[00:00:00] Speaker 01:
The next and final case for argument is 23-2266, Pirelli-Tyre versus United States.

[00:00:09] Speaker 01:
Counsel, please proceed.

[00:00:11] Speaker 02:
Thank you, Your Honor.

[00:00:13] Speaker 02:
May it please the court, Daniel Porter on behalf of Pirelli.

[00:00:17] Speaker 02:
Pirelli challenges the Commerce Department's conclusion that the Chinese government controlled the operations of Pirelli, Italy.

[00:00:25] Speaker 02:
an iconic Italian corporation listed on the Milan stock exchange.

[00:00:30] Speaker 02:
Commerce's decision is both unlawful and unsupported by substantial evidence.

[00:00:35] Speaker 02:
Commerce's decision is unlawful because Commerce's separate rate analysis did not attempt to demonstrate how its theory of control influenced Pirelli tires export functions, even though it was undisputed that the Chinese-owned shareholders have less than majority ownership.

[00:00:54] Speaker 04:
Can I just ask, what's wrong with the fairly simple minded thought that if the government can choose the personnel, it basically controls all the decisions made by the personnel?

[00:01:08] Speaker 04:
That is, choice of personnel is not task specific.

[00:01:13] Speaker 02:
Judge Toronto.

[00:01:15] Speaker 02:
question is understood.

[00:01:16] Speaker 02:
In these cases, the question is, what is the contrary evidence that, in fact, the de facto operation of the company were not controlled by the Chinese shareholders?

[00:01:33] Speaker 02:
And in this particular case, we have an abundance of contrary evidence.

[00:01:39] Speaker 02:
And specifically to your point here,

[00:01:43] Speaker 02:
For this particular time period, the Chinese government shareholders holding was reduced less than 50%.

[00:01:53] Speaker 02:
So yes, they could appoint some directors, but eight of the 15 members of the board were independent directors.

[00:02:01] Speaker 02:
And perhaps most importantly, there are explicit provisions that says the operations of Pirelli were to be done exclusively by the CEO, Mr.

[00:02:13] Speaker 02:
Tronchetti-Pravira.

[00:02:14] Speaker 02:
So yes, absent other evidence, Judge Toronto, you're correct.

[00:02:18] Speaker 02:
If you have the ability to sort of appoint the board, perhaps that's enough.

[00:02:24] Speaker 02:
But in this case, there was contrary evidence that we submit that the Commerce Department did not properly take into account.

[00:02:34] Speaker 02:
So I think with, yes, I'm sorry, Judge Change, do you have a question?

[00:02:38] Speaker 03:
Just to clarify,

[00:02:41] Speaker 03:
there's precedent of ours, a case called Sigma, that seems to suggest that not only is there a rebuttable presumption of government control, but also that the burden of proof is on the exporter to show an absence of government control.

[00:03:05] Speaker 03:
So not only is the presumption against you, but the

[00:03:10] Speaker 03:
you're also the party that carries the burden of proof.

[00:03:14] Speaker 03:
Do you have a differing view than my understanding of Sigma?

[00:03:20] Speaker 02:
I do not have a different view of your understanding of Sigma.

[00:03:30] Speaker 02:
I want to note a couple of things.

[00:03:33] Speaker 02:
First, yes, there is a rebuttable presumption.

[00:03:38] Speaker 02:
In our brief, we just sort of say a rebuttable presumption is a legal term that we're not so sure the Commerce Department is properly understanding and implementing.

[00:03:52] Speaker 02:
It is also true that historically, the Commerce Department has sort of required sort of that the respondent come forward with evidence.

[00:04:05] Speaker 02:
This is my interpretation is that the presumption is there primarily when there's no evidence, contrary evidence, advanced.

[00:04:16] Speaker 02:
Then the Commerce Department, if you have a number of Chinese exporters and they don't respond in any way, the Commerce Department is allowed to essentially apply the presumption and say, you're controlled by the Chinese government.

[00:04:32] Speaker 02:
This is not that case.

[00:04:33] Speaker 02:
This is a case in which substantial contrary evidence was provided.

[00:04:38] Speaker 02:
The other very important distinction I want to make is many, if not most, of the past decisions of this court on this topic have to do where the respondent was majority controlled by the government.

[00:04:54] Speaker 02:
There have been relatively few cases in which the respondent was only minority controlled by the Chinese shareholders.

[00:05:04] Speaker 02:
And even the Commerce Department itself admits in that situation that need an addition of control.

[00:05:11] Speaker 02:
So it's a little bit how the presumption applies when you have a Chinese exporter that's not majority owned by the Chinese government.

[00:05:23] Speaker 02:
I would say that perhaps some of the cases that the government cites aren't directly on point on that.

[00:05:31] Speaker 01:
So just if I could clarify your response on what the legal test is and how we apply the presumption, you're saying one, that the presumption should be lower because there's not majority ownership and or are you saying as long as contrary evidence is provided, that's sufficient to meet the presumption or it has to be substantial contrary evidence?

[00:06:01] Speaker 02:
Question is understood.

[00:06:03] Speaker 02:
I would step back and say, the comms department's determination must be supported by substantial evidence.

[00:06:14] Speaker 02:
That is literally the standard.

[00:06:17] Speaker 02:
And so the question is, is there substantial evidence that Pirelli tire

[00:06:24] Speaker 02:
was de facto controlled by the Chinese shareholders.

[00:06:30] Speaker 02:
And that is the question under the standard of review.

[00:06:37] Speaker 01:
We believe that the department- Sorry to interrupt, but I want to know how the presumption fits into that analytical framework that you just discussed.

[00:06:48] Speaker 02:
I understood.

[00:06:48] Speaker 02:
Again,

[00:06:50] Speaker 02:
It is my view that the presumption is a starting out thing.

[00:06:56] Speaker 02:
We have no evidence.

[00:06:57] Speaker 02:
What should we do?

[00:06:58] Speaker 02:
Well, we can apply a presumption and make a conclusion because there's no evidence.

[00:07:06] Speaker 02:
That then allows you to say, I'm just going to go forward and say this Chinese exporter who didn't offer any evidence is controlled by the Chinese government.

[00:07:16] Speaker 02:
To me, once the respondent, once the Chinese expert comes forward with substantial contrary evidence, then the substantial evidence rule kicks in.

[00:07:28] Speaker 02:
And the question is, is the Commerce Department's conclusion that the respondent is controlled by the Chinese government, is that supported by substantial evidence?

[00:07:39] Speaker 02:
And that's how I believe the two are intertwined.

[00:07:47] Speaker 02:
So, if I may, with your indulgence, I would like to highlight, get to this idea, there was not substantial evidence for the Commerce Department's conclusion that Pirelli was controlled by the Chinese government

[00:08:05] Speaker 02:
shareholders.

[00:08:07] Speaker 02:
And I want to jump to the heart of our argument.

[00:08:10] Speaker 02:
The other side claims that Pirelli is asking this court to reweigh the evidence that Pirelli presented to Commerce because, according to them, Pirelli simply disagrees with how Commerce addressed the evidence.

[00:08:23] Speaker 02:
But such argument is just wrong.

[00:08:26] Speaker 02:
Many of pearly substantial evidence arguments do not take issue with how commerce address contrary evidence, but rather the fact that commerce did not address contrary evidence at all.

[00:08:37] Speaker 02:
Such distinction is important because the substantial evidence standard requires that commerce do so.

[00:08:44] Speaker 02:
I'm quite sure you all are familiar with the substantial evidence standard.

[00:08:49] Speaker 02:
So let me explain why commerce's approach in this case did not satisfy the substantial evidence standard.

[00:08:57] Speaker 02:
Let me first talk about the alleged ability of the Chinese government shareholders to control Pirelli's board of directors.

[00:09:04] Speaker 02:
In our view, Congress does not adequately address the following contrary evidence.

[00:09:10] Speaker 02:
Only four of the 15 member board of directors were Chinese nationals.

[00:09:14] Speaker 02:
Eight of the 15 member board of directors were independent directors with explicit obligations under Italian law not to be beholden to any shareholder.

[00:09:24] Speaker 02:
And only four of the remaining seven

[00:09:26] Speaker 02:
board members were appointed by Chinese government shareholders.

[00:09:30] Speaker 02:
There was affirmative evidence that not a single independent director had any link to the Chinese government.

[00:09:37] Speaker 02:
Perhaps most importantly, Your Honor, the Chinese shareholders explicitly agreed and acknowledged the independence of the independent and the directors.

[00:09:47] Speaker 02:
We asked the court to take note of paragraph 4.6 addressing independent directors in the shareholders agreement.

[00:09:56] Speaker 02:
This can be found on page 1104.

[00:10:01] Speaker 02:
This the paragraph 1104 is literally entitled independent directors and this paragraph leaves no doubt that the Chinese government shareholders explicitly agreed that all independent directors appointed to Prellis board of directors.

[00:10:17] Speaker 02:
shall have the requisites of independence prescribed for directors of listed companies by law and the corporate governance code."

[00:10:25] Speaker 02:
And that's a quote.

[00:10:26] Speaker 02:
This provision demonstrates that the Chinese shareholders have explicitly agreed that the independent directors shall operate independently, and such fact directly contradicts the Commerce Department's effective conclusion that these independent directors were beholden to the Chinese government shareholders.

[00:10:45] Speaker 02:
I think that's direct contrary evidence which the Commerce Department has not adequately addressed.

[00:10:51] Speaker 02:
Now, moving on to the control of the export activities of

[00:10:57] Speaker 02:
of Pirelli.

[00:10:59] Speaker 02:
We note there was an abundance of evidence that demonstrated that the day-to-day operations of Pirelli were completely insulated from any influence by the Chinese government shareholders.

[00:11:10] Speaker 02:
We refer, Your Honors, to page 33 of a reply brief that itemizes the multiple different pieces of supporting documentation on this point.

[00:11:20] Speaker 02:
In other words, the record evidence demonstrates that extensive steps have been taken precisely to ensure the independence of Perley's day-to-day management.

[00:11:30] Speaker 02:
In our view, commerce effectively ignores this evidence and claims that general provisions and Perley's bylaws trump the more specific provision in the shareholders agreement.

[00:11:42] Speaker 02:
We refer to tab A of the Perley separate rate agreement that's

[00:11:47] Speaker 02:
that starts on page 1087 and provides the 2017 shareholders agreement signed by the Chinese government shareholders.

[00:11:58] Speaker 02:
We ask the court to note paragraphs 4.4 and 4.7, which can be found on appendix pages 1103 and 1104.

[00:12:08] Speaker 02:
These provisions address the day-to-day management of Pirelli.

[00:12:12] Speaker 02:
These provisions make clear that the Chinese government shareholders have explicitly agreed that the CEO, Mr. Marco Truncati-Pravira, was delegated the exclusive power and authority concerning the ordinary management of Pirelli.

[00:12:27] Speaker 02:
I also want to quickly, before my time runs out, highlight the annual report, because this is something that the Commerce Department references.

[00:12:36] Speaker 02:
And it's this, Your Honor, I believe, epitomizes the lack of following the mandates of the Suspential Evidence Standard by the Commerce Department.

[00:12:44] Speaker 02:
The Commerce Department cites a sentence in the annual report that says the company

[00:12:50] Speaker 02:
is indirectly controlled pursuant to Article 93 of the Italian Financial Code by ChemChina.

[00:12:57] Speaker 02:
And that can be found on page 0917.

[00:13:01] Speaker 02:
But literally, the very next sentence is following that sentence,

[00:13:06] Speaker 02:
explicitly contradicts the inference that the Commerce is attaching to that sentence.

[00:13:12] Speaker 02:
If you look at the remaining sentences, it says that as of the first day of trading, ChemChina ceases to have any management and coordination activities over Pirelli.

[00:13:25] Speaker 02:
And yet, Commerce ignores this.

[00:13:29] Speaker 02:
And this is, in my mind, the epitome of not following the mandate of the substantial evidence data and taking into account all contrary evidence.

[00:13:38] Speaker 02:
I see I only have a minute.

[00:13:40] Speaker 02:
I'm sorry, Judge Post, do you have a question?

[00:13:43] Speaker 01:
No, but I was going to remind you, you're into your rebuttal time.

[00:13:47] Speaker 02:
I did not realize that.

[00:13:49] Speaker 02:
I'm going to stop now and save my time for rebuttal.

[00:13:51] Speaker 02:
Thank you.

[00:13:52] Speaker 01:
Thanks.

[00:13:59] Speaker 01:
Good morning.

[00:14:02] Speaker 05:
Good morning.

[00:14:02] Speaker 05:
May it please the court?

[00:14:04] Speaker 05:
This court should affirm the trial court's decision because at bottom what Pirelli asked this court to do is both depart from this court's own well-established standards as well as reweigh the evidence.

[00:14:15] Speaker 05:
I'd like to start with a comment that Mr. Porter just made suggesting that there might be some difference in the standard of

[00:14:23] Speaker 05:
review or the level of presumption that's applied, where a company is majority-owned versus minority-owned.

[00:14:29] Speaker 05:
But the trial court addressed this argument and probably seems to have dropped it in front of this court and found that there is no difference in the standard.

[00:14:37] Speaker 05:
And this court has never counted in such a difference.

[00:14:40] Speaker 05:
In fact, in Zhejiang machinery, which is a decision that just came out, I think, last year from this court, there was a situation where the respondent was minority-controlled.

[00:14:50] Speaker 05:
And this court sanctioned commerce's ability

[00:14:52] Speaker 05:
to find that minority control can still be enough as long as commerce finds additional indicia of control.

[00:14:59] Speaker 05:
And so I think, again, Mr. Porter is just misstating the standard for what the presumption is and the respondent's burden to be able to basically prove that it is independent of government control, and there's no reason for this court to depart.

[00:15:16] Speaker 01:
What I understood he was saying was that most of the cases where the respondent has lost in these circumstances, most of them deal with majority.

[00:15:26] Speaker 01:
And there are only a small number of cases that deal with minority.

[00:15:30] Speaker 01:
And you disagree with that observation in terms of the cases?

[00:15:35] Speaker 05:
You know, I haven't done a rundown.

[00:15:37] Speaker 05:
I know that certainly some of those cases have dealt with majority ownership.

[00:15:41] Speaker 05:
But again, this court has never found any sort of difference to exist between majority and minority ownership.

[00:15:47] Speaker 05:
And in the recent Zhejiang machinery case, that was a case involving minority ownership where the court basically approved commerce's

[00:15:56] Speaker 05:
methodology for finding that when there's minority ownership, commerce looks for additional indicia of control before deciding whether the respondent had met the de facto criteria or not.

[00:16:08] Speaker 05:
And here, commerce did exactly that with respect to factor three, which is autonomy from this government and selecting management.

[00:16:16] Speaker 05:
And commerce found based

[00:16:18] Speaker 05:
on multiple pieces of record evidence that Pirelli had not rebutted the presumption that it was independent from the Chinese government in making decisions regarding the selection of management.

[00:16:31] Speaker 05:
I do really want to quickly address Pirelli's argument that somehow commerce is required to discuss specifically some sort of link to export activities or functions

[00:16:42] Speaker 05:
with regard to each factor in the de facto analysis.

[00:16:48] Speaker 05:
And the trial court found, and I think Judge Toronto alluded, that that's simply not the case.

[00:16:53] Speaker 05:
There is, of course, that overarching finding that Congress is trying to make, whether a respondent has demonstrated autonomy in its export functions.

[00:17:03] Speaker 05:
But that doesn't mean that each criteria specifically has to address those functions.

[00:17:08] Speaker 05:
I think Judge Toronto asks,

[00:17:10] Speaker 05:
If the government can choose its personnel, can't you reasonably infer that that means that the government could influence that personnel's choices?

[00:17:18] Speaker 05:
And the answer is yes, and Commerce has explained this in front of the trial court, not in this case, but has made that statement in front of the trial court in another case.

[00:17:28] Speaker 05:
The trial court sanctioned that saying that you can make that reasonable inference that if the Chinese government has a say in selecting management, and that means that that management would inherently be able to affect that exporters export functions or activities.

[00:17:44] Speaker 05:
So I'll just move to a couple pieces of the evidence that Pirelli discussed and that Commerce discussed.

[00:17:52] Speaker 05:
And while Pirelli has maybe been able to point to some pieces of evidence on the record showing that they may be autonomous from the selection of management, Commerce and the trial court pointed to multiple other pieces of evidence calling that into question.

[00:18:07] Speaker 05:
And again, the burden is on Pirelli to demonstrate that it rebutted the presumption of government control.

[00:18:13] Speaker 05:
Here, Commerce and the trial court pointed to multiple statements in the annual report that Pirelli was controlled.

[00:18:21] Speaker 04:
Can I ask you, do you think, I think I understood Mr. Porter to be saying that as part of the obligation of Commerce to

[00:18:36] Speaker 04:
have substantial evidence in support of its finding, or at least as part of our review, it is important that the facts found be reasonably found on consideration

[00:19:00] Speaker 04:
that if there are important pieces of evidence not addressed by commerce, that's a problem.

[00:19:13] Speaker 04:
How do we think about that?

[00:19:15] Speaker 05:
Well, I think you're referring to Mr. Porter's statement that, you know, commerce is required to address certain contrary evidence or arguments raised by the respondent.

[00:19:24] Speaker 05:
And I think there's a few issues with that.

[00:19:27] Speaker 05:
Number one, I think that commerce did address at least some of probably specific arguments, particularly regarding Mr. Rivera's authority versus his obligation to report to the board.

[00:19:38] Speaker 05:
Commerce certainly discussed that.

[00:19:40] Speaker 05:
Pirelli also made an argument regarding proprietary know-how that commerce discussed, but I think Pirelli's dropped that particular argument here.

[00:19:47] Speaker 05:
But the wrinkle, I think, in this case is that a couple of the other arguments that Pirelli made specifically relied on provisions of Italian law.

[00:19:56] Speaker 05:
And I think that relates largely to the fact that commerce found that the Chinese state-owned entity

[00:20:03] Speaker 05:
appointed the majority of the board of directors and Pirelli responded that while that may be the case, some of those directors were required to be independent under Italian law.

[00:20:13] Speaker 05:
And Commerce didn't ignore this.

[00:20:15] Speaker 05:
They addressed this argument.

[00:20:16] Speaker 05:
But what they did was find that Pirelli hadn't put that law on the record.

[00:20:20] Speaker 05:
And therefore, Commerce couldn't or wouldn't address it in the first instance.

[00:20:25] Speaker 04:
No, I don't remember.

[00:20:29] Speaker 04:
When Mr. Porter was identifying a handful of important, what he says were important pieces of evidence that commerce did not discuss

[00:20:43] Speaker 04:
I don't remember that any of those turned on any content of Italian law.

[00:20:51] Speaker 04:
Maybe one of them did about what it means to be independent, but I thought most of the others were not that.

[00:21:00] Speaker 04:
They had to do with, I don't know.

[00:21:04] Speaker 04:
not the bylaws, but some other internal company document and a variety of other things.

[00:21:11] Speaker 04:
I guess I want you to address the things that Mr. Porter focused on.

[00:21:17] Speaker 04:
It's not enough to say, well, commerce discussed a lot of other things to meet an argument that says there are some really important things that commerce did not discuss.

[00:21:27] Speaker 04:
And by the way, it has to discuss those things.

[00:21:30] Speaker 04:
That's a two-part

[00:21:31] Speaker 04:
point.

[00:21:32] Speaker 04:
Maybe they don't have to address all of them.

[00:21:37] Speaker 05:
I mean, I think that for one, I think Pirelli or Mr. Porter might have been sort of understating the reliance on Italian law made by Pirelli both in front of commerce and in front of this court.

[00:21:51] Speaker 05:
If you look at Pirelli's arguments in its brief, they refer consistently.

[00:21:55] Speaker 04:
No, I'm sorry.

[00:21:56] Speaker 04:
I guess if maybe you don't recall, certainly I don't recall, so I wouldn't understand it, the specific items that Mr. Porter discussed this morning.

[00:22:07] Speaker 04:
forget about what it said in its brief here or below.

[00:22:11] Speaker 05:
I mean, one of the things he addressed this morning, I believe, had to do with the independence of the directors.

[00:22:19] Speaker 05:
But I think you're talking aside from that particular argument, which is based on Italian law.

[00:22:23] Speaker 05:
But I think he also talked about statements in the annual report that

[00:22:29] Speaker 05:
that Pirelli would cease to, that I think its shareholders might cease to exercise management over certain activities.

[00:22:38] Speaker 05:
And I think those statements were made maybe in the annual report or the bylaws in addition to the statements that were clearly made as to ChemChina, the state-owned entity having control over Pirelli.

[00:22:52] Speaker 05:
And I think to that extent, commerce did

[00:22:57] Speaker 05:
I don't remember, sorry, what I don't remember is if Pirelli made that argument regarding management and coordination specifically in front of commerce divorced from that Italian law.

[00:23:09] Speaker 05:
So I think unless they did so, commerce wouldn't have been under any obligation to address it without that Italian law on the record.

[00:23:16] Speaker 05:
I also think that commerce is required to rationally explain its decision and rationally explain the evidence it relied on.

[00:23:23] Speaker 05:
What I don't think that Mr. Porter can cite authority for is a proposition that commerce is required to address in detail every single little facet of every piece of evidence that.

[00:23:37] Speaker 04:
But you can at least state the argument fairly.

[00:23:41] Speaker 04:
He doesn't say every little facet.

[00:23:44] Speaker 04:
He says all important facets.

[00:23:46] Speaker 04:
which at least under arbitrary and capriciousness review, which maybe doesn't apply here, is of kind of standard stock in administrative law.

[00:24:01] Speaker 05:
I mean, I think the standard that applies here statutorily under 1516A is the substantial evidence standard.

[00:24:08] Speaker 05:
And here, I think that it's clear that whichever way you look at it, commerce's determination was supported by substantial evidence.

[00:24:16] Speaker 05:
based on substantial evidence on the record, the half a dozen pieces of information that it and the trial court cited that Pirelli had not rebutted the presumption of de facto control.

[00:24:26] Speaker 05:
So even if Pirelli pointed to certain pieces of evidence that maybe could be considered contrary, either based or not based on Italian law,

[00:24:35] Speaker 05:
The fact is that the presumption, the burden still lies with Pirelli and commerce's determination that Pirelli had not rebutted that presumption, had not established the lack of government control over selection of management.

[00:24:50] Speaker 05:
That decision was still supported by substantial evidence, multiple pieces of substantial evidence.

[00:24:57] Speaker 05:
I'm happy to answer any other questions that this court may have.

[00:25:00] Speaker 05:
Otherwise, I concede my last minute to Mr. Birch.

[00:25:07] Speaker 01:
Bert, ready to hear from you.

[00:25:10] Speaker 00:
Thank you, Your Honors.

[00:25:11] Speaker 00:
May it please the Court, I don't believe I can add much to the government's presentation with limited time I have.

[00:25:15] Speaker 00:
However, given the emphasis Pirelli rests on its claims about Italian law, at least in its briefing, I believe it would interest the Court to know some of what has occurred under that Italian law, where last year the Italian government forced the restructuring of ChemChina's ownership of

[00:25:29] Speaker 01:
Excuse me, I'm sorry.

[00:25:30] Speaker 01:
Is this, is this information in the record and has the other side had a chance to respond to the arguments you're about to make to us?

[00:25:38] Speaker 00:
No, Your Honor, and that's exactly the point.

[00:25:40] Speaker 00:
There's a lot of facts that aren't on the record.

[00:25:42] Speaker 00:
And I'm sure Porrelli would forcibly tell you these facts were not before commerce.

[00:25:47] Speaker 00:
And I look forward to hearing Porrelli's counsel argue that commerce should not consider matters not properly placed before the record, because that's what Porrelli did with the matter of Italian law entirely.

[00:25:56] Speaker 00:
It didn't bring it up until briefing before commerce.

[00:25:59] Speaker 00:
Porrelli tried to force commerce and asks you today to take some enormous leaps in logic.

[00:26:04] Speaker 00:
claiming that Italian law uses terms like independent director and has protections for minority shareholders, hoping that you will just assume that the existence of that law means that ChemChina and Pirelli, their relationship was factually compliant with that law.

[00:26:18] Speaker 00:
As I was just saying, that's been rejected by the Italian government multiple times now, who is currently looking at whether or not Pirelli will have to be forced to be sold.

[00:26:28] Speaker 00:
commerce properly declined.

[00:26:31] Speaker 01:
I'm having a hard time, and if my colleagues disagree, I hope they'll say it once you go on, but I'm having a hard time entering into the record new information on Italian law, which is an argument that you actually, in the first instance, ask us not even to consider.

[00:26:46] Speaker 01:
But I really don't see how your friend is going to have an opportunity to respond if you're introducing evidence that no one's ever mentioned before.

[00:26:55] Speaker 00:
I don't want to try and introduce new evidence here, other than make the point that Commerce declined to dive off that logical cliff when Prelli lays these claims.

[00:27:04] Speaker 00:
The only thing Prelli tried to present to Commerce is, here's Italian law.

[00:27:08] Speaker 00:
You have to assume we are compliant with that.

[00:27:11] Speaker 00:
Made no showing of that.

[00:27:11] Speaker 00:
Commerce properly declined to do that because there was no chance for it to develop any kind of record that would allow it to investigate the factual veracity of Prelli's claims.

[00:27:21] Speaker 00:
There's no reason for this court to make that dive in place of the agency now, still lacking any meaningful investigation into the matter.

[00:27:29] Speaker 00:
Simply because Italian law exists doesn't mean that factually, China didn't control Pirelli.

[00:27:36] Speaker 00:
And so that's a major flaw in how Prelli has approached this.

[00:27:41] Speaker 00:
And that's why the trial court, the CIT, very considerably said the existence of telling law isn't something that commerce had to consider.

[00:27:49] Speaker 00:
It's very direct on that point.

[00:27:53] Speaker 00:
And it was, you know, this isn't a back door for Prelli to try and get facts before commerce now.

[00:28:00] Speaker 00:
So a couple of additional points, one of these, Toronto, to your question about these points that Pirelli's raised, I'd point to one of them, the one that he, that Mr. Porter says the epitome of the issue about this second statement in their annual report where Pirelli, Congress looked at the first statement in the annual report where it explicitly said Pirelli is controlled by ChemChina.

[00:28:24] Speaker 00:
And he says, well, you have to look at the second statement that he argues,

[00:28:28] Speaker 00:
states with more authority that Pirelli was no longer subject to Chinese control.

[00:28:33] Speaker 00:
But that second statement here and throughout their briefing, Pirelli likes to quote only part of that statement, but you can read the more complete statement on page 24 of Pirelli's reply brief.

[00:28:43] Speaker 00:
If you do, you'll know what's being referenced about the plain lack of management coordination isn't any decision by the Italian court,

[00:28:49] Speaker 00:
or legal authority to determination by Pirelli's board of directors.

[00:28:53] Speaker 00:
So on one hand, you have the statement that Pirelli was required to make under Italian law that they are controlled by ChemChina.

[00:28:59] Speaker 00:
And on the other hand, you have the declaration of their board of directors and that board of directors that was majority appointed by ChemChina pronouncing that they are free of ChemChina's control.

[00:29:10] Speaker 00:
There is no merit to Pirelli's claim the first statement must be disdained and the second statement by their directors be given controlling weight to the question here.

[00:29:17] Speaker 00:
Throughout its determination, Congress properly weighed the body of evidence before it and came to a conclusion that's fully supported by substantial evidence and could be accepted by any reasonable mind.

[00:29:29] Speaker 00:
I'm out of time, so I'll stop there.

[00:29:31] Speaker 01:
Thank you.

[00:29:34] Speaker 01:
We will give you three minutes of rebuttal.

[00:29:45] Speaker 01:
Turning back to Mr. Porter.

[00:29:50] Speaker 02:
Apologies, Your Honor.

[00:29:52] Speaker 02:
I didn't realize I had muted my microphone.

[00:29:55] Speaker 02:
A couple of points, just I think a more minor point.

[00:30:00] Speaker 02:
The case relied upon the government Zhengzhong machinery.

[00:30:04] Speaker 02:
In fact, in that case, both the Commerce Department and the court agreed the union, which was controlled by China, had majority controls.

[00:30:12] Speaker 02:
This was not a minority ownership case at all.

[00:30:15] Speaker 02:
That case was majority.

[00:30:19] Speaker 02:
Couple of important points.

[00:30:22] Speaker 02:
Our case 100% stands if you completely ignore Italian law provisions that we provided to the trade court.

[00:30:33] Speaker 02:
Our case is based on documentation that was submitted as part of the separate rate application, including the annual report and the shareholders agreement.

[00:30:44] Speaker 02:
that our case rests, well, some other documents upon these documents.

[00:30:50] Speaker 02:
So the whole Italian law thing is a complete red herring, okay?

[00:30:55] Speaker 02:
I believe that we were correct in the way we approached it, but you don't need to accept that.

[00:31:00] Speaker 02:
You can look at the documents that were given to Congress as part of the separate rate application, including the annual report and the shareholders agreement.

[00:31:09] Speaker 02:
Now, with respect to two other points,

[00:31:14] Speaker 02:
Government counsel says that our entire argument about independent directors rests on Italian law.

[00:31:23] Speaker 02:
That is not true.

[00:31:24] Speaker 02:
Our argument about independent directors rests on the term independent director.

[00:31:30] Speaker 02:
The Commerce Department says they can completely ignore the term independent.

[00:31:36] Speaker 02:
It is undisputed that eight of the 15 members of the board of directors were independent directors.

[00:31:42] Speaker 02:
The term independent director has meaning, yet the Commerce Department can claim that they can ignore that meaning.

[00:31:51] Speaker 02:
There's no basis for that.

[00:31:54] Speaker 02:
The next thing is on the statements in the anal report, which we claim are contrary to Congress's citing of one sentence.

[00:32:08] Speaker 02:
Mr. Birch went on and on about how he could interpret it differently.

[00:32:13] Speaker 02:
But guess what?

[00:32:14] Speaker 02:
Mr. Birch is not the Commerce Department.

[00:32:17] Speaker 02:
Everything Mr. Birch said, you cannot find in the Commerce Department's decision memorandum.

[00:32:22] Speaker 02:
The court knows it has to look at what did Commerce cite, what did Commerce say was justification for their decision.

[00:32:31] Speaker 02:
They didn't address the contrary evidence.

[00:32:34] Speaker 02:
And that is why their determination is not supported by substantial evidence.

[00:32:41] Speaker 02:
Thank you, Your Honor.

[00:32:43] Speaker 01:
Thank you very much.

[00:32:43] Speaker 01:
Thank all parties and the cases submitted.

[00:32:45] Speaker 01:
That concludes our proceeding for this morning.