[00:00:01] Speaker 04:
Our next case is Royal Brush Manufacturing versus the United States and Dixon Ticonderoga, 2022-1226, Mr. Gordon.

[00:00:13] Speaker 04:
Do you want to first tell us why we shouldn't grant the government's motion to dismiss?

[00:00:24] Speaker 02:
Yes, Your Honor.

[00:00:25] Speaker 02:
I'd be happy to start with that.

[00:00:30] Speaker 02:
The agency suggests that its own unlawful liquidation of the entries at issue precludes the court from now being able to grant any effectual relief to Royal Brush.

[00:00:45] Speaker 02:
That's not so.

[00:00:47] Speaker 02:
And there are several reasons for that.

[00:00:50] Speaker 02:
The first is that reliquidation is indeed possible.

[00:00:54] Speaker 02:
The zenith rule, which precludes reliquidation, has been limited by this court to actions under section 1516a, while this action is under section 1517.

[00:01:08] Speaker 02:
Second, even in actions under Section 1516A, the court has said there is an exception where the liquidation violates a court restraining order saying that there shouldn't be a liquidation.

[00:01:26] Speaker 02:
And here you have a congressional command in the statute that there shall be no liquidation during the pendency of an Enforce and Protect Act proceeding.

[00:01:37] Speaker 02:
So Congress is entitled to no less deference in its orders than the court is, we'd submit.

[00:01:42] Speaker 05:
But isn't the key question here that 517 specifically provides for judicial review of these decisions by customs without regard to the issue of liquidation?

[00:01:55] Speaker 02:
I agree with that too, Your Honor.

[00:01:57] Speaker 03:
Would you say then, even though Section 514, which is what Zenith is based on, has certain statutory exceptions to it, why doesn't it, I guess my answer is, if there's an exception under 517E1, why isn't that listed under Section 514?

[00:02:18] Speaker 02:
I think it's a completely, I'm not sure that I,

[00:02:23] Speaker 02:
I followed the court with that question, Your Honor.

[00:02:27] Speaker 02:
I mean, the EAPA proceeding, it seems to me, is a completely distinct proceeding that's limited to a very specific question.

[00:02:35] Speaker 02:
What is the revasion?

[00:02:37] Speaker 02:
The other provisions deal more generally with establishing applicable duties that are owed.

[00:02:45] Speaker 02:
Here, there's no dispute about what duties are owed.

[00:02:50] Speaker 02:
The only question is, was there evasion, which is a completely distinct issue.

[00:02:55] Speaker 02:
And Congress has said there shall be a judicial review of it, and moreover has said there shall be no liquidation

[00:03:03] Speaker 02:
while the agency proceeding is pending.

[00:03:05] Speaker 02:
Here, the agency violates its own obligations and then says, oh, well, gee, as a result, Royal Brush is out of luck, and the court's out of luck, because there's nothing the court can do about it.

[00:03:16] Speaker 02:
We don't think that that argument makes common sense, and we don't think it's congruent with the law.

[00:03:27] Speaker 02:
If there are any more questions on that issue, I'm happy to address them.

[00:03:32] Speaker 02:
Otherwise, I'll turn

[00:03:33] Speaker 02:
to the issues that we see with the agency's decision.

[00:03:38] Speaker 04:
Please proceed.

[00:03:44] Speaker 02:
Our claims in this case are fundamentally constitutional in nature based on due process.

[00:03:53] Speaker 02:
As a matter of due process, the agency cannot impose liability on Royal Brush without disclosing to Royal Brush all of the evidence on which it relied.

[00:04:05] Speaker 02:
Yet the agency did exactly that here and says it's entitled to do so because of its own regulations.

[00:04:13] Speaker 04:
It sure looks like there was evasion of the anti-dumping order.

[00:04:18] Speaker 04:
the evidence that the Philippine company didn't have the capacity to produce all that was imported and the products found that were labeled from China?

[00:04:37] Speaker 02:
Well, Your Honor, the whole point of

[00:04:40] Speaker 02:
due process is that Royal Brush never had an opportunity to address that evidence, particularly the evidence about what the capacity of the Philippine manufacturer was.

[00:04:53] Speaker 02:
All that Royal Brush was told, all that the administrative record disclosed was that as a result of the verification proceeding that the agency had determined that

[00:05:07] Speaker 02:
the manufacturer lacked the capacity to produce all the pencils that it shipped to the U.S.

[00:05:13] Speaker 02:
during that period.

[00:05:15] Speaker 02:
And, in fact, what the evidence actually showed, which was not available to Royal Brush, was that, according to the agency's own calculations, which were an extrapolation from Royal Brush's seven orders, which were less than 1 percent of the production capacity that the agency itself said the manufacturer had,

[00:05:36] Speaker 02:
They said that the manufacturer could have produced two out of every three pencils that were shipped to the U.S.

[00:05:43] Speaker 02:
in 2018.

[00:05:45] Speaker 02:
So, yet the agency found that all of the pencils that Royal Brush imported were among this one-third that it said that the manufacturer couldn't have produced.

[00:05:59] Speaker 02:
Royal Brush had no opportunity whatsoever to address any of that because it didn't know the data.

[00:06:06] Speaker 02:
The evidence was not disclosed to Royal Brush.

[00:06:10] Speaker 02:
That is a fundamental violation of due process.

[00:06:14] Speaker 05:
They bracketed all the numbers and just wrote the word number in it, right?

[00:06:22] Speaker 02:
That's correct, Your Honor.

[00:06:26] Speaker 02:
As a result of number plus number,

[00:06:28] Speaker 02:
that we find the manufacturer couldn't have produced many of the pencils that had shipped to the U.S.

[00:06:35] Speaker 02:
And there was no opportunity to respond.

[00:06:39] Speaker 02:
That is, you know, that's the equivalent of saying, well, the witness came in and said that you did A, B, and C, and therefore we conclude that you're liable.

[00:06:56] Speaker 02:
without any chance to probe exactly what the witness said and exactly what the weaknesses were in that.

[00:07:03] Speaker 02:
Moreover, there was a second violation of due process, which was that all of this came up in the verification report, which is at the tail end of the process.

[00:07:14] Speaker 02:
That was new factual information, these calculations, this finding about overall production capacity.

[00:07:20] Speaker 02:
Overall production capacity had not been an issue throughout the proceeding.

[00:07:24] Speaker 02:
the agency had focused exclusively on whether the manufacturer had the capacity to produce the pencils in royal brushes orders, which were seven, and which were a small order.

[00:07:39] Speaker 02:
You're talking not huge quantities of pencils.

[00:07:43] Speaker 02:
That was the focus.

[00:07:45] Speaker 02:
That was the announced purpose of the verification.

[00:07:47] Speaker 02:
And during verification, that was what the agency asked the manufacturer to produce, which was the records relating to those specific orders.

[00:07:56] Speaker 02:
The agency concluded, the verification team concluded, that they weren't happy with the manufacturer's records.

[00:08:05] Speaker 02:
And therefore, they decided on their own

[00:08:09] Speaker 02:
to shift gears and calculate, do an extrapolation from the information they did have of what the manufacturer's overall capacity was.

[00:08:19] Speaker 02:
And then they treated that as the findings of trained auditors which carried the weight of evidence.

[00:08:24] Speaker 02:
That is exactly what the agency said.

[00:08:27] Speaker 02:
But they didn't give Royal Brush the opportunity to respond to any of that.

[00:08:31] Speaker 02:
They didn't tell them what the information was, and they didn't give Royal Brush the opportunity to respond.

[00:08:36] Speaker 02:
Initially, the agency said, this is new factual information.

[00:08:40] Speaker 02:
We'll accept a response from you.

[00:08:42] Speaker 02:
But then they changed their mind after Royal Brush submitted its response and said, no, we've concluded that it's not new factual information, and therefore we will not consider your submission.

[00:08:54] Speaker 02:
It's hard to imagine two more fundamental violations of due process.

[00:08:59] Speaker 02:
Now, beyond that, there are other flaws in the approach that the agency took to reaching its determination here.

[00:09:07] Speaker 02:
Number one, it improperly shifted the burden of proof to Royal Brush.

[00:09:13] Speaker 02:
The statute requires the agency to establish the statutory condition of evasion.

[00:09:21] Speaker 02:
That burden is on the agency.

[00:09:23] Speaker 02:
Yet what the agency did was to shift the burden and say, well, neither Royal Brush nor the manufacturer have proven to our satisfaction that the pencils were manufactured in the Philippines.

[00:09:37] Speaker 02:
That's a reversal of the burden of proof.

[00:09:40] Speaker 02:
Second, the agency applied the wrong standard of proof.

[00:09:45] Speaker 02:
the agency said, we're going to simply rely on substantial evidence.

[00:09:51] Speaker 02:
Well, this court decided several years ago in Rodriguez that substantial evidence is the wrong standard of proof for the agency.

[00:10:01] Speaker 02:
It is the standard of review that this court applies, but that preponderance of the evidence is the applicable

[00:10:09] Speaker 02:
standard in virtually all agency proceedings.

[00:10:13] Speaker 02:
The agency did not apply for conference here.

[00:10:16] Speaker 02:
And to go back to your point, Judge Laurie, about the evidence and the production capacity, if we'd had all of the evidence, we could have made the argument, for example, that according to your evidence, agency, the manufacturer

[00:10:34] Speaker 02:
couldn't have produced one third of the pencils that shipped to the US in 2018.

[00:10:41] Speaker 02:
So that creates the possibility that in any given shipment that there were Chinese pencils.

[00:10:50] Speaker 02:
But it doesn't create the probability that in any given shipment there were pencils.

[00:10:57] Speaker 02:
And it certainly doesn't create the probability that the entirety of all the pencils that Royal Brush submitted

[00:11:04] Speaker 02:
happened to be made in China rather than in the Philippines.

[00:11:08] Speaker 02:
These are important arguments and the outcome of them turned significantly on the burden of proof and the standard of proof, which were misapplied by the agency.

[00:11:21] Speaker 02:
So we submit that this case raises very important and very fundamental questions.

[00:11:29] Speaker 02:
It may just be about pencils, but the issues go far beyond that.

[00:11:34] Speaker 04:
good morning your honors and may it please the court

[00:11:51] Speaker 01:
This court should dismiss this appeal for lack of jurisdiction because all of these entries were liquidated and Royal Brush failed to protest.

[00:11:58] Speaker 05:
You agree, don't you, that 515-17 specifically provides judicial review of an evasion determination, right?

[00:12:07] Speaker 01:
I do, Your Honor.

[00:12:08] Speaker 05:
So they come under 517 and they have a right to judicial review.

[00:12:13] Speaker 01:
they do, but it doesn't say anything about excluding the protest requirements of 1514.

[00:12:19] Speaker 05:
Unlike the 1516, this provides a specific alternative right to review, which doesn't require a protest, right?

[00:12:34] Speaker 01:
It does require, it does allow for a specific right to review, but it doesn't necessarily get Royal Brush out from under the protest requirements because what is under review... Where does 1517 say there has to be a protest?

[00:12:50] Speaker 01:
It is not contained in that statue, but in order for this court to have, in order for there to be standing for Royal Brush to bring this case, because the evasion determination only covers

[00:13:02] Speaker 01:
certain entries, and in here there were five entries that the evasion investigation covered, those cannot be liquidated, or they have to have been protested in order for Royal Brush to preserve its right to maintain the suspension of those liquidations.

[00:13:20] Speaker 01:
And this court has addressed those requirements repeatedly.

[00:13:25] Speaker 05:
Nine and fifteen seventeen.

[00:13:28] Speaker 01:
Fifteen seventeen is the new statute.

[00:13:30] Speaker 05:
We don't have any cases on it, right?

[00:13:32] Speaker 01:
That is correct.

[00:13:33] Speaker 05:
But what this court has... So no case is suggesting that you have to have a protest to come under 1517, and there's no language in the statute that says that either.

[00:13:42] Speaker 01:
That is correct.

[00:13:44] Speaker 01:
But other cases applying the 1514 protest requirements apply with more force here to this specific case

[00:13:54] Speaker 01:
and this set of facts, because what Royal Brush is challenging is not a decision or the action of commerce, but specifically a decision and action by CBP to erroneously liquidate these entries.

[00:14:12] Speaker 05:
Did you make this argument in the CIT?

[00:14:15] Speaker 01:
No, because we were not aware until the conclusion of that proceeding that these entries had been liquidated.

[00:14:28] Speaker 04:
address to process.

[00:14:31] Speaker 01:
Yes your honor.

[00:14:32] Speaker 05:
You seem to say they have no right to the evidence because our regulations don't give you give them a right to the evidence.

[00:14:38] Speaker 05:
I would have thought that under Ohio bail on a long line of Supreme Court cases if you're going to impose a monetary penalty on somebody you had to give them the evidence that supports the finding.

[00:14:50] Speaker 05:
Why is that wrong?

[00:14:52] Speaker 01:
Well this court has addressed specifically in

[00:14:56] Speaker 01:
foreign trade cases under PSC Avisma, what level of due process is required.

[00:15:02] Speaker 01:
And it's simply a notice and a meaningful opportunity to be heard.

[00:15:06] Speaker 05:
Well, how can you have a meaningful opportunity to be heard if you don't have access to the evidence?

[00:15:11] Speaker 01:
Well, they do have access to the public summaries of the evidence.

[00:15:16] Speaker 05:
But you blanked out all the numbers.

[00:15:19] Speaker 05:
How can that be sufficient?

[00:15:21] Speaker 05:
You blank out all the numbers and you say, well,

[00:15:24] Speaker 05:
Our regulations don't give you the numbers.

[00:15:26] Speaker 05:
They don't have a right to the numbers.

[00:15:27] Speaker 05:
How could they defend themselves without the numbers?

[00:15:30] Speaker 01:
Well, it's not that the regulations alone give us a right that allows us to comply with due process.

[00:15:40] Speaker 01:
It's that the disclosure of confidential business information is not something that the government is allowed to do unless they have authority to do that and they don't hear.

[00:15:48] Speaker 05:
You mean because the statute doesn't provide for protective orders, you can't use a protective order mechanism to protect the information?

[00:15:55] Speaker 01:
There is no statutory authority for CBP to do that, which is different than the statutory authority giving commerce the right to promulgate an APO system.

[00:16:07] Speaker 01:
That isn't to say that a court couldn't introduce administrative protective order.

[00:16:12] Speaker 01:
But it's not that power has not been granted to CBP here.

[00:16:16] Speaker 05:
You have no authority to impose a protective order in these circumstances?

[00:16:23] Speaker 01:
There is no statutory authority to do that.

[00:16:25] Speaker 05:
No, but you didn't answer my question.

[00:16:27] Speaker 05:
Are you saying that the agency lacked the authority to impose a protective order on the speaker?

[00:16:34] Speaker 01:
Well, CBP faces concern with respect to disclosing

[00:16:40] Speaker 05:
Now, but you're not answering my question.

[00:16:42] Speaker 05:
Are you saying that the agency, Customs, does not have the authority to impose a protective order to protect this information?

[00:16:51] Speaker 01:
If Customs did that, they would be filling in a gap in the statute that isn't explicitly provided for.

[00:16:56] Speaker 05:
And so, do they have that authority or don't they?

[00:16:59] Speaker 01:
They would be at risk of stepping outside of their statutory mandate.

[00:17:05] Speaker 01:
And that's why they promulgated this regulation.

[00:17:08] Speaker 01:
to fill in that gap.

[00:17:10] Speaker 05:
Filling in the gap is saying you don't get the information.

[00:17:14] Speaker 01:
It's not, though.

[00:17:14] Speaker 01:
Filling in the gap is saying you get a summary of the information.

[00:17:18] Speaker 05:
But you don't get the information.

[00:17:20] Speaker 05:
Come on.

[00:17:20] Speaker 05:
You blanked out the numbers.

[00:17:22] Speaker 05:
That's not giving them the information.

[00:17:24] Speaker 05:
How can you get anything out of a statement bracket number bracket when the numbers are not there?

[00:17:31] Speaker 05:
How can that possibly give you the necessary information?

[00:17:34] Speaker 01:
Well, I think that's a good question that Royal Brush was asked below and had the opportunity to, when they did have an APO in this case, to tell the Court of International Trade just how they were prejudiced by the lack of information.

[00:17:49] Speaker 01:
And yet they couldn't show that this outcome would have been any different or that they... Our decision in Stone, are you familiar with that?

[00:17:56] Speaker 05:
It says that where there's a due process violation, you don't look to the question of prejudice.

[00:18:02] Speaker 01:
Well, in Stone, the case from 1999, though, which relied in part on ex parte communication that was given to a deciding official.

[00:18:11] Speaker 05:
It says specifically that due process violations can't be dismissed on the ground lack of prejudice.

[00:18:22] Speaker 01:
But the employee there that was attempting to make the due process argument needed to show substantial and likely to cause prejudice to the level of a reversible error.

[00:18:35] Speaker 01:
So it wasn't simply that they were denied certain evidence.

[00:18:39] Speaker 01:
It was that they had to make an additional showing of how that did.

[00:18:42] Speaker 05:
Does not the case say that if there's a due process violation, it can't be undone by a theory of lack of prejudice?

[00:18:51] Speaker 01:
But in making the... It does say that, right?

[00:18:54] Speaker 01:
If there's a due process violation, yes.

[00:18:56] Speaker 01:
But in order to establish a due process violation, there has to be more than simply a showing that some evidence was excluded or wasn't... All the numbers.

[00:19:06] Speaker 01:
Pardon me?

[00:19:07] Speaker 05:
The numbers.

[00:19:07] Speaker 05:
All the numbers.

[00:19:09] Speaker 01:
And yet, Royal Brush has not shown how those numbers prejudiced it to the extent that it reached a due process violation.

[00:19:19] Speaker 01:
And in fact, the determination that resulted here didn't even require the production capacity numbers and the extrapolation that Royal Brush is relying on in its argument.

[00:19:30] Speaker 05:
Customs rely on the numbers, right?

[00:19:33] Speaker 01:
Customs relied on a number of things because the facts here were overwhelming.

[00:19:37] Speaker 01:
But primarily, there were invoices that Royal Brush put on the record of its exports.

[00:19:42] Speaker 05:
They relied on the numbers that you blanked out, right?

[00:19:46] Speaker 01:
Customs did not need to rely on extrapolated numbers.

[00:19:49] Speaker 05:
Whether they needed to or not, they did rely on the numbers that were blanked out, right?

[00:19:55] Speaker 01:
But substantial evidence was needed.

[00:19:57] Speaker 05:
Yes or no?

[00:19:57] Speaker 01:
They used those numbers, yes.

[00:19:59] Speaker 01:
And it was included in the verification report.

[00:20:03] Speaker 04:
And what about the provision permitting summaries?

[00:20:08] Speaker 04:
Did that obviate the need to produce the exact data?

[00:20:16] Speaker 01:
That is, that complied with the notice requirement that CBP has promulgated this regulation in order to comply with due process requirements because it cannot disclose

[00:20:29] Speaker 01:
all of the business confidential information.

[00:20:31] Speaker 03:
And so, just so I understand, the summary that was provided that we're talking about is the word number, right?

[00:20:40] Speaker 03:
In certain cases, yes.

[00:20:42] Speaker 03:
And in some cases, it's things like picture of a box, right?

[00:20:46] Speaker 01:
Right, with the description of the type of language on the box.

[00:20:55] Speaker 01:
Yes.

[00:20:55] Speaker 01:
But what was

[00:20:56] Speaker 05:
available to... Can you cite any case in administrative law where withholding the evidence that the agency relied on to reach the result is consistent with due process?

[00:21:10] Speaker 01:
Nothing from this court, Your Honor.

[00:21:12] Speaker 05:
Or any other court, right?

[00:21:17] Speaker 01:
Not that I'm aware of.

[00:21:20] Speaker 01:
But a different standard of due process applies to these administrative proceedings.

[00:21:26] Speaker 01:
I don't know.

[00:21:27] Speaker 03:
Are you saying these particular administrative proceedings or are you saying a different standard applies to all administrative proceedings?

[00:21:36] Speaker 01:
Well, to this administrative proceeding involving foreign trade.

[00:21:41] Speaker 03:
What is your legal basis for that?

[00:21:44] Speaker 01:
Well, the PSC Avisma case, which specifically considered a due process argument in the context of a

[00:21:53] Speaker 01:
administrative review.

[00:21:59] Speaker 01:
But there are also, I'm not aware of any cases where confidential business information, the withholding of confidential business information rose to the level of a due process violation either.

[00:22:12] Speaker 01:
So this is just simply a new area that hasn't been explored.

[00:22:17] Speaker 01:
Again, this is why CBP promulgated the regulations it did in order to come within the trade secrets law and not erroneously disclose information that it wasn't allowed to disclose.

[00:22:30] Speaker 03:
Can I ask you something?

[00:22:30] Speaker 03:
The erroneous concern about the trade secret law intrigued me because, of course, at this point now, that information has been provided.

[00:22:42] Speaker 03:
Why was there a concern about a trade secret violation before and now and so forth?

[00:22:47] Speaker 01:
Well, because the trade secret violation would be triggered if CBP disclosed this information without authority of law.

[00:22:56] Speaker 01:
But once there was a judicial order.

[00:22:59] Speaker 01:
That's right.

[00:22:59] Speaker 01:
But once the Court of International Trade issued a protective order, then it was insulated from that liability because it was allowed to do this subject to authority, legal authorization.

[00:23:11] Speaker 05:
So under the statute, if there's a protective order, there's no problem with the Trade Secrets Act.

[00:23:17] Speaker 01:
Well, it would be authorized by law, and that's the language.

[00:23:20] Speaker 05:
The answer is yes.

[00:23:21] Speaker 05:
There's not a problem with the Trade Secrets Act if there's a protective order.

[00:23:26] Speaker 01:
That is correct.

[00:23:30] Speaker 03:
But again, just to understand, the reason why you're saying that the CBP cannot have a protective order is because there's no express statutory authority for it to have.

[00:23:41] Speaker 01:
Right and in the commerce arena it's been given statutory authority to do that.

[00:23:47] Speaker 01:
CDP has not been given that authority here.

[00:23:51] Speaker 01:
Earlier iterations of this legislation included statutory authority for an administrative protective order but it did not make it into the final statute.

[00:23:59] Speaker 03:
I'm having a hard time understanding why statutory authority to have a protective order would be required.

[00:24:06] Speaker 01:
Well, it's to authorize CBP to disclose information that parties have deemed to be confidential business information.

[00:24:14] Speaker 01:
And as long as they are authorized to do that under a statute, then they cannot be liable elsewhere in the law for disclosing other parties' information.

[00:24:24] Speaker 03:
Even under a protective order.

[00:24:26] Speaker 03:
I'm trying to understand why the protective order wouldn't satisfy.

[00:24:31] Speaker 03:
Let's say they decide, we're going to have a protective order scheme like we do, or like it is purple in the A&E dumping cases, for example.

[00:24:38] Speaker 03:
We're going to implement something like that.

[00:24:41] Speaker 03:
Why would that raise trade secret concerns?

[00:24:44] Speaker 03:
if it's properly implemented.

[00:24:46] Speaker 01:
And so it would be a regulation then, which would be obviously subject to the statutory, I guess, reach that Congress has given CBP.

[00:24:57] Speaker 01:
And so that opens up a question of whether or not CBP has the authority to implement such a regulation, because it is not specifically provided for in the statute.

[00:25:08] Speaker 01:
And like I said, earlier iterations of this legislation did provide for that in the statute.

[00:25:13] Speaker 01:
It was taken out, which

[00:25:15] Speaker 01:
allows us to assume that Congress speaks and when it omits things from what it says, we take that seriously and intended to not allow an APO as a matter of statutory authority.

[00:25:27] Speaker 05:
Is there any indication in the legislative history that it was left out to deny you the authority to have protective orders?

[00:25:35] Speaker 01:
An earlier draft of the legislation that was introduced in the House included it.

[00:25:40] Speaker 01:
It just did not.

[00:25:41] Speaker 01:
That did not.

[00:25:42] Speaker 05:
So there's no indication in the legislative history that Congress thought protective orders were a bad idea, right?

[00:25:48] Speaker 01:
No, just the absence of Congress speaking on this issue, where they have spoken elsewhere on this issue.

[00:25:55] Speaker 04:
Counsel, your time has expired.

[00:25:58] Speaker 04:
Let's hear from Dixon by Tonderoga.

[00:26:02] Speaker 04:
Thank you.

[00:26:03] Speaker 04:
Ms.

[00:26:03] Speaker 04:
Knowles, is it?

[00:26:05] Speaker 00:
Yes.

[00:26:08] Speaker 00:
Good morning.

[00:26:09] Speaker 00:
May it please the court, Felicia Knowles, on behalf of Appellee Dixon Ticonderoga Company.

[00:26:15] Speaker 00:
This court should affirm the CIT's decision for three reasons.

[00:26:19] Speaker 00:
First, Royal Brush did receive due process.

[00:26:23] Speaker 00:
Second, CBP complied with its IPA regulations.

[00:26:27] Speaker 00:
And third, most importantly, Royal Brush has failed to show reversible error.

[00:26:35] Speaker 00:
Not only is the standard of review here highly deferential to the CIT and CBP.

[00:26:41] Speaker 05:
On a constitutional question?

[00:26:44] Speaker 05:
The standard of review is deferential on a constitutional question?

[00:26:47] Speaker 05:
What case says that?

[00:26:48] Speaker 00:
Your Honor, this is not a constitutional question.

[00:26:51] Speaker 05:
Due process is a constitutional question, isn't it?

[00:26:54] Speaker 00:
Your Honor, due process is a constitutional question.

[00:26:57] Speaker 05:
Do we defer to the agency on constitutional questions?

[00:27:00] Speaker 00:
You defer to the agency?

[00:27:01] Speaker 05:
Yes or no?

[00:27:04] Speaker 05:
Do we defer to agencies on constitutional questions?

[00:27:07] Speaker 00:
No, Your Honor, not on constitutional questions.

[00:27:10] Speaker 00:
But as it relates, as argued here by Royal Brush, Royal Brush had the obligation to set forth its arguments in accordance with the Supreme Court's

[00:27:24] Speaker 00:
due process standards in Matthews and it failed to do so in the wage.

[00:27:29] Speaker 05:
They cited a lot of Supreme Court cases.

[00:27:30] Speaker 05:
They cited Ohio Bell, which seems to be pretty much directly in point.

[00:27:34] Speaker 00:
No, Your Honor, I respectfully disagree.

[00:27:37] Speaker 00:
Ohio Bell is not relevant here because, first, it is not an IPA statute.

[00:27:43] Speaker 05:
Second, it relates to facts that do not include... We dismiss Supreme Court authority because it's under a different statute that presents the same issues.

[00:27:52] Speaker 00:
Yes, Your Honor.

[00:27:53] Speaker 00:
In addition, and more importantly, what is different is that in these EPA proceedings, the EPA regulations specifically provide that public summaries, as we were just discussing before, be provided in order to give a reasonable understanding of the substance of the information, and that was not provided in Ohio Bell.

[00:28:16] Speaker 00:
So here, customs followed the regulations that it had available to it to conduct this proceeding.

[00:28:25] Speaker 00:
But more importantly, the reason that Royal Brush has failed to show reversible error is because it is focusing

[00:28:32] Speaker 00:
on these two questions, one on the public summaries and two on the inability to submit rebuttal information.

[00:28:44] Speaker 00:
But our brief details first, why those due process arguments fail.

[00:28:50] Speaker 00:
But even assuming this court agrees with those arguments, it doesn't amount to reversible error because the mountain of evidence

[00:29:02] Speaker 00:
that we have over the course of this proceeding shows substantial evidence of evasion.

[00:29:11] Speaker 03:
First, Royal Brush's own... What's your basis for saying that we can set aside a due process violation because there's substantial evidence supporting the ultimate determination?

[00:29:27] Speaker 00:
Your Honor, the due process review is set forth in Matthews, and Royal Brush failed to address any of those Matthews standards.

[00:29:36] Speaker 03:
I don't feel like you're answering my question.

[00:29:38] Speaker 00:
Then I apologize.

[00:29:39] Speaker 03:
I don't understand the question.

[00:29:41] Speaker 03:
My question is, I don't know of any case law that says where there's a due process violation.

[00:29:46] Speaker 03:
It doesn't matter at all that there's a due process constitutional violation.

[00:29:50] Speaker 03:
And instead, I can just ignore it, because I think the result is right at the end of the proceeding.

[00:29:56] Speaker 00:
If I understand the question correctly, this court has to review whether there is reversible error.

[00:30:04] Speaker 00:
And the due process argument, even if the due process argument you rule in royal brushes favor, it still doesn't amount to reversible error.

[00:30:18] Speaker 03:
Why not?

[00:30:18] Speaker 03:
I mean, it's my understanding of the law that when there is a due process violation,

[00:30:24] Speaker 03:
I can't just say, oh, it's harmless.

[00:30:26] Speaker 03:
It doesn't matter because I don't see there's no prejudice to them because they would have lost anyway.

[00:30:32] Speaker 03:
So I'm asking you for any cases that you may know of that show that my understanding of the law is incorrect.

[00:30:40] Speaker 00:
No, Your Honor.

[00:30:41] Speaker 00:
I don't have any cases that come to mind at the moment.

[00:30:45] Speaker 00:
But per our brief, again, we do not believe that they were not afforded due process.

[00:30:51] Speaker 00:
They were afforded due process.

[00:30:53] Speaker 00:
And even with any failure with respect to these arguments, again, the facts on the record overwhelmingly support evasion that Royal Brush was unable

[00:31:08] Speaker 00:
to address, failed to address, or the Court of International Trade said did not overcome the evidence in the evasion proceedings.

[00:31:19] Speaker 04:
Thank you, counsel.

[00:31:21] Speaker 04:
Thank you.

[00:31:21] Speaker 04:
The time has expired.

[00:31:23] Speaker 04:
Mr. Gordon has some rebuttal time.

[00:31:30] Speaker 02:
I'd like to make one point.

[00:31:35] Speaker 02:
and that is that the statute, the EAPA, does not address confidential business information, period.

[00:31:43] Speaker 02:
It does not say that Commerce has to make a provision not to include confidential business information in public summaries.

[00:31:53] Speaker 02:
Yet Commerce, notwithstanding the statutory silence, said, while we have authority,

[00:31:59] Speaker 02:
to create this provision because we want to see the confidential business information.

[00:32:04] Speaker 02:
So we'll promise people that we won't publicly disclose it.

[00:32:08] Speaker 02:
They put that into regulation.

[00:32:10] Speaker 02:
What they didn't put into regulation was the concomitant provision to share it with Royal Brush or any other respondent.

[00:32:19] Speaker 02:
So when the government stands here and talks about how its hands are tied, I say that's just not true.

[00:32:26] Speaker 02:
The problem here, the lack of due process here,

[00:32:30] Speaker 02:
is a problem of the agency's own creation because its regulations do not afford due process.

[00:32:38] Speaker 02:
Now, in terms of the response to the verification report, its regulation does say on its face that you're entitled to respond to new factual information.

[00:32:48] Speaker 02:
They simply misapplied their own regulation in contravention of what this Court has said and in contravention of any reasonable interpretation of it.

[00:32:59] Speaker 02:
Those, I think, are the main points.

[00:33:01] Speaker 04:
If there are any questions from the court, I'll submit.