Court Opinion

ID: 9384477
Source: CourtListenerOpinion
Date Created: 2023-04-03 22:01:07.400318+00
Date Added: 2024-06-11T17:17:53.721598
License: Public Domain

Slip Op. 23-45

          UNITED STATES COURT OF INTERNATIONAL TRADE

MID CONTINENT STEEL & WIRE, INC.,

       Plaintiff and Consolidated
       Defendant-Intervenor,

v.

UNITED STATES,
                                                 Before: Claire R. Kelly, Judge
       Defendant,
                                                 Consol. Court No. 15-00213
and

PT ENTERPRISE, INC. ET AL.,

       Defendant-Intervenors and
       Consolidated Plaintiffs.

                             OPINION AND ORDER

[Remanding the U.S. Department of Commerce’s third remand redetermination in its
antidumping duty investigation of certain steel nails from Taiwan.]

                                                                Dated: April 3, 2023

Adam H. Gordon, Jennifer M. Smith, and Lauren Fraid, The Bristol Group PLLC of
Washington, D.C., for plaintiff and consolidated defendant-intervenor Mid Continent
Steel & Wire, Inc.

Ned H. Marshak, Andrew T. Schutz, and Max F. Schutzman, Grunfeld Desiderio
Lebowitz Silverman & Klestadt LLP of Washington, D.C., and New York, N.Y., for
consolidated plaintiffs and defendant-intervenors PT Enterprise, Inc., Pro-Team Coil
Nail Enterprise Inc., Unicatch Industrial Co., Ltd., WTA International Co., Ltd., Zon
Mon Co., Ltd., Hor Liang Industrial Corp., President Industrial Inc., and Liang
Chyuan Industrial Co., Ltd.
Consol. Court No. 15-00213                                                     Page 2

Mikki Cottet, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, D.C., for defendant. Also on the brief
were Brian M. Boynton, Principal Deputy Assistant Attorney General, and Patricia
M. McCarthy, Director. Of counsel was Vania Wang, Attorney, Office of the Chief
Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of
Washington, D.C.

      Kelly, Judge:    Before the court is the U.S. Department of Commerce’s

(“Commerce”) third remand redetermination in the antidumping duty investigation

of certain steel nails from Taiwan, in accordance with the mandate of the Court of

Appeals for the Federal Circuit in Mid Continent Steel & Wire, Inc. v. United States,

31 F.4th 1367 (Fed. Cir. 2022) rev’g in part 945 F. Supp. 3d 1298 (Ct. Int’l Tr. 2021).

The Court of Appeals vacated and remanded for Commerce to reconsider or further

explain its use of a simple average as the denominator of the Cohen’s d test, as part

of Commerce’s differential pricing analysis. See Mandate, June 13, 2022, ECF No.

177; Remand Order, June 14, 2022, ECF No. 178. On remand, Commerce again

asserts that its use of simple averaging is supported by statistical literature. See

Final Results of Redetermination Purs. Ct. Remand, Nov. 10, 2022, ECF No. 186-1.

For the following reasons, the court remands Commerce’s third remand

redetermination for further explanation or reconsideration.

                                  BACKGROUND

      The court presumes familiarity with the facts of this case from this court’s

previous opinions, as well as the Court of Appeals’ decision in Mid Continent V, and

now recounts only the facts relevant to the court’s review of the Remand Results. On

June 25, 2014, Commerce initiated an antidumping duty investigation of certain steel
Consol. Court No. 15-00213                                                      Page 3

nails from six countries, including Taiwan. See Certain Steel Nails from India, the

Republic of Korea, Malaysia, the Sultanate of Oman, Taiwan, the Republic of Turkey,

and the Socialist Republic of Vietnam, 79 Fed. Reg. 36,019 (Dep’t Commerce June 25,

2014) (initiation of less-than-fair-value investigations). On May 20, 2015, Commerce

issued its final determination, which resulted in an antidumping duty order on

subject nails from Taiwan. See Certain Steel Nails from Taiwan, 80 Fed. Reg. 28,959

(Dep’t Commerce May 20, 2015) (final determination of sales at less than fair value)

(“Final Results”) and accompanying Issues and Decision Memorandum, May 13,

2015, ECF No. 17 (“Final Decision Memo.”).

      On March 23, 2017, this court sustained Commerce’s determination, including

its decision to use a simple average in the denominator of Cohen’s d test. See Mid

Continent Steel & Wire, Inc. v. United States, 219 F. Supp. 3d 1161 (Ct. Int’l Tr. 2017)

(“Mid Continent I”). On October 3, 2019, the Court of Appeals vacated this court’s

judgment and remanded in part to Commerce for further explanation of its decision

to use the simple average in Cohen’s d test. See Mid Continent Steel & Wire, Inc. v.

United States, 940 F.3d 662 (Fed. Cir. 2019) (“Mid Continent III”). On remand,

Commerce defended its decision to use the simple average, explaining that its use of

the simple average was both accurate and in accord with statistical literature. See

Final Results of Redetermination Purs. Ct. Remand, June 16, 2020, ECF No. 144-1

(“Second Remand Results”).       On January 8, 2021, this court again sustained,

concluding that Commerce had adequately explained how its use of simple averaging
Consol. Court No. 15-00213                                                  Page 4

was more accurate, and thus a reasonable choice of methodology. See Mid Continent

Steel & Wire, Inc. v. United States, 945 F. Supp. 3d 1298 (Ct. Int’l Tr. 2021) (“Mid

Continent IV”). On April 21, 2022, the Court of Appeals again vacated this court’s

judgment, remanding to Commerce for further explanation of its decision to use the

simple average. See Mid Continent Steel & Wire, Inc. v. United States, 31 F.4th 1367

(Fed. Cir. 2019) (“Mid Continent V”).

      On remand, Commerce again defends its decision to use the simple average

with the Cohen’s d test, explaining that its usage is consistent with statistical

literature. See Final Results of Redetermination Purs. Ct. Remand, Nov. 10, 2022,

ECF No. 186-1 (“Remand Results”).         Consolidated Plaintiffs and Defendant-

intervenors PT Enterprise, Inc., et al. (“PT”) submitted comments asserting that

Commerce’s use of the simple average is not supported by literature and resulted in

increased dumping margins, as well as challenging Commerce’s decision to exclude

certain of its submissions from the record. See [PT’s] Cmts. on Remand Results, Dec.

13, 2022, ECF No. 188 (“PT’s Cmts.”).       Plaintiff and Consolidated Defendant-

intervenor Mid Continent Steel & Wire, Inc. (“Mid Continent”) submitted comments

supporting Commerce’s use of simple averaging. See [Mid Continent’s] Cmts. Supp.

Remand Results, Feb. 13, 2023, ECF No. 191 (“Mid Continent’s Cmts.”). On February

27, 2023, PT moved for oral argument, see [PT’s] Mot. Oral Arg., Feb. 27, 2023, ECF
Consol. Court No. 15-00213                                                     Page 5

No. 198, and on March 21, 2023, Mid Continent submitted its response in opposition

to oral argument. See Resp. Opp. Oral Arg., March 21, 2023, ECF No. 200.1

                JURISDICTION AND STANDARD OF REVIEW

      The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2018), which grants

the court authority to review actions initiated under 19 U.S.C. § 1516a(a)(2)(B)(i) 2

contesting the final determination in an antidumping duty order. The court will

uphold Commerce’s determination unless it is “unsupported by substantial evidence

on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

“The results of a redetermination pursuant to court remand are also reviewed ‘for

compliance with the court’s remand order.’”       Xinjiamei Furniture Co. v. United

States, 968 F. Supp. 2d 1255, 1259 (Ct. Int’l Tr. 2014).

                                   DISCUSSION

PT’s Rejected Submissions

       As a preliminary matter, PT argues that Commerce improperly rejected

portions of its case brief as new factual information. PT’s Cmts. at 31. Commerce

rejected a report authored by a statistical consultant for PT, which was submitted

together with PT’s comments on the draft remand results. See Rejection Ltr., ECF

No. 195, A-583-854, PRRD 15, bar code 4304452-01 (Oct. 25, 2022) (“Rejection Ltr.”);

1 In light of the court’s decision on the merits, PT’s motion for oral argument will be
denied as moot.
2 Further citations to the Tariff Act of 1930, as amended, are to the relevant

provisions of Title 19 of the U.S. Code, 2018 edition.
Consol. Court No. 15-00213                                                     Page 6

see also W.A. Huber Decl. Concerning Draft Results of Redetermination Pursuant to

Court Remand, ECF No. 195, A-583-854, PRRD 11, bar code 4290765-02 (Sept. 30,

2022) (“Huber Decl.”).

      Commerce properly rejected the Huber Declaration. Commerce’s regulations

require that it reject untimely-filed factual information unless the record is reopened

or, where appropriate, an extension is sought. 19 C.F.R. § 351.302(d). “Factual

information” includes, among other things, data or statements of fact in support of

allegations. 19 C.F.R. § 351.102(b)(21)(ii). Expert reports submitted to Commerce

“analyzing reported information clearly assume[] the weight of evidence and, as such,

amount[] to [d]ata or statements of fact in support of allegations, i.e., factual

information.” PSC VSMPO-Avisma Corp. v. United States, 688 F.3d 751, 760 (Fed.

Cir. 2012) (internal quotation and citation omitted). Commerce did not reopen the

record for new submissions on remand, see Defendant’s Resp. Cmts. on Remand

Redetermination, 29–30, Feb. 13, 2023, ECF No. 192 (“Def.’s Reply”), and the Huber

Declaration contains both the analysis and conclusions of PT’s statistical expert as to

the validity of the remand results. See generally Huber Decl. Therefore, the report

constitutes new factual information, which was properly rejected by Commerce.

      PT also challenges Commerce’s rejection of certain pages it submitted from

Cohen, and references in its comments to two non-record academic sources. PT’s

Cmts. at 32–33; Rejection Ltr. at 3. PT argues that these sources are not factual

information, but are only references to information in the public realm. PT’s Cmts.
Consol. Court No. 15-00213                                                       Page 7

at 32–33. Defendant counters that academic literature is factual information which

must be submitted as part of the record for Commerce to consider. Def.’s Reply at 31.

Again, factual information includes “data or statements of fact in support of

allegations,” 19 C.F.R. § 351.102(b)(21)(ii), and PT’s academic sources contain

statistical information which PT cites to support its argument in favor of weighted

averaging.   See PT’s Cmts. at 32.       Therefore, as with the Huber declaration,

Commerce did not reopen the record for new submissions on remand, so Commerce

properly rejected PT’s untimely submissions.

Cohen’s d Test and the Simple Average

      In Mid Continent V, the Court of Appeals remanded to Commerce to further

explain or reconsider its use of the simple average in the Cohen’s d test, in light of

statistical literature suggesting that only use of a weighted average is appropriate.

Mid Continent V, 31 F.4th at 1381. Commerce makes two arguments to support its

use of the simple average. First, it argues that the literature supports using the

simple average when the “full population” of data is considered. Remand Results at

14. Second, it argues that sample sizes are irrelevant, because they only affect

“statistical significance.” Id. at 14–16. 3 PT counters that the literature only supports

3 Commerce also argues against the alternative weighting proposals advanced by PT
and the Court of Appeals. Remand Results at 16–23. Because Commerce has not
elected to use either method on remand, the court does not reach the relative merits
of using either a single standard deviation or PT’s proposed equation. Moreover, even
if the alternate proposals were fully supported by the literature, this support would
not necessarily detract from Commerce’s choice of the simple average. See Motor
Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
Consol. Court No. 15-00213                                                     Page 8

weighted averaging, and that for Commerce’s purposes, analysis of full populations

is no different from analysis of a sample. PT’s Cmts. at 5–18. For the following

reasons, the court remands Commerce’s determination.

        When investigating whether merchandise is being sold at less than fair value,

Commerce typically compares the weighted average of normal values with the

weighted average of export prices for comparable merchandise, unless it determines

another method is appropriate. 19 U.S.C. § 1677f-1(d)(1)(A)(i); 19 C.F.R.

§ 351.414(c)(1). To address concerns over “targeted dumping,” 4 Congress amended

19 U.S.C. § 1677f-1 to allow Commerce to compare “the weighted average of the

normal values to export prices . . . of individual transactions for comparable

merchandise if (i) there is a pattern of export prices . . . for comparable merchandise

that differ significantly among purchasers, regions or periods of time, and (ii)

[Commerce] explains why such differences cannot be taken into account [with

another method].” 19 U.S.C. § 1677f-1(d)(1)(B)(i)–(ii). Congress has not specified how

Commerce should determine whether a “pattern of significantly different prices”

exists. 5   Therefore, the court determines whether Commerce’s methodology is

4 Targeted dumping occurs when an exporter sells at a lower, “dumped” price to
particular customers or regions, while selling at higher prices to other customers or
regions, such that the higher-priced products mask the dumped products by
increasing the overall average price. See Apex Frozen Foods Priv. Ltd. v. United
States, 862 F.3d 1337, 1341 (Fed. Cir. 2017).
5 The Statement of Administrative Action of the Uruguay Round Agreements Act

                                                                  (footnote continued)
Consol. Court No. 15-00213                                                    Page 9

reasonable in light of considerations that run counter to its decision. See Motor

Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983);

Ceramica Regiomontana, S.A. v. United States, 636 F. Supp. 961, 966 (Ct. Int’l Tr.

1986), aff’d, 810 F.2d 1137, 1139 (Fed. Cir. 1987). See also, e.g., Stupp Corporation

v. United States, 5 F.4th 1341, 1354 (Fed. Cir. 2021) (standard for reviewing

components of Commerce’s differential pricing methodology is reasonableness) (citing

Mid Continent III, 940 F.3d at 667).

       To implement § 1677f-1(d)(1)(B) Commerce performs a “differential pricing

analysis” of a respondent’s sales. See Differential Pricing Analysis; Request for

Comments, 79 Fed. Reg. 26,720, 26,722 (Dep’t of Commerce May 9, 2014). This

analysis contains three tests—the Cohen’s d test, the ratio test, and the meaningful

difference test. Only the Cohen’s d test, which determines whether there is a “pattern

of significantly different prices,” is at issue in this case.

       As applied by Commerce, the Cohen’s d test involves comparing the prices of

“test groups” of a respondent’s sales to a “comparison group” by region, purchaser,

and time period. See id. at 26,722. For each category, Commerce segregates sales

into subsets, with one subset becoming the test group, and the remaining subsets

being combined as the comparison group. Id. Commerce then calculates the means

explains that Commerce should proceed “on a case-by-case basis, because small
differences may be significant for one industry or one type of product, but not for
another.” Uruguay Round Agreements Act, Statement of Administrative Action, H.R.
Doc. No. 103-316, vol. 1, at 842–43 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4178.
Consol. Court No. 15-00213                                                     Page 10

and standard deviations of the test and comparison groups. Id. Commerce finally

calculates a d coefficient by dividing the difference in the groups’ means by the square

root of the average of the squared standard deviations of each group. 6 See, e.g.,

Xanthan Gum From the People’s Republic of China: Final Determination of Sales at

Less Than Fair Value, 78 Fed. Reg. 33,350 (Dep’t of Commerce June 4, 2013).

Commerce finds the average of the squared standard deviations by adding them

together and dividing by two, referring to the result as a “simple average.” See id.

Commerce does not account for the differences in the size of each group, i.e., use a

“weighted average.”

      Commerce tests each subset against the remaining subsets across each

category, and assigns a d coefficient by dividing the difference in the groups’ means

by the square root of the average of the squared standard deviations of each group.

If the d value of a test group is equal to or greater than the “large threshold,” or 0.8,

the observations within that group are said to have “passed” the Cohen’s d test.

Differential Pricing Analysis; Request for Comments, 79 Fed. Reg. 26,720, 26,722

(Dep’t of Commerce May 9, 2014). If a sufficient quantity of sales by volume pass

Cohen’s d test, Commerce may compare the export prices of individual transactions

6 Thus, d = |݉஺ െ ݉஻ | / ඥ(ɐଶ஺ + ɐଶ஻ )Τ2, where |݉஺ െ ݉஻ | is the absolute value of the
difference in means between the test and comparison groups, and ɐ஺ଶ + ɐଶ஻ is the sum
of the squared standard deviation of both groups. Standard deviation squared (ɐଶ ) is
also referred to as “variance.” Commerce’s formulation of what it calls the Cohen’s d
test is also known as Cohen’s equation (2.3.2). See Cohen, Jacob, Statistical Power
Analysis for the Behavioral Sciences, 44, (2nd ed. 1988), A-580-876, PRRD 8, bar code
4181776-01 (Nov. 12, 2021) (“Cohen”).
Consol. Court No. 15-00213                                                   Page 11

to normal value, instead of comparing the average export prices to normal value. Id.

at 27,622–23.

      In Mid Continent V, the Court of Appeals held that Commerce inadequately

explained its choice of the simple average over the weighted average in constructing

the Cohens’ d denominator, given that the literature relied upon by Commerce only

supports weighted averaging. Mid Continent V, 31 F.4th at 1378–81. Although

Commerce is not ordinarily bound to follow published literature, because it justified

its methodology by relying on that literature, the Court held that Commerce needed

to justify its departure from established statistical practice. 7 Id. As the Court of

Appeals explained, Commerce’s methodology must reasonably implement its

statutory mandate of determining when prices of certain groups differ significantly.

Id. at 1580–81; see also Motor Vehicle Mfrs. Ass’n, 463 U.S. 29, 43; Ceramica

Regiomontana, 636 F. Supp. 961, 966.         The Court of Appeals concluded that

Commerce’s methodology departed from the acknowledged literature.            See Mid

Continent V, 31 F.4th at 1381.

7 Reviewing the literature, the Court of Appeals referenced affirmative language in
Cohen, Coe, and Ellis which supports the use of a weighted average. See Mid
Continent V, 31 F.4th at 1378; see also Cohen at 67; Ellis, Paul, The Essential Guide
to Effect Sizes: Statistical Power, Meta-Analysis, and the Interpretation of Research
Results, 26–27, (2010), A-580-876, PRRD 8, bar code 4181776-01 (Nov. 12, 2021)
(“Ellis”); Coe, Robert, It’s the Effect Size: Stupid: What Effect Size Is and Why It Is
Important, 6, (September 2002), A-580-876, PRRD 8, bar code 4181776-01 (Nov. 12,
2021) (“Coe”). The Court of Appeals concluded that Commerce had departed from “all
the cited statistical literature governing Cohen’s d,” and that “[t]he cited literature
nowhere suggests simple averaging for unequal-size groups.” Id. at 1377, 1380.
Consol. Court No. 15-00213                                                    Page 12

        The Court found insufficient Commerce’s explanations that (i) the pricing

behaviors of the test and comparison groups represented “separate and equally

rational” and “equally genuine” behavior, and (ii) using the simple average provides

greater “predictability” in antidumping determinations. 8 Id. at 1379–80 (discussing

Second Remand Results at 8–9).         The Court emphasized Commerce’s failure to

explain the connection between the rationality and genuineness of a seller’s choices

and “the undisputed purpose of the denominator figure.” Id. Relatedly, the Court

questioned Commerce’s assertion that the means and variances of both test and

comparison groups “constitute an abstract effect” which “exclusively define[s] the

independent pricing behavior of each group.” Id. at 1380; Second Remand Results at

45. 9 The Court held Commerce failed to explain why focusing on the difference

8   In context, Commerce explained that:

        For the purpose of this particular analysis, Commerce finds that these
        two distinct pricing behaviors [of the test and comparison groups] are
        separate and equally rational, and each is manifested in the individual
        prices within each group. Therefore, each warrants an equal weighting
        when determining the “standard deviation” used to gauge the
        significance of the difference in the means of the prices of comparable
        merchandise between these two groups. Because Commerce finds that
        each of these pricing behaviors are equally genuine when considering
        the distinct pricing behaviors between a given purchaser, region, or time
        period and all other sales, an equal weighting is justified when
        calculating the “standard deviation” of the Cohen’s d coefficient.

Second Remand Results at 8–9.
9 The Court concluded that the section of Cohen cited by Commerce for the “abstract

effect” proposition did not call for simple averaging, and in any case, related to
calculating a different measure of effect size, f, instead of Cohen’s d. Mid Continent
V, 31 F.4th at 1380.
Consol. Court No. 15-00213                                                    Page 13

between the groups calls for a simple averaging yardstick. Mid Continent V, 31 F.4th

at 1380.

       Further, the Court of Appeals concluded Commerce’s assertion that using the

simple average provides greater “predictability” was both unclear and inadequate to

support its determination. The Court of Appeals stated it was unclear if Commerce

was referring to “predictability” as the ability to predict consequences, and if so, it

did not see how Commerce had provided a basis for its assertion of greater

predictability, given that weighting is calculated on the basis of product weight, value

or units, and not number of transactions. 10 Id.

      On remand, Commerce abandons its arguments justifying the use of a simple

average apart from the literature, and instead argues, again, that the literature

supports its methodology. See, e.g., Remand Results at 57 (arguing the choice of a

simple average is reasonable because it is supported by the academic literature); id.

at 42 (responding to the Court of Appeals’ discussion regarding the qualitative factors

and stating “the academic literature does contain support for the use of a simple

average”); id. at 42–43 (responding to the Court of Appeals’ direction to explain its

choice as reasonable or to reconsider, and explaining that the academic literature

supports its choice). Commerce does not further explain how the pricing behaviors of

10 Additionally, the Court of Appeals had already reached the same conclusion
regarding predictability in Mid Continent III, when Commerce claimed that simple
averaging was more predicable than weighted averaging. See Mid Continent III, 940
F.3d at 674.
Consol. Court No. 15-00213                                                  Page 14

the test and comparison groups represent “separate and equally rational” and

“equally genuine” behavior. Commerce likewise does not provide additional support

for its assertion of “predictability.”

       On remand, Commerce fails to offer any further explanation for its assertions

of predictability, abstract effect, and rationality, observing that “[t]he CAFC has

already opined in Mid Continent V that these prior arguments are unpersuasive to

support that the simple average is reasonable, and now Commerce has taken a new

approach which focusses on the academic literature . . . .” Remand Results at 36.

Commerce misconstrues the Court of Appeals’ mandate.           The Court held that

Commerce’s non-academic arguments were unsupported—not unsupportable. See,

e.g., Mid Continent V, 31 F.4th at 1379 (“Commerce has not offered an adequate

explanation of why [equal rationality and genuineness] support[] the particular step

Commerce must justify”); id. (“And in any event, Commerce has not provided a

reasonable explanation for this predictability assertion”).

       Mid Continent attempts to fill the void left by Commerce and argues that there

are practical justifications for using the simple average. For example, Mid Continent

argues that the “prevalence and sophistication of many respondents’ ‘dump-proofing’

activities” means that using a weighted average could potentially open the door to

manipulation of dumping calculations. Mid Continent’s Cmts. at 11. Yet, even if

such explanations could support the reasonableness of Commerce’s choice, they are

not Commerce’s explanation, and thus they cannot support its determinations. See
Consol. Court No. 15-00213                                                   Page 15

SEC v. Chenery Corp., 332 U.S. 194, 196 (1947) (agency action reviewed on grounds

invoked by agency).

      Instead of attempting to comply with the Court of Appeals’ direction “to provide

a reasonable justification for departing from what the acknowledge literature

teaches,” Commerce interprets the Court of Appeals’ direction as allowing it to offer

an explanation, again, of its view of the literature. Even assuming the Court of

Appeals left this option open, Commerce’s arguments fail to support its position.

First, Commerce argues that the simple average is supported because it uses the full

population of sales, and does not estimate means or standard deviations for the test

and comparison groups. Remand Results at 14. Therefore, because the literature

only contemplates using the weighted average approach when the standard

deviations are estimates, Commerce argues that the simple average is supported, and

the weighted average is not. Id.

      This argument fails for two reasons.       First, it is unclear what supports

Commerce’s premise that Cohen contemplated using equation (2.3.2), the simple

average, with full populations. 11 Cohen’s power tables appear to use sample size as

an input, see Cohen at 28, and specify that they are to be used “for power analysis in

11PT argues that section 2.3 of Cohen’s book exclusively concerns sampling from a
population. PT’s Cmts. at 9. However, as Defendant argues, PT failed to raise this
argument in its comments on the preliminary results, so it has not been exhausted.
See 28 U.S.C. § 2637; 19 C.F.R. § 351.309(c)(2). Because the court is remanding the
matter for further consideration or explanation, Commerce should address this
argument in the first instance on remand.
Consol. Court No. 15-00213                                                    Page 16

the case where two samples, each of n cases, have been randomly and independently

drawn from normal populations.” Id. at 19. Commerce’s reference to equations (2.2.1)

and (2.2.2) as “explicitly” calculating effect size based on actual populations seems

inconsistent, given that Cohen used these equations to generate d values to create

his power tables, not as stand-alone tests. See id. at 20; Remand Results at 35. A

test for full populations in the context of power analysis would be redundant on its

face, as there would be no question of statistical significance to analyze. Thus,

Commerce does not explain, and it is not discernable why Commerce believes that

equations (2.2.1) and (2.2.2)—still less equation (2.3.2), which expressly implicates

sample size—are intended for testing full populations. 12 Moreover, the Court of

Appeals has already held that the literature does not suggest simple averaging for

unequal-sized groups. Mid Continent V, 31 F.4th at 1380.

      Additionally, even if equation (2.3.2) could be used with full populations,

Commerce offers no support for its argument that use of the simple average is

reasonable in this context. Rather, Commerce argues that the weighted average

would be unreasonable, asserting that the literature discussing weighted averaging

is exclusively concerned with sampling. Remand Results at 14; see Cohen at 67.

12Defendant argues that PT failed to exhaust its argument that Cohen does not state
equation (2.3.2) applies only to full populations. See Def.’s Reply at 15; PT’s Cmts. at
9. In Mid Continent V, the Court of Appeals discusses the use of equation (2.3.2) with
sample groups, rather than full populations, implicitly recognizing that the equation
does not apply only to full populations. See Mid Continent V, 31 F.4th at 1378.
Therefore, because the Court of Appeals has already addressed this issue, the court
need not consider whether PT’s argument has been exhausted.
Consol. Court No. 15-00213                                                    Page 17

Commerce also asserts that the differential pricing analysis does not involve

sampling, but uses full populations, and thus concludes that weighted averaging is

inappropriate in light of this distinction.       Remand Results at 14. However,

Commerce’s premise does not lead to its conclusion. That weighted averaging is

supported when sampling is present does not mean that it is unsupported when

sampling is absent.

      Commerce further claims that it may use equation (2.3.2) regardless of sample

size, because sample size is only an important factor in the determination of

statistical significance. Id. at 15. In support of this proposition, Commerce references

Coe, Cohen, and Ellis, who agree that sample size is a necessary input when

calculating pooled standard deviation from sampled data. Remand Results at 15; see

also Cohen at 40; Coe at 10; Ellis at 10. Commerce’s argument again fails for two

reasons.

      First, although it is true that sample size is necessary to determine statistical

significance, it does not follow that sample size is irrelevant where statistical

significance is absent. Commerce explains that Cohen’s d is one of the three variables

(d, a, and n) used to determine statistical significance with a t-test. Remand Results

at 16. Thus, Commerce argues, Cohen’s warning that power values “may be greatly

in error” if both sample sizes and standard deviations are unequal does not apply to

the differential pricing analysis, which does not calculate power values. Id. As with

its “full population” argument, the fact that Commerce is not conducting a power
Consol. Court No. 15-00213                                                    Page 18

analysis does not necessarily mean that it may disregard Cohen’s limitations on

equation (2.3.2) for calculating d.

      Commerce’s assertion that equation (2.5.2) requires estimation from a sample

while equation (2.3.2) does not require estimation from a sample, appears

inconsistent with the literature. See id. at 15 (citing Cohen at 66–67). Although

Commerce identifies ɐ஺ and ɐ஻ in equation (2.3.2) as representing standard

deviations of full populations, it fails to consider that the ɐ values themselves seem

to be used by Cohen as pre-test estimates of the full population value, which will later

be calculated with sampling.      See Cohen at 44 (stating that equation (2.3.2) is

accurate “provided that sample sizes are about equal”); see also Ellis at 10, 10 n.8

(stating of Cohen’s d test “[i]f [the standard deviations] of both groups are roughly

the same then it is reasonable to assume that they are estimating a common

population standard deviation”). Thus, Commerce’s assertion that sampling is not

implicated in equation (2.3.2) is unsupported, as Cohen seems to use this equation in

calculating statistical power.

      Additionally, Commerce’s assertion that the literature provides no support for

the weighted average appears to contradict Cohen, Ellis, and Coe at a number of

points, as the Court of Appeals has already observed. See Mid Continent V, 31 F.4th

at 1378 (“the cited literature uniformly teaches use of a pooled standard deviation

that involves weighted averaging”). For example, Cohen’s power tables use a single

n value, representing the size of both samples. See Cohen at 40 (“Sample size, n.
Consol. Court No. 15-00213                                                      Page 19

This is the size of each of the two samples being compared”) (emphasis in original).

The tables appear to be designed for what Cohen calls “Case 0,” which is when ɐ஺ =

ɐ஻ and n஺ = n஻ (i.e., when standard deviations are equal and sample sizes are also

equal) See id. at 27. Cohen’s “Case 1” (equation (2.3.1)) and “Case 2” (equation (2.3.2))

represent adaptations to Cohen’s power tables, which allow them to function even

when an assumption is not met. See id. at 42–44. As Cohen’s examples following

each equation demonstrate, however, all three equations are evidently intended for

experimental planning. 13 See id. None of Cohen’s many illustrative examples show

using simple averaging with unequal samples. Equation (2.5.2), on the other hand,

is used for calculating d from experimental data. See Cohen at 67 (“Here, our focus

shifts from research planning to the appraisal of research results, and . . . the palpable

characteristics of the sample”). Ellis and Coe both expressly prescribe equation

(2.5.2) for situations where effect size is being calculated from experimental data. 14

See Ellis at 10 n.8; Coe at 10. Neither author discusses using a simple, unweighted

average. Therefore, as the Court of Appeals found in Mid Continent V, Commerce’s

13 Example 2.3 following equation (2.3.1) shows the power that a psychological
experimenter could find in a test, given posited values for a, d, n஺ , and n஻ . Cohen at
43. Example 2.4 is similar, and shows the power an economist could expect from
running an experiment with posited d, a, and n values. Id. at 45. These examples
show that the power tables in section 2.3 of Cohen’s book allow an experimenter to
find any one value of t, d, a, and n, provided that the other three variables are fixed.
See id. at 14. Thus, it appears that equation (2.3.2) is used as a tool to estimate d in
order to find one of the other three variables in a proposed experiment.
14 Coe and Ellis express pooled standard deviation using different notation than

Cohen, but their formulae are algebraically equivalent. Compare Ellis at 10 n.8 and
Coe at 10 with Cohen at 67.
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claim that academia supports the simple average appears to be contradicted by the

literature itself. If Commerce continues to rely on the academic literature to support

its methodology, it must further explain why its choice of the simple average is

reasonable in light of this inconsistency. The matter is remanded to Commerce for

further explanation or reconsideration.

                                     CONCLUSION

      In accordance with the foregoing, it is

      ORDERED that Commerce’s determination is remanded for further

explanation or reconsideration consistent with this opinion; and it is further

      ORDERED that Commerce shall file its remand redetermination with the

court within 90 days of this date; and it is further

      ORDERED that the parties shall have 30 days to file comments on the remand

redetermination; and it is further

      ORDERED that the parties shall have 30 days to file their replies to the

comments on the remand redetermination; and it is further

      ORDERED that the parties shall file the joint appendix within 14 days after

the filing of replies to the comments on the remand redetermination; and it is further

      ORDERED that Commerce shall file the administrative record within 14 days

of the date of filing of its remand redetermination; and it is further
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        ORDERED that PT’s motion for oral argument, see ECF No. 198, is denied as

moot.

                                                  /s/ Claire R. Kelly
                                                  Claire R. Kelly, Judge

Dated:        April 3, 2023
              New York, New York