Court Opinion

ID: 9939739
Source: CourtListenerOpinion
Date Created: 2024-02-12 17:01:43.735563+00
Date Added: 2024-06-11T13:41:52.315105
License: Public Domain

Slip Op. 24-15

          UNITED STATES COURT OF INTERNATIONAL TRADE

MID CONTINENT STEEL & WIRE,
INC. ET AL.,

       Plaintiff and Consolidated
       Plaintiffs,

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

and

PT ENTERPRISE INC. ET AL.,

       Defendant-Intervenors and
       Consolidated Defendant-
       Intervenor.

                            OPINION AND ORDER

[Sustaining the Department of Commerce’s Fourth Remand Redetermination.]

                                                         Dated: February 12, 2024

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

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

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

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

(“Commerce”) Final Results of Redetermination Pursuant to Court Remand, Aug. 31,

2023, ECF No. 207-1 (“Fourth Remand Results”) in the antidumping duty

investigation of certain steel nails from Taiwan, following the third remand

redetermination made in accordance with the mandate of the U.S. Court of Appeals

for the Federal Circuit in Mid Continent Steel & Wire, Inc. v. United States, 31 F.4th

1367, 1381 (Fed. Cir. 2022) (“Mid Continent V”) rev’g in part 495 F. Supp. 3d 1298

(Ct. Int’l Tr. 2021) (“Mid Continent IV”). Following this Court’s fourth remand order,

see Mid Continent Steel & Wire, Inc. v. United States, 628 F. Supp. 3d 1316 (Ct. Int’l

Tr. 2023) (“Mid Continent VI”), Commerce again contends its use of simple averaging

is reasonable. For the following reasons, Commerce’s fourth remand redetermination

is sustained.

                                  BACKGROUND

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

previous opinions, as well as the Court of Appeals’ decisions in Mid Continent Steel

& Wire, Inc. v. United States, 940 F.3d 662 (Fed. Cir. 2019) (“Mid Continent III”) and

Mid Continent V, and will discuss additional facts relevant to the Court’s review of

the Fourth Remand Results. On June 25, 2014, Commerce initiated an antidumping
Consol. Court No. 15-00213                                                   Page 3

duty investigation of certain steel nails from six countries, including Taiwan. See

Certain Steel Nails from India, the Republic of Korea, Malaysia, the Sultanate of

Oman, Taiwan, the Republic of Turkey, and the Socialist Republic of Vietnam, 79

Fed. Reg. 36,019 (Dep’t Commerce June 25, 2014) (initiation of less-than-fair-value

investigations). On May 20, 2015, Commerce issued its final determination, which

resulted in an antidumping duty order on subject nails from Taiwan. See Certain

Steel Nails from Taiwan, 80 Fed. Reg. 28,959 (Dep’t Commerce May 20, 2015) (final

determination of sales at less than fair value) (“Final Results”) and accompanying

Issues and Decision Memorandum, May 13, 2015, ECF No. 17 (“Final Decision

Memo.”).

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

its decision to use a simple average of standard deviations in the denominator of

Cohen’s d test. See Mid Continent Steel & Wire, Inc. v. United States, 219 F. Supp.

3d 1326, 1351 (Ct. Int’l Tr. 2017) (“Mid Continent I”). On October 3, 2019, the Court

of Appeals vacated this Court’s judgment and remanded in part to Commerce for

further explanation of its decision to use a simple average of standard deviations in

the denominator of Cohen’s d test. See Mid Continent III, 940 F.3d at 674–75. On

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

its use of the simple average was both accurate and in accord with statistical

literature. See Final Results of Redetermination Purs. Ct. Remand at 4, 15–16, June

16, 2020, ECF No. 144-1 (“Second Remand Results”). On January 8, 2021, this Court
Consol. Court No. 15-00213                                                  Page 4

again sustained Commerce’s decision, concluding that Commerce had adequately

explained how its use of simple averaging was more accurate, and thus a reasonable

choice of methodology. See Mid Continent IV, 495 F. Supp. 3d at 1308.

      On April 21, 2022, the Court of Appeals vacated this Court’s judgment,

remanding to Commerce for further explanation of its decision to use the simple

average. See Mid Continent V, 31 F.4th at 1381; see also Mandate, June 13, 2022,

ECF No. 177; Remand Order, June 14, 2022, ECF No. 178. The Court of Appeals held

that Commerce inadequately explained its choice of the simple average of the

standard deviations for the Cohen’s d denominator. Mid Continent V, 31 F.4th at

1378–81. The Court of Appeals rejected Commerce’s reasoning that the “equally

rational” and “equally genuine” pricing choices warranted equal weighting in the

Cohen’s d denominator. Id. at 1379. The Court of Appeals explained that “Commerce

needs a reasonable justification for departing from what the acknowledged literature

teaches about Cohen’s d.” Id. at 1381. The Court of Appeals also suggested that the

preferred way to establish the denominator was to “use the standard deviation of the

entire population.” Id. at 1377.

      In the third remand redetermination, Commerce defended its decision to use

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

with statistical literature. See Final Results of Redetermination Purs. Ct. Remand

at 42–43, 52, Nov. 10, 2022, ECF No. 186-1 (“Third Remand Results”). In Mid

Continent VI, this Court remanded Commerce’s third final results redetermination,
Consol. Court No. 15-00213                                                     Page 5

concluding that Commerce had not complied with the Court of Appeals’ mandate to

provide a reasonable justification for departing from the academic literature and to

explain its choice to rely upon a simple average of the standard deviations of the test

and control groups to determine the denominator in its Cohen’s d analysis. 628 F.

Supp. 3d at 1322–23. More specifically, this Court found unjustified Commerce’s

position that the academic literature did not support use of a weighted average,

concluding that Commerce’s explanation “appears to contradict Cohen, Ellis, and Coe

at a number of points, as the Court of Appeals has already observed.” Id. at 1325

(citing Mid Continent V, 31 F.4th at 1378).       In doing so, this Court instructed

Commerce to either explain its reasoning or reconsider its choice. Id. at 1326.

       Commerce issued its Fourth Remand Results on August 1, 2023. See Fourth

Remand Results at 1. In the Fourth Remand Results, Commerce continues to rely on

a simple average for the Cohen’s d test, justifying its decision by contending the

simple average incorporates equal reliability of the calculated standard deviations,

and thus can be reasonably used to calculate the denominator of the Cohen’s d

coefficient.   Id. at 10–13.   Commerce also concludes that the Court of Appeals’

proposed alternative, to use a single standard deviation of all sale prices in the test

and comparison groups as the denominator, would not be appropriate in the context

of its differential pricing methodology. Id. at 13–17.
Consol. Court No. 15-00213                                                       Page 6

                 JURISDICTION AND STANDARD OF REVIEW

      The Court has jurisdiction pursuant to Section 516A of the Tariff Act of 1930, 1

as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C. § 1581(c) (2012), 2 which

grants the Court authority to review actions contesting the final determination in an

antidumping duty order. The Court will uphold Commerce’s determination unless it

is “unsupported by substantial evidence on the record, or otherwise not in accordance

with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). “The results of a redetermination pursuant

to court remand are also reviewed ‘for compliance with the court’s remand order.’”

Xinjiamei Furniture Co. v. United States, 968 F. Supp. 2d 1255, 1259 (Ct. Int’l Tr.

2014) (quoting Nakornthai Strip Mill Pub. Co. v. United States, 587 F. Supp. 2d 1303,

1306 (Ct. Int'l Trade 2008). 3

1   Further citations to the Tariff Act of 1930, as amended, are to the relevant
provisions of Title 19 of the U.S. Code, 2012 edition.
2 Further citations to Title 28 of the U.S. Code are to the 2012 edition.
3 Plaintiffs argue that Commerce “is not entitled to the same deference accorded [to

it] when this Court analyzed its initial decision,” and that Commerce should “not be
accorded another chance” to explain use of simple averaging if another remand is
required. Consol. Pls.’ Cmts. On [Fourth Remand Results] at 2, Oct. 2, 2023, ECF
No. 209 (“Pls. Cmts.”). Plaintiffs cite cases which do not support a new standard of
review in this case. See, e.g., INS v. Cardoza–Fonseca, 480 U.S. 421, 446 n.30 (1987)
(explaining that an agency is afforded less deference to an interpretation that
conflicts with previous interpretation of the authority at issue); Good Samaritan
Hosp. v. Shalala, 508 U.S. 402, 417 (1993) (affirming deference to agency decision
that “closely fits the design of the statute as a whole and its object and policy” despite
shifts in agency practice years prior (internal citations and quotations omitted));
Tung Mung Dev. Co. v. United States, 25 C.I.T. 752, 772 (2001) (remanding
Commerce’s determination where its decision was “a clear reversal of its prior

                                                                    (footnote continued)
Consol. Court No. 15-00213                                                     Page 7

                                   DISCUSSION

      In a dumping investigation, Commerce typically compares the weighted

average of normal values with the weighted average of export prices for comparable

merchandise, unless it determines another method is appropriate. 19 U.S.C. § 1677f-

1(d)(1)(A)(i); 19 C.F.R. § 351.414(c)(1). Section 1677f-1, of Title 19, however, allows

Commerce to compare “the weighted average of the normal values to export

prices . . . of individual transactions for comparable merchandise if (i) there is a

pattern of export prices . . . for comparable merchandise that differ significantly

among purchasers, regions or periods of time, and (ii) [Commerce] explains why such

differences cannot be taken into account [with another method].” 4 19 U.S.C. § 1677f-

practice”); Olympic Adhesives, Inc. v. United States, 899 F.2d 1565, 1574–75 (Fed.
Cir. 1990) (ordering directed remand where International Trade Administration
failed to comply with statutory and regulatory requirements in the interest of time,
circumstances, lack of evidence and judicial economy); CS Wind Vietnam Co. v.
United States, 832 F.3d 1367, 1374 (Fed. Cir. 2016) (remanding Commerce’s
unsupported decision and directing it to weight calculations regarding dumping
margins).
       Commerce has not strayed from defending application of a simple average in
its Cohen’s d test and has remained consistent in its underlying reasoning. See
Fourth Remand Results at 10–13; Third Remand Results at 42–43, 52; Second
Remand Results at 15–16, 39–40; Def.’s Resp. To [Pls. Cmts.] at 8–9, Nov. 15, 2023,
ECF No. 212; [Def.-Int.] Reply To [Pls. Cmts.] at 2–3, Nov. 15, 2023, ECF No. 213
(“Def.-Int. Reply”). To the extent that the Court instructs Commerce to correct or
otherwise address a deficiency in its decisionmaking, a court’s remand order
represents a course correction to which the agency’s decisionmaking must comport
when rendering a new determination that accords with its statutory obligations. SEC
v. Chenery Corp., 332 U.S. 194, 199–201 (1947).
4 This subsection addresses targeted dumping, which occurs when an exporter sells

                                                                  (footnote continued)
Consol. Court No. 15-00213                                                      Page 8

1(d)(1)(B)(i)–(ii).   To implement Section 1677f-1(d)(1)(B), Commerce performs a

“differential pricing analysis” of a respondent’s sales to determine whether a “pattern

of significantly different prices” exists. 5 See Differential Pricing Analysis; Request

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

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

difference test. See id.; Mid Continent V, 31 F.4th at 1371. Only the Cohen’s d test,

which determines whether there is a “pattern of prices that differ significantly,” is at

issue in this case. See Mid Continent V, 31 F.4th at 1369–70; Differential Pricing

Analysis; Request for Comments, 79 Fed. Reg. at 26,722.

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

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

and time period. See Differential Pricing Analysis; Request for Comments, 79 Fed.

Reg. at 26,722. For each category, Commerce segregates sales into subsets, with one

subset becoming the test group, and the remaining subsets being combined as the

comparison group. Id. Commerce then calculates the means and standard deviations

of the test and comparison groups. Id. Commerce finally calculates a d coefficient by

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

explains that Commerce should proceed “on a case-by-case basis, because small
differences may be significant for one industry or one type of product, but not for
another.” Uruguay Round Agreements Act, Statement of Administrative Action, H.R.
Doc. No. 103-316, vol. 1, at 842–43 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4178.
Consol. Court No. 15-00213                                                        Page 9

dividing the difference in the groups’ means by the square root of the average of the

squared standard deviations of each group. 6 See Fourth Remand Results at 6 (citing

Cohen at 20). Commerce finds the average of the squared standard deviations by

adding them together and dividing by two, referring to the result as a “simple

average.” See id. Commerce does not account for the differences in the size of each

group, i.e., use a “weighted average.” Fourth Remand Results at 6.

      Commerce tests each subset against the remaining subsets across each

category and assigns a d coefficient. If the d value of a test group is equal to or greater

than the “large threshold,” or 0.8 (the difference in the means was at least 80% of the

pooled standard deviation), the observations within that group are said to have

“passed” the Cohen’s d test. Differential Pricing Analysis; Request for Comments, 79

Fed. Reg. at 26,722. If a sufficient quantity of sales by volume pass Cohen’s d test,

Commerce may compare the export prices of individual transactions to normal value,

instead of comparing the average export prices to normal value. Id. at 27,622–23.

      The Court determines whether Commerce’s methodology is reasonable in light

of considerations that run counter to its decision. See Motor Vehicle Mfrs. Ass’n of

U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); Ceramica

6  Thus, d = |݉஺ െ ݉஻ | / ඥ(ɐଶ஺ + ɐଶ஻ )Τ2, where |݉஺ െ ݉஻ | is the absolute value of the
difference in means between the test and comparison groups, and ɐ஺ଶ + ɐଶ஻ is the sum
of the squared standard deviation of both groups. Standard deviation squared (ɐଶ ) is
also referred to as “variance.” Commerce’s formulation of what it calls the Cohen’s d
test is also known as Cohen’s equation (2.3.2). See Cohen, Jacob, Statistical Power
Analysis for the Behavioral Sciences, 44, (2d ed. 1988), A-580-876, PRRD 8, bar code
4181776-01 (Nov. 12, 2021) (“Cohen”).
Consol. Court No. 15-00213                                                    Page 10

Regiomontana, S.A. v. United States, 636 F. Supp. 961, 966 (Ct. Int’l Tr. 1986), aff’d,

810 F.2d 1137, 1139 (Fed. Cir. 1987); see also, e.g., Stupp Corp. v. United States, 5

F.4th 1341, 1354 (Fed. Cir. 2021) (stating the standard of review for components of

Commerce’s differential pricing methodology is reasonableness) (citing Mid

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

       In the Fourth Remand Results, Commerce explains its choice to employ a

simple average in the Cohen’s d denominator, acknowledging as it must, the Court of

Appeals’ holding that the academic literature surrounding Cohen’s d relies upon a

weighted average. Fourth Remand Results at 9 (accepting the Court of Appeals

finding that in the Cohen’s d literature, simple averaging applies only when the

sample sizes are equal); Mid Continent V, 31 F.4th at 1378 (“In making [its] choice to

use simple averaging . . . Commerce departed from, rather than followed, the cited

statistical literature”). Nonetheless, Commerce maintains the reasonableness of its

use of a simple average for the Cohen’s d denominator. To support its determination,

Commerce explains that although the academic literature most often employs a

weighted average when pooling the standard deviations of two samples, the literature

uses a simple average when the sample sizes are equal. Fourth Remand Results at

12–13. Commerce reasons that the use of a simple average where sample sizes are

equal stems from the equal reliability of standard deviations in samples of equal

sizes. Id. at 13.
Consol. Court No. 15-00213                                                       Page 11

      Commerce’s focus on reliability stems from the use of samples in the literature.

Where samples are compared and a standard deviation for each sample is an

approximate, the actual standard deviation for the group represented by the sample

is not known.    Fourth Remand Results at 10 (citing Cohen at 6); see also Mid

Continent V, 31 F.4th at 1377. However, the larger the sample size, the more reliable

that approximate. Fourth Remand Results at 10 (citing Cohen at 6). Thus, where

two samples are compared, the value of the standard deviation as an approximate is

necessarily a function of the sample size. Id. at 11–12. The larger sample size will

be more reliable, and thus should play a greater role, in evaluating the difference

between the means. Id. 7

      Using this reliability framework Commerce reasons that just as sample sizes

of the same size share the same level of reliability, so do any two full populations.

See id.   Where a full population is examined, the standard deviation is not an

approximate. Id. at 12. The standard deviation of a full population is in fact the

7  Logically, where there is more data upon which an estimate is based, the estimate
should be more accurate. Yet, Plaintiffs reject Commerce’s reference to the size of a
sample in its reasoning, because in the academic literature, the size of the sample
refers to counts, typically of people. Pls. Cmts. at 9–10. However, Commerce’s
practice is to base its analysis not on the number of transactions, but on the weights
in kilograms of the product. Id. at 10. It is unclear to the Court the basis of Plaintiffs’
argument given that Commerce’s reference to counts is simply an example to
illustrate its analysis. Commerce could easily have used weights rather than counts
in explaining its reasoning. Commerce’s point is that when the size of two samples
is the same, whether by weight or count, the two samples will have equal reliability.
Consol. Court No. 15-00213                                                    Page 12

actual standard deviation—it has 100% reliability. 8       Thus, comparing the two

standard deviations of two full populations is the same as comparing the standard

deviations of two samples of equal size. Id. at 11. The reliability of equal sample

sizes is the same and the reliability of two full populations is the same. Id. Although

it is true that the academic literature does not support the use of a simple average

for unequal sample sizes, Mid Continent V, 31 F.4th at 1378; Pls. Cmts. at 9 (arguing

that the availability of the simple average mechanism when the groups are the same

size does not support the use of the simple average when they are not), the Court of

Appeals explicitly instructed Commerce that it is not limited to the literature in

supporting its determination. Mid Continent V, 31 F.4th at 1381. Its methodology

must be reasonable. Id. (“Commerce needs a reasonable justification for departing

from what the acknowledged literature teaches about Cohen’s d”).

8  Plaintiffs argue that the reliability of data does not control Commerce’s decision
regarding the Cohen’s d denominator. Pls. Cmts. at 9. Plaintiffs invoke this Court’s
prior rationale with respect to weight averaging, namely, that just because weight
averaging is supported in sampling does not mean it is unsupported when sampling
is absent. Pls. Cmts. at 9 (citing Mid Continent VI, 628 F. Supp. 3d at 1324).
Plaintiffs use this rationale to argue that equality in size or reliability is not
indicative of whether the denominator should be based upon a weighted average, or
a simple average. Id. Plaintiffs are correct that this Court previously faulted
Commerce’s logic in that its conclusion did not follow from its premise. Mid Continent
VI, 628 F. Supp. 3d at 1324 (“Commerce’s premise does not lead to its conclusion.
That weighted averaging is supported when sampling is present does not mean that
it is unsupported when sampling is absent”). Here Commerce’s logic is sound. It
assumes that simple averaging is appropriate where there is equal reliability; and
therefore, concludes that because full populations have equal reliability that simple
averaging is appropriate for full populations.
Consol. Court No. 15-00213                                                     Page 13

      Responding to the Court of Appeals, Commerce has provided an explanation

that logically connects the relevance of full populations to the use of simple averaging.

Commerce is not relying solely upon the academic literature to support its choice, but

rather argues that the principle it derives from the academic literature leads to a

logical conclusion that simple averaging in this case is a reasonable choice. Fourth

Remand Results at 12–13, 22–25. Commerce identifies where simple averaging is

supported by the literature, extrapolates a rationale for why simple averaging is

appropriate, and then applies that rationale to the circumstances before Commerce.

Although there may be other reasonable alternatives, the Court cannot find fault with

Commerce’s logic here. Commerce’s reliability analysis is reasonable.

      Plaintiffs argue that the use of a simple average is not reasonable and suffers

from the same defect as Commerce’s reasoning in Mid Continent V, 31 F.4th at 1379,

in which it argued that the standard deviation of each group was equally rationale

and thus should be given equal weight. 9 Pls. Cmts. at 11. The Court of Appeals

rejected that explanation because:

      The fact that the seller is acting rationally and genuinely in its pricing
      choices in both the test and comparison groups provides no apparent
      reason for assigning equal weight to each group's standard deviation
      when computing the pooled standard deviation. The rationality and
      genuineness of the seller's pricing choices have no evident connection to
      the undisputed purpose of the denominator figure—to provide a
      dispersion figure for the more general pool that serves as a yardstick for

9 Plaintiffs cite to Mid Continent III in their comments to support their position. Pls.
Cmts. at 11. However, the quoted portion of the cited opinion and the reporter
number and abbreviation are to Mid Continent V. See 31 F.4th at 1379; Pls. Cmts.
at 11.
Consol. Court No. 15-00213                                                     Page 14

      deciding on the significance of the difference in mean prices of the two
      groups. Both the numerator and denominator take the behavior as a
      given and form certain statistical measures from the objective data that
      are then related in the ratio that is Cohen's d. Commerce has not
      identified anything in the statistical measure at issue that depends on
      considerations of rationality and genuineness of the conduct that gave
      rise to the objective data. Indeed, Commerce has not shown that the
      numerous real-world examples used in Cohen to illustrate the methods
      taught are different in the respect Commerce now features, i.e.,
      Commerce has not shown that the Cohen examples (generally or,
      perhaps, ever) involve sampled groups of data that reflect behavior that
      is not “rational” and “genuine.” Thus, Commerce has not adequately
      justified, through its central rationale, its departure from the statistical
      literature's description of the Cohen's d coefficient.

Mid Continent V, 31 F.4th at 1379. Here, Plaintiffs aver the arguments regarding

reliability—similar to arguments about rationality—fail to justify giving equal

weighting. Pls. Cmts. at 11–12. Although Defendant rejects the comparison, Fourth

Remand Results at 6–7, there is a similarity between Commerce’s earlier explanation

and this one, but only insofar as each explanation stems from the fact that the

standard deviation in the test and control group is drawn from a full population, and

therefore is not an approximate. Id. at 12; Second Remand Results at 39–40.

Commerce previously explained that the pricing behavior in each group was equally

genuine, it was the separate, distinct, and rational pricing for that group and thus

should be weighted equally. Second Remand Results at 8.

      The point made by Commerce here is related but distinct. The pricing at issue

reveals a standard deviation that is not an approximate because it is based upon the

full population. Fourth Remand Results at 12.         As Commerce elucidates, if the

standard deviation was a guess, then the literature would dictate a weighted average
Consol. Court No. 15-00213                                                   Page 15

because the guess would be dependent on the size of the sample. Id. at 14–16. Here,

Commerce addresses the Court of Appeals’ mandate to provide a “connection to the

undisputed purpose of the denominator figure.” Mid Continent V, 31 F.4th at 1379.

It premises the use of a simple average where there are equal sized samples on the

equal reliability of those samples, Fourth Remand Results at 12–13, a premise

Plaintiffs do not refute. It explains that the use of weighted average is reasonable

when sampled groups have unequal sizes because the standard deviation is simply

an estimate, and therefore weighting the sample size is appropriate (the larger

sample size would likely be more reliable than the smaller and therefore should be

weighted more). Id. at 10 (citing Cohen at 6). But when each group is not a sample,

but rather a full population, reliability concerns would not support greater weight to

the deviation found in the larger size group. Id. at 23–24.

      Plaintiffs do not challenge the premise upon which Commerce relies, i.e., that

it is appropriate to use a simple average for equal sample sizes because the two

samples have equal reliability. See generally Pls. Cmts. Rather, Plaintiffs argue that

Commerce’s “analysis proves nothing.” Id. at 10. Plaintiffs state that reliability or

precision is dependent on a number of factors, at least with respect to samples. Id.

(“precision depends on multiple factors, including sample size, the amount of

variation in the population, the method by which the sample was obtained, the

method used to estimate the population property from the sample property, and other

factors”). Plaintiffs contend that the reliability of a sample cannot be compared to
Consol. Court No. 15-00213                                                     Page 16

the reliability of a full population. 10   Id. at 10–11.   However, Commerce is not

comparing the reliability of a sample to the reliability of a full population, rather

Commerce argues that samples of equal sizes have equal reliability and full

populations have equal reliability. Fourth Remand Results at 12–14. Therefore,

Commerce reasons that if it is appropriate to use a simple average where sample sizes

are equal, because of the equal reliability, then it is appropriate to use a simple

average where full populations are being used. Id. at 13.

      Plaintiffs assert that Commerce’s past practice supports use of a weighted

average in its differential analysis. Pls. Cmts. at 13. Specifically, Plaintiffs argue

that Commerce uses a weighted average when evaluating home market and U.S.

markets to calculate a respondent’s dumping margin. Id. at 13–14. This similarity

in calculation, Plaintiffs reason, supports use of a weighted average in Commerce’s

differential pricing analysis, rather than the simple average used here. Id. at 14.

Plaintiffs contend that Commerce relies on weighted average for all phases of pricing

calculations “until the very end, at which point it inexplicably relies on simple

averaging of two groups of data which have been obtained by weighted average prices

10  Plaintiffs attempt to cast doubt on Commerce’s reliability framework, asserting
that Commerce incorrectly claims “a perfectly reliable full population is 100%
reliable.” Pls. Cmts. at 11. Instead, Plaintiffs contend that perfect reliability “should
be expressed as having zero errors.” Id. However, Plaintiffs fail to explain in any
further detail any actual distinction between the two descriptions. Moreover,
Plaintiffs’ distinction does not undermine Commerce’s analysis, as Plaintiffs further
fail to explain how the characterization of a perfectly reliable full population as
having zero errors meaningfully alters the results.
Consol. Court No. 15-00213                                                 Page 17

and weighted standard deviations of prices.” Id. Moreover, Plaintiffs state that

substitution of simple averaging for weighted averaging at this phase of the

calculations “skews the results by according more weight to certain sales (and less

weight to others) than they previously had accorded throughout the analysis.” Id.

      Plaintiffs’ argument is inapposite. Plaintiffs argue that because Commerce

weight averages to determine dumping margins, that it should weight average in its

differential pricing methodology.   Id. at 15.   Plaintiffs fail to acknowledge that

Commerce’s task in its differential pricing methodology serves a diagnostic purpose.

Fourth Remand Results at 55; 19 U.S.C. § 1677f-1(d)(1)(B).       Congress’ grant of

authority to Commerce dictates that diagnostic purpose. 19 U.S.C. § 1677f-1(d)(1)(B)

(“[Commerce can compare] the weighted average of the normal values to export

prices . . . of individual transactions for comparable merchandise if (i) there is a

pattern of export prices . . . for comparable merchandise that differ significantly

among purchasers, regions or periods of time, and (ii) [Commerce] explains why such

differences cannot be taken into account [with another method]”).         Moreover,

Commerce has significant discretion to establish a reasonable methodology. Mid

Continent V, 31 F.4th at 1376 (“Commerce has discretion to make reasonable choices

within statutory constraints” (citing Mid Continent III, 940 F.3d at 667)). Dumping

margin calculations simply do not determine whether the difference in prices between

the two groups is significant or “the degree to which the phenomenon is present in
Consol. Court No. 15-00213                                                  Page 18

the population,” but rather the potential uncollected dumping duty due. See Fourth

Remand Results at 55; Pls. Cmts. at 13.

      Plaintiffs also point to a handful of examples they claim refute Commerce’s

justification for use of simple averaging in its calculation.11 Pls. Cmts. at 19–24.

Plaintiffs claim the data in the examples, including both hypothetical numbers and

sales from Plaintiff PT’s database, exhibit how the simple average skews the results

by “over-weigh[ing] the smaller group,” causing “a low ‘no-pass’ value of d to exceed

Commerce’s threshold of 0.80” and thus a false “pass” under Cohen’s d. Id. at 25.

However, and as Commerce explains, Plaintiffs examples are inapposite. Fourth

Remand Results at 41–43. Plaintiffs’ examples illustrate that when the averaging of

two values changes from an identical average (with equal weights) to a weighted

average (with unequal weights), the results will invariably change. 12 Id. at 52.

11 Defendant-Intervenor offers its own example of the dangers entailed by Plaintiffs’
suggestion of use of a weighted average in Cohen’s d. See Def.-Int. Reply at 7–8.
Defendant-Intervenor claims use of a “weighted average based on the physical
weights of sales within each group as the denominator of [Cohen’s] d,” as Plaintiffs
suggest, “opens the door to manipulation.” Id. at 7. This approach gives more weight
to the standard deviation from smaller groups when those smaller groups are from
larger sales, and Defendant-Intervenor argues that a supplier can manipulate the
measure of d by changing the relative volume even if the mean difference between
the groups is relatively large. Id. at 7. Defendant-Intervenor argues that there is
potential for manipulation “[g]iven the prevalence and sophistication of many
respondents’ ‘dump-proofing’ activities.’” Id. at 8.
12 Plaintiffs’ five provided examples, which involve both hypothetical and discretely

selected datasets, do nothing to undermine the reasonableness of Commerce’s use of
simple averaging as a general practice. Plaintiffs’ examples show how the use of a
weighted average lead to different results for these examples. Plaintiffs seem to

                                                                (footnote continued)
Consol. Court No. 15-00213                                                   Page 19

Plaintiff’s examples serve to illustrate how weighting would work; they do not

undermine the reasonableness of Commerce’s use of simple averages. Id. at 53. 13

      Finally, Commerce addresses the Court of Appeals suggestion that it could

consider using the standard deviation of the full population. Commerce reasons that

“the single standard deviation causes the denominator of the Cohen’s d coefficient to

reflect not just the dispersion of the data within each group, but also the dispersion

of the data between the two groups.” Id. at 17. However, Commerce views effect size,

contend that the visualizations of the data they provide in their five examples
illustrate that their approach is correct, and that Commerce’s use of a simple average
is incorrect. Pls. Cmts. at 19–27. However, Commerce’s use of Cohen’s d in
differential pricing calculations is not a visual analysis, but rather is a statistical
methodology. See Differential Pricing Analysis; Request for Comments, 79 Fed. Reg.
at 26,722. That Plaintiffs can identify five examples that do not correspond to what
they intuitively believe should be a visual representation of “a pattern of significant
price differences” is of little analytical value. Pls. Cmts. at 28. Even assuming
Plaintiffs’ intuitive belief regarding an appropriate visual representation of “a
pattern of significant price differences” is correct; Commerce is not tasked with
developing a perfect methodology. It is tasked with developing a reasonable
methodology. Furthermore, Commerce is not relying on a visual analysis to support
the reasonableness of its methodology. It relies upon principles taken from the
literature and logic.
13 Plaintiffs submit that even if Commerce’s choice of methodology is reasonable, its

determination in this case is unsupported by substantial evidence. More specifically,
they argue the facts of this case warrant departure from the methodology because
using it would lead to unreasonable results “contrary to economic reality.” Pls. Cmts.
at 29–30. However, and as Commerce explains, Plaintiffs fail to expound upon
precisely what the economic reality is that warrants departure from simple
averaging. Fourth Remand Results at 53. Without further explanation or record
support, Plaintiffs’ argument is unpersuasive.
Consol. Court No. 15-00213                                                       Page 20

i.e., the d coefficient, as meant to quantify the difference in the mean prices of each

group relative to the dispersion of prices within each group. 14 Id. at 17.

      The question before this Court is not whether the Court of Appeals’ proposal is

a reasonable one, as it would appear to be given the literature, but whether it detracts

from the reasonableness of Commerce’s proposal.           Commerce has explained its

rationale as based on the equal reliability of both full populations and equal sized

samples. It has also explained that standard deviation is specific to the mean to

which it relates. Id. at 14 (“[the standard deviation] in Dr. Cohen’s equations 2.2.1

and 2.2.2, is either the standard deviation of population A or the standard deviation

of population B, but it is not the standard deviation of populations A and B combined

together”). Because it is evaluating full populations, Commerce explains that using

14  Plaintiffs reject the independent nature of these two groups. Pls. Cmts. at 12
(arguing that the test in comparison groups “do not have independent existences”).
Plaintiffs make this point by noting that any sale might be in either a test group or
control group depending on Commerce’s focus. Id. at 12; see Fourth Remand Results
at 5 (explaining that in its differential pricing analysis, Commerce uses the Cohen’s
d test to measure “whether the sale prices to a given purchaser, region, or time period
differ significantly from the sale prices of comparable merchandise to other
purchasers, regions, or time periods, respectively”). Plaintiffs argue that it is illogical
for any sale to receive more weight depending upon whether it is in the test or
comparison group, as it necessarily does if Commerce uses a simple average. See Pls.
Cmts. at 12–13 (“how can the essay methodology lead to reliable results when each
sale has a different effect on the result, depending upon the group in which it falls?”).
Plaintiff’s argument is without merit. Commerce explains it is comparing the prices
to a given purchaser, region or time. The statute identifies these grouping as distinct.
See 19 U.S.C.§ 1677f-1(d)(B)(i) (instructing Commerce to determine whether “there
is a pattern of export prices (or constructed export prices) for comparable merchandise
that differ significantly among purchasers, regions, or periods of time”); Fourth
Remand Results at 55.
Consol. Court No. 15-00213                                                   Page 21

the dispersion of the group as a whole would eliminate the relevancy of each

individual standard deviation much in the same way that weighting the standard

deviations would diminish the relevancy of one of the standard deviations. See id. at

14–18.   Thus, Commerce has explained how its choice is reasonable and has

addressed any evidence or arguments that might detract from the reasonableness of

its choice. See Mid Continent V, 31 F.4th at 1381 (“Commerce must either provide

an adequate explanation for its choice of simple averaging or make a different choice,

such as use of weighted averaging or use of the standard deviation for the entire

population”).

                                  CONCLUSION

      Commerce has provided a reasonable explanation for its use of a simple

average as instructed by the Court of Appeals and this Court and its determination

is sustained. Judgment will enter accordingly.

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

Dated:          February 12, 2024
                New York, New York