[00:00:00] Speaker 04:
The next case for argument is 20-2121, Luoyang Bearing Corporation versus United States.

[00:00:07] Speaker 04:
Mr. Lee, whenever you're ready.

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

[00:00:13] Speaker 01:
Good morning.

[00:00:14] Speaker 01:
My name is Adams Lee with the law firm Harris Frickin.

[00:00:17] Speaker 01:
I am here today on behalf of Luoyang Bearing Corporation.

[00:00:21] Speaker 01:
We are appealing a Department of Commerce anti-dumping administrative review proceeding on tapered roller bearings from China, an order that was issued back in 1990, over 30 years ago.

[00:00:36] Speaker 01:
Our case involves two issues.

[00:00:39] Speaker 01:
Luoyang Bearing Company had their separate race status denied in the 2016-2017 administrative review.

[00:00:49] Speaker 01:
We are appealing that denial of separate-rate status, and we are appealing the Court of International Trade's decision not to review commerce's denial because of failure to exhaust administrative remedies.

[00:01:04] Speaker 04:
Okay, Mr. Lee, this is Judge Prost.

[00:01:07] Speaker 04:
But I think the heart of the case, so correctly if I'm wrong, is your problem was you feel to exhaust your remedies, and your defense of that is futility.

[00:01:18] Speaker 04:
So let me just start off about that and say, couldn't you have made the merits arguments that you make here to Commerce in a brief prior to Commerce's final determination?

[00:01:30] Speaker 04:
You argue here that they ignored record evidence that was relevant, but that's why you should have raised it in the case brief before Commerce.

[00:01:41] Speaker 04:
Isn't that right?

[00:01:45] Speaker 01:
Yes, Your Honor.

[00:01:46] Speaker 01:
I think, you know, I am in the unfortunate position where I was not counsel to Luoyang in the commerce proceeding or the Court of International Trade proceeding, and I am dealt with the factual cards that I have in hand.

[00:02:00] Speaker 01:
I do agree that they could have and perhaps should have filed there a case brief to make these points.

[00:02:09] Speaker 01:
However, the argument is that

[00:02:11] Speaker 01:
Even if they had made the arguments, it wouldn't have changed the outcome because the outcome was already preordained and was irrebuttable regardless of even if they had submitted the arguments.

[00:02:28] Speaker 04:
Well, how do we know that for sure?

[00:02:30] Speaker 04:
I mean, how are we supposed to divine that here at the appellate level that there was absolute certainty that nothing would have changed if you had exercised

[00:02:40] Speaker 04:
if you had followed procedure?

[00:02:44] Speaker 01:
I think fundamentally our argument is based on the fact that since the court's decision in advanced tech materials, the Diamond's Fowlblade finance cases back in 2013, 2014, commerce changed their separate rate status.

[00:03:03] Speaker 01:
Before then,

[00:03:04] Speaker 01:
Many Chinese companies with state-owned companies involved in the ownership chain, including William Bearing, were granted separate status.

[00:03:15] Speaker 01:
But since advanced tech came out and the change of commerce's separate practice, there's been not one single case in which commerce has even granted or even hinted at

[00:03:30] Speaker 01:
granting separate status if there is a finding of a majority ownership held by a state-owned company anywhere in the ownership chain.

[00:03:41] Speaker 01:
So if there was but one case that we could... What was the date you cited, Mr. Lee?

[00:03:49] Speaker 04:
Did you say since 2014?

[00:03:50] Speaker 01:
2014-13.

[00:03:52] Speaker 01:
The advanced tech decision came out, I believe, in 2013.

[00:03:58] Speaker 01:
Commerce, after that case, began modifying their separate rates analysis, you know, to where it stands right now.

[00:04:08] Speaker 01:
And so basically, you know, the cases in which they ruled against majority ownership by state-owned company effectively began in 2014.

[00:04:19] Speaker 02:
Your view is that it should be a multi-factor test

[00:04:29] Speaker 01:
Well, our view is that the separate rates analysis, you know, this is going back to the original Sparkler's test.

[00:04:38] Speaker 02:
Answer my question.

[00:04:39] Speaker 02:
Is your view going to be a multi-factor test?

[00:04:43] Speaker 01:
Yes, because Commerce's separate rates analysis before Advanced Tech and even now still is, on its face, a multi-factor test.

[00:04:53] Speaker 01:
It's a third-day jury analysis first.

[00:04:57] Speaker 01:
And then a de facto analysis which specifies four specific criteria that should be analyzed.

[00:05:04] Speaker 02:
Here and now.

[00:05:05] Speaker 02:
So if you presented it to commerce, isn't it possible that commerce would say even under the test that you propose, the multi-factor test that you propose, you lose, right?

[00:05:22] Speaker 02:
And you have the opportunity to do that.

[00:05:25] Speaker 01:
I think since 2015, there have been numerous instances where companies have argued that.

[00:05:33] Speaker 02:
Your job is to listen to the question and try to answer the question rather than to go off in some tangent.

[00:05:41] Speaker 02:
What I'm asking you is, isn't it possible that if you presented this,

[00:05:46] Speaker 02:
to commerce they would say even under your test you lose because we're making findings that under the multi-factor test you still lose, right?

[00:05:58] Speaker 01:
Our position is that in this instance no, it was not possible.

[00:06:07] Speaker 02:
How do we know that?

[00:06:09] Speaker 02:
How do we know that that's what commerce would say?

[00:06:14] Speaker 01:
Our position is that the track record, given the unanimous, the unbroken string in which commerce has denied separate status, any time there has been majority ownership by a state-owned company is our basis for saying that commerce has not and will not change going forward.

[00:06:46] Speaker 03:
Under the, this is Judge Clevinger, the de facto test has four parts.

[00:06:52] Speaker 03:
And the part that you're challenging is the part that says that the Expo Order has to prove that its management is independent, essentially that its management is independent of the Chinese government.

[00:07:05] Speaker 03:
And what Promise is, is where there's a showing that the Chinese government and corporate structure has the authority to pick the management.

[00:07:16] Speaker 03:
of an export, then there's a presumption that the Chinese government does so.

[00:07:20] Speaker 03:
And in each of the cases you've cited, I've looked at all of them.

[00:07:26] Speaker 03:
In almost all of them, there was an attempt by the exporter to show, as a matter of fact, that the Chinese government did not exercise influence to choose management.

[00:07:39] Speaker 03:
So what would have happened in this case, if you had chosen to produce your evidence to

[00:07:45] Speaker 03:
commerce, you could have said you realize that because of your corporate structure, there is a presumption that the Chinese government picks your management or can pick your management.

[00:07:56] Speaker 03:
You could rebut that because you can go to your management and ask them how they get picked.

[00:08:03] Speaker 03:
Your own management will know whether it was put in place by the Chinese government or whether it was independently picked and therefore autonomous.

[00:08:14] Speaker 03:
And so you and Ashley told, so to speak, the keys to the jailhouse door.

[00:08:21] Speaker 03:
And you had an opportunity to come into the agency and teach and show them just that, that your money was independently selected and with no input from the Chinese government.

[00:08:32] Speaker 03:
But you waved off that opportunity.

[00:08:36] Speaker 03:
And if you put that evidence in the record for what you thought showed autonomy,

[00:08:43] Speaker 03:
And Thomas disagreed with you.

[00:08:44] Speaker 03:
You would have been able to appeal to the CIT, ask it to balance that evidence.

[00:08:50] Speaker 03:
And if you lost there, you couldn't have come to us.

[00:08:55] Speaker 03:
And I think that's what exhaustion of administrative remedies is all about.

[00:09:02] Speaker 01:
Yes, Your Honor.

[00:09:03] Speaker 01:
Those definitely are valid points.

[00:09:07] Speaker 01:
I think our position is that,

[00:09:10] Speaker 01:
When you look at all those cases in which the Chinese respondents did appeal, did file a case brief, did file a CIT appeal, and were able to argue the case brief acts as submitted below, Commerce still unanimously rejected those attempts to

[00:09:36] Speaker 01:
disprove the Chinese government control through the majority shareholding.

[00:09:44] Speaker 03:
That's true because they failed to meet their burden to overcome the presumption.

[00:09:52] Speaker 03:
Now that what you're trying to argue is, as a matter of law, that this, I think it's number three, the third element of the four-part test, but you know which one we're talking about, I think you're arguing that either

[00:10:04] Speaker 03:
an irrational and capricious standard, or you're arguing that the presumption that that standard, unless it's overcome, is somehow arbitrary and capricious.

[00:10:19] Speaker 03:
But even that kind of legal challenge to the authority of the agency to apply

[00:10:28] Speaker 03:
The third part, as they've done, seems to be a matter that should additionally be presented to the agency so that its response would inform part of the debate when it comes in front of a judicial forum.

[00:10:45] Speaker 01:
Yes, Your Honor.

[00:10:46] Speaker 01:
I think, you know, these are all duly noted and, you know, we do appreciate the, you know, the administrative

[00:10:56] Speaker 01:
process in which the agency is supposed to have the first crack at handling these issues before it gets appealed up to the courts.

[00:11:06] Speaker 01:
But, you know, we're repealing, you know, because of the judicial discretion, you know, under the exhaustion claim to see is the separate rates test

[00:11:19] Speaker 01:
being administered fairly?

[00:11:22] Speaker 01:
Are the presumptions, you know, giving a fair opportunity for respondents to challenge the separate rates of presumption?

[00:11:33] Speaker 01:
We submit that.

[00:11:35] Speaker 03:
Your suggestion that the exporter doesn't have the opportunity to prior it, but is frivolous.

[00:11:42] Speaker 03:
Because the record proves every single case you cited except one shows that the exporter showed up at the agency as you did not in order to make your case.

[00:11:54] Speaker 03:
And the fact that no one has ever rebutted the presumption doesn't prove that the presumption is wrong, does it?

[00:12:02] Speaker 01:
It could.

[00:12:03] Speaker 01:
That's essentially what we're asking.

[00:12:14] Speaker 04:
Why don't we hear from the other side?

[00:12:19] Speaker 04:
Ms.

[00:12:19] Speaker 04:
Kristyniak.

[00:12:22] Speaker 05:
Thank you, Your Honor, and may it please the court.

[00:12:25] Speaker 05:
We ask that the court affirm the decision of the trial court requiring the exhaustion of administrative remedies here.

[00:12:32] Speaker 05:
As the court noted, Liu Yang did not file a case brief, so it's not a question of whether an issue was somewhat raised before commerce, but it simply was not raised at all.

[00:12:40] Speaker 05:
We think that this case falls squarely within this court's binding precedent in both Corristall from 2007 and in Tote II Builders from 2013.

[00:12:50] Speaker 05:
In Corristall, this court noted, quote, the mere fact that an adverse decision may have been likely does not excuse a party from statutory or regulatory requirements that it exalts.

[00:12:59] Speaker 04:
Well, this is Judge Prouse.

[00:13:00] Speaker 04:
Can I just interrupt you for a second?

[00:13:02] Speaker 04:
I don't know if you heard the preceding argument.

[00:13:05] Speaker 05:
I did, Your Honor.

[00:13:07] Speaker 04:
Well, I mean, as you might have gleaned, I mean, that's an instance where this court has a precedent that's binding on all future panels and can only be overturned by an en banc court.

[00:13:17] Speaker 04:
So they bring it to us first.

[00:13:19] Speaker 04:
I think under our rules, you can just file a petition for hearing in those circumstances and get right up to us without necessarily going the panel route.

[00:13:32] Speaker 04:
Is there such a procedure available in your sphere that would allow that?

[00:13:39] Speaker 04:
I mean, if there's been an absolute binding precedent that goes against you, does one have to exhaust

[00:13:45] Speaker 04:
all of the details, knowing he's going to lose, is there a way in which the petitioner or someone should be able to ally that and just go up for the answer to the body that has the authority to overturn it?

[00:14:00] Speaker 05:
I think the court's decision in coaching builders is an instance where this court found that the trial court abused this discretion in not applying the futility exception to the requirement.

[00:14:12] Speaker 05:
In that case, it was Commerce made the determination to rescind the review over certain steel products, and Itosu, which participated in the earlier parts of the administrative process, argued that the rescission should be further dated back to include certain entries that had already been reviewed.

[00:14:28] Speaker 05:
Commerce made it clear in those initial proceedings that its understanding of the applicable statute there meant that it did not believe the statute would permit it to ever rescind a review over an already reviewed entry.

[00:14:41] Speaker 05:
Itoichi did not repeat that argument after the preliminary determination, and the trial court found that it had failed to exhaust its administrative remedies, not withstanding the fact it noted that had Itoichi just simply refiled the same comments that it had initially filed, that would have worked to preserve the argument.

[00:14:57] Speaker 05:
And here, this court reversed that decision, finding that because commerce's determination hinged on its understanding of a statute, that was a legal determination that could be appealed straight up and did not have to be necessarily decided by commerce.

[00:15:13] Speaker 05:
In contrast, what we have here are factual determination applied to policy.

[00:15:17] Speaker 05:
The presumption of government control is not set forth in statute, right?

[00:15:22] Speaker 05:
It's a commerce policy that has been developed over several years.

[00:15:24] Speaker 05:
It has been reviewed and affirmed by this court.

[00:15:27] Speaker 05:
in the AT&M cases that counsel referred to, but then also in the diamond saw blade position from 2017, determining that the presumption is something that commerce has been affirmed.

[00:15:40] Speaker 05:
And I would note specifically the court held in court saw that the finding there that the exhaustion requirement was mandated was

[00:15:52] Speaker 05:
because the issue there was not dictated by statute or regulation, and I'm quoting from the decision, but was the product of policy decisions worked out by commerce and applied in other cases.

[00:16:01] Speaker 05:
And I think the facts, of course, are important here, too, because they were making a very similar argument.

[00:16:06] Speaker 05:
The argument was essentially because of the way commerce calculates duty absorption, it's essentially impossible for an importer to be found to be dumping and then not also found to be absorbing, duty absorbing.

[00:16:17] Speaker 05:
It was kind of a de facto finding that their argument was.

[00:16:21] Speaker 05:
based on the way that commerce calculated duty absorption.

[00:16:23] Speaker 05:
And this court said, again noted, the mere fact that an adverse decision may have been likely did not excuse them from raising that to commerce because it was not a statute or regulation that commerce was applying, but rather commerce's internal policy that it may have, again, language from the decision.

[00:16:39] Speaker 05:
Commerce is not bound to adhere to the approach it employs if a sufficiently pervasive showing is made that the approach is flawed in general or in its application to a particular case.

[00:16:49] Speaker 05:
That's what I believe some of the questions to opposing counsel were getting at, that even not withstanding the fact that perhaps commerce has not found this particular ownership structure to rebut the presumption of government control does not mean that commerce would not, it is impossible for commerce to look at the specific facts of the case and find that the presumption has been rebutted.

[00:17:08] Speaker 05:
I'll actually note that this court quite recently in a decision that just came out last December, and I believe Judge Syke, you were on this panel,

[00:17:14] Speaker 05:
noted, the Dillinger-France decision, noted, quote, a presumption is not irrebuttable where commerce considers objections to its methodology and provides its reason for rejecting them.

[00:17:24] Speaker 05:
And that is precisely what we have here.

[00:17:28] Speaker 03:
Ms.

[00:17:28] Speaker 03:
Christine, I have a challenge.

[00:17:29] Speaker 03:
But this is an information point.

[00:17:31] Speaker 03:
Since diamond saw blades and the fact that the ownership structure is being reasonably held against the export of which ownership shows possible government control,

[00:17:42] Speaker 03:
Has an exporter ever rebutted the presumption in any of these cases?

[00:17:48] Speaker 05:
Many exporters have rebutted the presumption.

[00:17:50] Speaker 03:
I looked at maybe 60 of them.

[00:17:53] Speaker 03:
Every single one I saw, the exporter was allowed to come in and make arguments as to why they thought the presumption of control over a magic all lost.

[00:18:02] Speaker 03:
I'm just curious, is there one exception for this one?

[00:18:07] Speaker 05:
So the presumption applies to all importers.

[00:18:09] Speaker 05:
Many importers do rebut.

[00:18:11] Speaker 03:
You're not going to answer my question if it's an answer, yes or no.

[00:18:14] Speaker 03:
In all of these cases, such as this one, commerce says to someone, your ownership structure controls the picking of your management.

[00:18:28] Speaker 03:
Therefore, we presume you're controlling, therefore, another payment.

[00:18:33] Speaker 03:
And the person gets a chance to come in

[00:18:35] Speaker 03:
I'm just asking, has such an exporter in the 60 or 70 cases ever succeeded?

[00:18:46] Speaker 05:
I am not aware of an instance where, with a particular ownership structure like we're looking at here, Your Honor, there has been a finding of a rebuttal of the presumption of government control.

[00:18:55] Speaker 05:
But I think it's worth discussing briefly.

[00:18:58] Speaker 03:
The ownership structure was a little different than what it was.

[00:19:02] Speaker 03:
of control of the exporter prevailed once he went and had his case.

[00:19:09] Speaker 05:
Your Honor, I apologize.

[00:19:10] Speaker 05:
It might be my connection, but I could not hear your question quite clearly if I could ask you to.

[00:19:14] Speaker 03:
Well, you answered my question by saying no.

[00:19:18] Speaker 03:
With the ownership structure present in this case, you would never see one that prevailed.

[00:19:25] Speaker 03:
I'm asking you if you had a situation where there was a challenge by commerce to ownership structure

[00:19:32] Speaker 03:
Does the expert prevail?

[00:19:37] Speaker 05:
Again, Your Honor, I'm not aware of one because the way the Chinese government sets out these corporations is that the SASAC, which stands for the State Owned Assets and Supervision Administration, I believe oversees almost every corporation there.

[00:19:53] Speaker 05:
And specifically in this instance, it is the 100% owner of Lu Yang's majority shareholder.

[00:19:59] Speaker 05:
And the commerce simply in undertaking these analyses assumes that a majority shareholder is going to act in their interest unless there is something within the applicable bylaws or articles of association, something that would bar them from acting in their interest.

[00:20:15] Speaker 05:
And that is not the case here.

[00:20:17] Speaker 05:
We just had a simple situation where the FASAC 100% owns the majority shareholder and there's no limitation on the majority shareholder's ability to select management.

[00:20:28] Speaker 05:
or excuse me, to select the board, which Commerce noted, and this finding is in Appendix Page 40 in the preliminary determination memo, Commerce noted that by virtue of the ability to select the board, the board selected management.

[00:20:41] Speaker 05:
So I'm not sure if I'd answer the court's question, but no, I'm not aware of a circumstance where a company that is majority-owned by some sort of government entity like we have here has successfully rebutted the presumption.

[00:20:56] Speaker 05:
But again, based on this court's precedent from Korostal, that is not a requirement for the presumption to stand.

[00:21:04] Speaker 02:
Well, I'm a little confused here.

[00:21:06] Speaker 02:
I confess as to what the presumption is.

[00:21:09] Speaker 02:
As I understand it, the presumption is that if it comes from an NME country, that it's government-controlled.

[00:21:18] Speaker 02:
That's the presumption which was discussed in Diamond Subway.

[00:21:22] Speaker 02:
Are you suggesting that there's another presumption that if it's government owned, that means it's government controlled?

[00:21:32] Speaker 05:
No, Your Honor.

[00:21:33] Speaker 05:
I believe that's the presumption that plaintiff of talent is asserting here, basically that there is a presumption that if the SASAC is somewhere in the ownership structure, therefore the rebuttal will be the

[00:21:46] Speaker 05:
The assumption of government control cannot be rebutted.

[00:21:49] Speaker 05:
That is not a presumption on commerce's part.

[00:21:51] Speaker 05:
And the court has, of course, the determinations before it.

[00:21:55] Speaker 05:
Commerce does not simply stop the analysis at, and we see the SASAC in the ownership structure, therefore, the rebuttal has failed.

[00:22:03] Speaker 05:
Rather, they continue, and again, this is at Appendix Stage 40, they continue to discuss the actual structure there.

[00:22:09] Speaker 05:
noting that there is no limit on the majority shareholder's ability to select the board, which in turn selects management.

[00:22:16] Speaker 02:
So I. So if the government has ownership and there's no limitation in the bylaws that restricts their ability to select management, then there's government control, regardless of other factors, right?

[00:22:34] Speaker 05:
That is commerce's practice, which was affirmed by this court in diamonds, yes, your honor.

[00:22:45] Speaker 05:
If there's no further questions on the presumption of control, I'll briefly touch on the standard of review here.

[00:22:53] Speaker 05:
As our brief noted, the standard of review applicable is not substantial evidence as argued by plaintiff appellant, but rather abuse of discretion.

[00:23:01] Speaker 05:
We'll note that plaintiff appellant has not really articulated any sort of argument as to what the abuse of discretion of the trial court was here.

[00:23:09] Speaker 05:
Rather, it seems to emphasize really just the factual record and what it thinks commerce should have determined back at the administrative level.

[00:23:17] Speaker 05:
So we think in addition to the binding precedent in Coristol and Itotu, which Plaintiff-Papelan really does not engage with in its briefing, the mere fact that Plaintiff-Papelan has not enunciated a legal theory under or any sort of theory under which the trial court abused its discretion underscores why this court should affirm the decision of the trial court.

[00:23:38] Speaker 02:
Could you help me, where in Diamond Sawblades did we approve the rule that you described that commerce is a fine?

[00:23:48] Speaker 02:
The rule that... Well, you're saying that government ownership is the end of it unless the bylaws say that ownership doesn't give you the right to select management.

[00:24:01] Speaker 02:
I felt... Where in Diamond Sawblades did we approve that rule?

[00:24:07] Speaker 05:
I apologize, Your Honor.

[00:24:08] Speaker 05:
I did not mean to imply that that was a specific finding in diamond saw blades that this court affirmed.

[00:24:12] Speaker 05:
Rather, I was referring to the language on 1311 of the court's decision, which we also quote in our brief, that essentially says, if a company fails to rebut the presumption, it will receive the single statewide dumping rate.

[00:24:26] Speaker 05:
And then within that decision, the court analyzed the structure that commerce has developed with regards to the actual du jour and de facto.

[00:24:36] Speaker 02:
So it didn't approve the rule that you say commerce applies?

[00:24:41] Speaker 05:
No, Your Honor, and I want to clarify that that is, yes, Your Honor, and I apologize if what I said was misleading.

[00:24:47] Speaker 05:
It's rather the structure of the presumption of government control with the de facto and de jure that this court did review and affirm in the Diamond Salt Blades decision.

[00:24:58] Speaker 05:
And if there are no further questions, we respectfully ask that the court affirm the decision of the trial court.

[00:25:03] Speaker 04:
Okay, thank you.

[00:25:05] Speaker 04:
Mr. Depressed, you've got three minutes if you have anything to add.

[00:25:15] Speaker 04:
Hello?

[00:25:16] Speaker 04:
Do you have your mood on?

[00:25:18] Speaker 00:
Thank you, Your Honor.

[00:25:19] Speaker 00:
I just disconnected the mute.

[00:25:23] Speaker 00:
There's one thing I would like to add.

[00:25:27] Speaker 00:
that might be instructed for the court to consult the joint appendix.

[00:25:34] Speaker 00:
And at the joint appendix on page 94 to 104, there is a very lengthy and detailed discussion of the SRA decision for another company that was under review, Zhejiang.

[00:25:55] Speaker 00:
And the discussion takes 10 single-spaced pages and includes very detailed discussion, includes graphs of the company structure.

[00:26:07] Speaker 00:
And the reason I point this out is that is what we are, that essential type of analysis, detailed analysis, that is exactly what we are missing in this case because of the appellant's decision

[00:26:25] Speaker 00:
to not file a case brief and to not give commerce a chance to address the arguments that are now believed are so important.

[00:26:33] Speaker 00:
So I, you know, the obviously lacking this discussion from commerce is, violates the principle that the agency should have the first crack at this.

[00:26:45] Speaker 00:
It also makes the review by the court very difficult because, you know, it, we should leave it to the,

[00:26:52] Speaker 00:
agency to present the details of the record, not have to, not place it on the responsibility on the court to examine these complicated records such as this, you know, involving the management of a company in China, you know.

[00:27:12] Speaker 00:
Then the other thing that I would like to add is the importance of the agency's regulation apart from the

[00:27:22] Speaker 02:
If the government is applying a rule that ownership is in itself conclusive unless the bylaws prevent the owners from selecting management, why isn't that a pure legal rule that can be reviewed without compromising the exhaustion principle?

[00:27:47] Speaker 00:
Well, I don't think the agency has a rule like that.

[00:27:51] Speaker 00:
I think the agency's position that they... When the government says it does, it's not right?

[00:28:00] Speaker 00:
No, I think what I meant was the agency is simply recognizing that the moment that you have evidence that a company is owned by the Chinese government,

[00:28:14] Speaker 00:
then that makes it very likely that the Chinese government will in fact exercise control.

[00:28:22] Speaker 00:
And then what the government does, just like it did for Zhejiang in our case, it examines all the aspects of the ownership and it examines how the rights that are inherent in that ownership are being exercised and it examines

[00:28:44] Speaker 00:
as a government council stated, if there are limitations, it examines a host of factors to see whether there is any reason to depart from sort of the common sense conclusion that if I own a company, it means I have control over the company.

[00:29:11] Speaker 02:
You're describing a rule which is not the one that government council says they apply.

[00:29:17] Speaker 02:
Government council says they apply a rule of government ownership is conclusive unless there's a bylaw that prevents them from selecting management.

[00:29:29] Speaker 00:
Unless there's a bylaw but the government is not saying that is the only thing that could stop it.

[00:29:36] Speaker 00:
you know, it's hard to predict what the factual situation will be for any particular company in a review.

[00:29:44] Speaker 00:
But all I can say is I have 10 pages of analysis of Zhejiang that doesn't suggest to me that it is an immutable conclusion or that there's no chance ever that the Commerce Department will not reach a different conclusion.

[00:30:12] Speaker 04:
Okay.

[00:30:13] Speaker 04:
Anything else, Judge Dyke?

[00:30:14] Speaker 04:
Any further questions?

[00:30:15] Speaker 04:
No.

[00:30:16] Speaker 04:
Okay.

[00:30:16] Speaker 04:
Mr. Lee, you have a few minutes on rebuttal.

[00:30:20] Speaker 01:
Thank you, Your Honors.

[00:30:22] Speaker 01:
Two points to make.

[00:30:26] Speaker 01:
The last point on the other respondent, Jojang Machinery, I know ironically I'm actually representing them in the CIT appeal of that decision.

[00:30:41] Speaker 01:
You know, Commerce actually did also deny separate status for them as well, too.

[00:30:47] Speaker 01:
There were, as Mr. DeFurze noted, several factual distinctions there.

[00:30:54] Speaker 01:
You know, so in terms of how the ownership was structured for Zhejiang, it was different.

[00:31:01] Speaker 01:
And so it was different enough that there were enough factual

[00:31:07] Speaker 01:
differences that they considered, you know, appealing in that case.

[00:31:12] Speaker 01:
But here, you know, for Luoyang, you know, because it was the cookie-cutter, straight-up majority ownership by a state-owned company, that has become an automatic basis for denial.

[00:31:31] Speaker 01:
becoming second layer.

[00:31:33] Speaker 02:
What were the factual differences in the other case that caused them to go through this elaborate analysis?

[00:31:39] Speaker 01:
For judge on machinery, the state ownership was just a proxy.

[00:31:45] Speaker 01:
It was not an actual owner.

[00:31:48] Speaker 01:
It was a proxy for an ESOP, an employee stock ownership program plan that were the true shareholders of that company, the judge on machinery affiliate.

[00:32:00] Speaker 01:
So in that case, the question really was, is it really a state-owned company controlling this, or is it really the employees through the ESOP that's controlling the company?

[00:32:13] Speaker 01:
So that was the key factual distinction for the other TRB company in this review.

[00:32:23] Speaker 01:
So in terms...

[00:32:25] Speaker 01:
So I guess you noted that, you know, commerce has effectively established a second layer of presumptions.

[00:32:33] Speaker 01:
You know, in addition to the first underlying presumption of Chinese government control of all companies, here majority state ownership is basically a de facto presumption of control of the management.

[00:32:48] Speaker 01:
So like an onion, this extra layer of, you know, of a presumption

[00:32:55] Speaker 01:
That's what we're challenging is that, you know, because the underlying burden to prove independence from Chinese government is already upon us, this extra burden trying to overcome the majority state ownership anywhere in the corporate structure is an on scenario presumption to apply.

[00:33:19] Speaker 04:
Okay.

[00:33:19] Speaker 04:
Thank you.

[00:33:21] Speaker 04:
We thank both sides and the case is submitted.

[00:33:24] Speaker 04:
That concludes our proceeding for this morning.

[00:33:26] Speaker 04:
Thank you all.

[00:33:27] Speaker 04:
Thank you, Michael.

[00:33:28] Speaker 03:
Bye.

[00:33:31] Speaker 03:
The Honorable Court is adjourned until tomorrow morning at 10 a.m.