[00:00:01] Speaker 01:
The United States Court of Appeals for the Federal Circuit is now open and in session.

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God save the United States and this honorable court.

[00:00:10] Speaker 01:
Good morning.

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For our purposes of our argument this morning, we've consolidated three cases for purposes of argument.

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Those cases are 192131, OMG versus United States, 192226, Midwest Fastener versus United States, and 19403,

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Simpson Strong, Thai Company versus United States.

[00:00:35] Speaker 05:
Ms.

[00:00:35] Speaker 05:
Bae, we're ready to proceed whenever you are.

[00:00:40] Speaker 02:
Thank you, Your Honor.

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May it please the court?

[00:00:43] Speaker 02:
The trial court's judgment should be reversed.

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The trial court erred in multiple respects, first and foremost by relying on dictionary definitions rather than the full language of the scope, including the consideration of what a nail of two or more pieces is.

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to hold that the products at issue in these cases are unambiguously outside of the scope of the orders, even though the scope language clearly describes and encompasses NAILS in a different, broader manner than their dictionary or common definition would dictate.

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Here, especially where no language unambiguously excluded the product at issue, the trial court erred and, again, should be reversed.

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I think...

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I just want to ask you kind of a preliminary technical question, which is, with respect to each of these three cases, is there any meaningful difference between how we should look at the zinc and the nylon anchors, Vietnam orders versus the China order, or do these all really rise and fall together?

[00:01:48] Speaker 02:
Your Honor, that's unfortunately a bit of a complicated question.

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I think for the most part these cases rise and fall together because of the primary issues that are common across all three cases of the court's errant reliance on dictionary definitions and because the language of the orders is so similar between the orders.

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In addition, we think that the trial court erred in its consideration of trade usage in all three cases as well as

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ignoring the K-1 factors due to its finding that the scope orders unambiguously exclude the products at issue.

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I do think that there are slight differences between the cases that might merit bringing up, and so I can just highlight those for your honors right now.

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Just the first one is that, as Your Honor pointed out, in the OMG case, we're dealing only with zinc anchors.

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In the Simpson and Midwest Fastener case, we're dealing with nylon and zinc anchors.

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As I said, I think that commerce's determination that all of these anchors fell within the scope of the orders was reasonable and should be sustained and that the trial court erred in all of these cases.

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But to the extent that there is some sort of

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distinction in your honor's minds.

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There is a slight difference between the nature of the products as far as a couple of them being nylon anchors versus ink anchors.

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But again, I don't think that that would really, should really change the outcome of the case.

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I think the other sort of primary difference in my mind is that it is with regard to this HTS or customs or tariff classification subheading.

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I know that OMG especially has

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made the HTS subheading somewhat of a centerpiece of its argument, and though we mentioned in our brief, I think it merits highlighting more that the HTS subheading that covers OMG's anchors and that would cover Simpson and Midwest Fasteners' zinc anchors, which is HTS subheading 7907, was actually, or rather is actually,

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specifically part of the language of anti-dumping duty and countervailing duty orders covering Nelson, Vietnam, and was always part of the final language of those orders.

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I think there is a slight difference there between the Vietnam orders then with the China order, which

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currently does also specifically include HTS subheading 7907, but my understanding is that it did not specifically include that subheading in its original iteration.

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But I do think it's very key and, again, highlights how the trial court erred that it completely ignores that HTS subheading 7907 was specifically included in the language of the orders

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covering nails from Vietnam and therefore then clear intent by commerce to incorporate products such as OMG, Midwest Fasteners, and Simpson's Inc.

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anchors.

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So I think that that's an important point that I know we raised in our briefs, but we did not perhaps highlight as much as merits.

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The crowd way.

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Yes, Your Honor.

[00:05:05] Speaker 03:
I'm sorry, unless you, are you done with answering that question?

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I just wanted to ask you a question about the framework.

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Of course, Your Honor.

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Yes, Your Honor.

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Okay, so I understand the framework to be a two-step framework where first you look at the scope ruling and determine whether the governing language is in fact ambiguous.

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And then once you determine that, you determine whether the product meets the unambiguous scope terms, which is the question of fact.

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My question is, when you're looking at that first step of determining whether the governing language is in fact ambiguous,

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Do you kind of do that in the context of the imported product at issue in the case?

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Like, for example, here, when we look at the language, nails constructed of two or more pieces, are we supposed to determine what that means?

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Like, do I need to know what that means for all examples, what all nails of two pieces are?

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Or is it really just I need to know enough that I can perform the second step

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of whether the product meets the unambiguous claim scope, given that what we're talking about here is anchors.

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Your Honor, if I'm understanding your question correctly, and please correct me if I'm not, I think Your Honor's second answer would be the one that we're positing is the correct framework, which is that the cornerstone of the

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of any anti-dumping duty or countervailing duty order is, as this court has held on many occasions, the language of the orders themselves.

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And so to the extent that this court or the trial court or commerce can determine simply based on the language of the orders themselves whether these products are facially covered, then that is all that it needs to do.

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If this court or commerce were to determine that the

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term male constructed of two or more pieces had some level of ambiguity, then, of course, it might need to consider the K1 factors or, you know, potentially industry jargon.

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And I think that sort of brings us into the framework that ArcelorMiddle discussed.

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I think I'm afraid maybe I want to make sure you understand my question because I understand.

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I'm wondering whether when you look at whether the language is ambiguous.

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whether I have to know the full scope of what that language means?

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Like, do I need to know, for example, whether a steel pin with a washer falls within the scope of that language?

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Or really, am I just looking at what does that language mean in the context of the imported product issue here, which is anchors?

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Your Honor, our answer would be the second, that you're really just looking at what

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the term or what the scope language means in its own context.

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And here, as commerce determines... In the context of the issue you're saying.

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You said in its own context, but by that, just to be clear, you mean in the context of the case at issue and the product at issue in the case, right?

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Yes, Your Honor.

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In the context of the scope language and the product at issue and whether the product at issue fits within the plain language of the orders.

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And here, again, commerce determines that there was this phrase in the scope language, nails constructed of two or more pieces.

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And there is this HTS subheading that includes

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zinc anchors, and commerce determined that the phrase, nails constructed of two or more pieces, reasonably encompass zinc anchors, which have as a key component a steel nail.

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And I think it's important to highlight here that none of the parties nor the trial court disputes that this component is a steel nail.

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The only dispute is... Council, what do we... Council, what do we review this determination for?

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Commerce determines

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that this scope order reasonably encompassed the anchors as part of its scope.

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What is our standard of review of that question?

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The standard of review of that question is one of substantial deference.

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I think this court has held on many occasions that courts afford commerce substantial deference

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in interpreting the scope of their own orders because... I'm not familiar with any substantial deference language.

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Please try to speak in terms of standards of review that we've actually ever articulated, like arbitrary and capricious, substantial evidence, clear error.

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Please try to identify for me an actual standard of review.

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I believe that this court did, actually, in the Shenyang-Dwanda case state that it granted significant deference.

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I may have used the wrong term, substantial, instead of significant.

[00:09:51] Speaker 04:
Again, significant deference doesn't mean anything to me.

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That's like saying, you know, you're a little bit tall.

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I don't know what significant deference means.

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Can you frame it in terms of a standard of review that we commonly use?

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Do we review commerce?

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Is this a staff question or a law question, for example?

[00:10:10] Speaker 02:
So your honor, I think with regard to whether the question is one of fact or one of law, the answer, as I believe this court has held, is that in determining whether a term in the order is ambiguous or unambiguous, that is a question of law that's reviewed de novo.

[00:10:26] Speaker 02:
But as this court held in Meridian, the question of whether a product meets the terms of the scope is a question of fact that is

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is something that commerce would be interpreting in the first instance and which then of course the court would.

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So if it's a question of fact whether or not anchors with the nail anchor combination is in fact a two-piece nail, then we would review that for substantial evidence coming from the agency, is that right?

[00:10:58] Speaker 02:
Yes, Your Honor, the standard would then be if it's, I believe, not unlawful and is supported by substantial evidence.

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And I believe that, sorry, Your Honor, that this Court has held that when it comes to whether something is supported by substantial evidence, then as long as commerce's determination is reasonable, this Court would not disturb it, even if it might have found differently in the first instance.

[00:11:25] Speaker 02:
I think that that, again, is where the trial court erred here.

[00:11:28] Speaker 02:
Rather than determining whether commerce's determination was reasonable and supported by substantial evidence, the court rather substituted its judgment for commerce's instead of affording commerce any deference, even though commerce... Counsel, can I just follow up on your discussion with Judge Moore, which is an important one?

[00:11:49] Speaker 05:
I think in your answer, you did note that in our case Meridian product,

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we said, I recall, and I may be wrong about this, that whether the terms are unambiguous or whether an ambiguity exists is a question of law for de novo review.

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Am I right about that?

[00:12:09] Speaker 02:
Yes, Your Honor.

[00:12:14] Speaker 03:
Yes, Your Honor.

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Council, this is Judge Still.

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Could I ask you another question?

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I wanted to ask you about Duger's, Commerce's conclusion that

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the OMG's anchors should be considered as a unitary article of commerce.

[00:12:32] Speaker 02:
Yes, Your Honor.

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I believe that all parties do agree that the anchors should be considered a unitary article of commerce, because they are meant to be used together, both the body component and the steel component, and they function together as a singular product, and therefore they should be considered unitarily.

[00:12:51] Speaker 02:
But I don't think that that detracts from the trial court's error in relying on dictionary definitions of the term nail, rather than considering what

[00:13:00] Speaker 03:
If it's a unitary product of commerce, doesn't the whole product and not just the steel pen have to be a nail?

[00:13:08] Speaker 02:
Your Honor, I take your point and the trial court's point, but I think the problem with the trial court's point in saying that the entire product needs to be a nail is that it doesn't take into account how there could be a nail of two or more pieces, which again is specifically part of commerce's scope language.

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And in determining what is a nail of two or more pieces, the trial court never considers or explains how

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there could be a nail of two or more pieces where each part constitutes a component of a nail.

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Commerce, on the other hand, did recognize that there would be nails of two or more pieces where one part could be a steel pin component and one part could be an anchor component.

[00:13:52] Speaker 03:
Well, isn't there another example of a two-part nail that could be a shaft with a decorative nail head being two parts?

[00:14:03] Speaker 02:
Your Honor, we're not disputing that that could be an example of a two-piece nail, but I think there's a couple important things to point out in that regard.

[00:14:11] Speaker 02:
One is that OMG, although it states that a two-piece nail would be something like a nail with a decorative head, the pages of the record that it cites to don't actually use the term nail of two or more pieces or two-piece nail or anywhere expressed explicitly on the pages of the record that OMG cites, but those are two-piece nails.

[00:14:32] Speaker 02:
and the trial court are substituting definitions that are not grounded in the scope language in determining what is a nail of two or more pieces.

[00:14:41] Speaker 02:
On the other hand, the ITC report, which contains, I believe, the only description on the records of what nails of two or more pieces are, specifically identify both nails with decorative heads, as well as nails with washers, as well as anchors that are comprised of an anchor body and, or sorry, a zinc body and

[00:15:01] Speaker 02:
a steel nail component such as we have here.

[00:15:04] Speaker 02:
I have a question about counsel.

[00:15:06] Speaker 03:
Is that a K-1 factor?

[00:15:09] Speaker 03:
Yes.

[00:15:10] Speaker 03:
Right.

[00:15:12] Speaker 03:
So why do I even look at that?

[00:15:14] Speaker 03:
Can I look at that now?

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I mean, let's say that I agree with you and the parties in the trial court below that the language is unambiguous.

[00:15:25] Speaker 03:
Why would I be looking at a K-1 factor to try to determine that it's ambiguous?

[00:15:30] Speaker 02:
Well, Your Honor, of course, if you agree with our position in commerce is that the language is unambiguous, then you would not need to look at the K-1 factors in accordance with our middle.

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But we're submitting that the trial court erred in holding that the language was unambiguous and unambiguously excluded the product at issue.

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And we think that that was clear error.

[00:15:54] Speaker 02:
this court were to determine that, you know, the term nail of two or more pieces, which, again, the court did not even consider, is ambiguous, then it would turn to things like the ITC report and the former scope ruling that Congress considered in this case.

[00:16:12] Speaker 02:
My understanding is that I am now about a minute and a half into rebuttal, so I'll reserve the rest for rebuttal.

[00:16:17] Speaker 05:
Let me just ask, make sure, because I thought I maybe heard Judge Mueller wanting to ask a question before.

[00:16:23] Speaker 05:
Any further questions for you, Judge Mueller?

[00:16:25] Speaker 04:
Yes, thank you.

[00:16:26] Speaker 04:
So I guess what do we reference to figure out if this is ambiguous or not?

[00:16:33] Speaker 04:
I'll be honest.

[00:16:34] Speaker 04:
I don't have experience with this concept of two-piece nails, and I'm pretty handy.

[00:16:38] Speaker 04:
So I've never heard of a two-piece nail before.

[00:16:41] Speaker 04:
So what would be the kind of thing we would reference to ascertain whether that phrase is ambiguous or not?

[00:16:48] Speaker 04:
Because it's just used in the order without sort of further explanation or example being given.

[00:16:54] Speaker 02:
Well, Your Honor, our position in commerce is that because the phrase is used in the order without any further restriction, that any nail that would be comprised of two or more pieces would unambiguously fit within the terms of the order.

[00:17:09] Speaker 04:
But Council, Council, you're saying any nail that's comprised of two or more pieces, but a nail in a washer is not a nail.

[00:17:15] Speaker 04:
A nail in a cap is not a nail.

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A nail in an anchor is not a nail.

[00:17:21] Speaker 04:
heard nor do I see in this record, apart from the ITC thing, any explanation for what a two-piece nail is.

[00:17:30] Speaker 04:
I understand that one could say a nail in a washer is a two-piece nail, but one could also say it's a nail in a washer.

[00:17:37] Speaker 04:
The washer isn't part of the nail, and therefore it's not a piece of the nail.

[00:17:41] Speaker 04:
Do you understand where I'm going?

[00:17:43] Speaker 04:
I'm just trying to use sort of plain English to understand this.

[00:17:47] Speaker 04:
And where do we reference?

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Because the two-piece nail concept is just

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It's just confusing for me.

[00:17:52] Speaker 04:
So in terms of determining whether it's ambiguous or not, and maybe it is unambiguous and I'm just certainly not a skilled artisan, but to me, where do we look to make this determination as a matter of law about whether it's ambiguous or not?

[00:18:09] Speaker 02:
Well, Your Honor, I think the answer to that is if this court determines that it is not clear from the language of the order itself,

[00:18:17] Speaker 02:
And again, I would point out here that the Vietnam orders do specifically incorporate the 7907 subheading, which does include OMG Zinc anchors.

[00:18:27] Speaker 02:
So I think that would be language of the order clearly pointing towards the inclusion of those anchors.

[00:18:32] Speaker 02:
But to the point that the court determines that it's just not clear from the language of the orders,

[00:18:41] Speaker 02:
what a nail of two or more pieces is, then I think at that point the court would proceed to a K-1 analysis, in which case the ITC report would be, we think, definitive or dispositive of the question at hand.

[00:18:55] Speaker 02:
If this court has no further questions for the current time, I'd like to reserve my last couple minutes for rebuttal.

[00:19:00] Speaker 05:
Thank you very much.

[00:19:02] Speaker 05:
From the other side, we have a split argument.

[00:19:08] Speaker 05:
So Mr.

[00:19:10] Speaker 05:
Uh, who is the first person to argue?

[00:19:13] Speaker 05:
I'm sorry.

[00:19:13] Speaker 07:
This is, um, Mr. Marshack.

[00:19:16] Speaker 07:
Am I, am I on the phone now?

[00:19:18] Speaker 07:
I'm unmuting myself.

[00:19:20] Speaker 07:
I can hear you.

[00:19:21] Speaker 07:
Yes.

[00:19:21] Speaker 07:
Okay.

[00:19:21] Speaker 07:
Good.

[00:19:23] Speaker 07:
Um, yeah, this is Ned Marshack and I represent OMG.

[00:19:26] Speaker 07:
So this is a Vietnam case we're talking about.

[00:19:29] Speaker 05:
Sir, I hope I'm speaking for the entire panel.

[00:19:32] Speaker 05:
I think your voice is a little too loud.

[00:19:34] Speaker 05:
So could you drop it down?

[00:19:36] Speaker 07:
Is this better?

[00:19:39] Speaker 07:
Yeah, a little bit.

[00:19:39] Speaker 05:
Yes, thank you.

[00:19:40] Speaker 07:
Okay.

[00:19:41] Speaker 07:
I'll put the phone a little bit further away.

[00:19:44] Speaker 07:
Ned Marschak on behalf of OMG, we have the zinc anchors from Vietnam.

[00:19:51] Speaker 07:
And I just, I guess I want to continue with the conversation that the court was having counsel for the United States.

[00:19:59] Speaker 07:
We believe that the order, the language and the CIT was correct, that unambiguously the language

[00:20:08] Speaker 07:
nails of two or more pieces unambiguously excludes our zinc anchors, because basically what we have here, we have a zinc anchor.

[00:20:16] Speaker 07:
We don't have a nail and a component part of a nail.

[00:20:20] Speaker 07:
We don't have a nail and a minor component of the nail.

[00:20:25] Speaker 07:
For example, you may say a washer or a cap.

[00:20:27] Speaker 07:
What we have is a zinc anchor, and in the zinc anchor, the body of the anchor is

[00:20:34] Speaker 07:
weighs 62% of the product, the value 74% of the product, it's being bought and sold.

[00:20:41] Speaker 07:
It's known in the trade, the trade uses a Zinc anchor.

[00:20:45] Speaker 04:
And when you look at the evidence of record in this case... Council, all these things that you're describing, how much it weighs, how much it costs, wouldn't those be K1 factor analysis points?

[00:20:56] Speaker 04:
How are those

[00:20:58] Speaker 04:
relevant to us deciding whether the word two-piece nail is ambiguous or not?

[00:21:03] Speaker 07:
Okay.

[00:21:04] Speaker 07:
What we're saying is whether or not the word two-piece nail is ambiguous, and we don't think it is, and I could get to that in a second when we talk about what two-piece nails are, a zinc anchor is just not a two-piece nail.

[00:21:20] Speaker 07:
For something to be a two-piece nail, the second piece has to be part of the nail.

[00:21:26] Speaker 07:
And here, the second piece is a body, and the body is really the defining part of this product.

[00:21:34] Speaker 07:
Again, it's a zinc anchor on the trade usage that's being sold.

[00:21:38] Speaker 07:
It's a zinc anchor.

[00:21:39] Speaker 07:
It's not a nail.

[00:21:41] Speaker 04:
So you're suggesting the proper definition of a two-piece nail, as I understand it,

[00:21:47] Speaker 04:
is that both pieces have to be part of the nail, is that correct?

[00:21:52] Speaker 07:
The pieces have to be part of the nail or the second piece has to somehow be a minor component.

[00:22:00] Speaker 07:
And there when we talk about two-piece nails, if you look at the appendix at page 243,

[00:22:08] Speaker 07:
These are the examples of two-piece nails.

[00:22:11] Speaker 07:
And this is the ASTM specifications that were placed, that were in the petition, that's on the record, that we cited to.

[00:22:18] Speaker 07:
And it talks about two-piece nails as being hand-driven cap nails, or hand-driven with a metal round cap, or a metal square cap, or a plastic round cap, or a plastic square cap.

[00:22:33] Speaker 07:
Now those are

[00:22:36] Speaker 07:
in the trade, adding common pollage, those are what are considered to be two-piece nails, where the second part of the nail is a cap to the nail.

[00:22:46] Speaker 03:
Counsel, this is Judge Stoll.

[00:22:48] Speaker 03:
I have a question for you.

[00:22:50] Speaker 03:
I find your answer here kind of interesting because when I read the CIT's decision, I saw the judge to be saying that a nail is something that has to be driven by impact.

[00:23:03] Speaker 03:
Yes.

[00:23:03] Speaker 03:
And really focusing on the impact insertion.

[00:23:06] Speaker 03:
Absolutely.

[00:23:07] Speaker 03:
And then finding that an anchor here is not a nail because it doesn't use impact insertion.

[00:23:14] Speaker 03:
And so I'm wondering, are you backing away from that?

[00:23:18] Speaker 07:
Absolutely not, Your Honor.

[00:23:20] Speaker 07:
That's like the fundamental distinction, and I probably should have talked about that first, between an anchor and a nail.

[00:23:28] Speaker 07:
And the judge hit on that.

[00:23:31] Speaker 07:
that when he looked at the definition of nail, it's like a slender object that you hit on the head with a hammer, and that's the insertion, where the zinc anchor is totally different.

[00:23:45] Speaker 07:
There, you drill a hole, you insert the zinc body, and then when you hit the pin or the nail, that expands the zinc body.

[00:23:55] Speaker 07:
And I think when the judge

[00:23:58] Speaker 07:
George Cashman was talking about the difference in the nail, why this is unambiguously not a nail.

[00:24:05] Speaker 07:
He was saying it doesn't function like a nail.

[00:24:08] Speaker 07:
A nail, regardless if it's one or two pieces, has the same function.

[00:24:13] Speaker 07:
Your two-piece plastic cap nail functions as a nail.

[00:24:17] Speaker 07:
You hit the head and it's inserted and that's the

[00:24:23] Speaker 07:
That's what the insertion is.

[00:24:25] Speaker 07:
That's what secures the two pieces.

[00:24:29] Speaker 07:
With a zinc anchor, the two pieces are secured by a totally different method.

[00:24:34] Speaker 07:
You drill the hole first and then you put the body in and then you expand.

[00:24:39] Speaker 07:
Yes.

[00:24:40] Speaker 04:
Council, how do you respond to the government's argument?

[00:24:46] Speaker 04:
And I hope I get it right as I understood her to explain it.

[00:24:50] Speaker 04:
that the Vietnam Order expressly references the HTS code which covers zinc anchors.

[00:25:02] Speaker 04:
Council, please don't interrupt me.

[00:25:03] Speaker 04:
But it expressly references the code covering zinc anchors.

[00:25:08] Speaker 04:
And, you know, why would it do that if it weren't meaning to include the zinc anchors in the two-piece mail category?

[00:25:18] Speaker 07:
Okay.

[00:25:19] Speaker 07:
One answer to that, Your Honor, is that... I just asked you to lower your voice a little.

[00:25:25] Speaker 07:
I'm sorry, Your Honor.

[00:25:26] Speaker 07:
One answer to that is that the HTS subheadings in the order aren't despised of their convenience.

[00:25:35] Speaker 07:
But I think a more important answer in this case, first, you look at the appendix page 339, and you're going to see when the International Trade Commission did its investigation,

[00:25:48] Speaker 07:
It did not include subheading 7907 in what they believed to be the HTS numbers subject to the investigation.

[00:25:59] Speaker 07:
And when they said for the tariff treatment, again, on appendix 339, it said, and this is according to the ITC, based upon the scope set forth by commerce, information available to the commission indicated to subject goods currently are classified in subheadings

[00:26:14] Speaker 07:
730-17055, 737-0065, and 737-0075.

[00:26:21] Speaker 07:
That does not include the classification for zinc anchors, which was 7907.

[00:26:27] Speaker 07:
And in addition, Your Honor, when they wrote the scope, if you look at the scope ruling, and that's on page 494 of the appendix, and you look at 497, when you look at the HTS numbers,

[00:26:43] Speaker 07:
on page 497 in the scope ruling for OMG, it does not include the 7907.

[00:26:53] Speaker 07:
So at the time they wrote the scope ruling, at the time the International Trade Commission did their investigation, they really weren't thinking about zinc anchors.

[00:27:03] Speaker 07:
Zinc anchors may have been put in the order as an afterthought for convenience

[00:27:08] Speaker 07:
But at the time of the investigation, the time of the ITC investigation, they did not include zinc anchors as part of the investigation.

[00:27:16] Speaker 07:
And, in fact, at the time of the scope ruling, they did not include the HTS for zinc anchors in your scope.

[00:27:23] Speaker 04:
But, but, but, but, Council, that's, that's the scope ruling or the investigation.

[00:27:29] Speaker 04:
We have to determine if the words two-piece anchors in the actual order

[00:27:35] Speaker 04:
is or is not ambiguous.

[00:27:37] Speaker 04:
And it's the actual order itself, which expressly refers to a heading that only applies to zinc anxious.

[00:27:43] Speaker 04:
Is that correct?

[00:27:44] Speaker 07:
Correct.

[00:27:45] Speaker 07:
Your honor.

[00:27:45] Speaker 07:
That is, um, again, it's, it's for convenience only.

[00:27:49] Speaker 04:
I don't understand what you mean.

[00:27:53] Speaker 04:
It's for convenience only.

[00:27:54] Speaker 04:
It was in the order as exemplifying what is covered by the scope of the order.

[00:27:59] Speaker 04:
Is that right?

[00:28:00] Speaker 07:
It's, it's in the order.

[00:28:02] Speaker 07:
because they have HTF subheadings are provided for convenience and customs purposes.

[00:28:07] Speaker 07:
And then it says the written description of the scope of the orders is dispositive.

[00:28:12] Speaker 07:
So the fact that they may have put 7907 for convenience does not... I don't understand whose convenience you mean.

[00:28:21] Speaker 04:
I don't even understand the use of that word in this context.

[00:28:24] Speaker 04:
The order gives these headings as what are

[00:28:28] Speaker 04:
presumptively, when they write the order, included within the order.

[00:28:33] Speaker 04:
Is that right?

[00:28:34] Speaker 04:
Am I understanding how these orders work and why the headings are listed?

[00:28:38] Speaker 07:
The headings are listed.

[00:28:39] Speaker 07:
And this is in every single heading for every single case.

[00:28:43] Speaker 07:
They're listed for the convenience and customs purposes.

[00:28:47] Speaker 07:
And then in every single case, it says the written description of the scope of the orders is dispositive.

[00:28:53] Speaker 07:
And here.

[00:28:54] Speaker 04:
The written description is dispositive, but the HTS headings

[00:28:58] Speaker 04:
aren't they listed as exemplifying what is intended to be covered by the order?

[00:29:05] Speaker 04:
What would be the purpose of listing them?

[00:29:08] Speaker 07:
Again, it's what commerce says for convenience.

[00:29:12] Speaker 04:
In this case, we believe if they listed them... You keep saying convenience, but who's convenience?

[00:29:18] Speaker 04:
The convenience is for the agency to know if something comes in under a certain heading.

[00:29:23] Speaker 04:
Ah, yes, this order is applicable to it.

[00:29:25] Speaker 07:
Is that the convenience you mean?

[00:29:28] Speaker 07:
If you look at 7907, Your Honor, it includes, you know, many, many, many products.

[00:29:33] Speaker 07:
I believe it's a basket provision for articles of zinc.

[00:29:38] Speaker 07:
So maybe there's something else there, but there's a possibility that an article of zinc could be considered to be subject to disorder.

[00:29:46] Speaker 07:
Our article of zinc, which is a zinc anchor, is not there.

[00:29:52] Speaker 07:
You know, the other reason they probably put it in because,

[00:29:56] Speaker 07:
that I believe that was in because of the Culper case, their decision there, and we believe that that was absolutely wrongly decided.

[00:30:04] Speaker 07:
Because when you look at the product, what we have is a zinc anchor, and this zinc anchor, the body, cannot, we believe in any stretch of the imagination, be considered part of a nail.

[00:30:20] Speaker 07:
It's just not a nail.

[00:30:22] Speaker 07:
It's a totally different product, and the trade believes it's a different product,

[00:30:27] Speaker 07:
Just anybody's nomenclature, people who use these products know when they ask for a zinc anchor, they get a zinc anchor.

[00:30:36] Speaker 07:
When they ask for a nail or a two-piece nail, they get a nail.

[00:30:39] Speaker 07:
And again, we have the ASTM and we have the Lowe's website where you see there's a category of two-piece nails and there's a totally separate category of zinc anchors.

[00:30:51] Speaker 07:
And the record in this case, you know, we have 10

[00:30:56] Speaker 07:
definitions or ten sources of what calling this product a zinc anchor.

[00:31:04] Speaker 07:
It's a zinc anchor.

[00:31:05] Speaker 07:
It's not a two-piece nail.

[00:31:07] Speaker 07:
And if petitioner of commerce wanted to come up with anything to say that it's a two-piece nail, they could have done it.

[00:31:14] Speaker 07:
And I think the absence of any evidence at all, there is absolutely nothing to show that anybody thinks of this zinc anchor.

[00:31:24] Speaker 07:
as a two-piece nail.

[00:31:26] Speaker 07:
They had the opportunity to put in any trade usage they wanted.

[00:31:29] Speaker 07:
The only person in the world who considers this zinc anchor to be a two-piece nail is commerce.

[00:31:36] Speaker 07:
And when you ask them why, they just say, well, it's a body and it's a nail, so therefore it's a two-piece nail.

[00:31:43] Speaker 07:
Without recognizing the body, it's not part of the nail.

[00:31:47] Speaker 07:
And we know it's not dispositive.

[00:31:49] Speaker 04:
I'm sorry, Your Honor.

[00:31:50] Speaker 04:
Didn't the ITC report also conclude this was a 2B snail?

[00:31:58] Speaker 07:
I believe that there's ambiguity there because if you will look at the appendix at 339 that it talks about it has the tariff treatment and the tariff treatment says we're not aware of any HTS subheadings so we're not aware of 7907 and right below it, it has the product.

[00:32:17] Speaker 07:
It talks about some nails are produced from two or more pieces.

[00:32:22] Speaker 07:
We agree with that.

[00:32:23] Speaker 07:
And then it talks about examples, nails with a decorative head.

[00:32:27] Speaker 07:
And then it talks about an example, a masonry anchor that comprises a zinc anchor and a steel wire nail.

[00:32:34] Speaker 07:
And I think there, the ITC recognized that you could have something together

[00:32:41] Speaker 07:
a anchor and a nail.

[00:32:43] Speaker 07:
We believe the ITC made a mistake because it's not the zinc anchor, it's the zinc body and a steel wire nail.

[00:32:49] Speaker 07:
So, you know, potentially there's some potential ambiguity in that one comment by the ITC, but I believe you don't even get there.

[00:32:59] Speaker 04:
You know, I believe this is... Well, but, Judge Counsel, you said nobody except for Commerce has ever considered zinc anchor to constitute a two-piece nail.

[00:33:11] Speaker 04:
But doesn't the ITC report suggest that the ITC also thinks so?

[00:33:16] Speaker 07:
I'm not sure.

[00:33:17] Speaker 04:
Because of the paragraph above, when we talk about tariff treatment and... So in order for me to conclude the ITC does not think the zinc anchor is a two-piece nail, I have to conclude they had a typo in their report?

[00:33:33] Speaker 07:
No.

[00:33:34] Speaker 07:
No, it's not a question of a typo.

[00:33:36] Speaker 07:
It's a question

[00:33:37] Speaker 07:
that when you're talking about this paragraph in the IPC report, then you're getting heavily into the K-1 factors, because this would be a K-1 factor.

[00:33:48] Speaker 07:
And if you got heavily into the K-1 factors, which the Department of Commerce didn't, because they said it was unambiguously a nail, and the court didn't, because the court said it was unambiguously not a nail,

[00:34:05] Speaker 07:
If you got into the K-2 factors, as we talked about in our brief, you know, we could say basically there are 10 K-1 factors that support our position that this is not a nail.

[00:34:20] Speaker 07:
You look at the petition, you look at the rest of the ITC report, and there's this one reference which potentially supports the possibility

[00:34:31] Speaker 07:
that it's a nail.

[00:34:32] Speaker 07:
So we believe if you did get into a careful analysis of the K1 factors, we would win on that, but neither the department or the court really got into that very, you know, sophisticated K1 analysis.

[00:34:48] Speaker 07:
But we believe we would win on that based on what's in our brief.

[00:34:52] Speaker 05:
If the panel doesn't have anything further for you, I think if Mr. Williams is up, I think I did hear the bell sound a few minutes ago.

[00:35:00] Speaker 05:
So the remainder of the time is for Mr. Williams.

[00:35:05] Speaker 05:
How much time is left?

[00:35:08] Speaker 01:
Your Honor, we had run over about five minutes for Mr. Marshak.

[00:35:14] Speaker 01:
Should I set it for five minutes for Mr. Williams?

[00:35:17] Speaker 05:
Yes.

[00:35:17] Speaker 05:
Thank you.

[00:35:20] Speaker 05:
Obviously, if the panel has a question, we'll extend that.

[00:35:23] Speaker 05:
Mr. Williams, you're up.

[00:35:25] Speaker 06:
Good morning, Your Honors.

[00:35:27] Speaker 06:
May I please the court?

[00:35:30] Speaker 06:
And perhaps the only question in these cases is whether anchors are nails.

[00:35:35] Speaker 06:
You have to reach the conclusion that these are nails before you can even get to the analysis of whether they are a two-piece nail.

[00:35:46] Speaker 05:
Well, let me ask you, is the threshold matter, Mr. Williams?

[00:35:49] Speaker 05:
This is Judge Prost.

[00:35:51] Speaker 05:
I was a little confused by your briefing.

[00:35:53] Speaker 05:
I think you agreed that the CIT was correct.

[00:35:57] Speaker 05:
But you also said that the CIT concluded that the term two-piece meals was ambiguous.

[00:36:04] Speaker 05:
Is that your reading of the CIT's opinion?

[00:36:08] Speaker 05:
The CIT included... Yeah, and I understand... Yeah, excuse me.

[00:36:13] Speaker 06:
I understand why you might think that that was confusing.

[00:36:19] Speaker 06:
When I was talking about, we were talking about the CIT's opinion and ambiguity.

[00:36:31] Speaker 06:
We were addressing the CIT's use of dictionary definitions to define what is a NAIL.

[00:36:41] Speaker 06:
And so to the extent that the CIT

[00:36:46] Speaker 06:
looked at dictionary definitions to define what a nail was a nail, then, you know, perhaps they concluded that there was some ambiguity in that statement.

[00:37:00] Speaker 05:
Well, is there anything to add to the CIT opinion that has, I thought, I read the CIT as saying there was no ambiguity.

[00:37:11] Speaker 06:
Yes, I would agree with that.

[00:37:14] Speaker 06:
Yes, that there's no ambiguity.

[00:37:16] Speaker 06:
And then when we were talking about ambiguity, we were looking at, you know, referencing their use of dictionary definitions to define what is a nail.

[00:37:29] Speaker 03:
Counsel, are you saying that it's okay for the CIT to look at dictionary definitions to understand the plain meaning of the word nail so long as it's not inconsistent with the order?

[00:37:40] Speaker 06:
Yes.

[00:37:42] Speaker 06:
We are.

[00:37:44] Speaker 06:
Because what is a nail?

[00:37:46] Speaker 06:
Anytime you're to say that something is within the scope, you have to know what it is.

[00:37:58] Speaker 06:
The scope here talks about certain steel nails having a nominal shaft length not exceeding 12 inches.

[00:38:06] Speaker 06:
And certain steel nails may consist of one piece construction or be constructed of two or more pieces.

[00:38:12] Speaker 06:
And so what is a nail?

[00:38:16] Speaker 06:
You have to know that.

[00:38:18] Speaker 06:
And at Commerce, in its determination, they never really addressed whether anchors are nails.

[00:38:28] Speaker 06:
They said that one component is a nail, and it's installed into position with a hammer.

[00:38:34] Speaker 06:
They just made a conclusory determination

[00:38:42] Speaker 06:
that anchors are nails.

[00:38:44] Speaker 06:
And then from there, they started talking about whether there were two-piece nails.

[00:38:52] Speaker 06:
Did I just hear the, I'm sorry, the timer that my time is up?

[00:38:57] Speaker 05:
I think I did, but let me just ask the panel if there are any further questions for Mr. Woelligen.

[00:39:01] Speaker 01:
I'm sorry, Your Honor.

[00:39:02] Speaker 01:
That was not the tone.

[00:39:03] Speaker 01:
I think that was someone's computer.

[00:39:05] Speaker 05:
Oh, OK.

[00:39:06] Speaker 05:
OK.

[00:39:07] Speaker 06:
We'll keep going then.

[00:39:10] Speaker 06:
OK.

[00:39:11] Speaker 06:
So they skipped over the first part of the analysis, our anchors' nails.

[00:39:17] Speaker 06:
And that in and of itself is an unreasonable determination.

[00:39:21] Speaker 06:
So when the CIT looked at what is a nail, defined that term, and then compared that definition to a nail, to the anchors, they concluded that these aren't nails.

[00:39:40] Speaker 06:
And the government argues that the CIT decision

[00:40:09] Speaker 06:
By using the definitions, they read out the whole part of a two-piece nail from the scope.

[00:40:20] Speaker 06:
But they didn't.

[00:40:21] Speaker 06:
They were just looking to see.

[00:40:23] Speaker 06:
The court was determining, what is a nail?

[00:40:29] Speaker 06:
Two-piece nails are still within the scope.

[00:40:31] Speaker 06:
But you first have to determine, are anchors nails?

[00:40:34] Speaker 06:
And if they aren't, then they're out of the scope of the case.

[00:40:40] Speaker 05:
Well, there is the buzzer.

[00:40:44] Speaker 05:
Does the panel have any further questions for Mr. Williams?

[00:40:48] Speaker 05:
No.

[00:40:50] Speaker 00:
No.

[00:40:50] Speaker 00:
OK.

[00:40:50] Speaker 05:
Thank you very much.

[00:40:52] Speaker 05:
Let's hear from the government, which has some time for rebuttal.

[00:40:55] Speaker 05:
Ms.

[00:40:55] Speaker 05:
Bay?

[00:41:04] Speaker 05:
Ms.

[00:41:04] Speaker 05:
Bay, are you with us?

[00:41:07] Speaker 02:
Yes.

[00:41:07] Speaker 02:
I'm sorry, Your Honor.

[00:41:08] Speaker 02:
I think I was still on mute.

[00:41:10] Speaker 02:
I think just getting to the heart of the matter, the relevant question, despite what Mr. Williams states, is not whether these products, anchors, are nailed within the dictionary definition of the terms, but whether the anchors can be considered subject merchandise, subject to the orders, whether by looking at the plain language of the orders or, even if necessary, looking at the K1 factors.

[00:41:32] Speaker 02:
And here, the trial court clearly erred by relying on dictionary definitions as an interpretive tool, but not just relying on them, but relying on them to the exclusion of scope language.

[00:41:43] Speaker 03:
This court held that... Counsel, this is Judge Stoll.

[00:41:47] Speaker 03:
I just have a quick question for you on that, the dictionary definitions.

[00:41:50] Speaker 03:
Are you saying that a judge cannot look at a dictionary definition to understand a plain meaning of a term when that plain meaning that the judge arrives at

[00:42:02] Speaker 03:
is not inconsistent with the order.

[00:42:04] Speaker 03:
Would you find that objectionable?

[00:42:07] Speaker 02:
Your Honor, no.

[00:42:08] Speaker 02:
I think as we stated in our briefs, we're not stating that a court may never look at dictionary definitions in interpreting an order, but rather that the court cannot rely on dictionary definitions that render other scope terms near surplusage or

[00:42:24] Speaker 02:
improperly narrow or obviate other parts of the scope and that is exactly what the court did here by stating that anchors simply cannot be mailed within their common dictionary definitions instead of looking first and foremost at the scope language and at what may be considered subject merchandise.

[00:42:43] Speaker 02:
Again, this court has held in the Meridian case that

[00:42:46] Speaker 02:
scope term should not be rendered mere surplusage and the court's reliance on dictionary definitions not only reads out nails of two or more pieces, which again the court conspicuously did not consider, but also read out other potential types of nails that don't fit within this narrow dictionary definition and do not

[00:43:07] Speaker 02:
but are clearly covered by the language of the orders.

[00:43:10] Speaker 02:
And for that matter, it even reads out the HTS subheading 7907, which is part of the language of the scope as well.

[00:43:18] Speaker 02:
I believe I heard my signal, so if this court has no further questions, thank you for your time.

[00:43:25] Speaker 05:
Anything further?

[00:43:26] Speaker 05:
Thank you.

[00:43:27] Speaker 05:
We thank both sides, all sides, and the three cases are submitted.

[00:43:32] Speaker 05:
Thank you.