[00:00:00] Speaker 02: The next case before the court is Next Deal Company Limited versus U.S. [00:00:08] Speaker 02: Case number 211334. [00:00:12] Speaker 02: It's an appeal from the Court of International Trade. [00:00:54] Speaker 02: OK, so I understand that the way we're going to do this is that Mr. Boleyn and Mr. Joson, is that how you pronounce it, are going to argue first for Ms. [00:01:06] Speaker 03: Joson? [00:01:10] Speaker 03: Your Honor, Ms. [00:01:10] Speaker 03: Joson represents the Department of Justice for the United States. [00:01:13] Speaker 03: OK. [00:01:13] Speaker 03: So she'll be arguing, I guess, in the very end. [00:01:14] Speaker 02: At the end. [00:01:16] Speaker 02: OK, and to the response as it relates. [00:01:19] Speaker 02: OK, the cross appeal. [00:01:22] Speaker 02: All right. [00:01:24] Speaker 02: And Mr. Allman and Mr. Winton, I'm just going to put you all on separate clocks. [00:01:31] Speaker 02: So when your time's up, your time's up. [00:01:34] Speaker 02: And so I'm not keeping track of your splitting. [00:01:37] Speaker 02: So the clock will tell you when your time, when you have to cede your time. [00:01:43] Speaker 02: OK. [00:01:44] Speaker 02: So Mr. Bulleen? [00:01:47] Speaker 03: It's VLINE, Your Honor. [00:01:48] Speaker 02: Sorry. [00:01:49] Speaker 02: VLINE. [00:01:53] Speaker 04: like I just made to the podium. [00:01:54] Speaker 02: Yeah, you're missing an extra E in there. [00:01:58] Speaker 04: I'll blame my ancestors. [00:02:00] Speaker 01: You can take your mask off if you're comfortable doing that. [00:02:02] Speaker 01: It's easier for us to hear. [00:02:03] Speaker 04: Sure, Your Honor. [00:02:04] Speaker 04: Thank you, Judge Bryson. [00:02:08] Speaker 04: Good afternoon, Your Honors, and may it please the court. [00:02:11] Speaker 04: For the record, my name is Thomas Beeline with the law firm Cassidy v. Kent on behalf of United States Steel Corporation. [00:02:17] Speaker 04: A bicameral and bipartisan Congress passed into law in 2015 the Particular Market Situation Provision. [00:02:26] Speaker 04: This was intended to give the U.S. [00:02:28] Speaker 04: Department of Commerce the quote-unquote queen on the chessboard when it came to adjusting costs and the anti-dumping calculation. [00:02:36] Speaker 04: And so in the case of Barr, this was one of the first cases that commerce had before it, substantial record evidence that established that a particular market situation existed in Korea, and commerce made adjustments to the constructed value of respondents to calculate their dumping margin. [00:02:54] Speaker 04: So what happened and why are we here? [00:02:57] Speaker 04: We're here because, as the first panel was describing, the substantial record evidence standard was misapplied by the Court of International Trade. [00:03:04] Speaker 04: Specifically, the Court did not defer to commerce's reasoned interpretation of the substantial evidence before it. [00:03:12] Speaker 04: In fact, Commerce had 6,200 pages in the form of evidence of articles, industry publications, government of Korea documents, official import statistics, which all established that the particular market situation in Korea impacted the cost of producing oil country tubular goods. [00:03:29] Speaker 02: Well, I'm trying to determine to what extent this is just a factual dispute and to what extent there is a debate over how the statute is to be interpreted. [00:03:39] Speaker 04: So Your Honor, primarily before the court is a substantial evidence question because the respondents here, my colleagues, did not appeal the Court of Natural Trades legal finding that commerce's interpretation of the statute, which by the way is entitled to Chevron deference, which the court applied here, [00:03:57] Speaker 04: where the Port of International Trade said that the totality of the evidence framework was appropriate and commerce did not explicitly need to tie any distortions to the cost of producing oil country tube your goods by these particular respondents. [00:04:12] Speaker 04: So that, I don't think, is before the Court. [00:04:14] Speaker 04: I think that that's a distraction. [00:04:16] Speaker 04: Rather, what's before the Court is that the Court of International Trade did not give credence to all of Commerce's reasons for finding a particular market situation. [00:04:24] Speaker 04: In fact, there's a large number of pieces of evidence that the Court of International Trade never addressed, even though Commerce specifically referenced those pieces of evidence. [00:04:33] Speaker 04: What should have happened here is what the Supreme Court counseled in Florida Power and Light, which was the court should have said, I don't find these issues or these pieces of evidence compelling to your conclusion, Commerce. [00:04:46] Speaker 04: Go back and explain further, or explain why I'm not understanding them correctly. [00:04:50] Speaker 06: I mean, the court did that once, right? [00:04:52] Speaker 06: And Commerce took a second shot at it. [00:04:54] Speaker 06: And it came back up. [00:04:56] Speaker 06: And the CIT said, no, that's still not good at it again. [00:05:01] Speaker 06: That's when I take the CIT directed that you shouldn't do this. [00:05:08] Speaker 06: And I mean, I see some appeal in that. [00:05:14] Speaker 06: I mean, I don't think the CIT should be able to do that. [00:05:17] Speaker 06: But the problem I have here is it does not seem that commerce objected to that and wanted a third try at justifying the particular market situation. [00:05:30] Speaker 06: And so what do we do with that? [00:05:32] Speaker 06: Because do you have a right as a domestic producer to force commerce to try to justify its reasoning for a third try? [00:05:41] Speaker 06: Or is that their discretion? [00:05:43] Speaker 06: And should we, I mean, we can ask this from the government when they get up here, but isn't that their call as to whether they want to try on a third remand or not to justify that? [00:05:52] Speaker 04: So, Your Honor, I think what you have here is evidence in the remand determination where Congress has put a footnote that they often do in situations where they disagree with the court. [00:06:01] Speaker 04: They cite to this court's opinion in barrage. [00:06:03] Speaker 04: And so I think that that's a signal to the court that it is unhappy with the situation that it's been put in, but it does not find that it has discretion when it's a direct verdict here. [00:06:14] Speaker 06: I mean the government well knows that that they have the discretion and if they wanted to they could have made enough fuss and either said no you're wrong we're gonna try it again or we'll do the directed verdict but we think we have the right to try it again and here's our third try [00:06:34] Speaker 06: Or even if they didn't want to annoy the CIT by trying it a third time, they could have said, we're doing what you say, and then appealed here. [00:06:43] Speaker 06: They didn't do any of those things, though. [00:06:45] Speaker 06: They did what the CIT said to do, and they haven't appealed, which is a lot like cases where the CIT knocks them down after the first couple of remands, and they say, we give up, and we'll live with it, and then don't appeal. [00:06:59] Speaker 06: that and that seems it's a little odd because of the directed verdict instead of the CIT just doing what it should have done which is send it back down and letting commerce have the discretion but given that commerce didn't appeal that I'm just a little curious as to what relief we can give you at best aren't we going to send it back to the CIT and say you shouldn't have directed this you should give commerce the opportunity to do it again if they want [00:07:26] Speaker 04: I'm glad I'm glad you asked your honor because our request for relief is actually this court has the ability on de novo review. [00:07:32] Speaker 06: No, no, no, but I'm interested in that. [00:07:34] Speaker 06: What I want to know is if we're not going to do a new de novo review for you on substantial evidence, which I'm not inclined to do on the first instance, even though we can do it, is [00:07:45] Speaker 06: Is the result going to be, CIT, you shouldn't have directed the verdict here, let Commerce tell you whether they want a third remand or not, and what is Commerce going to say? [00:07:56] Speaker 06: I guess they'll say, but if they say, no, we don't want a third remand, you don't have any independent right to force them to do a third remand, do you? [00:08:03] Speaker 04: I could appeal Congress's decision not to have based its determination on substantial evidence. [00:08:10] Speaker 04: I have a stack of papers that says that Congress's determination is supported. [00:08:16] Speaker 04: On the other side, there just is no evidence to suggest that there's no particular market situation in Korea. [00:08:22] Speaker 06: But that's what you're already appealing. [00:08:24] Speaker 04: Right. [00:08:24] Speaker 04: But if Congress made a determination, a reasoned determination, I'm sorry, Your Honor. [00:08:29] Speaker 06: No, okay. [00:08:31] Speaker 06: What you're saying is if commerce declines to do a third remand, you can say that decision's not supported by substantial evidence, and its original decision was supported by substantial evidence. [00:08:43] Speaker 06: But you're already here saying it's original, or at least a second remand determination. [00:08:48] Speaker 06: So then we would just be reviewing a completely, almost completely discretionary act of whether they're going to undertake [00:08:55] Speaker 06: a third remand. [00:08:56] Speaker 04: Well, so Your Honor, not to peel back the curtain at all, but while this appeal was pending, Commerce continued to find particular market situations in Korea, and they continue to have directed verdicts by the Corps of International Trade. [00:09:08] Speaker 04: So where we are is in a situation where Commerce feels like they are boxed in on remand. [00:09:13] Speaker 04: They do not feel like that with the Article 3 judge telling them you cannot find a particular market situation, [00:09:18] Speaker 04: that they have discretion to find a particular market situation. [00:09:22] Speaker 04: So what they've done is they've released what is essentially a bare bones remand redetermination that has no evidentiary basis at all to say we're complying. [00:09:31] Speaker 06: Okay, I get it, but if they disagreed with that and like I said don't want to annoy the CIT by ignoring it, they still could appeal to us and say stop doing that. [00:09:41] Speaker 04: I wish they would have. [00:09:42] Speaker 04: They didn't. [00:09:42] Speaker 04: I wish they would have, Your Honor. [00:09:43] Speaker 04: It would have been nice to have them here appealing it, of course. [00:09:47] Speaker 04: But frankly, this is an issue that the Congress was identifying as a major issue for domestic producers of OCTG. [00:09:55] Speaker 04: And so we're here, because we're picking up Congress's mantle at this point, to say, you passed the law in 2015. [00:10:00] Speaker 04: President Obama signed it. [00:10:02] Speaker 04: First application of it, the court of national trade says you can't do it anymore. [00:10:05] Speaker 04: It's barely five years, and this is dead law at this point. [00:10:08] Speaker 06: Well, did they say you can't do it, or they say you haven't provided sufficient evidence to invoke the study? [00:10:15] Speaker 04: You haven't provided sufficient evidence, but we're not going to review the entirety of the record evidence before you. [00:10:20] Speaker 04: In fact, what is missing from this decision is a stack of papers that's about 10 tabs long of information that Commerce cited that was never addressed by the Court of International Trade. [00:10:31] Speaker 04: So the court did not even give Commerce a cogent reason as to why [00:10:37] Speaker 04: substantial flaws of the record were ignored. [00:10:40] Speaker 04: And that's just not a substantial evidence review, I don't think. [00:10:43] Speaker 01: What do you think? [00:10:45] Speaker 01: There are a lot of weeds in this case. [00:10:46] Speaker 01: So let's get down to the weeds a little bit. [00:10:48] Speaker 01: Why do you think it was OK for Commerce to base its ultimate decision on the subsidies for HRC on an AFA [00:11:04] Speaker 01: Finding in an entirely separate proceeding against posco. [00:11:08] Speaker 04: It's a fair point your honor I think that what commerce had before it was what is the quantification of the adjustment? [00:11:15] Speaker 04: What should it be what it had was a final determination of? [00:11:19] Speaker 04: subsidization of posco and what it had before it in the record evidence was information talking about a [00:11:25] Speaker 04: the steel industry identifying restructuring as urgent. [00:11:28] Speaker 04: It had POSCO's CEO saying things like, we're struggling from China flooding the market with cheap products, we need government intervention. [00:11:36] Speaker 04: It had information that said that Chinese imports were placing downward pressure of a significant degree. [00:11:43] Speaker 01: And so, all that complicated... But I really want to focus just on the subsidization of HRC. [00:11:47] Speaker 01: issue and the use of AFA at 60 percent which is awfully high compared to what later was determined to be more like one half of one percent. [00:11:56] Speaker 04: I agree your honor it is obviously wrinkle in this case but I don't I think that that goes to the adjustment factor and what we have here before you is actually not the adjustment itself per se we have the fact that the quarter national trade didn't even get there because they said you can't find a particular market situation. [00:12:13] Speaker 04: Well [00:12:13] Speaker 01: Well, if the 60% is not reliable, doesn't that go to the question of whether there was a PMS at all? [00:12:21] Speaker 04: Oh, I think it's completely reliable, Your Honor. [00:12:23] Speaker 01: I mean, it's in the final... 60% is... AFAs are designed not to be reliable. [00:12:27] Speaker 01: They're designed to be punitive. [00:12:29] Speaker 04: Well, no, Your Honor, respectfully, I'll disagree, because the rate is not supposed to be punitive. [00:12:34] Speaker 01: It's supposed to encourage cooperation. [00:12:36] Speaker 01: Right. [00:12:36] Speaker 01: It's like the difference between... [00:12:39] Speaker 01: specific deterrence and punitive measures. [00:12:45] Speaker 04: That's fair, Your Honor. [00:12:46] Speaker 04: What I guess I'm trying to say is that Commerce had before it something to quantify the adjustment with. [00:12:52] Speaker 04: It had a number. [00:12:53] Speaker 04: It felt confident in that number. [00:12:55] Speaker 04: Whether there were other numbers that could have been used on the record, there certainly were. [00:12:59] Speaker 04: And those could have been argued about. [00:13:01] Speaker 04: And some people argued about them and some people didn't. [00:13:04] Speaker 04: But what is here before I think this Court is whether commerce has supported its remand or determination with substantial evidence. [00:13:13] Speaker 04: Did a particular market situation exist in Korea during the period of review? [00:13:16] Speaker 04: We say that it does. [00:13:18] Speaker 04: This Court should affirm that. [00:13:19] Speaker 04: It should reverse the Court of International Trade's direct verdict. [00:13:22] Speaker 04: And if not, then send it back, as Judge Hughes said, send it back to Commerce and say, explain in longer sentences why these 10 documents that were never addressed by the Court of International Trade do support your finding. [00:13:36] Speaker 04: And if Commerce wants to reopen at that point and say, you know what, we heard Judge Bryson. [00:13:40] Speaker 04: Judge Bryson said that 60% seems like a very high adjustment rate. [00:13:44] Speaker 04: We'll make an adjustment. [00:13:46] Speaker 04: By the way, the record evidence that the Court of International Trade ignored [00:13:50] Speaker 04: shows about a 60% differential between what the Chinese prices were and what domestic Korean prices should have been. [00:13:55] Speaker 02: So it's not so... When you say Congress kept doing this, and you did it in other cases, but Congress kept referring back to this one, right? [00:14:02] Speaker 03: Correct, Your Honor. [00:14:03] Speaker 03: This was the first. [00:14:03] Speaker 02: So to the extent, you know, [00:14:05] Speaker 02: garbage in, garbage out, to the extent there are flaws in this one, there are flaws in others down the line. [00:14:10] Speaker 04: Respectfully, Judge O'Malley, there were flaws in the first administrative review, which was the very first time that Commerce applied the provision. [00:14:16] Speaker 04: And Commerce looked at it in preliminary determination and looked at it in silos. [00:14:21] Speaker 04: They looked at four different factors and said, ah, silo one, we can't find it, silo two, we can't find it, et cetera. [00:14:26] Speaker 04: Then in the final determination, after receiving case and rebuttal briefs, Commerce said, ah, all these things interact with one another. [00:14:33] Speaker 04: I see how it works. [00:14:34] Speaker 04: That makes sense. [00:14:35] Speaker 04: So they looked at the totality of the circumstances. [00:14:37] Speaker 04: Commerce explained that to everybody in the final determination. [00:14:42] Speaker 04: And the Court of Natural Trade directed a verdict in error one without even hearing from Commerce. [00:14:45] Speaker 02: Well, the Court of Natural Trade said, in theory, that totality of the circumstances, I get it. [00:14:50] Speaker 02: Right. [00:14:50] Speaker 02: And that's OK. [00:14:51] Speaker 02: Right. [00:14:52] Speaker 02: And said, I'll assume they can proceed on that assumption. [00:14:54] Speaker 02: But even with that, [00:14:56] Speaker 02: You know, you can't make the sum of the parts equal something that individually they just don't add up to. [00:15:07] Speaker 04: Sure, Your Honor. [00:15:08] Speaker 04: In this record, as we explained to the quarter national trade during oral argument, the quarter national trade found the argument waived, which was strange to us because the judge specifically asked what's different between this administrative record and the first administrative record. [00:15:21] Speaker 04: And we said there are 29 new documents. [00:15:23] Speaker 04: five documents where they've been substantially updated for this period of review, and those all go to all the different factors as to how things work together, where there's complete overlap. [00:15:33] Speaker 04: And the things that Commerce found that were lacking in the first administrative review preliminarily, that there was no cause and effect, there was a Government of Korea study done about restructuring of the steel industry that identifies a cause and effect. [00:15:46] Speaker 04: And so to the extent that that wasn't existing in AR-1, but does exist in the record of AR-2, that should have been given credence by the court, and that was wholly ignored. [00:15:56] Speaker 04: And so what I'm saying to Your Honors is that administrative reviews are snapshots in time. [00:16:00] Speaker 04: I recognize my time is over speaking of time. [00:16:03] Speaker 04: But those are snapshots in time, and the administrative record changes periodically. [00:16:07] Speaker 04: And so you may have one decision and one review that finds one thing and another decision and another. [00:16:12] Speaker 04: And that's to your honor's point about different CBD rates. [00:16:16] Speaker 04: So your honor, thank you very much for your indulgence in going over time. [00:16:18] Speaker 04: I'll give you your two minutes, May. [00:16:19] Speaker 04: Thank you. [00:16:22] Speaker 02: Mr. Almond? [00:16:40] Speaker 05: Good afternoon, and may it please the court. [00:16:44] Speaker 05: I'm Henry Allman from Arnold Porter K. Scholder, for the record, here on behalf of Next Seal Company Limited. [00:16:50] Speaker 05: I'm going to be splitting my time today, well, our side's time, with counsel per se, Mr. Winton. [00:16:55] Speaker 02: What do we do about those 29 documents that were never considered? [00:17:00] Speaker 05: Well, first off, I do think that they were considered. [00:17:04] Speaker 05: The court gave commerce a remand. [00:17:06] Speaker 05: Commerce looked at all of the evidence. [00:17:09] Speaker 05: And the court's analysis, when it looked back at Congress's remand analysis, was that those 29 documents weren't enough to move the needle across the certain threshold. [00:17:23] Speaker 05: We have to rewind to the history a little bit, which Mr. Beeline touched on as well. [00:17:28] Speaker 05: This all really started in the first administrative review. [00:17:31] Speaker 05: Petitioners made this allegation under the new statute. [00:17:35] Speaker 05: And Commerce deliberated on it for months. [00:17:38] Speaker 05: The allegation was there. [00:17:39] Speaker 05: They deliberated. [00:17:40] Speaker 05: And they issued a preliminary decision, a 19-page memo, step by step, saying each of the four factors, there was no evidence. [00:17:51] Speaker 05: And so the question really is whether those 29 new documents kind of change that analysis. [00:17:57] Speaker 05: You're starting with no evidence, and now do these 29 documents out of 6,200 pages, do these handful of new documents on the pile change things? [00:18:07] Speaker 05: And Commerce focused on a couple of those documents in particular. [00:18:11] Speaker 05: There was articles about the steel industry in China and imports into Korea. [00:18:19] Speaker 05: And the court looked at Commerce's analysis and said, those materials are not compelling. [00:18:24] Speaker 05: That's not a re-wing of the evidence. [00:18:26] Speaker 05: That's taking a look at the documents and saying, this does not constitute substantial record evidence. [00:18:32] Speaker 05: It was evidence of, [00:18:34] Speaker 05: surprise, there are imports from China into Korea. [00:18:38] Speaker 05: That's basically what a lot of those materials show. [00:18:41] Speaker 02: But didn't Congress find that the evidence showed that there was a distortion of production costs because of these factors? [00:18:50] Speaker 05: That may be Congress's conclusion, and that's a conclusion that we don't think is supported by substantial record evidence at all. [00:18:56] Speaker 05: The statute isn't just does a particular market situation exist, period or question mark, depending on how you phrase it. [00:19:04] Speaker 05: The question the statute poses is whether there is a PMS such that the respondents' costs are outside the ordinary course of trade. [00:19:12] Speaker 05: And we think that's the fundamental flaw in commerce's overall analysis is they don't get to that question. [00:19:20] Speaker 05: They take these 6,000 pages, a factor here, a factor there, but they don't tie them back to our cost. [00:19:26] Speaker 05: And that's what the statute is trying to do. [00:19:28] Speaker 05: It's trying to calculate a constructed value based on our client's costs. [00:19:34] Speaker 05: And without assessing those costs, I don't see how commerce can reach a conclusion that they're outside the ordinary course of trade. [00:19:42] Speaker 05: So I think that covers some of the history of the case and why. [00:19:48] Speaker 06: So how does that apply to the totality of circumstances test, which, at least for the purpose of this, we seem to agree can apply? [00:19:55] Speaker 06: Commerce doesn't have to show exactly how a particular market situation impacts a certain input, right? [00:20:01] Speaker 06: They can look at all the various inputs and describe in at least some detail that the totality of circumstances are affecting the costs and do this adjustment, right? [00:20:14] Speaker 05: And this is what Judge Tolle Grove said. [00:20:16] Speaker 05: Yes, in theory, you can. [00:20:17] Speaker 06: Well, that's what I understand. [00:20:18] Speaker 06: And your position, even if you maybe you want to dispute the totality of the circumstances at all, let's just not get into that. [00:20:25] Speaker 06: Let's assume that applies. [00:20:27] Speaker 06: But the view here is that even if that's possible, all commerce is done is shown these four basic areas where there are some things going on [00:20:38] Speaker 06: that could lead to distortion of cost. [00:20:41] Speaker 06: But they're basically theories, and they've made no allegation to connect any of them up to an actual cost distortion. [00:20:50] Speaker 05: That's right. [00:20:51] Speaker 05: And going back to your initial phrasing of the question, sort of what is the degree of specificity that commerce needs to find, I'm not going to sit here and stand here and say that commerce needs to be [00:21:03] Speaker 05: put a fine needle on it to say the costs are x percent lower than they should have been but commerce didn't do any of that they didn't reach any determination so i guess that's what i want to ask because i i [00:21:15] Speaker 06: Again, it's a new statute. [00:21:18] Speaker 06: It's a very fuzzy kind of terminology in calculation anyway. [00:21:23] Speaker 06: What else would they need to do when they say, look, China's dumping hot rolled coiled steel. [00:21:30] Speaker 06: The Korean government subsidizes electricity. [00:21:34] Speaker 06: Just assume all these are true. [00:21:36] Speaker 06: I know you want to object to that. [00:21:37] Speaker 06: I just want to get to the hypothetical. [00:21:38] Speaker 06: And then the other two things I forget off the top of my head. [00:21:41] Speaker 06: They say these are all these things that clearly [00:21:45] Speaker 06: can affect the markets or the cost inputs because one input is the steel, one input is electricity and based upon all these factors together we think that the cost of productions here don't match up and so we're going to make an adjustment. [00:22:00] Speaker 06: What do they need to do to make that connection beyond identifying these are the typical inputs and we think they're distorted? [00:22:08] Speaker 05: I think, number one, they have to somehow reference our actual data. [00:22:12] Speaker 05: They didn't do that whatsoever. [00:22:13] Speaker 05: Number two, they have to meaningfully consider the contradictory evidence we provided. [00:22:20] Speaker 05: For my client NextDeal, we compared our costs to a whole series of benchmarks. [00:22:25] Speaker 05: And I get it. [00:22:26] Speaker 05: Commerce, they're very good at this. [00:22:28] Speaker 05: They disregarded them based on it's not perfect, this, that, and the other. [00:22:33] Speaker 05: Mr. Winton, for his client Seau, will tell you that they pointed [00:22:37] Speaker 05: to their purchases from Japan, and they have these confidential numbers in their brief, that would show, hey, look, if something's going on in Korea, let's get out of this allegedly infected market and find something outside of it. [00:22:52] Speaker 05: Let's see if this bears out in the data. [00:22:54] Speaker 05: Let's see if your costs are lower relative to some [00:22:58] Speaker 05: something outside of that quote-unquote infected market. [00:23:02] Speaker 05: So we think that's what commerce needs to do at some level. [00:23:07] Speaker 02: Well, isn't the difficulty with the quantification, doesn't that go more toward what methodology commerce could use ultimately to address that misstep in the market rather than to whether or not there's a PMS in the first place? [00:23:27] Speaker 05: I think it's both. [00:23:28] Speaker 05: And our reading of the statute is that there's this phrase after the words particular market situation. [00:23:34] Speaker 05: It says a particular market situation such that the costs are outside the ordinary course of trade. [00:23:40] Speaker 05: So we think at some level, they need to conduct an analysis of the cost to conclude that they're outside the ordinary course of trade. [00:23:47] Speaker 05: Going to the second question of whether that strictly goes. [00:23:51] Speaker 02: Well, didn't they conclude that all of these things basically impacted [00:23:56] Speaker 02: or decreased production costs? [00:24:00] Speaker 05: That's their conclusion, and that's the conclusion we think is unsupported by evidence because there's no link to the costs. [00:24:06] Speaker 05: But as you say, there is this adjustment factor question. [00:24:12] Speaker 05: And the adjustment factor they used completely undermines the whole story, in that they're saying that there's these factors, and here we're going to apply this huge adjustment to the costs. [00:24:24] Speaker 05: That, in our view, is obviously unsupported by substantial evidence. [00:24:29] Speaker 05: The other side has gone to length to not include that in this appeal. [00:24:32] Speaker 05: The lower court of international trade didn't expressly rule on it. [00:24:37] Speaker 05: But that's a whole separate issue. [00:24:39] Speaker 05: Weather Commerce could use this AFA [00:24:42] Speaker 05: calculation from another case as a plug for our company's data. [00:24:48] Speaker 01: What else did they have in the record to rely on? [00:24:56] Speaker 01: In your brief, you say, well, they should have looked to the subsequent 0.54 number. [00:25:02] Speaker 01: But that wasn't in the record, as I understand it, of the administrative review. [00:25:08] Speaker 05: Is that right? [00:25:09] Speaker 05: I'll have two points on that. [00:25:12] Speaker 01: Well, first, am I right in thinking it's not in the record? [00:25:16] Speaker 01: That's probably a yes or no. [00:25:19] Speaker 05: I'll do something I probably shouldn't do and say, yes, that's right, it's not in the record, with a caveat. [00:25:24] Speaker 05: And that caveat is, Congress's remand was in November 2019. [00:25:30] Speaker 05: Throughout the remand, Commerce says, we're doing this analysis de novo. [00:25:34] Speaker 05: The court has thrown it back at us. [00:25:35] Speaker 05: We're going to take a big step back and look at everything. [00:25:39] Speaker 05: In the intervening time in, I think, I believe, June of 2019, Commerce had published that 0.5% rate. [00:25:46] Speaker 05: So whether it's in the record or not, it's a published decision. [00:25:50] Speaker 02: But whatever the rate is, whether it's 60% or 0.5%, isn't it fair to say that subsidies relating to an input [00:25:59] Speaker 02: can distort the market? [00:26:01] Speaker 05: It's fair to say that they can. [00:26:03] Speaker 05: But, and this is a big but, there's no evidence that those subsidies would flow through to our clients. [00:26:10] Speaker 05: This is a subsidy to an unaffiliated, well, there's been questions in the case previously whether the company was affiliated. [00:26:18] Speaker 05: But whether one company that receives a subsidy, be it 60% or 5%, are they going to pass that through in the form of lower costs? [00:26:26] Speaker 05: The whole point of a subsidy investigation is whether [00:26:29] Speaker 05: you know, the respondent there benefits. [00:26:32] Speaker 05: If a respondent benefits to the tune of 60% or 0.5%, they're going to keep that in their own pocket. [00:26:39] Speaker 05: They're not going to just one for one lower their prices to their customers. [00:26:44] Speaker 05: So yes, some benefit might pass down. [00:26:47] Speaker 05: There's no evidence here that any benefit did pass down. [00:26:51] Speaker 01: Let me see if I understand what you said in response to my question about it wasn't in the record. [00:26:59] Speaker 01: Run that by me again, that it was already published. [00:27:02] Speaker 01: It was a published rate. [00:27:04] Speaker 01: At what point and in what proceeding was it published, the 0.54? [00:27:08] Speaker 05: That's right. [00:27:09] Speaker 05: So the 0.54 and 0.2 is from the hot rolled coil CBD first review. [00:27:16] Speaker 05: So we've got the first investigation, which was a 60%. [00:27:19] Speaker 05: And then these cases are proceeding in parallel. [00:27:26] Speaker 05: The Hopro CDD first review was published in June of 2019. [00:27:30] Speaker 05: I believe I have my dates right. [00:27:33] Speaker 05: And Commerce issued its remand, the remand on appeal here in November. [00:27:39] Speaker 05: So Commerce is saying, [00:27:40] Speaker 05: We're doing this de novo review, but we're going to, you know, well, Congress didn't ignore that decision. [00:27:47] Speaker 05: They said, looking at these two decisions, we think the investigation one is more probative because it's more timely or contemporaneous. [00:27:57] Speaker 05: As the Court of International Trade said, that's just patently wrong. [00:28:01] Speaker 05: So it's a decision that Commerce itself had published. [00:28:05] Speaker 01: Okay, so what you're saying, I guess, to the chase, is that even though it wasn't part of the formal investigation record, it was something that Commerce had published, albeit in a different proceeding, but one was predicated on exactly the same facts, and therefore should have been taken cognizance of in this investigation. [00:28:25] Speaker 01: That's our position, yes. [00:28:27] Speaker 02: Okay, I need to give Mr. Witten time. [00:28:31] Speaker 05: No further questions thank you [00:29:18] Speaker 02: Mr. Winton, are you limiting yourself just to the cross appeal, right? [00:29:22] Speaker 07: I had intended to, but I thought I might if it's OK. [00:29:27] Speaker 02: OK, well, you've got five minutes. [00:29:29] Speaker 07: I'll talk fast. [00:29:32] Speaker 07: Good afternoon. [00:29:33] Speaker 07: Jeffrey Winton on behalf of, say, a steel corporation. [00:29:38] Speaker 07: I want to just touch briefly on the discussion you just had, because I think there's a misunderstanding. [00:29:43] Speaker 07: The statute doesn't say, is the price of hot world coil low? [00:29:48] Speaker 07: I'm sorry. [00:29:49] Speaker 07: Was Pasco's cost of hot world coil means lower? [00:29:52] Speaker 07: The question is whether our cost of hot world coil reflected the cost of production of hot world coil in the ordinary course of trade. [00:29:59] Speaker 07: That's a different question. [00:30:00] Speaker 07: To answer that question, you need to know what is the cost of production of coil in the ordinary course of trade. [00:30:06] Speaker 07: And there's no evidence on the record at all as to what that might be. [00:30:11] Speaker 07: So yes, as Henry said, maybe there's a PMS, maybe there's a not. [00:30:15] Speaker 07: Not. [00:30:15] Speaker 07: But the statute says it's not the existence of a distortion. [00:30:18] Speaker 07: It's a distortion such that the cost of coil that we pay [00:30:23] Speaker 07: does not reflect the cost of production quote in the ordinary course of trade. [00:30:28] Speaker 07: Subsidies to possibly, I think Henry's addressed everything else. [00:30:31] Speaker 06: I did want to talk about- Well, I can give that, but if the allegation is that China is dumping into Korea [00:30:41] Speaker 06: Hot roll coil that is below the cost of production. [00:30:45] Speaker 06: There's no evidence for that Well, I understand but this is the problem is there's the theory which seems what commerce has come up with and then I think what the CIT's problem is that [00:30:58] Speaker 06: They didn't connect that up to cost of production to you. [00:31:01] Speaker 07: I would say it's different. [00:31:02] Speaker 07: The CIT didn't actually address what I just said to you. [00:31:06] Speaker 07: CIT looked at this and said, you use the phrase totality of the circumstances like it's abracadabra. [00:31:12] Speaker 07: I got four empty glasses here, abracadabra, it's fault. [00:31:17] Speaker 07: That's how they use totality of the circumstances. [00:31:18] Speaker 07: There's no actual analysis. [00:31:20] Speaker 07: that these things work together in any way. [00:31:23] Speaker 07: There's nothing. [00:31:24] Speaker 06: It's just we looked at poor things. [00:31:26] Speaker 06: They weren't enough. [00:31:27] Speaker 06: I think you don't do yourself a service when you exaggerate in this way and pass off commerce's analysis here as so frivolous. [00:31:35] Speaker 06: I mean, they've come forth with at least four specific things that theoretically could impact and make a particular market situation. [00:31:44] Speaker 06: If the facts are born out, [00:31:46] Speaker 06: Those are sufficient. [00:31:48] Speaker 06: And so I think just brushing this aside and saying, don't interrupt me, please. [00:31:55] Speaker 06: But the question is how far you have to go in proving those. [00:31:59] Speaker 06: And I get it, the CIT said, you have just posited these theories, and there's not enough to substantiate these theories. [00:32:07] Speaker 06: But this is very, very difficult economic stuff. [00:32:10] Speaker 06: The proof is often. [00:32:12] Speaker 06: not there in records and stuff. [00:32:14] Speaker 06: You know, you do yourself a hugest favor. [00:32:16] Speaker 06: You sat in the audience during your opponent's or your friend's side and shook your head vigorously one way or another. [00:32:22] Speaker 06: Now you are frowning at us and making faces. [00:32:25] Speaker 06: This is not the way to appear in an appellate event. [00:32:27] Speaker 07: Your Honor, I'm very sorry. [00:32:28] Speaker 06: Can you just tell me what the level of particularity is required? [00:32:32] Speaker 06: See, here's where I respectfully disagree. [00:32:36] Speaker 06: No, I didn't I don't know. [00:32:38] Speaker 06: I'm not making a point to disagree I want to know from you. [00:32:41] Speaker 07: Help me. [00:32:42] Speaker 06: What? [00:32:43] Speaker 07: In the first review commerce looked at four factors and said none of them individually adds up to anything [00:32:50] Speaker 07: in the preliminary. [00:32:51] Speaker 07: In their final, without any further analysis, they simply said, but the totality of the circumstances. [00:32:56] Speaker 07: That's not the question I asked you. [00:32:57] Speaker 07: The question I asked you is, what level of particularity should have been made to substantiate that? [00:33:03] Speaker 07: Well, what I'm saying is, in order to say the totality of the circumstances proves something, you need to show how these things work together. [00:33:13] Speaker 07: It isn't enough just to say, and really, you may [00:33:16] Speaker 07: just like the way I'm arguing and saying I'm privileged, but the reality is when you look at what Commerce said, they said there's a totality of the circumstances, we've got all these things, we have maybe something here, maybe something not here, the statement was made, it's really the same record as in the first review. [00:33:33] Speaker 07: The evidence is basically the same as in the first review. [00:33:37] Speaker 07: We make the same decision as in the first review. [00:33:39] Speaker 07: In the first review, we said none of these four was sufficient on its own, but we looked at them and we said totality of the circumstances, but never explained how that was supposed to work. [00:33:49] Speaker 07: And to me, you may disagree with my characterization, but I think it's actually accurate. [00:33:54] Speaker 07: That it's not sufficient to say, we looked at this in the whole, and we look at the whole and it's okay. [00:34:02] Speaker 07: You gotta explain why it's okay. [00:34:04] Speaker 07: You gotta explain why the subsidies, alleged subsidies, interact with these other things. [00:34:10] Speaker 07: to cause the cost we pay not to reflect the cost. [00:34:15] Speaker 02: But you made that argument to the CIT that you wanted commerce to be required to, before it ever confined to a particular market situation, to apply the analysis on a company-specific basis. [00:34:30] Speaker 02: And the CIT never made that finding. [00:34:33] Speaker 07: Right. [00:34:33] Speaker 07: But it didn't go either way. [00:34:35] Speaker 02: But you're saying we're supposed to assume that you're right. [00:34:37] Speaker 07: No, I'm not. [00:34:39] Speaker 07: Because it's not a question necessarily. [00:34:40] Speaker 07: You could say, you don't need to show that SAIA's price for coil didn't reflect the cost of production. [00:34:48] Speaker 07: But if you're going to do it on a market-wide basis, then you have to show that the [00:34:53] Speaker 07: didn't reflect the cost of production on the ordinary course of trade. [00:34:57] Speaker 07: We did not rely on this that it's got to be company-specific. [00:35:00] Speaker 07: That argument was made by other parties. [00:35:03] Speaker 07: Our argument was whatever it is, market-wide, company-specific, the statutory standard is whether it reflects the cost of production in the ordinary course of trade. [00:35:14] Speaker 07: The price, our specific price, the market-wide price, reflects the cost of production in the ordinary course of trade. [00:35:22] Speaker 07: And there is no evidence as to what the cost of production in the ordinary course of trade was, so you couldn't make that determination on a company-specific or a company-wide basis. [00:35:31] Speaker 07: But the court of international trade didn't rely on our argument. [00:35:34] Speaker 07: they can get to it. [00:35:36] Speaker 07: What they said was, we looked at these things, we looked at the evidence commerce society, we asked them to explain why all of these things work together, because they said it was the totality of the circumstances, and they really didn't come up with anything. [00:35:50] Speaker 07: They didn't come up with anything. [00:35:52] Speaker 07: They didn't explain how these things fit together. [00:35:54] Speaker 07: They didn't explain how this created [00:35:57] Speaker 07: you know, a distortion in the market. [00:35:59] Speaker 07: You're way over your time, and I understand that we took you down some of the roads, but I've given you extra time, so... Well, I'm very sorry, because I really did want to talk about one of our cross-appeal issues, but I take very seriously, judges, what you said to me, and I will try to... Which particular cross-appeal did you want to talk about? [00:36:17] Speaker 07: The issue of the freight revenue cap. [00:36:19] Speaker 02: Of the what? [00:36:19] Speaker 07: Freight revenue cap. [00:36:21] Speaker 02: Okay. [00:36:21] Speaker 02: Do you, just so we can clean this up, do you agree that the differential pricing analysis issue [00:36:27] Speaker 02: that because of our earlier decision in the Stupp case, that's off the table. [00:36:32] Speaker 07: Stupp resolves it. [00:36:34] Speaker 07: Stupp says there's nothing to say. [00:36:39] Speaker 07: are a little time. [00:36:41] Speaker 07: Everybody agrees it's a straightforward question of statutory interpretation, but the disagreement is what is the relevant statutory provision. [00:36:50] Speaker 07: If you look at the definition of export price and constructed export price, they say you start with the price at which the merchandise is first sold to the unaffiliated customer. [00:36:59] Speaker 07: That's the price you start with. [00:37:01] Speaker 07: The provision concerning freight adjustments then says, if that price, such a price, includes freight, you can make an adjustment for freight costs. [00:37:09] Speaker 02: Well, it only talks about reductions, right? [00:37:11] Speaker 02: Right. [00:37:11] Speaker 07: But our point is, you're right, you can only deduct freight costs. [00:37:17] Speaker 07: The question is, if you say that the price of the merchandise doesn't include the freight revenue that you charge the customer, [00:37:25] Speaker 07: Right? [00:37:26] Speaker 07: You sell the pipe for $1,000. [00:37:27] Speaker 07: You say, I'll deliver it to you for $50 more. [00:37:30] Speaker 07: Commerce says, no, the price of the merchandise is $1,000. [00:37:33] Speaker 07: Then the price of the merchandise does not include freight. [00:37:37] Speaker 07: And under 1677C, you can't make any adjustment for freight costs. [00:37:42] Speaker 02: OK. [00:37:42] Speaker 07: And that's not what commerce did. [00:37:44] Speaker 07: We've got it. [00:37:45] Speaker 07: Thank you. [00:37:48] Speaker 02: All right, Mr. Bealing. [00:37:55] Speaker 04: Thank you, Your Honor. [00:37:56] Speaker 04: It's made me support Tom Buhlein again on rebuttal. [00:37:59] Speaker 04: So I think, Your Honor, I spent some time talking about the statute with my friends across the aisle here. [00:38:05] Speaker 04: You know, what is really interesting to me is they kept talking about their costs. [00:38:10] Speaker 04: The constructed value provision has very little to do with those particular costs. [00:38:16] Speaker 04: It is constructed normal value. [00:38:18] Speaker 04: It is broad. [00:38:19] Speaker 04: It merely says the sum of the materials and fabrication plus selling general administrative expenses plus an element of profit. [00:38:26] Speaker 04: Why does it exist? [00:38:27] Speaker 04: It exists because we don't have home market sales to compare in the dumping calculations. [00:38:31] Speaker 04: So commerce is directed by statute to come up with what the comparator ought to be. [00:38:37] Speaker 04: So it's constructed. [00:38:38] Speaker 04: In the constructed world, does commerce use the cost as reported by the respondents? [00:38:43] Speaker 04: Sure, because it's the best information available on the record. [00:38:46] Speaker 04: But where there's information to call into question that those costs might be distorted by a particular market situation, which is a new provision of the law, Commerce is looking at that and evaluating whether there is an issue or not. [00:38:57] Speaker 04: And Commerce is entitled to deference on substantial evidence questions, deference that the Court of Renational Trade did not give, that this Court's opinions consistently counsel. [00:39:06] Speaker 04: And we come up here every now and then to have the substantial evidence framework [00:39:12] Speaker 04: reconfigured in a given case. [00:39:14] Speaker 04: This case is one of those to explain to the court that deference to commerce's reason determinations are appropriate. [00:39:20] Speaker 04: To Judge Bryson's question about the adjustment factor, that's a question that we can all argue about administratively. [00:39:27] Speaker 04: We can come back to this court as to whether the specific factor is the right factor. [00:39:31] Speaker 04: But the question right now is whether a particular market situation exists. [00:39:34] Speaker 04: And so if there are no other questions for me, I will rest on that. [00:39:39] Speaker 04: Thank you, Your Honors. [00:39:40] Speaker 04: We appreciate the indulgence. [00:39:42] Speaker 02: Okay, Ms. [00:39:43] Speaker 02: Johnson. [00:40:05] Speaker 02: Ms. [00:40:05] Speaker 02: Johnson, before you get into your argument, I think Judge Bryson has a couple of threshold questions that he's going to ask on behalf of all of us. [00:40:12] Speaker 02: Is that OK? [00:40:12] Speaker 00: I'm sorry. [00:40:13] Speaker 00: I couldn't hear you. [00:40:13] Speaker 02: I said Judge Bryson has some threshold questions he wants to ask on behalf of the panel. [00:40:18] Speaker 01: Sure. [00:40:19] Speaker 01: In your brief, you ask for affirmance of the CIT's judgment. [00:40:24] Speaker 01: And what that led me to wonder is, are you taking the position that the CIT's analysis of the issues [00:40:32] Speaker 01: including issues you have not addressed in your brief, was correct. [00:40:38] Speaker 00: No, Your Honor. [00:40:38] Speaker 00: We actually are just, we haven't entered an appearance in the US field. [00:40:45] Speaker 00: Right. [00:40:45] Speaker 01: I understand that you haven't entered an appearance in the other case. [00:40:48] Speaker 01: But you're asking for affirmance of the judgment. [00:40:51] Speaker 01: There's one judgment, two appeals from the one judgment. [00:40:54] Speaker 01: So when you ask for an affirmance of the judgment, in effect you're saying, [00:40:59] Speaker 01: or at least it looks on its face to be saying that the CIT's judgment and therefore its analysis is fine with you? [00:41:11] Speaker 01: Is that the position the government is taking? [00:41:13] Speaker 00: Only with respect to the three issues that SEA is challenging. [00:41:18] Speaker 01: You're not really asking for an affirmance as such. [00:41:21] Speaker 00: Not of the whole, no, just with respect to, and I'm sorry if that was confusing in our brief, but it's with respect to the issues that [00:41:29] Speaker 00: seya has and what position is the government taking with respect to the issues that you haven't addressed we're not taking any issues with respect to those in any position no i'm not taking a position like the other issue that's before the court we're not you know pms issue we are not taking a position with respect to that and with respect to the next appeal you're not taking any position at all no we're not your honor so you didn't [00:41:52] Speaker 06: And I know you can't go into this, but usually when there's an adverse decision, the Justice Department consults with the agency and determines whether to appeal or not. [00:42:01] Speaker 06: And in this case, at least, and in the next case, you've decided not to appeal the Court of International Trade's treatment of the particular market situation issue. [00:42:13] Speaker 00: That's right, Your Honor. [00:42:14] Speaker 00: We have decided not to. [00:42:15] Speaker 06: You don't agree with it necessarily. [00:42:17] Speaker 06: You're not conceding that it was right, but you're just not appealing in this case. [00:42:20] Speaker 00: We're not appealing, and we're not taking a position. [00:42:22] Speaker 00: That's right, Your Honor. [00:42:23] Speaker 00: Thank you. [00:42:24] Speaker 00: OK. [00:42:25] Speaker 00: Sorry. [00:42:26] Speaker 00: Go ahead. [00:42:26] Speaker 02: And I assume that you don't have to address the deferential pricing analysis, given the concession of that stock. [00:42:35] Speaker 00: That's right, Your Honor. [00:42:36] Speaker 00: We agree that stuff governs, and we would just respectfully ask that the court remanded for commerce to [00:42:41] Speaker 00: further articulate its decision with respect to that one issue with the Cohen's D test. [00:42:46] Speaker 06: Given you're no appeal though of the particular market situation issue, what do we do with this directed verdict issue? [00:42:54] Speaker 06: Because normally I would think that you would disagree and appeal that, but since you haven't appealed that, even if we find what the CIT did was improper here, [00:43:04] Speaker 06: and vacate and remand, how do you envision this going back when it goes back to the CIT? [00:43:11] Speaker 06: Because it's not really up, at least it seems to me that it's not up to the domestic producers to determine whether you're going to do another remand determination on the particular market situation. [00:43:24] Speaker 06: It's up to you. [00:43:26] Speaker 06: And if you were wanted to do that, it seems like you would have appealed. [00:43:29] Speaker 06: I'm not asking you to predict everything, but it seems a little bit odd that we would send [00:43:35] Speaker 06: Because I think the directive verdict, the way the CIT is doing the directive verdict in these cases is improper. [00:43:40] Speaker 06: They should just find a lack of substantial evidence and send it back like they customarily do instead of directing a verdict. [00:43:47] Speaker 06: But if we agree with that that's error and send it back to the CIT, do you have any sense of what commerce is going to do once it gets back to the CIT given that you didn't appeal that? [00:43:58] Speaker 00: I have no idea, Your Honor. [00:44:01] Speaker 06: So you could foresee Congress saying, we don't want to do a third remand, and so the results would just be sustained. [00:44:10] Speaker 00: Again, I think it would be in the agency's discretion. [00:44:12] Speaker 00: I have no idea. [00:44:13] Speaker 00: That's something I definitely cannot predict at all on what would the agency do in that circumstance. [00:44:19] Speaker 06: But it would seem a little bit odd if the agency wanted to do a third remand and didn't ask us to do one. [00:44:27] Speaker 06: Do you see what I'm saying? [00:44:28] Speaker 06: You chose not to appeal. [00:44:29] Speaker 06: I mean, I know how that process works. [00:44:31] Speaker 06: And you chose not to appeal. [00:44:33] Speaker 06: And so it seems a little odd to me. [00:44:38] Speaker 06: I guess what I'm asking is, and I don't know, because none of this was briefed in this particularly kind of technical way, is whether [00:44:46] Speaker 06: the air is either harmless or whether the domestic producer even has the authority to raise this legal error, because it's not really air that is theirs to raise. [00:44:59] Speaker 06: It's your procedural error. [00:45:01] Speaker 06: You can just say you don't want to answer that. [00:45:02] Speaker 06: This is all very complicated. [00:45:04] Speaker 00: Yeah. [00:45:04] Speaker 00: Yeah. [00:45:06] Speaker 00: It is, and I'm sorry I can't. [00:45:08] Speaker 00: I don't have a response to that. [00:45:09] Speaker 00: Hi. [00:45:10] Speaker 02: The only thing Mr. Whitten got to on the cross-affair really was the fact [00:45:16] Speaker 02: cap on freight revenue so why don't you focus there. [00:45:18] Speaker 00: Sure, sure with respect to the freight revenue cap determination that should be affirmed and the reason is what commerce did feel reasonable it was supported by substantial evidence and it was in accordance with law. [00:45:31] Speaker 00: The reason it was reasonable is when commerce is coming up [00:45:36] Speaker 00: When it does a fair comparison between normal value and the export price, or in this case, the constructed export price, and commerce is making that fair comparison between those two prices, it makes certain adjustments to make the price, the US price, at the ex-factory level. [00:45:52] Speaker 00: Meaning that you're trying to get the price of the merchandise itself without any extra costs or anything else, but just the price of the merchandise. [00:46:02] Speaker 00: And that's what Commerce did here. [00:46:04] Speaker 00: And according to the statute, Commerce deducted the freight costs that SEIA incurred. [00:46:10] Speaker 00: The actual freight costs that SEIA incurred, Commerce reduced the price, the constructed extra price for that. [00:46:18] Speaker 00: And then what Commerce did was for the revenue [00:46:21] Speaker 00: from the freight, and that's what the issue here is. [00:46:24] Speaker 00: SEA charges its customer for freight, which is a service. [00:46:28] Speaker 00: It's not the good. [00:46:28] Speaker 00: It's not the merchandise. [00:46:29] Speaker 00: It's a service. [00:46:31] Speaker 00: SEA charges its customer separately for that freight. [00:46:35] Speaker 00: So when SEA gets revenue from that freight profit, Commerce caps it. [00:46:40] Speaker 00: Commerce equals the revenue that it puts into that, that it adds into that constructed export price. [00:46:47] Speaker 00: It caps it so it matches the actual amount that SEA encourages. [00:46:51] Speaker 00: That's how you get the fair comparison. [00:46:54] Speaker 00: What FAIA is asking for here is include all of it. [00:46:58] Speaker 00: Include even if there's a profit, but then what the construction export price would actually be is potentially it will be artificially inflated. [00:47:07] Speaker 00: It will be artificially higher than it should be because you're putting in profit [00:47:12] Speaker 00: from the sale of a service, which is the freight. [00:47:17] Speaker 02: Are you assuming that to the extent that there's a loss or a discount on the freight that's charged, that's otherwise built into the price of the merchandise? [00:47:29] Speaker 00: No, what's happening is there's a loss. [00:47:31] Speaker 00: Again, commerce is only adding in the very new from the freight. [00:47:36] Speaker 00: to match what SEA actually incurred. [00:47:38] Speaker 00: So this whole concept that SEA is trying to argue that commerce is doing it differently if there's a loss or there's a profit, commerce is not. [00:47:45] Speaker 00: Commerce, at the end of the day, is doing what the statute is requiring and doing a fair comparison. [00:47:52] Speaker 00: Commerce is only allowing SEA to include the revenue up to the amount it actually incurred. [00:48:00] Speaker 00: It's not letting it go high and low. [00:48:02] Speaker 01: What if, what if, say, it is actually taking a loss, not making a profit on the freight or servicing the freight at cost, but in fact taking a loss? [00:48:13] Speaker 01: Why not adjust that? [00:48:15] Speaker 00: Because that's not, that, again, you're, the freight, you're not getting a fair comparison. [00:48:20] Speaker 00: You're not getting to the ex-factory level of that. [00:48:23] Speaker 00: The customer is still paying that price. [00:48:26] Speaker 00: So you're getting, you're putting... Well, the point is that the customer might be paying for something. [00:48:32] Speaker 02: but it's not necessarily the cost incurred if I say it. [00:48:37] Speaker 00: That's right, but that is still the U.S. [00:48:39] Speaker 00: price that the customer is paying. [00:48:41] Speaker 00: The customer is paying, even though it's paying separately for the revenue, I mean for the freight service, that is still a part of the price that the customer is paying. [00:48:51] Speaker 00: So that's, bottom line, you're just trying to get at the price of the merchandise that the customer is paying and making it at the same level, at the ex-factory level, [00:49:01] Speaker 00: So it doesn't include anything else like, for example, profit from the sale of freight. [00:49:08] Speaker 00: And that's why the fair comparison, that's what's the bigger picture here. [00:49:12] Speaker 00: Commerce is trying to make these adjustments so you get a fair comparison between normal value and the constructed export price so they match up. [00:49:20] Speaker 00: And that's how commerce is statutorily supported and it's reasonable what commerce did here. [00:49:27] Speaker 00: And for that reason, we would ask the support respectfully to affirm Congress's decision with respect to that and also see the profit cap. [00:49:34] Speaker 00: If there's no questions regarding the profit cap, I just rest on a brief. [00:49:42] Speaker 00: Thank you. [00:49:43] Speaker 00: Thank you, Your Honor.