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Case is Primetime Commerce versus the United States, 2021, 1783.

[00:00:05] Speaker 01:
Mr. Leonard.

[00:00:06] Speaker 01:
Your Honors, may it please the court?

[00:00:17] Speaker 02:
My name is Mark Leonard.

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I represent Primetime Commerce.

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The context of this case is the question of whether an importer

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can do anything to protect itself against a high, usually adverse, fax-available rate from its exporter, its supplier.

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This court in Roanoke, several years ago, a couple decades ago, said yes, an importer could.

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Commerce here said no.

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The issue before the court, though, is a question of exhaustion and the applicability of the futility exception to exhaustion.

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What Primetime did below was, as the importer, when the exporter initially participated in the review and then limited its participation, Primetime submitted information on the record on behalf of its exporter.

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And it said in its submission that what it was providing to the Department of Commerce was a lot of information, but it needed some supplemental information that could be taken from prior confidential records.

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The Department of Commerce declined to put that information on the record to allow Primetime to develop its arguments and explanations of how the Department of Commerce could calculate a margin for the importer.

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Initially, Commerce rejected the information off the record completely.

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Primetime requested reconsideration, filed a case brief, all the time explaining why it was important to have this other

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confidential information from other parties and prior proceedings on the record.

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The initial appeal to the Court of International Trade focused on that refusal or the rejection of commerce of the information that Primetime had put on the record.

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The Court of International Trade remanded to the Department of Commerce to accept Primetime's filing.

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including the request in that filing that Commerce supplement the record with confidential information from other parties in prior proceedings.

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The reason Primetime made that request was because Primetime didn't have access to the confidential information, but the Department of Commerce did.

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So the Department of Commerce was the only party that could put that information on the record.

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On remand, Primetime resubmitted what it had filed initially.

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And the draft remand redetermination by the Department of Commerce acknowledged all of Primetime's arguments and rejected them.

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At that point, I didn't know what else I could say.

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There really wasn't anything else to say.

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There wasn't any new argument to make.

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And Commerce had already rejected it five times.

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uh... prime time didn't file comments on the draft remand and the final remand uh... acknowledged prime time's arguments which were included in the remand submission uh... and that was filed with the court uh... counsel did the landscape change when commerce accepted prime time's questionnaire response not materially no uh... and the answer the reason is because

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primetime acknowledged that the information it submitted to the Department of Commerce needed supplementing.

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And there was no change in that question.

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And it was a question that

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commerce had addressed in its uh... initial rejection of the submission at the initial or the original administrative proceedings that it addressed uh... in some respect in the preliminary determination in the administrative proceeding because it said prime time submitted the request for reconsideration and in the preliminary decision commerce said that uh... prime time had not made a materially different argument than in its submission

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says to me that it read the arguments, considered them, considered them in light of the original arguments, and rejected them again.

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And then in the case brief and in the final termination, Commerce rejected the same arguments again.

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So whether those arguments were made before the information was on the record or after, they were the same arguments.

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Commerce's rejection of the argument didn't change the whole time.

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With one exception, they initially claimed that they couldn't put confidential information on the record, but then conceded that it was wrong at the Court of International Trade.

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So the pre-remand and pre-accepting of the information on the record and post-accepting of the information on the record, there was no difference in the argument that primetime needed this other

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confidential information on the record before it could make any meaningful argument about how the rate should be calculated.

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This court in Etosha Building Products found that the Court of International Trade had abused its discretion by requiring exhaustion and declining or finding that the futility exception did not apply under circumstances that are very similar to prime times here.

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In Itoshu, the proceeding was a scope proceeding, which is a little different from what we're looking here at the underlying administrative proceeding as an administrative review.

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An administrative review has more formal proceedings, including a formal regulatory requirement that the case brief contain all the case brief submitted after the preliminary determination.

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contain all relevant arguments.

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The scope proceeding doesn't have that formal regulatory requirement.

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And a remand proceeding, like the one that Primetime was involved in, doesn't have a formal regulatory requirement either.

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In Itosu, the parties there had fully briefed the Department of Commerce, meeting with them, and submitting the complete argument before the preliminary determination.

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With Primetime, there's a parallel here in terms

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uh... the argument being submitted to the department of commerce uh... and in my report in the brief we talk about uh... arguing the case of the court of international trade is a parallel to presenting the case to the department of commerce officials but i think that's i think the relevant part of this of this aspect is that uh... the department of commerce fully understood Itochi's argument and had rejected it

[00:07:10] Speaker 01:
Counsel, we're halfway through your argument, and I think we haven't gotten to the main point, which is that your exporter, who is the interested party, failed to refute the presumption that it's not independent of the government.

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That's true.

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That is correct.

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In this proceeding, the exporter filed a separate rate application.

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which for most parties in cases involving China, all they need to do is file a separate application that contains all the relevant information for determining whether the exporter is separate from the Chinese government.

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What happened here is the exporter and the amount of the exports were relatively tiny.

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It's a very small percentage of total exports and total exports under review.

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And so what happened is all the other parties withdrew their request for review and just Ning Bohomi, the exporter, was left.

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And with the very small export volume, they decided that they would limit their participation to what they had done already, the separate application.

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So there is information on the record that demonstrates that Ning Bohomi is separate from the Chinese government.

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But even then, although the Department of Commerce decided

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as a matter of adverse facts available that Ningbo Homi was not separate despite the information being on the record.

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There are cases where parties have had rates calculated for them and then been determined not to be separate from the government of China.

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And what the Department of Commerce has done is taken the calculated rate

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and averaged it with the China wide rate to get something in the middle.

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This happened in two cases that came up before this court, China Manufacturers Alliance and Diamond Sawblades, where at least they were able to lessen the impact of this high China wide rate.

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Here it's 114%, where the average

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calculated rating under this proceedings about fifteen percent uh... and for this uh... prime time commerce which is a small company it's uh... one hundred eighteen percent is is very significant that's why it's the hope is that you know this court will recognize uh... what happened in rome pulling and allow or require the department of commerce to take submissions from an importer and use that to

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allow the importer to affect the outcome of the review and the rate that will be applied that they have to pay on the imports.

[00:09:55] Speaker 01:
Your client's problem is that it's buying from a Chinese company that's controlled by the government, and so gets stuck with the China-wide rate.

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Well, it may be it is stuck with a ruling that

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that Ningbo Homi is not separate from the government of China.

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But that shouldn't prevent it from providing information to the Department of Commerce to allow the Department of Commerce to calculate a rate and then have the Department of Commerce follow this pattern, which it followed in China manufacturers and diamond saw blades to average the calculated rate with the China wide rate.

[00:10:38] Speaker 02:
If there are no further questions.

[00:10:40] Speaker 01:
We will save you a rebuttal time.

[00:10:42] Speaker 01:
Ms.

[00:10:43] Speaker 01:
Akers.

[00:10:48] Speaker 00:
May it please the Court?

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I'll first address Prime Time's failure to exhaust its administrative remedies.

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The Trade Court did not abuse its discretion by requiring Prime Time to exhaust its administrative remedies when this Court's well-established precedent dictates that exhaustion is required absent a strong reason to the contrary.

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The only reason that primetime submitted to the trial court for failing to exhaust its administrative remedies was that it assumed commerce would have rejected those arguments.

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And this court has rejected that same argument in chorus stall where it explained that the mere fact that a party believes an adverse

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result is likely does not excuse the party from exhausting its administrative remedies.

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Similarly, in Mittal Steel, a case that's factually analogous to this case, Mittal Steel argued in the initial administrative determination certain arguments, and then on remand, it failed to file comments on commerce's remand re-determination.

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And Mittal Steel was precluded from making those arguments because of exhaustion.

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This court explained that even if a party had previously asserted the same arguments, if it fails to do so on remand, commerce can reasonably conclude that the party has abandoned those arguments.

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So at a very minimum, primetime should have, as the court in Nittal Steel explained, reiterated that it maintained those prior positions.

[00:12:21] Speaker 01:
What about it taught you?

[00:12:23] Speaker 00:
Sure, Your Honor.

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Atochu is not as strong as Primetime purports it to be for several reasons.

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First, exhaustion is a case-by-case, fact-by-fact analysis.

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And so there's no firm rule or test like Primetime asserts from Atochu.

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The trial court has broad discretion.

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Second, in Itochu, in the final page of the opinion, footnote two, this court distinguished Itochu from Mattal Steel and explained that in Mattal Steel, there was a circumstance where a party did not file comments on remand results.

[00:12:55] Speaker 00:
And that distinguished the case from Itochu.

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Same here.

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A party, primetime, didn't file comments on remand results, and so the factual distinctions between Itochu and Mitol Steele are also present here.

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And then third, Your Honor, Itochu is different from this case for several factual reasons.

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First and foremost, in Atochu, Atochu did, in fact, submit its legal arguments to the Department of Commerce, although not in a case brief.

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It did so in a different form.

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Here, Primetime never submitted its legal arguments to the Department of Commerce.

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In fact, in the remand results, Commerce explained in depth why it could not place fact

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gap-filling information on the record.

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It provided numerous reasons why it would be unable to do so.

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Primetime, although it did previously request that Commerce place gap-filling information on the record, had never provided any legal argumentation as to why Commerce was legally required to place that information on the record.

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And that's the argument

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that Primetime asserted to the trial court for the very first time.

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Itochu is also factually distinguishable from this case, because this court explained that Commerce had every opportunity to address the arguments that Itochu made, since it had previously put those forth.

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And so therefore, it would not have facilitated Commerce's development of the record in that case.

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Here, on the other hand, it would have been incredibly helpful had Primetime submitted the arguments to the Department of Commerce.

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Primetime's arguments to the trial court were, for example, that Commerce's analysis was circular and inadequate.

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Had Primetime submitted those arguments to the Department of Commerce, Commerce could have addressed those arguments and created a more fulsome or it could have elaborated its analysis in the final results.

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But it didn't do so.

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And then the final distinguishing factual difference between a toe-toot in this case is that in a toe-toot, there was the issue at hand

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related to commerce's practice of when it would revoke a certain order.

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And timing was really of the essence there.

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In that case, commerce had a recent practice of adhering to a specific date on which it would revoke the order.

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And so Atochu had every reason to believe that commerce would not change that practice, because it was a recently iterated practice.

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And commerce was defending that same practice in court at the same time this was going on.

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Here, there's no legally binding precedent or practice that commerce has regarding placing gap-filling information on the record.

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It's a case-by-case analysis, as commerce explained.

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And commerce explained why, under the facts of this case, it could not place gap-filling information on the record.

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So although a toe-toe is cited at length by primetime, it really doesn't do any work for the legal argument.

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And I'd also note that this court in a toe-toe

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explained that it is the very rare example where the futility exception applies.

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So this court noted that.

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And all of the circumstances that are distinguishable from this case warranted the no exhaustion in a tochu.

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I'll move now to Primetime's second argument regarding commerce's application of the government-wide rate

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to Ningbo Homi, which is the exporter.

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And it's undisputed here that the exporter failed to rebut the presumption of government control.

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It's commerce's long-established practice that has been sustained by this court as recently as this year in China Manufacturers Alliance.

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that when an exporter fails to rebut the presumption of government control, commerce is permitted to apply the China-wide rate.

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And that's whether the China-wide rate is based in whole or in part on adverse facts available.

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This has been constantly sustained by this court.

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The only arguments that primetime raises to this court as to why that was unlawful are completely irrelevant.

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Primetime argues that commerce unlawfully applied the statute 1677E.

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But that statute was not at issue here, because commerce never applied facts available.

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It applied the China-wide rate.

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And so the trial court certainly lawfully sustained commerce's determination that it could apply the China-wide rate, given the exporter's failure to rebut the presumption of government control.

[00:17:22] Speaker 00:
Thank you.

[00:17:24] Speaker 01:
Thank you, counsel.

[00:17:27] Speaker 01:
Mr. Leonard has some rebuttal time, four and a half minutes.

[00:17:33] Speaker 02:
If you're honest with me, please record.

[00:17:36] Speaker 02:
First, I'd like to address Mittal, where the government has argued that Mittal is different because, or Mittal should be followed here, because Mittal failed to make an argument on remand.

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And that isn't the case here.

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We're prime time submitted.

[00:18:00] Speaker 02:
It resubmitted the information that it had submitted in the administrative review.

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It was about a 700-some-odd page submission, 575 pages of which were the public version of the confidential information that Primetime wanted to be put onto the record.

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And the Department of Commerce, in the draft remand, acknowledged that

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primetime wanted that information put on the record, evaluated that the argument that we made, which we need this on the record before we can make more arguments about what commerce can do, we said, and this is Appendix 612, once the confidential versions are on the record, primetime can provide more specific information.

[00:18:50] Speaker 02:
That information on the record was essential before primetime could really make any further argument.

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So the Department of Commerce acknowledged that argument, addressed it, and rejected it in the draft remand, and then included that same acknowledge, address, and rejection in the final remand.

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Primetime did raise the argument.

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It was before the draft remand.

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But that's comment all is distinguished in terms of the applicability and the requirement for exhaustion there.

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and uh... there's a similar principle with the total how it's how it applies and i think the the relevant uh... principle from the total is that the department of commerce new it'll use argument and uh... rejected and it and the record was very clear because because it's something before the preliminary uh... decision and that with the department of commerce and that on the record should the department of commerce was fully aware of

[00:19:58] Speaker 02:
uh... the extent of the toasties argument rejected it anyway and that point because because department commerce knew about it uh... and had rejected uh... that's part of the reason why this court reversed the trade courts requirement of exhaustion uh... here at the trade court said uh... two things about uh... why exhaust was required one was to your point uh...

[00:20:26] Speaker 02:
The trade court said, primetime cannot argue that prior attempts to render its efforts futile.

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But the other was, the court said, commerce was not given the opportunity to respond to primetime's argument in its remand re-determination.

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And all of the explanation that the Department of Commerce gave about how it calculates margins and the deficiencies in primetime's submission, they were all besides the point.

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The point was we needed more information from these other parties, the confidential information from prior proceedings, before we could go further and say anything else.

[00:21:05] Speaker 02:
And so when the Department of Commerce in its remand determination said, primetime has its submission and requests that we put other information on the record, the Department of Commerce said, therefore, primetime's submission is deficient.

[00:21:22] Speaker 02:
We asked the court to remand so that the Department of Commerce would put that information on the record, and we would have a meaningful opportunity to participate and explain how a rate could be calculated, and even in light of an adverse facts available, finding that Ningbo Homi was not separate from the Chinese government.

[00:21:44] Speaker 02:
So no further questions, Your Honor.

[00:21:46] Speaker 01:
Thank you counsel, time time is almost out of time so we will take the case on the advisement.