[00:00:00] Speaker 03:
The case is number 20-2114, ABB Enterprise Software Incorporated against the United States.

[00:00:09] Speaker 03:
Mr. Kendler.

[00:00:11] Speaker 01:
Thank you, Your Honor.

[00:00:12] Speaker 01:
Ron Kendler of Whiten Case on behalf of Hyundai.

[00:00:15] Speaker 01:
May it please the Court, Your Honors, this is a case about the Commerce Department changing its mind years after making a final decision and then penalizing Hyundai for that very change.

[00:00:28] Speaker 01:
The government bases its entire defense of the application of adverse facts available, or AFA, on the notion that it belatedly, quote, discovered Hyundai's allegedly hidden service-related revenue, or SRR.

[00:00:45] Speaker 01:
The Court of International Trade, CIT, then affirmed the application of AFA on the basis of that supposed discovery.

[00:00:55] Speaker 01:
the administrative record and the statute refute the government's defense.

[00:01:00] Speaker 01:
As Hyundai has demonstrated, the application of AFA is therefore invalid, and we respectfully ask the court to reverse the CIT's decision and remand to the Commerce Department.

[00:01:14] Speaker 01:
There are two reasons why Commerce's application of AFA on remand was invalid, two things that the court should remember above all else in this case.

[00:01:25] Speaker 01:
Commerce's awareness and Commerce's approval.

[00:01:29] Speaker 00:
Wait, I'm a little confused about your argument.

[00:01:32] Speaker 00:
I thought the issue here was whether under 1677MD, the Commerce had to give you an opportunity to remedy if it found that there was something wrong with the data, right?

[00:01:48] Speaker 01:
Thank you, Judge Dyke, yes.

[00:01:50] Speaker 00:
And what the Commerce said and what the CIT affirmed

[00:01:55] Speaker 00:
was that that opportunity didn't have to be given because somehow the jerk line had concealed what was in the data during the course of the proceeding.

[00:02:11] Speaker 00:
Does it make any difference whether there was concealment or not in terms of whether there should be an opportunity to correct?

[00:02:19] Speaker 01:
According to the statute, no, this makes no difference, and we contest the notion that there was concealment.

[00:02:27] Speaker 01:
That is why I noted the Commerce Department's awareness and its approval of Honda's reporting of service-related revenue, or SRR.

[00:02:35] Speaker 01:
This goes back to the idea that the Commerce Department avers that it discovered the service-related revenue, and that's why it was excused from providing the deficiency notice under 1677MD,

[00:02:47] Speaker 01:
But as the record demonstrates, there was no such concealment.

[00:02:52] Speaker 01:
There was no such discovery.

[00:02:54] Speaker 00:
I understand that, but I don't think you're answering my question.

[00:02:57] Speaker 00:
My question is a hypothetical.

[00:02:59] Speaker 00:
Suppose there was concealment.

[00:03:02] Speaker 00:
Is there an obligation once the concealment is discovered to give an opportunity to remedy?

[00:03:09] Speaker 01:
Absolutely.

[00:03:10] Speaker 01:
The language of 1677 and the says that as soon as commerce, quote, determines,

[00:03:16] Speaker 01:
that information is missing, it shall promptly inform the person submitting the response.

[00:03:22] Speaker 01:
It makes no reference to concealment or any kind of intent of whether the information is submitted or not.

[00:03:30] Speaker 01:
Once Commerce discovers that there's no information or that there's less information than it asks for, it must notify the respondent.

[00:03:41] Speaker 01:
With that said, as discussed, we would contest this notion of concealment in this case.

[00:03:46] Speaker 01:
First, Commerce was at all times fully aware of Hyundai's SRR reporting.

[00:03:52] Speaker 01:
Based on Hyundai's explanations and the documentation on the record, it did not discover any concealed SRR.

[00:04:00] Speaker 01:
And second, the Commerce Department repeatedly and unequivocally approved.

[00:04:05] Speaker 00:
If you point us to some of these invoices that you say disclosed the methodology, is one of those

[00:04:14] Speaker 00:
2408.

[00:04:18] Speaker 01:
So 2408, Your Honor, is the questionnaire response in which Hyundai first discussed its method for reporting service-related revenue, or SRR, consistent with the terms of sale.

[00:04:29] Speaker 01:
If you'd like to see the actual documentation, I would direct the Court most relevantly to Appendix 10311 to 10348.

[00:04:39] Speaker 01:
These are the sales documents for multiple sales that the department reviewed at verification and which Hyundai highlighted the specific line items for the Court of International Trades review before the proceedings in that court.

[00:04:54] Speaker 01:
We would further point the court to Appendix 2891 to 2910.

[00:04:57] Speaker 00:
Wait, wait, this is just numbers.

[00:05:03] Speaker 00:
What's your best invoice that this process?

[00:05:07] Speaker 01:
I would say most certainly in terms of the temporal aspect, it would be 2891 to 2910.

[00:05:13] Speaker 01:
That's the sequence 11 sales documentation, the purchase order, invoice, and change orders, which all show the separate line items for service related revenue that were brought to the department's attention during the review before verification by ABB, the petitioner.

[00:05:32] Speaker 01:
And that discussion by ABB is that Appendix 6162 to 6163.

[00:05:37] Speaker 00:
Twenty-nine eleven.

[00:05:44] Speaker 01:
Twenty-eight ninety-one to twenty-nine ten.

[00:05:48] Speaker 00:
Twenty-eight ninety-one.

[00:05:50] Speaker 00:
Hold on.

[00:05:59] Speaker 00:
Twenty-eight ninety-one is the invoice.

[00:06:02] Speaker 01:
Give me one moment, Your Honor.

[00:06:05] Speaker 01:
I will just open that as well and confirm.

[00:06:08] Speaker 01:
So, 2891 is the purchase order.

[00:06:12] Speaker 01:
And then if you proceed throughout the pages, what you'll see in particular on 2894, for starters, we have a line item for supervision.

[00:06:23] Speaker 01:
Then 2897 begins the change order.

[00:06:26] Speaker 01:
Again, 2900, we see supervision.

[00:06:29] Speaker 01:
And then another change order at 2903.

[00:06:32] Speaker 01:
And then at 2907, we see supervision.

[00:06:37] Speaker 01:
So supervision in this case is the service that is discussed.

[00:06:41] Speaker 01:
And you can see the revenue for supervision being provided, that 26,000 figure, for example, on 2907.

[00:06:50] Speaker 01:
These are the separate line items that contain the separate revenue.

[00:06:55] Speaker 01:
that ABB highlighted to the department well before verification, therefore indicating that the department had an awareness of what was in this sales documentation.

[00:07:09] Speaker 00:
And you didn't create a field separately reporting this?

[00:07:14] Speaker 01:
That's correct because what Hyundai was doing was making clear to the department that it would not create such fields where these services were covered by the terms of sale.

[00:07:25] Speaker 01:
So it explained that to the department, the department understood it, and the department approved it in the final determination, the final results of the second administrative review, when it stated that there was no indication, that's at appendix 9638 to 9639, no indication that Hyundai improperly reported its sales data based on the documentation on the record, including the sales traces reviewed at verification.

[00:07:55] Speaker 01:
So what the Commerce Department was saying here was we've looked at this documentation.

[00:08:00] Speaker 01:
We see these separate line items.

[00:08:02] Speaker 01:
We still find that Hyundai has reported service related revenue consistent with the terms of sale.

[00:08:09] Speaker 01:
And the fact that there are these line item breakouts is of no relevance to that determination.

[00:08:19] Speaker 01:
I would, I would further direct the court, your honor, if I may, uh, as mentioned earlier to appendix 10,311 to 10,348.

[00:08:26] Speaker 01:
Those are additional sales documentations where we've, and this was before the court of international trade highlighted the specific separate revenue that again, the department saw at verification and was aware of in making that final decision.

[00:08:47] Speaker 01:
So with that in mind, the department had this full awareness.

[00:08:51] Speaker 01:
It saw these documents throughout the administrative review, it reviewed them again at verification, and it failed to provide the deficiency notice.

[00:09:00] Speaker 01:
And that's really very relevant here because it completely belies the government's argument that Commerce, quote, discovered the SRR and that Hyundai concealed it.

[00:09:12] Speaker 01:
It may have not reported it, but that reporting was consistent with the basis of reporting of the terms of sale, which as discussed, the department approved in the final results of the second administrative review, just as it had in previous reviews.

[00:09:29] Speaker 01:
And Hyundai made clear, and that's what we see at Appendix 6162 to 6163, that is Hyundai's description of the SRR reporting,

[00:09:41] Speaker 01:
I realized that earlier I quoted that for ABBs alerting the department.

[00:09:46] Speaker 01:
That is in fact that Appendix 6887.

[00:09:49] Speaker 01:
Apologies for that.

[00:09:51] Speaker 01:
But we see in that discussion, Hyundai making clear the basis for its reporting of service-related revenue on the terms of sale.

[00:10:00] Speaker 01:
So it's important because 1677MD, as discussed earlier,

[00:10:06] Speaker 01:
requires the department as soon as it realizes that information is missing from the record to issue that deficiency notice.

[00:10:14] Speaker 01:
It failed to do so during the review and it failed to do so again when it was remanded to the department after proceedings at the Court of International Trade.

[00:10:24] Speaker 01:
Because of that failure and because that failure is not excused, there is no basis to affirm the application of facts available and no defense for the government.

[00:10:36] Speaker 01:
In addition to its awareness, the government, the Department of Commerce also approved Hyundai's SRR reporting.

[00:10:43] Speaker 01:
As we discussed on Appendix 9638 and 9639, no indication based on the sales documentation that Hyundai improperly reported its sales data.

[00:10:53] Speaker 01:
But also importantly, in that final results decision, we find repeated and unequivocal statements by the Department of Commerce that there is no basis for the application of facts available.

[00:11:05] Speaker 01:
and no basis for an adverse inference.

[00:11:08] Speaker 01:
On Appendix 9649, they state no basis for the application of facts available because the department could not conclude that there was necessary information not on the record, could not conclude that Hyundai withheld information, could not conclude that it acted significantly to impede the proceeding.

[00:11:29] Speaker 01:
And further, on Appendix 9662,

[00:11:32] Speaker 01:
The Commerce Department stated that due to its analysis of the comments, it found Hyundai to have responded to the department's various requests for information to the best of its ability.

[00:11:43] Speaker 01:
And that goes to the application of an adverse inference under 1677EB.

[00:11:48] Speaker 01:
I would point to this court statement in the seminal case of Nippon Steel versus the United States.

[00:11:54] Speaker 01:
When the court stated that before applying an adverse inference,

[00:11:58] Speaker 01:
Commerce must examine the extent of the respondent's abilities, efforts, and cooperation and may apply an adverse inference only under circumstances in which it is reasonable for commerce to expect that more forthcoming responses should have been made.

[00:12:13] Speaker 01:
Here, it would not have been reasonable for Hyundai to be any more forthcoming given the department's awareness and given its approval of Hyundai's SRR reporting.

[00:12:23] Speaker 01:
Indeed, we even saw this after the final results in the department's ministerial error memorandum at appendix 9796 to 9798, where it stated that the department found no such capping was necessary because based on its review of the record, it did not suggest that Hyundai should have reported revenues from the reimbursement to expenses.

[00:12:48] Speaker 01:
And so throughout the review, throughout the remand, there was no discovery.

[00:12:52] Speaker 01:
Rather, the Commerce Department's view, as it admits, quote, evolved at page 29 of its brief and Appendix 104.

[00:13:00] Speaker 01:
The Commerce Department's view evolved, and because of that evolution, it has penalized Pondi.

[00:13:06] Speaker 01:
That is fundamentally unreasonable, and it is unsupported by the statute.

[00:13:10] Speaker 01:
With that, I rest and yield the rest of my time to rebuttal.

[00:13:14] Speaker 03:
Okay.

[00:13:15] Speaker 03:
Any more questions at the moment for Mr. Kindler?

[00:13:18] Speaker 01:
No.

[00:13:19] Speaker 01:
No.

[00:13:19] Speaker 03:
Okay.

[00:13:20] Speaker 03:
Thank you.

[00:13:20] Speaker 03:
Then we'll hear from Mr. Toder.

[00:13:24] Speaker 02:
May it please the court.

[00:13:26] Speaker 02:
We respectfully request that the court affirm the decision of the Court of International Trade that properly affirmed the Department of Commerce's determination.

[00:13:35] Speaker 00:
Mr. Toder, Mr. Judge, on page 26 of your brief, you say because commerce did not receive notice of Hyundai's deficient response until verification, et cetera, et cetera.

[00:13:47] Speaker 00:
But that's not accurate, right?

[00:13:50] Speaker 00:
You had plenty of notice about what their methodology was before verification.

[00:13:56] Speaker 02:
We disagree with that insofar as Commerce's initial questionnaire, specifically at page 248 of the record, directed Hyundai to report any service-related revenues in a separate data field.

[00:14:12] Speaker 02:
in its questionnaire response.

[00:14:14] Speaker 00:
Yeah, but they told you they weren't doing that, for example, at 6162 to 63, right?

[00:14:19] Speaker 00:
I mean, they didn't make a mystery about it.

[00:14:22] Speaker 00:
They told you what they were doing.

[00:14:25] Speaker 02:
Well, they said that they would report it if there was a separate purchase order to the customer that had the separate item in there.

[00:14:32] Speaker 02:
But that's not what commerce asked for.

[00:14:34] Speaker 02:
Commerce asked them,

[00:14:35] Speaker 02:
That's not the question.

[00:14:36] Speaker 02:
Report the revenue, not a document.

[00:14:39] Speaker 00:
Wait, wait.

[00:14:40] Speaker 00:
The question that I asked is not what commerce asked for.

[00:14:43] Speaker 00:
My question is you had noticed, contrary to what you said in your brief, you had noticed that they were doing it in a way that you thought was noncompliant.

[00:14:58] Speaker 02:
We disagree with that because.

[00:15:00] Speaker 00:
OK, so why is it?

[00:15:04] Speaker 00:
that appendix 6162 to 63 where they answered your questionnaire, they told you exactly what they were doing, why isn't that notice?

[00:15:15] Speaker 02:
Because the reporting that they gave in association with that questionnaire was they had no such revenues to report.

[00:15:22] Speaker 02:
And that was inaccurate as commerce later determined.

[00:15:26] Speaker 02:
and we looked specifically in the first remand report.

[00:15:28] Speaker 00:
No, no, you're not answering my question.

[00:15:30] Speaker 00:
Why didn't 61 to 60 answer the questionnaire tell you what they were doing?

[00:15:37] Speaker 02:
It told Commerce what they were doing, but it didn't reveal that there were in fact service-related revenues that they weren't reporting as a result of what they were doing.

[00:15:46] Speaker 00:
The invoice was the service revenues, right?

[00:15:51] Speaker 02:
Some of the ones that discovered with verification were not reported then, and they showed other service-related revenues well beyond what Hyundai had originally reported.

[00:16:04] Speaker 02:
And Commerce only had notice of those at verification, and that was the basis for Commerce applying the partial adverse facts available for the reasons explained.

[00:16:14] Speaker 02:
Specifically, at page 107 of the record and the initial remand results, Commerce goes through how

[00:16:20] Speaker 02:
an invoice commerce discovered only at verification had various service related revenues that Hyundai did not report and that associated invoice.

[00:16:30] Speaker 00:
Okay, that may be true that there were additional invoices but you had invoices earlier that disclosed what they were doing.

[00:16:38] Speaker 00:
Now my question to you is why under the statute when it says specifically that they're supposed to receive an opportunity remedy, why didn't you give them an opportunity to remedy?

[00:16:51] Speaker 02:
Uh, because they didn't, commerce did not have notice of that, not all kind of days to say what they were doing.

[00:16:58] Speaker 02:
They didn't say what they were doing excluded service related.

[00:17:01] Speaker 02:
Revenues.

[00:17:02] Speaker 02:
And that was the key distinction.

[00:17:04] Speaker 02:
That's why commerce did not have notice before verification, why it wasn't required to give notice under 60, 77 MD, which provides that a commerce shall give, uh, the opportunity to correct, uh, in compliance with the time limits set for the investigation.

[00:17:20] Speaker 02:
There was a time limit placed on submission of factual information.

[00:17:23] Speaker 00:
Wait, wait, wait.

[00:17:25] Speaker 00:
You're being totally confusing.

[00:17:27] Speaker 00:
If you had noticed that of their methodology, you were obligated to give them an opportunity to correct, right, to remedy?

[00:17:40] Speaker 02:
Only if we had noticed that there was something wrong as a result of what they reported.

[00:17:47] Speaker 00:
OK, so if we conclude that

[00:17:50] Speaker 00:
You did have notice we have to reverse, right?

[00:17:55] Speaker 02:
It's notice of that, not only that Hyundai reported what they were doing, but what they were reporting was not what Commerce asked for.

[00:18:02] Speaker 00:
Okay, but please answer my question.

[00:18:05] Speaker 00:
If we conclude that you had notice of what they were doing, we have to reverse, right?

[00:18:13] Speaker 02:
If Commerce had notice before verification of what Hyundai was doing and,

[00:18:19] Speaker 02:
That notice of what Hyundai was doing should have given Commerce notice that Hyundai had not complied with Commerce's request, then Commerce should have given the 1677MD notice, but that's not what happened here.

[00:18:34] Speaker 02:
What happened here was Hyundai gave notice of what it was doing, but that notice did not give Commerce notice that Hyundai had failed to give the information Commerce had requested, specifically at page 248 of the record in its initial questionnaire.

[00:18:49] Speaker 02:
And that's the reason why Congress was not required to give the 1677MD notice or deficiency opportunity in this case.

[00:18:58] Speaker 00:
So suppose we hypothetically were to agree that they didn't give notice, contrary to what we've been discussing.

[00:19:07] Speaker 00:
Where does the statute say that excuses you're giving them an opportunity to remedy?

[00:19:13] Speaker 00:
OK.

[00:19:13] Speaker 02:
So we look at 1677MD.

[00:19:17] Speaker 02:
It says, if the administrative authority of commerce determines that a response does not comply with the request, commerce shall promptly inform the person, assuming the response to the nature of the deficiency, and to the extent practicable, provide that person with an opportunity to remedy or explain the deficiency in light of the time limits established for the completion of investigation or reviews under this subtitle.

[00:19:40] Speaker 02:
And that's the key point here.

[00:19:41] Speaker 02:
This information

[00:19:43] Speaker 02:
that showed that Hyundai's reporting did not match up with what Commerce had asked for was only discovered at verification.

[00:19:49] Speaker 02:
That was after the time limit for submission of factual information.

[00:19:53] Speaker 02:
So that was beyond the point when Commerce would be expected to give notice under 6077MD.

[00:20:02] Speaker 02:
And that's why the fact that the information didn't come up with verification, which is not supposed to be submission of new information, it's supposed to be confirming information that's already been submitted,

[00:20:13] Speaker 02:
That's why it doesn't trigger a 1677MD requirement.

[00:20:20] Speaker 02:
And when you look at the specific information, for example, in the remand results at page 107, Commerce describes one Hyundai invoice, which is in the record from the verification exhibits at appendix 8068.

[00:20:34] Speaker 02:
That goes through.

[00:20:37] Speaker 02:
that there were separate service-related revenues on a Hyundai invoice that were not reported in a separate field as Commerce had asked for.

[00:20:45] Speaker 02:
This had the effect of making Commerce not able to apply a capping methodology.

[00:20:51] Speaker 02:
In essence, it causes Hyundai's U.S.

[00:20:53] Speaker 02:
price to be higher than it would have been otherwise, and thus its dumping margin to be lower than it would have been otherwise.

[00:21:01] Speaker 02:
That was the reason why that's important.

[00:21:05] Speaker 00:
Did Commerce approve the Hyundai methodology in the original final decision, right?

[00:21:13] Speaker 02:
It did.

[00:21:14] Speaker 02:
And then we asked for and the court granted a voluntary remand based upon ABB's, Commerce's, you know, in our consideration of ABB's arguments.

[00:21:26] Speaker 02:
And the court granted Commerce voluntary remand, as it's permitted to do under this court's decision in SKF USA, and Commerce re-examined the record and reached a different factual conclusion on remand.

[00:21:40] Speaker 02:
And again, it is permitted to do specifically, for example, under this court's decision in Tongmeng Development Company, that Commerce can reach a different factual conclusion on remand, and that different factual conclusion can still be

[00:21:54] Speaker 02:
supported by substantial evidence can still be entitled to Chevron deference, even though they reached a different factual conclusion.

[00:22:02] Speaker 00:
When Commerce initially approved this, it knew exactly what was going on, right?

[00:22:08] Speaker 02:
It knew what ABB's arguments were that it was wrong.

[00:22:11] Speaker 00:
It knew what it was doing.

[00:22:12] Speaker 00:
It knew what they were doing, right?

[00:22:15] Speaker 02:
It had the same information.

[00:22:18] Speaker 02:
It did not reopen the record on

[00:22:19] Speaker 02:
So yes, it had the same information in its possession at the time.

[00:22:23] Speaker 02:
It just reached a different conclusion upon remand, upon reconsideration of the record.

[00:22:27] Speaker 00:
So knowing what the methodology was, it approved it, correct?

[00:22:32] Speaker 02:
In its initial final decision, but that has been superseded by its remand decision found in this court in Tongbong.

[00:22:40] Speaker 02:
And so that new remand decision, you know, now I guess there are three remand decisions after the court made three remands from on other issues.

[00:22:49] Speaker 02:
But that is decaying commerce's, you know, final determination and replaced the earlier one insofar as it reached a different factual conclusion.

[00:22:58] Speaker 00:
Okay.

[00:22:58] Speaker 00:
But it seems to me difficult for commerce to complain that it was misled when it knew exactly what they were doing and approved it in the first final decision.

[00:23:10] Speaker 02:
It didn't have the information

[00:23:14] Speaker 02:
for purposes of 1577MD within the time limit for the investigation at any time.

[00:23:21] Speaker 02:
It only discovered that information as verification.

[00:23:24] Speaker 00:
How can it say that it was misled?

[00:23:28] Speaker 02:
Well, Hyundai failed to cooperate to the best of its ability under Nippon Steel.

[00:23:34] Speaker 02:
You're not answering my question.

[00:23:35] Speaker 02:
But in terms of whether commerce didn't have the information.

[00:23:39] Speaker 02:
Don't interrupt me.

[00:23:41] Speaker 00:
When I, what I'm asking you is when you approved what they were doing, how could you say that you were misled?

[00:23:51] Speaker 02:
They had, didn't have the information prior to the deadline for factual submissions.

[00:24:00] Speaker 02:
Verification only happened afterward.

[00:24:02] Speaker 02:
Commerce reached a different conclusion upon remand as it did in the original decision as to whether that verification information caused it to change its conclusion.

[00:24:11] Speaker 02:
but the relevant consideration as to whether commerce, you know, how the MD requirement of deficiency, that was triggered at the initial fact deadline, not at anything discovered at verification or later.

[00:24:25] Speaker 00:
Okay, but after verification, you knew exactly what they were doing and you approved it, right?

[00:24:32] Speaker 02:
That, yes, in the original decision.

[00:24:35] Speaker 00:
Okay.

[00:24:38] Speaker 02:
However, that is not the,

[00:24:42] Speaker 02:
date of the triggering event for ND.

[00:24:45] Speaker 02:
That is our point on that.

[00:24:47] Speaker 02:
The other point Hyundai is raising, if I may turn to that, is whether it was appropriate for the court to affirm Commerce's application of adverse facts available.

[00:24:57] Speaker 02:
They suddenly suggest that they should be limited to neutral facts available, the average of the defy rates.

[00:25:03] Speaker 02:
The court properly affirmed Commerce's finding that adverse facts were appropriate.

[00:25:09] Speaker 02:
Specifically, the court found that

[00:25:12] Speaker 02:
Hyundai failed to cooperate to the best of its ability because it had this information in possession.

[00:25:16] Speaker 02:
It just chose not to report it to Commerce in the form and manner Commerce requested.

[00:25:21] Speaker 02:
Hyundai said, well, this is how Commerce accepted it in the prior investigation and review, and we're going to report it the same way.

[00:25:28] Speaker 02:
Commerce asked a different question.

[00:25:30] Speaker 02:
It's permitted to ask a different question.

[00:25:31] Speaker 02:
It should get the information it wants, not the information Hyundai wants.

[00:25:35] Speaker 02:
I see that I've reached the end of my time.

[00:25:38] Speaker 03:
Do you have any more questions for Mr. Toder?

[00:25:42] Speaker 03:
Okay.

[00:25:43] Speaker 03:
Ms.

[00:25:43] Speaker 03:
Brewer, I think Mr. Toder, you have stopped your time, but please proceed and tell us whatever else, no need to cover what's already been covered.

[00:25:55] Speaker 04:
Thank you, Your Honor.

[00:25:55] Speaker 04:
Good morning.

[00:25:56] Speaker 04:
Melissa Brewer for ABB.

[00:25:58] Speaker 04:
May it please the court?

[00:25:59] Speaker 04:
I'd like to bring into this discussion a little bit of context that I think would be very helpful.

[00:26:05] Speaker 04:
And the review underlying this appeal is the second administrative review of this anti-dumping duty order.

[00:26:11] Speaker 04:
The appeal of the third administrative review recently concluded just in the fall of last year.

[00:26:17] Speaker 04:
And it involved very similar issues that I think are helpful to bring into this discussion.

[00:26:24] Speaker 03:
The court... Was anything filed with the court after that review?

[00:26:29] Speaker 03:
Or are you giving us new information?

[00:26:32] Speaker 04:
No, Your Honor.

[00:26:33] Speaker 04:
This court upheld pursuant to Rule 36.

[00:26:36] Speaker 04:
the CIT's decision that upheld Commerce's decision.

[00:26:40] Speaker 04:
We cite this all in our brief.

[00:26:42] Speaker 04:
And in that administrative review, there was a very similar reporting deficiency.

[00:26:47] Speaker 04:
Commerce had, again, asked Hyundai to report separately negotiated revenues.

[00:26:51] Speaker 04:
There was a failure to do so.

[00:26:53] Speaker 04:
And as a result, Commerce actually applied total adverse facts available to Hyundai for its reporting shortcomings in that review.

[00:27:01] Speaker 04:
And the Court of International Trade

[00:27:03] Speaker 04:
upheld that decision and this court upheld it.

[00:27:06] Speaker 03:
I want to be sure what your point is, that we should decide this case in accordance with the decision of the third review and ignore what we're told in the briefs on this case?

[00:27:19] Speaker 04:
No, Your Honor, not ignore what you're told in this case, but take into consideration the fact that Hyundai made a nearly identical argument in the appeal of the third review that the CIT rejected and that this court affirms.

[00:27:32] Speaker 04:
And in that review, Hyundai argued.

[00:27:35] Speaker 00:
Wait, that's not true, right?

[00:27:36] Speaker 00:
In that appeal that the opportunity to remedy wasn't an issue, was it?

[00:27:43] Speaker 04:
Well, in that, I'm weighing in on the argument that Hyundai made that it can rely on prior reporting, Your Honor.

[00:27:50] Speaker 00:
My question, that proceeding did not involve the opportunity to correct, to remedy, right?

[00:27:57] Speaker 04:
Not the way that it arises under 1670-70 in this appeal.

[00:28:02] Speaker 04:
But if I may, Your Honor, it involves the question that has been discussed about whether Hyundai can rely on its reporting in prior reviews the way it did throughout its questionnaire responses in this review.

[00:28:15] Speaker 00:
They're not arguing that they did it correctly.

[00:28:17] Speaker 00:
They are arguing that when they did it incorrectly, Commerce was aware of it instead of giving them an opportunity to correct.

[00:28:24] Speaker 00:
That's not an issue in the other case.

[00:28:27] Speaker 04:
That's correct, Your Honor.

[00:28:29] Speaker 04:
But if I may, the court was asking about the exchange and the questionnaire responses.

[00:28:35] Speaker 04:
And I do see my time is up, Your Honor, if I may make a point.

[00:28:41] Speaker 04:
All right.

[00:28:41] Speaker 04:
The court was asking about the exchange and the questionnaire responses.

[00:28:44] Speaker 04:
And to be as brief as I can, Commerce asked, if the invoice to your customer includes separate charges, create a separate field and report those charges.

[00:28:53] Speaker 04:
Hyundai provided an incomplete response.

[00:28:55] Speaker 04:
and it did not alert Commerce to the fact that the invoices to its customers did, in fact, include that information.

[00:29:03] Speaker 04:
And so, to the extent that it relies on its reporting in prior reviews... They gave them invoices, right?

[00:29:09] Speaker 00:
They gave them invoices and they described exactly what they were doing.

[00:29:15] Speaker 04:
They did not, Your Honor, and the court pointed to the appendix that... How is it that they didn't tell them what they were doing?

[00:29:22] Speaker 00:
It seems to me

[00:29:23] Speaker 00:
at 6162 and 63 in response to the question there, they told them exactly what they were doing.

[00:29:30] Speaker 00:
And indeed, Commerce approved it and said, yes, that's right.

[00:29:35] Speaker 04:
I'm looking at that quote, Your Honor, where Hyundai said the customer had issued a separate, where the customer had issued a separate additional purchase order for services related to but not included in the purchase order for the sale.

[00:29:47] Speaker 04:
Those are the revenues that Hyundai reported.

[00:29:49] Speaker 04:
That says absolutely nothing about the fact that there were invoices.

[00:29:53] Speaker 04:
numerous invoices that included separate charges and that Commerce asked Hyundai to report and asked them to create a separate field for.

[00:30:02] Speaker 04:
So this response is incomplete and it does not disclose the response to the factual question that Commerce asked.

[00:30:09] Speaker 04:
This is Commerce's attempt to build the record in this review to gather facts from Hyundai and Hyundai simply failed to alert Commerce to the fact

[00:30:18] Speaker 04:
that there were invoices that were responsive to Commerce's question and that it should have reported those charges.

[00:30:25] Speaker 00:
Commerce in its final decision described exactly what they were doing, was well aware of it, and said that's fine.

[00:30:31] Speaker 00:
We agree that's the right methodology.

[00:30:33] Speaker 00:
How were they misled under those circumstances?

[00:30:37] Speaker 04:
Your Honor, Hyundai's reporting during the underlying review was never complete.

[00:30:42] Speaker 00:
So, what happened was... Answering my question, how could it be that Commerce was misled when it itself described what was going on and said it was fine?

[00:30:53] Speaker 04:
Because as Commerce then explained in the first remand, Your Honor, it didn't fully understand the record because Hyundai hadn't built the record as Commerce requested.

[00:31:03] Speaker 04:
There was missing information throughout the review and Commerce didn't understand when it gathered the information after the remand, right?

[00:31:12] Speaker 04:
That's correct.

[00:31:12] Speaker 04:
The record closed during the administrative review.

[00:31:16] Speaker 04:
But Commerce's understanding of the facts and what Hyundai had withheld, that's what evolved and that's what was explained on remand.

[00:31:24] Speaker 04:
If a respondent doesn't cooperate during a review and give you everything you asked for, you know, it's hard to, at a final result, to bring everything together and

[00:31:36] Speaker 00:
That seems to be an inaccurate description of what Commerce said in its final decision.

[00:31:43] Speaker 00:
It explained exactly what was going on and said it was fine.

[00:31:51] Speaker 04:
Well, Your Honor, I think that the first remand explained why the final results were a mistake of fact based on the record.

[00:32:00] Speaker 03:
I think we have the position.

[00:32:03] Speaker 03:
Is there any last word you need to give us, Ms.

[00:32:05] Speaker 03:
Brewer?

[00:32:06] Speaker 03:
I appreciate the court's time.

[00:32:08] Speaker 03:
Thank you, Your Honor.

[00:32:10] Speaker 03:
All right.

[00:32:10] Speaker 03:
Mr. Kendler, you have some rebuttal time.

[00:32:12] Speaker 01:
Thank you, Your Honor.

[00:32:15] Speaker 01:
The government in ADB has failed to demonstrate that the government, quote, discovered Hyundai's SRR reporting.

[00:32:21] Speaker 01:
Any such discovery was the result of the department's self-proclaimed evolution of how it considered SRR made after the final results.

[00:32:31] Speaker 01:
Its awareness and approval of Hyundai's SRR reporting belies any notion of a discovery.

[00:32:39] Speaker 01:
The government's defense, therefore, is untenable.

[00:32:42] Speaker 01:
The only reason the CIC excused Commerce from providing the statutorily required deficiency notice was because of that reported discovery.

[00:32:52] Speaker 01:
And without it, there is no justification for the failure to provide that notice, and therefore no justification for the application of facts available.

[00:33:00] Speaker 01:
Again, with its full awareness of Hyundai's SRO reporting, Commerce concluded that there was, quote, no indication that Hyundai improperly reported its service-related revenue, and that includes its review of sales documentation at verification.

[00:33:16] Speaker 01:
Bless you, I assume that was a sneeze.

[00:33:18] Speaker 01:
Going to the point that the government made about 1677MD and there being insufficient time, eight months passed between verification and the final results.

[00:33:29] Speaker 01:
Verification was in July of 2015.

[00:33:31] Speaker 01:
The final results were in March of 2016.

[00:33:35] Speaker 01:
Yet the government, again, in the final results stated no indication of improper reporting.

[00:33:40] Speaker 01:
There was sufficient time to issue a deficiency notice and nothing in the statute justifies the department's failure to do so.

[00:33:48] Speaker 01:
Likewise, there's no justification for the application of an adverse inference.

[00:33:52] Speaker 01:
Again, the department unequivocally found no basis

[00:33:57] Speaker 01:
to conclude that Hyundai did not cooperate to the best of its ability.

[00:34:01] Speaker 01:
Its, quote, evolution on remand is the only reason why it changed that factual conclusion.

[00:34:07] Speaker 01:
And given the words of this court, Hyundai could not have been more, quote, forthcoming given this clear and unequivocal contemporaneous acceptance of Hyundai's SRR reporting and conclusion.

[00:34:21] Speaker 01:
If I may finish, Your Honors?

[00:34:22] Speaker 03:
Please, yes.

[00:34:23] Speaker 01:
and conclusion that Hyundai cooperated to the best of its ability.

[00:34:28] Speaker 01:
This court should therefore reverse the CIT and remand to the department to make a finding without the application of adverse facts available.

[00:34:37] Speaker 01:
Thank you, Your Honors.

[00:34:38] Speaker 03:
Any more questions for Mr. Cunder?

[00:34:41] Speaker 01:
No.

[00:34:42] Speaker 03:
All right.

[00:34:43] Speaker 03:
Thank you.

[00:34:44] Speaker 03:
Thanks to all counsel.

[00:34:46] Speaker 03:
The case is taken under submission.

[00:34:48] Speaker 03:
That concludes our argument calendar for this morning.

[00:34:55] Speaker 04:
The Honorable Court is adjourned until tomorrow morning at 10am.