everyone on the panel has put forward a total of five cases two of them will be submitted without argument on the briefs later today those are appeal seventy one twenty six warren versus department of veterans affairs and we need versus social security administration that's appeal thirty to fifty five on the argument list will hear argument first an appeal to all fifty seven who are best limited vs and then states mr remsen good morning to you welcome to the apply to be a little bit unusual but that's the sequence that we've worked out here the congress gave and commerce to instructions as to how to value the factors of production and non market economy cases first paragraph one of one thousand u s c sixteen seventy seven b c provides a general instruction comma shock value of the factors of production or f o p quote based on the best available information regarding the values of such of a statutory provision but they congress gave parents a paragraph for as a specific parameters to select surrogate values and that even if they're not the best information available well i mean in that in the conference report accompanying the one nine hundred eighty eight act count congress made a clear connection between the term best available information through the two filters a paragraph or the per for has escaped clause to you the least then possible that's right though is that is that the hint that congress has given us the about the relationship between the first paragraph and for well we view that as as congress saying to commerce and last it's impossible you should stick within countries that satisfy both the test and here it was possible con commerce had a value that qualified under both the statutory primary and the various other factors that commerce ran the wage rates through india and it was twenty one cents an hour and commerce threw that out and so we have to throw it out because we have this regulation clearly that writes paragraph four and the two filter to paragraph four right out because they are not paying any attention at all to whether the country where the surrogate data comes from a country which is a significant producer of comparable march and ice in they go out of their way to include every country in the world luxembourg norway switzerland that has data that passes their their various filters so paragraph four is the more specific instruction and we don't think that that it's reasonable to say that paragraph one provides a general escape for comments to use whatever it wants in every case regardless of the two filters that congress spent time this case that the indian value was not an anomaly instead of using that they they'd follow their very complicated regulation which they promulgated in one nine hundred ninety seven which required regression analysis specific and paragraph one yes it covers everything that paragraph one covers for paragraph four is the more specific construction when you get down to actually selecting prices or costs of factors of production year and to progress for and congress made it clear and has confirmed in the legislative history that they meant that that goes hand in hand with the best available information you can't write out those two statutory factors by the general best available information words and in paragraph one that's commerce his position in this case and then this court has only ever dealt with paragraph four the words to the extent possible and one one case and that's the nation forward case and in that case it was the flip side of this where commerce had a distorted domestic value and they wanted to go outside the country and this court said that is acceptable here they had an acceptable value in india but they said they have to follow the regulation throw that value out and go outside india where they found under this regression calculation actually a value that statistically that's correct in that case is not yet final ok there is a rematch due in that case at the end of i believe at the end of february that has a plant how many times let me ask you this question how many times has the c i t this it says in valuing the factors of production under paragraph want it's clearly a further modification of paragraph one it is more specific at saying when you when you find the best available information under paragraph values that will qualify under paragraph four and commerce says well we have an obligation to stop the best available information this is how sometimes they'll pick they'll decide to slot the data that's publicly available rather than the data  that's that data that's not publicly available or more contemporaneous romney that what factors of production yes that's correct even even values that satisfy all of or commerce when choosing between what values to use they will often rely on already in a paragraph one and say we have an obligation to slot the best available information do you think that if commerce instead of having the regression line as the sole basis for deciding labor costs head use the regression is a fullback and had said all right here's our regression line if we find that any particular case the surrogate is not  not give us a value that we feel confident in that we will use we will resort to that to the regression would that be valid in your lot in your view under the statute well to go back to wh i'm trying to get at whether you think it would be permissible for commerce to use the regression line but just not as an exclusive or first line recourse well  i don't think that when you put data into the regression line that fails to meet the statutory factors of paragraph four that you are complying with what congress direct court judge poe and in ruling on a facial challenge this in a way over my time in ruling on the facial challenge said that it's conceivable that commerce could be faithful to the statute and still file its regulation that the only data under four is let's say in the indian data for some reason that's an anomaly and i know in this case it hasn't been determined to be human he i think he said would you then go beyond the kinds i don't i wouldn't read it that far but i would say that the to the extent possible language the exception of of for could kick in at some point if there's no youse data from us something from outside and that's what the court chrono nation for is a very different situation where they had usable data but said we can't use it because our regulation forces us to go outside and to use data that has a error rate of plus or minus forty cents as we you deleted worse when would there ever be a different result under applying for these go hand in hand and it's not one or the other but go hand in hand doesn't help us at least it doesn't help me it's like when you say will force more specific than one well yeah i agree in a way it is but so what w conclusion flows from the fact that it's perhaps more specific what will i say the conclusion of flows is that they can't rely on the more general paragraph one to essentially ignore paragraph four that's what they're doing and every single non market economy case involving the labor and put out of all these imports commerce singled out labor and said to congress i mean we have a better idea of how to value this that this one raw material import and it is one of the non market economy but don't want the current to hop countries for the non market economy case or china and vietnam and there may be others involved in the stands the former soviet union but there's no activity and this applies to every now market plant stand i just wondered as a practical matter whether we're just talking about china we're not just talking about china and actually if you go to a situation like vietnam where are the result of this labor rate calculation is a number in the thirty cent range then this y intercept of commerce's calculation which is thirty one cents that's a that has it's having a tremendous effect they're making a global minimum wage of thirty one cents and you can't say that's coming from the low income countries that waiver question but i'm happy to answer questions of course i have and just to conclude on the labor rate this is the one in quote that con commerce of singled out and and decided to ignore the statute paragraph c for every single case regardless of the quality of the data here they had a good piece of data from india that was not an anomaly and they refused to use it based on an illegal but elation i guess this was the  question is whether the what is the language to the extent possible median for and and commerce is concerning that meet well it's not possible to use this data because it's not good enough and so we're looking to regression analysis including fifty four countries or whatever it is to get better at it and the question is whether that's reasonable construction of a statute under several well opposition and said absolutely not it available source just like the other sixty countries in the regression and commerce aside it's not an anomaly it's from the primary surrogate country that commerces has elected it's consistent with all the other values that commerce is using to do the cost build up reasonable way this is not it this is a robotic automatic rejection of every labor figure from the primary circuit country and every single case to the extent possible yes there could be a value  that was qualified under paragraph four of the commerce still said in this case we can't use it they are not conducting any case by case evaluation of this one piece of data and every non market economy cases the supplying like a machine once a year this calculation comes out nobody understands it that's why we're here thirteen years after this was was promulgated is that this is frankenstein of a methodology that nobody has bothered to look into before but it issues raised by half mc's appeal first commerces decision to include the financial statements for smaller companies and the second remain results was based on substantial evidence of its later decision to exclude those financial statement  lacking but it is your best to judge poe did find that there was a lack of substantial evidence and that requires this court to review that determination they know that well i don't know  only expletive the or under respectful protest then they didn't agree with the court and it's our position is set forth in our brief that the decision in the third remained results under respectful protest itself is not based on substantial evidence it is also contrary to law but suppose you are wrong and that supposes that commerce was right both you know that it's certainly possible for the agency to be right  in terms of the substantial evidence test with despite having come to different conclusions is it do you it's your position i take it that because they were right the first time and in  that we should focus on the previous the question of whether they were rightly sustainable in the what is it second remain and results right why in your view is that something that we can and should look at in in terms of our review at this point of the final judgment because the commerce department plainly stated in the third remained resells that it was only doing so so under respectful respectful protest they went not a road that would not want to go out that meant that it's not worth fighting about i mean then they could have continued to challenge it right that is have to give up right right but i think if they were indifferent if they were saying this is an with the following result and kind of assessment been instructed to come down with this result and therefore coming down with the result that we still think that the position before struck you would say that the question then still is whether they were right the first not find their relative size in relation or about us is a basis for the inclusion a rejection of the financial statement and if you look at our our october twenty seven syrup library at page twelve and you can you see the a listing of the revenues work best compared to the revenues of of the other of the seven surrogate countries sir sir sir companies and you'll see that that conclusion by farmers is exactly right i mean and it would be one thing if you had a if you had one company that was of the same size as your best and then you had a bunch of other companies that were not the best but here you had no company that came anywhere close to the size of your best so commerce recently explain that science cannot be a relevant criterion for selecting surrogate statements in this case the second commerce found no evidence the relative size is a primary driver in the differences in the financial ratios of the indian surrogate companies on the record and on page eighteen in our opening brief we lay out in the columns the revenue of each of the surrogates the overhead ratio the s g and a ratio and the sum of the overhead and as you know a ratio and if you look at that data and look at commerce findings you'll finally surely see support for commerce conclusion commerce noted that the s ragbir the second largest company had the lowest overhead ration and lowest point the point is that the there's no real there's no correlation looking at the data there's no correlation decide between size and problems with well first you've got this arbitrary decision that there are three large companies and four smaller companies look at the data in our in our table it goes through the revenues there's no there's no dividing point they're all why should we be reviewing the the best never came up with a reason for saying here's where you draw the line why you draw the line at this point as opposed to saying there were just that that i have is the only large company and the other s evidence to support the more bottom line of course we know that well here there is not any substantial evidence to support the vision of the three large companies in the force more companies and there's no substantial evidence to show that the only the only the only evidence the record is the trial courts are part of belief that economies of scale have some effect on s g and a ration and that was stated in indoor best want and that's what got this all the strain off the tracks from the get go all right let's assume that the criterion is to the extent possible i don't understand your argument as the best available information is also irrelevant standard let's put that aside for them what if if we work to determine that the only standard is to the extent possible why is it not possible to use data from india and other countries for all and within paragraphs for instead of doing a regression analysis using fifty four countries when you haven't  stand labor rates would be distorted nonetheless i take it commerce would use the regression line even if that line produced a number that was very different from the labor rate in correct its commerce practice to use their aggression line that's what the regulation states however if there is evidence as there was in this case that there is that as there was not in this case but is there is in your hypothetical you know that there was believe the hype but that means based on i'm trying to get a sense of what their methodology is aren't we committed heart and soul locked in on the regression line or is there room to say and the regression line is one way to do it and if we're unhappy with looking at the data we go to the regression it's more the former than the latter it's not is more the former of them so in my case i mean although you say well they'd be free to look at that there's nothing in the regulation give them that freedom i take no they would use the surrogate country as opposed to the regression line or simply they considered it because they are that was interesting but quite irrelevant since they use the regression line though i think they considered it i think the record reflects that they considered all the options regulations they were not you just told me that they work well the regulation is there bound by the regulation but the reality of it is that your hypothetical con directly could but the fact is that the information does not exist labor is unique in the sense that there exists a pool of information that's reliable and and can be used to construct a i was a regression analysis like  constructing piloting a global relationship between first national income and labor and then is just is using the broadest set of data to get the most accurate line but when we look to china for example in this case analysis no matter what alternatives made exist and the reason for that is that when problem in the regulation powers and studied and believe that there is not that this will be the best available information that it's it i if it did it again to be clear on this because i i want to make sure i understand your answer to be clear even if someone an economist sitting in the department of commerce said whoa this is this is exactly right you a twin of kyrgyzstan then and this is a perfect replication of of the labor rate so the extent that we can tell you would still go to the regression consistent with congress mandate that's the question is the reg consistent with commerce is mandate it's not an answer to that say well it's based on what congress believes but the regulation as written is consistent because again perhaps that would again the it was written that way because the evidence showed that relying on a single presupposed suppose hypothetically that we held that the regulation to clear the part that requires reliance on the regression analysis is inconsistent with the statute and therefore is invalid and your colleagues at the table and you would then huddle because the secretary of commerce they were well now what do i do use o easy this rewrite the regulation exactly the way it was before and then after the word regression analysis was put in a few words to say as long as that makes it in view of other better and if not use something else that we would have to easy fix not if the regression as written we believe is valid your version would also be valid supposed to interpret that part believe that the original examination was supported by substantial evidence but it also believed that the court subsequent determination was for about substantial evidence we didn't appeal that issue and we we don't have so in  your view and this may be out of the area that you've briefed and perhaps not appropriately directed to you but if you can give us some guidance on this it would be helpful in your view in that situation is pretty unusual but but in that situation would our task be to determine whether congress has first determination was correct put in by substantial evidence or would it be to determine whether congress is latest determination is supported by substantial evidence so that if we found both were what would we do could have said i suppose in that appeal you know we under protest we did this and we frankly we think this is supported by substantial evidence given what the trial court required of us but we appeal because we think the tr court was wrong to require more than and the ultimately a different result than was reached in the previous three men it's here and in that situation you would say that our choice would be confined to deciding whether what the trial judge did was wrong feel has many factors beyond i think i think the fact that we didn't appeal doesn't mean we don't think that there are good we believe about things what why shouldn't you be helped to make an election if you think it's wrong fight it if you think it's if we continue to fight before forever they'll just keep reminding me that some point we need to draw lines that we can move on to an appellate well exactly that's the point so that's what congress this decision was that it was important to move on and not conti assume it would be futile to fight against what you conclude is an illegal decision by trial point out that there are the it's a pretty big deal for the government to take an appeal and frequently the government does not pursue an appeal even when it thinks its position is clearly correct and it's not something that's done lightly so it's in it i suppose that the argument would be that there is there ought to be room for the government to say well we're not going to trouble you with that appeal but you still should treat this position as having been  for purposes of analysis of what's gone on before i agree or against the significance of the thing undervote has no meaning in this case but it's a warning to the court and the government then in a future case it's to prod to preserve against their argument in a later case that you sort of waive the right to comply i think that's all well in and not in a in a later case but in a different case we might  inventor terminations in response to that in the third remain determination if you had set up now that judge bogus pointed this out to we now realize the error of our previous ways we think he's absolutely right and we now not under protest at all but with enthusiasm embrace his analysis and we come to a different result then i guess there would be no argument with there that that we want to then look at the second remain and determination instead we would be case is clearly answered and congress is well making in the two thousand and six war making they say under the department's regression methodology the value for labor will be the same in every proceeding involving a forget what i just said and i agree with her that but when one commerce promulgated the original regulation they actually included language which could have made it at least in part consistent with the statute they had the words in there in the middle of the regulation that the regression would be applied to countries found to be economically probable but they took it out so they they've made it and we've got in the final reg back at the your original issu that's correct in the ninety seven reg it took it out they said we haven't changed anything which was wrong and then they said years later that people had a opportunity to comment on this and only one person did on our as we sort of pace for five to fifty of our brief what the world understood was that they were actually trying to comply with the statute promulgated this rag and that ninety seven change was really something of a bait and switch i want to deal with the rubber would ministerial air very quickly mr daunt didn't argue this the situation i mentioned before where i'm proceeding him but and brief there is a controlling regulation on raising ministerial air allegations other times of whether to be consistent with its past practices should have corrected the error here i think the question is whether it was an abuse of discretion under the past if they saw fit to fail and it could be if there were identical complete answer to this argument where we haven't asked to appeal because the courts have said not withstand that regulation harsh you do have that discretion but one thing that i wanted to point out is that in the three brief filed that the court the petitioners don't even deal with the five day time limit of the control of the controlling regulation and furthermore they don't deal with the second reason that commerce sided below which is what ing them change and raise new issue now two years into the complaint could prejudice not only door bust but a potentially up to two hundred other parties whose rates were dependent and part on door bust right that's why commerce articulated a valid it's a case that did not involve that additional finding by congress of a prejudice i think you'll find in the petitioners position simply that you should fix this because it's wrong but they analysis of late ministerial air always raises this tension between finality and accuracy and the cut and congress told commerce to fix these things within a reasonable time and commerce said five days is a reasonable time and the courts have  even if those data even if they are from other countries would make the result more accurate then ink and congress could not have meant that commerce was hands were tired to only use countries considered to be appropriate by the ministry of art so it's up to commerce determine what the appropriate countries are so that's the shout version in paragraph one and then paragraph forced to the extent possible so paragraph one does trump fo information and promotes accuracy in the dumping margin in quote and that's exactly what commerce has done here and congress has not ignored paragraph four it's addressed paragraph or on at least three occasions explaining that it had this practice of just you know picking a single circuit country and we're going to say well that's the estimate of china's wage rate or vietnam to wage rate or other and he says that is very unpredictable it's just a random exercise it's unfair because there's such a large variation in wage rates for this handful of the economically comparable countries and congress says that's that's not fair it's not predictable it's just random and so it came up with this approach of using a regression analysis to create that helpful but on this particular point it seems to me it might have something to say to us and you're familiar with it i'm sure that the conference committee refers to this very issue and says the factors would be value from the best available evidence in a market economy country or countries that it is that at comparable level of economic development that sounds like what the committee is saying they mean by best available information and in in one this process because the average wage rate for the global data set is indexed the g and i of particular in me so so in the in the decision below commer said the regression instance why its approach was was more accurate and and judge program also said that commerce explained the economic comparability the stablished in the regression calculation itself through the per capita income in the  enemy in question which ensures that the result represents a wage rate for a country economically comparable to the enemy in quotes because all the regression is doing is creating a statistical relationship and  saying is we're going to try to follow the wrong one of the statute and come up with the best available information and what we've been doing the past doesn't work because it's random it's unpredictable you have these people just playing games like we want country a because it's got to happen to have an outli low wage rate like india and it and then the result of the margin in the panel the selection of that single sort of country and conversely if that doesn't result in the best information available we need we have a much better way to do it we've one approach would have been to go to congress in the pro choice they chose instead was the easy approach of going to the federal register and the question is can they do that given what looks like a fairly you know it when it went back and did i notice and comment preceding and your best comment for example on the methodology then and congress went through the same analysis and explain why not this approach is far four is a definition in that circumstance of what best information available means that there is no conflict there is no issue about those one time for four is defining for those more robust just historical correlation between wage rates and she and i are right and india is not it is not the twin of china india's gross national income is four