[00:00:00] Speaker 03: So the court will hear argument number 20, 1857, Stupp Corporation against United States. [00:00:07] Speaker 03: Mr. Winton, please begin when you're ready. [00:00:11] Speaker 04: Thank you, Your Honor. [00:00:13] Speaker 04: Our initial brief in this case had a lot of discussion of statistics, but I want to assure you that we're not asking you to decide this case based on statistical principles. [00:00:23] Speaker 04: I wish I could, because I think they're pretty clear here. [00:00:26] Speaker 04: But I recognize that you're a court of law and not a council of math teachers. [00:00:30] Speaker 04: And our claims here are really about administrative procedure and in particular what an agency has to show when it purports to apply fixed numerical thresholds that have not been adopted through the statute or through notice and comment rulemaking. [00:00:46] Speaker 04: The statutory provision at issue here concerns the method used to calculate dumping margins. [00:00:51] Speaker 04: Commerce is normally required to use an average to average, what we call A to A methodology. [00:00:56] Speaker 04: but is permitted to switch to what's called an average to transaction or A to T methodology if certain findings are made. [00:01:05] Speaker 04: Now, where the statute establishes conditions that must be met before commerce can take specific actions, it is commerce that has the burden of proof to establish that the statutory conditions are satisfied. [00:01:16] Speaker 04: And in that regard, I point to your 1994 decision in a case called Crestwell Trading, which adjusts a different statutory provision but establishes that principle. [00:01:28] Speaker 04: Now, what commerce does to determine if the statutory conditions have been met, whether there's a pattern of prices that differ among purchasers, regions, or time periods, is something it calls its differential pricing analysis, or the DPA. [00:01:43] Speaker 03: Can I ask you, this is Judge Toronto, how much, let's assume, or assume for purposes of this question, that commerce acted [00:01:56] Speaker 03: within its discretion in rejecting certain portions of your case brief. [00:02:01] Speaker 03: How would that assumption affect your, let's call them the merits criticism arguments you were making? [00:02:08] Speaker 04: In my view, of course, in my view, it doesn't, but it doesn't because our argument is, first of all, the burden was on commerce to produce substantial evidence in support of its position, which it hasn't done. [00:02:22] Speaker 04: Second, that commerce has an obligation [00:02:25] Speaker 04: since it hasn't adopted this DPA through notice and comment rulemaking, it's required as a matter of law to decide each case as if the policy didn't exist. [00:02:36] Speaker 04: They have to come to each case fresh. [00:02:38] Speaker 04: And that means any factual determinations they make in the case have to be based on substantial evidence, as factual determinations always have to be based. [00:02:47] Speaker 04: When you apply a numerical threshold, for example, if you say that a dumping margin [00:02:53] Speaker 04: of less than 0.5% is always de minimis. [00:02:57] Speaker 04: What you're really saying is a factual claim that a dumping margin at that level is always insignificant. [00:03:04] Speaker 04: And in Washington Red Raspberry, which we rely on, this court said, look, if you're going to use those numerical thresholds without establishing a rule, then you have to show in each case that the thresholds are appropriate. [00:03:17] Speaker 04: And it's not just that you have to show that the dumping margins [00:03:21] Speaker 04: which were the issues in Red Raspberry, were less than 0.5%. [00:03:25] Speaker 04: You have to establish that 0.5% is the appropriate standard for de minimis in this particular case. [00:03:32] Speaker 04: And so in that case, you affirm, but only after commerce showed that compared to the margin of underselling and prices in the market, the dumping margin, which was, I think, in that case, 0.42%. [00:03:43] Speaker 03: I want to see if I understand this right. [00:03:46] Speaker 03: So you don't think that, [00:03:48] Speaker 03: If commerce, for example, in xanthan gum or some of the other earliest cases, had actually set out a sound basis for the use of every aspect of differential pricing analysis that is relevant here, [00:04:13] Speaker 03: in circumstances that are present here that commerce would have to in this proceeding do more than say the only challenges to our use of the analysis here have already been addressed, see the analysis that we adopted in the earlier proceeding or would that incorporation by reference be enough? [00:04:43] Speaker 04: The incorporation by reference would not be enough because the standard is in this case, commerce has to find that a pattern exists. [00:04:53] Speaker 04: And in this case, that finding has to be based on the evidence in this case. [00:04:57] Speaker 04: And so the fact that in a different case, [00:05:00] Speaker 03: I was trying to build that into my question, that the facts would be the same, but in which case an incorporation by reference would just be a shorthand for repeating everything. [00:05:16] Speaker 03: subject, of course, to your having introduced new factual evidence criticizing, say, a methodological point previously adopted. [00:05:29] Speaker 04: Well, see, I disagree with you because I know I'm not supposed to disagree with judges. [00:05:35] Speaker 04: Go on. [00:05:36] Speaker 04: The 0.8 standard for Collins D., for example, the facts are never the same. [00:05:42] Speaker 04: Our case is different than Xanthan Go. [00:05:44] Speaker 04: And what Washington Red Raspberry says is you have to explain in this case why that's appropriate. [00:05:50] Speaker 04: The fact that in xanthan gum, to go to the Red Raspberry, if commerce said in xanthan gum 0.5 is de minimis, that doesn't mean 0.5 is de minimis in this case, because as you said in Red Raspberry, you have to look at the market and what's going on. [00:06:07] Speaker 04: And so the notion that commerce could say, look, 0.8 is the appropriate cutoff [00:06:13] Speaker 04: Because they haven't gone through notice and comment rulemaking, they have to come to our case as if the policy doesn't exist. [00:06:21] Speaker 04: That is what you said in, I'm forgetting the case, Unwired Planet, which is based on a DC circuit case called Pacific Gas. [00:06:33] Speaker 04: And we quoted it extensively in footnote 38. [00:06:35] Speaker 04: And I think the explanation by the DC circuit is terrific at laying out why [00:06:40] Speaker 04: an agency can't circumvent the requirement of substantial evidence by saying, well, it's our policy. [00:06:46] Speaker 04: And, you know, the other problem is the xanthan gum evidence is not on the record in my case. [00:06:53] Speaker 04: So I can't respond to it, you know, and I don't know what, you know, there are literally thousands of Commerce Department cases. [00:07:01] Speaker 04: I, you know, I've had cases in the past where I've addressed all of this and Commerce has left the information on the record. [00:07:08] Speaker 04: I put in evidence that this method doesn't work, that it finds patterns in truly random data. [00:07:15] Speaker 04: Commerce hasn't rejected that. [00:07:17] Speaker 04: You know, said you can't put that on the record, but they said it doesn't matter. [00:07:21] Speaker 04: You know, which case is factually the same? [00:07:24] Speaker 04: The legal standard is when commerce doesn't go through notice and comment rulemaking, it comes to each case as if a new and it has to satisfy the substantial evidence test. [00:07:35] Speaker 00: Mr. Wetten, this is Des Bryson. [00:07:37] Speaker 00: Let's assume we don't agree with you on that point and instead view what commerce has done as to adopt an interpretive rule within the meaning of the APA and that that rule can be upheld upon a finding of reasonableness. [00:07:55] Speaker 00: Now, assume that's the case with respect to the DPA and each element of the DPA. [00:08:03] Speaker 00: That still leaves us, of course, with the problem of what is the proper application of that approach in this case. [00:08:11] Speaker 00: Unfortunately, I'm afraid that gets us into the statistics. [00:08:15] Speaker 00: So I would like you to explain, at least for my benefit and perhaps for the others, why it is that the [00:08:25] Speaker 00: commerce argument, which is made in this case and in many of the previous cases, that your argument that the Cohen's approach is not valid [00:08:43] Speaker 00: unless there is a normal distribution, roughly equivalent variance, and sufficient size. [00:08:52] Speaker 00: Commerce is arguing that those don't apply because it is looking at the entire universe of sales and not simply looking at a sample. [00:09:02] Speaker 00: Can you respond to that? [00:09:04] Speaker 04: Sure. [00:09:05] Speaker 04: The problem is Commerce [00:09:07] Speaker 04: Let me back up. [00:09:09] Speaker 04: Commerce could use the DPA exactly as it is if it justifies it. [00:09:14] Speaker 04: But the problem here is [00:09:16] Speaker 04: Commerce justified the 0.8 by saying, this is what big boy statisticians do. [00:09:22] Speaker 04: So we're just doing the same thing statisticians do. [00:09:25] Speaker 04: And when we said, no, you're not, which was not rejected as new factual information, the arguments were left on the record. [00:09:31] Speaker 04: The citations were taken off. [00:09:34] Speaker 04: Commerce's response was, well, but we're not using it the way that Professor Cohen and all these other people have described it. [00:09:40] Speaker 04: That leads right into your decision in Mid-Continent where you said, if commerce is going to say our methodology is justified because it's an application of widely adopted statistical principles, then practices, then they've got to use those widely adopted statistical practices. [00:09:59] Speaker 04: They can't have it both ways where they say, [00:10:01] Speaker 04: Point eight is appropriate, because that's what statisticians do. [00:10:05] Speaker 04: But the limitations that statisticians require don't matter, because we're not doing what statisticians are doing. [00:10:10] Speaker 00: OK, but I really want you to focus, if you would, on the question of whether the Cohen's D analysis is applicable without regard to the limitations that you argued for in your brief in a situation in which commerce has the entire universe of sales before it. [00:10:31] Speaker 00: OK. [00:10:32] Speaker 04: Well, let me just say no. [00:10:35] Speaker 04: The answer is no. [00:10:36] Speaker 04: It's not applicable where it has the entire universe. [00:10:39] Speaker 04: Commerce's statements about normal distributions and Cohen's d is what statisticians refer to as a parametric test. [00:10:47] Speaker 04: And it can only be used when the data follows the bell-shaped curve. [00:10:51] Speaker 04: It's a mathematical, the cutoffs that Professor Cohen adopted are rules of thumb based on looking at that precise type of distribution. [00:11:02] Speaker 04: He never said .8 makes sense in other situations. [00:11:05] Speaker 04: And as we laid out in our initial brief, it doesn't make sense to apply it when the data is not normal. [00:11:12] Speaker 03: Mr. Winton, can I just focus on what I think I'm hearing Judge Bryson's question is. [00:11:23] Speaker 03: I would have expected you to open your answer to his most recent question by saying the opposite. [00:11:31] Speaker 03: I would have expected you to say the Coen's D preconditions apply whether you are treating a sample or whether you are treating the entire universe. [00:11:41] Speaker 03: And the problem is that those conditions have not been shown to be met here. [00:11:49] Speaker 04: This is why you have been appointed to the court and I'm just an advocate. [00:11:54] Speaker 04: That was what I was trying to say. [00:11:58] Speaker 03: But sampling has nothing to do with the question that Cohen's D addresses, which is within some set that you have, whether it's a subset or the universe, there are significant differences within the group you're looking at. [00:12:18] Speaker 04: Yes. [00:12:18] Speaker 04: I think my time is up. [00:12:20] Speaker 04: I have reserved time for rebuttal. [00:12:22] Speaker 03: I can keep talking or just... Take another couple of minutes to add what you think is worth adding to with being conscious that you're on borrowed time. [00:12:36] Speaker 03: Thank you. [00:12:37] Speaker 03: I feel on borrowed time. [00:12:41] Speaker 04: The issue here, the other part of the test [00:12:45] Speaker 04: is the ratio test, the 33 and 66% numbers. [00:12:48] Speaker 04: And those numbers are purely made up. [00:12:51] Speaker 04: And there's no justification for them at all, except Commerce says, we think these are the right numbers. [00:12:57] Speaker 04: And again, that is by definition arbitrary. [00:13:01] Speaker 04: And we've had cases where I said, why do you say 33 and 66? [00:13:06] Speaker 04: Why isn't it 20 and 80 or 40 and 90 or something like that? [00:13:10] Speaker 04: And Commerce said, well, you didn't explain why those are better numbers. [00:13:14] Speaker 04: But the problem is, [00:13:15] Speaker 04: We can't explain why our numbers are better than commerce's because we don't know why commerce chose these numbers. [00:13:22] Speaker 04: All we know is that commerce said when these numbers are satisfied, we think the methodology should change, but not why those cutoffs require the change. [00:13:34] Speaker 04: It's just at these levels we change. [00:13:38] Speaker 04: We've pointed out in other cases that this doesn't work. [00:13:42] Speaker 04: rejected that. [00:13:44] Speaker 04: We showed that if you ran purely random numbers, you would find the shockingly high pass rate. [00:13:51] Speaker 04: Commerce doesn't seem familiar with the concept of false positives or what. [00:13:56] Speaker 03: Can I just double check something with you? [00:13:59] Speaker 03: We've addressed bits and pieces of this overall differential pricing analysis in a few of our cases. [00:14:09] Speaker 03: two aspects, I guess, in mid-continent steel, the 0.8 saying, okay, in general, that's reasonable, and then the denominator problem of weighted averaging or not. [00:14:25] Speaker 03: We addressed some aspect of it in, what is it, apex. [00:14:33] Speaker 03: Have we addressed the, I guess what they, [00:14:36] Speaker 03: call the, is this the ratio test, the 3366 breakdown in any of our decisions? [00:14:43] Speaker 03: I don't believe so. [00:14:45] Speaker 00: How about APEX at 862 at 1349 to 50? [00:14:51] Speaker 00: I think that addresses that issue. [00:14:54] Speaker 04: I don't have it in front of me, so while the opposing council is speaking, I will quickly. [00:14:59] Speaker 04: All right. [00:15:02] Speaker 04: The last point I would make is, [00:15:06] Speaker 04: The meaningful difference test, I think we've laid out in our brief our position on that. [00:15:12] Speaker 04: It's clear that it's probable that in some circumstances the average average methodology can do what commerce calls masking dumping. [00:15:22] Speaker 04: But it's also clear that the average transaction methodology can, in certain circumstances, create dumping. [00:15:28] Speaker 04: And so when you have a difference between the results [00:15:31] Speaker 04: It's not enough to say there's a difference. [00:15:33] Speaker 04: You need to say why is there a difference? [00:15:35] Speaker 04: Is it because average-to-average was masking or is it because average-to-transaction is creating? [00:15:40] Speaker 04: That's a required part of the explanation I would submit and one that doesn't exist in this case. [00:15:45] Speaker 04: Thank you very much for the additional time and I have to go. [00:15:48] Speaker 03: Okay, thank you, Mr. Wynton. [00:15:52] Speaker 03: And we'll hear from Mr. Kipura now. [00:15:59] Speaker 01: Thank you, and good morning, Your Honors, and may it please the Court. [00:16:02] Speaker 01: Appellant has raised three arguments on appeal, all of which have previously been presented and rejected by this Court, and Appellant presents nothing new which would distinguish this case [00:16:13] Speaker 01: for many of the court's previous decisions. [00:16:17] Speaker 03: Where have we addressed the questions of the preconditions of a sufficient size, comparable variance, and normality of the distribution for the Cohen's D test? [00:16:32] Speaker 01: Your Honor, the court's mid-continent decision addressed the Cohen's D test and the use of the .8 [00:16:42] Speaker 01: threshold for determining that. [00:16:47] Speaker 03: I don't think that's the same point. [00:16:50] Speaker 00: The point A is quite a different point it seems to me from the question of whether Cohen's D requires the preconditions of normality roughly equal variance and sufficient size. [00:17:04] Speaker 00: Can you tell us why those requirements are not required [00:17:12] Speaker 00: for purposes of applying Cohen's D in a case such as this one? [00:17:17] Speaker 01: Well, yes, Your Honor. [00:17:18] Speaker 01: It goes to the point that was being discussed earlier where the entire universe of sales is available to commerce when it's making this determination. [00:17:34] Speaker 00: Why does that make a difference? [00:17:36] Speaker 00: This is the question Judge Toronto asked of your opposing counsel. [00:17:40] Speaker 00: And I need to understand why that makes a difference. [00:17:45] Speaker 00: It may require us to get into the math a little bit, but please explain it to me. [00:17:49] Speaker 00: Because I don't think that in any of the various decision issues and decision memos that Commerce has written on this, they actually explain why that is true. [00:18:03] Speaker 00: They have said that it's true. [00:18:05] Speaker 00: but I haven't seen an explanation. [00:18:07] Speaker 00: So this is your chance. [00:18:10] Speaker 01: Yes, your honor. [00:18:11] Speaker 01: And the purpose of it is that the Cohen-D test is to examine whether the price differences that are found to exist between different purchasers, regions, or time periods are significant. [00:18:25] Speaker 01: And then the commerce turns to the ratio test to determine whether or not those differences are sufficient to find a pattern. [00:18:33] Speaker 01: So in other words, [00:18:35] Speaker 01: The purpose of the test is to identify the differences within the universe of sales to determine if differences in prices are significant. [00:18:51] Speaker 01: And so that's why it's significant or why it matters that the entire [00:19:01] Speaker 01: universe of sales is available because we're not comparing those sales against some uniform or randomized group of sales. [00:19:12] Speaker 01: We're comparing them to all of the sales within the United States and trying to determine whether or not sales to particular regions or purchasers or time periods are different from the average throughout the region. [00:19:28] Speaker 01: And then the second step comes in with the ratio test to determine whether or not those differences are sufficient to find a pattern. [00:19:36] Speaker 00: Well, I don't understand why, I still don't understand why something like the normal distribution isn't important even for the purpose that you're using it, that you're using Cohen State. [00:19:51] Speaker 00: For example, if you had a number of sales that were all at a [00:19:58] Speaker 00: specific amount with only the tiniest variations among those sales, tiny variations. [00:20:07] Speaker 00: The standard deviation for that group would be extremely small. [00:20:14] Speaker 00: I think we can agree on that, right? [00:20:17] Speaker 00: Yes. [00:20:17] Speaker 00: Right. [00:20:18] Speaker 00: OK. [00:20:19] Speaker 00: And therefore, that would tend to drive the Cohen's D number up. [00:20:27] Speaker 00: So it does seem that the normality issue is important to Cohen's D, just for that example alone. [00:20:40] Speaker 01: Why not? [00:20:41] Speaker 01: Well, again, Your Honor, because what is being compared, what commerce is trying to determine is, again, this concept of mask dumping. [00:20:54] Speaker 01: And so the comparison [00:20:57] Speaker 01: is attempting to sort out whether or not the differences are sufficient that the different prices that are going on in the different regions are a significant change from the overall average. [00:21:23] Speaker 00: I understand that's the purpose. [00:21:24] Speaker 00: I'm just not seeing how Cohen's D achieves that purpose when the conditions that Cohen himself admits are applicable are not met in a case like this. [00:21:39] Speaker 01: Well, Your Honor, again, the Court has previously upheld the use of the differential pricing analysis. [00:21:47] Speaker 00: To my knowledge, and I've read all the cases here, the Court has not [00:21:53] Speaker 00: grappled with the issue that we are discussing right now. [00:21:58] Speaker 00: The question of whether Cohen's D is applicable to a situation in which the preconditions are not satisfied. [00:22:08] Speaker 00: I don't see any case law other than cases from the CIT that satisfy, that address that issue directly. [00:22:18] Speaker 01: Well, Your Honor, the question before the courts [00:22:22] Speaker 01: is not so much whether or not there's a perfect reliance or how Professor Cohen's analysis fits in. [00:22:34] Speaker 01: It's whether or not commerce's application of the methodology comports with the statute and whether or not it's a reasonable method of determining [00:22:48] Speaker 01: whether or not there are significant differences that demonstrate a pattern. [00:22:55] Speaker 01: Can you tell me why it's reasonable? [00:23:00] Speaker 01: Yes, Your Honor, because it is commerce's methodology to determine whether or not the differences that it's seeing in the prices [00:23:14] Speaker 01: are significant. [00:23:15] Speaker 00: So what the court has previously found... So you're saying that the method is reasonable because commerce uses it to achieve a particular end, but that skips over the critical question of why is it reasonable? [00:23:32] Speaker 01: Your Honor, as the court has previously stated, the statute is silent as to how commerce should [00:23:41] Speaker 01: make this determination. [00:23:43] Speaker 01: And so commerce has explained that this is the methodology that it has employed in order to make that comparison. [00:23:51] Speaker 01: Now, if the court's question is about whether or not this particular mathematical model is reasonable compared to some other mathematical model, again, we would say that this particular one achieves the purpose [00:24:11] Speaker 01: of making the determination as to whether or not the differences are significant. [00:24:20] Speaker 02: This is Judge Chen. [00:24:21] Speaker 02: Are you saying it's reasonable to do this differential pricing analysis as articulated in xanthan gum? [00:24:31] Speaker 02: Because commerce has to pick some kind of framework and this is the framework it's chosen and it has support [00:24:41] Speaker 02: out there among statisticians. [00:24:45] Speaker 02: And that's all it needs, the commerce needs to articulate. [00:24:49] Speaker 02: It doesn't need to articulate why the framework it has adopted is, I don't know, working for its intended purpose in every different circumstance. [00:25:08] Speaker 02: I guess that's what I'm wondering. [00:25:10] Speaker 02: I mean, we have to figure out how to understand our review objective here on reasonableness of Commerce's selection of using this methodology. [00:25:24] Speaker 02: Is it just the adoption of the methodology in general or is it the adoption of this methodology in the context of this case where assuming for purposes of this question, the premises for why you would use Cohen's deed [00:25:39] Speaker 02: are not really present here on the facts of this case? [00:25:46] Speaker 01: Well, Your Honor, I would begin by referring the court back to its pineapple decision in where commerce receives that deference when selecting the methodology. [00:26:00] Speaker 01: And in this case, commerce has explained why it's employing the differential pricing analysis [00:26:09] Speaker 01: and how it's doing that and the results that it achieves. [00:26:14] Speaker 01: What Appellant has been arguing is that, you know, there's some other way that the Cohen D test, you know, could be performed or, you know, might reach a different result. [00:26:26] Speaker 01: But what the question before the court is, is whether or not commerce's explanation is sufficient to explain what it did and whether or not [00:26:38] Speaker 01: that procedure is reasonable under the statute. [00:26:44] Speaker 03: So you agree that commerce's explanation has to be sufficient to justify what it is doing here? [00:26:59] Speaker 03: And I think you just said that. [00:27:03] Speaker 03: And it seems to me, as I understand the discussion, there are kind of two possible things going on here. [00:27:10] Speaker 03: One is commerce said, we rely on it because some well-regarded statisticians rely on what we're doing. [00:27:23] Speaker 03: And then the question is, well, [00:27:25] Speaker 03: to the conditions here satisfy what the well-regarded statisticians have laid out. [00:27:30] Speaker 03: And then the second possibility is that we are actually departing from what [00:27:35] Speaker 03: the statisticians do because we think there's a reason to depart from it and I think the only aspect that we've talked about this morning at least is that the idea that this is a full universe analysis case not a sampling case and I'm not sure there's been given a at least to my mind a trackable explanation for why that's an actual difference here. [00:28:06] Speaker 01: Well, Your Honor, I think just to address the point as to whether this issue of the preconditions for it, there's nothing in the statute that would require commerce to specify that in order to use a particular mathematical model that it has to [00:28:30] Speaker 01: you know, meet the certain preconditions that were laid out by a particular statistician. [00:28:37] Speaker 01: What Commerce has explained here is that it is using this model, this Co and Z test, but applying it to the specific facts of this case in order to make that determination as to whether or not there are significant differences. [00:28:57] Speaker 01: And as to the question of [00:28:59] Speaker 01: a departure from what may have been cited in the academic text about using a normal distribution. [00:29:11] Speaker 01: Again, we're not comparing this to a random sample. [00:29:16] Speaker 01: We're comparing it to the sales in the United States as a whole. [00:29:21] Speaker 01: So commerce's application of the mathematical model [00:29:27] Speaker 01: is acceptable because it's using it to apply the statute in order to make its determination as to whether or not there are significant differences that are sufficient to establish a pattern. [00:29:48] Speaker 01: And on that point, I just wanted to respond to one issue that was raised about [00:29:56] Speaker 01: you know, whether or not this is a determination that requires notice and comment, has the trial court explained, in fact, twice in both its initial determination and its decision? [00:30:12] Speaker 03: Just to be clear, I understand the other side's argument actually not to be that this had to be done by notice and comment, but rather, given that it was not done, that the justification has to be, has to appear [00:30:26] Speaker 03: in the particular as-applied case. [00:30:30] Speaker 03: He hadn't made a separate argument, I think, that this had to be done by notice and comment just about what the consequences are given Commerce's choice not to do it. [00:30:43] Speaker 01: Well, yes, Your Honor, but the issue there is that it's been described as a policy. [00:30:48] Speaker 01: And as the trial court made clear, the methodology being employed by Commerce [00:30:55] Speaker 01: is not a question of policy, it's a question of statutory interpretation. [00:31:02] Speaker 01: And if the court, I would just like to briefly conclude if that's all right. [00:31:07] Speaker 01: Okay. [00:31:09] Speaker 01: And again, what the trial court found was that this was not a question of policy, that the differential pricing analysis is a methodology that is used by commerce in order to find fact. [00:31:24] Speaker 01: And that's the distinguishing characteristic between the analysis of the differential pricing analysis versus what the court was employing in Washington Red Raspberry. [00:31:37] Speaker 00: Just one quick follow-up question. [00:31:39] Speaker 00: You said you understood this DPA as a matter of statutory construction. [00:31:46] Speaker 00: I thought that your view was it was really more of a gap-filling measure. [00:31:52] Speaker 00: rather than construing a particular term in the statute that it was the case that the legislature left it unresolved as to what the right approach to, or for that matter, the right numbers would be for determining whether there is, whether there is dumping or whether the AA or AT methods should be used, but instead left it to commerce to come up with a [00:32:21] Speaker 00: a device for doing that as a matter of gap filling. [00:32:25] Speaker 00: Is that correct? [00:32:25] Speaker 00: Is that your position? [00:32:27] Speaker 01: Yes, that's correct, Your Honor. [00:32:29] Speaker 01: In section 1677, F1, and we go down to paragraph D, so the relevant portion is whether there's a pattern of export prices for comparable merchandise that differ significantly among the purchaser's areas and regions. [00:32:49] Speaker 01: those terms that differ significantly and the pattern, this court and the Court of International Trade have found that Congress was silent on those terms. [00:33:02] Speaker 01: And so the differential pricing analysis and then subsequently the meaningful difference test is the method by which commerce determines whether or not that provision has been met. [00:33:19] Speaker 03: Okay. [00:33:20] Speaker 03: Thank you, Mr. Kipura. [00:33:23] Speaker 03: Mr. Winton, you have three minutes reserved for rebuttal. [00:33:29] Speaker 04: Thank you. [00:33:30] Speaker 04: I'm really feeling inadequate as a lawyer because I've been looking at the apex decisions that were, there are two apex decisions and neither of them seems to address the argument we're making about the ratio test. [00:33:43] Speaker 04: They talk about how commerce calculates margins under the mixed methodology once [00:33:48] Speaker 04: It's satisfied that the ratio test is 33%. [00:33:52] Speaker 04: But it's never addressed our 33 and 66% reasonable numbers. [00:33:58] Speaker 04: And to be reasonable, there's got to be a reason for them. [00:34:01] Speaker 04: And there isn't one. [00:34:02] Speaker 04: All commerce has said is, we think these are the right numbers. [00:34:05] Speaker 04: That's all they've ever said. [00:34:07] Speaker 04: That's not something you can review. [00:34:09] Speaker 04: It's not something we can argue. [00:34:10] Speaker 04: And I would submit that's something totally arbitrary. [00:34:13] Speaker 04: I'll just finish up on this issue of whether [00:34:17] Speaker 04: This methodology is an interpretation of the statute. [00:34:20] Speaker 04: Well, first of all, you're right. [00:34:22] Speaker 04: Commerce has said it's a gap-filling interpretation. [00:34:25] Speaker 04: But if it's an interpretation, I ought to be able to use some kind of construction to interpret it. [00:34:32] Speaker 04: And Commerce has done that. [00:34:33] Speaker 04: They looked at what does the word pattern mean, and they looked at the dictionary definition of pattern, and they interpreted that. [00:34:38] Speaker 04: And I think they were right. [00:34:39] Speaker 04: Actually, I had suggested that interpretation, so I'm very happy with it. [00:34:43] Speaker 04: But they don't have any sort of tying this to the statute. [00:34:47] Speaker 04: Why is it 0.8? [00:34:48] Speaker 04: Why is it 33 and 66%? [00:34:51] Speaker 04: There's nothing in the statute that leads you to those. [00:34:55] Speaker 04: Those are factual conclusions. [00:34:57] Speaker 04: The methodology that we're going to calculate something that will call Cohen's D, that will calculate a pass rate, yes, those are methodologies. [00:35:04] Speaker 04: And if they're reasonable, they're reasonable. [00:35:06] Speaker 04: But in evaluating the output of those methodologies, Congress is making a factual determination that 0.8 is large. [00:35:13] Speaker 04: that something happens at 33%, and something else happens at 66%, although Commerce has never told us what it is. [00:35:22] Speaker 04: And so those are factual findings, and they have to be supported by evidence. [00:35:31] Speaker 04: You asked earlier about what if Commerce and Xanthan Gum had put on evidence. [00:35:36] Speaker 04: Well, we should address it. [00:35:37] Speaker 04: But if you look at the evidence in Xanthan Gum, [00:35:42] Speaker 04: It's the effects by stupid article, because that's the name of the article, not co. [00:35:50] Speaker 04: Co, thanks. [00:35:51] Speaker 04: That's a better way of putting it, which says it only works, you know, co and C can only be used if the variances are approximately equal and if there's a normal distribution. [00:35:59] Speaker 04: So, you know, there's no evidence here. [00:36:03] Speaker 02: Was that a... Mr. Wynton, this is Judge Jen. [00:36:05] Speaker 02: I was wondering if commerce [00:36:11] Speaker 02: shouldn't use Cohen's d here for the reasons that you had given, then what should commerce have done? [00:36:18] Speaker 02: What would have been the better alternative? [00:36:22] Speaker 02: Well, there are two possibilities. [00:36:24] Speaker 02: Just for the Cohen's d part. [00:36:26] Speaker 04: Right. [00:36:26] Speaker 04: Let me give you two possibilities. [00:36:27] Speaker 04: One is they could have used Cohen's d if they justified it somehow, but not by saying this is with statisticians. [00:36:35] Speaker 04: If they said, we've done calculations, [00:36:38] Speaker 04: Empirically, we can show that a Cohen's d of 0.8 means the following, you know, they're allowed to do that. [00:36:46] Speaker 04: What they're not allowed to do is say we're doing what statisticians do. [00:36:50] Speaker 04: And, right, if you were saying, well, how would statisticians do this? [00:36:55] Speaker 04: There are entire books written on nonparametric methods of, you know, measuring effect size. [00:37:02] Speaker 04: And commerce could have used those. [00:37:03] Speaker 04: You know, I'm not a statistician and I'm, you know, [00:37:06] Speaker 04: somebody puts it in front of me, I'm too lazy to try to learn all these things. [00:37:09] Speaker 02: I understand that, but you have to understand commerce has a railroad to run, right? [00:37:14] Speaker 02: They have a lot of different cases, and they have to set up frameworks to review different cases and fact patterns. [00:37:21] Speaker 02: And you're saying, well, under these particular conditions, in my particular case, this framework that you have announced and adopted and say you want to apply everywhere, it just won't work under my factual scenario. [00:37:33] Speaker 02: So, but then, [00:37:36] Speaker 02: Commerce, I would think, would expect you to come forward and say, don't use that, use this other framework, and here's the other framework that really is far more rational than your unreasonable application of Cohen's D. Well, you know, Commerce asked for comments after his anthem gone. [00:37:54] Speaker 04: And the comment I made, I submitted 50-something pages of comments, and the conclusion was, you should use a nonparametric test. [00:38:04] Speaker 04: I didn't say which one. [00:38:05] Speaker 04: Commerce, you know, could evaluate them, but there are tests that can be used when the data doesn't follow the normal distribution. [00:38:13] Speaker 04: And, you know, commerce simply ignored that. [00:38:17] Speaker 04: That's, you know, I understand they have a railroad to run, but on the other hand, we have administrative procedures to follow, and commerce didn't follow them here. [00:38:28] Speaker 00: Thank you. [00:38:31] Speaker 00: The portion of apex I was referring to is the very last section. [00:38:37] Speaker 00: of the second apex case where they had the question before them as to whether the AT test was applicable. [00:38:47] Speaker 00: And they said it was because the number was in the 33 to 66 range. [00:38:53] Speaker 00: It was 65.31, which the court blessed. [00:38:59] Speaker 00: So it seems to me, unless there's a reason that that doesn't constitute a blessing of the three-part test, [00:39:06] Speaker 00: It looks to me like that's what they're saying is that's fine. [00:39:10] Speaker 04: I would say it's an issue that wasn't litigated in that case. [00:39:17] Speaker 04: The appellant didn't say to you this 33 and 66% have no basis. [00:39:23] Speaker 04: In fact, they accepted that a mixed methodology was appropriate and they argued about how you calculate the results. [00:39:30] Speaker 04: They said that, you know, if you didn't address, if the issue wasn't raised [00:39:35] Speaker 04: It's not a binding decision. [00:39:37] Speaker 00: All right. [00:39:40] Speaker 00: I don't know. [00:39:41] Speaker 00: Were you done? [00:39:42] Speaker 00: Because I had a couple of administrative issues I wanted to raise that I don't want to use up your time. [00:39:49] Speaker 00: No, I think I've said enough. [00:39:51] Speaker 00: OK. [00:39:52] Speaker 00: There were a couple of things that were missing from the joint appendix that seemed to me to be at least potentially important. [00:40:00] Speaker 00: One was the Kelly article. [00:40:02] Speaker 00: You cite that in your brief as one of the few articles that's pertinent to this whole question of Cohen's D. And you have a site to 10626 of the Joint Appendix. [00:40:16] Speaker 00: 10626 does not exist in the Joint Appendix. [00:40:19] Speaker 00: So if you would send us a copy of that article, I would appreciate it. [00:40:28] Speaker 00: The other thing is that, [00:40:31] Speaker 00: You cite at page 9789 of the joint appendix your redacted brief that you submitted after the department struck your initial case brief. [00:40:48] Speaker 00: But you give us only one page of that. [00:40:50] Speaker 00: In order to understand the argument, you were making two commerce that would be helpful to have the entire brief. [00:40:57] Speaker 00: that you submitted after the redactions. [00:41:01] Speaker 00: So if you could submit that to us as well, I would appreciate it. [00:41:05] Speaker 04: Thank you. [00:41:05] Speaker 04: We'd be delighted to. [00:41:07] Speaker 03: All right. [00:41:09] Speaker 03: Okay. [00:41:10] Speaker 03: With that, I'll thank both counsel and say that the case is submitted.