[00:00:00] Speaker 03:
The next case is Saha Thai Steelpipe versus United States and Wheatland Tube Company, number 22-1175.

[00:00:07] Speaker 03:
Ms.

[00:00:08] Speaker 03:
Drake, when you're ready.

[00:00:12] Speaker 00:
Good morning, Your Honors.

[00:00:13] Speaker 00:
May I please support Elizabeth Drake on behalf of defendant appellant Wheatland Tube Company.

[00:00:19] Speaker 00:
This court in Hyundai Steel ruled that the U.S.

[00:00:22] Speaker 00:
Department of Commerce may not adjust a respondent's cost reduction to account for a cost-based particular market situation when commerce is performing the sales below cost test on home market sales.

[00:00:35] Speaker 00:
But in reaching this conclusion, the court emphasized that its interpretation of the statute would not lead to absurd results.

[00:00:43] Speaker 00:
In particular, the court rejected appellant's claims that this interpretation

[00:00:47] Speaker 00:
would require commerce to include home market prices in normal value even though those prices only pass the sales flow cost test due to the fact that the costs were distorted by the PMS and there was no adjustment for the PMS.

[00:01:01] Speaker 00:
Instead, the court explained that commerce is not powerless to address home market sales that are affected by a PMS, yet still pass the sales below cost test.

[00:01:13] Speaker 00:
The court pointed specifically to section 1677B A1, stating that it, quote, specifically gives commerce the tools to ensure a proper comparison with the export price.

[00:01:26] Speaker 00:
This is the exact same provision

[00:01:28] Speaker 00:
that Commerce invoked in the first remand results below in this case to find that absent the adjustment in the sales below cost test, the Commerce Department was precluded from performing a meaningful sales below cost test and meeting the goals of the sales below cost test, which is to determine that home market sales are actually in the ordinary course of trade.

[00:01:53] Speaker 00:
Deprived of the tool in the sales below cost test, commerce instead relied on provisions in the normal value statute that state first that home market sales must be in the ordinary course of trade, and second that the ordinary course of trade is defined as excluding those situations in which a particular market situation

[00:02:13] Speaker 00:
prevents a proper comparison with export price.

[00:02:16] Speaker 00:
Excuse me.

[00:02:18] Speaker 00:
Commerce, looking at these two provisions together, one in the normal value statute saying home market prices need to be in the ordinary course of trade, one in the definition section defining the ordinary course of trade as excluding situations affected by a PMS.

[00:02:33] Speaker 00:
Ben said, well, if we can't rely on home market prices under paragraph A4 of the normal value statute, we are allowed to go directly to constructed value for normal value.

[00:02:43] Speaker 00:
And that's what Commerce did in the first remand results here.

[00:02:48] Speaker 00:
Unfortunately, the court below, when it was reviewing Commerce's first remand results, did not have the benefit of this court's opinion in Hyundai's deal due to a lag in timing.

[00:03:00] Speaker 03:
What adjustment?

[00:03:02] Speaker 03:
Did commerce make, though, in those first remand determinations?

[00:03:06] Speaker 00:
In the first remand determination, commerce based normal value on constructive value, a buildup of the cost of production plus an amount for profit.

[00:03:15] Speaker 00:
And in doing that, because it was using constructive value, it was instructed by paragraph E of section 1677B, which explains how commerce is to calculate constructive value.

[00:03:30] Speaker 00:
And it was that section that was amended by Congress to say that where commerce finds that a PMS distorts respondents' costs, they may use any other methodology.

[00:03:41] Speaker 00:
So the other methodology that commerce used was to make an adjustment to Saha Tai's steel costs, hot rolled coil costs, to account for the fact

[00:03:51] Speaker 00:
first, that the US government had found.

[00:03:54] Speaker 03:
Isn't your problem that they really just re-described a way of doing something that we said they couldn't do in Hyundai Steel, which is change, alter the cost of production in determining normal value.

[00:04:10] Speaker 03:
They just tried to push it to a later phase.

[00:04:15] Speaker 03:
That still seems to me to be impermissible under Hyundai.

[00:04:19] Speaker 00:
So under Hyundai, did they make the record?

[00:04:22] Speaker 03:
Sorry.

[00:04:24] Speaker 03:
As I understand it, you first look at normal value and you look at the home market sales and see if there's any of them sufficient so you can use that.

[00:04:32] Speaker 03:
And that's the preferred method.

[00:04:33] Speaker 03:
Yes.

[00:04:34] Speaker 03:
And so here they looked at them.

[00:04:37] Speaker 03:
There were certainly ones that met the criteria for using normal value, right?

[00:04:43] Speaker 00:
Well, no, because what commerce found was that those home market sales were not in the ordinary course of trade.

[00:04:48] Speaker 00:
So there's several different thresholds that have to be met in order for home market prices to be a reasonable basis of normal value.

[00:04:57] Speaker 00:
And one of those thresholds is that those home market sales need to be in the ordinary course of trade.

[00:05:02] Speaker 00:
And in defining the ordinary course of trade in 1677-15C,

[00:05:07] Speaker 00:
Congress said situations in which a PMS prevents a proper comparison are not in the ordinary course of trade.

[00:05:15] Speaker 00:
And so what commerce found is that it could not rely

[00:05:19] Speaker 00:
on those home market prices because doing so would prevent a proper comparison and therefore it would be relying on sales that are not on the ordinary course of trade which is prohibited under the statute.

[00:05:30] Speaker 00:
And Hyundai Steel was very importantly differentiated the cost of production provisions of the statute which are used... Can I just ask you, generally, putting aside the facts which states, if you find

[00:05:43] Speaker 03:
that you can't use normal value for whatever reason.

[00:05:46] Speaker 03:
When you go out to constructive value, when you're looking for how you put together constructive value, where do you get the cost of inputs in a constructive value situation normally?

[00:06:00] Speaker 03:
Don't you look at third party sales and things like that, rather than just adjust the cost of the input in the whole market sale?

[00:06:09] Speaker 00:
Normally you use the respondents cost there may be some elements that are missing that need to be added but 1677 e After it lays out the normal method for calculated constructive value says where PMS affects those costs commerce may use quote any I get that but the question really for me is if we've already said you can't adjust this factor of production under this one subsection and

[00:06:37] Speaker 03:
why we would say that you can just get it in by re-describing it in a certain way rather than just do a different kind of constructive value.

[00:06:45] Speaker 03:
I think this is hard because it does seem like there's a potential for an issue here that's not captured but I'm not sure

[00:06:53] Speaker 03:
how that we can do that without conflicting with Hyundai Steel.

[00:06:57] Speaker 03:
Because it really is the same adjustment, basically, isn't it?

[00:07:01] Speaker 00:
The difference, Your Honor, is that the adjustment issue in Hyundai Steel was under paragraph B, which was not amended by Congress to allow for any other methodology.

[00:07:12] Speaker 00:
Whereas the adjustment that Congress made here in the first remand

[00:07:16] Speaker 00:
was under paragraph E that was amended by Congress to allow Commerce to use any other methodology.

[00:07:22] Speaker 00:
And it was specifically that distinction, the amendment of one paragraph but not the other, that the court relied upon in Hyundai's deal to say this adjustment is not permitted under paragraph Z. That was the issue there.

[00:07:34] Speaker 03:
Correct.

[00:07:34] Speaker 03:
But it's still the same type of adjustment.

[00:07:38] Speaker 03:
Commerce is just trying to get it in.

[00:07:40] Speaker 03:
under a different statutory section.

[00:07:42] Speaker 03:
And I noticed commerce.

[00:07:44] Speaker 03:
I mean, I'm not reading into it.

[00:07:45] Speaker 03:
But commerce is not here to defend that or, I guess, on your side to argue for that interpretation.

[00:07:52] Speaker 00:
But the reason that the court disallowed the adjustment under Hyundai Steel was not just because it opposes any such adjustments.

[00:08:00] Speaker 00:
It was because that section of the statute didn't authorize the adjustment.

[00:08:03] Speaker 00:
This section of the statute does.

[00:08:05] Speaker 03:
So I guess the question for us is, even if it, and just assume this is correct, I think it is, but if it's not, you can tell me.

[00:08:13] Speaker 03:
But if it's the same adjustment that Commerce tried under the earlier subject and that they can't do under B, if they're just trying to re-characterize it and say, well, we can get it in under that section, we need to resolve as a matter of law whether that's consistent with Hyundai or not.

[00:08:30] Speaker 03:
And it seems to me that it's,

[00:08:33] Speaker 03:
there's a little bit of wiggle room there but not much for your side because what we've said is you've got to use these normal value sales and you can't you can't adjust the cost of production in that so if the only thing that's making these below market or sorry not in the ordinary of course a trade is that then why is that permissible to adjust later sorry that was convoluted but

[00:08:58] Speaker 00:
I think I understand, Your Honor.

[00:08:59] Speaker 00:
So it is permissible to adjust later because, as I said, that specific section of the statute does authorize any other calculation methodology, including these adjustments, and also because Commerce undertook the additional analysis to determine that the inability to account for the PMS and the sales below cost test

[00:09:21] Speaker 00:
made home market sales unreliable.

[00:09:23] Speaker 03:
Let me ask it a little bit a different way.

[00:09:26] Speaker 03:
If we've determined that methodology is impermissible, then how is, even if it's under commerce as any other permissible methodology under the other subsection, I can't give you the full numbers, but we know what we're talking about.

[00:09:42] Speaker 03:
Why is it a permissible methodology when we've already said that type of adjustment is not permitted by Congress?

[00:09:48] Speaker 00:
because Hyundai Steel's ruling was limited to paragraph B that has no language about any other calculation methodology and was specifically contrasted with E, which does permit any other calculation methodology.

[00:10:01] Speaker 00:
So there's no tension with Hyundai Steel.

[00:10:04] Speaker 00:
In fact,

[00:10:05] Speaker 00:
once the court in Hyundai Steel was considering whether or not its ruling about the claim meaning of B would lead to absurd results.

[00:10:13] Speaker 00:
No, because commerce does still have power to address the PMS.

[00:10:18] Speaker 03:
Here's my problem.

[00:10:19] Speaker 03:
It's not just, I mean, the case says what it says.

[00:10:23] Speaker 03:
My understanding of that language was,

[00:10:26] Speaker 03:
you have other tools available but commerce is not using another tool it's using the same tool under a different subsection and that seems to be problematic why didn't the commerce really thinks this is a problem why don't they go out and say well we can't use the normal value cost for that because it's

[00:10:45] Speaker 03:
it's not in the ordinary course of trade, and go out and get third-party evidence and say, here's what that product costs in the ordinary course of trade, and we're going to use that cost in the constructive value.

[00:10:56] Speaker 00:
I think Commerce could have done that under the very broad language of any other methodology.

[00:11:01] Speaker 03:
And that's usually what they do in constructive value, isn't it?

[00:11:04] Speaker 00:
That's often what they do, especially in non-market economy cases where they're building up the value in that method.

[00:11:09] Speaker 00:
But here, it wasn't

[00:11:11] Speaker 00:
the nature of the adjustment itself that the court objected to in Hyundai Steele.

[00:11:16] Speaker 00:
It was the fact that that part of the statute did not authorize any kind of adjustment, even the latter type of adjustment just identified by your honor.

[00:11:26] Speaker 00:
And so once commerce was

[00:11:29] Speaker 00:
now operating under constructive value, under paragraph E, where it is allowed to make any other type of adjustments, this adjustment was authorized.

[00:11:38] Speaker 00:
And we believe that Commerce provided the analysis required to explain why it had to rely on constructive value given the inability

[00:11:46] Speaker 00:
to use the sales flow cost.

[00:11:48] Speaker 01:
Can I ask on that, that may be a factual point, but what confused me among other things is the PMS here, is there any evidence that it affected the home market price or value any differently than the export

[00:12:05] Speaker 01:
price, because it seems at least the CIT thought, presumptively at least, it would impact both the same.

[00:12:12] Speaker 01:
So how could that make a proper comparison difficult?

[00:12:15] Speaker 01:
What's the record on that?

[00:12:16] Speaker 00:
Thank you, Your Honor.

[00:12:16] Speaker 00:
There is no specific record that there is any asymmetry in how the hot rolled steel cost affected home market prices versus export prices.

[00:12:25] Speaker 00:
And respectfully, we explain in our reply brief why such a showing is not required, because the anti-dumping statute

[00:12:34] Speaker 00:
It doesn't just require symmetry.

[00:12:37] Speaker 00:
It actually holds normal values to a higher standard.

[00:12:39] Speaker 00:
Normal values, whether they're based on prices or costs, have to be in the ordinary course of trade.

[00:12:44] Speaker 00:
Export prices don't.

[00:12:46] Speaker 00:
There's no requirement that export prices are in the ordinary course of trade.

[00:12:50] Speaker 00:
So for example, when eliminating home market prices that are below cost,

[00:12:56] Speaker 00:
That only happens on the normal value side.

[00:12:58] Speaker 00:
Export prices can be below cost, and there's no adjustment whatsoever.

[00:13:01] Speaker 01:
It sounds like you're acknowledging there's a lack of evidence of an asymmetric impact.

[00:13:06] Speaker 01:
that you say, we didn't have any burden to show an asymmetric impact.

[00:13:10] Speaker 00:
I believe there was a quote from Huss Steel that was cited in a footnote to Hyundai Steel, excuse me, they're all steel cases, assuming that some sort of asymmetry would be required.

[00:13:20] Speaker 00:
And respectfully, I don't believe that any asymmetry is required because there are many instances where the statute requires normal values to meet a higher standard.

[00:13:30] Speaker 01:
Did you have a burden at commerce to show that there was at least a PMS?

[00:13:35] Speaker 00:
Yes.

[00:13:36] Speaker 01:
And whether you met that burden or not, is that disputed any longer in this case?

[00:13:41] Speaker 00:
The court below never reached the substantial evidence issue as to whether or not our PMS allegation.

[00:13:46] Speaker 01:
Is that something that would have to be reached if you prevail on the legal question in front of us?

[00:13:51] Speaker 00:
Yes.

[00:13:51] Speaker 01:
So you can't just win.

[00:13:54] Speaker 01:
The other side has a chance still to challenge that.

[00:13:56] Speaker 00:
Unless the court wanted to resolve that issue.

[00:14:00] Speaker 00:
But no, the substantial evidence issue was briefed but never decided.

[00:14:04] Speaker 00:
Thank you.

[00:14:05] Speaker 00:
Thank you very much.

[00:14:06] Speaker 02:
Thank you.

[00:14:08] Speaker 02:
Mr. Jordan.

[00:14:09] Speaker 02:
Good morning.

[00:14:10] Speaker 02:
May it please the court.

[00:14:11] Speaker 02:
I'm James Durling here for Sahatai.

[00:14:14] Speaker 02:
Let me join the conversation.

[00:14:15] Speaker 02:
I think the discussion so far reflects that the court understands the issues here.

[00:14:20] Speaker 02:
So I think I can be very brief and just sort of summarize where we stand.

[00:14:25] Speaker 02:
First, the court correctly recognized that it's exactly the same adjustment.

[00:14:29] Speaker 02:
In fact, commerce went out of its way repeatedly

[00:14:33] Speaker 02:
in his remand determination to stress, we haven't changed anything.

[00:14:37] Speaker 02:
It's still a cost PMS.

[00:14:39] Speaker 02:
We're not going to a price PMS.

[00:14:41] Speaker 02:
And when they actually made the adjustment, it was exactly the same adjustment they'd made previously.

[00:14:47] Speaker 02:
So the only thing that changed in the remand determination was the legal box they tried to squeeze it into.

[00:14:54] Speaker 02:
But as the discussion just a few minutes ago indicates, in fact, this statute is very specific on what is allowed and what is not allowed.

[00:15:05] Speaker 02:
Commerce did not meet the standard for invoking the provision they're now trying to rely upon.

[00:15:12] Speaker 02:
They claim repeatedly, paraphrasing the statute, that they basically found that there was not a proper comparison of price.

[00:15:21] Speaker 02:
But other than paraphrasing the statute, they repeatedly came back to the same single explanation, the cost is too low.

[00:15:30] Speaker 02:
That's the only explanation they provided.

[00:15:32] Speaker 02:
Well, the cost being too low is symmetrical.

[00:15:35] Speaker 02:
And that's been discussed repeatedly in the court decisions.

[00:15:39] Speaker 02:
In fact, in Hyundai in footnote 11, this court favorably cited that point made by the trade court in that particular case.

[00:15:46] Speaker 02:
It's equally applicable here.

[00:15:48] Speaker 02:
But the key point, Your Honors, is the statutory hook commerce tried to rely upon here

[00:15:55] Speaker 02:
can't be met with what commerce did in the remand.

[00:16:00] Speaker 02:
Proper comparison of cost, ordinary course of trade.

[00:16:04] Speaker 02:
But look at the other words in those statutory provisions.

[00:16:08] Speaker 02:
Nothing in that language suggests that it's a hook for making an adjustment because of improper costs that are too low.

[00:16:16] Speaker 03:
The language is basically- What's the typical way when commerce determines

[00:16:20] Speaker 03:
sales are not in the ordinary course of trade and so therefore they're not qualified for normal value and goes to constructive value.

[00:16:30] Speaker 02:
Well the main thing is they're examining the prices and the way in which they're sold.

[00:16:36] Speaker 02:
Right?

[00:16:37] Speaker 02:
Ordinary course of trade is part of that price provision of the statute.

[00:16:43] Speaker 02:
And that's where commerce completely dropped the ball in this remand because they made no effort to do that.

[00:16:48] Speaker 02:
Now, in fairness, commerce had been presented below with a cost PMS.

[00:16:53] Speaker 02:
But commerce seemed to think they could just kind of change the box.

[00:16:56] Speaker 02:
And that is insufficient.

[00:16:57] Speaker 02:
Let me ask you this hypothetically.

[00:16:58] Speaker 02:
Yeah, no, I understand that.

[00:16:59] Speaker 03:
But hypothetically, if commerce had done the proper, in your view, price comparison and determined

[00:17:07] Speaker 03:
that these sales don't qualify for normal value because they're not in the ordinary course of trade.

[00:17:12] Speaker 03:
And so when they go to constructive value, and assume that's right, can they then make this adjustment to cost for constructive value once they've made a proper ordinary course of trade?

[00:17:24] Speaker 03:
Or do they have to do what I think is the normal thing of look, find other sales from

[00:17:31] Speaker 03:
third party sales or something.

[00:17:35] Speaker 03:
I guess I'm just asking.

[00:17:37] Speaker 03:
The question is, it does seem to me that it's either a hole in the statue that Congress needs to fix or Commerce needs to find some other way.

[00:17:45] Speaker 03:
If the costs of production are somehow unfairly subsidized or below market or something,

[00:17:52] Speaker 03:
Clearly, we said you can't adjust that during the normal value.

[00:17:57] Speaker 03:
Is there a way to get at that in a constructed value determination?

[00:18:03] Speaker 02:
Your Honor, the statute is what Congress gave us.

[00:18:08] Speaker 02:
In this area of the law, the framework Congress gives us is not always kind of the model of perfect clarity.

[00:18:16] Speaker 02:
But as the trade court, I think, correctly emphasized, sequence matters.

[00:18:21] Speaker 02:
The statute provides a very specific sequence and order.

[00:18:25] Speaker 02:
If you aren't happy with home market sales, you need to go through the statutory

[00:18:31] Speaker 02:
statutorily prescribed steps of considering other alternatives.

[00:18:35] Speaker 02:
If you eventually land in constructed value, then there is specific authority in the statute to make an adjustment for costs that are too low.

[00:18:43] Speaker 02:
But you have to get there by following the proper procedure.

[00:18:47] Speaker 02:
You can't just jump there at the very end.

[00:18:49] Speaker 03:
Is your point that it's not necessarily the actual

[00:18:53] Speaker 03:
adjustment made here.

[00:18:55] Speaker 03:
The problem is they did not make the specific findings necessary to kick this into constructive value at all.

[00:19:01] Speaker 02:
Well, first that they did make the specific findings necessary.

[00:19:05] Speaker 02:
The findings that this court in Hyundai made very clear in footnote 10

[00:19:10] Speaker 02:
different footnote 10 I think very prophetically drew a very sharp distinction between the nature of the allegation for not proper comparison of price and the nature of the allegation if it's below cost the costs are too low so footnote 10 is very important they did not do that

[00:19:28] Speaker 02:
And they did not follow the proper procedure of if there's a problem with home market price, do you consider the other alternatives?

[00:19:36] Speaker 02:
Do you go through the proper steps?

[00:19:38] Speaker 02:
And that was something that the trade court stressed, we think, quite correctly.

[00:19:43] Speaker 02:
So we've talked about the narrow statutory authority, which doesn't give commerce the authority that they claimed here.

[00:19:51] Speaker 02:
We talked about the fact that commerce is basically just recycling exactly the same adjustment.

[00:19:57] Speaker 02:
To be honest, the only thing we're left with is this kind of argument about the asymmetry.

[00:20:04] Speaker 02:
In our view, the symmetry is important because that's the statutory provision we're looking at.

[00:20:10] Speaker 02:
We're looking at a provision that talks about making a proper comparison.

[00:20:14] Speaker 02:
It may be true that there are other areas of the dumping law where the statute specifically says

[00:20:20] Speaker 02:
You can do something that results in asymmetry.

[00:20:23] Speaker 02:
But the statute makes that clear when it's allowed.

[00:20:26] Speaker 02:
Here, we have statutory language on its face that talks about making a proper comparison.

[00:20:32] Speaker 02:
And our position is that language does not allow its invocation

[00:20:38] Speaker 02:
for an input cost PMS.

[00:20:42] Speaker 02:
If it's a different kind of PMS, we might have a different case.

[00:20:46] Speaker 02:
If Commerce chose on remand to undertake a different analysis, it would be a different case.

[00:20:52] Speaker 02:
But this case, the one that's before you now, is

[00:20:56] Speaker 02:
commerce basically taking exactly the same set of conclusions, trying to put it in a new legal box and get around this court's decision in Hyundai, which we submit is not permissible and it's not consistent with the statute.

[00:21:11] Speaker 01:
Is your authority for requiring an asymmetric impact of the PMS, is it just the proper comparison language in the statute or is that an issue that's been addressed elsewhere?

[00:21:23] Speaker 02:
It's our position that's the proper interpretation of proper comparison and we know that it has been favorably invoked in numerous trade court decisions and this court's decision in Hyundai in footnote 11.

[00:21:39] Speaker 02:
But we think that is the proper reading of that statutory language.

[00:21:44] Speaker 01:
And your arguments may already address this, but I want to make sure I understand.

[00:21:48] Speaker 01:
So for instance, at page 26 of the blue brief, they say, nothing in the language of the statute itself

[00:21:56] Speaker 01:
limits commerce's ability to take distorted costs into account when determining whether home market prices are in the ordinary course of trade under section 1677-15 and 1677-BA1-BI.

[00:22:12] Speaker 01:
Is it correct?

[00:22:14] Speaker 01:
And if that's incorrect, tell me what in the language of the statute itself limits commerce's ability to do that.

[00:22:21] Speaker 02:
It is not correct.

[00:22:22] Speaker 02:
The reason it is not correct is the provision you cited.

[00:22:25] Speaker 02:
Their hook, ordinary course of trade, specifically uses the statutory terms, and I'm quoting here, price, which is not cost.

[00:22:36] Speaker 02:
It reinforces the use of the word price with the word sold.

[00:22:40] Speaker 02:
You can sell something, but you can't sell a cost.

[00:22:44] Speaker 02:
Nothing in the definition of ordinary course of trade, 1677 paren 15, changes that.

[00:22:52] Speaker 02:
Because 1677 paren 15, the focus is on what has been normal in the trade.

[00:22:58] Speaker 02:
You trade goods at prices.

[00:23:01] Speaker 02:
You don't trade costs.

[00:23:03] Speaker 02:
And the statute specifically also uses the phrase sales and transactions.

[00:23:09] Speaker 02:
So in multiple places, the statute makes very clear that when that is the hook, when it's a home market sales aren't right hook, it has to be based on something wrong with the sales.

[00:23:22] Speaker 02:
And Congress has not given commerce the authority to take a cost problem and stick it in this provision that is explicitly limited to dealing with sales problems.

[00:23:35] Speaker 02:
In the particular PMS language here, same thing, proper comparison, proper comparison of sales of prices, not proper comparison of costs.

[00:23:45] Speaker 02:
So their argument is essentially, if I were to summarize it, if I'm summarizing incorrectly, I'm sure my colleague will correct me, they're trying to make the word situation do way too much duty.

[00:23:59] Speaker 02:
They read situation out of the statute as if it's a carte blanche to do anything.

[00:24:06] Speaker 02:
Because a situation could be anything.

[00:24:09] Speaker 02:
But situation doesn't exist in isolation.

[00:24:11] Speaker 02:
Situation is part of this broader statutory language, which makes it very clear it's about sales and prices, not about cost problems.

[00:24:22] Speaker 02:
If the court has no further questions, I've concluded my argument.

[00:24:26] Speaker 02:
Thank you.

[00:24:27] Speaker 02:
Mr. Drake, I'll give you three minutes for rebuttal.

[00:24:29] Speaker 00:
Thank you very much, Your Honor.

[00:24:30] Speaker 00:
I'd like to begin where Mr. Durling just left off.

[00:24:34] Speaker 00:
and say that 1677-15C is explicitly not limited to just sales prices.

[00:24:41] Speaker 00:
The chapeau says sales and transactions among others.

[00:24:45] Speaker 00:
The first paragraph A is about sales disregarded because they're below cost.

[00:24:49] Speaker 00:
That involves both sales and cost.

[00:24:52] Speaker 00:
Paragraph B is about transactions that are disregarded because they're between affiliated parties.

[00:24:57] Speaker 00:
Paragraph C, Congress specifically chose the word situations, not sales,

[00:25:02] Speaker 00:
not prices, but situations where PMS prevents a proper comparison.

[00:25:07] Speaker 00:
And I believe Congress was authorized to interpret the word situations to encompass the situation it was facing here, where it could not perform a meaningful sales flow cost test because the costs were so distorted by PMS, and therefore it couldn't determine that home market prices were actually in the ordinary course of trade.

[00:25:26] Speaker 01:
What about the argument that references to price and sold and trade all relate not to costs?

[00:25:35] Speaker 00:
Right.

[00:25:35] Speaker 00:
Well, in the price at which the foreign-like product is sold in the exporting country in the usual commercial quantities and in the ordinary course of trade.

[00:25:48] Speaker 00:
So then commerce looks to the definition of ordinary course of trade and situations in which it's not possible to make a proper comparison

[00:25:56] Speaker 00:
are outside the ordinary course of trade.

[00:25:58] Speaker 00:
And so that situation encompasses both the home market sales prices and the costs that were incurred to make those sales.

[00:26:08] Speaker 01:
Do we have any cases yet where we've had to construe what situation means and how broad it is in this statute?

[00:26:13] Speaker 00:
In this specific section, no, Your Honor, I don't believe that you have construed that term.

[00:26:19] Speaker 00:
And the same with the term proper comparison.

[00:26:23] Speaker 00:
I believe it would be far too narrow to say that that only allows a finding of a PMS where there is asymmetry.

[00:26:30] Speaker 00:
Proper and symmetrical are not the same.

[00:26:33] Speaker 00:
There are many reasons a comparison might be improper.

[00:26:36] Speaker 00:
And here, commerce found that a comparison based on home market prices would be improper because there was no way to test whether or not those sales were actually in the ordinary course of trade.

[00:26:47] Speaker 00:
given the large distortions to respondents' costs in this case.

[00:26:51] Speaker 00:
And I believe pages 20 through 22 of Commerce's remand determination are especially helpful in explaining just how large the impact of these distortions was in this particular case.

[00:27:03] Speaker 00:
And therefore, why not taking those distortions into account would prevent a proper comparison.

[00:27:09] Speaker 00:
Thank you.

[00:27:10] Speaker 00:
Thank you.

[00:27:11] Speaker 03:
Thank both parties.

[00:27:12] Speaker 03:
The case is submitted.