[00:00:02] Speaker 04:
We have one case for argument today, Gillen Forest Industry.

[00:00:07] Speaker 04:
I'm sure I'm pronouncing that wrong.

[00:00:09] Speaker 04:
Versus US number 23-2245.

[00:00:12] Speaker 04:
Mr. Jordan, when you're ready.

[00:00:25] Speaker 03:
It please the court.

[00:00:26] Speaker 03:
This court should reverse the decision of the Court of International Trade because its decision plainly contravenes decades of binding precedent that the Trade Court and this court are bound to follow.

[00:00:36] Speaker 03:
Ever since this court's 1997 decision in Sigma v. United States, this court has continually held that it is within commerce's authority to implement a presumption of state control for exporters in a non-market economy and to place the burden on exporters to demonstrate an absence of central government control.

[00:00:53] Speaker 00:
Mr. Jordan, if

[00:00:55] Speaker 00:
Let's assume that there weren't any prior decisions on this issue.

[00:01:01] Speaker 00:
And so just looking at the merits of the issue, what is your argument as to the propriety of the NME presumption, which I take it is the core submission of the Epolies?

[00:01:15] Speaker 03:
Sure.

[00:01:16] Speaker 03:
The NME is an exercise of commerce's discretion to administer the trade statute, and it does not contradict or contravene other statutory mandates, including the mandate to calculate an individually investigated rate.

[00:01:30] Speaker 03:
And in the record here, the logic or reasonability of that is supported, given the nature of how an NME controls firms operating under it.

[00:01:42] Speaker 03:
And so it makes sense as a matter of logic that you would treat.

[00:01:46] Speaker 03:
firms within an NME that have not rebutted the presumption as if they are the NME.

[00:01:51] Speaker 00:
And the adoption of a presumption in a situation such as this is, you say it's logical.

[00:01:59] Speaker 00:
What's the closest precedent you would point to, again, setting aside our prior decisions on this issue?

[00:02:10] Speaker 03:
So the court has recognized

[00:02:16] Speaker 03:
In the binding cases, too many to list, as the CMA court held, the application of this precedent.

[00:02:26] Speaker 03:
I think in our briefing, we cite some cases where the nature of the NMA

[00:02:33] Speaker 03:
that it makes sense for commerce to apply this rebuttable presumption.

[00:02:40] Speaker 03:
And I would also add that there's a distinction between applying the presumption and then applying control of the NME to the entire entity.

[00:02:48] Speaker 03:
And so the presumption is used given commerce's resources.

[00:02:53] Speaker 03:
and also given its understanding of the enemy.

[00:02:57] Speaker 03:
And then also the idea that the enemy control can be attributed to the entity that's subject to investigation also makes sense as a matter of logic as well.

[00:03:15] Speaker 03:
And so the idea of applying a rebuttable presumption and then applying the NME wide rate to the entity is supported by the record.

[00:03:24] Speaker 03:
I believe the appendix page is 170 through 186.

[00:03:27] Speaker 03:
Commerce talks about that.

[00:03:29] Speaker 03:
And one thing I would like to point out is

[00:03:35] Speaker 03:
The sort of central error, I think, that the trade court made is they identified this as an exercise of Chevron deference, as opposed to just the broad discretion to administer the trade statute.

[00:03:47] Speaker 03:
And so this court in 1983, before Chevron acknowledged that commerce has this discretion in Smith Corona v. United States,

[00:03:55] Speaker 03:
And indeed, since Loper-Brite, this court has at least twice acknowledged that the enemy presumption presides, most notably in Pirelli-Tyre.

[00:04:06] Speaker 03:
And then a few weeks ago, in another case called CMA that was decided on April 28, 2025, they acknowledged that the

[00:04:15] Speaker 03:
NME presumption presides, and it's pursuant to this broad discretion to administer the statute of commerce.

[00:04:22] Speaker 02:
Does commerce ever identify a specific statutory authority or regulation that is the basis for the NME policy?

[00:04:31] Speaker 02:
Because that's what the trade courts seem to be crying out for.

[00:04:35] Speaker 02:
Is your answer, we don't have to do that, or that you have done it?

[00:04:38] Speaker 02:
And if so, where have you done it?

[00:04:40] Speaker 03:
So the statutes that

[00:04:44] Speaker 03:
put on commerce a responsibility to calculate a rate is what it is acting pursuant to.

[00:04:50] Speaker 03:
Is there a particular section of the US code that existed in 1991 when commerce started using this presumption that says, for NME policies, this is the particular thing you use?

[00:05:03] Speaker 03:
To my knowledge, that kind of thing does not exist within the US code.

[00:05:07] Speaker 03:
But it does have the authority to calculate rates

[00:05:11] Speaker 03:
and conduct investigations and administrative reviews.

[00:05:16] Speaker 03:
And this court has held that commerce does not abuse its discretion.

[00:05:19] Speaker 02:
And not just no statute, but by not telling me a regulation, you also agree there is no specific regulation that commerce has adopted that expressly says, here's this MME policy, and we're going to act pursuant to it.

[00:05:36] Speaker 03:
So I think within the CFR, there exists

[00:05:40] Speaker 03:
references to it that suggests that.

[00:05:45] Speaker 03:
I think we said in our briefs, 19 CFR 351.107D.

[00:05:49] Speaker 03:
And my understanding is that since the end of the briefing, that now exists at 351.108.

[00:05:55] Speaker 00:
No, that's effective in 2025, right?

[00:06:00] Speaker 03:
Yeah, I think it's December of 2024 or 2025.

[00:06:03] Speaker 00:
Right, but that regulation would not have had any applicability to

[00:06:09] Speaker 00:
this particular ruling that's under review, right?

[00:06:12] Speaker 03:
It's come out since the investigation.

[00:06:15] Speaker 00:
But it has no retroactive effect, I take it.

[00:06:18] Speaker 00:
Or do you submit that it does?

[00:06:20] Speaker 03:
It's not my understanding that it would.

[00:06:22] Speaker 03:
But my understanding is that 107D, which did exist at the time, is subsumed within 108.

[00:06:28] Speaker 03:
And so I looked at 107.

[00:06:30] Speaker 03:
And the text that used to be in 107D, it's my understanding that that now exists in 108.

[00:06:36] Speaker 03:
And 107D talks about,

[00:06:38] Speaker 00:
non-market economies, and then there's also... Right, but there's no reference to the presumption, if I recall correctly, in 107D.

[00:06:48] Speaker 03:
I believe that is correct with respect to the presumption, and I think it's more of a... There's various parts within the CFR that

[00:06:57] Speaker 03:
reference it, you know, and within the U.S.

[00:06:59] Speaker 03:
Code, you know, they mentioned 1677-18, which talks about the definition of it.

[00:07:04] Speaker 00:
That's just a definition, though, right?

[00:07:05] Speaker 00:
That doesn't do anything more than tell you what an NME is.

[00:07:09] Speaker 00:
It doesn't actually say, and what do we do about it, right?

[00:07:13] Speaker 03:
Yeah, so I mean, at the end of the day, you have commerce that is charged with calculating a rate, with administering the statute.

[00:07:20] Speaker 03:
And the way it did so does not contradict, does not contravene law and is a rational exercise of its discretion to determine that.

[00:07:29] Speaker 03:
as the court has continually found, and as the record in this case supports.

[00:07:36] Speaker 04:
Is your view generally, I mean, the statutes are pretty broad and they tell commerce to investigate and determine rates for exporters.

[00:07:47] Speaker 04:
And they don't tell commerce anything further about how to do it.

[00:07:51] Speaker 04:
So commerce has fairly broad discretion in determining how to do it, unless it's arbitrary or precious or whatever.

[00:07:59] Speaker 04:
When they're looking at companies from non-market economies, this presumption is a lawful exercise of that broad power.

[00:08:11] Speaker 04:
And it doesn't have anything to do with gap filling or an ambiguous statute.

[00:08:18] Speaker 04:
So Chevron and Loper-Brite don't come into play.

[00:08:21] Speaker 04:
It's a specific statutory authorization to undertake this.

[00:08:26] Speaker 03:
Correct.

[00:08:27] Speaker 03:
And I would analogize it to the broad discretion that a contracting officer has to structure a procurement.

[00:08:32] Speaker 03:
That is discretion, but it's not statutory discretion.

[00:08:37] Speaker 03:
And so with here, we're dealing with administering the statute.

[00:08:40] Speaker 03:
And so I think what the trade court did is it conflated

[00:08:43] Speaker 03:
discretion to administer the statute with Chevron, but it's anecdotally distinct that kind of discretion.

[00:08:50] Speaker 04:
So I guess the follow-up to that is why doesn't the presumption and then the subsequent use of the NME rate for pretty much everybody that can't show independence

[00:09:04] Speaker 04:
Why isn't that inconsistent with like 1677 F1C1 that says they shall determine the individual weighted average during dumping margin for each known expert?

[00:09:15] Speaker 04:
That seems to suggest that they're going to do an individual one for each one, not this group one.

[00:09:22] Speaker 03:
And as this court and CMA recognized, it is an individually investigated rape because of the nature of the NME entity.

[00:09:29] Speaker 03:
If you have a government that can exercise wide latitude, and in this case, they were majority ownership, there was a labor union, and they can effectively reach into very specific business operations.

[00:09:44] Speaker 04:
I think we're bound by CMA.

[00:09:45] Speaker 04:
So most of these questions are, if CMA, we're not binding.

[00:09:49] Speaker 04:
But is that because even if they did actually go out and look for each entity controlled by the Chinese government, that you would use the same formula and methodology anyway to come up and it would all be the same?

[00:10:04] Speaker 04:
dumping margin, because you wouldn't rely on their books because they wouldn't be reliable if they're not independent.

[00:10:10] Speaker 04:
And then you would just resort to whatever surrogate values and adverse influences and all that other stuff.

[00:10:17] Speaker 04:
And so there's no reason to do that 15 different times for 15 controlled companies, because it's all going to arrive at the same number.

[00:10:25] Speaker 04:
I'm just kind of speculating about what would happen, but that seems to me would likely happen if they had to do it.

[00:10:34] Speaker 04:
company by company.

[00:10:36] Speaker 03:
And I think that's the nature if you have a government which controls the entities within its operations, and it's held to do that, that it doesn't make sense to come up with those separate rates, given the nature of what it means to be a non-market economy with control.

[00:10:51] Speaker 00:
So what that comes down to, ultimately, I take it, is if you lose on determining that there is

[00:11:01] Speaker 00:
that the presumption, if you lose on the presumption as a company in what is presumably a non-market economy, and you are unable to establish that you have independence from the government, you're pretty much done.

[00:11:18] Speaker 00:
It sounds like there's not much left that you can do.

[00:11:21] Speaker 00:
It's out of your hands.

[00:11:23] Speaker 00:
That's the way it feels in looking at it.

[00:11:26] Speaker 00:
Is that unfair, or do you have other recourse that is within your control?

[00:11:32] Speaker 03:
Yeah, so I think as the presumption operates, the company needs to affirmatively come up with that proof.

[00:11:40] Speaker 03:
And so if it's established that it is from one of the 12 non-market economies, and they just don't do anything, then they're presumed to be part of it.

[00:11:50] Speaker 00:
Right.

[00:11:51] Speaker 00:
Once that presumption comes into play, it seems like,

[00:11:55] Speaker 00:
matters are outside of your control.

[00:11:57] Speaker 00:
There's nothing you can do to show anybody that, in fact, you're not dumping.

[00:12:05] Speaker 03:
There would be judicial review.

[00:12:07] Speaker 03:
To demonstrate the lack of control, there would be judicial review.

[00:12:10] Speaker 03:
Right.

[00:12:11] Speaker 04:
I'm going to ask a hypothetical, because I think you're not quite getting.

[00:12:17] Speaker 04:
But let's just assume that they can't demonstrate

[00:12:21] Speaker 04:
independence, so there's control, but hypothetically also the records themselves establish, you know,

[00:12:30] Speaker 04:
clearly with no debate that this company is not actually dumping.

[00:12:35] Speaker 04:
And so that seems to result in a perceived unfairness that even though the Chinese government controls them, they're not dumping.

[00:12:44] Speaker 04:
Is there another avenue to challenge that?

[00:12:46] Speaker 04:
Or is that just a function of being in a company in a non-market economy where you can't demonstrate independence?

[00:12:54] Speaker 03:
So I think that is a function of the non-market economy.

[00:12:58] Speaker 03:
From time to time, the NME status of companies can be reviewed.

[00:13:02] Speaker 03:
It's my understanding that the vast majority of NMEs are former Soviet republics.

[00:13:05] Speaker 03:
And I'm not sure about this, but I think Armenia used to be, and now it's not.

[00:13:10] Speaker 00:
But the short answer to Judge Hughes's question, which put the question much more succinctly and precisely than mine, is yes.

[00:13:19] Speaker 00:
That's the end of the road for that company, right?

[00:13:22] Speaker 03:
unless they challenge the NME itself.

[00:13:24] Speaker 00:
Right.

[00:13:24] Speaker 00:
But his first point is, assume that you can't win on the NME presumption issue.

[00:13:31] Speaker 00:
You're cooked, right?

[00:13:35] Speaker 03:
With respect to getting the NME-Y rate, that's commerce's practice.

[00:13:38] Speaker 04:
All right.

[00:13:41] Speaker 04:
OK, thank you.

[00:13:41] Speaker 04:
You're in for your time.

[00:13:43] Speaker 04:
I'll restore your three minutes.

[00:13:44] Speaker 04:
Let's hear from the other side now.

[00:13:48] Speaker 04:
Ms.

[00:13:48] Speaker 04:
Powell?

[00:13:51] Speaker 01:
Good afternoon, may it please the court, Britton Powell for G. Lynn Forest.

[00:13:55] Speaker 01:
The court should find that the CIT did not err in finding that commerce exceeded its authority to impose the enemy presumption, because there is no clear statutory basis for this authority.

[00:14:06] Speaker 01:
Commerce has been imposing the enemy presumption for nearly 30 years.

[00:14:10] Speaker 04:
And when- Isn't China manufacturing in all these cases binding?

[00:14:14] Speaker 04:
I mean, I get on the merits.

[00:14:16] Speaker 04:
You have a very interesting legal argument.

[00:14:18] Speaker 04:
But how?

[00:14:19] Speaker 04:
I mean, I don't even see how we as a panel can ignore all these cases.

[00:14:23] Speaker 04:
I am baffled that Judge Eaton ignored those cases.

[00:14:26] Speaker 01:
Those cases are distinguished from the issue at hand because those cases didn't consider the source of commerce's statutory authority to impose it on me in the first place.

[00:14:35] Speaker 01:
How does that matter?

[00:14:36] Speaker 04:
It's just a different legal argument.

[00:14:39] Speaker 04:
You can always come in and say, well, they didn't consider it this legal argument.

[00:14:44] Speaker 04:
The holding rested on something else.

[00:14:46] Speaker 04:
That doesn't make it any less binding precedent.

[00:14:49] Speaker 04:
If the binding precedent says commerce is allowed to use this NME methodology and evidentiary presumption,

[00:14:56] Speaker 04:
then they're allowed to do it until we overrule it on Malka or until the Supreme Court overrules it.

[00:15:02] Speaker 04:
Otherwise, precedent would never be precedent, because everybody would come in and say, well, I have a new argument.

[00:15:07] Speaker 04:
You didn't consider that argument, so it's not binding anymore.

[00:15:10] Speaker 04:
And I get it.

[00:15:11] Speaker 04:
I mean, you got Judge Eden to buy off on it.

[00:15:14] Speaker 04:
But I just don't see how that's a way around precedent.

[00:15:17] Speaker 01:
So CMA really looks at challenges of the legal authority to use the enemy-wide AD rate.

[00:15:23] Speaker 01:
But it doesn't answer the question of commerce's authority to impose the enemy presumption in the first place.

[00:15:28] Speaker 00:
But why does commerce need statutory authority to adopt an evidentiary presumption?

[00:15:36] Speaker 01:
So a few reasons why.

[00:15:39] Speaker 01:
First of all, agencies are creatures of statute.

[00:15:41] Speaker 01:
They derive their authority from the legislative branch.

[00:15:45] Speaker 01:
When commerce was instructed by the court to identify the delegated power by Congress to impose the enemy presumption, commerce could not.

[00:15:54] Speaker 00:
But their position- It's the basic principle of administrative law that agencies can make rules by either regulation, informal rulemaking, or adjudication.

[00:16:09] Speaker 00:
And when they do it by adjudication, and there's a long line of cases on this, one of the things that that enables them to do, entitles them to do, is to draw inferences and adopt presumptions.

[00:16:24] Speaker 00:
There are a batch of cases on this.

[00:16:26] Speaker 00:
You may be familiar with them, going all the way back to Republic Aviation in 1945.

[00:16:30] Speaker 00:
Are you familiar with Republic Aviation?

[00:16:33] Speaker 01:
Not familiar specifically with that case.

[00:16:35] Speaker 01:
The general premise.

[00:16:37] Speaker 00:
Here's language from one case.

[00:16:40] Speaker 00:
Administrative agencies are entitled to create evidentiary presumptions, period, full stop, citing a batch of Supreme Court cases.

[00:16:49] Speaker 00:
Why is that a proposition that requires statutory authorization, as opposed to being something that's just inherent in the adjudicative process?

[00:17:00] Speaker 00:
Courts draw presumptions all the time, and concoct them, frankly, even when there's no statutory authority for that.

[00:17:09] Speaker 00:
Why can't an administrative court do the same thing?

[00:17:13] Speaker 01:
I think it's for the first time that commerce identified the enemy presumption as an evidentiary presumption.

[00:17:20] Speaker 01:
That is, it defines as an interpretive rule rather than a legislative rule.

[00:17:26] Speaker 01:
But in fact, the presumption is functioning as a legislative rule.

[00:17:29] Speaker 01:
It didn't undergo the required process under the APA.

[00:17:32] Speaker 01:
It affects the rights of parties, exporters, and non-market economy cases to have access to calculate to individual investigated weighted average.

[00:17:41] Speaker 00:
But that's exactly the same argument that was made in all of these NLRB acts almost exclusively through adjudication, right?

[00:17:52] Speaker 00:
And they have been.

[00:17:53] Speaker 00:
Again, since 1945 and repeatedly since then, the NLRB has been upheld when it has adopted presumptions, and it's adopted a number of them.

[00:18:05] Speaker 00:
And there's no statutory authority for the adoption, but the Supreme Court has said, yep, they have the authority to do that.

[00:18:14] Speaker 00:
It's inherent in the adjudicative process.

[00:18:17] Speaker 00:
That's the problem I have with your attack on the agency's application of the presumption.

[00:18:24] Speaker 01:
I think the trial court was correct in recognizing this tension first between commerce's use of the presumption, which it created out of whole cloth without any express or direction from the legislator.

[00:18:38] Speaker 01:
While they have some discretion to implement the statute and the statutory mandate,

[00:18:44] Speaker 01:
their discussion is not unbounded.

[00:18:46] Speaker 04:
And in this case... Well, let me ask you about that because there's two questions for that.

[00:18:51] Speaker 04:
First is, is there exercise of this presumption inconsistent with any statute that gives them an authority?

[00:18:59] Speaker 04:
It seems to me that these statutes are really broad and just says go out and investigate and calculate.

[00:19:05] Speaker 04:
Is there a inconsistency, a plain inconsistency between the presumption and those statutes?

[00:19:12] Speaker 01:
Our position is that the inconsistency is with 19 USC 1677 F-1, where C, in which the statute directs commerce expressly to calculate

[00:19:27] Speaker 01:
says, the authority of commerce shall determine the individual weighted average dumping margin for each known exporter producer.

[00:19:35] Speaker 01:
And this statute only provides for a few exceptions.

[00:19:39] Speaker 04:
But it doesn't say it has to be based upon the exporter-specific records.

[00:19:44] Speaker 04:
Commerce would have the discretion

[00:19:47] Speaker 04:
as it does in any kind of cases, even outside of NME cases, to say, we don't find your records reliable, or we don't find what you're giving us good enough.

[00:19:56] Speaker 04:
So we're going to use surrogate values and adverse interests.

[00:19:59] Speaker 04:
You know, the whole drill that they're authorized to do.

[00:20:02] Speaker 04:
Why isn't the same kind of evidentiary presumption for the MME part of that same toolbox?

[00:20:11] Speaker 01:
Again, our position is that it's not merely an evidentiary presumption.

[00:20:14] Speaker 04:
OK, but whatever we call it, why isn't that the same thing, is they have to go do it.

[00:20:20] Speaker 04:
It doesn't tell them how to do it.

[00:20:22] Speaker 04:
And one of the ways they're doing it for these companies that are in non-market economies is saying, if you can show independence, we're going to follow our normal rules.

[00:20:30] Speaker 04:
But if you can't, we're going to calculate a weight for the single entity, because we assume that single entity is setting all the prices and stuff.

[00:20:40] Speaker 01:
So the presumption is changing the rules for exporters and non-market economy cases.

[00:20:45] Speaker 01:
The statute does it.

[00:20:46] Speaker 04:
Changing what rules and what rules are?

[00:20:49] Speaker 01:
The rule is that you have to first affirmatively show that you're not part of the China-wide entity in order to.

[00:20:56] Speaker 01:
No, no, no, no.

[00:20:57] Speaker 04:
You're saying for NMEs are changing the rules.

[00:21:00] Speaker 04:
What rules are they changing that aren't applicable to other investigations?

[00:21:07] Speaker 01:
The notion that a company can, like GWIN, have a calculated margin of zero, but unless it affirmatively establishes independence.

[00:21:15] Speaker 04:
No, no, no, no.

[00:21:15] Speaker 04:
You're not answering my question.

[00:21:17] Speaker 04:
When you say they're changing the rules, it sounds familiar, like you said.

[00:21:20] Speaker 04:
Congress has set forth the rule somewhere that commerce follows in all these other cases, but is not following them in NME cases.

[00:21:29] Speaker 01:
I think it goes back to this statute.

[00:21:31] Speaker 04:
But that's not true, right?

[00:21:33] Speaker 01:
No.

[00:21:33] Speaker 04:
Congress has not set forth a series of rules to tell commerce specifically how to calculate dumping margins.

[00:21:41] Speaker 01:
That's correct.

[00:21:42] Speaker 04:
OK.

[00:21:42] Speaker 04:
OK.

[00:21:43] Speaker 04:
They've given them super broad authority.

[00:21:45] Speaker 04:
I mean, most agencies don't get the kind of discretion that commerce gets for these anti-dumping cases.

[00:21:50] Speaker 04:
It's a very specific.

[00:21:52] Speaker 04:
It's like go out and calculate.

[00:21:54] Speaker 04:
And so I think the problem is you have to show me why that's inconsistent with that.

[00:22:00] Speaker 04:
Their practice is inconsistent, which you're not going to be able to do.

[00:22:04] Speaker 04:
Then it becomes, is it an abuse of discretion to do that?

[00:22:07] Speaker 04:
And why would it be an abuse of discretion?

[00:22:10] Speaker 01:
Well, commerce, to conclude my last point.

[00:22:14] Speaker 01:
the enemy presumption is imposing new obligations that are not specified in the statute.

[00:22:20] Speaker 04:
So in order to have access to... Everything commerce does in these investigations is not specified in the statutes.

[00:22:27] Speaker 04:
Lots of these practices for both enemy companies and non-enemy companies have evolved out of the continuing investigations and reviews and the like, and they develop sets of practices

[00:22:40] Speaker 04:
that they are not inconsistent with the statute, so we approve them over and over again.

[00:22:46] Speaker 04:
The mere fact that it's something that's not in the statute doesn't say much, because the statute doesn't say much.

[00:22:51] Speaker 04:
If the statute had a list of, here are steps 1 through 10 on how you calculate duties, and commerce came in and said, we're going to add step 11 and 12,

[00:23:02] Speaker 04:
then we would probably have to determine are 11 and 12 consistent with or inconsistent with in a proper exercise.

[00:23:09] Speaker 04:
But you're not pointing to anything that is inconsistent with what Congress is doing.

[00:23:14] Speaker 04:
You're just saying they're doing something that Congress didn't specifically say they could be allowed to do.

[00:23:19] Speaker 04:
But what I'm asking is, can you point to anywhere where Congress specifically said they could not do this?

[00:23:27] Speaker 01:
I would refer to the government's reply brief.

[00:23:30] Speaker 01:
I think they mentioned the use of condom-specific reporting is something that is obligatory in order to obtain a calculated rate.

[00:23:38] Speaker 01:
But it's not expressed in the statute.

[00:23:40] Speaker 01:
They're permissible.

[00:23:42] Speaker 01:
It's under their discretion to impose that kind of reporting requirement in order to calculate a margin.

[00:23:49] Speaker 01:
So in those instances where commerce has employed the condom-specific reporting or other requirements,

[00:23:56] Speaker 01:
to further their aim, their statutory aim and mandate to calculate a dumping margin for the individually investigated exporters.

[00:24:03] Speaker 01:
Whereas the enemy presumption is the way that they've employed it is abdicating that statutory mandate.

[00:24:11] Speaker 01:
It's not in furtherance of calculating a margin.

[00:24:14] Speaker 01:
It's in furtherance of setting aside a calculated margin.

[00:24:19] Speaker 00:
Maybe the real core of your argument, as I'm beginning to hear it, is not

[00:24:25] Speaker 00:
really an attack on the enemy presumption itself, but rather saying that even if the enemy presumption is upheld, and even if Jilin came in and says, yeah, we're all part of a government-wide enterprise, nonetheless, 1677F requires you to individually look at us, even if all the others were part of this larger

[00:24:55] Speaker 00:
coalition of state-owned entities.

[00:24:59] Speaker 00:
Isn't that the core of your argument?

[00:25:02] Speaker 01:
It is.

[00:25:03] Speaker 01:
That is the tension between the enemy presumption and the state express mandate of the state.

[00:25:06] Speaker 00:
But that doesn't really have anything to do with the presumption so much as it has to do with the implications of accepting that either arguendo or in fact that your client is part of an overall state-run operation.

[00:25:25] Speaker 00:
If, even under those circumstances, it's a violation of the statute not to do an individual investigation, then you've got an argument that doesn't require you to win on the NME presumption, right?

[00:25:41] Speaker 01:
I think that the court should still analyze the source of authority, because that is ultimately part of what's missing from the analysis.

[00:25:50] Speaker 01:
So on the one hand, you have 1906.

[00:25:54] Speaker 01:
USC 1677 F1, imposing an obligation for commerce to calculate or determine an individual weighted average dumping margin for each known or investigated exporter.

[00:26:05] Speaker 01:
But on the other hand, you have a policy with no binding effect of law that commerce uses to

[00:26:14] Speaker 04:
Determine that the the let me just hypothetically if instead of this enemy policy or presumption or whatever you want to call it Commerce still because there's enemy status.

[00:26:26] Speaker 04:
We know which are enemies So there's enemy status.

[00:26:30] Speaker 04:
What if for every single company that was in a non-market economy Commerce came in and they did an investigation and they said

[00:26:38] Speaker 04:
we are not going to rely on your records and because they're not trustworthy because you're controlled by the state entity and they look at it and they don't have resumption but they look at it under the same factors which is if you can't establish

[00:26:54] Speaker 04:
independence, they're then going to resort to the normal bag of tricks of adverse influences, all that kind of stuff.

[00:27:03] Speaker 04:
And they come up and they say, here's the dumping margin, because this is the same.

[00:27:08] Speaker 04:
And then they do that for every single company in the non-market economy.

[00:27:14] Speaker 04:
Would that satisfy the statute?

[00:27:17] Speaker 01:
I think that does get closer to satisfying the statute.

[00:27:19] Speaker 01:
What is the functional difference?

[00:27:21] Speaker 01:
The reason being that commerce is applying the enemy presumption widely against all exporters and all non-market economy cases.

[00:27:28] Speaker 04:
But my hypothetical makes that in, even though they're making an individual determination, they're using the same set of factors, which is, is there majority control of the board?

[00:27:38] Speaker 04:
All the other factors that are already in the presumption, they're just doing it 10 times.

[00:27:44] Speaker 04:
over and over again, instead of requiring the importers or exporters or whoever's challenging it to rebut it.

[00:27:51] Speaker 04:
I don't see any difference whatsoever.

[00:27:54] Speaker 04:
It seems to me to be a functional difference if you're relying on the fact that it needs to be company by company.

[00:28:00] Speaker 04:
They're doing it company by company.

[00:28:02] Speaker 04:
They're just saying, here's the factor if we're going to apply.

[00:28:04] Speaker 04:
If you don't prove you're outside of it, then you're going to get this rate, which is the rate we're going to come up with for every single company also.

[00:28:13] Speaker 01:
Is your hypothetical that they're applying the presumption on a case by case basis?

[00:28:16] Speaker 01:
Because what I'm understanding is they're not in your hypotheticals.

[00:28:18] Speaker 01:
They're not applying the presumption.

[00:28:21] Speaker 04:
They do apply it on a case by case basis, right?

[00:28:23] Speaker 04:
Every single company that's subject to this rule has the ability to come in with facts and say, look,

[00:28:29] Speaker 04:
We aren't controlled by the Chinese government.

[00:28:32] Speaker 04:
We've been seeing cases where, in fact, companies come in and say, the Chinese government only controls 30% of the seats on our border, 40%.

[00:28:40] Speaker 04:
So that shows a lack of government control.

[00:28:43] Speaker 04:
Then we get into other factors, and it shows that those 40 actually do control it.

[00:28:47] Speaker 04:
It can go both ways.

[00:28:50] Speaker 04:
just saying automatically, they give you the ability to robot.

[00:28:53] Speaker 04:
What difference would it make if it just is changing from, we're going to presume that you're controlled in China, versus we're going to apply the same set of factors.

[00:29:04] Speaker 04:
It switches the burden of proof from them to you.

[00:29:07] Speaker 04:
But that doesn't seem to be something that's addressed by your argument or the statute.

[00:29:12] Speaker 01:
But it is imposing an obligation that didn't exist.

[00:29:16] Speaker 01:
The presumption is imposing an obligation.

[00:29:19] Speaker 04:
I mean, they can make you turn over records.

[00:29:23] Speaker 04:
They can do all these kind of stuff.

[00:29:24] Speaker 04:
And if they don't do it, they can impose an adverse inference.

[00:29:28] Speaker 04:
How is this any different in some sense than, like I say, the normal box of tools they have to do these things?

[00:29:34] Speaker 01:
I think that at the end of the day, Congress does not typically use oblique or elliptical language when they're empowering an agency to make radical or fundamental change.

[00:29:47] Speaker 01:
And the enemy presumption is essentially modifying the application of the statute to make radical or fundamental change with respect to the exporters in the non-market economy countries.

[00:29:58] Speaker 01:
And for that reason, it's not merely an interpretive rule or

[00:30:04] Speaker 01:
an evidentiary demonstration, it should have undergone the APA requirements that gave parties an opportunity to be heard and to appear, and to determine the source and whether commerce ultimately had the authority to implement this presumption in the first place.

[00:30:22] Speaker 04:
Anything further?

[00:30:23] Speaker 01:
I know you're on it.

[00:30:24] Speaker 01:
Thank you.

[00:30:38] Speaker 03:
I will be brief.

[00:30:43] Speaker 00:
If we were to decide that the application of the enemy presumption in a particular case was irrational, would that be a point that the importer would be entitled to raise?

[00:31:01] Speaker 00:
in this case?

[00:31:02] Speaker 00:
No, just in general.

[00:31:03] Speaker 00:
Just suppose the case comes along and the enemy presumption is applied, but we decide ultimately that it's an irrational presumption, either in an individual case or in general.

[00:31:21] Speaker 03:
In an individual case, I would submit it depends on the facts, and they can raise that.

[00:31:25] Speaker 03:
With respect here, I think the idea of, in the abstract, commerce being able to do that has been continually affirmed in an abstract.

[00:31:33] Speaker 00:
I know it has.

[00:31:33] Speaker 00:
But again, I'm in the hypothetical world here.

[00:31:36] Speaker 00:
What I'm really asking is, I think it's pretty clear that agencies can embrace presumptions, but they have to be rational.

[00:31:47] Speaker 00:
And that's a limitation on adopting presumptions.

[00:31:51] Speaker 00:
You can't, well, I won't go into all the kinds of presumptions that you can't make, but you're not suggesting that an attack on the rationality of the NME presumption would be a non-starter, right?

[00:32:09] Speaker 03:
Given the current understanding of what an NME is, that presumption

[00:32:15] Speaker 03:
is rational.

[00:32:16] Speaker 03:
I want to get back to one of the earlier questions.

[00:32:18] Speaker 04:
But not this specific presumption, any presumption.

[00:32:22] Speaker 04:
Let's just say hypothetically, commerce decides, if you're in a non-market economy country, we're just going to automatically apply a presumption that you have to pay 1,000% duties.

[00:32:36] Speaker 04:
That's clearly irrational, right?

[00:32:38] Speaker 04:
They can challenge that because it's irrational, even if it's not necessarily inconsistent with the language of the statute.

[00:32:45] Speaker 03:
I think it would go into how that's calculated and the particular facts.

[00:32:49] Speaker 04:
Well, they're not calculating a specific case.

[00:32:51] Speaker 04:
This is a per se rule.

[00:32:53] Speaker 04:
They're going to adopt a policy that says, we've decided that for China, that whatever reason, and let's just assume it gives no reason, that everybody gets 1,000% duties.

[00:33:07] Speaker 04:
Everybody across the board, no way to get around it.

[00:33:11] Speaker 04:
That's our policy.

[00:33:13] Speaker 04:
That's an irrational policy.

[00:33:14] Speaker 04:
And even though commerce has pretty broad authority, they don't have that broad of authority, even though it doesn't conflict with the direct language of any of these statutes.

[00:33:24] Speaker 03:
The APA is a binding constriction here.

[00:33:29] Speaker 03:
And I would also mention, the court earlier asked about cases that talk about the NME

[00:33:34] Speaker 03:
that application.

[00:33:36] Speaker 03:
On page 23 of our brief, we cite Quindow, Titho Group, which cites ICC industries, and it talks about the nature of the NME.

[00:33:46] Speaker 03:
I think in my prior argument, I cited the 27 years of cases.

[00:33:50] Speaker 03:
That's one specific one we mentioned.

[00:33:52] Speaker 03:
I see my time has expired, but I'm happy to address other questions.

[00:33:59] Speaker 02:
Any more questions?

[00:34:02] Speaker 02:
Thanks.

[00:34:02] Speaker 02:
Great.

[00:34:02] Speaker 02:
The case is met.