CAFC Questions If Remand Needed in Appeal on 'd' Test in Light of Stupp, Marmen
The U.S. Court of Appeals for the Federal Circuit questioned whether it should grant the government's voluntary remand motion in an antidumping duty case on the Commerce Department's use of the Cohen's d test in light of CAFC's decisions in Stupp v. U.S. and Marmen v. U.S. During oral argument held Dec. 1, Judges Richard Taranto, William Bryson and Tiffany Cunningham appeared ready to grant the motion, asking the parties what specifically the remand order should say (Mid Continent Steel & Wire v. United States, Fed. Cir. # 24-1556).
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The two CAFC decisions invalidated the agency's approach to the Cohen's d test (see 2511240015), prompting the voluntary remand request. In Marmen, the court said 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).
The appellants, led by exporter PT Enterprise, opposed the motion for remand. Before the court, Ned Marshak, counsel for PT Enterprise, emphasized that the current case has been litigated for 10 years and that he doesn't contest that Commerce can use the Cohen's d test to detect masked dumping. "It may not be perfect, but it's reasonable and it works," he said.
Marshak then sought to distinguish Marmen and Stupp from the present case, arguing that in Marmen and Stupp, the Federal Circuit said the agency couldn't use the d test where three basic statistical assumptions aren't met. "We don't know if those exist in our case," Marshak said. Instead, the present case is focused on the denominator of the Cohen's d coefficient and whether the agency can use a single standard deviation of the entire population of data for the denominator as opposed to a simple average of the groups of data being compared.
Cunningham then asked, if the court chose to remand the case, what instructions the court should give on remand. Marshak replied that the court should instruct the agency to use a single standard deviation, which is "reasonable based on the facts of our case." He added that the use of a single standard deviation could alleviate some of the problems with the data the court identified in Stupp and Marmen.
Adam Gordon, counsel for petitioner Mid Continent Steel & Wire, said that Marshak would have the court ignore precedential rulings in Stupp and Marmen, which invalidated the use of the d test "writ large," and not the use of the test in a particular case.
Throughout the argument, Marshak bemoaned the new test Commerce has adopted in light of the rejection of the d test, arguing that it's "not even close" to being reasonable. Taranto said the court is not positioned in the present case to entertain that argument, and Gordon argued in response that this issue isn't "ripe" for the appellate court's review. Taranto then asked DOJ attorney Mikki Cottet if PT Enterprise could challenge Commerce's use of its new method for identifying masked dumping, and she said yes, the company could challenge the methodology both before the agency and before the Court of International Trade.
Bryson asked Cottet what the limits were on the court's authority to "simply dictate an outcome" instead of saying the outcome reached by an agency is somehow flawed, referring to two cases cited by PT Enterprise in which CAFC directed a certain outcome for the prospect of securing a directed remand in the present case. In response, Cottet, supported by Taranto, distinguished the two cases.
In one, CS Wind v. U.S., the issue was a "pure substantial evidence question about how to do the weight balancing" of wind towers, and the court found that the evidence only supported one result. The other case, Olympic Adhesives v. U.S., was decided based on what was required under the regulation, and thus wasn't an issue of substantial evidence or "reasonable methodology," whereas the present case is "in this category of reasonable methodology," Taranto said.