for the first time in its final determination? [00:05:14] Speaker 01: No, they don't. [00:05:17] Speaker 01: That's a different exception as well. [00:05:19] Speaker 01: Right, I mean, that makes sense. [00:05:20] Speaker 03: We don't have that here. [00:05:22] Speaker 01: No, we don't have that here. [00:05:23] Speaker 03: And at least in that case, they filed a Kingsburg. [00:05:26] Speaker 01: Right, but not on those issues. [00:05:28] Speaker 01: I mean, we had one issue that wasn't raised, but it was one issue alone that was a problem in this case. [00:05:35] Speaker 01: And again, I mean, we keep trying to bring back the fact that the reason we require exhaustion, which you keep bringing up, Judge Hughes, and we agree, is that we want the agency to consider it. [00:05:44] Speaker 01: And the point is that the agency did consider this. [00:05:47] Speaker 01: When they didn't not consider applying AFA, they did. [00:05:50] Speaker 01: They looked at whether Zongsi had filed a no-sales cert, and they did, and looked at the contrary information later and said, that's grounds for AFA. [00:06:00] Speaker 01: So our question before the court below, the merits that we didn't get to, was whether that's legal. [00:06:05] Speaker 01: So Commerce did consider that fact. [00:06:08] Speaker 01: And that's why we're looking at the peer law case here and looking at all initial determinations, though. [00:06:13] Speaker 03: They make decisions. [00:06:15] Speaker 03: And they have considered the initial arguments, but you're still required to file a case brief challenging those initial determinations. [00:06:23] Speaker 03: I don't see how we rule for you here without basically eviscerating the exhaustion requirement. [00:06:34] Speaker 01: Again, when the court determines that exhaustion is not required, it's a very narrow set of facts. [00:06:40] Speaker 01: It's not opening up a floodgate of situations. [00:06:43] Speaker 01: We have a very narrow situation here where Congress did directly consider whether we should apply AFA. [00:06:49] Speaker 03: The real narrow situation is that the prior council made a mistake and cost your client a lot of money, probably. [00:06:59] Speaker 03: I don't know that that's a basis for exhaustion or non-exhaustion. [00:07:03] Speaker 01: But yeah, an aspect of when the court has discussed why exhaustion is required, on the one side, we have the agency making the decision in the first place, which we would argue they have made the decision in the first place on clear facts that everyone knows. [00:07:17] Speaker 01: And on the other side, we're also looking at the unjustness on the other side, which is what you were just starting to get at. [00:07:24] Speaker 01: The US importers owe $15 million because of what we would argue is a harmless error. [00:07:29] Speaker 01: in this case. [00:07:30] Speaker 01: So you have a great amount of injustice on one side. [00:07:33] Speaker 01: If Zongsi had done absolutely nothing in this case, the US importers would be owing $2 million instead of $17 million. [00:07:41] Speaker 01: So this small error that happened early on in the case is resulting in a grave injustice. [00:07:46] Speaker 01: And that needs to still be considered in the institutional interest that commerce has in the writing of a case brief. [00:07:53] Speaker 01: And we say that institutional interest is particularly small in this case, unlike a situation [00:07:58] Speaker 04: You did file a supplemental questionnaire, right? [00:08:01] Speaker 01: Yes. [00:08:03] Speaker 01: That's where, so Commerce put on the CBP data that showed Zongsi did have information and then issued a supplemental questionnaire about it, where Zongsi looked in their information and confirmed that not all of their sales were... Was that filing part of the record? [00:08:21] Speaker 01: Yes. [00:08:22] Speaker 04: It is. [00:08:22] Speaker 04: It is. [00:08:23] Speaker 01: I can give you the page if that's helpful. [00:08:26] Speaker 03: But that filing was untimely, right? [00:08:29] Speaker 01: No, that filing was timely. [00:08:31] Speaker 01: What was rejected was later. [00:08:33] Speaker 03: The explanation of why you were late or why you did it. [00:08:36] Speaker 03: Yes. [00:08:37] Speaker 01: Later their counsel tried to explain why they had an issue. [00:08:41] Speaker 03: You want to portray this as a small error, but how does commerce know that? [00:08:45] Speaker 03: I mean, commerce has a strong interest in having all of its procedures followed. [00:08:50] Speaker 03: I mean, that's why they use AFA in some circumstances like this. [00:08:55] Speaker 03: You know, maybe it was an oversight when you said we didn't have any sales, and we did. [00:08:59] Speaker 03: But there's other explanations not so benign for not reporting sales. [00:09:07] Speaker 03: And so if you had a benign explanation and you didn't come forward with it in a timely manner, then is in commerce entitled to go forward? [00:09:18] Speaker 03: Again, you should have raised all these arguments in a case brief. [00:09:22] Speaker 01: One point is that the commerce, when they get a no-sale certification, anti-dubbing or countervailing, commerce never takes it at base value. [00:09:30] Speaker 01: It is normal commerce practice in all their cases to put CBP data on the record and examine, is that true? [00:09:37] Speaker 01: They don't just rescind a review based on that certification. [00:09:40] Speaker 01: They always go through the process, which is why we characterize it as a harmless error, because one, the error was corrected early on, and two, [00:09:48] Speaker 01: That's never the basis alone of a no-sale certification. [00:09:50] Speaker 01: The review was never going to be rescinded on that error alone. [00:09:55] Speaker 01: It would have had to have been empty in the CBP data as well. [00:09:58] Speaker 01: So that's a normal procedure that Commerce goes through in no sales. [00:10:02] Speaker 01: And again, looking at whether they got to consider this issue, they did consider those two facts, that there was no sales and then that this was corrected later, and determined that that alone was enough for AFA. [00:10:17] Speaker 01: And that's a legal question, a very narrow legal question that they've already examined. [00:10:21] Speaker 01: I'm not doubting that this would be a much better situation if there had been a case brief filed. [00:10:26] Speaker 01: But this exception weighing the smaller institutional interests in this case, it's not a big complicated issue that they never considered. [00:10:38] Speaker 01: It's not like they didn't consider a methodology or a surrogate value. [00:10:42] Speaker 01: This was absolutely considered. [00:10:44] Speaker 01: with the facts clear and undisputed. [00:10:46] Speaker 01: So the agency did get to exercise its expertise. [00:10:49] Speaker 01: And then on the other side, to weigh the fact that this $15 million are owed for what we characterize again as a heartless error. [00:10:58] Speaker 01: And another consideration we thought should have been considered is the fact that they had now four counsel with us throughout the review, leading to this misunderstanding that those circumstances need to be considered. [00:11:10] Speaker 01: And for that I will leave the remainder of my time for rebuttal. [00:11:14] Speaker 02: We will save this for you. [00:11:16] Speaker 01: Thank you. [00:11:17] Speaker 02: Ms. [00:11:17] Speaker 02: Akers. [00:11:23] Speaker 00: May it please the court? [00:11:25] Speaker 00: The court should affirm the dismissal of Zongxi's complaint for failure to exhaust administrative remedies because Zongxi admits that it didn't exhaust those remedies and the only reason that it gave to the trial court was that [00:11:38] Speaker 00: it didn't believe that it had to, the futility exception, which is the exact reason and rationale that this court has previously rejected many times. [00:11:48] Speaker 00: This court has clearly stated that even though an adverse decision may have been likely, a party is not excused of their exhaustion requirements. [00:11:58] Speaker 00: And that's what Zongxi put forth to the trial court here. [00:12:01] Speaker 00: And Zongxi has put forth nothing to this court that explains [00:12:05] Speaker 00: how the trial court abused its discretion in following this court's clear precedent. [00:12:11] Speaker 00: Zongxi's counsel today says that commerce already had the opportunity to consider these issues. [00:12:18] Speaker 00: But I would point the court to the complaint that Zongxi filed with the trial court. [00:12:22] Speaker 00: Zongxi argues not only the AFA question, but also that it should be given an all others rate, and also that the court erred in concluding that the submission was untimely. [00:12:33] Speaker 00: So Zongxi raises far more issues at the trial court than were ever considered by Commerce at the administrative level. [00:12:41] Speaker 00: And as Your Honors noted, because Commerce didn't have the first opportunity to speak on these issues, it would be improper for the trial court to now hear the issues in the first instance without having the benefit of the agency's expertise and the full record before it. [00:12:58] Speaker 00: So if Your Honors have no further questions, we'll see the remainder of our time. [00:13:02] Speaker 00: Thank you. [00:13:05] Speaker 02: Ms. [00:13:06] Speaker 02: Salzman has her final time. [00:13:09] Speaker 01: Thank you. [00:13:10] Speaker 02: Not much to report, but your time. [00:13:11] Speaker 01: No, I just want to make a couple quick points. [00:13:16] Speaker 01: We did not just raise the futility argument before the court. [00:13:19] Speaker 01: As I said, we raised the pure law, and again, pointed to under the circumstances part. [00:13:25] Speaker 01: And that's where we get to the abuse of discretion here, is that the lower court only viewed those two narrow exceptions with also having mistaken facts when it reviewed those. [00:13:36] Speaker 01: One, with the supplemental brief, we could never have raised additional information in a case brief. [00:13:41] Speaker 01: And two, misunderstanding really what was that issue with AFA here. [00:13:44] Speaker 01: AFA decisions are usually a huge factual consideration. [00:13:48] Speaker 01: Here, it's not. [00:13:49] Speaker 01: It's a very narrow consideration. [00:13:51] Speaker 01: So we'd say both of those issues were a misunderstanding in discussing those exceptions. [00:13:55] Speaker 01: But the bigger issue throughout our briefing is the fact that it's under the circumstances. [00:14:01] Speaker 01: Whether they should be required and that's what was not considered was the breath of the circumstances here Council to the doj raised that there were things that the commerce did not get to consider, but we're not we did not appeal the untimely submission of Their explanation we did not raise that as an issue that they should have accepted it [00:14:22] Speaker 01: We're not bringing that before the agency. [00:14:24] Speaker 01: We're also not bringing the level of AFA rate itself. [00:14:27] Speaker 01: The only issue on the merits that we're bringing before the court is whether it's appropriate to apply AFA when a company filed a no sales certification that was subsequently corrected. [00:14:38] Speaker 01: And that issue was addressed by the agency. [00:14:41] Speaker 01: And so now we find ourselves in an area of pure law. [00:14:45] Speaker 01: with that question. [00:14:46] Speaker 01: And so we would ask that this court should find that the lower court abused its discretion in requiring exhaustion under these particular circumstances because they failed to examine the full circumstances and misunderstood some key facts. [00:14:59] Speaker 01: So we ask that this court remand to the lower court to actually decide on the merits of this case. [00:15:06] Speaker 02: Thank you, counsel. [00:15:07] Speaker 02: The case is submitted.