[00:00:00] Speaker 04: Our next case is Hyundai Heavy Industries Company LTD versus United States and ABB Inc. [00:00:09] Speaker 04: Mr. Bond, I understand that you have reserved two minutes of your time for rebuttal? [00:00:14] Speaker 04: Yes, Your Honor. [00:00:16] Speaker 04: Okay. [00:00:16] Speaker 04: You may proceed, sir. [00:00:18] Speaker 05: Thank you. [00:00:19] Speaker 05: Good morning and may it please the court? [00:00:21] Speaker 05: Hyundai raised four issues in its case brief. [00:00:26] Speaker 05: First, the DSC's treatment of service-related revenue, SRR, documents related to SRR, the reporting of revenues for a part, and the use of total adverse facts available. [00:00:39] Speaker 04: I'm going to discuss the first few issues. [00:00:43] Speaker 04: Why don't you start with the issue, the argument that you think is most important to your case? [00:00:48] Speaker 05: Thank you, Your Honor. [00:00:48] Speaker 05: That's where I'm heading. [00:00:49] Speaker 05: I think with respect to the first two issues, this case ultimately turns on the concept of reliance. [00:00:57] Speaker 05: And in our view, the record clearly shows that Hyundai was reasonably, was reasonable in relying on the department of SRR that the department had used previously. [00:01:06] Speaker 05: It had previously used a particular definition and three proceedings for the term. [00:01:12] Speaker 05: The term is not defined in the statute or the regulations, nor was it defined [00:01:16] Speaker 04: in the questionnaire that Hyundai... Mr. Bond, is commerce required to rely on the investigatory steps it took in prior annual reviews? [00:01:30] Speaker 05: Well, I think, Your Honor, it's not a simple yes or no answer. [00:01:34] Speaker 05: First of all, the circumstances in this review were such that the exact same evidence was at issue in POR 3 as in POR 2, some of it was identical, some of it was similar. [00:01:44] Speaker 05: the same legal issue was being considered, and the decision that was made in POR 2 overlapped with the reporting in POR 3. [00:01:52] Speaker 05: So under those circumstances, we think that the department's practice was very relevant to, number one, the approach Hyundai took in responding to questions in POR 3, as well as the department's claim that they weren't cooperative in relying on that definition. [00:02:09] Speaker 04: So conducting the third administrative review, [00:02:13] Speaker 04: You're saying, you're arguing that commerce had to or was obligated somehow to proceed on the same basis it did in the prior reviews? [00:02:25] Speaker 05: No, I would say it differently, Your Honor. [00:02:27] Speaker 05: I would say that the Department of Commerce was certainly free if it chose to take a different route to do so. [00:02:34] Speaker 05: But where Hyundai was very clear in its reliance on what the department had previously said, the department had an obligation, a high obligation [00:02:43] Speaker 04: to tell Hyundai that those previous divisions... Let's assume that in a fourth administrative review that commerce and verification determines that it needs to take a different approach or ask for information in a different form. [00:03:02] Speaker 04: Is it permitted to do so? [00:03:05] Speaker 05: Yes, as long as it makes the nature of the request clear, as long as it makes clear that it's asking for something different than what it previously required or accepted. [00:03:16] Speaker 05: Our point, Your Honor, is not that commerce is fixed, but it must always take the same approach. [00:03:21] Speaker 05: The point is that where it's routinely, regularly taking the same approach and based on the same evidence, it has an obligation to notify a respondent that it intends to make a change and that it's asking for something different. [00:03:34] Speaker 01: Mr. Bond, this is Judge Chen talking. [00:03:38] Speaker 01: I saw in your brief and then also you said at the beginning of your oral argument that commerce had provided a particular definition of service-related revenue. [00:03:53] Speaker 01: And I just couldn't find that in the record to point me where commerce prior to AR3 had [00:04:01] Speaker 01: said, here's our definition of service-related revenue that we're going to be using. [00:04:09] Speaker 05: I'll also get you the appendix sites, Your Honor. [00:04:11] Speaker 05: But in the memorandum for the original investigation in POR 2, the Commerce Department made very clear that the definition, which we called the department's definition, which focused on terms of sale, was the definition that it was following. [00:04:26] Speaker 05: It also made clear that the ADB definition based on just whether there happened to be revenue on a particular document was something that it had considered and was rejecting. [00:04:37] Speaker 02: Mr. Bond, did the previous definition, this is Judge Cleveringer, did the previous definition determine whether or not the services were separately invoiced as opposed to being rolled into the total cost? [00:04:50] Speaker 05: No, I think that's the issue, Your Honor. [00:04:51] Speaker 05: The previous definition focused on whether the [00:04:55] Speaker 05: The respondent here, Hyundai, was required to provide the services under the terms of sale of the merchandise. [00:05:02] Speaker 05: It did not turn simply on whether there happened to be some itemized revenue on a document. [00:05:07] Speaker 05: And so in the documents from POR 3 that were also on the record for POR 2, there is plainly separate revenue broken out. [00:05:16] Speaker 05: The problem, the question is that under the previous definition that was applied, that would not indicate that Hyundai had separate revenue to report because those services were being provided in conformity with the terms of sale. [00:05:28] Speaker 02: My understanding was that the documents in P.R.O. [00:05:31] Speaker 02: 2 and 3 were the same but that A, B, B blew the whistle in review number 3 and pointed out the fact that those documents needed in 2 showed the possibility of independent stream of revenue [00:05:46] Speaker 02: the independent billing of the services. [00:05:49] Speaker 02: And that it was ABB blowing the whistle that caused Commerce to raise its eyes, look at the situation, and then obviously agree with ABB by coming back to you after your first refusal to give over the independent document for independent service, came back to you and said, now we really want it. [00:06:11] Speaker 02: And then when you didn't give it the second time, they came back the third time. [00:06:15] Speaker 02: and said, we want that information. [00:06:19] Speaker 05: Yeah, Your Honor, I would say that that is not consistent with what occurred, and it's not consistent with our presentation and our papers. [00:06:28] Speaker 05: What ABB did in POR 2 was, I'm sorry? [00:06:33] Speaker 02: Well, I think that's going to be the government's argument, at least that's how I understood it from the government and ABB, was that their position was that in third review, [00:06:44] Speaker 02: a specific question of whether or not there was an independent income stream for services, meaning that there was a question as to what the total product cost was. [00:06:54] Speaker 02: But that was evidenced by the documents, even though the documents had been present as well in review two. [00:07:01] Speaker 02: So if that much of it is actual, then you have to explain why it was dirty, cruel, or unfair on loan. [00:07:12] Speaker 02: our Congress to want in Review Number 3 to find out the extent to which there had been separate billing on services. [00:07:22] Speaker 05: Because I do believe... Your point, Your Honor, your point, I believe, works to support our argument. [00:07:28] Speaker 05: The documents that we're talking about that show the separate revenue which ABB placed on the record for POR 3 were also on the record for POR 2, and ABB brought those documents to the Department of Intentions. [00:07:41] Speaker 02: They didn't blow the whistle in number two. [00:07:44] Speaker 05: Well, I'm not sure what you mean by blow the whistle. [00:07:46] Speaker 05: They specifically asked the Department of Commerce to review the documents at the verification of POR2, which the Commerce Department did, and it still found that there was no service-related revenue. [00:07:56] Speaker 04: Well, Mr. Bond, in the course of that verification, it seems to me that's where A, B, and B acquired documents that showed that Hyundai could, in fact, separate [00:08:08] Speaker 04: the service-related cost or revenue from its U.S. [00:08:14] Speaker 04: price. [00:08:15] Speaker 04: That's where it blew the whistle. [00:08:18] Speaker 05: Well, again, I'm not sure what you mean by blew the whistle. [00:08:20] Speaker 04: Prior to the verification of POR2, many of these documents were... By blowing the whistle, I mean that it challenged Honda's assertion that it did not have the ability or it was unable to separate the stream of revenue related to services from its U.S. [00:08:37] Speaker 04: price. [00:08:38] Speaker 05: Correct. [00:08:39] Speaker 05: And the ABB made that claim prior to the verification of POR2, which is why the department specifically considered it as a verification of POR2. [00:08:48] Speaker 04: Tell me if I'm wrong. [00:08:52] Speaker 04: Excuse me, sir. [00:08:54] Speaker 04: Tell me if I'm wrong, but it seems that during the third review that ABB acquired the verification documents that showed that Hyundai in fact was able and had been separating [00:09:08] Speaker 04: the service-related revenue stream from its U.S. [00:09:12] Speaker 04: price in the quotes it was given to U.S. [00:09:15] Speaker 04: customers. [00:09:18] Speaker 04: That's the blowing of whistle part. [00:09:22] Speaker 05: If I could clarify two points, please. [00:09:24] Speaker 05: First, Your Honor, the documents with the separate revenue that we're referring to as whistle-blowing documents, those documents were on the record prior to the verification of PORT 2. [00:09:35] Speaker 05: ABB was aware of those documents, many of them. [00:09:38] Speaker 05: And they specifically asked Commerce to look at this particular issue with respect to those documents at the PORG verification. [00:09:45] Speaker 02: And despite that, after having done so, Mr. Bond, Mr. Bond, what I meant by whistle-blowing, I suppose I chose the wrong words, what I meant was focus attention on. [00:09:59] Speaker 02: The question, as I understood it, the question was when Hyundai was capable of separating out a service [00:10:08] Speaker 02: charges from the other charges. [00:10:10] Speaker 02: That specific question wasn't raised in number two. [00:10:15] Speaker 05: That's my point. [00:10:17] Speaker 05: The question was raised, and it was considered in video. [00:10:20] Speaker 02: In number two, there wasn't any focus of attention on this issue. [00:10:26] Speaker 02: I'm saying in review number two, there was no focus of attention [00:10:35] Speaker 02: created either by ABB or Commerce on the question that the presiding judge has nicely framed, which was whether your client was capable of separating out that service email. [00:10:48] Speaker 02: So that was just a non-issue in number two. [00:10:52] Speaker 02: It becomes an issue in number three. [00:10:54] Speaker 02: So you have to prove to us that it was illegal for Commerce to raise that issue in number three in order for you to prevail, I believe. [00:11:06] Speaker 02: And I hear you talking around the circle, not coming directly to the question. [00:11:10] Speaker 02: And I believe the presiding judge was asking the same question more sharply than I have, which was, why couldn't Amherst, once it focused its attention on documents that it had seen before, but on which it had not focused, why couldn't it ask the questions it was asking? [00:11:31] Speaker 05: Your Honor, I think there's a misconception of what Commerce did during POR 2, and therefore the relevance of its decision in POR 2 to POR 3. [00:11:39] Speaker 05: In POR 2, Commerce, based on the same documents, paid a lot of attention to this issue. [00:11:43] Speaker 05: This wasn't a new issue in POR 3. [00:11:46] Speaker 05: In particular, in POR 2, the Commerce Department said, quote, a review of sales documents on the record, including the sales traces reviewed at verification, showed no indication that Hyundai improperly reported sales data. [00:11:59] Speaker 05: None of these expenses were inconsistent with the terms of sale. [00:12:02] Speaker 05: So the idea that the Commerce Department discovered this issue based on statements of ABB for the first time in PR3 is false. [00:12:10] Speaker 05: This was a live issue beginning with the original investigation and despite that, the Commerce Department agreed with Hyundai. [00:12:17] Speaker 04: Okay. [00:12:18] Speaker 04: Accepting the argument then, how is it that you can claim some sort of surprise in PR3? [00:12:26] Speaker 04: Well, I think... Well, how is it that you can claim that you would like... I'm sorry? [00:12:32] Speaker 04: Did you say something? [00:12:34] Speaker 04: No, no. [00:12:34] Speaker 04: I started to, but please finish your question. [00:12:36] Speaker 04: I'm sorry. [00:12:37] Speaker 04: Well, thank you. [00:12:39] Speaker 04: How is it that you can say that you were relying on period two in reporting in period three when this was a live question during the second administrative review? [00:12:54] Speaker 04: CHMED alerted you to gather the data and to check your information going into the third administrator review? [00:13:04] Speaker 05: Well, in PR3, Your Honor, first of all, we were responding at the time of the original questionnaire to essentially the exact same question we've responded to in the previous segments of the proceeding. [00:13:14] Speaker 05: And so in doing that, we think reasonably relied on the Commerce Department's repeated statements that our approach was correct and ABB's approach was incorrect. [00:13:22] Speaker 05: Subsequently, between the original response and the supplemental response, the Commerce Department issued its final decision in POR 2, where once again, it concluded that our approach was correct and ABB's was incorrect. [00:13:34] Speaker 05: So, not surprisingly, we followed that approach again in responding to the supplemental questionnaire. [00:13:41] Speaker 01: Mr. Vaughn, did you ever find in the record Commerce's proclaimed definition for what SRR means? [00:13:51] Speaker 05: The definitions on the record come from, as I say, the memos from... I know. [00:13:58] Speaker 01: We were talking about this before, how you, you know, you're saying you relied on their definitions. [00:14:05] Speaker 01: And I just am looking for a page, a pinpoint, a line that where I can read, where I can see where Commerce said, here's our definition of SRR for purposes of this case. [00:14:21] Speaker 01: I mean, this is your argument. [00:14:22] Speaker 01: You argued that they had an express definition that you relied on to your detriment. [00:14:29] Speaker 01: And so I just want to see what that definition actually reads as. [00:14:38] Speaker 05: Your Honor, we described it. [00:14:41] Speaker 05: Do you have a site? [00:14:43] Speaker 05: Appendix 5120 to 23, citing to the IDM. [00:14:48] Speaker 01: I'm sorry, could you repeat that? [00:14:53] Speaker 05: We decrypted an Appendix 5120 to 23. [00:14:56] Speaker 05: 5120. [00:15:02] Speaker 05: What document is this? [00:15:05] Speaker 05: 5120. [00:15:08] Speaker 05: It's in our questionnaire responses, Your Honor. [00:15:11] Speaker 05: In our questionnaire responses, we were in turn citing to the decision memorandum of the Commerce Department from the previous segments of the proceeding. [00:15:19] Speaker 02: I have 512 open. [00:15:22] Speaker 02: I have the record open. [00:15:24] Speaker 02: Can you point from the main language in the record what you're talking about? [00:15:28] Speaker 02: Because you're citing three pages. [00:15:30] Speaker 02: Where is the definition in the three pages, please? [00:15:41] Speaker 05: Your Honor. [00:15:52] Speaker 02: These are questions and answers. [00:15:53] Speaker 02: These are answers that you're giving to commerce, I believe. [00:15:58] Speaker 05: Correct. [00:15:59] Speaker 05: I think perhaps one of the most relevant. [00:16:02] Speaker 02: So where in your answer do you define, do you say here's where out commerce has defined a term? [00:16:10] Speaker 02: I got the record open. [00:16:14] Speaker 05: 5121, your honor. [00:16:17] Speaker 02: About how far down on the page? [00:16:33] Speaker 05: Let me read it to you. [00:16:34] Speaker 05: Perhaps it would be the easiest. [00:16:36] Speaker 05: Quote, the department recognized... I'm sorry. [00:16:38] Speaker 01: Could you tell us where on the page you're reading from? [00:16:42] Speaker 05: I'm pulling the document, Your Honor. [00:16:53] Speaker 04: While he's pulling the document, Michael, did I... Am I correct that I heard the... On the tile, Your Honor. [00:17:00] Speaker 02: I think the sentence to which the council is referring is about 40% down in the page on 5121 and it reads, the department recognized that its practice is to separate revenue and expenses, quote, that are not included in the term of sale, period, close quote. [00:17:23] Speaker 05: Correct, your honor. [00:17:24] Speaker 05: And as support for that, we cited [00:17:28] Speaker 02: And how is that a definition of services? [00:17:39] Speaker 05: For any original investigation in this case, and since then, there were two operative potential definitions of service-related revenue. [00:17:45] Speaker 05: As I say, it's not defined in the statute, the regulations, or the questionnaire. [00:17:49] Speaker 05: One option, which is the option that Hyundai had followed, was that service-related revenue existed [00:17:57] Speaker 05: if someone was performing a service that it wasn't required to perform under the terms of sale. [00:18:02] Speaker 05: That was the approach that Commerce had adopted and accepted. [00:18:05] Speaker 05: The second approach, which was ABB's proposal, was that service-related revenue existed wherever there was a separate amount of money that appeared on the sales document. [00:18:14] Speaker 05: And so the tension here is that on certain sales documents, there are revenues for separate services, but those services were being performed in accordance with the terms of sale. [00:18:26] Speaker 05: So one day. [00:18:27] Speaker 02: How would you know whether or not they were included in the terms of the sale or not? [00:18:35] Speaker 02: If all you had was a document that showed you that there's a line item for service and then there's a line item for the equipment. [00:18:44] Speaker 02: And that's what the record shows of these invoices that I looked at and they were in both three and two and three. [00:18:52] Speaker 02: How do you know unless you read the underlying contract, how do you know whether the services were rolled into the total cost? [00:19:02] Speaker 05: You don't. [00:19:03] Speaker 02: You need to review the contract and sales documents. [00:19:06] Speaker 02: And if I'm not mistaken, Commerce was asking for those documents so it could determine whether or not the definition was met. [00:19:17] Speaker 05: Right, so first of all. [00:19:20] Speaker 02: I don't see how commerce is changing the definition. [00:19:22] Speaker 02: They're asking you, when ABB points out the invoices that show separate sums for service as opposed to the hardware, then ABB and commerce say, well, that's OK, provided that the terms of sale provide for the bundling of the two. [00:19:47] Speaker 05: Your Honor, it seems pretty clear that the Commerce Department changed the definition because in POR 2, looking at precisely the same sales documents that it reviewed in POR 3, it reached different conclusions. [00:19:59] Speaker 05: And the reason that it did that is because in POR 2, it stated, for example, we quote this on page 8 of our reply brief, that it was focused on whether the services were performed based on the terms of sale. [00:20:12] Speaker 05: The fact that there was separate revenue wasn't relevant. [00:20:15] Speaker 05: And POR 3 had reached an opposite conclusion based on the sales, the same sales documents. [00:20:20] Speaker 05: Oh, you know, the facts didn't change. [00:20:22] Speaker 05: What changed was their interpretation of those facts through its definition of what service-related revenue was. [00:20:29] Speaker 04: Okay. [00:20:29] Speaker 04: This is, this is, this is Judge Raina. [00:20:31] Speaker 04: Michael, where are we on time? [00:20:33] Speaker 04: Am I correct that, that Mr. Bonds' time went out, including his rebuttal time? [00:20:38] Speaker 00: Yes, your honor. [00:20:39] Speaker 00: Mr. Bonds exceeded his time by about five minutes. [00:20:42] Speaker 04: Okay. [00:20:43] Speaker 04: Mr. Bond, I'll give you your two minutes rebuttal time when it comes, all right? [00:20:49] Speaker 04: So let's hear from the other side members. [00:20:51] Speaker 04: Yes. [00:20:53] Speaker 04: Mr. Tudor, you're going to speak on behalf of the government for 12 minutes, and I understand that Mr. Liberta is going to speak for three minutes on behalf of A, B, and B. Is that correct? [00:21:06] Speaker 03: This is Mr. Tudor. [00:21:07] Speaker 03: That's my understanding, yes, Your Honor. [00:21:09] Speaker 03: All right. [00:21:09] Speaker 03: So you may proceed. [00:21:11] Speaker 03: May it please the court? [00:21:14] Speaker 03: We respectfully request that the court affirm the decision of the Court of International Trade. [00:21:20] Speaker 03: The Court of International Trade sustained commerce and remand results that applied. [00:21:25] Speaker 03: Total facts available with an adverse inference on the basis of three issues. [00:21:29] Speaker 03: One is the service-related revenue issue that the court was discussing with the Pounds Council. [00:21:34] Speaker 03: Second was the incorrect reporting of a particular [00:21:38] Speaker 03: large power transformer part that was then consistently reported in the home and U.S. [00:21:42] Speaker 03: market. [00:21:43] Speaker 04: Counselor, this is Judge Raina. [00:21:46] Speaker 04: What is it that occurred in the third review that prompted Commerce to issue its supplemental questionnaires asking for specific information on the revenue stream related to the service? [00:22:01] Speaker 03: My understanding is there's two factors. [00:22:04] Speaker 03: The initial questionnaire in the third review was much more explicit than the one in the second review as to how the service-related revenues and expenses should be reported. [00:22:16] Speaker 03: The initial questionnaire in the third review made it explicit that those revenues and expenses should be reported in separate fields in a separate database and that all such expenses and revenues should be reported. [00:22:31] Speaker 03: Hyundai didn't do that. [00:22:33] Speaker 03: They, in their response, said, well, we're going to follow the same approach that we did in the second review. [00:22:40] Speaker 03: Commerce pointedly asked a more, I guess, pointed question in their third review questionnaire than they did in the second review. [00:22:51] Speaker 03: For context, in the second review, it was discovered only at verification that there were documents that suggested that the revenues were separately negotiable, had separate line items for them. [00:23:03] Speaker 03: was only discovered at verification in the second review. [00:23:06] Speaker 03: In the third review, Commerce put the issue on the table right from the beginning. [00:23:11] Speaker 03: That's the first difference. [00:23:13] Speaker 03: Second difference is ABB did place documents on the record from the second review, those same documents, I believe, from the verification that showed that there were separate line items for things like freight or installation, had a separate price attached to them. [00:23:27] Speaker 03: Court of International Trade properly found that those records were consistent with Commerce's [00:23:34] Speaker 03: definition of service-related revenues. [00:23:38] Speaker 03: We discussed that at pages 30 and 31 of our brief. [00:23:41] Speaker 03: The court can also refer to page 127 of the appendix at note 88 for the previous Commerce Administrative determinations that had explained the basis for the capping methodology and the limiting of service-related revenues to the amount of corresponding revenues. [00:23:59] Speaker 03: After that, Commerce sent a second questionnaire in July of [00:24:04] Speaker 03: 2016, again, asking Hyundai to sell out these specific revenue items such as freight and installation and to do so in separate fields. [00:24:15] Speaker 03: Hyundai again didn't do it. [00:24:17] Speaker 03: Commerce has this third time, October of 2016, asking again, list all of these fields, all these expenses and revenues and expenses in separate fields. [00:24:27] Speaker 03: Hyundai, in response to that, [00:24:30] Speaker 03: didn't do it in the manner that commerce requested, submitted a worksheet showing that they have the information, they just didn't put it on the record before. [00:24:38] Speaker 03: Hyundai is essentially arguing that commerce is prohibited from taking a harder look at an issue in a subsequent review because it didn't take as hard a look on the issue in the previous review. [00:24:49] Speaker 03: That's inconsistent with commerce's discretion as the administering agency. [00:24:53] Speaker 03: The Court of International Trade also referred to this court's decision in Jackson Brother Fastener Company. [00:24:59] Speaker 03: 822 F3 1289 from 2014 shows a lot of different conclusions based on different facts in the record. [00:25:09] Speaker 03: Commerce explicitly asked for different facts in this case. [00:25:12] Speaker 03: Hyundai didn't want to give them to them. [00:25:13] Speaker 03: When it tried to give them to them belatedly, that information was late and incomplete. [00:25:19] Speaker 03: Commerce was under no obligation to consider it given that it was late and cannot be verified. [00:25:27] Speaker 03: There should be no question that Commerce gave the appropriate notice required under 1677M subsection B. It gave two deficiencies very pointed to this issue. [00:25:38] Speaker 03: Hyundai's defense to that is not that Commerce was unclear in what it was saying or that what Commerce wanted. [00:25:43] Speaker 03: It's just Commerce shouldn't be able to ask for that because it didn't ask for that on the factual record of a prior review. [00:25:50] Speaker 03: Prior reviews are a separate factual record. [00:25:52] Speaker 03: Commerce decided to build the factual record in this one, in part informed by [00:25:56] Speaker 03: the fact that it discovered these documents only at verification in the second review and didn't want to be in that position. [00:26:03] Speaker 03: It wanted to have all of the information on the record from the outset in this review. [00:26:07] Speaker 03: That's why it made the more explicit ask in the initial questionnaire and did so in two subsequent questionnaires. [00:26:15] Speaker 03: Hyundai, respond to this. [00:26:17] Speaker 03: Mr. Tudor? [00:26:19] Speaker 02: Yes, your honor. [00:26:21] Speaker 02: Mr. Tudor, you heard opposing counsel [00:26:25] Speaker 02: make what it means to be a strong argument that the definitions that the department was using or the conditions under which you had to separately report service changed from review number two to review number three. [00:26:44] Speaker 02: You heard that argument, correct? [00:26:46] Speaker 03: I heard that argument, Your Honor, and we disagree with it. [00:26:49] Speaker 02: And can you please tell us what the proper definition [00:26:53] Speaker 02: was and whether appendix 5121 reflects the definition. [00:27:00] Speaker 03: I was looking at 5121. [00:27:01] Speaker 03: So Hyundai appears to be citing Congress's issues and decisions memorandum in the second review. [00:27:09] Speaker 03: One, their citation amidst the previous sentence where it says that there was no separate arrangements on behalf of the customer and where Hyundai had not sought reimbursement for that cost. [00:27:22] Speaker 03: Here, the court found that there were separate line items, reflecting that these were separately negotiated with the customer. [00:27:28] Speaker 03: And therefore, Hyundai was seeking reimbursement for that cost. [00:27:31] Speaker 03: So that's inconsistent with what Hyundai's even saying in its questionnaire response. [00:27:36] Speaker 03: As for what definition commerce was using, again, we would refer to the court to pages 30 and 31 of our brief, specifically note seven, their spike to previous commerce determinations. [00:27:50] Speaker 03: One quote from the circular welded carbon steel pipes from Thailand determination, although we will offset freight expenses with freight revenue where freight revenue earned by a respondent exceeds the freight charge incurred for the same type of activity, commerce will cap freight revenue at the corresponding amount of freight charges incurred because it is inappropriate to increase gross unit selling price for subject merchandise as a result of profit earned on the sale of services i.e. [00:28:17] Speaker 03: freight. [00:28:18] Speaker 03: Commerce was applying the same legal definition in both POR2 and POR3. [00:28:25] Speaker 03: In POR2, Commerce did not have information on the record or had not taken until the verification stage that there were these separate line items on Hyundai's purchase order that then Commerce tried to make various with it on the record in POR3 that this was what was going on and try to figure out exactly what those revenues were. [00:28:48] Speaker 03: As to the question as to whether there was any discussion of this issue, that is in the CIP case 16-54, which is on appeal to this court, I believe, at 20-2114. [00:29:03] Speaker 03: And in the decision of the court in that case from February 19th of this year, which was ECF 178 in that case, the court did affirm Congress's application of partial fact available. [00:29:16] Speaker 03: to Hyundai because it discovered these submissions only at the verification stage. [00:29:23] Speaker 03: Here, Commerce made explicit on the record, tried to get the accurate information on this so that there was no confusion as to whether there were these revenues and what the amount was and what the amount of the expenses was. [00:29:37] Speaker 03: And Hyundai, nevertheless, didn't provide the information until [00:29:41] Speaker 03: well after the response to the third questionnaire and then the information was laid in and complete. [00:29:48] Speaker 03: Therefore, Congress's application of facts available with an average inference was reasonable given Hyundai's first refusal to do so and then when it did provide the information, didn't provide it in the form or manner that Congress requested. [00:30:01] Speaker 03: Does that answer the court's question with respect to [00:30:07] Speaker 03: legal definitions as opposed to the course of dealings between Commerce and Hyundai and the two reviews. [00:30:17] Speaker 04: Hey, do my colleagues have any questions? [00:30:21] Speaker 04: Okay, let's hear from Mr. Luberta. [00:30:25] Speaker 00: Thank you, your honor. [00:30:26] Speaker 00: Alan Luberta for ADD may please the court. [00:30:30] Speaker 00: I'd also like to focus on Hyundai's detrimental reliance [00:30:34] Speaker 00: argument because it rests entirely on a mischaracterization of commerce's alleged stated policy from the second administrative review to the point of where the definition of how service-related revenues are to be treated. [00:30:50] Speaker 00: On this record, if the court would look at appendix page 127, which is the issues and decision memorandum in the third review, the second paragraph there, the court [00:31:04] Speaker 00: Commerce Department explains that it didn't require separate service-related revenues in the second AR based on a factual determination that there were not separately invoiced or line item for those revenues. [00:31:25] Speaker 00: So it was a factual, not a policy issue. [00:31:28] Speaker 02: Mr. Laverne, but the record discloses that that factual [00:31:32] Speaker 02: Ascentation is incorrect, correct? [00:31:35] Speaker 00: That's correct. [00:31:36] Speaker 00: They made an error. [00:31:39] Speaker 02: Right. [00:31:40] Speaker 02: They missed in review two what they found in review three. [00:31:46] Speaker 00: That's correct. [00:31:47] Speaker 00: And as Mr. Toter pointed out, we appealed that and they corrected. [00:31:51] Speaker 00: They in fact took a voluntary remand in that case to fix what was a clear factual error. [00:31:57] Speaker 04: But the policy... How was the... This is Judge Ruina. [00:32:00] Speaker 04: How was the editor discovered? [00:32:02] Speaker 04: Through verification? [00:32:04] Speaker 00: Yeah, verification. [00:32:06] Speaker 00: Yeah, the verifier brought back a number of sales documents from verification. [00:32:11] Speaker 00: And we actually briefed in that case. [00:32:14] Speaker 00: Look, there are verification documents that show that there are separately line item issues or separate line item revenues for service. [00:32:25] Speaker 00: And we were pretty flabbergasted when the Commerce Department issued a determination that said those didn't exist. [00:32:32] Speaker 00: So we did appeal. [00:32:34] Speaker 00: When we got to the third review, we brought those documents forward and said, look, they're here. [00:32:39] Speaker 00: Please investigate this. [00:32:41] Speaker 00: And so Commerce did. [00:32:42] Speaker 00: If the court looks at the citation that Mr. Baum provided to the second review IND memo, [00:32:52] Speaker 00: You'll see on page eight of their reply brief, there's a sort of a long quote from that IND memo that's full of ellipses. [00:33:01] Speaker 00: If you go to those ellipses, if you go to the actual determination and you read what was in the ellipses, quote, quote, and as they were not listed as a separate line item on the sales invoices or separately invoiced to the customers, we find no basis to indicate Hyundai sought [00:33:19] Speaker 00: or obtained reimbursements for the expenses from the customers," end quote. [00:33:23] Speaker 00: So this is essentially the statement both of their policy to require reporting where it's separately invoice or line item and of what happened there, their idea that there was no such invoice in the last. [00:33:39] Speaker 00: So for Hyundai to take that and rely upon it as a basis, I mean they are misstating [00:33:47] Speaker 00: the basis of the determination in the last review as the Commerce Department put in its IND memo in this review. [00:33:55] Speaker 00: And so I don't see how their detrimental alliance argument can stand up. [00:34:04] Speaker 04: All right, Mr. Roberta. [00:34:05] Speaker 04: I think we've got that and you're out of time. [00:34:08] Speaker 04: Mr. Bond, will we restore you back to your two minutes of rebuttal? [00:34:12] Speaker 05: Thank you, Your Honor. [00:34:14] Speaker 05: Two quick points. [00:34:16] Speaker 05: It's important, I think, in evaluating this reliance point to think about it in context. [00:34:22] Speaker 05: Whether the Commerce Department intentionally looked at those documents and concluded that the standard that Hyundai was using, definition that Hyundai was using was correct or it made an error. [00:34:32] Speaker 05: In either case, at the time that Hyundai was preparing its responses, three times it had been told by the Commerce Department's approach that it was correct. [00:34:40] Speaker 05: Therefore, it was reasonable for Hyundai to continue following that approach. [00:34:44] Speaker 05: It wasn't until after the preliminary determination that the Commerce Department expressly said that it was considering a change. [00:34:51] Speaker 05: And at that point in time, Hyundai provided the requested worksheet with service-related revenue reported based solely on whether the revenue happened. [00:35:02] Speaker 04: But Commerce didn't ask for a worksheet, did it? [00:35:07] Speaker 05: Thomas asked for it to be put in a database when Hyundai submitted a worksheet with the information. [00:35:11] Speaker 05: That's true. [00:35:12] Speaker 04: Yeah, but right. [00:35:13] Speaker 04: It didn't ask for a worksheet. [00:35:15] Speaker 04: It asked for the underlying documents and it asked for the information for you to separate the information from US cells and to resubmit US cells with the service revenue streams separated from that. [00:35:34] Speaker 05: The department made two separate requests, Your Honor. [00:35:36] Speaker 05: The first was for [00:35:37] Speaker 05: for the data with respect to revenue that was separate based on services, which Hyundai provided in attachment 3S-46, which is in the appendix at 13258. [00:35:50] Speaker 05: That's what I'm talking about, right? [00:35:53] Speaker 05: That was a worksheet that you provided. [00:35:55] Speaker 04: Correct. [00:35:56] Speaker 05: That was requested. [00:35:57] Speaker 05: But the department also requested, as you just noted, the documents. [00:36:01] Speaker 05: So the Commerce Department requested all US sales documents. [00:36:05] Speaker 05: which Hyundai provided about 3,300 pages of documents and the department did nothing with those. [00:36:10] Speaker 05: It simply claimed that it was out of time and didn't have time to think about the extent to which they supported what was in the worksheet that I just cited. [00:36:19] Speaker 06: Okay. [00:36:21] Speaker 05: Okay, would you like to conclude? [00:36:22] Speaker 05: I would. [00:36:24] Speaker 05: I would simply conclude by saying, Your Honor, to the extent that lateness became an issue, the lateness became an issue because Congress didn't decide [00:36:32] Speaker 05: what servicing revenue meant and what it wanted until after the preliminary determination. [00:36:37] Speaker 05: The department had plenty of time left to review that worksheet that I cited as well as the documents to assess the extent to which that worksheet had useful information that could be used and to clarify any deficiencies that it thought existed, but it didn't do that. [00:36:51] Speaker 05: It just punted and claimed that it was out of time. [00:36:53] Speaker 05: Thank you, Your Honor. [00:36:55] Speaker 05: Okay, thank you. [00:36:55] Speaker 04: That concludes this morning's argument. [00:37:00] Speaker 04: I thank the parties.