[00:00:00] Speaker 04:
Our next case is 22-1176, full member subgroup of the American Institute versus United States.

[00:00:10] Speaker 04:
Mr. Johnson, you have reserved three minutes of your time for rebuttal, correct?

[00:00:14] Speaker 04:
Correct, Your Honor.

[00:00:16] Speaker 04:
And Mr. Henderson, you and Mr. Witkowski have divided your time 12 minutes and three minutes, correct?

[00:00:23] Speaker 00:
That is correct, Your Honor.

[00:00:24] Speaker 00:
Okay.

[00:00:25] Speaker 04:
that we're going to set the clock for you for 12 minutes.

[00:00:29] Speaker 04:
And at the end of that, there'll be three minutes remaining.

[00:00:32] Speaker 04:
There should be three minutes remaining.

[00:00:35] Speaker 03:
Your Honor, I may please the court.

[00:00:36] Speaker 03:
Tom Johnson, appearing for appellant AISC.

[00:00:40] Speaker 03:
The International Trade Commission committed multiple errors of law in concluding that the domestic fabricated structural steel industry was not materially injured by the imports at issue in this investigation.

[00:00:53] Speaker 03:
Those errors relating to the definition of the domestic-like product, the captive production provision, and pricing resulted in both a flawed and inconsistent record and an unreasoned final views.

[00:01:06] Speaker 03:
And if allowed to stand, would prejudice the FSS industry every time it attempts to obtain relief under the trade laws.

[00:01:14] Speaker 03:
So I'd like to start, Your Honors, with the Commission's failure to resolve a critical ambiguity in the definition of the domestic-like product.

[00:01:22] Speaker 03:
So the commission provided no explanation in the final views, let alone a reason for why it accepted material data from NCI and Blue Scope that consisted of complete pre-engineered metal building systems, or PEMs, that were expressly excluded from the scope.

[00:01:39] Speaker 01:
Well, now, when you say complete PEMs, are you including kits?

[00:01:46] Speaker 01:
Yes, Your Honor.

[00:01:47] Speaker 01:
I think that's a pretty important distinction.

[00:01:49] Speaker 01:
I think, why don't we, for the purposes of this argument,

[00:01:52] Speaker 01:
keep the distinction between kits and finished PEMS and use those two terms separately.

[00:02:00] Speaker 01:
Because I understand your argument that the PEMS and the kits should not be distinguished, but factually they are different.

[00:02:10] Speaker 01:
And it's important to the way the commission looked at this case.

[00:02:14] Speaker 03:
Well, I accept that, your honor, but I don't want to sort of, without prejudice to my argument, which would be that when you're talking about a PEMS, it's a pre-engineered metal building system.

[00:02:24] Speaker 03:
And so we understand that a system and a kit, that those are synonymous terms and that when the commission, excuse me, when commerce in its scope excluded from the investigation PEMS, it was excluding the system.

[00:02:37] Speaker 01:
So it was excluding- But it wasn't excluding kits is the argument.

[00:02:41] Speaker 03:
I don't believe so, Your Honor.

[00:02:43] Speaker 03:
I think that their argument is that.

[00:02:44] Speaker 01:
I believe that it was or wasn't.

[00:02:46] Speaker 01:
I didn't understand.

[00:02:47] Speaker 03:
I'm sorry, Your Honor.

[00:02:48] Speaker 03:
Our position is that a system and a kit is the same thing.

[00:02:52] Speaker 01:
But when you say system, again, let's take finished PIM, sitting there with a roof on, the walls up, all the structures in place.

[00:03:01] Speaker 01:
That is what, at least as the commission looked at it, that's a PIM, a finished PIM, as opposed to the kit, which is the components that are later assembled

[00:03:11] Speaker 01:
by the purchaser on the site.

[00:03:14] Speaker 01:
Right?

[00:03:14] Speaker 03:
So, Your Honor, I accept there's a distinction.

[00:03:16] Speaker 03:
I understand the distinction you're making between the finished building and PEM.

[00:03:19] Speaker 01:
Yeah.

[00:03:19] Speaker 01:
It would help me, at least, if you would distinguish between the kit and the finished PEM for the purpose of this argument.

[00:03:28] Speaker 03:
That's fine, Your Honor.

[00:03:30] Speaker 03:
So from there, I want to get to what my legal argument about that would be, which is that, first of all, the commission in note 304 of the final views, which was the sum total of its discussion on this point, it did not make a determination, as you were saying, that the PEM exclusion was limited only to the final building.

[00:03:51] Speaker 03:
And for various reasons, we would say that would not be a reasonable determination.

[00:03:55] Speaker 03:
It did not explain.

[00:03:57] Speaker 03:
why the exclusion would only apply, as you said, to the final building, as opposed to the kit or the system.

[00:04:04] Speaker 03:
It, without explanation, permitted NCI and Blue Scope to report a complete system.

[00:04:11] Speaker 03:
And that's inconsistent with the scope.

[00:04:12] Speaker 01:
The scope specifically... When you say complete system again, do you mean the buildings after construction, or do you mean the kit?

[00:04:21] Speaker 03:
No, Your Honor, we mean the kit.

[00:04:22] Speaker 01:
Okay, let's use the word kit instead of the word system.

[00:04:26] Speaker 01:
It's never confusing to me.

[00:04:27] Speaker 03:
That's fine, Your Honor, but our position, just to be clear for the record, is that kit and system are synonymous.

[00:04:33] Speaker 03:
Okay, I accept it.

[00:04:34] Speaker 01:
Okay, that's fine.

[00:04:34] Speaker 03:
Let's go with kit.

[00:04:36] Speaker 03:
That's fine, Your Honor.

[00:04:37] Speaker 03:
So, I mean, in terms of the kit,

[00:04:39] Speaker 03:
The commission in note 304 does not explain why it permitted within that exclusion that refers to the term system, the reporting of complete kits.

[00:04:49] Speaker 03:
And your honor, if indeed the exclusion was so narrow as to only encompass the completed building, that would be a null set.

[00:04:57] Speaker 03:
I mean, every producer, no producer involved in this investigation.

[00:05:01] Speaker 03:
On the domestic side,

[00:05:02] Speaker 03:
on the importer side is shipping complete two-story buildings.

[00:05:07] Speaker 03:
So for the exclusion to have any meaning at all, it has to be referring to something less than that, which is why that exclusion uses the word system.

[00:05:16] Speaker 01:
And your understanding, commerce excluded in its scope determination did not include the finished buildings.

[00:05:25] Speaker 01:
Is that fair?

[00:05:27] Speaker 03:
Certainly the finished buildings are out, your honor.

[00:05:29] Speaker 03:
I completely agree with you.

[00:05:30] Speaker 03:
But it's also, they're out in part because no one is shipping finished buildings.

[00:05:40] Speaker 03:
If all the exclusion referred to was a completed two-story building, that would neither be imported nor produced domestically.

[00:05:46] Speaker 03:
And your honor, we've been going back and forth about this for a few minutes.

[00:05:50] Speaker 03:
And I think the important thing here is that the commission

[00:05:54] Speaker 03:
didn't even grapple with this.

[00:05:55] Speaker 03:
I mean, our argument, our first argument in the brief is that this is a state farm problem.

[00:06:00] Speaker 03:
If the commission truly believed that the only thing excluded from the scope was a completed building and that therefore the builders or the consumers or the end users are actually the producers of a PEM, then it had a responsibility to explain why it was that it took that position and it failed to do so.

[00:06:21] Speaker 03:
And so our first position is that on remand

[00:06:23] Speaker 03:
the Commission should grapple with precisely the kinds of questions that you and I are discussing right now.

[00:06:28] Speaker 03:
It didn't do that with respect to PEMS, and it didn't do that with respect to certain steel components for which there was a dispute as to whether or not those non-structural components were included within the scope.

[00:06:42] Speaker 03:
And on that second issue, the Commission's failure to grapple with that dispute resulted in an inconsistent record.

[00:06:50] Speaker 03:
So it's a case like New Corp Fastener in which

[00:06:52] Speaker 03:
the commission accepted inconsistent data and didn't explain the consequences of that and didn't explain why that was reasonable.

[00:07:01] Speaker 03:
You had two producers taking one view of the scope reporting certain non-structural components.

[00:07:07] Speaker 03:
You had a third producer that told commission staff it wasn't going to do that based on a different view of the scope.

[00:07:14] Speaker 03:
That's inconsistent.

[00:07:15] Speaker 03:
And it's not sufficient for the commission to say in note 304 of the final views,

[00:07:20] Speaker 03:
will just trust us because commission staff looked at it and they determined that this was a reasonable conclusion.

[00:07:27] Speaker 03:
It's an unexplained discrepancy in the record that Warren's remand.

[00:07:32] Speaker 03:
And with respect to the PEMS issue, Your Honor, I mean, this is an error that also impacted a very important issue of first impression for this industry that is coming up to this court under what's called the captive production provision of the statute.

[00:07:47] Speaker 03:
So here, the commission did not engage in an exercise of statutory interpretation at all.

[00:07:54] Speaker 03:
What it did was it had a conclusory reference to the statutory language, the key statutory term production.

[00:08:03] Speaker 03:
It then cited to the SSA, which uses the same term, italicizes that term production.

[00:08:09] Speaker 03:
And then it merely asserts that it is not enough for the defendants in this case to aggregate

[00:08:17] Speaker 03:
the various steel components of a PEMS and then to ship, invoice, and sell those PEMS.

[00:08:23] Speaker 03:
That that does not constitute downstream production.

[00:08:27] Speaker 05:
It didn't engage... What is the downstream article in your view here?

[00:08:31] Speaker 03:
So, I mean, I think that the downstream article is what we are calling it with Judge Bryce in a system or kit.

[00:08:40] Speaker 03:
I mean, and I think that everyone agrees here there is some downstream article.

[00:08:45] Speaker 03:
The disagreement is that under their interpretation of the statute, that the producer of the downstream article is, in fact, the builder.

[00:08:54] Speaker 03:
It's the end user or consumer, which doesn't make any sense because that would mean that in order for anyone to get relief under the trade laws for PEMS, the person standing to bring a petition would be the buyer that would never complain.

[00:09:09] Speaker 03:
that its prices were too low.

[00:09:11] Speaker 03:
I mean, it just turns the entire concept of a producer on its head.

[00:09:17] Speaker 03:
And the problem here, your honor, as I mentioned, first it's a problem that the reasoning in the final views is conclusory, but there's also a significant chennery problem here because the only assertion made by the commission in the final views is that aggregation of parts does not constitute production.

[00:09:35] Speaker 03:
the CIT and government council on appeal add significant amounts of additional analysis here, citing to different parts of the legislative history, the SAA, to say that there needs to be internal further processing of the components for it to qualify, and that there also needs to be vertical integration.

[00:09:55] Speaker 03:
Now, Your Honor, those concepts, which are themselves not self-defining,

[00:10:00] Speaker 03:
don't appear anywhere in the authoritative agency's opinion.

[00:10:05] Speaker 03:
And so it should not be, I mean, the entire purpose of Chenery is to afford deference to the expert agency officials, not appellate counsel, not the agency's lawyers.

[00:10:17] Speaker 03:
And so at minimum, the commission had an obligation to grapple with this in the first instance.

[00:10:24] Speaker 04:
Let me understand something.

[00:10:25] Speaker 04:
Your argument is that the pins are downstream articles?

[00:10:29] Speaker 04:
Right?

[00:10:30] Speaker 04:
Correct, Your Honor.

[00:10:31] Speaker 04:
Well, how can it be a downstream oracle and also be a like product?

[00:10:36] Speaker 03:
Well, Your Honor, so those are two separate inquiries, as I think both the statute and the SAA.

[00:10:42] Speaker 03:
Well, they're contradictory.

[00:10:43] Speaker 04:
And that's your argument.

[00:10:45] Speaker 04:
You can't argue both sides.

[00:10:47] Speaker 03:
No, Your Honor.

[00:10:48] Speaker 03:
So first, the commission has the responsibility

[00:10:53] Speaker 03:
to define the domestic-like product.

[00:10:55] Speaker 03:
Now, if I'm understanding your question, yes, our first argument is they should not have permitted complete PEMs, or what I'm calling kits, to be part of the domestic-like product.

[00:11:06] Speaker 03:
But assuming it is part of the domestic-like product, then there's a separate statutory consideration, which is for purposes of the impact analysis, would you consider PEMs if PEMs are a downstream article?

[00:11:20] Speaker 03:
The entire purpose of this provision is to say,

[00:11:23] Speaker 04:
But it can be both for purposes of a capital production argument.

[00:11:27] Speaker 04:
You can't have an article be a downstream article and then also be within the scope of the like product determination.

[00:11:40] Speaker 03:
Well, Your Honor, I do think initially we are arguing it's not part of the domestic like product definition.

[00:11:48] Speaker 03:
But if it is,

[00:11:51] Speaker 03:
then it's permissible to exclude it from the impact analysis if it constitutes a downstream product.

[00:11:57] Speaker 04:
I mean, I think what happened before- I didn't catch you were making an alternative argument.

[00:12:02] Speaker 03:
Yes.

[00:12:03] Speaker 03:
Correct, Your Honor.

[00:12:04] Speaker 03:
Right.

[00:12:04] Speaker 03:
So I think we're on the same page now, right?

[00:12:06] Speaker 03:
So the question is, if it's in the domestic like, should it be excluded for purposes of the impact analysis?

[00:12:12] Speaker 03:
And if you look, Your Honor, if you read the SAA as a whole, if you look at the Bethlehem Steel case that we saw,

[00:12:20] Speaker 03:
Uh, you know, the, the, what Congress was trying to do was to isolate those cases in which, uh, products are competing with each other in the merchant market, not products that never make it to the merchant market, but are, but are, but are sold as part of the market for some downstream market.

[00:12:38] Speaker 03:
Right.

[00:12:38] Speaker 03:
And so that that part of the SAA is also in there that they don't cite to.

[00:12:44] Speaker 01:
So it's not just where in the SAA is we want, we look.

[00:12:49] Speaker 01:
to see the portions that you say are favorable to your view of this.

[00:12:55] Speaker 03:
Sure, Your Honor, there are paragraphs right next to each other.

[00:12:58] Speaker 03:
I can get you the page.

[00:13:00] Speaker 03:
But it is cited in the government's brief, and in a number of the briefs, where they talk about the part of that SAA that mentions vertical integration and internal processing.

[00:13:12] Speaker 03:
In the very next paragraph, it talks about what the purpose of the provision is.

[00:13:15] Speaker 01:
It's in the same section.

[00:13:16] Speaker 03:
The entire section is maybe five or six paragraphs long.

[00:13:19] Speaker 03:
And my only point there, Your Honor, is not that this court

[00:13:22] Speaker 03:
should be grappling with what the DC Circuit has called an interpretation laden with policy consequences in the first instance.

[00:13:31] Speaker 03:
My point is that there are two different ways to read this statute.

[00:13:35] Speaker 03:
We certainly think ours is much more consistent with statutory purpose to try to figure out which products are actually competing as opposed to their view, which is that what matters is whatever internal physical or chemical process you're using to produce the downstream article.

[00:13:51] Speaker 03:
I think that is no

[00:13:52] Speaker 03:
bearing on the statutory purpose.

[00:13:55] Speaker 03:
And so in terms of how you would interpret those key terms of production and processing, that is something that the commission ought to have grappled with in the first instance.

[00:14:06] Speaker 03:
It's not something that the court can credit on such a consequential issue for the first time on appeal.

[00:14:13] Speaker 03:
I see I'm eating into my rebuttal, your honor.

[00:14:15] Speaker 03:
I did want to get to pricing, but if I'm eating into my rebuttal, I'm happy to stay here.

[00:14:21] Speaker 04:
You are, but you can brush it.

[00:14:24] Speaker 03:
Let me just, if I could just say a word on it, your honor.

[00:14:26] Speaker 03:
I mean, this is not a typical case from our perspective where we are asking the court to reweigh the evidence on pricing.

[00:14:33] Speaker 03:
Our position here is that the commission did not engage in the hard work to weigh the evidence at all and reach an underselling determination.

[00:14:42] Speaker 03:
Under this court's decision in Allegheny and Ludlam, the commission has sort of two options when it is confronted with a data set that it claims has limitations in the record.

[00:14:54] Speaker 03:
It can either make reasonable efforts to acquire additional data, which we ask the commission to do, or it can make its best judgment based on the information available.

[00:15:03] Speaker 03:
Here instead, what the commission did was it took each one of the data sets that are going to be used

[00:15:08] Speaker 03:
in any investigation involving this industry.

[00:15:12] Speaker 03:
And it found limitations in each of them that are going to be endemic to FSS investigations.

[00:15:18] Speaker 03:
And it found that it could not conclude there was underselling.

[00:15:22] Speaker 03:
That is what we are claiming is error here, was the failure to either collect additional data to complement the data that it claimed was flawed or to make a judgment based on the record as it existed.

[00:15:35] Speaker 04:
There's no further questions.

[00:15:39] Speaker 04:
I won't say cross the line, but your argument gets very close to the line where you're requesting that we reweigh the evidence, the data here.

[00:15:49] Speaker 04:
And you know we can't do that.

[00:15:51] Speaker 03:
I understand, your honor.

[00:15:53] Speaker 04:
What we're looking at is whether the commission's determinations are based on substantial evidence.

[00:16:01] Speaker 04:
And I think that these issues are unique.

[00:16:06] Speaker 04:
and maybe even new, I don't see that the commission's determinations are unreasonable or that they're without unsupported substantial evidence.

[00:16:21] Speaker 04:
Just take one or two minutes and address a substantial evidence issue here.

[00:16:25] Speaker 03:
Sure.

[00:16:25] Speaker 03:
I mean, I appreciate that, Your Honor.

[00:16:26] Speaker 03:
That's why I started by saying that I thought that there were

[00:16:29] Speaker 03:
defining characteristics here that were different than the typical case for reweighing evidence, right?

[00:16:34] Speaker 03:
I mean, so I'll make two points.

[00:16:36] Speaker 04:
And understanding that you may have a good argument.

[00:16:41] Speaker 04:
There may be two sides to this story.

[00:16:43] Speaker 04:
But as long as the commission's side of the story is supported with substantial evidence, they're going to win.

[00:16:49] Speaker 03:
So let me point out to you.

[00:16:51] Speaker 03:
I'll limit myself to pointing out two items, Your Honor, because I think it's very similar to cases like

[00:16:56] Speaker 03:
diamond saw blades in which the court found.

[00:16:58] Speaker 03:
There have been cases where the court has scrutinized, for example, a cost analysis and found that it didn't make much sense.

[00:17:04] Speaker 03:
So I'll limit myself to just two quick points.

[00:17:07] Speaker 03:
First, with respect to the Commission's consideration of price suppression and the COGS ratio, which is typically used to identify price suppression, what the Commission says there is that

[00:17:23] Speaker 03:
uh... because revenues absolute revenues have increased you know that sort of counter weighs the fact that the cogs ratio went up during this period well that's sort of a non sequitur your honor because it's possible for you to be making more money but not be able to keep up with costs under this profitability measure because of competition from subject inputs so i think that that was a non sequitur but sort of the overarching problem if you look

[00:17:51] Speaker 03:
at how the commission ends its pricing analysis.

[00:17:53] Speaker 03:
There's almost a half concession.

[00:17:54] Speaker 03:
What they say at the end is,

[00:17:56] Speaker 03:
We are not able to find underselling, but we do find that prices here were competitive.

[00:18:01] Speaker 03:
But it's unclear as to how they came up with that determination.

[00:18:05] Speaker 03:
Why is it competitive rather than underselling?

[00:18:07] Speaker 03:
They've just finished telling you that all of these five data sets are fundamentally flawed.

[00:18:11] Speaker 03:
So in Diamond Sawblades, it's a similar case in which this court said, if we can't connect the dots, if we can't get from A to B to C, that's a basis for remand.

[00:18:20] Speaker 03:
It's basically a state farmage.

[00:18:22] Speaker 03:
Thank you, Your Honor.

[00:18:24] Speaker 04:
Councilor Henderson, you have 12 minutes.

[00:18:26] Speaker 00:
Pardon?

[00:18:27] Speaker 00:
You have 12 minutes.

[00:18:27] Speaker 00:
12 minutes.

[00:18:28] Speaker 00:
Thank you, Your Honor.

[00:18:30] Speaker 00:
John Henderson from the US International Trade Commission.

[00:18:33] Speaker 00:
And first, we'd like to note that we respectfully request that this court affirm the CIT's well-reasoned opinion affirming the commission's determination.

[00:18:45] Speaker 00:
Now, this was an intensely factual case before the CIT.

[00:18:49] Speaker 00:
and remain so before this court.

[00:18:51] Speaker 00:
And the CIT upheld all of the commission's relevant factual determinations.

[00:18:55] Speaker 00:
But Appellant is trying to convert some of these factual issues into legal issues where they don't belong.

[00:19:03] Speaker 00:
For example, on the like product issue, the commission did make an unambiguous definition of the like product to be coextensive with the scope as Appellant had requested.

[00:19:12] Speaker 00:
And it cannot appeal being the like product determination

[00:19:18] Speaker 00:
being the prevailing party.

[00:19:20] Speaker 00:
The issue they are raising here is a data set issue, and that's how they presented it to the Commission at the time.

[00:19:28] Speaker 00:
Should these questionnaire responses of these two firms, NCI and Blue Scope, be included in the Commission's data set?

[00:19:35] Speaker 00:
And the Commission of course investigates all questionnaire responses, over 250 in this case, and conducts due diligence

[00:19:43] Speaker 00:
examining all the questionnaires, do they belong or don't they?

[00:19:45] Speaker 00:
Are there errors that need to be corrected?

[00:19:48] Speaker 00:
And in this case, once the issue was raised as these two particular questionnaires, the commission staff did additional due diligence, and it contacted the firms, it instructed them only to include in scope merchandise in their questionnaires, it got data from these firms about exactly what they reported and what they didn't, it conducted a financial audit of NCI's questionnaire response,

[00:20:12] Speaker 00:
And importantly, when it found that one other producer, Nucor, had not submitted a questionnaire response three months after the deadline, the commission reached out to Nucor and insisted and obtained a questionnaire response.

[00:20:27] Speaker 00:
And the argument that because Nucor's reporting might have

[00:20:32] Speaker 00:
done differently the way that the two other firms, NCI and Blue Scope, who did timely reporting, that that is somehow the commission's fault.

[00:20:40] Speaker 00:
If the commission gets an 11th hour response from a producer, it has limited time for due diligence.

[00:20:47] Speaker 00:
In this case, after the commission staff did its analysis,

[00:20:51] Speaker 00:
and found that there was nothing that was clearly outside commerce's scope as it explained it both in its final decision and in the scope decision memo, the commission decided to include the questionnaire responses of these firms in its data set and then explained it in detail in that footnote 304.

[00:21:12] Speaker 00:
At first, it clearly understood the issue, which was a data set issue as Appellant had presented it during the investigation.

[00:21:20] Speaker 00:
it explained exactly the steps that the commission took to investigate the supplemental due diligence it did.

[00:21:27] Speaker 00:
It explained its decision to include it and its reasoning.

[00:21:30] Speaker 00:
And as to the argument about one of Appellant's big arguments at the time was that FSS needed to be providing structural support to be included in the like product, in the scope.

[00:21:48] Speaker 00:
the Commission cited the particular pages of Commerce's scope that said FSS does not need to provide structural support to be load-bearing as long as it's in the structure.

[00:21:59] Speaker 00:
So the Commission relied on Commerce's scope memo and Commerce's scope in making its decision, and it explained that adequately.

[00:22:06] Speaker 00:
Now, the argument that the Commission needed to make some sort of formal scope determination, which is up to Commerce, or another

[00:22:15] Speaker 00:
like product determination after having fully explained this like product determination, that's unnecessary.

[00:22:22] Speaker 00:
Now, the issue that the appellant raises now about the inclusion of this data, one thing I would note, responding to the court's questions about this, about what is a kit.

[00:22:33] Speaker 00:
Now, I would note that one thing that just

[00:22:37] Speaker 00:
The reason why the reporting from NCI and Blue Scope was within the domestic-like product is they were producing FSS, FSS components of PEMBs.

[00:22:49] Speaker 00:
And now on AISC's reply brief at page 12 says, the commission concedes that domestic producers produce complete PEMBs kits or systems, citing our brief at page 29.

[00:23:02] Speaker 00:
But our brief does not say that at all at page 29, and we make no such concession.

[00:23:07] Speaker 00:
The record shows that the two firms, NCI and Blue Scope, reported to the commission that there were certain components that go in a complete PMB that they do not produce.

[00:23:20] Speaker 01:
Closing windows, for example?

[00:23:23] Speaker 00:
The specific components that they say they don't produce are confidential.

[00:23:28] Speaker 01:
There you go.

[00:23:33] Speaker 00:
And the commission's view stated that

[00:23:36] Speaker 00:
When the various components and the kits, incidentally, go in stages or phases, I mean they sometimes may go as complete kits, but as the components are ready to go, and the commission's views stated that the job site, when the builder gets the kits, it may include components that receives from a third party, now a third party producer of some of the components.

[00:24:05] Speaker 00:
It is not the case that if these two firms, if there are certain components they do not produce, then it's not the case that they produce a complete kit, even though they may ship components over time that constitute a complete kit.

[00:24:24] Speaker 00:
So they are producers of FSS components, they are not producers of complete PMBs, and that was an important distinction for the Commission.

[00:24:33] Speaker 00:
And because they were

[00:24:35] Speaker 00:
FSS producers, the Commission had to include their FSS production within the domestic industry.

[00:24:44] Speaker 04:
Now with respect to the captive production issue... Do the producers of the PERMS, do they also produce fabricated steel?

[00:24:56] Speaker 00:
Well, in our view, or what the Commission found, was that the companies that produce the complete PMBs

[00:25:03] Speaker 00:
are the builders at the job sites.

[00:25:06] Speaker 00:
But the parties that produce the FSS components of PMBs, obviously they produce FSS.

[00:25:15] Speaker 00:
There are certain other third party suppliers who may produce other components.

[00:25:20] Speaker 00:
Now they may or may not produce FSS, so far as we know.

[00:25:24] Speaker 04:
Part of the services that the fabricated steel producer supplies is erection at the site.

[00:25:33] Speaker 00:
Yeah, and the erection, of course, is a separate service.

[00:25:37] Speaker 00:
It is not FSS.

[00:25:38] Speaker 00:
And that was an important distinction in the commission's underselling determination, that whenever you're looking at a total bid price, that includes some erection services on top of the light product, FSS.

[00:25:50] Speaker 00:
And the commission must make its light product determination with respect to respective prices of FSS and disregarding the erection cost.

[00:25:59] Speaker 05:
Do you agree that the respondents actually make these kits?

[00:26:04] Speaker 00:
We're just saying they do not produce complete kits.

[00:26:11] Speaker 00:
They may ship complete kits, and kits, as I say, go in stages.

[00:26:16] Speaker 00:
Now, whether these third-party suppliers send them directly to the job site, or whether they send them to NCI or Blue Scope, and for them, NCI and Blue Scope, to submit them to the job site.

[00:26:29] Speaker 00:
Complete kits obviously end up at the job site, but NCI and Blue Scope, the record shows, they do not produce complete kits, complete PMBs.

[00:26:39] Speaker 00:
They produce FSS components, and that's why they are part of the domestic industry.

[00:26:44] Speaker 01:
It's certainly conceivable, is it not, that I could order a PMB and the kit

[00:26:53] Speaker 01:
would have everything I need in it.

[00:26:55] Speaker 01:
And then the kit gets shipped to my premises, and I hire a builder to put together all those components.

[00:27:01] Speaker 01:
So it isn't always the case that there are additional components, I take it, that have to be added to the kit.

[00:27:08] Speaker 00:
Well, I mean, there were certain FSS components, and there were certain components that are

[00:27:15] Speaker 00:
Not FSS or not INSCOs, like doors and windows.

[00:27:17] Speaker 01:
But there could very well be a situation, I would suppose, in which I would order something that didn't have a need for doors and windows.

[00:27:26] Speaker 01:
And when I put the building up, I wasn't going to have doors and windows.

[00:27:30] Speaker 01:
It's just a very simple structure, like a carport or something like that.

[00:27:35] Speaker 01:
The kit would have everything in it that needed to be used in the construction of that

[00:27:44] Speaker 01:
of that PMB, right?

[00:27:47] Speaker 00:
Right.

[00:27:47] Speaker 01:
Now, whether the kit would all come from... But it could have the entire thing.

[00:27:52] Speaker 01:
And you would still include the kit within the domestic-like product.

[00:28:00] Speaker 00:
Well, assuming they were all FSS.

[00:28:03] Speaker 00:
If they were non-FSS components, that's not part of the light product.

[00:28:07] Speaker 00:
And on the captive production issue, the statute is clear that

[00:28:13] Speaker 00:
the domestic-like product has to be internally transferred for production or as the first substantive criterion of the statute rephrasing it says processing and that's in the statute which we quoted in the views into a separate or into a downstream product and here there wasn't any internal transferring

[00:28:37] Speaker 00:
for production or the Commission found that all that happened was that after the NCI or Blue Scope produced the domestic light product, they aggregated and sent it as is, without further processing, without further production of the downstream product, and sent it off to the job site where the builder

[00:29:04] Speaker 00:
uh... you know produced assembled the the complete pmd and uh... that commission finding was supported by substantial evidence and we think the statute is clear that uh... if if all the producers doing after it produces the domestic like product is aggregating components and sending them that is as is that does not constitute production of a downstream process for processing of it

[00:29:32] Speaker 00:
into a downstream product as the statute requires.

[00:29:36] Speaker 00:
And in terms of arguments about the congressional intent, the important thing is, is the statutory requirement in the threshold condition satisfied?

[00:29:46] Speaker 00:
And if it's not satisfied, you don't have to go beyond it to figure out what was Congress's intent for the overall threshold provision.

[00:29:55] Speaker 00:
Bethlehem's deal deals with the

[00:29:57] Speaker 00:
the third criterion of the statute, which has since been repealed.

[00:30:01] Speaker 01:
I take it that the commission's position on the legal effect of the SAA is that it is effectively statutory in nature by virtue of 3512D, is that it?

[00:30:12] Speaker 01:
That is correct.

[00:30:13] Speaker 01:
3511?

[00:30:15] Speaker 01:
All right.

[00:30:16] Speaker 01:
You might want to treat it as a statute, given that Congress said the SAA is binding authoritative.

[00:30:24] Speaker 00:
Authoritative, yes.

[00:30:26] Speaker 00:
OK.

[00:30:27] Speaker 00:
And with respect to the underselling issue, we feel that the commission appropriately considered all the limitations that are identified in each data source when conducting its analysis of the record as a whole.

[00:30:43] Speaker 00:
If you find that a particular data source is not probative because of data inconsistencies, errors, very low coverage, or lack of comparability, those

[00:30:57] Speaker 00:
those problems don't disappear when you look at the record as a whole.

[00:31:00] Speaker 00:
So the Commission has to consider what it has already analyzed as to each data set when it considers the record as a whole.

[00:31:09] Speaker 00:
And in terms of the underselling determination, as we pointed out and the CIT judge noted, the holding of Allegheny Ludlam was confined to, in that case, the Commission's application of the rather narrow product line

[00:31:25] Speaker 00:
statutory provision, which is not at all applicable here.

[00:31:29] Speaker 00:
But what the court said in allegating Ludlam is that the Commission must conduct reasonable, active, and reasonable efforts to collect relevant data.

[00:31:39] Speaker 00:
And it certainly did that here.

[00:31:40] Speaker 00:
This court also said something similar more recently in the Hitachi Metals case.

[00:31:46] Speaker 00:
And by any standard, as the CIT found, the Commission conducted a reasonable investigation.

[00:31:52] Speaker 00:
All its data requests were reasonable.

[00:31:54] Speaker 00:
And you can't just

[00:31:55] Speaker 00:
turn this into a completely results-oriented approach.

[00:31:58] Speaker 00:
If the Commission makes reasonable data determinations, as the CIT found, and then collects voluminous data, and at the end of the process it analyzes all that data and finds that it does not support an affirmative finding of underselling, that's the nature of investigation.

[00:32:16] Speaker 00:
You make reasonable determinations, you collect the data, you analyze it, and then you see whether the data supported or not.

[00:32:22] Speaker 04:
Councilor, I think we have your argument on that.

[00:32:25] Speaker 00:
You're out of time.

[00:32:26] Speaker 00:
Okay.

[00:32:27] Speaker 00:
Thank you, your honor.

[00:32:28] Speaker 02:
Good morning and may it please the court.

[00:32:30] Speaker 02:
I'm Daniel Wieckowski on behalf of Cornerstone Building Brands.

[00:32:33] Speaker 02:
I'd like to clarify a couple of questions that were asked and I think Mr. Henderson was also a little bit reluctant to answer some of the questions because of, you know, dealing with our data, but doors in windows petitioner in the proceedings before the commission.

[00:32:47] Speaker 02:
describe complete pre-engineered metal building systems, including these structural components.

[00:32:52] Speaker 01:
That's confidential.

[00:32:54] Speaker 02:
No, that's not confidential.

[00:32:55] Speaker 02:
And what I was getting to is that boost-open NCI do not produce doors and windows.

[00:32:59] Speaker 02:
So we are not producing all of the components in a kit.

[00:33:02] Speaker 02:
So going to the scope exclusion itself, the scope exclusion defines a system and then says systems is a complete building.

[00:33:12] Speaker 02:
So the system is defined as a building in the scope language itself.

[00:33:15] Speaker 02:
It refers to these MVMA standards and the actual scope exclusion itself.

[00:33:20] Speaker 02:
As the CIT noted on page, this is appendix page 31,

[00:33:24] Speaker 02:
Petitioner had noted that the MBMA standards apply to finished buildings, whereas the actual components are subject to a different standard.

[00:33:32] Speaker 02:
So the scope exclusion is including standards that apply to a finished building.

[00:33:35] Speaker 01:
Finished as in?

[00:33:37] Speaker 02:
As in a complete finished.

[00:33:38] Speaker 01:
Standing there.

[00:33:39] Speaker 02:
Yes, a standing building.

[00:33:42] Speaker 02:
Exactly.

[00:33:42] Speaker 02:
But even if you did with a kit, the exclusion would still require production of the complete kit, which NCI and Blue Scope don't produce those either.

[00:33:54] Speaker 02:
using components that are produced by other parties, we're producing the FSS components and sending it straight to the job site as is.

[00:34:02] Speaker 02:
The Department of Commerce, on the basis of an argument that was made by Petitioner, found that the FSS components, even when they're sent to a job site to be incorporated into a pre-engineered metal building system, are within the scope.

[00:34:13] Speaker 02:
of the case, and since the scope and the domestic-like product are coextensive, they're part of the domestic-like product.

[00:34:19] Speaker 02:
So the commission's sort of faced with this thing of the FSS components that are going to the job site are in scope.

[00:34:25] Speaker 02:
Well, what is then the out-of-scope item?

[00:34:27] Speaker 02:
What has to be then the finished building?

[00:34:29] Speaker 02:
Because the only thing that we're doing is we're taking FSS off the production line, we're sending it to the job site, just like

[00:34:36] Speaker 02:
the product that was coming from Building Systems de Mexico, was the imported merchandise that Commerce found to be within the scope of the anti-dumping investigation.

[00:34:45] Speaker 02:
So petitioners are really trying to have it both ways as to how they're treating that exclusion, where it's extremely narrow and doesn't really have any meaning for when it comes in across the border.

[00:34:57] Speaker 02:
But when we're doing the same thing that Building Systems de Mexico is doing, they want that to be treated as somehow outside the domestic-like product.

[00:35:04] Speaker 02:
There was a question about erection services.

[00:35:07] Speaker 02:
I think the Commission found it's fully supported by the record that the FSS component producers for pre-engineered mental building systems are not doing the erection themselves.

[00:35:21] Speaker 02:
The erection is done by third-party builders, so it's not something that we are providing that service in the vast majority of instances.

[00:35:28] Speaker 02:
There could be some rare circumstances where that's not the case.

[00:35:32] Speaker 05:
That's one clarifying question.

[00:35:34] Speaker 05:
So you disagree that respondents are making complete kits in the first place, right?

[00:35:37] Speaker 05:
Like that's your position?

[00:35:39] Speaker 02:
Yeah, correct.

[00:35:40] Speaker 02:
If you read that scope exclusion petitioner is very clear that you had to produce the entire kit.

[00:35:47] Speaker 02:
What if it's the entire kit, even assuming it's a kit versus the finished building, which our position would be that it's the finished building.

[00:35:54] Speaker 02:
But even if not,

[00:35:55] Speaker 02:
NCI and Blue Scope do not produce all of the elements for the kit, so you can't produce an excluded item if you don't meet the actual limitations of the exclusion.

[00:36:04] Speaker 01:
Well, now I'm confused.

[00:36:08] Speaker 01:
Thank you for asking that question, because this surfaces as this distinction between anything.

[00:36:16] Speaker 01:
So is it your position, or let me put it this way, is it the commission's position that a kit

[00:36:24] Speaker 01:
that is not the assembled building, but that happens in a particular case to contain all the parts that have been ordered and that will make their way into the finished building is within or outside of scope or the domestic like product.

[00:36:41] Speaker 02:
I understand the commission's decision to be that the actual finished building is the builders that are.

[00:36:46] Speaker 01:
So if I make a FSS producer and I produce a kit,

[00:36:53] Speaker 01:
that has a bunch of parts and those parts are the only things that will be used in the finished building, that that kit is not excluded from the scope of what commerce defines or the domestic-like product.

[00:37:07] Speaker 01:
Is that correct?

[00:37:08] Speaker 02:
That's correct.

[00:37:09] Speaker 02:
That's correct.

[00:37:10] Speaker 01:
So all the talk about whether there are additional things that are added and so forth, they're essentially irrelevant.

[00:37:15] Speaker 02:
They are irrelevant except to the extent that you buy this argument that, well, clearly the commission violated the scope language, even under their interpretation.

[00:37:24] Speaker 02:
They would require a violation of the scope language, again, under their own interpretation.

[00:37:29] Speaker 02:
So I also wanted to point out one other thing about the, there was a question, and I recognize that I'm over time, but just to clarify one legal point, if I may, of the SAA does specify that the downstream product has to be an out of

[00:37:44] Speaker 02:
scope or beyond the scope of the domestic-like product in order for the captive production provision to apply.

[00:37:50] Speaker 02:
So if the Commission finds that these components that we're producing are within the domestic-like product as are the kits, then the captive production provision is not relevant, and that's stated specifically in the Commission's views.

[00:38:05] Speaker 02:
That's at the Dependix 8800, where they've made that query about the SAA saying that the downstream product says

[00:38:13] Speaker 02:
processed into the downstream product, that downstream product must be outside of the scope of the mesquite product.

[00:38:23] Speaker 04:
Thank you.

[00:38:26] Speaker 03:
Thank you, your honor.

[00:38:27] Speaker 03:
Let me, let me, let me just start there to avoid confusion.

[00:38:29] Speaker 03:
So, I mean, I think, I think, you know, where the confusion may be, I mean, the domestic like for purposes of, of, of the captive production provision can be internally consumed.

[00:38:41] Speaker 03:
Yes, the downstream article, that would be something that's different than the domestic like.

[00:38:45] Speaker 03:
But our argument would be that either these components should not be considered in the domestic life, or if they are, they should be considered internally consumed for purposes of creating a different downstream product.

[00:38:59] Speaker 03:
Judge Friesen, I want to get to this colloquy that you've had now with counsel on the other side about complete PEMS.

[00:39:05] Speaker 03:
I think there's agreement as to what factually

[00:39:09] Speaker 03:
has occurred here, which is these producers often will aggregate and sell and ship and invoice all of the components that a builder would need.

[00:39:20] Speaker 03:
to produce a completed building.

[00:39:23] Speaker 03:
The only exceptions to what they manufacture internally are things like doors and windows.

[00:39:29] Speaker 03:
So I take their argument to be that similar to saying like if Microsoft does not produce a computer because it happens to contain an Intel chip.

[00:39:40] Speaker 03:
I mean, as we would say, Your Honor, to say that it's merely the fact that you're sourcing a couple of non-steel components

[00:39:46] Speaker 03:
from some third party, that that means that you're not the producer of the PEM kit, and therefore you are outside the scope of this exclusion.

[00:39:55] Speaker 03:
That again would mean that that exclusion is a null set.

[00:39:58] Speaker 03:
It would mean that the only producers of the buildings are the end users or the builders, and it would mean that nothing is excluded.

[00:40:05] Speaker 03:
But at minimum, Your Honor, rather than this court go back and forth on these things, our argument at bottom is that note 304 says nothing about this.

[00:40:15] Speaker 03:
the three pages of the scope memorandum that they cite to says nothing about this.

[00:40:21] Speaker 03:
And so this court should remand for the commission to provide a reasoned explanation as to why these PEM kits are inside or outside the scope.

[00:40:31] Speaker 03:
I'd like to just read the scope language here, which I have because I think it

[00:40:35] Speaker 03:
I think it is not the case that this unambiguously only applies to metal buildings, quite the opposite.

[00:40:41] Speaker 03:
It's pre-engineered metal building systems, your honor, so again, Joe Bryson using that word systems, which are defined as complete metal buildings that integrate steel framing, roofing, and walls to form one pre-engineered building system that meet Metal Building Manufacturers Association guide specifications.

[00:41:00] Speaker 01:
Where are you reading from?

[00:41:01] Speaker 03:
I'm sorry, Your Honor.

[00:41:03] Speaker 03:
This is the scope.

[00:41:04] Speaker 03:
It appears on Appendix 8363.

[00:41:09] Speaker 03:
I also want, Your Honor, for the record, the SAA language is pages 852 to 853 of the SAA.

[00:41:16] Speaker 03:
I don't believe it's in the Joint Appendix.

[00:41:20] Speaker 03:
Again, our reading of that, and the only reading that I think gives the scope any meaning, that is what is excluded is the system.

[00:41:26] Speaker 03:
Yes, it can be assembled into a metal building that meets manufacturer specifications, but that what actually is being excluded is the system or the kit itself.

[00:41:41] Speaker 03:
I'm over time.

[00:41:41] Speaker 03:
May I have one more minute on the captive production provision, Your Honor?

[00:41:47] Speaker 03:
So I just wanted to respond to an argument there about congressional intent.

[00:41:51] Speaker 03:
So our position here is not that you jump over the text of the statute and you get to intent.

[00:41:58] Speaker 03:
Our position is that both the statute itself, and as you said, Judge Price, on the authoritative interpretation of the SAA, it contains broad language like production, process, vertical integration, that the commission, if it's going to have an authoritative interpretation on this, ought to consider in the first instance.

[00:42:17] Speaker 03:
I mean, just to consider one example, I mean, they sell these PEM kits in a very different way than the typical multi-bit FSS process.

[00:42:26] Speaker 03:
They sell them to affiliated builders.

[00:42:28] Speaker 03:
And so what is the relationship between them and their affiliated builders?

[00:42:31] Speaker 03:
Would that meet the SAA's test for vertical integration?

[00:42:35] Speaker 03:
That is something that was not considered by the commission because the vertical integration standard was introduced by appellate council for the first time on appeal.

[00:42:42] Speaker 03:
And so it's a classic chennery issue in which the commission ought to consider these things as an initial matter.

[00:42:49] Speaker 04:
Thank you.

[00:42:49] Speaker 04:
Thank you, Your Honor.

[00:42:51] Speaker 04:
We conclude the arguments this morning.

[00:42:53] Speaker 04:
We thank all the parties for their arguments.

[00:42:55] Speaker 04:
And this court now will make a recess.