[00:00:00] Speaker 02: Our next case is Boson Tools versus Chengdu Wefeng et al. [00:00:10] Speaker 02: versus the United States in diamond saw blades, 2021, 1929. [00:00:15] Speaker 02: Mr. Menegas. [00:00:20] Speaker 04: It's been a while since I've been here, it's the first time I'm maining the glasses, so I'm going to set them here. [00:00:34] Speaker 04: I'm hoping that I can elucidate some of these issues that you may not encounter every day. [00:00:39] Speaker 04: This is a matter of first impression, we believe. [00:00:43] Speaker 04: It's also a fact-intensive inquiry. [00:00:46] Speaker 04: I don't think there's much dispute about the statutory framework. [00:00:51] Speaker 04: But I think the statutory framework means something different to the parties. [00:00:55] Speaker 04: And certainly, we have a very different view of the burden. [00:00:57] Speaker 04: And we don't think the Commerce Department met its burden of reasonably choosing an alternative method [00:01:04] Speaker 04: And the evidence to cooperate its choice also has been rejected by the court in Albemarle. [00:01:10] Speaker 04: So we've made this point in our briefs that this statute was kind of written in the market economy context a long time ago. [00:01:19] Speaker 04: And it didn't really specifically address NME cases, although this court recognized in Albemarle that this is what we're stuck with, so we're going to use this. [00:01:28] Speaker 04: But I do think there's a major difference the court should be aware of. [00:01:32] Speaker 04: This statute is specifically written for investigations. [00:01:35] Speaker 04: So when you get a rate out of an investigation, it's just a deposit rate. [00:01:39] Speaker 04: So if commerce does something very unfair, in the worst case, you're out of the market for three years with a prohibitive deposit rate. [00:01:46] Speaker 04: We are dealing here in the seventh review, where their final result is an assessment rate. [00:01:51] Speaker 04: This is where they are taking money out of the pockets of the importers. [00:01:54] Speaker 04: So we think that the court should be taking that into consideration when determining whether the Commerce Department met its burden. [00:02:01] Speaker 04: to select any other reasonable method, which the SAA informs us must be reasonably reflective of dumping marches. [00:02:11] Speaker 04: And so when it comes to the way they came up with this method, there's some long history that's not currently before the court with both mandatory response [00:02:24] Speaker 04: had a day initially, then one was reversed on first remand to a zero. [00:02:28] Speaker 04: And so the issue of first impression for this court now is you have this mixed situation. [00:02:33] Speaker 04: And it's similar to BestPak. [00:02:36] Speaker 04: There's four cases we think are seminal here, BestPak, Albemarle. [00:02:40] Speaker 05: Can I just ask you? [00:02:41] Speaker 05: I mean, they use the expected method. [00:02:45] Speaker 05: You know, that's generally the way they're going to go unless they find it's not reasonable. [00:02:51] Speaker 05: What do you think, assuming that we agree with you that it's not reasonable, what methodology should they use? [00:02:58] Speaker 05: Well, there's no guidance in the statute or in the regulations, right? [00:03:02] Speaker 05: Particularly in these NME economies for what methodology? [00:03:06] Speaker 04: Right. [00:03:07] Speaker 04: So I think it might be easier to understand my response to you when I walk through the analysis. [00:03:14] Speaker 04: But I think you raise an excellent point that I was going to get to. [00:03:18] Speaker 04: And that is the government, in its brief, wants to nitpick these big cases, Bespak, Albemarle, and Changsuhad. [00:03:27] Speaker 04: to death for the differences and cast them aside and not have you look at those cases. [00:03:31] Speaker 04: I think the answer to your question is in those cases. [00:03:34] Speaker 04: There's a lot of guidance in those cases. [00:03:38] Speaker 04: And including the Cheng Tzu Wuhan, which was a little earlier. [00:03:41] Speaker 04: That was 2012, Best Box 2013, Albemarle's 2016, Cheng Tzu's 2017. [00:03:49] Speaker 04: In the three cases other than Albemarle that dealt with investigations, [00:03:54] Speaker 04: None of them agreed that even though the statute said commerce could use a certain method, that they could just go ahead and penalize cooperating companies with an intuitive rate. [00:04:04] Speaker 05: I let you go on a really long time. [00:04:06] Speaker 05: You're not answering my question. [00:04:08] Speaker 05: If the expected method is not the methodology, what is the methodology, where does it come from, and what's your support for it? [00:04:15] Speaker 04: So the teaching is in Albemarle and Cheng Tzu-Hot. [00:04:21] Speaker 04: The stress contemporaneity first of all right and that they were both cases where all the rates were de minimis But they're saying they said contemporaneity is very important [00:04:33] Speaker 04: And you can't really, in the investigation, you have no prior history. [00:04:36] Speaker 04: But in Albemarle, since it dealt with a case with some prior history, you can look at the prior history. [00:04:41] Speaker 05: I'm not asking what these cases say. [00:04:43] Speaker 05: I've read them. [00:04:45] Speaker 05: In the specific context of this case, what would you have commerce do as its methodology? [00:04:51] Speaker 05: If they're not going to do the expected method, what should they do? [00:04:54] Speaker 04: We think, similar to Cheng Zuhua, that because Bosong was a cooperating entity, it is more similar to the cooperating entity that got the de minimis rate than to a non-cooperating entity that is a state-controlled entity. [00:05:09] Speaker 04: And so the car you think they should get zero. [00:05:12] Speaker 04: That's that's the relief we've saw. [00:05:13] Speaker 05: Now even though the history shows that you've never gotten zero or almost never gotten zero. [00:05:19] Speaker 04: Right. [00:05:19] Speaker 05: So there's why is that reasonable. [00:05:22] Speaker 05: If you have a history of dumping even if it's not as extreme as the rate you've gotten for this one although you've gotten a similar rate. [00:05:30] Speaker 05: obviously not individual, but in another context. [00:05:34] Speaker 05: Why would it be reasonable to come up with a 0% dumping rate when you've never once achieved a zero rate? [00:05:41] Speaker 04: All of these courts have said commerce has created its own dilemma by not selecting enough respondents. [00:05:46] Speaker 04: The reason you're seeing these cases in this time frame, they used to take up to 12 respondents. [00:05:51] Speaker 04: And then it was four. [00:05:51] Speaker 04: And then it was three. [00:05:53] Speaker 04: By the middle of 2012, 2013, they were almost selecting only two in each case. [00:05:59] Speaker 04: And you haven't challenged that here, right? [00:06:01] Speaker 05: You haven't said it was an abuse of discretion or whatever for commerce to not select you as a mandatory respondent. [00:06:08] Speaker 04: But the courts have said the commerce created this dilemma. [00:06:11] Speaker 04: And therefore, they have to explain why the cooperating separate companies are not like the companies that got de minimis. [00:06:20] Speaker 04: Those companies cooperated. [00:06:22] Speaker 04: The SRAs cooperated. [00:06:23] Speaker 04: The non-cooperative entity is not comparable to the non-cooperative entity. [00:06:27] Speaker 05: Well, isn't the reason that you're not comparable to the companies that got a 0% rate is that you have a history of dumping and have never gotten a 0% rate? [00:06:35] Speaker 04: And that's where Auburn Mall says you have to stress the current review. [00:06:40] Speaker 04: That's the most important. [00:06:42] Speaker 04: Now, you could say there's an alternative [00:06:46] Speaker 05: Remedy let me ask you this because I get what you're saying if that's what you're saying I understand your argument. [00:06:52] Speaker 05: You're not suggesting some other alternative Method where commerce goes back and looks at all of your individual rates or separate rates through through all the past Administrative record reviews and does some kind of weighted averaging based upon them. [00:07:07] Speaker 05: You just want the zero. [00:07:08] Speaker 05: Okay, well I [00:07:10] Speaker 04: What we've said in our briefs, just to be fair, is that because we've had a history of low margins when we were individually investigated, we are more like the de minimis company than the non-cooperating company. [00:07:21] Speaker 04: And therefore, we should be assigned the rate of the de minimis company. [00:07:24] Speaker 04: OK, that's what we said in our briefs. [00:07:26] Speaker 04: But in Albemarle, there's some very good language at the end that talks about when would the history of the order be probative. [00:07:36] Speaker 04: and discusses if there's a stable history in the order, then it might be probative. [00:07:41] Speaker 04: But even in Albemarle, it says the history of the order is not enough. [00:07:45] Speaker 04: We're stressing contemporaneity. [00:07:47] Speaker 04: What people did in the last review may not be exactly what they're doing in this review. [00:07:51] Speaker 05: In Albemarle, they're- So what I hear you saying is that past reviews are not relevant to the fact that you've gotten rates in the single digit numbers or the low [00:08:04] Speaker 04: attends are not relevant to this review [00:08:19] Speaker 04: And so that's what Audemaral said. [00:08:20] Speaker 04: They said, there's something to be learned from the history. [00:08:23] Speaker 04: But Commerce had the opportunity to do more investigating these companies and didn't. [00:08:28] Speaker 04: And the same thing the best back court said, and the same thing Cheung Tzu-Hot Court said. [00:08:32] Speaker 04: And they all refused to allow them to impute an adverse inference to cooperating parties. [00:08:37] Speaker 04: But that certainly is an alternative if the court merely were to say that Commerce cannot impute an adverse inference to Bo Sun on these facts, where [00:08:47] Speaker 04: It has a long history of cooperating fully and getting low rates when it was individually investigated. [00:08:55] Speaker 04: So you can't impute an adverse inference to it. [00:08:59] Speaker 04: Go back and do something else that satisfies the standard of reasonableness. [00:09:04] Speaker 04: Then they could go back to what they were doing that caused Alkmaar, which is pulling through the most recent rate. [00:09:10] Speaker 04: And our most recent rate before this review, the seventh review, is the sixth review rate, which is now basically final. [00:09:18] Speaker 04: I don't know if you want me to find that tab you would have to look at our reply brief for the active the updated Was that rate part of the record if you see page 11 can I was that rate part of the record? [00:09:33] Speaker 05: Was the final six percent part of the record? [00:09:36] Speaker 05: Well the final six percent was a final result of review policy question was a part of the record before commerce at the time of this review [00:09:45] Speaker 04: Yes, it would be because they always proceed I mean the six review result now there was a result, but it was appealed Okay, and so that it's actually still formally on appeal for another ten days, but it's not going to be appealed I'm the appellant [00:10:02] Speaker 05: And when Commerce came up with the 41% rate on, I guess, the second remand here, was that 6% record before them? [00:10:12] Speaker 04: Yes, because once you get into it. [00:10:15] Speaker 05: So that rate had already been determined in that second review. [00:10:19] Speaker 04: Yes, because that was the sixth review. [00:10:21] Speaker 04: Once you get past the first review, which is an 18-month review, all the reviews go to a fixed 12-month schedule. [00:10:26] Speaker 04: So the sixth review results was published. [00:10:28] Speaker 05: So if I look in the record, [00:10:30] Speaker 05: In this case, and look at the administrative record, there's going to be a determination that this 6% rate applied in this review. [00:10:39] Speaker 05: Not by operation of law or by some inference that they should have known about it. [00:10:42] Speaker 05: It's going to be in the actual record. [00:10:45] Speaker 05: I mean certainly it would have been in our I think it would Okay, you're not answering my question if I assume the six percent is not part of the record the most recent rate then is the 39 percent rate right well It was pretty comparable to the 41 percent [00:11:07] Speaker 04: The 41% is indisputably part of the record, isn't it? [00:11:13] Speaker 04: I think they have equal weight because they're published final results. [00:11:17] Speaker 04: We don't normally consider them facts that need to be added to an administrative record. [00:11:22] Speaker 04: They're final results of review. [00:11:24] Speaker 04: And the fifth review only became an issue in the second remand. [00:11:28] Speaker 04: It wasn't the focus of any briefing or discussion until the second remand. [00:11:31] Speaker 01: And then in the course of the second remand... Is the current sixth review rate 15.91% or is it the 6.91%? [00:11:37] Speaker 04: What is the... Okay, so the final results of review that would have been available to Commerce at the time that it made this decision in AR 7 were 6%. [00:11:48] Speaker 04: And then that went up to this court and this court reversed the Commerce Department in multiple rounds of remand and they just came back with a 15% rate. [00:11:59] Speaker 04: And the petitioner didn't brief it. [00:12:01] Speaker 04: And we're the ones in control of appealing that rate. [00:12:04] Speaker 04: We're not going to appeal that rate. [00:12:05] Speaker 04: So the six review rate is essentially 15%, the final six review rate. [00:12:11] Speaker 04: It's like we have another 10 days to appeal it, but we're not going to do that. [00:12:15] Speaker 04: So I have only three minutes left. [00:12:17] Speaker 04: But the point is, if commerce is going to hinge everything on the history, we think they should look at Boson's individual history, not the fifth review where Boson was not a mandatory respondent. [00:12:30] Speaker 04: There were a lot of unique factors in the fifth review that are aberrant vis-a-vis both sons' rates. [00:12:37] Speaker 04: And the Elmerov court made that clear, that why are you talking to us about a review when these respondents weren't mandatory? [00:12:44] Speaker 04: That doesn't tell you anything about that particular respondents' dumping practice. [00:12:49] Speaker 04: So we think that the cooperation that was key to the Commerce Department in supporting its 82% rate has actually been rejected as the type of source that the CFC finds persuasive. [00:13:02] Speaker 01: In your view for the other appellants who weren't individually examined, what do you contend we should look at? [00:13:08] Speaker 04: Well, you know, again, you know, they didn't write a brief. [00:13:11] Speaker 04: They're not here. [00:13:12] Speaker 04: I'm not representing them. [00:13:13] Speaker 04: The government made that clear in a footnote. [00:13:15] Speaker 04: But I think this is a very important case that you're deciding, because there's a lot of cases backed up behind you. [00:13:20] Speaker 04: And when commerce is only going to select two respondents, and enemy cases are much more complex than market economy cases, there's a good chance one of them will fail, then all of our clients are in hot water in a lot of these reviews. [00:13:33] Speaker 04: The question is, did commerce do a proper inquiry to have a factual foundational basis in the record as to why it's fair to apply an AFA rate to impute that to cooperating companies that there's no indication that they're not cooperating or that there's Chinese state control? [00:13:51] Speaker 04: That is the broader issue that is actually, this is a really big deal to the whole trade bar in this case. [00:13:59] Speaker 05: Well, I mean, if the argument, the real problem here is commerce is not [00:14:03] Speaker 05: accepting enough mandatory respondents, and that it's distorting the rate, why isn't the challenge to that as an arbitrary and nutritious practice, rather than to the customary method? [00:14:15] Speaker 05: If they expanded the number of mandatory respondents, wouldn't that largely solve this and allow them to use the expected method? [00:14:24] Speaker 04: It might. [00:14:24] Speaker 04: What it would give us is more opportunities for above-the-minimus rates, so you wouldn't have to go to this exception. [00:14:30] Speaker 04: Because you just use the de minimis rate. [00:14:32] Speaker 04: If there's three de minimis and one above de minimis, you use that one de minimis rate to assign the old others rate to the separate companies. [00:14:39] Speaker 05: Has anybody made that challenge to the CIT? [00:14:42] Speaker 05: I mean, I can see arguments both ways. [00:14:44] Speaker 05: I imagine commerce response is going to be, it's really burdensome to do [00:14:49] Speaker 05: investigations and then verifications in China because of the difficulties encountered there and so that's why we're doing two but your argument could be exactly this that it provides by only doing two it really distorts the expected method [00:15:05] Speaker 05: and that commerce should have to do more than two if it wants to rely on the expected method, which I hear you arguing that it's unfair to do that, but not as a kind of direct challenge to that. [00:15:17] Speaker 04: Well, we think it's established from VESPAC, Alvaro, and Cheng Zuhad. [00:15:22] Speaker 04: The panels in all three of those cases said that in direct response to the argument you're articulating that our colleagues are going to make. [00:15:29] Speaker 04: They said it's not good enough to cite a lack of resources to do something unreasonable to cooperating companies. [00:15:35] Speaker 04: So we have two seconds left. [00:15:39] Speaker 05: I guess the problem is you're not asking us to say that commerce's practice of only doing two respondents here was invalid and therefore the rates that it came up with can't be used under the customary method. [00:15:54] Speaker 05: You're just asking us to say, well, the customary method's not good enough, come up with a different rate. [00:15:59] Speaker 04: Those are two different things. [00:16:00] Speaker 04: You know why? [00:16:01] Speaker 04: Because we've constantly been rejected when we try to make voluntary applications. [00:16:05] Speaker 04: You can do a voluntary respondent. [00:16:07] Speaker 04: First of all, what client's going to pay for that when only 1% of them are accepted? [00:16:11] Speaker 04: And every time we go to the court and say, you decide how commerce allocates the resources, they tell us no. [00:16:16] Speaker 04: So we're stuck with this environment, but we've got three great panel decisions saying that's not reasonable. [00:16:22] Speaker 04: Commerce can't rely on that excuse. [00:16:24] Speaker 04: So I guess I'll save the rest of my time for the bottle. [00:16:28] Speaker 02: Well, you obviously have nothing to say, but we will give you three minutes of the bottle time. [00:16:34] Speaker 02: Thank you. [00:16:34] Speaker 02: Mr. Toder. [00:16:37] Speaker 03: Thank you, and may it please the court. [00:16:39] Speaker 03: Commerce appropriately applied the expected method to reach this, and its rate was reasonably reflective of the potential dumping margins for Boson and the other separate rate respondents. [00:16:50] Speaker 03: The most recent calculated rate for two mandatory orders. [00:16:54] Speaker 02: Could you hold on a minute, please? [00:16:56] Speaker 02: I thought you were selecting 12 minutes out of 15. [00:17:00] Speaker 03: That is correct. [00:17:01] Speaker 02: So please start with 12. [00:17:12] Speaker 03: Commerce, and this is reflected at page 185 of the appendix, selected the fifth administrative review rate to calculate at 39.66% as a probative, reasonable, comparable. [00:17:24] Speaker 03: And it was the most contemporaneous one based on calculated rates for both mandatory respondents. [00:17:30] Speaker 03: That fifth review was not an AFA rate. [00:17:32] Speaker 03: It was calculated based upon those respondents' own data. [00:17:35] Speaker 03: Congress reasonably found that 39.66, extremely close to the 41% here, was reasonably reflective of the potential dumping margins for the separate rate respondents. [00:17:46] Speaker 03: With respect to the sixth review, the procedural history we set forth on page 29 of our brief, what the situation was [00:17:56] Speaker 03: Our understanding, Boson had received a 6% review and an initial final results from Commerce. [00:18:03] Speaker 03: On a remand from the court, that was changed to an AFA rate of 82% based upon an issue with the country of origin reporting for Boson-Programm Council of Record in that case. [00:18:16] Speaker 03: Then that was appealed to this court, and then this court remanded it again. [00:18:20] Speaker 03: However, at the time, Commerce made its determination in this case. [00:18:26] Speaker 03: That was in October of 2020. [00:18:29] Speaker 03: At that point, the 82% rate was the rate that was in effect, because that was the rate that was in effect after the first remand from the Court of International Trade. [00:18:40] Speaker 03: That rate was then appealed to this court. [00:18:42] Speaker 03: This court remanded it again in 2021. [00:18:44] Speaker 03: Commerce issued its remand results with a 15% rate this summer. [00:18:50] Speaker 03: The Court of International Trade entered judgment on October 27th this year, so that rate's not yet final. [00:18:56] Speaker 03: But the point here is that at the time, Commerce made its decision [00:19:01] Speaker 03: Here, in this case, for the seventh review, the rate for the sixth review was not the 6% that Bozen was talking about. [00:19:07] Speaker 03: It was an 82% adverse rate. [00:19:10] Speaker 03: That was not changed until after appeal to this court. [00:19:13] Speaker 03: This court made its decision after Congress made its. [00:19:16] Speaker 05: I mean, given how much that rate has bounced around, why would we consider it probative of anything? [00:19:22] Speaker 03: Commerce didn't apply here. [00:19:24] Speaker 03: And what they did apply was the rate from the fifth review, which is based on calculated rates, the respondents' own data, not any claim that it was based on adverse inferences applied to the two mandatory respondents in that review. [00:19:39] Speaker 03: That review's final. [00:19:41] Speaker 03: There's no court challenge to that. [00:19:43] Speaker 03: In essence, Boson is arguing that, well, that should somehow count less because they were only a separate respondent. [00:19:51] Speaker 03: They weren't the mandatory respondents. [00:19:52] Speaker 03: Again, mandatory respondents are considered are. [00:19:56] Speaker 03: given a rebuttable presumption that they're representative. [00:19:58] Speaker 03: There was no challenge to that in this case. [00:20:00] Speaker 03: So the fifth review, that was the rate applied to Boston. [00:20:03] Speaker 03: There's no challenge that that was the rate applied to Boston in the fifth review. [00:20:06] Speaker 05: And this, at least that rate, doesn't have the same possibility of distortion based upon AFA because there was no AFA. [00:20:14] Speaker 05: Correct. [00:20:15] Speaker 05: But I think your friend does raise somewhat of a point that if you're only selecting two mandatory respondents, particularly in an arm market economy, [00:20:25] Speaker 05: you're often at risk for including AFA rates in this expected method that won't necessarily be representative of cooperating respondents. [00:20:37] Speaker 03: There is a limitation in the SAA that it has to be reasonably reflected. [00:20:41] Speaker 03: In this case, we think the facts are strong that it is reasonably reflected, given it's a 1 and 1 half percent difference. [00:20:47] Speaker 03: We would also point out that in the 2015 trade [00:20:51] Speaker 03: Preferences Extension Act, there was, I believe, added the provisions 1677, F1, C1, and 2, which explicitly contemplates commerce using the top two volume mandatory respondents as the mandatory respondents. [00:21:06] Speaker 03: And that was the practice that they followed here. [00:21:09] Speaker 03: Some of the cases that Boson cites, such as Albemarle and Yangtzu Bespak, were decided prior or under the prior regime. [00:21:16] Speaker 03: So Boson doesn't challenge the selection of mandatory respondents in this case. [00:21:21] Speaker 03: to the method commerce used to select the mandatory response was specifically contemplated by the 2015 statute. [00:21:29] Speaker 03: Bosun's argument, in many respects, amounts to saying that commerce should give an individual examination or an individual consideration of Bosun's data after the fact. [00:21:41] Speaker 03: Even though Bosun was not selected as a mandatory respondent, there was no statutory basis requiring commerce to do that. [00:21:48] Speaker 03: in fact, in this method, followed the expected method. [00:21:52] Speaker 05: So let's say hypothetically, though, that we have this company very much like Boson, who sometimes is a mandatory respondent and gets a separate rate, sometimes is not. [00:22:01] Speaker 05: But over the years, it's been shown that whenever they're a mandatory respondent and get a separate rate, although they may do some dumping, it's always a below 10% margin. [00:22:12] Speaker 05: And then when they're not and other companies are selected, they dump a lot more. [00:22:16] Speaker 05: And so they're saddled with a higher rate. [00:22:18] Speaker 05: I mean, you know, I know this isn't all about fairness and equity, but what is a company like that supposed to do if they're trying to keep their prices reasonably in line with competitive prices? [00:22:32] Speaker 05: And it's just by sheer fact that they're not being selected as a mandatory respondent, that they get saddled with these rates like the 41% and the 39%. [00:22:43] Speaker 05: when in other years they get to end up with like, you know, nine or four or eight. [00:22:48] Speaker 05: Is there any way out for them? [00:22:51] Speaker 03: One would be to ask to be selected as a voluntary respondent. [00:22:54] Speaker 03: Commerce doesn't have to do it. [00:22:56] Speaker 03: I mean, they can challenge the court. [00:22:57] Speaker 05: Well, I think your friend said they almost never do that, though. [00:23:00] Speaker 05: So, I mean, if that's not a really practical out, [00:23:03] Speaker 05: What can they do? [00:23:04] Speaker 03: Well, that's one potential. [00:23:07] Speaker 03: And then 1677F1 gives Commerce other options, such as selecting industry-wide, and they can select other respondents. [00:23:13] Speaker 03: But there are administrative limitations on Commerce's ability to examine a certain number of respondents in every review, especially if you're talking about dealing with verifications overseas. [00:23:25] Speaker 03: The other factor here is this is a somewhat special case in that we're dealing with having no rates that are calculated rates for this particular review. [00:23:36] Speaker 03: And the statute specifically contemplates commerce has the option [00:23:40] Speaker 03: And to use this expected method or the other reasonable method, it determines that that's not reasonably reflective. [00:23:49] Speaker 03: But that is a decision that is given to Commerce and reviewed by this court for substantial evidence. [00:23:56] Speaker 03: But ultimately, Commerce are the ones who are charged with implementing the statute. [00:24:00] Speaker 03: And they did so here following the expected method. [00:24:03] Speaker 03: The case is both insights for cases where [00:24:05] Speaker 03: commerce deviated from the expected method, here they cite, here they use the expected method. [00:24:10] Speaker 03: The one that commerce, the one that they do cite where commerce had applied an average and was found to be not reasonably effective, Yangtze BestPak, is very different from this case. [00:24:22] Speaker 03: In Yangtze BestPak, you had 123%, I think was the rate. [00:24:27] Speaker 03: So it was either 123% or zero, and there were no other rates on the record. [00:24:31] Speaker 03: Here we've got 41% and 39.66% was on the record from the most recent review with calculated rates. [00:24:38] Speaker 03: Very different situation. [00:24:40] Speaker 03: Here the fact that the rates are certainly close enough to where it is reasonably reflected. [00:24:45] Speaker 03: Very different situation from Yangtze best pack that even that case found that there wasn't anything in the statute prohibiting commerce [00:24:52] Speaker 03: from averaging a de minimis, and then even in that case, an AFA rate, this was, that was okay. [00:24:58] Speaker 03: It was just a question of whether it was reasonably reflected. [00:25:02] Speaker 03: There was no additional disfavoring of the use of the rate. [00:25:05] Speaker 05: Can I ask you hypothetically, if we take away the [00:25:11] Speaker 05: the 39% rate, the calculated rate. [00:25:15] Speaker 05: And all we had was all these other rates, which were, I think, at best, got to 12. [00:25:20] Speaker 05: Would that make any difference here for the expected method? [00:25:27] Speaker 03: It would be a factual determination. [00:25:29] Speaker 03: If commerce said the 39 didn't exist, we're just going to take the average because that's what this. [00:25:34] Speaker 03: Well, here the court did remand for commerce to do a specific analysis of whether it was reasonably reflective. [00:25:40] Speaker 05: Sure, but I think the 39 helps you out an awful lot here. [00:25:46] Speaker 05: Because it's the closest one. [00:25:48] Speaker 05: I'm just asking, if you have a history [00:25:53] Speaker 05: Partly what I was asking your friend, if you have a history of dumping, of both dumping as a separate respondent rate or a smaller separate rate that's in the, let's just say hypothetically, 10 or below range. [00:26:11] Speaker 05: And for this one, it comes out at 41%. [00:26:17] Speaker 05: Is that reasonably reflected because it's the expected method? [00:26:21] Speaker 03: Well, I think it's possible in a case where you've just had a history of positive but non-zero margins, commerce might choose to use another reasonable method. [00:26:32] Speaker 03: It's potential. [00:26:33] Speaker 05: So can you give me, I know you probably don't want to say this, and your friend wouldn't say it either. [00:26:38] Speaker 05: Can you give me any sense of what that other reasonable method would be? [00:26:42] Speaker 05: Clearly, it shouldn't be zero because if there's a history of dumping, [00:26:46] Speaker 05: you shouldn't get zero. [00:26:48] Speaker 05: But I'm trying to picture, if you throw out zero, you throw out the expected method. [00:26:54] Speaker 05: Has commerce used other methodologies in the past to deal with this situation? [00:26:58] Speaker 03: The closest analogy I can think of is Albemarle. [00:27:00] Speaker 03: I think they looked at a historical dumping margin in that one, and then I think that actually got remanded because commerce wasn't following the expected method. [00:27:09] Speaker 03: So that's the closest example I can think of. [00:27:13] Speaker 03: I believe in this case, the separate rate respondents had raised in their comments before the agency. [00:27:18] Speaker 03: I think it's discussed at pages 189 through 198. [00:27:21] Speaker 03: They were asking for an average of the historical separate rate margins. [00:27:26] Speaker 03: And Congress rejected that because of the preference for contemporaneous margins based on Albemarle. [00:27:32] Speaker 03: That's the most information I have on that. [00:27:35] Speaker 05: Right. [00:27:35] Speaker 05: So I don't want to get into the weeds of this too much. [00:27:38] Speaker 05: But let's just say you came up with the 41% right here under the expected method. [00:27:43] Speaker 05: And the next, the most contemporaneous rate was 10%. [00:27:49] Speaker 05: Would you think, and there was a history of nothing being involved 10%. [00:27:53] Speaker 05: Would you think that the 41% was still reasonable? [00:27:56] Speaker 05: Or would you have to do some further averaging between the 41 and the 10? [00:28:01] Speaker 03: I think commerce would need to look at, you know, all the facts to determine that. [00:28:05] Speaker 03: I can't say whether... Well, just assume there's no other facts. [00:28:08] Speaker 03: Okay. [00:28:08] Speaker 05: Use the expected method here because you have one rate, AFA rate, and then you have a de minimis rate, and you got the expected method. [00:28:16] Speaker 05: And the only other rate you have on the books is 10%. [00:28:19] Speaker 05: OK. [00:28:20] Speaker 03: It's 10% every year. [00:28:21] Speaker 03: So one factor, Congress cited a rising tide of rates. [00:28:25] Speaker 03: If it's always 10% for them, then I think they need to look at whether the 10% was more reasonably reflected. [00:28:33] Speaker 03: Beyond that, I can't really say. [00:28:35] Speaker 03: Right. [00:28:35] Speaker 05: But that's not true here because we have [00:28:38] Speaker 05: that calculated 39%. [00:28:40] Speaker 03: Right, we have 29% in history of rising margins that they cite, page 25 of the appendix. [00:28:47] Speaker 03: If there are no further questions, we respectfully request the court affirm the judgment of the Court of International Trade. [00:28:52] Speaker 02: Thank you, counsel. [00:28:53] Speaker 02: Ms. [00:28:54] Speaker 02: Bell, the diamond saw blades. [00:28:57] Speaker 00: Thank you, Your Honor. [00:28:57] Speaker 00: May I please escort Stephanie Bell on behalf of the Diamond Salters Manufacturers Coalition? [00:29:02] Speaker 00: Council for a defendant I believe covered most of the main points that we would like to make very thoroughly, but there are just a few things that I would like to highlight for the court that will help hopefully aid you in your decision here. [00:29:13] Speaker 00: First, Council for a defendant did note the court's decision in best pack and the fact that the court found it was permissible to use an AFA rate. [00:29:21] Speaker 00: I would like to highlight the specific language used by the court there, and this is at page 1378. [00:29:26] Speaker 00: It says, best path contends that commerce is not permitted to include an AFA rate in the calculation of a separate rate. [00:29:34] Speaker 00: However, section 1673 DC 5B and the SIA explicitly allow commerce to factor both de minimis and AFA rates into the calculation methodology. [00:29:46] Speaker 00: So there's no support for the contention that because an AFA rate here, an AFA rate was part of the calculation method here that it is necessarily inappropriate. [00:29:54] Speaker 00: And Council Ferguson did concede that in their reply brief, that it has been deemed appropriate under certain circumstances. [00:30:02] Speaker 00: We recognize that Council Ferguson has argued best pack. [00:30:06] Speaker 00: The facts follow closely here. [00:30:07] Speaker 00: Council for defendant clearly outlined why the facts of best pack are distinct, and the outcome there is not appropriate here. [00:30:16] Speaker 00: Second, with respect to the argument that the statute regarding the calculation of the all other rates [00:30:23] Speaker 00: is related to investigations. [00:30:25] Speaker 00: I would direct the court to the decision in Albemarle, specifically at page 1352, footnote 7. [00:30:32] Speaker 00: The court specifically rejected the argument that the language in the SAA regarding the expected methodology applied to investigations only, noting that that language also covered administrative reviews. [00:30:43] Speaker 00: Now, I recognize there was also the issue regarding market economy versus non-market economy. [00:30:48] Speaker 00: But of course, Albemarle was dealing with a non-market economy administrative review. [00:30:52] Speaker 00: Next with respect to the discussion about Well the history of the margins and while we do have this thirty nine point six six from the 1314 review there have been some other low rates I do think it's also important to highlight that this was not a fact pattern where we had let's say single digits every single year and now you have this anomalous thirty nine point six six percent all of a sudden in 1314 and now things have come back down and [00:31:16] Speaker 00: As commerce recognized in its determination, what you had seen over the recent history of the order was in each review, you had sort of a steady uptick of rates. [00:31:24] Speaker 00: So if I may, looking at the recent reviews, you had in the 11-12 administrative review, the separate rate calculated was 4.83%. [00:31:32] Speaker 00: Then in 12-13, you have a separate rate of 12.5%. [00:31:37] Speaker 00: And then in 13-14, you have the separate rate of 39.66%. [00:31:41] Speaker 00: So what you do not see is this consistent pattern of there's always these low rates. [00:31:44] Speaker 00: Instead in recent years you've seen this slow growth each review an increase in the margins calculated and that further supported commerce of determination here in the reasonableness Of the rate applied I see that my time is just about up so unless there are any questions from the court Thank you counsel. [00:32:01] Speaker 00: Thank you. [00:32:02] Speaker 02: Mr.. Manigas has three minutes for a bottle [00:32:05] Speaker 04: Thank you, your honor. [00:32:07] Speaker 04: So, well, three minutes. [00:32:09] Speaker 04: I think, you know, best pack, Arbor Marl. [00:32:12] Speaker 02: Three minutes is a long time for a bottle. [00:32:14] Speaker 04: I know. [00:32:15] Speaker 04: And our AR6 result are all cases where commerce ran amok, imputing adverse inferences to companies. [00:32:22] Speaker 04: And the court rejected that. [00:32:24] Speaker 04: So we still think that in this case of first impression, where they're trying to impute a rate that was derived from the state-controlled entity, in the second review to our current dumping practice, in the seventh review, [00:32:35] Speaker 04: simply is not reasonable. [00:32:37] Speaker 04: And they say there's a trend and an uptick and everything, that's because they're cherry picking one high rate out of all of the review experience at Bosun. [00:32:46] Speaker 04: That was calculated for other companies, not for Bosun. [00:32:49] Speaker 04: So I do think the court has multiple options in this case, including [00:32:54] Speaker 04: Ordering commerce to only consider both sons previous rates and selecting a reasonable method to determine both sons rate in its review so and and that's that the Fifth review you know that was way highs rate mainly determined that and diamonds always are very complicated There's over 20 steals in them over a hundred factors of production in them and so [00:33:16] Speaker 04: Both sons' rates have been relatively stable, under 15%, mostly under 10%. [00:33:22] Speaker 04: You get a different respondent, they have different mixes of consumption of raw materials, you get a different rate. [00:33:27] Speaker 04: So we don't think that's reasonable to pick one rate out of all of the reviews and then conclude that a second review rate for a state-controlled entity is reasonable. [00:33:37] Speaker 04: And so we hope this court will, you know, consider this argument, at least for Bosun, come up with a more, you know, order them to come up with a more reasonable alternative than to impute a partial AFA rate to Bosun's rate. [00:33:51] Speaker 04: I think unless there are other questions, I'm prepared to, yes. [00:33:54] Speaker 02: Thank you, counsel. [00:33:55] Speaker 02: The case is submitted. [00:33:57] Speaker 04: Thank you. [00:33:59] Speaker 02: That concludes today's arguments.