[00:00:41] Speaker 01:
Good morning.

[00:00:42] Speaker 01:
Good morning.

[00:00:43] Speaker 01:
May it please the Court, my name is Matt McCullough on behalf of Appellants.

[00:00:48] Speaker 01:
Your Honors, Section 771B of the Tariff Act contemplates that certain agricultural products will satisfy the subsidy attribution conditions set forth therein, and some will not.

[00:01:01] Speaker 01:
This includes the condition that demand for the prior stage product be substantially dependent on demand for the latter stage product.

[00:01:10] Speaker 01:
This appeal challenges, as a matter of law and substantial evidence, an affirmative, substantially dependent finding in the context of a table olive industry where there are two primary uses for raw olives, oil and table olives.

[00:01:25] Speaker 01:
In the period of examination, 92% of all raw olives were used to produce oil.

[00:01:31] Speaker 01:
8% were used to produce table olives.

[00:01:36] Speaker 01:
The majority of table olives were made from dual-use olives equally suited for oil or table applications.

[00:01:45] Speaker 01:
And no matter how you refine the prior stage product contemplated by the statute, olive oil demand dwarfs table olive demand, and most table olives are still made from dual-use olives that can be used for oil.

[00:02:01] Speaker 01:
The statutory term we must consider today is substantially dependent

[00:02:06] Speaker 01:
not the term substantial, the salient statutory criterion is the degree of dependence.

[00:02:14] Speaker 01:
In the remand decision on appeal before this court, the department resorted to a more than half used standard in implying this statutory language.

[00:02:23] Speaker 01:
That interpretation is contrary to law.

[00:02:26] Speaker 01:
It lacks the quantitative and qualitative bases necessary to meet the substantially dependent condition found in the statute.

[00:02:34] Speaker 04:
What, is there a number?

[00:02:36] Speaker 04:
I mean, I'll remember if the government said, yes, anything over 50% is good and below 50% is not.

[00:02:43] Speaker 04:
I mean, we're not talking about picking a finite number.

[00:02:45] Speaker 04:
We're talking that the issue is whether or not this 55.8% or whatever is substantially dependent.

[00:02:52] Speaker 01:
That's correct, Your Honor.

[00:02:54] Speaker 01:
We wouldn't argue that there isn't a finite number that establishes substantially dependent.

[00:02:59] Speaker 05:
Would you say, what number did you say is less than 55?

[00:03:04] Speaker 01:
No, I'm saying, Your Honor, in the context of the table all of industry, it can't be 55%.

[00:03:10] Speaker 01:
When you look at the quantitative and qualitative context of this industry.

[00:03:15] Speaker 04:
So what number would you pick?

[00:03:17] Speaker 04:
Are we in the business of picking numbers here?

[00:03:21] Speaker 04:
uses words like all or substantially all.

[00:03:25] Speaker 04:
So what does that mean, over 90%?

[00:03:29] Speaker 01:
Well, Your Honor, I think the simple answer to that, so all or substantially all, is part of the statutory test.

[00:03:37] Speaker 01:
And all or substantially all can't be 55% on the face of it.

[00:03:41] Speaker 01:
55% doesn't matter.

[00:03:42] Speaker 04:
Well, you say it's part of the test.

[00:03:43] Speaker 04:
The words in the statute are substantially dependent.

[00:03:47] Speaker 04:
It doesn't say all, and it doesn't say substantially all, right?

[00:03:51] Speaker 01:
No, Your Honor, it says substantially dependent, and that term encapsulates two important elements, a quantitative and qualitative element.

[00:04:00] Speaker 01:
All are substantially all, and single continuous line of production.

[00:04:04] Speaker 01:
And we know that because of very, very precise

[00:04:08] Speaker 01:
well-articulated, thorough legislative history, as well as a very thorough articulation of the rule that was codified by Congress, offered by the Department of Commerce in the Port Case, 1985 Port Case.

[00:04:23] Speaker 03:
But that's not typically how we do statutory interpretation.

[00:04:27] Speaker 03:
We look at the text, which is substantially dependent.

[00:04:31] Speaker 03:
We don't go back and say what were senators

[00:04:35] Speaker 03:
thinking about at the time that they came up with substantially dependent.

[00:04:40] Speaker 01:
You're right, Your Honor, but it's for that.

[00:04:42] Speaker 01:
So two points.

[00:04:44] Speaker 01:
One, it's not just the floor statements of the sponsors of the amendment in the Senate.

[00:04:49] Speaker 01:
We also have a conference committee report that said the intent of Congress was to codify the rule articulated by the Commerce Department.

[00:04:58] Speaker 01:
But we can look at the terms themselves.

[00:04:59] Speaker 03:
But it doesn't say every last little detail of the rule that was being applied in one or two particular cases, does it?

[00:05:07] Speaker 04:
If they were going to codify the rule, they would have put the language of the ruling.

[00:05:12] Speaker 01:
In effect, they did, Your Honor, through the legislative history and through the statements and the conference committee report saying, we are codifying the rule that was articulated in port from Canada.

[00:05:24] Speaker 03:
Isn't it an awful big leap, for instance, the single continuous line of production?

[00:05:28] Speaker 03:
If they thought this test only applied to single continuous lines of production, wouldn't they have told us that in the statutory language?

[00:05:36] Speaker 01:
Your Honor, again, my position would be they do tell us that through the words substantially dependent.

[00:05:44] Speaker 01:
And maybe we can take a look at the plain meaning of substantially dependent, and we can get there.

[00:05:50] Speaker 01:
Now, the plain meaning of substantially dependent is largely but not wholly contingent.

[00:05:56] Speaker 01:
Now, dependent or contingent, those reflect conditions of, it reflects an existential condition.

[00:06:03] Speaker 01:
right, that must be considered in the context of raw agricultural products.

[00:06:07] Speaker 01:
That's what this provision is about.

[00:06:09] Speaker 01:
So you have to ask yourself what uses are available to such products and not merely what they are used for.

[00:06:17] Speaker 01:
In some, Congress chose the word dependent, but it did more than that, an existential term.

[00:06:22] Speaker 01:
And then it magnified it by placing next to it the term substantially, substantially dependent

[00:06:30] Speaker 01:
That term has much greater weight than the emphasis, I think, the US, the United States, places on the term substantially alone.

[00:06:38] Speaker 01:
It's substantially dependent.

[00:06:39] Speaker 01:
And that term is consistent with the rule articulated by commerce in court from Canada and consistent with, I think, the unambiguous congressional intent to codify that rule.

[00:06:52] Speaker 04:
Let me ask you, the government, I think, makes the argument or makes a statement that what is substantially dependent naturally differs based on the facts and circumstances.

[00:07:02] Speaker 04:
you meet to a particular industry.

[00:07:03] Speaker 04:
Do you agree with that?

[00:07:05] Speaker 01:
I agree, which is why I think you have to look at that term in the context of the table olive industry and the raw olive industry in this case.

[00:07:14] Speaker 01:
And I think when you look at the record of this case.

[00:07:16] Speaker 04:
Well, does that suggest that there's a certain amount of deference that the commerce has to review the entire industry?

[00:07:23] Speaker 04:
And what is our review of that?

[00:07:27] Speaker 04:
What is our standard of review on that?

[00:07:29] Speaker 01:
I agree that each industry will present a different context that you have to look at in order to arrive at a substantially dependent finding.

[00:07:40] Speaker 01:
And in this case, the table olive industry has a very specific context.

[00:07:44] Speaker 01:
And that is a context in which olive oil dwarfs on a consumption basis for raw olives, table olives.

[00:07:56] Speaker 01:
Dual use olives are the majority of olives used to consume, to produce table olives.

[00:08:06] Speaker 01:
Dual use olives are equally suited to olive oil.

[00:08:11] Speaker 01:
I think in the context of substantially dependent demand, you could never say that those dual use olives are dependent on table olive demand.

[00:08:22] Speaker 01:
they would easily be absorbed by a much, much larger consumption base for olive oil.

[00:08:28] Speaker 04:
So that's a different issue than the one we've been talking about.

[00:08:31] Speaker 04:
That's not a statutory construction issue.

[00:08:34] Speaker 04:
That's kind of like, what's the sausage that goes in to coming up with that?

[00:08:40] Speaker 01:
Well, I do think it actually goes directly to the statute and the term dependence.

[00:08:46] Speaker 01:
I think it's directly linked to that.

[00:08:48] Speaker 01:
You have to assess dependence and not merely use of the raw aggregate.

[00:08:52] Speaker 04:
Fair enough.

[00:08:53] Speaker 04:
I think we've been focusing more on the numerical substantially.

[00:08:59] Speaker 01:
But I do think these concepts that are encapsulated and substantially dependent, for example, single continuous line of production, that is the discipline embedded in the statute to ensure you have a reasonable later stage product.

[00:09:14] Speaker 01:
And it also is a qualitative assessment of dependence, where you have a situation where a raw agricultural product has little or no other use.

[00:09:24] Speaker 01:
And that is the very essence of dependence, and that is the statutory term we're really focused on, is dependence.

[00:09:33] Speaker 05:
If we didn't have any dual-use varieties in this case, all the Blanca and the Pennsylvania and the smaller dual-uses, in this case, we'd certainly be a lot simpler.

[00:09:47] Speaker 05:
But I would think then,

[00:09:51] Speaker 05:
that you would have separate lines of production.

[00:09:56] Speaker 05:
Would you not, even though there's a little bit of bleed over from the mill olives, olives cultivated from mill versus olives cultivated from table.

[00:10:06] Speaker 05:
There's only a little movement in one direction.

[00:10:09] Speaker 05:
Looking at 2016, I know later years have changed.

[00:10:14] Speaker 05:
Would that satisfy, in your view, the test for a single line of production?

[00:10:20] Speaker 01:
Let me see if I understand your question correctly.

[00:10:23] Speaker 01:
First of all, this is really a hypothetical.

[00:10:26] Speaker 05:
I understand.

[00:10:27] Speaker 05:
I'm focusing on the table olive component of those two lines of production.

[00:10:33] Speaker 05:
Right.

[00:10:34] Speaker 05:
Is that discrete enough to be a single line of production going from the non-dual use table olives cultivated for table usable for the most part only in table, all the way to the table?

[00:10:50] Speaker 01:
I don't believe so because, Your Honor, in that situation, I think you are, in essence, gerrymandering the prior stage product.

[00:10:59] Speaker 01:
Because what you're doing, are you assuming that there is no existence of dual-use solids?

[00:11:05] Speaker 01:
Are you trying to, OK.

[00:11:06] Speaker 01:
Yes.

[00:11:06] Speaker 05:
You're starting with the assumption that there are no dual-use solids.

[00:11:09] Speaker 01:
I think that would be a very different fact pattern, a very different context.

[00:11:13] Speaker 05:
Well, what you're doing then is when you're talking about a single line of production, are you saying they can't really be any legal?

[00:11:23] Speaker 01:
I think the rule that was articulated by commerce and that was codified contemplates that there should be little or no other bleed over.

[00:11:34] Speaker 01:
That's correct.

[00:11:35] Speaker 03:
One question about, you've got various substantial evidence disputes, but particularly about the carcinoma olives that are excluded by commerce.

[00:11:48] Speaker 03:
Have you shown any error, any harm to you from that alleged error?

[00:11:53] Speaker 01:
I think that error, the significance of that error, Your Honor, is in the denominator of the department's dependence ratio.

[00:12:05] Speaker 01:
Because what they've done is taken a dual-use olive, Casarania.

[00:12:10] Speaker 01:
They have excluded that portion of it that was grown for oil but used for table.

[00:12:19] Speaker 01:
They assume that none of that casserina volume was grown for table to begin with.

[00:12:25] Speaker 01:
And therefore, although we know from the record that there was 41,000 tons.

[00:12:30] Speaker 03:
But did they exclude it from the numerator and the denominator?

[00:12:35] Speaker 01:
By leaving some casserina in the numerator, because they didn't completely exclude it, they should have.

[00:12:42] Speaker 01:
included casarania, including that component used to make oil, much like the e blanca in the denominator.

[00:12:48] Speaker 03:
So you do say you were harmed because, what, it made the overall 55% higher than it should have been?

[00:12:54] Speaker 01:
That's correct.

[00:12:55] Speaker 05:
Where do you find the inclusion of casarania, in part, in the numerator?

[00:13:02] Speaker 01:
In the numerator, Your Honor.

[00:13:03] Speaker 05:
Because I know the understanding that what commerce did was to leave out casarania altogether, since they didn't have the data.

[00:13:22] Speaker 05:
of casillania between table and nil is the same as pokeblanka, for example, then that affects the ultimate numbers a little bit, a couple percent, but not fundamentally.

[00:13:35] Speaker 05:
Where do you get that casillania was included in the numerator?

[00:13:38] Speaker 01:
I didn't see that.

[00:13:39] Speaker 01:
So you have to start with the base of the numerator.

[00:13:45] Speaker 01:
And what the Commerce Department assumed at the very beginning from the base of the numerator using their category-based data is that Casareña is not there.

[00:13:54] Speaker 01:
They said this is the number for the other varietals, excluding Casareña.

[00:14:01] Speaker 01:
Well, they assumed it wasn't there, but if you look at

[00:14:10] Speaker 01:
This is appendix 11643, which is the ICA data, which is relied upon by the department on the periphery of its analysis to do some of its computations.

[00:14:21] Speaker 01:
If you look there, this is what the Commerce Department claims are olives grown for table.

[00:14:30] Speaker 01:
And you will see that casserina grown for table is 45,000 tons.

[00:14:36] Speaker 01:
So there are 45,000 tons in their base numerator that they simply assumed did not include those 45,000 tons.

[00:14:44] Speaker 01:
The exclusion that they affected was to take the casserina grown for oil but was used for table.

[00:14:53] Speaker 01:
based on a ratio analysis.

[00:14:56] Speaker 01:
So there is Kasserina in the numerator, but they didn't do anything with the denominator as they did with OE Blanca.

[00:15:02] Speaker 01:
And because these are dual-use olives, and because the oil market is so massive compared to table, and if you look at the experience of OE Blanca, the volume of OE Blanca used for oil almost approaches the total volume of raw olives used to produce table olives.

[00:15:20] Speaker 01:
And so the assumption that Kasserania wouldn't have a significant impact on the denominator, I think, is invalid.

[00:15:28] Speaker 01:
It's a dual-use olive.

[00:15:29] Speaker 01:
You would expect it to have a large oil component that would be in there, much like the ojiblanca.

[00:15:35] Speaker 05:
Is it reasonable to assume that the breakdown between oil and table ultimate use in Kasserania is roughly the same as with ojiblanca?

[00:15:47] Speaker 01:
I think that is as reasonable, Your Honor, as the department's ratio analysis to assume to break down the different varietals that are in that volume of oil used for table that they didn't perform the exclusion on.

[00:16:02] Speaker 05:
Was that a yes or a no?

[00:16:04] Speaker 01:
I think it's reasonable to assume yes, because they are dual-use solids.

[00:16:09] Speaker 04:
All right.

[00:16:09] Speaker 04:
Let's hear from the other side in the next session in double time.

[00:16:12] Speaker 01:
I'm sorry, Your Honor?

[00:16:13] Speaker 04:
Let's hear from the other side.

[00:16:14] Speaker 01:
Oh, yes.

[00:16:15] Speaker 01:
I see my time is up.

[00:16:26] Speaker 04:
11 minutes and the colleague is taking the floor.

[00:16:29] Speaker 04:
Yes, Your Honor.

[00:16:30] Speaker 05:
Could you just straighten me out with respect to the last issue, that whether Casareño is in fact included in Commerce's numerator?

[00:16:38] Speaker 00:
It is not, Your Honor.

[00:16:39] Speaker 00:
It is neither included in the numerator or the denominator.

[00:16:42] Speaker 00:
That's explained at page 58 of the appendix, which is Commerce's second remand redetermination.

[00:16:49] Speaker 00:
And you can also see that from the actual calculation, which is found on page

[00:16:58] Speaker 00:
Excuse me.

[00:17:02] Speaker 00:
Page 11895, I apologize, it is the font is a little small, but if you look at the... It's a lot smaller.

[00:17:14] Speaker 00:
But if you look at step five, where Commerce actually does the ratio calculation, the denominator, which is the 1,024,026 tons that comprises the Manzanilla, Cordal, Carrasquena, and Huelanca varietals, it's just simply not the case.

[00:17:36] Speaker 00:
That was the whole entire point of removing it from the denominator.

[00:17:41] Speaker 03:
What about the 45,000 tons of it listed in the ICA data?

[00:17:45] Speaker 03:
What happens to that?

[00:17:48] Speaker 00:
That is explained.

[00:17:58] Speaker 00:
Commerce does explain that calculation at page 280, I believe.

[00:18:09] Speaker 03:
2302 I'm sorry.

[00:18:12] Speaker 00:
That's the wrong determination

[00:18:34] Speaker 00:
At your time, I'll sign the page number.

[00:18:37] Speaker 05:
Thank you.

[00:18:38] Speaker 05:
That's fine.

[00:18:39] Speaker 00:
Yes, we'll do, Your Honor.

[00:18:41] Speaker 00:
I would like to return, first of all, may it please the court, and I would like to return to the statutory interpretation question.

[00:18:50] Speaker 00:
we fundamentally disagree that Congress had any sort of specific quantitative threshold in mind when it enacted the statute that is not reflected in the language that Congress used in legislative history or indeed even in the prior administrative determinations.

[00:19:11] Speaker 00:
And we would, I think,

[00:19:13] Speaker 00:
I respectfully disagree somewhat with the trial court to the extent that the trial court seemed to infer that there had to be some sort of 50% threshold.

[00:19:24] Speaker 00:
We don't think that there is one.

[00:19:25] Speaker 00:
Commerce has never stated that that is its practice.

[00:19:29] Speaker 04:
So what do we do with that?

[00:19:32] Speaker 04:
If it's a question of interpretation, is that interpretation on a case-by-case basis

[00:19:38] Speaker 00:
Yes, Your Honor.

[00:19:39] Speaker 00:
And I think that is the case for two rates.

[00:19:42] Speaker 04:
And is that a step one Chevron question, then?

[00:19:46] Speaker 00:
Or what?

[00:19:47] Speaker 00:
I think it's fundamentally a step two determination, because the term substantial, substantially dependent, necessarily has both a quantitative and a qualitative aspect to it.

[00:20:00] Speaker 00:
And it's a broad term.

[00:20:02] Speaker 00:
Substantially could mean more than a scintilla.

[00:20:05] Speaker 00:
It could also mean, as here, something that, on the facts of this record, was more than 50%.

[00:20:13] Speaker 05:
If the Supreme Court should, for example, decide that Chevron is no longer good law, what happens for your Chevron step two?

[00:20:21] Speaker 00:
Well, we hope that your ODIF is still good law after that.

[00:20:27] Speaker 05:
You mean specifically in respect to commerce issues?

[00:20:31] Speaker 00:
Exactly, Your Honor.

[00:20:35] Speaker 05:
Assume you don't have a shadow at all.

[00:20:39] Speaker 05:
What is your position as to what this statute means?

[00:20:43] Speaker 00:
We believe that the statute requires some, I mean, we agree that the statute requires commerce to evaluate the degree to which demand for the prior stage product is dependent on the latter stage project in consideration of the structure and the makeup of the particular agricultural market.

[00:21:04] Speaker 00:
Substantially dependent, I think, certainly means something more than de minimis.

[00:21:09] Speaker 00:
But it does not necessarily have a 50% or any specific threshold.

[00:21:20] Speaker 04:
You say in your brief, it naturally differs based on the facts and circumstances you meet to a particular industry given.

[00:21:28] Speaker 04:
But beyond that, you have no range.

[00:21:33] Speaker 00:
What I can point the court to is the Commerce's 2013 administrative determination from shrimp from China, where Commerce explained that on the facts of that case, even a 25% ratio would constitute substantial dependence.

[00:21:50] Speaker 00:
because if 25% of the market for the latter stage product were to evaporate, that would essentially lead to a collapse of the demand for the prior stage product.

[00:22:06] Speaker 00:
So I think if the court is looking for some specific

[00:22:09] Speaker 00:
That's a number that Congress has pointed to as wouldn't be a minimum that would meet the statutory definition.

[00:22:19] Speaker 05:
Dr. Hardley, one of the ways that the Supreme Court has identified the manner in which Congress can act with respect to agencies is to say that, and this is separate from Chevron step two, or at least it's

[00:22:39] Speaker 05:
a different component of the overall shadowing analysis.

[00:22:43] Speaker 05:
It is to say that Congress can give explicitly or even implicitly give an agency the authority to make determinations as to the application of the statute in particular cases, separate from the general shadowing to argument that, well, agencies have an inherent power to do this.

[00:23:05] Speaker 05:
But rather saying that when Congress says, and by the way,

[00:23:09] Speaker 05:
the head of the VA can issue regulations to define what survival means.

[00:23:15] Speaker 05:
Then there's a clear allocation, delegation of authority.

[00:23:20] Speaker 05:
Do you think this case falls within that category, even though there's no express delegation to the Secretary of Commerce?

[00:23:28] Speaker 00:
Yes.

[00:23:30] Speaker 00:
And as this court has said many times, that commerce is considered the master of the anti-dumping law.

[00:23:36] Speaker 00:
In the same regard, it's the master of the countervailing duty law.

[00:23:39] Speaker 00:
So I think that that has been a very well-established understanding that Congress does not always identify the specific fact patterns or the specific methodological tests that commerce has to use

[00:23:55] Speaker 00:
it necessarily has to delegate to the Secretary of Commerce to do whatever.

[00:24:00] Speaker 05:
But that sounds more like a step, a conventional Chevron step two analysis, rather than a delegation analysis.

[00:24:08] Speaker 05:
I'm looking to see if there's anything in the history or anywhere else that can give us a way of saying, this is more of a delegation case than it is a preference case.

[00:24:23] Speaker 00:
You see what I'm saying?

[00:24:25] Speaker 00:
I do understand the distinction that the court is drawing.

[00:24:27] Speaker 00:
And I don't have a specific citation to a statute with regard to overall delegation to the secretary in matters of countervailing duty law.

[00:24:39] Speaker 00:
Though I feel confident that there is one.

[00:24:41] Speaker 00:
I don't have it.

[00:24:42] Speaker 04:
But are we talking about necessarily overall delegation, which means we get no review?

[00:24:47] Speaker 04:
No.

[00:24:47] Speaker 04:
I agree with your question.

[00:24:50] Speaker 04:
The word substantially invites somebody having to do something.

[00:24:54] Speaker 04:
And presumably, that person would be someone with expertise.

[00:24:58] Speaker 04:
But then we can play around with whether or not we get to decide the essence of what substantially means.

[00:25:08] Speaker 04:
So you make your case about why this is substantial, and we review it perhaps differentially.

[00:25:14] Speaker 04:
but applying the word substantial, right?

[00:25:18] Speaker 00:
We absolutely agree.

[00:25:19] Speaker 00:
If the court finds that the determination here, based upon the facts of this record, does not comport with a substantially dependent language, it's an unreasonable application.

[00:25:32] Speaker 04:
So on that point, just moving on to your friends, I'll make a major argument about the market here.

[00:25:39] Speaker 04:
How do you think you can say about that?

[00:25:40] Speaker 00:
Well, I think we disagree with a few of the characterizations of that market.

[00:25:46] Speaker 00:
What commerce found was, I think was particularly with respect to the dual-use olives, is that yes, it is absolutely true that they can be used either for mill or table.

[00:25:59] Speaker 00:
But the factor means that at the beginning, that there is different size, quality, blemish,

[00:26:05] Speaker 00:
requirements for both table and for oil and as a matter of practice farmers know at the beginning of the growing season

[00:26:16] Speaker 00:
where the destination of those olives are likely to be.

[00:26:20] Speaker 00:
Because there's different insurance premiums, there's different cultivation practices, there's different irrigation practices.

[00:26:28] Speaker 00:
And we also agree that there is some degree of fungibility or fluidity, perhaps.

[00:26:34] Speaker 05:
Well, the joker in the deck is the dual use, right?

[00:26:37] Speaker 05:
That would mean boncana, casserina, and the minor flavors.

[00:26:42] Speaker 05:
And they are not dedicated to one or the other at the outside, as I understand it.

[00:26:49] Speaker 00:
No, they are, Your Honor.

[00:26:50] Speaker 00:
I think that's what we're saying, is that it's from a practical perspective, because there are different irrigation practices.

[00:26:57] Speaker 00:
Oh, I see.

[00:26:57] Speaker 05:
I didn't know what you were saying.

[00:26:58] Speaker 05:
So a given dual use olive may be cultivated on dry setting,

[00:27:06] Speaker 05:
less pending, less pruning.

[00:27:09] Speaker 00:
Yes, right.

[00:27:11] Speaker 00:
So I think that's a reasonable... Those olives may end up in the mill.

[00:27:16] Speaker 00:
They may end up in the mill because they don't meet the quality standards, for example.

[00:27:20] Speaker 03:
So you're not defending the CIT's interpretation.

[00:27:23] Speaker 03:
What exactly would be the statutory interpretation you would have us adopt?

[00:27:28] Speaker 00:
Well, I guess to go back to the point of I don't know that the court has to adopt it.

[00:27:34] Speaker 00:
I think it has to adopt a particular holding about what that language specifically means, because I don't think that there is a plain language answer to it.

[00:27:42] Speaker 00:
What the court can do is find that in this circumstance, on this record, a 55% consumption ratio does meet the statutory definition of substantially dependent, which is something that requires

[00:27:55] Speaker 00:
some degree of dependence.

[00:27:58] Speaker 03:
If we were to actually use the case to construe the statute, you would have us strike the most, or mostly, or greater than 50% from what the trade court said.

[00:28:09] Speaker 00:
I think that's fair.

[00:28:10] Speaker 00:
And there were other dictionary definitions that the trial court identified, such as words like essential, material, that the court did not adopt for whatever reason.

[00:28:22] Speaker 04:
I will let my colleague speak.

[00:28:25] Speaker 00:
Thank you.

[00:28:41] Speaker 06:
Thank you.

[00:28:46] Speaker 02:
May it please the court, Raymond Paretsky.

[00:28:48] Speaker 02:
The U.S.

[00:28:49] Speaker 02:
right-ball of industry appreciates the opportunity to appear today.

[00:28:52] Speaker 02:
Appellant's faulty interpretation of Section 771B would leave numerous agricultural industries without recourse from unfair foreign subsidies, contrary to the intent of Congress.

[00:29:05] Speaker 02:
Building on what the Council for the Government said, I know that the black defines substantial

[00:29:10] Speaker 02:
as important, essential, and material, and considerable in amount or value.

[00:29:15] Speaker 02:
Nothing in this definition requires a strict 50% minimum standard.

[00:29:19] Speaker 02:
Would 8% be enough?

[00:29:21] Speaker 02:
Because at one point, commerce thought it was.

[00:29:23] Speaker 02:
I think not.

[00:29:23] Speaker 02:
I think not.

[00:29:24] Speaker 02:
But on its first remand, commerce moved on from that to 8% and came up with a different definition.

[00:29:31] Speaker 03:
If we did as you want us to do here, what's to prevent commerce from going back to 8%?

[00:29:38] Speaker 02:
I think that what is substantial is going to vary based on the context in the case.

[00:29:45] Speaker 02:
We know about raspberries, for instance, which the congressional drafters referenced.

[00:29:50] Speaker 02:
Raspberries have a lot of downstream products, and it's possible that frozen raspberries are 12% and

[00:29:57] Speaker 02:
Purees eight percent and but there's two other products jam and fresh because fresh raspberries are edible Delicious not like olives.

[00:30:07] Speaker 02:
They could be 40 each.

[00:30:08] Speaker 02:
I think in that context both of them are substantial.

[00:30:12] Speaker 02:
It may be that

[00:30:13] Speaker 02:
fresh is 50% and there isn't a single process product.

[00:30:19] Speaker 02:
All the process products together don't equal 50 and yet perhaps the two that are the most significant would qualify as substantially dependent.

[00:30:30] Speaker 02:
What's the driver for the demand?

[00:30:32] Speaker 03:
Is the right interpretation one that allows for something as low as maybe single digits to potentially be proven to be substantially dependent?

[00:30:42] Speaker 02:
It's hard for me.

[00:30:43] Speaker 02:
I mean, I wouldn't set a standard, but it's hard for me to imagine a case where single digits is sufficient in context.

[00:30:50] Speaker 02:
But I could certainly imagine cases where there's two, even three processed products that are potentially all significant.

[00:31:00] Speaker 02:
I don't think we can rule that out.

[00:31:01] Speaker 05:
When you conclude, as you just did, that single digits really probably wouldn't cut it.

[00:31:07] Speaker 05:
What's going through your mind analytically as to why you think single digits won't work?

[00:31:15] Speaker 02:
It has to be substantially dependent.

[00:31:17] Speaker 02:
There has to be some element that the demand is being driven by the demand for the latter product.

[00:31:24] Speaker 02:
In this case, I would argue that

[00:31:26] Speaker 02:
Because table and returning to your dual use table olives When dual use olives are grown, it's the table olives that are the driver, right?

[00:31:36] Speaker 02:
I mean nobody if you put in the money to grow dual use olives for table intention, right?

[00:31:42] Speaker 02:
You're spending a lot of money on pruning you're on the good land You know, you're you're really going out of your way to do it

[00:31:50] Speaker 02:
What goes to Mill from that is going to be a disappointment.

[00:31:55] Speaker 02:
That's right.

[00:31:56] Speaker 02:
So there's no question that you have substantial demand, whatever the figure happens to be in a particular year.

[00:32:04] Speaker 02:
And here, I think the figure is diluted because after the first remand from the court

[00:32:10] Speaker 02:
forced commerce to redefine the prior stage product, it included the dual-use olives that are grown for mill.

[00:32:18] Speaker 02:
But those dual-use olives that are grown for mill aren't getting the benefits of that extra money that's not in the right land and everything like that.

[00:32:28] Speaker 02:
So they're never going to make, just one or two percent of them in any given year are good enough to go to table.

[00:32:34] Speaker 02:
It's clear that the higher profit product, the table olives, is what is driving the demand.

[00:32:40] Speaker 02:
So I think that while we could argue over what the percentage should be, I don't think there is a minimum.

[00:32:47] Speaker 02:
It's context.

[00:32:48] Speaker 02:
I see them out of time.

[00:32:50] Speaker 02:
I think that in this case, it's very clear that they're substantial.

[00:32:53] Speaker 05:
So you would be happier if the second time around, I guess it was, had been the prevailing view in that

[00:33:04] Speaker 05:
I think so.

[00:33:08] Speaker 02:
Okay.

[00:33:09] Speaker 02:
And I think we do.

[00:33:10] Speaker 02:
Okay.

[00:33:12] Speaker 02:
Thank you very much.

[00:33:24] Speaker 01:
Very quickly, your honors.

[00:33:27] Speaker 01:
Let me address the substantial evidence arguments, because I think they'll illuminate both the statutory issue and some of the evidentiary errors.

[00:33:35] Speaker 01:
And I'll reduce it to 70,000 tons of dual-use olives.

[00:33:38] Speaker 01:
And context is important here.

[00:33:40] Speaker 01:
The department had to concede that dual-use olives are equally suited for table applications or oil applications.

[00:33:46] Speaker 01:
And the record showed that dual-use olives are more than half of the total volume consumed to produce table olives.

[00:33:51] Speaker 01:
Now, the department attempted to address this through the numerator of its dependence analysis by including only those olives that it found must be used to produce table olives, either because of biological distinction or

[00:34:03] Speaker 01:
In the framework they created for do-it-yourself is because of cultivation practices.

[00:34:08] Speaker 01:
I would argue that something that is less economically viable is not equivalent to dependence.

[00:34:13] Speaker 01:
But in any event, it was in effect the department's own quantification of dependence volume.

[00:34:21] Speaker 01:
Yet even after committing to this very specific depiction of the market, and despite various data and computational machinations that we covered in our brief, the department's analysis still showed 70,000 tons of dual-use olives that were grown for oil, yet used for table, that the department could not explain.

[00:34:40] Speaker 01:
These olives were not subject to the dependence and constraints that the department identified with respect to dual-use olives grown for table.

[00:34:46] Speaker 05:
What year are you referencing here?

[00:34:48] Speaker 01:
2016?

[00:34:48] Speaker 01:
2016.

[00:34:50] Speaker 01:
This is their data.

[00:34:53] Speaker 01:
It was true.

[00:34:54] Speaker 01:
The problem here is the only way they satisfied their standard was to add this 70,000 tons of non-contingent dual-use olives to the enumerator.

[00:35:05] Speaker 01:
It was the only way.

[00:35:07] Speaker 01:
Yet that was totally inconsistent with the framework they created.

[00:35:11] Speaker 01:
And it was totally inconsistent with the statute, and I want to return to the statute.

[00:35:15] Speaker 01:
It's about dependence.

[00:35:17] Speaker 01:
And the second you start putting tons of olives into the numerator that were simply used but not dependent on table of demand, you're only measuring use.

[00:35:27] Speaker 01:
And that's a critical point, and that takes it back to the statute that you cannot ignore.

[00:35:31] Speaker 01:
Because that part of it, whether you think that there are terms not in the statute or in the statute, dependence is there, and it has to be interpreted

[00:35:39] Speaker 01:
by its plain meaning and it is not the equivalent of use.

[00:35:43] Speaker 01:
One last point I want to make about Kasserania.

[00:35:47] Speaker 01:
Appendix 11241.

[00:35:50] Speaker 01:
This is their data.

[00:35:54] Speaker 01:
It's category-based data.

[00:35:55] Speaker 01:
You don't know what varietals are in there in this data.

[00:35:59] Speaker 01:
They assume that their base of 492,244 tons in year 2016 does not include Casareña.

[00:36:07] Speaker 01:
That's their base.

[00:36:08] Speaker 01:
They start from there and they say, it's not there, but that's going to be in the numerator.

[00:36:12] Speaker 01:
We know from the other data that they relied upon.

[00:36:15] Speaker 01:
in part, that there is at least 41,000 tons of Kasserania that were grown for table.

[00:36:21] Speaker 01:
And under their analysis, if it was grown for table, then it must be used for table.

[00:36:26] Speaker 01:
So it is in the numerator of their analysis and was never excluded.

[00:36:33] Speaker 04:
Yes.

[00:36:34] Speaker 04:
OK.

[00:36:34] Speaker 04:
Thank you.

[00:36:35] Speaker 04:
Ms.

[00:36:35] Speaker 04:
Hogan, you were going to give us a slide.

[00:36:37] Speaker 04:
Did you find that?

[00:36:40] Speaker 00:
No, my citation is actually to my colleague's brief at page 25.

[00:36:43] Speaker 00:
There's a fairly substantial analysis with the citations to the record.

[00:36:48] Speaker 01:
OK, thank you very much.