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Our final case this morning is Z.A.

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C. Cruz, Private Limited, et al.

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versus the United States and the Ad Hoc Trade Action Committee, 2023-1469.

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Good morning, Mr. Zachary Walker.

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Yes.

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My colleague just noted this is probably historic, two Zacharies appearing before us consecutively.

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Very nice.

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please proceed yes good morning your honor and may it please the court Zachary Walker of Picard-Kentz and Willow on behalf of the ad hoc trim trade action committee this appeal presents two issues concerning commerce's discretion in determining normal value under section seven seven three of the tariff act and anti-dumping duty proceedings

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Our first issue is whether commerce supported its determination that the price of ZA Seafood's third country sales through resellers and traders in Vietnam were not representative for purposes of determining normal value with substantial evidence.

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And second, whether following remand, the CIT erred in holding that arguments presented by Ad Hoc Shrimp related to the statutory term for consumption in the exporting country were waived.

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With respect to our first issue, we believe that Commerce reasonably concluded in the final results that the prices of ZA Seafood's third country sales were not representative, such that the CIT erred in holding that the agency failed to support its original determination with substantial evidence.

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CIT's decision.

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The determination was that the Vietnamese sales were representative or were not proven to be unrepresentative.

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So commerce determination in the final results determined that the prices were unsuitable to determine normal value because those prices were unrepresentative, were not representative.

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But the CIT remanded and commerce made a new determination, which

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CIT affirm, and that's what's on review.

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Well, you're stepping into the shoes of the trial court and reviewing the final, whether or not there was substantial evidence on that original determination.

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If we think the remand determination is correct and supported by substantial evidence, then we affirm.

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That's, yeah, we agree with you partially.

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We disagree that where there also has to be, you're also looking at whether or not substantial evidence supported commerce's first determination and whether or not the court properly remanded it.

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That's the point, yeah.

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You know, when the case went up the first time, when the first time around, commerce had lifted all the facts and said, these cells in Vietnam are representative.

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And you appealed that?

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We did not.

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We were not.

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We were the defendant.

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Somebody, when you said they were the representatives, somebody appealed.

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Yes, the Indian producer appealed.

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OK, fine.

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That's what I said.

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It wasn't me, but that issue was appealed.

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Yes.

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And on appeal, on that issue, the court must have said, no, I'm going to look at this, and I think that Congress made the wrong decision.

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Correct, yes.

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That was an important reasonable position to appeal that decision now, because the case had been remanded.

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So that whole question of whether or not that original decision was correct.

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for apparent purposes, which had no relevance.

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Correct, yes.

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And you got involved in the case.

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Well, we were involved.

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You got involved earlier.

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I was a defendant.

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You ran at Commerce.

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Correct.

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The first time, and you lost at the CIT.

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The government lost at the CIT.

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Were you an intervener at the CIT?

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We were a defendant intervener at the CIT.

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OK.

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So essentially, you're saying the remand was improper because Commerce's

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final Determination with the purpose of that track your honor yes when you get confusing when you're just jumping and don't acknowledge that we meant itself I understand it's basically the same argument that it's

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Procedurally, you're saying the remand, which was entered in the remand determination, was improper.

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Yes.

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So there are two issues.

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The first issue challenges the initial remand by this court in CAC Foods 1.

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And that issue, if you agree with us there, that there was substantial evidence supporting Commerce's original determination, that would move out our second issue in this case.

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But if we were to adjust you on that, if we say we agree that the remand decision was correct,

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because Congress made the mistake the first time around, then you have an additional argument out there.

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Then we have an additional argument that deals with the CIT's decision, and it's a second opinion, finding that we waived any challenge.

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It's only the waiver that comes up.

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I mean, if we were against you and find that the original remand was done correctly, right?

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Then you go to our second issue.

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And then the second issue has to do with whether they should have ignored your second argument on consumption.

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Correct, yes.

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And those are two, your representativeness and floor consumption are two different.

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I understand that.

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So when did you make the floor consumption argument to commerce?

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At Commerce, no, because in the preliminary result... Not even on the remand?

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Oh, on the remand, yes.

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When the case went back to Commerce, Commerce issued a draft remand.

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And Commerce said that was too late?

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Commerce did not say it was too late.

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They said that our arguments were based on the same evidence that the CIT had dismissed with regards to the representativeness.

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Part of the case so that they were not going to, the court was going to be similarly dismissive of it whether or not it was for consumption.

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Does that answer your question?

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Don't ask that.

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Your argument was that that commentary on the remand decision was sufficient to present the issue that wasn't raised initially.

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Well, the court's holding in CASF 2 about waiver wasn't that we didn't exhaust this issue before commerce.

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It wasn't that.

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We're just talking about the factual circumstances in this case.

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In response to your colleague, Judge Hughes, you said when the case was in front of commerce the very first time around, that the consumption issue wasn't being raised.

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So it gets raised up somehow on the remand after the first CIT decision.

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Correct, yes.

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And so then it comes up to you and you say, well, by the way, in front of the CIT the second time, if you disagree with us on whether the initial remand was correct, by the way, we now want to have you litigate and look at the consumption issue.

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Correct.

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And the CIT said, no, I think that's been waived.

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And the question for us is decide whether that discretionary call

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is abuse of discretion, right?

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Correct, yes.

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And the latitude of discretion when they give to trial leaders is pretty generous, right?

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Correct, but the nature of what happens is... And for an issue that's never been in the case from the get-go,

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The notion that it's being introduced late in the game might influence the decision of an appellate court to allow it to reenter on appeal.

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Yes, but in this case, the waiver issue is whether or not we waved by presenting inadequate arguments in our brief before the trial court itself.

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It has nothing to do with what happened earlier.

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What happened below?

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It's just whether you probably preserved it in the briefing to the trial court.

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Correct.

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So we filed briefs with the trial court.

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That's got to be at the height of discretion for the trial court to determine whether you presented a sufficient argument to entertain or not.

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correct and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and and

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We presented an argument based on the plain text of the statute and applied the record evidence to that requirement of the statute.

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And Commerce and the CIT just decided that it was not going to consider that argument, even though both the Department of Justice and the plaintiff at the trial court level addressed that argument on the merits.

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Now, I want to go back to now... You know where the Justice Department is in here?

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I mean, weren't there parties to this case?

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There were.

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And then they not named and they appeal?

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They did not enter an appearance in this case.

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uh... today at the trial court level they appeared as the defendant and native date uh... rigorously defended congress' original determination that the sales to uh... z a c foods customer in vietnam were not representative uh... and then on appeal day but when i went back to commerce they obviously defended the agency's remand determination for the c i t well i'm assuming

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they're along with the appellate and they don't appear because they have to get SG permission to do that.

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But when the appellee, it seems to me odd that they're not here.

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I think that's a very fair observation.

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I don't want to speculate as to why they aren't here defending their determination on remand, but I think

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What we can tell from the record that we do have is that in three different filings before the CIT, they defended the Commerce Department's original determination that the sales were not representative and could not be used to determine normal value.

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You know, if we want to look now at what supported commerce's initial determination that its prices, the ZAC Foods' sales to Vietnam were not representative, we have information showing that ZAC Foods' primary customer in Vietnam, entities that compose the Minh Food Group, exported, were large exporters of shrimp to the United States.

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That information is uncontroverted in the record.

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Were they only exporters?

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They were not totally exploiters, no.

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I mean, isn't that the big problem with this case is there's no showing, even though there's maybe inferences that can be drawn, there's no actual evidence that these people only sent stuff to the United States or didn't do any processing before they sent it to the United States.

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Well, and with the processing, only certain types of processing would result in... Yeah, but there's no evidence.

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there's no evidence that they were processed in Vietnam.

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There actually is evidence that they were not.

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Yeah, but Congress has to come up with actual evidence to show that these weren't appropriate because they were either sold directly to the United States without processing or

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that they rep sold in Vietnam, and the inferences aren't there in this evidence, are they?

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No, Your Honor, I would disagree with that, partly because the way the statute and the regulations are set up is there's a presumption that sales to a third country market are representative.

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And then Commerce's regulation says that Commerce's

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permitted to decline to calculate normal value in a particular third market country when it is established to the satisfaction of the agency that there's a reasonable basis for believing that the prices of those sales are not represented.

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And what evidence did it rely on for that reasonable basis?

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Correct.

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So Thomas relied on in the

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The CIT grouped this into two baskets.

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They called it the Trade Evasion Evidence, and that had to do with information related to CA Seafood's primary customer in Vietnam, which itself was a large exporter to the United States.

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We also had a determination issued by Customs and Border Protection that Commerce placed on the record, showing that this customer commingled Indian origin and Vietnamese origin shrimp.

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And three, we know that this customer did, in fact, export some Indian origin shrimp into the United States, co-mingled with the Vietnamese origin shrimp.

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We are into your bubble time, and I'm sure you want to save it.

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I would like to, yes.

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Thank you.

[00:13:00] Speaker 00:
Ms.

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Sugano.

[00:13:09] Speaker 01:
Good morning, Your Honors.

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May it please the court.

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On behalf of Appellees, we will keep our remarks rather short because we think the evidence here, or even the lack of evidence, really speaks for itself in this case.

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Rather than the evidence, he just talked about sufficient under a differential substantial evidence review to support Commerce's final determination here before the remand.

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The EPA determination, which is the

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substantial evidence, really, only in this case, does not support a finding that ZA Seafood's sales to Vietnam were unrepresentative.

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Because there was no connection in the IPA determination between ZA Seafood's, well, it doesn't mention ZA Seafood's at all, and it doesn't show that ZA Seafood's sales were not processed in Vietnam.

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or that they weren't sold to other customers in Vietnam.

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The IPA determination, it's just speculation, and they rely on it as like a likelihood of some sort of transshipment scheme going on.

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But with that IPA determination, as we noted in our brief, it was ultimately appealed to the CIT, and they reversed that determination.

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So the CIT was correct to find that commerce could not rely on that determination to support the conclusion that the sales to Vietnam were unrepresentative.

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And as to Appellant's second argument concerning the issue of waiver, well, we agree with the CIT that they waived the argument, and second,

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the underlying issue about poor consumption doesn't have any merit, because it concerns the same evidence that they are reviewing about representatives.

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I'll move the second part, because that's on the merits.

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Right.

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The question is, well, not that coordination firms should have entertained the argument.

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So.

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And what we've been told by your adversary, the question as to the consumption,

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was not raised and adjudicated by Commerce the first time around.

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But that when the case was remanded because of the CIT's decision on the other issue, that then the question was presented whether or not this consumption requirement had been satisfied.

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And apparently the agency, Commerce, made a decision on that subject.

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And so that's not a problem, because the tests are the same.

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You think I'm going to flunk you.

[00:16:10] Speaker 01:
Exactly.

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That's all correct.

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Right.

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Exactly.

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Then we get up on appeal, and the adversary says to the court-martial trade group, you disagree with me on my primary argument, which is you shouldn't have demanded the case in the first place.

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You at least now should entertain, I guess, deciding whether or not Congress was correct in rejecting this argument on the grounds that the issues were the same.

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Correct.

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Why isn't that question preserved?

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Why is it waived?

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Appellants didn't present adequate argument on the issue of foreconsumption in their briefing.

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They didn't have adequate argument at commerce or in front of the court?

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Both, at commerce and at the CIT.

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They did not present adequate argument.

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And did they?

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Did the CIT judge say that's the reason why I'm waiving it?

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You raised it, but the argument was inadequate?

[00:17:06] Speaker 01:
Correct.

[00:17:08] Speaker 00:
Yes.

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We found that the argument was waived because they had mere assertions to how the statute should be interpreted, but they didn't provide any further argument.

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So it's basically it's being waived for inadequate presentation?

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Correct.

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Not being waived because it wasn't raised below?

[00:17:29] Speaker 01:
Right.

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It wasn't an exhaustion issue.

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It was an issue about whether or not it was adequately argued.

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And we agree with this EIT.

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And also, while we understand that the merits aren't being discussed here, we note that, at worst, if it wasn't waived, it's a harmless error.

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Because... Well, that's because you never really know.

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Right.

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But the merits are the same as the representative.

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That's a thumb on the scale.

[00:18:02] Speaker 00:
Right.

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Didn't the juror ask you whether the fundamental question of whether or not the waiver decision was correct?

[00:18:08] Speaker 01:
Well, yeah, we agree that they did waive the argument because they didn't adequately argue it.

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even if, in the worst case scenario, we agree that they did not adequately argue the for consumption issue.

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But do you have a sense that the waiver decision has to rest on the merits of whether or not the judge was correct in saying it was inherently briefed and rejected for that reason?

[00:18:46] Speaker 01:
Correct.

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So if there are no further questions, we will rescind the remainder of our time.

[00:19:09] Speaker 00:
Thank you.

[00:19:12] Speaker 00:
Mr. Walker has some rebuttal time.

[00:19:16] Speaker 02:
uh... you know it's just a response to a couple of the points that were made uh... first the cdp people determination was not the only evidence commerce relied on in determining that the price is the a seafood sales were not representative in fact uh... in the preliminary results commerce declined to rep uh... to calculate normal value on the basis of third country sales and that determination was made in february

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more than six months before that IPA determination came out and was placed on the record in October.

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So even in the preliminary results, Commerce said, the evidence on this record, we believe that it does not show that these sales were representative.

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And then the IPA determination was further evidence that Commerce relied on in the final results.

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Secondly, even today, worked hearing about

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that we failed to provide any argument regarding consumption.

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Commerce did not find that we waived any argument in their remand determination.

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They addressed our comments regarding consumption.

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That wasn't the basis that Commerce only waived.

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It was that the trial court found that you hadn't adequately presented that.

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I believe you heard today from a penalty that we waived at both Commerce and the CIT.

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But Commerce addressed our arguments and did not find any waiver there.

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It was only at the CIT.

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And then finally, just to respond to the process into non-subject merchandise, you know, the substantial evidence standard is highly deferential to the agency.

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You know, whether or not it could have found that these were processed, there was no evidence on the record that they were.

[00:20:58] Speaker 02:
You know, the response ZAC Foods could have in response to our allegation that these were transhipped,

[00:21:04] Speaker 02:
put on evidence showing that, you know, Minh Phu and its other Vietnamese trader and trader customers did process, did produce a canned or breaded or other non-subject shrimp.

[00:21:17] Speaker 02:
The record doesn't have any evidence on it that would suggest that those companies make non-subject merchandise.

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And in fact, we have information from when Minh Phu was reviewed before Commerce that shows that they used

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imported market economy shrimp to produce subject merchandise for the U.S.

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market.

[00:21:38] Speaker 02:
So that shows that, in fact, there is evidence that shows that the shrimp wasn't processed into non-subject merchandise.

[00:21:46] Speaker 02:
Unless there's anything else we ask that the court reverse the trial judge's decision in this case.

[00:21:51] Speaker 02:
Thank you.

[00:21:52] Speaker 00:
Thank you, counsel.

[00:21:53] Speaker 00:
The case is submitted.