US Asks CAFC for Remand in Appeal on 'd' Test Due to CAFC's Marmen Ruling; Exporters Oppose
The U.S. asked the U.S. Court of Appeals for the Federal Circuit on Nov. 21 for a voluntary remand in a case involving a challenge to the Commerce Department's use of the Cohen's d test in light of the CAFC's decision in Marmen v. U.S., invalidating the agency's approach to the test. The government asked that oral argument in the case, which is currently set for Dec. 1, be canceled (Mid Continent Steel & Wire v. United States, Fed. Cir. # 24-1556).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The appellants, led by exporter PT Enterprise, opposed the motion, though the exporters said the court should cancel oral argument "and reschedule" it "for a later session." PT Enterprise said the "general legality of the Cohen's d methodology is not at issue in this litigation."
The case concerns the antidumping duty investigation on steel nails from Taiwan in which Commerce used the Cohen's d test to detect "masked" dumping. The Court of International Trade upheld the agency's use of a simple average of standard deviations in the Cohen's d test denominator, ruling that it couldn't find any fault with Commerce's logic (see 2402120036).
However, since the trade court's ruling, CAFC decided Marmen, ruling that Commerce can't use the d test when the "underlying data is not normally distributed, equally variable, and equally and sufficiently numerous" (see 2504220030). Since this ruling, the agency has sought out new ways to detect masked dumping, including through a new "price differences test" (see 2509030070).
For the present appeal on the Taiwanese steel nail AD investigation, the U.S. said a "voluntary remand is appropriate because there has been a significant change in the law and, as a result, Commerce has changed its policy since the parties filed their briefs in this appeal."
PT Enterprise said the court should deny the voluntary remand motion, since it has "consistently acknowledged that this test makes sense, and conforms to judicial precedent, provided that Commerce modifies its calculation methodology by basing the Cohen’s d denominator on: (1) a weighted average of the standard deviations (“SD”) of the Test subgroup and Comparison subgroup; or (2) a single standard deviation of all sales." In the present case, the courts have been given a "binary choice as to how to apply the Cohen’s d test to the facts in this case to arrive at a reasonable result which is supported by substantial evidence and conforms to law, and have not been asked to decide whether the test is generally applicable in all cases."
While the court in Marmen said the test as applied was "fatally flawed," the court didn't address the "general legality of the modified Cohen’s d test subject to the" present appeal, the brief said. PT Enterprise added that its challenge to Commerce's reliance on a standard "simple average" denominator has been before the court for over 10 years.
"The Government has had multiple opportunities to propose a differential pricing test which is based on substantial evidence and conforms to law," the brief said. Instead, Commerce refused to deviate from this methodology and merely advanced a new reason why it conformed to law. "This Court has the discretion to consider the importance of ending lengthy litigation (in this case over 10 years) to achieve a just result, and to order an agency to accept one of two binary choices, rather than remand for further analysis," the brief said.