Court Opinion

ID: 4201353
Source: CourtListenerOpinion
Date Created: 2017-09-06 15:03:07.176967+00
Date Added: 2024-06-11T07:47:34.355392
License: Public Domain

Slip Op. 17 - 120

           UNITED STATES COURT OF INTERNATIONAL TRADE

- - - - - - - - - - - - - - - - - - - - x       Senior Judge Aquilino
XI’AN METALS & MINERALS IMPORT & EXPORT :
CO., LTD.,
                         Plaintiff,     :

                 -and-                     :

THE STANLEY WORKS (LANGFANG) FASTENING :
SYSTEMS CO., LTD. and STANLEY BLACK AND
DECKER, INC.,                           :

            Consolidated-Plaintiffs,       :    Consolidated
                                                Court No. 15-00109
                   v.                      :

UNITED STATES,                             :
                         Defendant,
                 -and-                     :

MID CONTINENT STEEL & WIRE, INC.,          :

              Intervenor-Defendant.     :
- - - - - - - - - - - - - - - - - - - - x

                         Opinion & Order

[Plaintiff motions for judgment on the agency record,
 contesting surrogate-value determinations based thereon,
 granted in part; remanded to the International Trade
 Administration.]

                                             Dated: September 6, 2017

     Gregory S. Menegaz, J. Kevin Horgan, Alexandra H. Salzman, and
John J. Kenkel, deKieffer & Horgan, PLLC, Washington, D.C., for the
plaintiff.

     Lawrence J. Bogard and Peter J. Bogard, Neville Peterson LLP,
Washington, D.C., for the consolidated-plaintiffs.

     Sosun Bae, Trial Attorney, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice, Washington, D.C., for the
defendant. Also on the papers Benjamin C. Mizer, Principal Deputy
Assistant Attorney General, Jeanne E. Davidson, Director, and
Consol. Court No. 15-00109                                                    Page 2

Patricia M. McCarthy, Assistant Director; Zachary Simmons,
Attorney, Office of the Chief Counsel for Trade Enforcement &
Compliance, U.S. Department of Commerce, of counsel.

     Adam H. Gordon and Ping Gong, The Bristol                        Group   PLLC,
Washington, D.C., for the intervenor-defendant.

          AQUILINO,      Senior    Judge:     At        bar   are    consolidated

complaints invoking 19 U.S.C. §§ 1516a(a)(2)(A)(i)(I) and (B)(iii)

and 28 U.S.C. §1581¥c¦ jurisdiction over the final results of the

fifth administrative review (“AR5”) of its antidumping-duty order

covering certain steel nails from the People’s Republic of China

(“PRC”) published by the U.S. Department of Commerce, International

Trade Administration (“ITA”) sub nom. Certain Steel Nails from the

PRC, 80 Fed.Reg. 18816 (April 8, 2015), PDoc 294. See accompanying

final issues and decision memorandum (“IDM”), PDoc 276, covering

the period of August 1, 2012 through July 31, 2013.

          Moving   for    judgment    on    the    resultant        administrative

record of AR5, plaintiff Xi’an Metals & Minerals Import & Export

Co., Ltd. raises four issues: (1) the suitability of Thailand as

the   primary   surrogate         country,        (2)     valuation      of     its

brokerage/handling (“B&H”) and freight costs, (3) adjustment of the

weight denominator used in calculating its inland freight and B&H

costs, and (4) double counting of SG&A (selling, general, and

administrative) labor expenses in the labor rate used.
Consol. Court No. 15-00109                                       Page 3

            Also moving for judgment pursuant to USCIT Rule 56.2,

consolidated-plaintiffs The Stanley Works (Langfang) Fastening

Systems Co., Ltd. and Stanley Black & Decker, Inc. press one minor

issue and a much broader matter for relief: (5) correction of a

“transcription    error”   in   their   factors-of-production   (“FOP”)

database and (6) various challenges to ITA’s “differential pricing”

analysis.

            Judicial review of AR5 is governed by the applicable law

and by the substantial evidence of record, which has long been

defined as “such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion.” Consol. Edison Co. v.

NLRB, 305 U.S. 197, 229 (1938).     See 19 U.S.C. §1516a(b)(l)(B)(i).

                                    I

            The antidumping-duty statute requires the ITA to seek

surrogate values (“SVs”) for the factors of production for subject

merchandise produced in or exported from a non-market economy

(“NME”) country.      19 U.S.C. §1677b(c)(1).     The agency selected

Xi’an Metals and the Stanley firms as AR5’s mandatory respondents.

It sent antidumping questionnaires to them, to which they responded

in a timely manner.    ITA circulated a letter to interested parties

inviting comments on surrogate country selection and SV data, to

which it received comments and rebuttal comments. It thereafter
Consol. Court No. 15-00109                                                Page 4

issued    supplemental    questionnaires       to   which     Xi’an   Metals   and

Stanley also timely responded.

            ITA published notice of the preliminary results of AR5

sub nom.    Certain Steel Nails from the People’s Republic of China,

79 Fed.Reg. 58744 (Sept. 30, 2014), PDoc 304.                  See accompanying

preliminary decision memorandum (“PDM”), PDoc 224.                Employing its

differential pricing analysis, the agency preliminarily calculated

a weighted-average dumping margin of 6.69 percent for Stanley and

72.40 percent for Xi’an Metals.           As part of its analysis, ITA

concluded that there was a pattern of export prices for comparable

merchandise that differed significantly among purchasers, regions,

or time periods.      See id. at 17-18.    For Stanley, it found that the

average-to-average       (“A-A”)    methodology       did   not   appropriately

account for such differences and applied the average-to-transaction

(“A-T”) methodology to some Stanley U.S. sales and applied A-A to

its other United States sales (reflecting a “mixed” alternative

methodology). See id. For Xi’an Metals, ITA concluded that the A-A

methodology     appropriately      accounted    for    such    differences     and

applied    it   to   calculate   that   firm’s      weighted-average     dumping

margin.    See id. at 18.    The agency also selected Thailand as the

primary surrogate country for FOP valuation and surrogate financial

ratios in constructing normal value.           See PDoc 226.
Consol. Court No. 15-00109                                             Page 5

           During the course of its verification of the Stanley

United   States   sales    database   and   FOP,     ITA    accepted   minor

corrections that were brought to its attention.            In February 2015,

the   agency   requested   that   Stanley   submit   new     sales   and   FOP

databases to reflect the corrections that were revealed during

verification. PDoc 257.      Stanley did so timely.          Whereafter ITA

disclosed to the parties its calculations for AR5.              On April 7,

2015, ITA received a ministerial error allegation from Stanley that

urged the agency to correct a transcription error that Stanley had

made in its revised FOP database.      ITA declined to do so.

           The AR5 final results were published the next day. Based

on the differential pricing analysis and the use of Thai SV data,

ITA calculated a weighted-average dumping margin of 13.19 percent

for Stanley and 72.52 percent for Xi’an Metals.            In those results,

the agency used the consolidated customer code (field CCUSCODU) in

the Stanley margin program after determining that the use of

individual customer codes (field CUSCODU) for the Preliminary

Results had been erroneous.       See IDM at 45-46.         This correction

altered the results of the differential pricing analysis, leading

ITA to apply the A-T methodology to all of the Stanley U.S. sales.
Consol. Court No. 15-00109                                  Page 6

                                II

          For its AR5 final results, ITA continued to select

Thailand as the primary surrogate country.   Plaintiff Xi’an argues

the substantial evidence of record shows that that country is

unsuitable as a surrogate in this case, that the Thai steel wire

rod values are aberrant, and that either the Philippines or Ukraine

is a superior primary surrogate country for valuing FOP.

                                 A

          Plaintiff Xi’an argues reports compiled by the U.S. Trade

Representative in 2011, 2012 and 2013, the U.S. Department of

Commerce, and FedEx International Resource Center all constitute

substantial evidence of record showing that Thai customs officials

routinely manipulate the entered values of imported merchandise,

that such manipulation is pervasive across all sectors, and that

therefore the Thai import data are tainted.        Plaintiff Xi’an

further argues that the average Thai import price for steel wire

rod (“SWR”) during the POR of $916 per metric ton is not only the

highest SWR price of record but exceeds “by far” the benchmarks it

provided therefor.   Xi’an’s benchmarks included SWR data from the

World Bank Global Economic Monitor (“GEM”), world steel prices

published by MEPS (International) Ltd., MEPS Asian Market SWR

prices, official Thai domestic steel prices, SWR prices for Thai
Consol. Court No. 15-00109                                  Page 7

domestic and export sales from TATA Steel, “UN Comtrade” (i.e.,

United Nations International Trade Statistics Database) import

prices for other countries at a comparable level of economic

development as the PRC (including the Philippines and Ukraine), and

world market prices published by Asian Metal and Metal Expert.

          The AR5 final results explain that, in order to value an

input accurately, ITA examines all relevant price information on

the record, including any appropriate benchmark data; that in any

given case the agency’s current practice is to examine available

import data for potential surrogate countries and/or data from the

same HTS category for the surrogate country over multiple years to

determine if the current data appear aberrational compared to

historical values; and that the existence of higher prices alone is

not a sufficient basis for concluding that the price data for a

particular SV are distorted or misrepresentative.    On the record

for AR5, ITA concluded that none of the datasets suggested by Xi’an

Metals serve as reliable benchmark data to determine whether Thai

wire rod import data are aberrational1, and that Xi-an Metals’ HTS

      1
          Specifically, ITA concluded: that the World Bank GEM data
on the record are unclear as to which countries (which could
include NME countries) were used to calculate the steel rod prices,
but more critically do not make any distinction for carbon content,
                                                     (continued...)
Consol. Court No. 15-00109                                    Page 8

data analysis, submitted to support concluding that the Thai import

data for SWR are distorted and should be disregarded because they

are higher than export prices, does not permit “an appropriate

comparison in order to determine if the data [are] aberrational”

because Xi’an’s analysis is at the six-digit HTS level and “does

not include any of the 11-digit HTS categories used to value wire

rod at the Preliminary Results”.   IDM at 16.

           Plaintiff Xi’an contends defendant’s reasoning conflates

the use of such benchmarks to evaluate the suitability of the

average Thai import price with using such benchmarks as SVs in

their own right; that the defensive responses2 of it and the

intervenor-defendant   do    nothing   to   dispel   such   “serious

       1
          (...continued)
which is one of the most important physical characteristics of that
input; that the “MEPS data suffer[ ] from similar deficiencies” in
that none of the countries covered thereby are at the same level of
economic development as the PRC nor do the data distinguish carbon
content; and that none of the countries covered by the Asia Metal
Market prices are potential surrogate countries meeting ITA’s
surrogate country criteria. See IDM at 15-16.
      2
          To wit: that the reports cited by Xi’an Metals refer only
to general concerns about certain practices by Thailand’s Customs
Department and fail to address the specific raw material inputs
consumed by respondents in this case; that the Thai SWR import
values on which ITA relied cannot be concluded aberrant, as the
existence of higher prices alone does not necessarily indicate that
price data are distorted or misrepresentative; and that Xi’an
Metals fails to identify record evidence that materially undermines
the integrity of the SWR values upon which ITA relied.
Consol. Court No. 15-00109                                         Page 9

deficiencies” in ITA’s choice of Thailand as the primary surrogate

country; that because the defendant and ITA acknowledge that Thai

customs officials arbitrarily increase some import values the

record evidence provides reason to believe or suspect that the

import values of the inputs used as SVs for Xi-an Metals’ inputs

were manipulated; and that defendant’s claim that the agency

“believe or suspect” analysis “hinges on specific and objective

evidence on which [ITA] would rely in determining that a country’s

surrogate value data were unreliable” is not supported in practice.

          Assuming   the   correctness   of   its   foregoing   position,

plaintiff Xi’an argues that either the Philippines or Ukraine is

superior to Thailand as a primary surrogate country in this case

since the data for neither are tainted by manipulation of entered

values for imported merchandise.         The plaintiff contends the

Ukrainian SWR prices from Metal Expert in particular are more

specific than the Thai values as to the diameters of the SWR, and

ITA has used that source for SWR in past reviews.         And plaintiff

Xi’an complains that the defendant does not back up its “fall back”

argument that ITA “is not required to consider or give weight to

any particular criteria in determining what constitutes the best

available information on the record” for SVs with reference to

substantial evidence when the agency emphasizes certain criteria
Consol. Court No. 15-00109                                       Page 10

and “completely ignores” other data quality criteria.         XM Reply at

9, referencing Gerald Metals, Inc. v. United States, 132 F.3d 716,

720 (Fed.Cir. 1997) (substantial evidence standard “requires more

than mere assertion of ‘evidence which in and of itself justified

[the   .   .    .    determination],   without   taking   into   account

contradictory       evidence   or   evidence   from   which   conflicting

inferences would be drawn’”, quoting Universal Camera Corp. v.

NLRB, 340 U.S. 474, 487 (1951)).

           The question, as always, is whether substantial evidence

of record supports ITA determination(s). This court is unpersuaded

herein that it does not, or that the agency has not considered all

available evidence.       Defendant’s logic is weak at points3, but

ITA’s determination has substantial support on the record, and in

toto, plaintiff Xi-an essentially asks for substitution of judgment

for that of the agency, a request in conflict with the teaching of

Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 619-20 (1966).           See,

       3
          Plaintiff Xi’an argues, for example, that defendant’s
contention that Ukraine’s Metal Expert prices are unusable because
they do not satisfy ITA’s criteria of being exclusive of taxes and
duties is disingenuous when the defendant states in a previous
sentence that the Metal Expert prices are actual transactions that
include 20% VAT and a 4% mark-up charged to intermediate traders
who buy the material from domestic producers and sell to
warehouses, and the calculation of the price free of such taxes and
duties is a simple mathematical computation which ITA has performed
in the past.
Consol. Court No. 15-00109                                     Page 11

e.g., Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927,

933 (Fed.Cir. 1984) (“the possibility of drawing two inconsistent

conclusions   from    the   same   evidence   does   not   prevent   an

administrative agency’s finding from being supported by substantial

evidence”) (quoting same).    Cf. Elkay Manufacturing Co. v. United

States, 40 CIT ___, ___, 180 F. Supp. 3d 1245, 1255 (2016) (“record

evidence of manipulation of [Thai] customs values does not rise to

such a level that [ITA] was left with no choice but to foreclose

any use of Thai import data to determine [an SV] for a production

input”), appeal filed, No. 16-2637 (Fed.Cir. Sept. 14, 2016).

                                   B

          Plaintiff Xi’an also argues that a military coup in

Thailand should have triggered a “reason to believe or suspect”

standard of pricing distortion in that country’s economy.            It

placed 43 pages of articles on the record detailing the massive

political unrest and protests that rocked Thailand between 2011 and

2014, culminating in military-controlled government.        The review

period (“POR”) at issue in this appeal is August 1, 2012 through

July 31, 2013.       The plaintiff claims the materials covering

Thailand’s political and economic turbulence attest that the 2011

elections were never accepted as legitimate, that the military coup

was an undemocratic and complete takeover of the country, and that
Consol. Court No. 15-00109                                          Page 12

it was reasonable to conclude that a free-market economy could not

properly function in the absence of the free flow of information or

impartial rule of law.    Plaintiff Xi’an argues the issue should be

remanded for ITA to explain how the military coup does not meet the

lenient “reason to believe or suspect” standard, because it is

counter-intuitive, if not hypocritical, that the agency would

reject the PRC economy based on state control but then select the

an   alternative     country    under      military   dominance     as    the

“free-market” surrogate for the PRC where “better” alternative

countries    were   presented   on   the    record    for   which   no   such

distortions were alleged.

            The burden is on the plaintiff, however, to provide for

the record evidence to support its argument. The AR5 final results

explain ITA’s

     disagree[ment] with Xi’[a]n Metals’ argument that the
     Thai military coup renders Thai import data to be
     unrepresentative and unreliable. . . . [I]t is the
     Department’s practice to focus on several criteria,
     including whether the SV data are contemporaneous,
     publicly    available,   tax    and   duty    exclusive,
     representative of a broad market average, and specific.
     Xi’[a]n Metals has neither provided any evidence on the
     record as to why the military coup affects the criteria
     considered by the Department nor how specific inputs are
     affected.

IDM at 13.
Consol. Court No. 15-00109                                           Page 13

           Plaintiff Xi’an’s arguments here do not persuade as to

the incorrectness of ITA’s position on the subject. See, e.g., NMB

Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed.Cir.

2009) (ITA’s explanations need not be perfect, only “reasonably

discernible”).

                                        C

           Plaintiff Xi’an also complains that an NME respondent has

no   “ability”    to    select   the   primary   surrogate   country.    The

defendant counters this is contrary to the statute because the

surrogate country must be deemed “appropriate by the administering

authority.”      Xi’an replies that it could select the home market by

applying   all     of   the   statutory     criteria,   including   economic

comparability and significance of production, see 19 U.S.C. §

1677b(c)(1)(B), and that the defendant has no answer to the problem

of how an NME respondent can comply with the remedial nature of the

antidumping laws if it has no way to estimate its costs when it

sets the price for export to the United States.              Plaintiff Xi’an

states that it is simply pointing out that the NME respondent is

severely disadvantaged vis-á-vis market economy respondents if it

is not permitted to assert a surrogate country meeting all the

criteria and host to reasonably reliable data for the valuation of

its factors.
Consol. Court No. 15-00109                                 Page 14

           The court appreciates this concern and can concur that a

rational producer would not chose the highest available steel costs

when lower domestic, regional, and economically comparable sources

are available4, but the argument is one that conflicts with what

has long been the case: “It is [ITA], not the respondent, that

determines what information is to be provided” for a particular

proceeding.   Ansaldo Componenti, S.p.A. v. United States, 10 CIT
28, 37, 628 F. Supp. 198, 205 (1986).    Accord Essar Steel Ltd. v.

United States, 34 CIT 1057, 1072-73, 721 F. Supp. 2d 1285, 1298-99

(2010), aff’d in relevant part, 678 F.3d 1268 (Fed.Cir. 2012); NSK,

Ltd. v. United States, 20 CIT 361, 367, 919 F. Supp. 442, 447

(1996); Nachi-Fujikoshi Corp. v. United States, 19 CIT 914, 920,

890 F. Supp. 1106, 1111 (1995); Tianjin Mach. Import and Export Co.

v. United States, 16 CIT 931, 936, 806 F. Supp. 1008, 1015 (1992);

Chinsung Indus. Co. v. United States, 13 CIT 103, 705 F. Supp. 598

(1989); Timken Co. v. United States, 11 CIT 786, 804, 673 F. Supp.
495, 513 (1987); Smith-Corona Group Consumer Prods. Div., SCM Corp.

v. United States, 713 F.2d 1568, 1577 n. 26 (Fed.Cir. 1983), cert.

denied, 465 U.S. 1022 (1984).      As the final selection of an

       4
          Cf. Sigma Corporation v. United States, 117 F.3d 1401,
1408 (Fed.Cir. 1997) (finding problematic the rationale that a
casting producer in the surrogate country would choose to pay the
highest combination of prices for pig iron plus freight).
Consol. Court No. 15-00109                                             Page 15

appropriate surrogate country occurs post-closing of the review

period, it may be that such selection is not susceptible to the

kind   of   predictability    plaintiff      Xi’an   desires,    but   it     is,

nonetheless, susceptible to the burden of persuasion borne by

interested parties.

                                       D

            Plaintiff   Xi’an   also       asserts   that    ITA’s   surrogate

brokerage and handling (“B&H”) is unreliable and unreasonably high.

It prays for remand consistent with Since Hardware (Guangzhou) Co.

v. United States, 38 CIT ___, 977 F. Supp. 2d 1347 (2014), which

barred the agency from relying on the hypothetical weight postured

in Doing Business reports.        The plaintiff argues that, for the

denominator calculating B&H and inland freight costs, ITA should

use either the maximum cargo load for a 20-foot container or Xi’an

Metals’ own average cargo load instead of the weight of 10,000

kilograms from the relevant Doing Business report.

            The   defendant   responds      that   Xi’an    Metals   failed   to

exhaust this specific argument before ITA during the administrative

process.    It also responds that it would be inappropriate to use

Xi’an Metals’ own average cargo load because the value must come

from a selected surrogate country, and that substantial evidence

supports the use of the 10,000 kilogram denominator in any event
Consol. Court No. 15-00109                                           Page 16

because the relationship between costs and quantity is maintained

in reliance upon the Doing Business report and results in an

accurate per-unit cost.     See also Def-Int’s Resp. at 18-20.

           Pursuant to 28 U.S.C. §2637(d), the court “shall, where

appropriate, require the exhaustion of administrative remedies” in

civil actions arising from ITA’s antidumping- and countervailing-

duty determinations. The doctrine of exhaustion is that “no one is

entitled to judicial relief for a supposed or threatened injury

until the prescribed administrative remedy has been exhausted.”

Sandvik Steel Co. v. United States, 164 F.3d 596, 599 (Fed.Cir.

1998), quoting McKart v. United States, 395 U.S. 185, 193 (1969).

It is well-settled that “[a] reviewing court usurps the agency’s

function when it sets aside an agency determination upon a ground

not   theretofore    presented    and   deprives   the    [agency]    of    an

opportunity to consider the matter, make its ruling, and state the

reason for its action.” Unemployment Compensation Comm’n of Alaska

v. Aragan, 329 U.S. 143, 155 (1946) (“UCCA”); accord Yantai

Oriental Juice Co. v. United States, 27 CIT 1709, 1719 (2003).

“Simple   fairness   to   those   who   are   engaged    in   the   tasks   of

administration, and to litigants, requires as a general rule that

courts should not topple over administrative decisions unless the

administrative body not only has erred but has erred against
Consol. Court No. 15-00109                                           Page 17

objection made at the time appropriate under its practice.” United

States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952).

See also Metz v. United States, 466 F.3d 991, 999 (Fed.Cir. 2006).

           Thus, a party must present all arguments to ITA at the

time it is addressing an issue.          E.g., Mittal Steel Point Lisas

Ltd. v. United States, 548 F.3d 1375, 1383-84 (Fed.Cir. 2008).              A

party’s obligation to exhaust its administrative remedies applies

equally to overall issues as well as to individual arguments. Rhone

Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed.Cir.

1990). By failing to raise this argument until now, Xi’an Metals

deprived ITA of the “opportunity to consider the matter, make its

ruling, and state the reason for its action.” UCCA, 329 U.S. at

155.

           None   of   the   limited     exceptions   to   the     exhaustion

requirement apply here. See Corus Staal BV v. United States, 30 CIT
1040, 1050 n. 11 (2006) (identifying exceptions for pure legal

questions, futility in raising argument at agency level, denial of

access     to     confidential      record,      intervening         judicial

interpretation), aff’d, 502 F.3d 1370 (Fed.Cir. 2007).             First, the

pure   question   of   law   exception   does   not   apply   to    arguments

concerning the new factual analysis that plaintiff Xi’an now posits
Consol. Court No. 15-00109                                              Page 18

for the first time.           See Mittal Steel, 548 F.3d at 1384 (pure

question of law exception does not apply when the argument relies

on unique facts of the case).           ITA did not have the opportunity to

analyze,    in    the    first       instance,    Xi’an   Metals’   contentions

pertaining to the Doing Business report and its preference for

instead using those B&H costs incurred by Thai exporters of frozen

freshwater shrimp. Second, it would not have been futile for Xi’an

Metals to present the analysis of the factual information to the

agency   during    the    underlying      administrative    proceeding.    The

futility exception to the exhaustion doctrine is narrow: parties

must demonstrate that they “would be required to go through

obviously useless motions in order to preserve their rights”, Corus

Staal, 502 F.3d    at   1379    (internal    quotations   and   citations

omitted), and plaintiff Xi’an’s argument does not satisfy that

standard.      Third, there has been no intervening judicial decision

that might excuse the absence of Xi’an Metals’ argument at the

administrative level.         Fourth, plaintiff Xi’an does not allege any

untimely access to the confidential record.               Thus did it fail to

exhaust.

                                          E

            Plaintiff Xi’an’s last claim is that ITA made two labor

classification errors: (1) it included staff labor costs in the
Consol. Court No. 15-00109                                                           Page 19

the    selling,          general,     and     administrative       (“SG&A”)        expenses,

reasoning         that     the    respondents      did     not    report     labor     hours

associated with the selling and administrative staff; and (2) from

the financial statements of the Thai company L.S. Industries Co.

(“LSI”) used for calculation of surrogate financial ratios5 ITA

accounted for various line items such as “welfare” and “social

security and compensation” as SG&A-type labor costs despite the

fact     that       the    Thailand         National    Statistics        Office     (“NSO”)

statistics used to calculate labor SV includes such benefits in the

reported labor rate.              See IDM at 19-20.        ITA decided that it would

adhere       to    how    the    surrogate      financial        statements    themselves

classified these items.               See id. at 20.

                  And    yet,    in   the    calculation    of     surrogate       financial

ratios, it is the agency’s practice to avoid double-counting labor

costs that are included among SG&A by “adjust[ing] the surrogate

financial ratios when the available record information -- in the

form of itemized indirect labor costs -- demonstrates that labor

costs are overstated.” Antidumping Methodologies in Proceedings

Involving Non–Market Economies: Valuing the Factor of Production:

Labor,       76    Fed.Reg.       36092,     36093-94    (June      21,    2011)    (“Labor

         5
          See Final Surrogate Value Submission and Pre-Preliminary
Comments (Aug. 19, 2014) at Exhibit SV-1, PDoc 208.
Consol. Court No. 15-00109                                       Page 20

Methodologies”). Stated differently, ITA looks to the surrogate

financial    statements   on   the   record,   and   if   they   “include

disaggregated overhead and [SG&A] expense items that are already

included in the [record data used to value labor], [it] will remove

these identifiable costs items.” Id. at 36094. See, e.g., Certain

Frozen Warmwater Shrimp From the Socialist Rep. of Vietnam, 67

Fed.Reg. 56158 (Sept. 12, 2011), and accompanying issues and

decision memorandum (“I&D memo”) at cmt. 5.B.

            The defendant maintains that ITA followed practice during

the administrative proceeding by treating labor-related costs in

its financial ratio calculations in the same manner that the

surrogate company disaggregates labor costs, explaining that under

ITA’s FOP methodology for calculating normal value, labor expenses

capture the labor cost only for manufacturing, which is obtained by

multiplying a respondent’s reported direct and indirect labor hours

to manufacture subject merchandise by the surrogate labor rate

(e.g., the Thai NSO labor rate).      The defendant contends that the

Thai NSO 2007 labor data, used to calculate the labor SV, were

derived from an average remuneration paid for persons engaged in

various “manufacturing and non-manufacturing activities”6 and that,

       6
            Def’s Resp. at 82.
Consol. Court No. 15-00109                                                  Page 21

contrary to plaintiff Xi’an’s argument, it does not follow that the

labor expenses calculated using the NSO labor rate capture all

labor expenses.       Further, the defendant contends, the respondents

did   not    report     labor      hours    associated       with    selling    and

administrative staff, as staff labor costs would normally be

expected to be included among the SG&A expenses.                  Concluding, the

defendant    argues    the     SG&A    labor     expenses    in   each    surrogate

company’s financial statement should therefore be included in the

numerator of the SG&A ratio associated with that company, and

therefore    the   SG&A    labor      expenses    listed     in   LSI’s   financial

statements    should      be   classified      under   the    SG&A   expenses   and

included in the respective numerator of the SG&A ratio calculation,

an outcome ITA ensured by including the “Salary and Bonus” line

item from LSI’s “Total Cost of Management” in the SG&A buildup in

the financial ratio calculations.                 See Def’s Resp. at 82-83,

referencing IDM at 19-20.          See also Def-Int’s Resp. at 20-22.

             Plaintiff Xi’an counters that defendant’s (and intervenor

-defendant’s similar) explanation merely restates ITA’s position

from the IDM rather than confronting the facts and logic of their

argument, which it contends amounts to a waiver of any surrogate
Consol. Court No. 15-00109                                        Page 22

labor cost defense7; and that the Thai NSO 2007 labor data do

indeed cover “all” labor expenses, including overtime, benefits,

vacation pay, and the range of executive, administrative, and

production    labor,   regardless   of   the   exactitude   of   “various

manufacturing and non-manufacturing activities”.        XM Reply at 19,

referencing Pet’s SV Submission at Ex. 9, PDocs 158-160. Plaintiff

Xi’an further argues, it does not follow from the fact that

respondents are not required to report hours of administrative or

non-production labor (see NME questionnaire) that those costs have

not been counted, and also that it is indisputable that the labor

rate ITA now relies upon pursuant to Labor Methodologies is an

inflated rate intended to account for those very expenses.

             It is apparent from the IDM at page 19 that ITA’s

reasoning was informed by Elkay Manufacturing Co. v. United States,

       7
          À la Calgon Carbon Corp. v. United States, 40 CIT ___,
Slip Op. 16-4 (Jan. 20, 2016) at 11 (“[t]he government and
petitioners, in their response briefs, chose not to address the
merits of CAC’s arguments, which were raised by CAC in its opening
brief supporting its CIT Rule 56.2 motion[;] [a]ny argument,
therefore, defending ITA’s selection of a $2.42 per kilogram rate
to Shanxi DMD, is waived, as CAC claimed in its reply brief”),
citing United States v. Great American Ins. Co. of New York, 738
F.3d 1320, 1328 (Fed.Cir. 2013) (“[i]t is well established that
arguments that are not appropriately developed in a party’s
briefing may be deemed waived”) (add’l citations omitted). See
also Nan Ya Plastics Corp. v. United States, 810 F.3d 1333, 1346-47
(Fed.Cir. 2016), quoting id.
Consol. Court No. 15-00109                                              Page 23

38 CIT ___, ___, 34 F. Supp. 3d 1369, 1375-84 (2014) (rejecting

argument that the NSO labor rate “failed to capture any SG&A labor

costs”, but also rejecting conclusion that “double-counting” of

SG&A labor expenses required the specific downward adjustments made

in that case, i.e., the record “lack[ed] substantial evidence to

support [ITA]’s conclusion that the rate [it] applied to the hours

of   production   labor   reported     by   the    investigated    respondents

overstated the value of those labor hours to such an extent as to

justify the specific, compensatory adjustments . . . made to the

SG&A/interest expense ratios”).        See also Elkay Manufacturing Co.,

supra, 40 CIT at ___, 180 F.Supp.3d at 1257-59 (sustaining ITA’s

revised decision not to remove identifiable SG&A labor items from

its calculated SG&A expense ratios).              The problem here, however,

appears similar to that which was recently considered in Yingqing

v.   United   States8.    But,   the   source      and   labor   rate   ITA   has

deliberately chosen pursuant to Labor Methodologies apparently

        8
          40 CIT ___, ___, 195 F. Supp. 3d 1299, 1309-11 (2016)
(discussing reliance upon Thai 2007 NSO data and LSI’s financial
statements and remanding for explanation of why items such as
“Employee welfare cost” and “Subsidy of Social Security Fund and
Workmen Compensation Fund”, which ITA had previously recognized in
Certain Steel Nails from the PRC, 79 Fed.Reg. 19316 (April 8,
2014), and accompanying I&D memo at cmt. 2, as indirect labor
expenses of the type covered by the 2007 NSO data which therefore
necessitated adjustment of the surrogate financial ratios to avoid
double counting, had not been treated similarly in the review under
consideration in Yingqing).
Consol. Court No. 15-00109                                       Page 24

includes all types and forms of labor as well as labor benefits,

and, in that announcement of new methodology, the agency recognized

that it would be over-counting the labor rate for production labor

and specifically indicated therein that the financial ratios would

have to be adjusted so labor was not double-counted; the implicit

remedy would be to move all labor costs explicitly incorporated in

the SG&A source and rate chosen to the ratio denominators.

          In this case, by not removing the various line items such

as “welfare” and “social security and compensation” that are

presumptively included already in the Thai NSO rate, the SV for

labor is inflated, which requires correction initially via the

court’s grant of the pertinent part of plaintiff Xi’an’s motion for

agency reconsideration.    On remand therefor, if ITA continues to

select a source and rate that includes all labor positions and

benefits, it needs to ensure that all forms of labor costs on the

financial statements are in the “materials-labor-energy” (or “MLE”)

denominator   of   the   ratios   in   accordance   with   its    Labor

Methodologies, but whatever course it chooses will need to obviate

the double counting9 that is manifest in the AR5 final results.

      9
          Prior to Labor Methodologies, ITA’s approach had been to
select a source for the production labor rate that included only
production labor, but the “mixed method” adopted by ITA here double
                                                     (continued...)
Consol. Court No. 15-00109                                  Page 25

                               III

                                A

           The first claim of the Stanley plaintiffs’ Rule 56.2

motion is that ITA arbitrarily refused to correct a transcription

error in their February 17, 2015 post-verification FOP database

(specifically the omission of a zero in the tenth or one-hundredth

decimal place in field “V_DLCROD”), which they claim resulted in

the FOP for low-carbon SWR being overstated by almost nine percent,

and directly resulted in an erroneous increase in their dumping

margin of 3.09 percentage points -- about 30 percent higher than it

would have been absent the error.    ITA had directed them to submit

the post-verification database to implement minor FOP corrections

that it had accepted at verification, including corrections to the

variance rate for SWR. PDoc 257.       The purpose of the revised

database was thus to ensure that the AR5 final results would be

based on verified data, and the minor corrections should have

reduced the Stanley dumping margin from the Preliminary Results.

           The Stanley plaintiffs contend ITA did not issue its

request for the revised FOP database until eight weeks after

       9
          (...continued)
counts the respondent’s labor cost by saddling production labor
with a rate embedded with administrative and executive labor and
then charging for that administrative and executive labor a second
time by leaving those costs in the factory overhead and SG&A ratio
numerators. Cf. Yingqing, supra.
Consol. Court No. 15-00109                                          Page 26

verification, and the agency initially afforded only two days in

which to prepare and submit the revised database, a deadline

subsequently   extended    over    a   President’s   Day    weekend,   which

relatively   short   deadline     “certainly   contributed    to   Stanley’s

computer programmer inadvertently omitting a zero to the right of

the decimal point in the field for concerning low-carbon SWR.”

Stanley Reply at 3.      The consolidated-plaintiffs further explain

that it was not possible to have identified the error in their

administrative    case    brief   because   the   revised     database   was

submitted on the same day as that brief.          Id. at 4.

            Whatever the excuse, the error occurred, and it is

manifest.    ITA’s ministerial error memorandum, PDoc 297, and the

defendant imply Stanley had an opportunity to bring the error to

ITA’s attention in the time period between the case brief and the

AR5 final results, to which the Stanley reply is that the timely

submission of a ministerial error allegation is the only available

procedure for correcting a clerical error in a submission made

concurrently with a case brief.          See 19 U.S.C. §1675(h) and 19

C.F.R. §351.224(e) (contemplating that final results are only

“final” subject to correction of ministerial errors).           Stanley did

so.   CDoc 327.   But ITA rejected the ministerial error allegation

by stating that, generally, “ministerial errors include only those
Consol. Court No. 15-00109                                                             Page 27

errors that are produced by the Department.                         The Department will

only correct a respondent’s error when that error is ‘so egregious

and   so    obvious’     that      failing      to   correct       the    error    would     be

arbitrary and capricious.”              PDoc 297 at 4.            ITA then concluded the

error      was    “neither        so   egregious      nor     so    obvious       as    to    be

characterized as a ministerial error.”                      Id.

                 However, in light of the Stanley presentment, it is

difficult to fathom how their ministerial error could have been

concluded otherwise, especially given its impact on their overall

dumping     margin      (a    43.5     percent       change       from   the   Preliminary

Results).         In short, ITA must be ordered on remand to make the

correction. See, e.g., NTN Bearing Corp. v. United States, 74 F.3d
1204, 1208 (Fed.Cir. 1995) (it is incumbent on ITA to correct such

errors,     as     it   has   a    “duty   to    determine         dumping     margins       ‘as

accurately as possible’”), quoting Rhone Poulenc, Inc. v United

States, 899 F.2d 1185, 1191 (Fed.Cir. 1990).                             See also Brother

Indus., Ltd. v. United States, 15 CIT 332, 341, 771 F. Supp. 374,

384 (1991) (“court-ordered amendments of ministerial errors are not

destructive of the ITA’s ability to manage its proceedings”).

                                             B

                 The remainder of the Stanley motion focuses on ITA’s

targeted dumping analysis of its sales, i.e, by “purchasers,
Consol. Court No. 15-00109                                           Page 28

regions, or periods of time.”       19 U.S.C. §1677f-1(d)(1)(B).          See,

e.g.,   Mid Continent Nail Corp. V. United States, 38 CIT ___, ___

n. 3, 999 F. Supp. 2d 1307, 1311 n. 3 (2014).

             Section   1677f-l(d)   of   Title   19,   U.S.C.   directs   “in

general” that ITA “shall” calculate dumping margins using the A-A

or transaction-to-transaction (“T-T”) price comparison methods, see

id., subsection (1)(A), but where the record establishes the

existence of a pattern of export prices that differ significantly

among customers, regions, or time periods and why such differences

cannot be accounted for using the A-A method is explained, ITA

“may” calculate dumping margins using a different methodology such

as the A-T method.     See 19 U.S.C. §1677f-l(d)(l)(B).         When ITA uses

that method, it reverts to “zeroing”10 but does not ignore non-

        10
          This refers to the practice of not using transactions
with U.S. selling prices above normal value to offset transactions
with U.S. selling prices below normal value. See, e.g., Timken Co.
v. United States, 38 CIT ___, ___, 968 F. Supp. 2d 1279, 1281-82
(2014). ITA abandoned “zeroing” in administrative reviews in 2012,
Antidumping Proceedings: Calculation of the Weighted-Average
Dumping Margin and Assessment Rate in Certain Antidumping Duty
Proceedings; Final Modification, 77 Fed.Reg. 8101 (Feb. 14, 2012),
and Stanley complains that the continued act of “zeroing” generates
higher calculated dumping margins (Stanley claims the use of A-T
with zeroing raised its margin from zero to 13.19 percent). The
court observed in dicta nearly twenty years ago that comparisons
based on the A-A method appear to “allow higher prices to cancel
out some amount of dumping” and also that “transaction-specific
price comparisons are statistically biased toward a dumping
                                                     (continued...)
Consol. Court No. 15-00109                                     Page 29

dumped sales when it uses the A-A method.           The Statement of

Administrative   Action   (“SAA”)   accompanying   the   Uruguay   Round

Agreements Act explains that Congress intended “targeted dumping”

to comprise “situations [in which] an exporter may sell at a dumped

price to particular customers or regions, while selling at higher

prices to other customers or regions.”      The SAA explicitly links

ITA’s use of the A-T method to “targeted dumping”:

     New Section 777A(d)(l)(B) provides for a comparison of
     average normal values to individuals export prices ... in
     situations where an average-to-average or transaction-to-
     transaction methodology cannot account for a pattern of
     prices that differ significantly among purchasers,
     regions, or time periods, i.e., where targeted dumping
     may be occurring.

SAA at 843.

            Consistent with the SAA, ITA promulgated a targeted

dumping regulation, 19 C.F.R. §351.414(f). See Antidumping Duties;

Countervailing Duties, 62 Fed.Reg. 27296, 27373-76 (May 19, 1997).

Its salient elements are:

       10
          (...continued)
finding”, Borden, Inc. v. United States, 22 CIT 233, 235-40, 4
F. Supp. 2d 1221, 1224-28 (1998), citing How the GATT Affects U.S.
Antidumping   and    Countervailing   Duty   Policy,    33-35,   66
(Congressional Budget Office 1994), but to that point “zeroing” had
long been understood to be a not-improper philosophic, not
mathematic, interpretation of how dumping is best determined under
U.S. law -- at least until certain members of appellate panels of
the World Trade Organization began to surprise these United States
in opining what had originally been negotiated and “agreed to” when
the Antidumping “Agreement” was signed.
Consol. Court No. 15-00109                                 Page 30

     1. Targeted dumping must be determined through the use of
     “standard and appropriate statistical techniques.”

     2. The A-T comparison is used only for those specific
     sales that comprise targeted dumping.

     3. “Normally,” targeted dumping will be pursued only in
     response to an allegation by a petitioner that includes
     supporting factual information and an explanation as to
     why the A-T comparison could not take into account any
     alleged price differences.

            The current11 test of targeted dumping, differential

pricing, purports to examine differences in a respondent’s prices

among individual purchasers, geographic regions, and quarterly time

periods.    It is performed at the level of individual product

control numbers (CONNUMs) and net of adjustments to gross U.S.

selling price.    ITA does not require any allegation or factual

       11
          ITA’s approach has evolved over at least five distinct
tests to determining the presence of targeted dumping: (1) the
“pasta test”, announced in 1998 in response to the Borden decision,
supra; (2) the “P/2” test (Notice of Final Determination of Sales
at Less Than Fair Value: Coated Free Sheet Paper from the Republic
of Korea, 72 Fed.Reg. 60630 (Oct. 25, 2007)); (3) the “Nails I”
test (Certain Steel Nails from the People’s Republic of China:
Final Determination of Sales at Less Than Fair Value and Partial
Affirmative Determination of Critical Circumstances, 73 Fed.Reg.
33977 (June 16, 2008)); (4) the “Nails II” test (Polyethylene
Retail Carrier Bags from Taiwan: Final Determination of Sales At
Less Than Fair Value, 75 Fed.Reg. 14569 (March 26, 2010)); and (5)
differential pricing (Xanthan Gum from the People’s Republic of
China: Final Determination of Sales At Less Than Fair Value, 78
Fed.Reg. 33351 (June 4, 2013), and accompanying I&D memo).
Consol. Court No. 15-00109                                              Page 31

support   in    differential      pricing;    rather,   ITA    now     performs

differential pricing by rote in every proceeding.

             ITA analyzes prices for each CONNUM by dividing them into

a series of “test groups” (each comprising prices to a specific

purchaser,     region,   or    calendar      quarter)   and    “base    groups”

(comprising     the   remaining     purchasers,     regions,    or     calendar

quarters). Prices to every purchaser, region, and calendar quarter

are serially analyzed as a test group and then recycled into the

base group of prices for that CONNUM.            Differential pricing then

entails three elements.

             In the first element, ITA employs “Cohen’s d statistic”

to measure the “effect size” between each test group and its

relevant base group.          The agency describes effect size as a

descriptive measure of the “magnitude” of the difference between

two groups, which the Stanley plaintiffs contend infra is gross

oversimplification.

             ITA calculates the Cohen d statistic as the difference

between the weighted average net prices of the test and base groups

divided by the “pooled” standard deviation of the net prices of the

two groups.     The pooled standard deviation is calculated as the

square root of the sum of the square of the base group’s standard
Consol. Court No. 15-00109                                         Page 32

deviation plus the square of the test group’s standard deviation,

divided by two. The resulting coefficients are labeled as “small”,

“medium”, or “large”.

          Notably,       ITA     ignores   whether    a   test     group’s

weighted-average price is higher or lower than the base group’s

weighted-average price.        A “large” Cohen’s d coefficient is 0.8 or

greater, which means that the weighted-averages of the base group

and the test group differ by 0.8 standard deviations.            The agency

deems all sales that meet or exceed the 0.8 Cohen d coefficient to

have “passed” that threshold, thereby satisfying the statute’s

requirement     that   “significant”    price   differences   exist    as   a

precondition to using the A-T method.

          In the second element, called the “ratio” test, ITA

stratifies the percentage of a respondent’s sales that “pass” the

Cohen d test.    If the value of a respondent’s passing sales account

for 66 percent or more of the value of its total sales, then the

agency uses the A-T method with zeroing for all sales.                If the

Cohen d test “pass” rate is 33 percent or less, then ITA uses the

A-A method for all sales.        If the Cohen d test “pass” rate falls

between 33 percent and 66 percent, then the agency uses the A-T

method with zeroing for sales that “pass” the Cohen d test and the
Consol. Court No. 15-00109                                 Page 33

A-A method for the remaining sales.   ITA deems this stratification

of CDT “pass” rates to establish whether a “pattern” of significant

price differences exists.

          In the third element, called the “meaningful difference”

test, ITA calculates the respondent’s dumping margin in three ways.

First, it uses the A-A method for all sales.     Second, it uses a

“mixed” method in which the A-T method with zeroing is applied only

to sales that have “passed” the Cohen d test while the A-A method

is applied to the remaining sales.     Third, ITA applies the A-T

method with zeroing to all sales.   Depending on the results of the

“ratio” test, the margin resulting from either the second or third

method is compared to the margin resulting from the A-A method for

all sales.   The agency deems a “meaningful difference” to exist

between the two calculations if the margin using the A-T (or

“mixed”) method (1) generates a 25 percent relative change in the

dumping margin compared to the A-A method, or (2) generates a

dumping margin that crosses the de minimis threshold when compared

to the A-A method.    ITA deems the existence of a “meaningful

difference” sufficient to explain why it cannot account for a

pattern of significant price differences using the A-A method.
Consol. Court No. 15-00109                                    Page 34

                                  C

          As an initial matter, the Stanley plaintiffs raise again

the issue of ITA’s “abrupt” withdrawal of its 1997 targeted dumping

regulation pursuant to Withdrawal of the Regulatory Provisions

Governing Targeted Dumping in Antidumping Duty Investigations, 73

Fed.Reg. 74930 (Dec. 10, 2008).   See 19 C.F.R. §351.414(f) (2007).

           Mid Continent Nail Corp. v. United States, 846 F.3d 1364

(Fed.Cir. 2017), indeed held that withdrawal to have been unlawful

and not harmless in accordance with the Administrative Procedures

Act.   Defendant’s explanation is that, whereas the statute places

certain restrictions on ITA selection of a comparison methodology

for purposes of investigations, it does not do so for purposes of

administrative reviews such as the one at bar.     Def’s Resp. at 23-

24, referencing 19 U.S.C. §1677f-1(d)(1)(B), SAA at 842-43.       JBF

RAK LLC v. United States, 790 F.3d 1358, 1364 (Fed.Cir. 2015), held

that to be true, and cases since have consistently deferred to that

interpretation.   E.g., Fine Furniture (Shanghai) Ltd. v. United

States, 40 CIT ___, ___, 182 F. Supp. 3d 1350, 1364 (2016); Nan Ya

Plastics Corp., Ltd. v. United States, 39 CIT ___, ___ n. 3, 128
F. Supp. 3d 1345, 1349 n. 3 (2015); Apex Frozen Foods Private Ltd. v.

United States, 38 CIT ___, ___,       37 F. Supp. 3d 1286, 1293 (2014),

aff’d, 862 F.3d 1322 (Fed.Cir. 2017); CP Kelco Oy v. United States,
Consol. Court No. 15-00109                                        Page 35

38 CIT ___, ___, 978 F. Supp. 2d 1315, 1320 (2014); Timken Co. v.

United States,     38 CIT ___, ___ & n. 7, 968 F. Supp. 2d 1279, 1286 &

n. 7 (2014).     Further, although ITA typically cites to 19 U.S.C. §

1677f-1(d)(1)(B)     for   “guidance”,    it   does   not   consider   that

provision “binding” legal authority since its statutory authority

to select a comparison methodology in reviews is derived from a

different provision, 19 U.S.C. §1677f-1(d)(2), which does not place

restrictions on ITA’s choice of comparison methodology.          As such,

the agency has discretion12 to apply A-T methodology in reviews

notwithstanding the circumstances surrounding the withdrawal of the

pre-2008 targeted dumping regulation.

           The    defendant    contends    ITA   properly    applied    A-T

methodology during AR5.       It found that the value of Stanley sales

passing the Cohen d test accounted for more than 66 percent of the

value of total Stanley United States sales and also found a

meaningful difference between the weighted-average dumping margins

      12
          But as a further threshold matter, the Stanley plaintiffs
complain ITA initiated differential pricing without an allegation
that they had engaged in targeted dumping.        And cf. Diamond
Sawblades Manufacturers’ Coalition v. United States, 39 CIT ___,
Slip Op 15–116 (Oct. 21, 2015), at 5-6 & n.4 (ITA rejecting a
targeted dumping allegation as untimely and declining to
self-initiate on the ground that the targeted dumping provision
applies by its express terms to agency investigations not
administrative reviews). The consolidated-plaintiffs do not press
the point to one of unlawfulness herein, however.
Consol. Court No. 15-00109                                  Page 36

calculated using the A-A methodology and an alternative comparison

methodology based on the A-T method.      See Stanley Final Results

Analysis Memo at 3.       See also IDM at 36.    Specifically, when

comparing the Stanley weighted-average dumping margin calculated

pursuant to the A-A method and an alternative comparison method

based on the A-T method, that margin rose above the de minimis

threshold.     Such a difference in the weighted-average dumping

margins has been held to satisfy the statutory requirement that ITA

explain why the A-A method cannot account for such differences. See

Apex Frozen Foods, supra, 38 CIT at ___, 37 F.Supp.3d at 1295-96.

Cf. Golden Dragon Precise Copper Tube Grp., Inc. v. United States,

39 CIT ___, Slip Op. 15-89 (2015) at 15-16 (“the significance of

the ‘effect size’ . . . in and of itself ‘explains why such

differences cannot be taken into account’ using A-A methodology”).

             Be that as it may, it misses the Stanley point that the

regulation expressly limits the A-T methodology “to those sales

that constitute targeted dumping”, and it is this “limiting rule”

that Gold East Paper (Jiangsu) Co. v. United States, 37 CIT ___,

___, 918 F. Supp. 2d 1317, 1327 (2013), and Mid Continent both held

still in effect at the times in question.    The AR5 final results
Consol. Court No. 15-00109                                                    Page 37

violate this rule by applying the A-T methodology to all Stanley

sales.   Remand,    for   the    purpose         of   properly    applying     it,   is

therefore necessary.

                                            D

           The Stanley plaintiffs argue that ITA’s use of the Cohen

d test is unlawful because it (i) was allegedly designed for a

context dissimilar to that being analyzed by the agency in a

differential pricing analysis; (ii) is arbitrary in terms of its

classification of effect sizes; (iii) is unreasonable when the

entire data population is available; and (iv) fails to measure

statistical significance.

                                        (i)

           Their claim is that Dr. Cohen’s d test was created for

psychological    research       and   used      as    a   tool   in   the   behavioral

sciences and should not apply in a matter like this. The defendant

responds that ITA uses the test to analyze a respondent’s pricing

behavior, see IDM at 31, and that the economics of pricing behavior

is, in fact, a subset within the ambit of behavioral science.                        It

is an accepted statistical test, employed by ITA to discern a

pricing pattern, and the Stanley position neither persuades that

the   agency’s     use    of    it    was       unreasonable      nor   demonstrates

unlawfulness thereof.
Consol. Court No. 15-00109                                                      Page 38

                                       (ii)

            The    Stanley       plaintiffs    contend    ITA’s          classification

method for the Cohen d test effect size is arbitrary.                         By way of

background,      after     ITA    determines    Cohen’s        d    coefficient,      it

establishes a threshold to determine whether that is significant.

See PDM at 16-17.        The defendant explains that the agency adheres

to the three different fixed thresholds Dr. Cohen deduced (small,

medium,    and    large)    because    they    allow     ITA       to    determine   the

“significance” (or meaningfulness) of the differences between

prices to a particular purchaser, region, or time period as well as

the prices of comparable merchandise to all other purchasers,

regions, or time periods in an efficient and predictable way, and

are generally accepted thresholds for the d test.                       See id. at 34-35

(citing and quoting David Lane et al., “Effect Size,” Section 2,

“Difference      Between    Two    Means”     (stating    that          the   guidelines

suggested by Dr. Cohen as to what constitutes small, medium, and

large effect size “have been widely adopted”)). ITA generally uses

the “large” threshold (i.e. Cohen’s d coefficient above 0.8) as the

threshold for passing the d test, because the “large” threshold

provides    the     strongest       support    for     the     differences        being

meaningful.      Id. at 36-37.
Consol. Court No. 15-00109                                       Page 39

            Substantial evidence of record herein supports the use of

Dr. Cohen’s d test and the threshold demarcations he intuited,

along with the caveats he enunciated, since the record evinces that

his test gained awareness, acceptance, and use among scientists

within various disciplines of the self-professed community of

“experts”, see, e.g., id., and the Stanley arguments do little to

contradict or counteract this fact.       Therefore, because ITA used

widely accepted thresholds, provided a rational explanation as to

which threshold to employ, and selected a threshold for the Cohen

d coefficient which has real world, practical meaning consistent

with the statute, its use of the threshold is not arbitrary.         Cf.

Cosco Home & Office Prods. v. United States, 28 CIT 2043, 2049-50,

350 F. Supp. 2d 1294, 1299-1300 (2004) (holding ITA’s interpretation

of   19   U.S.C.   §1675(a)(1)   and   amendment   of   its   regulations

reasonable); Mitsubishi Heavy Indus., Ltd. v. United States, 21 CIT
1227, 1233-35, 986 F. Supp. 1428, 1434-35 (1997) (50 percent test).

                                  (iii)

            The Stanley plaintiffs challenge ITA’s application of the

ratio test, claiming that it does not explain how the three
Consol. Court No. 15-00109                                                     Page 40

thresholds       thereof13    satisfy      the   statutory     requirements.      ITA

explained that it uses the ratio test to complete its determination

as    to   whether    there       exists   a   pattern   of    prices   that   differ

significantly by purchaser, region, or period of time.                   See PDM at

17.    This is necessary because, even though the sales for one or

more groups of comparable merchandise for specific purchasers,

regions, or time periods may pass the Cohen d test, it does not

necessarily follow that, in relation to the total volume of a

respondent’s export sales, there is sufficient evidence that there

exists a pattern of prices that differ significantly.                    See IDM at

37-38.          Pursuant     to    19   U.S.C.    §1677f-1(d)(1)(B),      ITA     “may

determine” whether sales were made at less than fair value using

the alternative method when subsections (i) and (ii) of the

provision are satisfied, but the statute is silent as to how ITA

may determine whether those subsections are thus and such. See id.

The agency in this matter lawfully exercised its discretion in

filling the gaps of determining how the A-T method could be

considered as an alternative methodology.                     See id. See also JBF

RAK, supra, 790 F.3d at 1364.

           13
          Thirty-three percent or less; 33-66 percent; and 66
percent or more.
Consol. Court No. 15-00109                                 Page 41

                               (iv)

          The Stanley plaintiffs assert that the statute requires

ITA to measure “statistical significance,” which the Cohen d test

does not measure.   This assertion underlies many of the Stanley

arguments, but “statistical significance” is irrelevant where, as

here, the agency has a complete set of data to consider.

          The statute provides that ITA may apply an alternative

comparison methodology if it finds “a pattern of export prices (or

constructed export prices) for comparable merchandise that differ

significantly among purchasers, regions, or periods of time[.]” 19

U.S.C. §1677f-1(d)(1)(B)(i) (emphasis added).    Additionally, the

SAA states:

     New Section 777A(d)(1)(B) provides for a comparison of
     average normal values to individual export prices . . .
     in situations where an [A-A] or [T-T] methodology cannot
     account for a pattern of prices that differ significantly
     among purchasers, regions, or time periods, i.e., where
     targeted dumping may be occurring.

SAA at 843 (emphasis added).     Neither the statute nor the SAA

defines the term “significantly”, but the consolidated-plaintiffs

contend its plain meaning is “statistically significant.”        ITA

interprets otherwise.
Consol. Court No. 15-00109                                                Page 42

             Statistical significance only takes on relevance when

“determin[ing] from a sample (i.e., the data at hand) of a larger

population an estimate of what the actual values (e.g., the mean or

variance) of the larger population may be”.          IDM     at 34.      Here, ITA

has the entire population of the respondents’ sales in the U.S.

market; therefore, “‘statistical significance’ is not a relevant

consideration.”         Id.     The     agency   calculates      the     Cohen    d

coefficients    to    determine      whether   differences    in    prices       for

comparable merchandise among purchasers, regions, or time periods

are significant, and those calculations are based upon all of the

United States sales that Stanley reported for the POR, not merely

a sample, and thus form the entire population of U.S. sales of

subject merchandise.      See id.      Sampling error does not exist when

there are complete data for analysis.

             The Stanley plaintiffs state that the purpose of the

Cohen d test is to “make reasonable queries as to how big an

intervention effect may be when only a sample is available.”                      It

would   be   more    accurate   to    state,   however,   that     the    Cohen   d

coefficient measure of effect size “quantifies the size of the

difference between two groups, and may therefore be said to be a

true measure of the significance of the difference” based on
Consol. Court No. 15-00109                                              Page 43

complete information, not samples.             See id. at 33 (citations

omitted).    Accordingly, once again, the “statistical significance”

of   ITA’s   calculations   is     not   relevant   to    its   analysis,    and

requiring the agency to measure statistical significance here,

where it has incorporated all of the respondents’ data in the

analysis, would be inappropriate14.

             As   noted   above,    Congress    did      not    use   the   word

“statistical” or any variation thereof when it drafted the statute.

And as ITA stated in the IDM, and as Stanley has argued elsewhere,

Congress acts intentionally when it drafts statutory language.

Simply put, if Congress had wanted ITA to measure “statistical

        14
          A number of Stanley arguments continue to press an
interpretation of the term “significant” that is at variance with
what the statute requires.       For example, the consolidated-
plaintiffs raise concerns with regard to accounting for random
events and Type I error (i.e., a “false positive” leading to
incorrect rejection of a true null hypothesis), and they also
express concerns about whether Cohen’s d test tests a statistical
hypothesis, which is necessary when measuring for statistical
significance. But as indicated above, there are no random estimates
of actual statistical measures because ITA’s analysis relies on
complete information to perform such calculations. See IDM at 34.
Because the agency has the complete population of Stanley United
States sales, none of the resulting calculations evince random
errors because of sampling, and because there is no sampling or
randomness, all issues related to Type I errors, which are errors
that occur because of sampling, are moot.
Consol. Court No. 15-00109                                       Page 44

significance,” it would have included the word “statistical”15.       In

applying the Cohen d test, ITA fulfills the statutory requirement

to measure whether there exists a pattern of prices that differ

“significantly”, and the d test enables the agency to quantify, in

a   simple    and   transparent   approach,   whether   prices    differ

significantly among purchasers, regions, or time periods.

                                  (v)

             The Stanley plaintiffs claim that several other aspects

of ITA’s differential pricing analysis contravene congressional

intent. However, mere disagreement with its approach, where the

statute is silent, is not a sufficient basis for the court to

overturn the agency’s reasoning.     See Mid Continent Nail Corp. v.

United States, 34 CIT 512, 519, 712 F. Supp. 2d 1370, 1376-77 (2010)

(“[g]enerally, courts lack an ‘independent authority to tell the

[agency] how to do its job’ when a statute does not specify ‘any

       15
          The Stanley definition of “significant” is “1. a) having
or expressing a meaning, b) full of meaning; 2. important;
momentous; 3. having or conveying a special or hidden meaning;
suggestive; 4. of or pertaining to an observed departure from a
hypothesis too large to be reasonably attributed to chance”,
Stanley Br., p. 32, citing Webster’s New World Dictionary of the
American Language at 1325 (1980) (emphasis omitted), and that
proffered definition supports ITA’s understanding of being tasked
by statute to find a meaningful difference between the average
price of a test group and the average price of a comparison group,
which the Cohen d test accomplishes. See IDM at 32, 36-37.
Consol. Court No. 15-00109                                               Page 45

Congressionally mandated procedure or methodology for assessment of

the statutory tests’”), quoting U.S. Steel Group v. United States,

96 F.3d 1352, 1362 (Fed.Cir. 1996).           The statute does not specify

the particular analysis or approach that ITA must use, and in the

absence    of   showing    challenged        aspects   of     agency    analysis

unreasonable, the court will defer to its discretion.

                                      (vi)

            The final step of ITA’s differential pricing analysis

examines whether the A-A methodology can account for a pattern of

prices that differ significantly by determining whether there

exists a meaningful difference in the weighted-average dumping

margins    calculated   using    that   methodology     and    an   appropriate

alternative comparison methodology.            See IDM at 36.       The Stanley

plaintiffs argue that the AR5 final results do not explain why the

difference in the pattern of prices cannot be accounted for with

the A-A method.    But their argument fails to persuade that ITA’s

explanation therein as to why that approach cannot account for

pricing differences was unreasonable.           See id.

            As explained in the AR5 final results (and again above),

if   the   difference     in    the   weighted-average        dumping    margins

calculated using the A-A method and an appropriate alternative
Consol. Court No. 15-00109                                                Page 46

comparison method is meaningful, then that fact is indicative of

whether    that   method   cannot    account    for    such    differences      and

therefore an alternative method would be appropriate.                     See id.

More precisely, a meaningful difference between the results of the

A-A    methodology   and    an    appropriate   alternative      (A-T    in    this

instance) exists if: (1) there is a 25 percent relative change in

the weighted-average dumping margins between the A-A methodology

and the appropriate alternative where both are above the de minimis

threshold, or (2) the resulting weighted-average dumping margins

move across that threshold.         See id.

            ITA found that a meaningful difference exists because the

Stanley    weighted-average       dumping   margin     did    move    across   that

threshold upon a comparison of the two methods.                  See id.       This

threshold is reasonable because comparing the weighted-average

dumping margins calculated using the two methods allows ITA to

quantify the extent to which the A-A method cannot take into

account different Stanley pricing.            And ITA’s determination that

the A-A methodology cannot account for the difference in the

pattern of prices in similar circumstances has been upheld in

court.    E.g., Samsung Elecs. Co. v. United States, 39 CIT ___, ___,

72 F. Supp. 3d 1359,    1368   (2015)    (holding    that    ITA    reasonably
Consol. Court No. 15-00109                                             Page 47

explained that “the A-to-A method does not take into account such

price differences because there is a meaningful difference in the

weighted average dumping margins when calculated using the A-to-A

method and the A-to-T method” and that Samsung’s margin had moved

across the de minimis threshold (citations omitted; emphasis in

original)); Apex, supra, 38 CIT at ___, 37 F.Supp.3d at 1299-1300

(holding that ITA reasonably concluded that the A-A methodology

could not account for targeting where plaintiff’s margin crossed

the de minimis threshold), aff’d, 862 F.3d at 1323-24. The Stanley

argument does not persuade that this is an unreasonable approach to

fulfilling the statute’s aim of combating masked dumping.

           In AR5, ITA concluded that the A-A methodology could not

account   for    the   difference   in   the   pattern   of   prices   once   a

meaningful difference existed between that methodology and the A-T

approach when the Stanley weighted-average dumping margin moved

above the de minimis threshold.             And, as in Apex and Samsung,

Stanley   does    not    show   that     the   meaningful     difference   was

immaterial.

                                    (vii)

           The Stanley plaintiffs allege that ITA use of the Cohen

d test is biased toward finding prices that differ significantly,
Consol. Court No. 15-00109                                             Page 48

leading it to overuse the A-T method.               The argument appears to

conflate passing the d test with application of the A-T comparison

methodology, which requires that ITA find not only that a pattern

of prices that differ significantly exists but also that the A-A

methodology cannot account for such differences.                 Each of these

provisions requires a separate analysis, with distinct results, and

both   must    be    satisfied    to   apply   an    alternative    comparison

methodology.        Moreover,    Stanley   citations       to   instances    when

respondents’ sales passed Cohen’s d test without discussing whether

ITA applied an alternative comparison methodology, Stanley Brief at

39-40, illustrate only that the respondents’ pricing behavior

exhibited certain significant differences in prices. See IDM at 37

(stating that both requirements under the statute must be satisfied

before applying an alternative comparison methodology and that the

Stanley analysis is concerned with and limited to only the first of

the two requirements).          These instances do not show whether ITA

applied an alternative comparison methodology or whether it found

that the respondents sold subject merchandise at less than normal

value.

              The   Stanley   plaintiffs   also     fail   to   appreciate   the

difference between sales found to be at significantly different
Consol. Court No. 15-00109                                                   Page 49

prices   as    opposed     to   whether    ITA   has   applied    an    alternative

comparison methodology to address masked dumping.                      They connect

high rates of sales passing Cohen’s d test to dumping.                        A high

passing rate, however, does not mean that the A-A methodology

cannot account for such differences (i.e., whether or not dumping

even   exists    or   is    being    masked).    As    ITA    explained,     “[b]oth

requirements     of   section       1677f-1(d)(1)(B)     of     the    Act   must   be

satisfied before [it] has the option of applying an alternative

comparison method in less-than-fair-value investigations.”                    IDM at

37-38.   As such, even if a large proportion of U.S. sales pass the

d test, ITA does not automatically apply the A-T method.                     Id.    It

must also consider whether the A-A method can account for such

differences and, if the standard comparison methodology can account

for    such    differences,       ITA     will   not    apply    an     alternative

methodology.      See id.

              In other words, a finding that there exists a pattern of

prices that differ significantly means only that ITA will consider

whether the standard comparison methodology can account for the

differences.     Subject merchandise can be sold in the United States

market at significantly different prices yet none of the sales are

priced at less than normal value (i.e., there is no dumping); in
Consol. Court No. 15-00109                                              Page 50

such a situation, the A-A method will be able to account for the

differences,     and   that   method   will   be    used   to    calculate   any

weighted-average margin.          A firm can also make those same U.S.

sales at significantly different prices among purchasers, regions,

or time periods at prices which are all less than normal value

(i.e., all sales are dumped); in such a situation, the A-A method

also will be able to account for such differences, and thus, that

method can, again, be used.        Thus, even if there is a high Cohen’s

d pass rate, it is meaningless without consideration of whether the

A-A method can account for the differences.                See id. at 38; 19

U.S.C. §1677f-1(d)(1)(B)(ii).

                                    (viii)

           ITA reiterated the importance of both lower and higher

priced sales in masked dumping, noting that “higher priced sales

are equally capable as lower priced sales to create a pattern of

prices   that    differ    significantly.”    IDM    at    38.    The   Stanley

plaintiffs      disagree   that   “high”   and     “low”   priced   sales    are

appropriate considerations when conducting Cohen’s d test.

           They argue that ITA may not find that higher priced sales

pass that test and are part of a pattern of prices that differ
Consol. Court No. 15-00109                                           Page 51

significantly, but “high” and “low” are relative terms, and they

concede that the statute is silent as to this issue, providing only

that the agency must determine whether a pattern of prices that

differ significantly exists.        The statute does not specify whether

ITA may or may not consider prices that differ because they are

higher or lower. See 19 U.S.C. §1677f-1(d)(1)(B) (alternative

methodology may be applied if (i) “there is a pattern of export

prices . . . for comparable merchandise that differ significantly

among purchases, regions, or periods of time, and (ii) [ITA]

explains why such differences cannot be taken into account” using

the A-A methodology).

           Finding      no   explicit   statutory   support,   the   Stanley

plaintiffs look to the SAA, which they interpret to mean that

targeting and dumping are linked in the statute and, thus, ITA is

only authorized to consider dumped prices.              But the SAA does

discuss both “dumped prices” and “higher prices”, as Stanley itself

notes:   “[t]he   SAA    explains   that   ‘targeted   dumping’   comprises

‘situations [in which] an exporter may sell at a dumped price to

particular customers or regions, while selling at higher prices to

other customers or regions.’” Stanley Brief at 42, quoting SAA at

842 (emphasis deleted).       Thus, the SAA acknowledges that “targeted
Consol. Court No. 15-00109                                        Page 52

dumping” includes sales which have been made at both “dumped” (or

lower) prices as well as higher prices, and high priced sales will

offset   lower   priced   sales,    “either    implicitly    through    the

calculation of a weighted-average sale price for a [United States]

averaging group, or explicitly through the granting of offsets when

aggregating the A-to-A comparison results, that can mask dumping”.

IDM at 38. In other words, higher and lower priced sales do not

operate independently: in theory at least all sales are relevant to

the analysis, and nothing in the statute or the SAA precludes ITA

from reviewing both higher and lower priced sales.             See id. at

38-39.

                                   (ix)

          Additionally,    the     Stanley    plaintiffs    challenge   the

calculation of the measure which ITA uses to gauge the effect size,

i.e., the Cohen d coefficient.       To calculate the effect size, it

uses the “pooled standard deviation,” which is based on the

distribution of the prices between the test and comparison groups,

because it “reflects the dispersion, or variance, of prices within

each of the two groups.”     IDM at 36.      The consolidated-plaintiffs

contend that the use of a pooled standard deviation leads to a bias

for finding high Cohen d pass rates.      See Stanley Brief at 39 (“ITA

incorrectly calculated the pooled standard deviation in the Cohen
Consol. Court No. 15-00109                                         Page 53

d statistic -- generating an upward bias in the ‘pass’ rate -- by

giving equal weight to the squared standard deviations of the

‘target’ and ‘comparison’ price groups despite clear evidence that

the target groups were much smaller in volume and the standard

deviations of the target and comparison groups were not equal”).

            But once again, there is no statutory directive with

respect to how ITA determines whether a pattern of prices that

differ significantly exists, let alone how to calculate the pooled

standard deviation of the Cohen d coefficient.        See Certain Frozen

Warmwater    Shrimp   From   the   Socialist   Republic   of   Vietnam,   80

Fed.Reg. 55328 (Sept. 15, 2015), and accompanying I&D memo at 27.

ITA has generally relied on a reasonable and predictable approach

by using a simple average when determining the pooled standard

deviation.      E.g., id. By giving equal weight to the test and

comparison groups, ITA balances the importance of the exporter’s

pricing behavior to a given purchaser, region, and time period, and

the exporter’s pricing behavior to other purchasers, regions, and

time periods.    This implies that the magnitude of the sales to one

group does not skew the outcome.       See id.

            Furthermore, as discussed above, even when a majority of

a respondent’s sales pass the Cohen d test, this does not end ITA’s
Consol. Court No. 15-00109                                       Page 54

analysis in determining whether to apply an alternative methodology

when calculating its weighted-average dumping margin. See IDM at

38.   The agency must also consider and explain why the A-A

comparison method cannot account for such differences, in order to

satisfy both requirements under section 1677f-1(d)(1)(B) of the

Act, and only then does ITA consider the application of the A-T

method.        Id.

                The Stanley plaintiffs attempt to validate their claim on

the supposed bias of the Cohen d test by pointing to the outcomes

of 150 preliminary determinations in which a differential pricing

analysis was employed.        See Stanley Administrative Case Brief at

33-34 and Addendum A.16 However, the Stanley data and analysis fail

to establish (1) that a bias exists among those preliminary

determinations and (2) how any potential bias would be attributable

to ITA’s calculation of the pooled standard deviation based on a

simple average of the variances of the test and comparison groups.

See IDM at 37.

          16
          The Stanley brief at bar cites an expanded data set
covering 209 respondents through September 2015.       See p. 40,
Addendum B. The defendant requests that this expanded data set be
ignored, as it was not submitted to ITA during the administrative
process and is therefore not part of the record for this
administrative review per 19 U.S.C. § 1516a(b)(1)(B)(i). It is so
ordered.
Consol. Court No. 15-00109                                                              Page 55

               The Stanley data fail to demonstrate a bias in ITA’s

application of the Cohen d test.                     They show that 113 of the 150

cases cited involved a sufficient percentage of sales value passing

the d test to consider the application of an alternative comparison

methodology.         See Stanley Administrative Case Brief at Addendum A.

Of    these,    ITA       applied    the       A-T    method     in    only       50    of   the

determinations.           From Stanley’s own data, accordingly, there does

not appear to exist a bias in the agency’s application of the

differential pricing analysis including Cohen’s d test based on the

use   of   a    simple      average      in    determining       the       pooled      standard

deviation.          Only one-third of the cases to which Stanley cites

resulted       in    the    application          of     an    alternative          comparison

methodology, representing less than one-half of the cases in which

there   existed       a    pattern       of   prices     that    differ       significantly

pursuant to the Cohen d and ratio tests.

               The Stanley argument, to wit, “the conclusion that two

companies       targeted       all       of     their        sales    underscores”           the

unreasonableness of differential pricing because “it makes no

economic sense for any one company to ‘target’ the majority of its

sales,”    Stanley        Brief     at   40,    and    because       “if    all     sales    are

‘targeted,’ then none can be,” Stanley Administrative Case Brief at
Consol. Court No. 15-00109                                         Page 56

33, expresses a misappreciation of how ITA determines the existence

of a pattern of export prices that differs significantly among

purchasers,   regions,   or   time   periods.   The   focus   is   not   on

“targeting” and economic decision-making, but on the difference

between export prices.17      While Stanley pointed to a single case

where all of the respondent’s sales prices differed significantly,

there are also 16 cases in the data where none of the sales prices

did so, indicating that ITA’s approach is not unreasonable and does

not exhibit a bias.      In other words, the phenomenon to which

Stanley points as proof of bias is controverted by its opposite,

i.e., that no sales pass the Cohen d test.      Accordingly, Stanley’s

own data indicate that, if anything, there is a tendency against

finding a pattern of prices that differ significantly across

purchasers, regions, or time periods.

       17
          For example, consider two purchasers, A and B. If the
prices to purchaser A are found to differ significantly from the
prices to purchaser B, then it follows that the prices to purchaser
B differ significantly from the prices to purchaser A. Here, it is
reasonable to conclude that all prices differ significantly.
Similarly, if the prices to purchaser A do not differ significantly
from the prices to purchaser B, then it follows that the prices to
purchaser B do not differ significantly from the prices to
purchaser A. Here, it is reasonable to conclude that none of the
prices differ significantly.
Consol. Court No. 15-00109                                         Page 57

                                    (x)

           The Stanley plaintiffs press a number of additional

arguments, none of which is persuasive.

           First, their argument that the “meaningful difference”

element of the Cohen d test has the perverse effect of allowing a

respondent to avoid the A-T method with zeroing if all its sales

are dumped, gaining a lower margin than if only some of its sales

are dumped, lacks merit.         If all of a respondent’s sales are

dumped, then there is no zeroing because there are no sales that

are not dumped, and the weighted-average dumping margin calculated

using the A-A and A-T method is identical.            If only some of a

respondent’s sales are dumped, the calculated weighted-average

dumping margin will be reduced, reflecting the fact that there is

less dumping overall, regardless of whether or not zeroing is

applied to the non-dumped sales.          Accordingly, it is unclear how

the respondent would gain a lower dumping margin if all of its

sales were dumped. Stanley erroneously associates the possible use

of   zeroing   with   always   reducing   the   weighted-average   dumping

margin, and draws an unsupportable conclusion.

           Second, the Stanley plaintiffs argue that ITA’s approach

is mechanical and rote, contrary to Congress’s intent that an

analysis to detect masked dumping be conducted on a case-by-case
Consol. Court No. 15-00109                                          Page 58

basis.      But   the   agency   does   examine   whether   the   statutory

requirements have been satisfied on a case-by-case basis.                It

reviews the individual pricing behavior of each respondent when it

conducts a differential pricing analysis.         Its analysis begins by

examining the extent to which a respondent’s sales pass the Cohen

d test, and whether a group of sales passes that test is measured

relative to the “pooled standard deviation” discussed above, which

specifically reflects the pricing behavior of each individual

respondent.       Then, ITA determines whether the differences in

respondent’s prices, based on purchaser, time period, and region,

can be accounted for using the A-A methodology, which is directly

related to the respondent’s dumping in the U.S. market and whether

such dumping is masked.     See IDM at 41 (“[o]n a case-by-case basis,

[ITA] also considers the factual information and arguments on the

record for each segment of a proceeding”).

            Furthermore, ITA considers arguments from parties in each

segment of a proceeding concerning whether its approach should be

modified.     See PDM at 17 (“[i]nterested parties may present

arguments and justification in relation to the above-described

differential pricing approach used in these preliminary results,

including arguments for modifying the group definitions used in
Consol. Court No. 15-00109                                  Page 59

this proceeding”).   For example, in the 2011-2012 administrative

review of copper tubing from the PRC, the agency modified the time

periods used in the Cohen d test.   See Seamless Refined Copper Pipe

and Tube From the PRC, 79 Fed.Reg. 23324 (April 28, 2014), and

accompanying I&D memo at 13-14.

          The defendant contends that not only does ITA review the

specific circumstances of a respondent, it continues to expand its

experience and alter its method as it applies the methodology, see

IDM at 41, and that the agency reviewed Stanley sales to determine

which passed the Cohen d test, compared Stanley weighted-average

dumping margins calculated using the A-A methodology and the mixed

alternative methodology to determine whether the significant price

differences based on purchaser, period, and region, could be

accounted for by the A-A methodology, and found that the A-A

methodology did not account for such differences.       See IDM at

30-31. To the extent ITA’s application of the differential pricing

analysis was tailored to Stanley, it was not mechanical; and even

if the Cohen d test itself may be inferred mechanistic, that does

not, ipse dixit, make it unlawful, or else all calculations would

be.
Consol. Court No. 15-00109                                 Page 60

          Third, the Stanley plaintiffs challenge ITA’s continued

use of sales that have been found to pass the Cohen d test in the

base group of other comparisons.   But as stated in the Preliminary

Results, the purpose of that test is “to evaluate the extent to

which the net prices to a particular purchaser, region, or time

period differ significantly from the net prices of all other sales

of comparable merchandise.”   PDM at 16.    Simply because certain

sale prices are part of a test group in one instance and part of a

comparison group in other instances does not constitute double

counting; agency dumping analysis includes all information and data

on the record, and selectively including or excluding certain sales

is not supported by the statute.

          Furthermore, the inclusion of sales that “pass” the Cohen

d test in base groups for other test groups does not cause sales to

“pass” that otherwise would not.     The Stanley assertion to the

contrary is refutable through the use of a hypothetical scenario:

     [T]here are two purchasers, A and B, which purchase the
     subject merchandise at average prices of 10 and 20,
     respectively. Based on the Cohen’s d Test, when testing
     purchaser A, the weighted-average price to purchaser B
     will be the comparison group, and the difference in the
     two prices between purchaser A and purchaser B, i.e., 10,
     is found to pass the Cohen’s d Test. Then, when purchaser
     B is the test group, purchaser A will be the comparison
     group, and the sales to purchaser B will also be found to
     pass the Cohen’s d Test.
Consol. Court No. 15-00109                                      Page 61

IDM at 41-42. If the weighted-average price to purchaser A differs

significantly from the weighted-average price to purchaser B, the

weighted-average price to purchaser B also differs significantly

from the weighted-average price to purchaser A.            The Stanley

suggestion (that once ITA finds that the weighted-average price to

purchaser A differs significantly from the weighted-average price

to purchaser B, the sales prices to purchaser A should be excluded

henceforth from the analysis) appears illogical, as it would result

in no comparison being made for the weighted-average price to

purchaser B because sales to purchaser A would not be allowed to be

a basis for comparison. Further, if purchaser B’s sales were tested

first, purchaser A’s sales would not be tested for the same reason,

and such an approach would lead to arbitrary and unpredictable

results that would depend upon the order in which purchasers,

regions, or time periods were examined.

            Fourth, the Stanley plaintiffs contend that the Cohen d

test   prevents   respondents   from   refraining   from   engaging   in

“targeted dumping.”   They claim that high pass rates for that test

make it difficult to “avoid being found ‘guilty’ of targeted

dumping.”   But that test alone does not determine whether ITA will

apply an alternative comparison methodology.        See IDM at 37-38.
Consol. Court No. 15-00109                                 Page 62

          Lastly, the consolidated-plaintiffs challenge agency use

of net prices rather than gross prices when examining if a pattern

of prices differs significantly. Their specific contention is that

ITA fails to account for circumstances of sale that cause net

prices to vary, and that such circumstances are exogenous factors

that do not affect a respondent’s pricing behavior but are beyond

its control because of differences in selling circumstances.   The

defendant contends ITA uses net prices to address all circumstances

of sale, deducting the associated expenses from the reported gross

unit prices which are used in the Cohen d test and that the

suggestion that circumstances of sale do not affect the pricing

behavior of a respondent is misleading.     The defendant explains

that respondents will generally account for costs such as freight,

packing, and direct selling expenses in their pricing decisions,

and that, when a dumping margin is calculated, it is based on net

prices.   For that reason, the defendant continues, ITA deems it

appropriate to examine whether there is a “differ significantly”

pattern based on net prices, because such examination later informs

agency margin calculation.   See IDM at 37 (“[ITA] finds that it is

appropriate and reasonable that its examination of a pattern of

prices that differ significantly to be based on net prices rather

than gross prices, as net prices are the basis used to calculate
Consol. Court No. 15-00109                                                Page 63

dumping margins and determine a respondent’s amount of dumping”).

As this appears to implement the intent of the statute and the

regulations, where the purpose of a differential pricing analysis

is to determine whether the A-A comparison methodology is the

appropriate tool with which to measure a respondent’s dumping in

the U.S. market, see 19 C.F.R. §351.414(c)(1), this court cannot

fault defendant’s rationale.

                 In sum, with the exception of section III.C, supra, the

Stanley plaintiffs have not established that ITA’s utilization of

its differential pricing analysis was out of order.                      See Apex

Frozen Foods Private Ltd. v. United States, 862 F.3d 1322 and 862
F.3d 1337 (Fed.Cir. 2017), passim.

                                            IV

                 In view of the foregoing, the motions of the plaintiff

and the consolidated-plaintiffs for judgment on the agency record18

can   be        granted   only   to   the    extent   of   remand   to   ITA   for

reconsideration of the issues of (1) the two labor classification

           18
          The quality of the papers submitted in support, as well
as of those presented in opposition, obviated any need to burden
the parties with oral argument, and their motion therefor, for the
record, is thus hereby denied.
Consol. Court No. 15-00109                                       Page 64

matters, as discussed in section II.E, supra, (2) the apparent

omission, in the Stanley February 17, 2015 post-verification factor

of production database, of a zero in the tenth or one-hundredth

decimal place in field “V_DLCROD”, as discussed in section III.A

above, and (3) the application of the limiting rule, as discussed

in section III.C, supra.

          The results of this remand shall be filed on or before

November 30, 2017, with any comments thereon due within 30 days of

the filing thereof.

          So ordered.

Dated:   New York, New York
          September 6, 2017

                                    __/s/   Thomas J. Aquilino, Jr.__________
                                                Senior Judge