Prosperity Tieh Enterprise Co., Ltd. v. United States

S	l	ipOp	. 18	-5
UN	ITEDSTATESCOURT OFINTERNAT	IONALTRADE
PROSPER	ITYT	IEHENTERPR	ISECO	.	,
LTD	.,
P	la	in	t	i	f	f,
and
Y	IEHPHU	IENTERPR	ISECO	.	,LTD,
P	la	in	t	i	f	f,
v	.
UN	ITEDSTATES,
De	fendan	t,
and
AKSTEELCORP	.	,NUCORCORP	.	,
STEELDYNAM	ICS	,INC	.,CAL	IFO	RN	IA
STEELINDUSTR	IES	,INC	.	,
ARCELORM	ITTALUSALLC	,and
UN	ITEDSTATESSTEELCORP	.,
De	fendan	t-	In	te	rveno	r	s	.
Be	fore	:T	imo	thyC	.S	tanceu,Ch	ie	fJudge
Con	so	l	.Cour	tNo.16-	00138
OP	IN	IONANDORDER
[Remand	ingtotheagencyade	te	rm	ina	t	ioninanan	t	idump	ingdu	tyinve	s	t	iga	t	iono	fce	r	ta	in
co	r	ro	s	ion-	re	s	i	s	tan	ts	tee	lp	roduc	t	sf	romTa	iwan	]
Da	ted	:Janua	ry23	,2018
Dona	ldB	.Came	ron, Mo	r	r	i	s	, Mann	ing& Ma	r	t	inLLP	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	rp	la	in	t	i	f	f
P	ro	spe	r	i	tyT	iehEn	te	rp	r	i	seCo	.	,L	td	. W	i	thh	imontheb	r	ie	fwe	reJu	l	ieC	. Mendo	za,R	. W	i	l	l
P	lane	r	t,B	rady W	. M	i	l	l	s,EugeneDegnan,andMa	ryS	.Hodg	in	s.
Ke	l	lyA	.S	la	te	r,App	le	tonLu	f	fP	te	.L	td	.	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	rp	la	in	t	i	f	fY	iehPhu	i
En	te	rp	r	i	seCo	.	,L	td	. W	i	thhe	rontheb	r	ie	fwe	reJayY	.NeeandEdmund W	.S	im.
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Con	so	l	.Cour	tNo	.16	-00138 Page2
E	l	i	zabe	thA	.Speck,Sen	io	rT	r	ia	lA	t	to	rney	,Comme	rc	ia	lL	i	t	iga	t	ionB	ranch	,C	iv	i	lD	iv	i	s	ion	,
U	.S	.Depa	r	tmen	to	fJu	s	t	ice	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	rde	fendan	t	. W	i	thhe	rontheb	r	ie	fwe	re
ChadA	.Read	le	r,Ac	t	ingA	s	s	i	s	tan	tA	t	to	rneyGene	ra	l	,JeanneE	.Dav	id	son,D	i	rec	to	r	,andC	laud	ia
Bu	rke,A	s	s	i	s	tan	tD	i	rec	to	r	. O	fcoun	se	lwa	sM	ichae	lT	.Gaga	in,O	f	f	iceo	ftheCh	ie	fCoun	se	lfo	r
T	radeEn	fo	rcemen	t&Comp	l	iance	,U	.S	.Depa	r	tmen	to	fComme	rce	.
S	tephenA	.Jone	s,K	ing&Spa	ld	ing	,LLP	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	rde	fendan	t	-	in	te	rveno	r
AKS	tee	lCo	rp	. W	i	thh	imontheb	r	ie	fwa	s Dan	ie	lL	.Schne	ide	rman	.
A	lanH	.P	r	ice, W	i	leyRe	inLLP	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	rde	fendan	t	-	in	te	rveno	rNuco	r
Co	rp	. W	i	thh	imontheb	r	ie	fwa	s T	imo	thyC	.B	r	igh	tb	i	l	l	.
Roge	rB	.Schag	r	in,Schag	r	inA	s	soc	ia	te	s	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	rde	fendan	t	-	in	te	rveno	r	s
S	tee	lDynam	ic	s	,Inc	.andCa	l	i	fo	rn	iaS	tee	lIndu	s	t	r	ie	s	,Inc	.
John M	.He	r	rmann	,I	I,Ke	l	leyD	rye & Wa	r	ren	,LLP	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	r
de	fendan	t	-	in	te	rveno	rA	rce	lo	rM	i	t	ta	lUSALLC	.
Je	f	f	reyD	.Ge	r	r	i	sh,SkaddenA	rp	sS	la	te Meaghe	r &F	lom	,o	f Wa	sh	ing	ton	,D	.C	.	,fo	r
de	fendan	t	-	in	te	rveno	rUn	i	tedS	ta	te	sS	tee	lCo	rp	.
S	tanceu	,Ch	ie	fJudge	:Inth	i	scon	so	l	ida	tedac	t	ion	,1p	la	in	t	i	f	f	scon	te	s	tanadm	in	i	s	t	ra	t	ive
dec	i	s	ioni	s	suedbytheIn	te	rna	t	iona	lT	radeAdm	in	i	s	t	ra	t	ion	,U	.S	.Depa	r	tmen	to	fComme	rce
(“Comme	rce”o	rthe“Depa	r	tmen	t”	)toconc	ludeanan	t	idump	ingdu	tyinve	s	t	iga	t	iononce	r	ta	in
co	r	ro	s	ion-	re	s	i	s	tan	ts	tee	lp	roduc	t	s(“CORE”	)f	romTa	iwan(	the“	sub	jec	tme	rchand	i	se”	)	.	2 The
cou	r	tremand	sthede	te	rm	ina	t	iontoComme	rcefo	rfu	r	the	rcon	s	ide	ra	t	ionandrede	te	rm	ina	t	ion	.
1Con	so	l	ida	tedunde	rP	ro	spe	r	i	tyT	iehEn	te	rp	r	i	seCo	.v	.Un	i	tedS	ta	te	s(C	t	.No	.16	-00138	)
i	sY	iehPhu	iEn	te	rp	r	i	seCo	.v	.Un	i	tedS	ta	te	s(C	t	.No	.16	-00154	)	. O	rde	r(Oc	t	.20	,2016	)	,
ECFNo	.47	.
2Theinve	s	t	iga	t	ioncove	red“	f	la	t	-	ro	l	leds	tee	lp	roduc	t	s	,e	i	the	rc	lad	,p	la	ted	,o	rcoa	tedw	i	th
co	r	ro	s	ion	-	re	s	i	s	tan	tme	ta	l	ssucha	sz	inc	,a	lum	inum	,o	rz	inc	-	,a	lum	inum	-	,n	icke	l	-o	ri	ron	-ba	sed
a	l	loy	s	,whe	the	ro	rno	tco	r	ruga	tedo	rpa	in	ted	,va	rn	i	shed	,lam	ina	ted	,o	rcoa	tedw	i	thp	la	s	t	ic	so	r
o	the	rnon	-me	ta	l	l	icsub	s	tance	sinadd	i	t	iontotheme	ta	l	l	iccoa	t	ing	.”Ce	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	t
S	tee	lP	roduc	t	sF	romTa	iwan	:F	ina	lDe	te	rm	ina	t	iono	fSa	le	sa	tLe	s	sThanFa	i	rVa	lueandF	ina	l
A	f	f	i	rma	t	iveDe	te	rm	ina	t	iono	fC	r	i	t	ica	lC	i	rcum	s	tance	s	,inPa	r	t,81Fed	.Reg	.35	,313	,35	,315(	In	t	’	l
T	rade Adm	in	.June2	,2016	)	.
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Con	so	l	.Cour	tNo	.16	-00138 Page3
I	.BACKGROUND
A	. ThePa	r	t	ie	sinth	i	sL	i	t	iga	t	ion
P	la	in	t	i	f	f	sP	ro	spe	r	i	tyT	iehEn	te	rp	r	i	seCo	.	,L	td	.(“P	ro	spe	r	i	ty”	)andY	iehPhu	iEn	te	rp	r	i	se
Co	.L	td	.(“Y	iehPhu	i”	)a	reTa	iwane	sep	roduce	r	sandexpo	r	te	r	so	fCORE	. AKS	tee	lCo	rpo	ra	t	ion	,
Nuco	rCo	rpo	ra	t	ion	,S	tee	lDynam	ic	s	,Inc	.	,Ca	l	i	fo	rn	iaS	tee	lIndu	s	t	r	ie	s	,Inc	.	,A	rce	lo	rM	i	t	ta	lUSA
LLC	,andUn	i	tedS	ta	te	sS	tee	lCo	rpo	ra	t	ionwe	repe	t	i	t	ione	r	sintheinve	s	t	iga	t	ionanda	reeach
de	fendan	t	-	in	te	rveno	r	sinth	i	scon	so	l	ida	tedac	t	ion(	toge	the	r	,the“de	fendan	t	-	in	te	rveno	r	s”	)	.
B	. TheCon	te	s	tedDec	i	s	ion
Cha	l	lengedinth	i	sl	i	t	iga	t	ioni	sCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sF	romInd	ia	,
I	ta	ly	,thePeop	le	’	sRepub	l	ico	fCh	ina	,theRepub	l	ico	fKo	reaandTa	iwan	:AmendedF	ina	l
A	f	f	i	rma	t	iveAn	t	idump	ingDe	te	rm	ina	t	ionfo	rInd	iaandTa	iwan	,andAn	t	idump	ingDu	tyO	rde	r	s,
81Fed	.Reg	.48	,390(	In	t	’	lT	radeAdm	in	.Ju	ly25	,2016	)(“AmendedF	ina	lDe	te	rm	ina	t	ion”	)	. The
AmendedFina	lDe	te	rm	ina	t	ion mod	i	f	iedtheDepa	r	tmen	t	’	sdec	i	s	ioninCe	r	ta	inCo	r	ro	s	ion	-
Re	s	i	s	tan	tS	tee	lP	roduc	t	sF	romTa	iwan	:F	ina	lDe	te	rm	ina	t	iono	fSa	le	sa	tLe	s	sThanFa	i	rVa	lue
andF	ina	lA	f	f	i	rma	t	iveDe	te	rm	ina	t	iono	fC	r	i	t	ica	lC	i	rcum	s	tance	s	,inPa	r	t,81Fed	.Reg	.35	,313
(	In	t	’	lT	r	adeAdm	in	.June2	,2016	)(“F	ina	lDe	te	rm	ina	t	ion”	)	. Thepe	r	iodo	finve	s	t	iga	t	ion(“PO	I”	)
wa	sAp	r	i	l 1	,2014th	rough Ma	rch31	,2015	.Id	.a	t35	,313	.
C	.P	roceed	ing	sbe	fo	reComme	rce
Ape	t	i	t	ionf	i	ledinJune2015sough	tanan	t	idump	ingdu	tyo	rde	ronimpo	r	t	so	fCORE
f	romI	ta	ly	,Ind	ia	,Ch	ina	,Ko	rea	,andTa	iwan	.SeeCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	s
F	romI	ta	ly	,Ind	ia	,thePeop	le	’	sRepub	l	ico	fCh	ina	,theRepub	l	ico	fKo	rea	,andTa	iwan	:In	i	t	ia	t	ion
o	fLe	s	s	-Than	-Fa	i	r	-Va	lue	-	Inve	s	t	iga	t	ion	s,80Fed	.Reg	.37	,228(	In	t	’	lT	radeAdm	in	.
June30	,2015	)	.Fo	l	low	ingin	i	t	ia	t	ion	,Comme	rcese	lec	tedY	iehPhu	iandP	ro	spe	r	i	tya	sthe
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Con	so	l	.Cour	tNo	.16	-00138 Page4
Ta	iwane	semanda	to	ryre	sponden	t	sfo	rind	iv	idua	linve	s	t	iga	t	ion	. Se	lec	t	iono	fRe	sponden	t	sfo	rthe
An	t	idump	ingDu	tyInve	s	t	iga	t	iononCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sf	romTa	iwan a	t4
(	Ju	ly20	,2015	)(P	.R	.Doc	.62	)	.	3
Comme	rcepub	l	i	shedap	re	l	im	ina	ryde	te	rm	ina	t	iononCOREf	romTa	iwanon
Janua	ry4	,2016	.SeeCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sf	romTa	iwan	:Nega	t	ive
P	re	l	im	ina	ry De	te	rm	ina	t	iono	fSa	le	sa	tLe	s	sThanFa	i	rVa	lue	,81Fed	.Reg	.72(	In	t	’	lT	rade
Adm	in	.Jan	.4	,2016	) (“	P	re	l	im	.De	te	rm	ina	t	ion”	)	;seea	l	soDec	i	s	ion Memo	randumfo	rthe
P	re	l	im	ina	ryDe	te	rm	ina	t	ionintheAn	t	idump	ingDu	tyInve	s	t	iga	t	iono	fCe	r	ta	in
Co	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sf	romTa	iwan,A	-583	-856	,(Dec	.22	,2015	)
(P	.R	.Doc	s	.262	-263	)	,ava	i	lab	lea	th	t	tp	s	:	/	/en	fo	rcemen	t	.	t	rade	.gov	/	f	rn	/	summa	ry	/	ta	iwan	/2015	-
32761	-1	.pd	f(	las	tv	i	s	i	tedJan	.18	,2018	)(“	P	re	l	im	.Dec	i	s	ion Mem	.”	)	.IntheP	re	l	im	ina	ry
De	te	rm	ina	t	ion	,Comme	rcet	rea	tedY	iehPhu	iandSynnIndu	s	t	r	ia	lCo	.	,L	td	.(“Synn”	)a	sas	ing	le
en	t	i	ty(	the“Y	iehPhu	i	/Synn”en	t	i	ty	)	.4 P	re	l	im	.Dec	i	s	ion Mem	. a	t4	. Comme	rced	idno	tinc	lude
P	ro	spe	r	i	tyw	i	thintheY	iehPhu	i	/Synnen	t	i	ty	.Id	. Comme	rceca	lcu	la	tedap	re	l	im	ina	ryze	ro
pe	rcen	tdump	ingma	rg	info	rbo	thP	ro	spe	r	i	tyandtheY	iehPhu	i	/Synnen	t	i	tyandp	re	l	im	ina	r	i	ly
de	te	rm	inedtha	tCOREf	romTa	iwanwa	sno	tbe	ing	,andi	sno	tl	ike	lytobe	,so	ldintheUn	i	ted
S	ta	te	satle	s	sthanfa	i	rva	lue	.P	re	l	im	.De	te	rm	ina	t	ion,81Fed	.Reg	.a	t72	-73	.
3Wh	i	lethecou	r	tre	l	ie	son	lyonpub	l	icdocumen	t	s(	inc	lud	ingpub	l	icve	r	s	ion	so	fbu	s	ine	s	s
p	rop	r	ie	ta	ry	,i	.e	.	,“con	f	iden	t	ia	l”documen	t	s	)inth	i	sOp	in	ionandO	rde	r	,c	i	ta	t	ion	sa	rep	rov	idedto
bo	ththepub	l	icandbu	s	ine	s	sp	rop	r	ie	ta	ryve	r	s	ion	so	fthec	i	teddocumen	twhe	repo	s	s	ib	le	.Pub	l	ic
documen	t	sa	reiden	t	i	f	iedby“P	.R	.Doc	.__	.” Con	f	iden	t	ia	ldocumen	t	sa	reiden	t	i	f	iedby
“C	.R	.Doc	.__	.”
4SynnIndu	s	t	r	ia	lCo	.	,L	td	.(“Synn”	)i	saTa	iwane	sep	roduce	ro	fsub	jec	tme	rchand	i	se	.
Synnd	idno	t makeanyexpo	r	tsa	le	stotheUn	i	tedS	ta	te	sdu	r	ingthepe	r	iodo	finve	s	t	iga	t	ion	.
Comme	rce	’	sSa	le	sVe	r	i	f	ica	t	ionRepo	r	tfo	rSynna	t7(Ap	r	.13	,2016	)(P	.R	.Doc	.345	)
(C	.R	.Doc	.571	)(“	Sa	le	sVe	r	i	f	ica	t	ionRep	.fo	rSynn”	).
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Con	so	l	.Cour	tNo	.16	-00138 Page5
IntheF	ina	lDe	te	rm	ina	t	ion	,Comme	rcefoundtha	tCOREf	romTa	iwanwa	sbe	ing	,o	rwa	s
l	ike	l	ytobe	,so	ldintheUn	i	tedS	ta	te	sa	tle	s	sthanfa	i	rva	lue	.F	ina	lDe	te	rm	ina	t	ion,81Fed	.
Reg.a	t35	,313;seea	l	soI	s	sue	sandDec	i	s	ion Memo	randumfo	rtheF	ina	lDe	te	rm	ina	t	ioninthe
An	t	idump	ingDu	tyInve	s	t	iga	t	iono	fCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sf	romTa	iwan,
A	-583	-856	,(May26	,2016	)(P	.R	.Doc	.372	)	,ava	i	lab	lea	t
h	t	tp	s	:	/	/en	fo	rcemen	t	.	t	rade	.gov	/	f	rn	/	summa	ry	/	ta	iwan	/2016	-12975	-1	.pd	f(	la	s	tv	i	s	i	tedJan	.18	,2018)
(“	F	ina	lDeci	s	ion Mem	.	”	).Inreach	ingth	i	sde	te	rm	ina	t	ion	,Comme	rcet	rea	tedY	iehPhu	i	,
P	ro	spe	r	i	ty	,andSynna	sas	ing	leen	t	i	ty(	the“Y	iehPhu	i	/P	ro	spe	r	i	ty	/Synn”en	t	i	ty	)	.F	ina	l
De	te	rm	ina	t	ion,81Fed	.Reg	.a	t35	,314;F	ina	lDec	i	s	ion Mem	.a	t24	-28	.IntheF	ina	l
De	te	rm	ina	t	ion	,Comme	rcedec	l	inedtomakedownwa	rdad	ju	s	tmen	t	stoY	iehPhu	i	’	sandSynn	’	s
homema	rke	tsa	le	sp	r	ice	stoaccoun	tfo	rce	r	ta	inreba	te	sg	ran	tedtothe	i	rre	spec	t	ivehomema	rke	t
cu	s	tome	r	s	.F	ina	lDec	i	s	ion Mem.a	t20	-24	. Comme	rcefu	r	the	rde	te	rm	inedtha	tP	ro	spe	r	i	tyfa	i	led
torepo	r	tp	rope	r	lythey	ie	lds	t	reng	tho	fce	r	ta	insa	le	so	fCOREandapp	l	iedfac	t	so	the	rw	i	se
ava	i	lab	le	,w	i	thanadve	r	sein	fe	rence	,totheco	s	t	so	fthesa	le	sfoundtohavebeen m	i	sc	la	s	s	i	f	ied	.
Id	.a	t11	-19	. Comme	rcea	s	s	ignedtheY	iehPhu	i	/P	ro	spe	r	i	ty	/Synnen	t	i	tyawe	igh	ted	-ave	rage
dump	ingma	rg	ino	f3	.77%	. F	ina	lDe	te	rm	ina	t	ion,81Fed	.Reg	.a	t35	,314	.
Fo	l	low	ingam	in	i	s	te	r	ia	le	r	ro	ra	l	lega	t	ion	,Comme	rcepub	l	i	shedanamendedf	ina	l
de	te	rm	ina	t	iontha	tinc	rea	sedthewe	igh	ted	-ave	ragedump	ingma	rg	ina	s	s	ignedtothe
Y	iehPhu	i/P	ro	spe	r	i	ty	/Synnen	t	i	tyf	rom3	.77%to10	.34%	.AmendedF	ina	lDe	te	rm	ina	t	ion,
81Fed	.Reg	.a	t48	,391	,48	,393	.
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Con	so	l	.Cour	tNo	.16	-00138 Page6
I	I	.DISCUSSION
A	.Ju	r	i	sd	ic	t	ionandS	tanda	rdo	fRev	iew
Thecou	r	texe	rc	i	se	sju	r	i	sd	ic	t	ionacco	rd	ingtosec	t	ion201o	ftheCu	s	tom	sCou	r	t	sAc	t
o	f1980	,a	samended,28U	.S	.C	.§1581	(c	)	,wh	ichp	rov	ide	sthecou	r	tju	r	i	sd	ic	t	iontorev	iewaf	ina	l
a	f	f	i	rmat	ivede	te	rm	ina	t	iono	fsa	le	sa	tle	s	sthanfa	i	rva	lueinanac	t	ionb	rough	tunde	rsec	t	ion
516A	(a	)	(2	)o	ftheTa	r	i	f	fAc	to	f1930(	the“Ta	r	i	f	fAc	t”	);see19U	.S	.C	.§§1516a	(a	)	(2	)	(A	)	,
(a	)	(2	)	(B	)	(	i	)	.	5 Inrev	iew	ingaf	ina	lde	te	rm	ina	t	ion	,thecou	r	tw	i	l	lho	ldun	law	fu	lanyf	ind	ing	,
conc	lu	s	ion	,o	rde	te	rm	ina	t	ionno	tsuppo	r	tedbysub	s	tan	t	ia	lreco	rdev	idenceo	ro	the	rw	i	seno	tin
acco	rdancew	i	thlaw	.19U	.S	.C	.§1516a	(b	)	(1	)	(B	)	(	i	)	.Sub	s	tan	t	ia	lev	idencei	s“	suchre	levan	t
ev	idencea	sarea	sonab	le m	indm	igh	taccep	ta	sadequa	tetosuppo	r	taconc	lu	s	ion	.”Con	so	l	.
Ed	i	sonCo	.v	.NLRB,305U	.S	.197	,229(1938	)	.
B	. Comme	rceUn	law	fu	l	lyFa	i	ledtoAd	ju	s	ttheP	r	ice	sinHome Ma	rke	tSa	le	sfo	rReba	te	s
Comme	rcede	te	rm	ine	sanan	t	idump	ingdu	tyma	rg	inbycompa	r	ingtheno	rma	lva	lueo	fthe
sub	jec	tme	rchand	i	setotheexpo	r	tp	r	ice(o	rcon	s	t	ruc	tedexpo	r	tp	r	ice	)a	twh	ichthesub	jec	t
me	rchand	i	sei	sso	ldintheUn	i	tedS	ta	te	s	.19U	.S	.C	.§1673	. No	rma	lva	lueo	rd	ina	r	i	lyi	s
de	te	rm	inedf	romthe“p	r	icea	twh	ichthefo	re	ignl	ikep	roduc	ti	sf	i	r	s	tso	ld...fo	rcon	sump	t	ionin
theexpo	r	t	ingcoun	t	ry	,”w	i	thce	r	ta	inad	ju	s	tmen	t	s	.Id	.§1677b	(a	)	(1	)	(B	)	.Inpe	r	t	inen	tpa	r	t	,the
Depa	r	tmen	t	’	sregu	la	t	ion	,19C	.F	.R	.§351	.401	(c	)	,p	rov	ide	sa	sfo	l	low	s	:
U	seo	fp	r	ice ne	to	fp	r	icead	ju	s	tmen	t	s	.Inca	lcu	la	t	ingexpo	r	tp	r	ice	,con	s	t	ruc	ted
expo	r	tp	rice	,andno	rma	lva	lue(whe	reno	rma	lva	luei	sba	sedonp	r	ice	)	,the
Sec	re	ta	ryw	i	l	lu	seap	r	icetha	ti	sne	to	fanyp	r	icead	ju	s	tmen	t	,a	sde	f	inedin
§351	.102	(b	)	,tha	ti	srea	sonab	lya	t	t	r	ibu	tab	letothesub	jec	tme	rchand	i	seo	rthe
fo	re	ignl	ikep	roduc	t(wh	icheve	ri	sapp	l	icab	le	)	.
5A	l	lc	i	ta	t	ion	stotheUn	i	tedS	ta	te	sCodehe	re	ina	retothe2012ed	i	t	ionanda	l	lc	i	ta	t	ion	sto
theCodeo	fFede	ra	lRegu	la	t	ion	she	re	ina	retothe2016ed	i	t	ion	.
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19C	.F	.R	.§351	.401	(c	)	.“	‘P	r	icead	ju	s	tmen	t	’mean	sanychangeinthep	r	icecha	rgedfo	rsub	jec	t
me	rchand	i	seo	rthefo	re	ignl	ikep	roduc	t	,sucha	sd	i	scoun	t	s	,reba	te	sandpo	s	t	-	sa	lep	r	ice
ad	ju	s	tmen	t	s	,tha	ta	re[s	ic	]re	f	lec	tedinthepu	rcha	se	r	’	sne	tou	t	lay	.”19C	.F	.R	.§351	.102	(b	)	(38	)	.
Y	iehPhu	iandSynnp	rov	idedthe	i	rhomema	rke	tcu	s	tome	r	swha	ttheyca	l	led“quan	t	i	ty
reba	te	s	”o	r“pu	rcha	serewa	rd	sreba	te	s	.” Thete	rm	sandcond	i	t	ion	sfo	rthe	sereba	te	swe	reno	t
e	s	tab	l	i	shedp	r	io	rtothet	imeo	fsa	le	. Ra	the	r	,Y	iehPhu	iandSynnwou	ldcon	s	ide	r	,ona
cu	s	tomer	-	by-cu	s	tome	rba	s	i	s	,theto	ta	lquan	t	i	tysh	ipped	,ma	rke	tcond	i	t	ion	s	,andthepo	ten	t	ia	lfo	r
fu	tu	reo	rde	r	sinde	te	rm	in	ingthereba	te	s	.
Y	iehPhu	ic	laim	stha	tComme	rcev	io	la	ted19C	.F	.R	.§351	.401	(c	)wheni	tfa	i	ledtomake
co	r	respond	ingdownwa	rdad	ju	s	tmen	t	sinthes	ta	r	t	ingp	r	ice	sComme	rceu	sedinde	te	rm	in	ing
no	rma	lva	lue	,i	.e	.	,thep	r	ice	sa	twh	ichY	iehPhu	iandSynnso	ldthefo	re	ignl	ikep	roduc	tini	t	s
homema	rke	t	. Mem	.o	fP	.&A	.inSupp	.o	fP	l	.Y	iehPhu	iEn	te	rp	r	i	seCo	.	,L	td	.	’	sRu	le56	.2 Mo	t	.
fo	rJ	.ontheAgencyR	.1	-15(Dec	.15	,2016	)	,ECFNo	s	.52(con	f	.	)	,53(pub	l	ic	)(“Y	iehPhu	i	’	s
B	r	.”	);R	ep	lyB	r	.o	fP	l	.Y	iehPhu	iEn	te	rp	r	i	seCo	.	,L	td	.2	-7(May24	,2017	)	,ECFNo	.67(“	Y	ieh
Phu	i	’	sRep	lyB	r	.”	)	. Acco	rd	ingtoY	iehPhu	i	,Comme	rceac	tedcon	t	ra	rytothep	la	inmean	ingo	f
thepe	r	t	inen	tre	gu	la	t	ion	sandimp	rope	r	lyrequ	i	redi	tto“p	rovecu	s	tome	rknow	ledgeo	fan
ad	ju	s	tmen	tatanypa	r	t	icu	la	rpo	in	tre	la	t	ivetotheda	teo	fsa	le	.” Y	iehPhu	i	’	sB	r	.8	.Fo	rthe
rea	son	sd	i	scu	s	sedbe	low	,thecou	r	tf	ind	sme	r	i	tinth	i	sc	la	im	.
IntheF	ina	lDe	te	rm	ina	t	ion	,Comme	rced	i	sa	l	lowed mon	th	lyhomema	rke	treba	te	srepo	r	ted
by Y	iehPhu	iandSynn	.F	ina	lDeci	s	ion Mem	.a	t20-24	. Comme	rceba	sedth	i	sconc	lu	s	ion	,in
pa	r	t	,oni	t	sf	ind	ingtha	tthete	rm	so	fthe	sereba	t	e	s“we	reno	tf	ixeda	to	rbe	fo	retheda	teo	fsa	le	.”
Id	.a	t21	. Comme	rceexp	la	inedtha	ttheDepa	r	tmen	t“on	lyad	ju	s	t	[	s	]no	rma	lva	luetoaccoun	tfo	r
reba	te	swhenthete	rm	sandcond	i	t	ion	so	fthereba	tea	reknowntothecu	s	tome	rp	r	io	rtothesa	le
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andthec	la	imedreba	te	sa	recu	s	tome	r	-	spec	i	f	ic	.”Id	. Comme	rcea	l	soba	sedi	t	sdec	i	s	iontore	jec	t
Y	iehPhu	i’	sandSynn	’	srepo	r	tedreba	tead	ju	s	tmen	t	sonaf	ind	ingtha	tthe	sereba	te	swe	rei	s	sued
w	i	ththepu	rpo	seo	fl	im	i	t	ingan	t	idump	ingdu	tyl	iab	i	l	i	ty	. Id	.a	t21	-22	.IntheF	ina	lDec	i	s	ion
Memo	randum	,Comme	rcea	l	soind	ica	tedi	t	sd	i	sag	reemen	tw	i	thth	i	sCou	r	t	’	sho	ld	ingin
Pap	ie	r	fab	r	ikAugu	s	tKoeh	le	rAGv	.Un	i	tedS	ta	te	s,38C	IT__	,971F	.Supp	.2d1246(2014	)
(“	Koeh	le	r”)	.Id	.a	t22	.InKoeh	le	r,th	i	sCou	r	t	,in	te	rp	re	t	ing19C	.F	.R	.§351	.102	(b	)	(38	)	,
d	i	sa	l	lowedtheDepa	r	tmen	t	’	sre	jec	t	iono	fce	r	ta	inp	r	icead	ju	s	tmen	t	sonthep	rem	i	setha	tthe
re	sponde	n	t	’	scu	s	tome	r	slackedknow	ledgeo	fthete	rm	sandcond	i	t	ion	so	fthereba	te	sa	tthet	ime
o	fsa	le	.Koeh	le	r,38C	ITa	t__	,971F	.Supp	.2da	t1259	.IntheF	ina	lDec	i	s	ion Memo	randum	,
Comme	rceop	ined“	tha	tKoeh	le	rcon	f	l	ic	t	sw	i	tho	the	rC	ITdec	i	s	ion	stha	ta	f	f	i	rmedthe
Depa	r	tmen	t	’	spo	s	i	t	ion	store	jec	tc	la	im	sfo	rp	r	icead	ju	s	tmen	t	s	.” F	ina	lDec	i	s	ion Mem	.a	t22
(c	i	ta	t	ion	som	i	t	ted	)	.
Inth	i	sca	se	,Comme	rced	idno	treachaf	ind	ingtha	tthereba	te	srepo	r	tedbyY	iehPhu	iand
Synnwe	reno	tac	tua	l	lypa	idtothecompan	ie	s	’homema	rke	tcu	s	tome	r	s	. Comme	rced	idno	t
que	s	t	iontha	tthereba	te	swe	reac	tua	l	ly“	re	f	lec	tedinthepu	rcha	se	r	’	sne	tou	t	lay	,”see19C	.F	.R	.
§351	.102	(b	)	(38	)	,o	rwhe	the	rthereba	te	swe	re“	rea	sonab	lya	t	t	r	ibu	tab	le”tosa	le	so	fthe“	fo	re	ign
l	ikep	roduc	t”w	i	th	inthe mean	ingo	f19C	.F	.R	.§351	.401	(c	)	.SeeF	ina	lDec	i	s	ion Mem.a	t20	-24	.
Tothecon	t	ra	ry	,Comme	rceve	r	i	f	iedthehomema	rke	treba	te	srepo	r	tedbyY	iehPhu	iandSynn
andfoundnod	i	sc	repanc	ie	so	rincon	s	i	s	tenc	ie	sw	i	ththereba	tein	fo	rma	t	ionrepo	r	ted	.Ve	r	i	f	ica	t	ion
o	ftheSa	le	sRe	spon	se	so	fY	iehPhu	iEn	te	rp	r	i	seCo	.	,L	td	.a	t10(Ap	r	.14	,2016	)(P	.R	.Doc	.343	)
(C	.R	.Doc	.569	)	;Ve	r	i	f	ica	t	iono	ftheSa	le	sRe	spon	se	so	fSynnIndu	s	t	r	ia	lCo	.	,L	td	.a	t11
(Ap	r	.13	,2016	)(P	.R	.Doc	.345	)(C	.R	.Doc	.571)	.
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Onthe	i	rface	,theregu	la	t	ion	srequ	i	reComme	rcetorecogn	izeareduc	t	ioninthe
pu	rcha	se	r	’	sne	tou	t	layfo	rthefo	re	ignl	ikep	roduc	ttha	tsa	t	i	s	f	ie	sthede	f	in	i	t	iono	fa“p	r	ice
ad	ju	s	tmen	t”in§351	.102	(b	)	(38	)	.19C	.F	.R	.§351	.401	(c	)(“	Inca	lcu	la	t	ing...no	rma	lva	lue
(whe	reno	rma	lva	luei	sba	sedonp	r	ice	)	,theSec	re	ta	ryw	i	l	lu	seap	r	icetha	ti	sne	to	fanyp	r	ice
ad	ju	s	tmen	t	,a	sde	f	inedin§351	.102	(b	)....”(empha	s	i	sadded	)	)	. A	sY	iehPhu	ino	te	s	,“	[	t	]he
regu	la	t	ion	ss	ta	tetha	tComme	rce‘w	i	l	l	’(no	t‘may	’	)u	seU	.S	.andcompa	r	i	sonma	rke	tp	r	ice	sne	to	f
‘	anyp	r	icead	ju	s	tmen	t	’solonga	sthead	ju	s	tmen	ti	srea	sonab	lya	t	t	r	ibu	tab	letothesub	jec	t
me	rchand	i	se(o	rthefo	re	ignl	ikep	roduc	t	)andfa	l	l	sw	i	th	inthe‘p	r	icead	ju	s	tmen	t	’de	f	in	i	t	ion	.”
Y	iehPhu	i	’	sB	r	.7(empha	s	i	sino	r	ig	ina	l	)	. G	iv	inga	sexamp	le	s“d	i	scoun	t	s	,reba	te	sandpo	s	t	-	sa	le
p	r	icead	ju	s	tmen	t	s	,”theregu	la	t	ion	sse	tfo	r	thab	roadde	f	in	i	t	iono	f“p	r	icead	ju	s	tmen	t”
encompa	s	s	ing“anychangeinthep	r	icecha	rgedfo	r...thefo	re	ignl	ikep	roduc	t”tha	t“a	re
re	f	lec	tedinthepu	rcha	se	r	’	sne	tou	t	lay	.”19C	.F	.R	.§351	.102	(b	)	(38	)	.Inthes	i	tua	t	ionp	re	sen	ted
he	re	,§351	.401	(c	)d	idno	tpe	rm	i	tComme	rcetou	seahomema	rke	tp	r	icefo	rthefo	re	ignl	ike
p	roduc	ttha	twa	sno	tne	to	fap	r	icead	ju	s	tmen	tsa	t	i	s	fy	ingthe§351	.102	(b	)	(38	)de	f	in	i	t	ion	.
Inreach	ingtheoppo	s	i	teconc	lu	s	ion	,Comme	rce madeanumbe	ro	fi	r	re	levan	tf	ind	ing	s	,
inc	lud	ingtha	tthete	rm	so	fY	iehPhu	i	’	sandSynn	’	shomema	rke	treba	te	s“we	reno	te	s	tab	l	i	shed
p	r	io	rtosh	ipmen	tandinvo	ic	ing	.”F	ina	lDec	i	s	ion Mem.a	t24	.S	im	i	la	r	lyi	r	re	levan	ti	sthe
Depa	r	tmen	t	’	sf	ind	ingtha	tne	i	the	rcompanyhadany“e	s	tab	l	i	sheds	tanda	rd	so	rpo	l	ic	ie	s	,w	r	i	t	teno	r
unw	r	i	t	ten	,tha	tspec	i	fytheamoun	tandthepo	s	s	ib	i	l	i	ty”o	freba	te	s	.Id	.a	t23	-24	. The
Depa	r	tmen	t	’	sf	ind	ingtha	tthehomema	rke	treba	te	s“cou	ldno	thavei	s	sued...w	i	thou	t
[an	t	idump	ing	]du	tyl	iab	i	l	i	tyinm	ind”i	sa	l	soex	t	raneou	sandi	r	re	levan	t	.Id	.a	t23	. The	sef	ind	ing	s
a	rea	l	ld	i	rec	tedtothew	rongque	s	t	ion	. Unde	rtheregu	la	t	ion	s	,theque	s	t	ioni	sno	twhe	the	rthe
reba	te	swe	remadeacco	rd	ingtoa“p	rog	ram”tha	tsa	t	i	s	f	iedtheva	r	iou	sp	re	requ	i	s	i	te	sComme	rce
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iden	t	i	f	iedintheF	ina	lDec	i	s	ion Memo	randum	,o	rwhe	the	rtheywe	remadefo	rarea	son
accep	tab	letoComme	rce	,bu	twhe	the	rthemon	th	lyreba	te	swe	reac	tua	l	lyre	f	lec	tedinpu	rcha	se	r	s	’
ne	tou	t	lay	s	.
Inreach	ingconc	lu	s	ion	sf	romi	t	sf	ind	ing	s	,theDepa	r	tmen	t	’	srea	son	ingi	se	r	roneou	sin
seve	ra	lre	spec	t	s	.F	i	r	s	t	,theF	ina	lDec	i	s	ion Memo	randumm	i	sapp	l	ie	stheDepa	r	tmen	t	’	s
regu	la	t	ion	sindec	l	in	ingtoad	ju	s	tthehomema	rke	tp	r	ice	sfo	rthemon	th	lyreba	te	s	. A	sd	i	scu	s	sed
above	,Comme	rced	idno	tconc	ludetha	tthemon	th	lyreba	te	swe	reno	t“re	f	lec	tedinthe
pu	rcha	se	r	’	sne	tou	t	lay”w	i	th	inthemean	ingo	f§351	.102	(b	)	(38	)o	rtha	tthereba	te	swe	reno	t
“	rea	sonab	lya	t	t	r	ibu	tab	letothe...fo	re	ignl	ikep	roduc	t”w	i	th	inthemean	ingo	f§351	.401	(c	)	.In
add	i	t	ion	,a	sthecou	r	tha	spo	in	tedou	t	,Comme	rcesucce	s	s	fu	l	lyve	r	i	f	iedtha	tthemon	th	lyreba	te	s
i	s	suedbyY	iehPhu	iandSynnwe	reinfac	tpa	idtohomema	rke	tcu	s	tome	r	s	.Inthec	i	rcum	s	tance	s
p	re	sen	tedbytheDepa	r	tmen	t	’	sownf	ind	ing	s	,theregu	la	t	ion	srequ	i	reComme	rcetot	rea	tthe	se
reba	te	sa	spo	s	t	-	sa	lep	r	icead	ju	s	tmen	t	s	. A	l	though§351	.401	(b	)p	rov	ide	stha	t“	[	t	]hein	te	re	s	ted
pa	r	tytha	ti	sinpo	s	se	s	s	iono	fthere	levan	tin	fo	rma	t	ionha	sthebu	rdeno	fe	s	tab	l	i	sh	ingtothe
sa	t	i	s	fac	t	iono	ftheSec	re	ta	rytheamoun	tandna	tu	reo	fapa	r	t	icu	la	rad	ju	s	tmen	t	,”Comme	rcewa	s
no	tempowe	redbyth	i	sgene	ra	lp	rov	i	s	ion	,wh	ichapp	l	ie	stoa	l	lad	ju	s	tmen	t	s	,no	tme	re	lyp	r	ice
ad	ju	s	tmen	t	s	,toigno	rethespec	i	f	ics	tanda	rde	s	tab	l	i	shedby§351	.401	(c	)	,acco	rd	ingtowh	ichthe
Sec	re	ta	rymu	s	trecogn	izea“p	r	icead	ju	s	tmen	t”a	sde	f	inedin§351	.102	(b	)	(38	)	.He	re	,Comme	rce
madenof	ind	ing	ss	ta	t	ingo	rsugge	s	t	ingtha	tthep	r	icead	ju	s	tmen	t	sd	idno	toccu	r	.
TheF	ina	lDec	i	s	ion Memo	randuma	l	som	i	scon	s	t	rue	stheDepa	r	tmen	t	’	sd	i	scu	s	s	iono	fi	t	s
regu	la	t	ion	sinthep	reamb	letha	taccompan	iedp	romu	lga	t	iono	ftheregu	la	t	ion	sa	ti	s	sue(	the
“P	reamb	le”	)	.SeeAn	t	idump	ingDu	t	ie	s	;Coun	te	rva	i	l	ingDu	t	ie	s,62Fed	.Reg	.27	,296	,27	,344
(	In	t	’	lT	radeAdm	in	. May19	,1997	)(“	F	ina	lRu	le”	)	. Con	t	ra	rytode	fendan	t	’	sa	rgumen	t	,the
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P	reamb	ledoe	sno	tsuppo	r	taregu	la	to	ryin	te	rp	re	ta	t	ionunde	rwh	ichComme	rcewa	sf	reeto
d	i	s	rega	rdreba	te	ssucha	stho	sea	ti	s	sueinth	i	sca	se	. Ra	the	r	,thepe	r	t	inen	td	i	scu	s	s	ioninthe
P	reamb	lerevea	l	stha	tinp	romu	lga	t	ingthef	ina	lru	leComme	rcein	tendedfo	rreduc	t	ion	s	,
inc	lud	ingpo	s	t	-	sa	lereduc	t	ion	s	,inthep	r	iceo	fthefo	re	ignl	ikep	roduc	ttore	su	l	tinad	ju	s	tmen	t	sto
thes	ta	r	t	ingp	r	ice	su	sedtode	te	rm	ineno	rma	lva	luei	ftheya	rere	f	lec	tedinthepu	rcha	se	r	’	sne	t
ou	t	lay	.
TheP	reamb	leexp	la	inedtha	t§351	.401	(c	)“	re	s	ta	tedtheDepa	r	tmen	t	’	sp	rac	t	icew	i	th
re	spec	ttop	r	icead	ju	s	tmen	t	s	,sucha	sd	i	scoun	t	sandreba	te	s	.”F	ina	lRu	le,62Fed	.Reg	.a	t27	,344	.
Inp	ropo	s	ing§351	.401	,Comme	rcede	sc	r	ibedtheDepa	r	tmen	t	’	sp	rac	t	icea	sfo	l	low	s	:“Unde	r
pa	rag	raph(c	)	,theDepa	r	tmen	tw	i	l	lcon	t	inuei	t	sp	rac	t	iceo	fad	ju	s	t	ingrepo	r	tedg	ro	s	sp	r	ice	sfo	r
d	i	scoun	t	s	,reba	te	sandce	r	ta	inpo	s	t	-	sa	lead	ju	s	tmen	t	stop	r	icetha	ta	f	fec	tthene	tp	r	ice	.”
An	t	idump	ingDu	t	ie	s	;Coun	te	rva	i	l	ingDu	t	ie	s,61Fed	.Reg	.7	,308	,7	,329(	In	t	’	lT	radeAdm	in	.
Feb	.27	,1996	)(no	t	iceo	fp	ropo	sedru	lemak	ing	)	.
ThePreamb	lefu	r	the	rexp	la	inedtha	tComme	rcetook“	seve	ra	ls	tep	sa	imeda	ta	l	lev	ia	t	ing”
con	fu	s	ionconce	rn	ingthep	ropo	sed§351	.401	(c	)	,andp	r	icead	ju	s	tmen	t	sgene	ra	l	ly	,tha	t
Comme	rcebe	l	ievedtohavebeenre	f	lec	tedinthecommen	t	stothep	ropo	sedru	le	.F	ina	lRu	le,
62Fed	.Reg	.a	t27	,344	. TheP	reamb	leexp	la	inedtha	ttheDepa	r	tmen	tinc	ludedinthe
p	romu	lga	ted§351	.102anewde	f	in	i	t	iono	fthete	rm“p	r	icead	ju	s	tmen	t	.”Id	.Conce	rn	ingthe
te	rm“p	r	icead	ju	s	tmen	t”andi	t	sde	f	in	i	t	ion	,theP	reamb	leadd	stha	t“	[	t	]h	i	ste	rmi	sin	tendedto
de	sc	r	ibeaca	tego	ryo	fchange	stoap	r	ice	,sucha	sd	i	scoun	t	s	,reba	te	sandpo	s	t	-	sa	lep	r	ice
ad	ju	s	tmen	t	s	,tha	ta	f	fec	tthene	tou	t	layo	ffund	sbythepu	rcha	se	r”andtha	t“	suchp	r	ice
change	s...a	rechange	stha	ttheDepa	r	tmen	tmu	s	ttakein	toaccoun	tiniden	t	i	fy	ingtheac	tua	l
s	ta	r	t	ingp	r	ice	.”Id	.a	t27	,300(empha	s	i	sadded	)	. Th	i	sP	reamb	led	i	scu	s	s	ion	,l	iketheregu	la	t	ion
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i	t	se	l	f	,make	sc	lea	rtha	tComme	rcein	tendedtoapp	lyaun	i	fo	rmde	f	in	i	t	iono	f“p	r	icead	ju	s	tmen	t”
when de	te	rm	in	ingas	ta	r	t	ingp	r	icefo	rca	lcu	la	t	ingno	rma	lva	lue	.Id	.
TheFina	lDec	i	s	ion Memo	randumm	i	scon	s	t	rue	sthelanguageandthein	ten	to	fthe
P	reamb	leinconc	lud	ingtha	t“	[w	]h	i	letheDepa	r	tmen	t	’	sregu	la	t	ion	sp	rov	idefo	rpo	s	t	-	sa	lep	r	ice
ad	ju	s	tmen	t	stha	ta	rerea	sonab	lya	t	t	r	ibu	tab	letothesub	jec	tme	rchand	i	se	,theP	reamb	leind	ica	te	s
tha	texpo	r	te	r	so	rp	roduce	r	sshou	ldno	tbea	l	lowed‘	toe	l	im	ina	tedump	ingma	rg	in	sbyp	rov	id	ing
p	r	icead	ju	s	tmen	t	s‘a	f	te	rthefac	t	.	’	’”F	ina	lDec	i	s	ion Mem.a	t21-22(quo	t	ingF	ina	lRu	le	,62Fed	.
Reg	.a	t27	,344	)	. Thepa	s	sageintheP	reamb	lef	romwh	ichtheF	ina	lDec	i	s	ion Memo	randumd	rew
th	i	sconc	lu	s	ionread	sa	sfo	l	low	s	:
Onecommen	te	rsugge	s	tedtha	t	,a	tlea	s	tfo	rpu	rpo	se	so	fno	rma	lva	lue	,the
regu	la	t	ion	sshou	ldc	la	r	i	fytha	ttheon	lyreba	te	sComme	rcew	i	l	lcon	s	ide	ra	reone	s
tha	twe	recon	temp	la	teda	tthet	imeo	fsa	le	. Th	i	scommen	te	ra	rguedtha	tfo	re	ign
p	roduce	r	sshou	ldno	tbea	l	lowedtoe	l	im	ina	tedump	ingma	rg	in	sbyp	rov	id	ing
“	reba	te	s”on	lya	f	te	rtheex	i	s	tenceo	fma	rg	in	sbecome	sappa	ren	t	.
TheDepa	r	tmen	tha	sno	tadop	tedth	i	ssugge	s	t	iona	tth	i	st	ime	. Wedono	t
d	i	sag	reew	i	ththep	ropo	s	i	t	iontha	texpo	r	te	r	so	rp	roduce	r	sw	i	l	lno	tbea	l	lowedto
e	l	im	ina	tedump	ingma	rg	in	sbyp	rov	id	ingp	r	icead	ju	s	tmen	t	s“a	f	te	rthefac	t	.”
Howeve	r	,a	sd	i	scu	s	sedabove	,theDepa	r	tmen	t	’	st	rea	tmen	to	fp	r	icead	ju	s	tmen	t	sin
gene	ra	lha	sbeenthesub	jec	to	fcon	s	ide	rab	lecon	fu	s	ion	.Inre	so	lv	ingth	i	s
con	fu	s	ion	,wein	tendtop	roceedcau	t	iou	s	lyandinc	remen	ta	l	ly	. Theregu	la	to	ry
rev	i	s	ion	scon	ta	inedinthe	sef	ina	lru	le	scon	s	t	i	tu	teaf	i	r	s	ts	tepa	tc	la	r	i	fy	ingou	r
t	rea	tmen	to	fp	r	icead	ju	s	tmen	t	s	. Wew	i	l	lcon	s	ide	radd	ingo	the	rregu	la	to	ry
re	f	inemen	t	sa	tala	te	rda	te	.
F	ina	lRu	le,62Fed	.Reg	.a	t27	,344	. Nosub	s	tan	t	iveamendmen	t	swe	remadetothetex	to	f
§351	.401	(c	)o	r§351	.102	(b	)	(38	)be	tweenthep	romu	lga	t	ingo	fthef	ina	lru	lein1997andthe
inve	s	t	iga	t	iona	ti	s	sue	.	6 Whenreadintheen	t	i	re	tyandincon	junc	t	ionw	i	ththeDepa	r	tmen	t	’	s
6Fo	l	low	ingthedec	i	s	ioninPap	ie	r	fab	r	ikAugu	s	tKoeh	le	rAGv	.Un	i	tedS	ta	te	s,38C	IT__	,
971F	.Supp	.2d1246(2014	)	,Comme	rceamendedi	t	sregu	la	t	ion	s	.See Mod	i	f	ica	t	iono	f
Regu	la	t	ion	sRega	rd	ingP	r	iceAd	ju	s	tmen	t	sinAn	t	idump	ingDu	tyP	roceed	ing	s,
81Fed	.Reg	.15	,641(	In	t	’	lT	radeAdm	in	. Ma	r	.24	,2016	)	. Theamendedregu	la	t	ion	sa	l	te	r
(con	t	inued...	)
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regu	la	t	ion	s	,theP	reamb	ledoe	sno	tsuppo	r	ttherea	son	ingbywh	ichComme	rced	i	s	rega	rd	edY	ieh
Phu	i	’	sandSynn	’	smon	th	lyreba	te	s	.
Be	fo	rethecou	r	t	,de	fendan	tandde	fendan	t	-	in	te	rveno	r	s makeanumbe	ro	fa	rgumen	t	sin
suppo	r	to	ftheDepa	r	tmen	t	’	sexc	lu	s	iono	fY	iehPhu	i	’	sandSynn	’	shomema	rke	treba	te	s	,mo	s	to	f
wh	ichpa	ra	l	le	lthee	r	roneou	srea	son	ingo	ftheF	ina	lDec	i	s	ion Memo	randum	. See De	f	.	’	sOpp	’nto
P	l	.	’	sandCon	so	l	ida	tedP	l	.	’	s Mo	t	s	.fo	rJ	.upontheAgencyR	.45	-58(Ap	r	.26	,2017	)	,ECFNo	s	.63
(con	f	.	)	,66(pub	l	ic	)(“De	f	.	’	sOpp	’n	”	);Re	sp	.B	r	.o	fDe	f	.	-	In	t	s	.inOpp	’ntoP	l	s	.	’ Mo	t	.fo	rJ	.onthe
AgencyR	.34	-39(Ap	r	.26,2017	)	,ECFNo	s	.64(con	f	.	)	,65(pub	l	ic	)(“De	f	.	-	In	t	s	.	’ Opp	’n	”	).F	i	r	s	t	,
de	fendan	ta	rgue	stha	ttheDepa	r	tmen	t	’	sregu	la	t	ion	sdono	tde	f	inethete	rm“	reba	te	s”andtha	t	,
acco	rd	ing	ly	,i	ti	sf	reetodeve	loparea	sonab	lein	te	rp	re	ta	t	iontof	i	l	lth	i	sgap	. De	f	.	’	sOpp	’n50	-51	.
Th	i	sa	rgumen	ti	sspec	iou	sbecau	sethede	f	in	i	t	iono	fthete	rm“	reba	te”i	sno	tthei	s	sueinth	i	sca	se	.
Theapp	l	icab	leregu	la	t	ion	,19C	.F	.R	.§351	.401	(c	)	,le	f	tnoroomfo	rin	te	rp	re	ta	t	ioninrequ	i	r	ing
downwa	rdad	ju	s	tmen	t	stothes	ta	r	t	ingp	r	icefo	rno	rma	lva	luefo	rany“p	r	icead	ju	s	tmen	t” madeto
thehomema	rke	tp	r	iceo	fthefo	re	ignl	ikep	roduc	tw	i	th	inthemean	ingo	f19C	.F	.R	.
§351	.102	(b	)	(38	)	. Thela	t	te	rp	rov	i	s	ionde	f	ined“p	r	icead	ju	s	tmen	t”b	road	lyandd	i	rec	t	lycon	t	ra	ry
tothein	te	rp	re	ta	t	ionComme	rceadvancedintheF	ina	lDec	i	s	ion Memo	randum	.See19C	.F	.R	.
§351	.102	(b	)	(38	)(“	‘P	r	icead	ju	s	tmen	t	’mean	sanychangeinthep	r	icecha	rgedfo	rsub	jec	t
me	rchand	i	seo	rthefo	re	ignl	ikep	roduc	t	, sucha	sd	i	scoun	t	s	,reba	te	sandpo	s	t	-	sa	lep	r	ice
ad	ju	s	tmen	t	s	,tha	ta	rere	f	lec	tedinthepu	rcha	se	r	’	sne	tou	t	lay	.”	)(empha	s	i	sadded	)	. Whe	the	ro	r
(	...con	t	inued	)
§351	.102	(b	)	(38	)and§351	.401	(c	)tos	ta	tetha	ttheDepa	r	tmen	tw	i	l	lno	taccep	tap	r	icead	ju	s	tmen	t
tha	ti	smadea	f	te	rthet	imeo	fsa	le“un	le	s	sthein	te	re	s	tedpa	r	tydemon	s	t	ra	te	s	,tothesa	t	i	s	fac	t	iono	f
theSec	re	ta	ry	,i	t	sen	t	i	t	lemen	ttosuchanad	ju	s	tmen	t	.”Id	.a	t15	,645	-46	. Theamendedregu	la	t	ion	s
dono	tapp	lytotheinve	s	t	iga	t	iontha	tgaver	i	setoth	i	sac	t	ion	.
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Con	so	l	.Cour	tNo	.16	-00138 Page14
no	tComme	rcecon	s	ide	r	sthepo	s	t	-	sa	lep	r	icead	ju	s	tmen	t	sa	ti	s	sueinth	i	sca	setobe“	reba	te	s”i	s
i	r	re	levan	ttotheque	s	t	ionp	re	sen	ted	.
Nex	t	,de	fendan	tandde	fendan	t	-	in	te	rveno	r	sa	rguetha	tY	iehPhu	i	’	sre	l	ianceonth	i	sCou	r	t	’	s
dec	i	s	ioninKoeh	le	ri	sinco	r	rec	t	. De	f	.	’	sOpp	’n52	-54	;De	f	.	-	In	t	s	.	’Opp	’n36	. Be	fo	rethecou	r	t	,
Y	iehPhu	ire	l	ie	sonKoeh	le	rtosuppo	r	ti	t	sa	rgumen	ttha	tComme	rceac	tedun	law	fu	l	lyinfa	i	l	ingto
makedownwa	rdad	ju	s	tmen	t	sinthes	ta	r	t	ingp	r	ice	sComme	rceu	sedtode	te	rm	ineno	rma	lva	lue	.
De	fendan	tandde	fendan	t	-	in	te	rveno	r	sa	s	se	r	ttha	tKoeh	le	rcon	f	l	ic	t	sw	i	tho	the	rdec	i	s	ion	sandtha	ti	t
wa	sw	rong	lydec	ided	. De	f	.	’	sOpp	’n52	-54	;De	f	.	-	In	t	s	.	’Opp	’n36	.Ina	rgu	ingtha	tKoeh	le	r
con	f	l	ic	t	sw	i	tho	the	rdec	i	s	ion	s	,de	fendan	td	i	rec	t	sthecou	r	ttoapa	i	ro	fca	se	stha	twe	recon	s	ide	red
inKoeh	le	r. De	f	.	’	sOpp	’n53	-54(c	i	t	ingKoen	ing &Baue	r	-A	lbe	r	tAGv	.Un	i	tedS	ta	te	s,
22C	IT574	,15F	.Supp	.2d834(1998	)	,a	f	f	’dinpa	r	t,vaca	tedono	the	rg	round	s,259F	.3d1341
(Fed	.C	i	r	.2001	)andNach	i	-Fu	j	iko	sh	iCo	rp	.v	.Un	i	tedS	ta	te	s,19C	IT914	,
890F	.Supp	.1106(1995	)	)	. A	sexp	la	inedinKoeh	le	r,bo	thKoen	ing &Baue	r	-A	lbe	r	tAGand
Nach	i	-Fu	j	iko	sh	iCo	rp	.a	ro	sef	romadm	in	i	s	t	ra	t	ivede	te	rm	ina	t	ion	smadep	r	io	rtotheJune18	,1997
e	f	fec	t	iveda	teo	fthef	ina	lru	letha	tin	s	t	i	tu	tedtheve	r	s	ion	so	f§351	.401	(c	)and§351	.102	(b	)	(38	)
tha	ta	rea	ti	s	sueinth	i	sac	t	ion	.SeeKoeh	le	r,38C	ITa	t__	,971F	.Supp	.2da	t1256	. Thecou	r	t
no	te	stha	ttheDepa	r	tmen	t	’	sin	te	rp	re	ta	t	iono	fthere	levan	tregu	la	t	ion	si	sa	l	soincon	s	i	s	ten	tw	i	thth	i	s
Cou	r	t	’	sop	in	ioninTen	s	ionS	tee	lIndu	s	t	r	ie	sCo	.	,L	td	.v	.Un	i	tedS	ta	te	s,40C	IT__	,179F	.Supp	.
3d1185(2016	)	.Seea	l	soTen	s	ionS	tee	lIndu	s	.Co	.	,L	td	.v	.Un	i	tedS	ta	te	s,41C	IT__	,
236F	.Supp	.3d1361(2017	)	,appea	ldocke	ted,No	.17	-2526(Fed	.C	i	r	.Nov	.8	,2017	)	.
Becau	setheDepa	r	tmen	t	’	sdec	i	s	ionintheF	ina	lDe	te	rm	ina	t	ionno	ttomakedownwa	rd
ad	ju	s	tmen	t	stoY	iehPhu	i’	sandSynn	’	shomema	rke	tsa	le	sp	r	ice	stoaccoun	tfo	rreba	te	sg	ran	ted
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tothe	i	rhomema	rke	tcu	s	tome	r	sv	io	la	tedi	t	sownregu	la	t	ion	s	,Comme	rcemu	s	tco	r	rec	tth	i	se	r	ro	r
inthere	de	te	rm	ina	t	ioni	treache	sinre	spon	setoth	i	sOp	in	ionandO	rde	r	.
C	. TheDepa	r	tmen	t	’	sDe	te	rm	ina	t	ionto“Co	l	lap	se”P	ro	spe	r	i	tyw	i	ththeY	iehPhu	i	/SynnEn	t	i	tyis
Ba	sedonCe	r	ta	inF	ind	ing	sNo	tSuppo	r	tedbySub	s	tan	t	ia	lEv	idence
P	ro	spe	r	i	tyandY	iehPhu	icha	l	lengetheDepa	r	tmen	t	’	sdec	i	s	iontot	rea	tP	ro	spe	r	i	tya	sa
s	ing	leen	t	i	tyincomb	ina	t	ionw	i	ththeY	iehPhu	i	/Synnen	t	i	tyandthe	rebya	s	s	ignth	i	sen	t	i	tya
s	ing	lean	t	idump	ingdu	tyma	rg	inintheF	ina	lDe	te	rm	ina	t	ion	.Mo	t	.o	fP	l	.P	ro	spe	r	i	tyT	ieh
En	te	rp	r	i	seCo	.	,L	td	.fo	rJ	.upontheAgencyR	.1	,2	-3	,13	-14	,15-25(Dec	.15	,2016	)	,ECFNo	s	.54
(con	f	.	)	,55(pub	l	ic	)(“P	ro	spe	r	i	ty	’	sB	r	.	”	);Y	iehPhu	i	’	sB	r	.1	,24	-27	;P	l	.P	ro	spe	r	i	tyT	ieh	’	sRep	lyin
Supp	.o	fi	t	s Mo	t	.fo	rJ	.upontheAgencyR	.2-9(May	,25	,2017	)	,ECFNo	s	.71(con	f	.	)	,72
(pub	l	ic	)(“P	ro	spe	r	i	ty	’	sRep	lyB	r	.	”	);Y	iehPhu	i	’	sRep	lyB	r	.1	-2	,11	-13	. A	sexp	la	inedbe	low	,
ce	r	ta	inf	ind	ing	suponwh	ichComme	rcere	l	iedinmak	ingthecha	l	lengeddec	i	s	iona	reun	suppo	r	ted
bysub	s	tan	t	ia	lev	idenceonthereco	rd	.
T	rea	t	ingtwore	la	teden	t	i	t	ie	sa	sas	ing	leen	t	i	tyi	sre	fe	r	redtoco	l	loqu	ia	l	lya	s“co	l	lap	s	ing	,”
andi	sin	tendedtoadd	re	s	sthepo	s	s	ib	leman	ipu	la	t	iono	fdump	ingma	rg	in	sbya	f	f	i	l	ia	ted
compan	ie	s	.7 SeeV	i	ra	jG	rp	.v	.Un	i	tedS	ta	te	s,476F	.3d1349	,1356(Fed	.C	i	r	.2007	)	. The
Depa	r	tmen	t	’	sregu	la	t	ion	spe	rm	i	tComme	rcetot	rea	ta	f	f	i	l	ia	tedp	roduce	r	sa	sas	ing	leen	t	i	ty“whe	re
tho	sep	roduce	r	shavep	roduc	t	ionfac	i	l	i	t	ie	sfo	rs	im	i	la	ro	riden	t	ica	lp	roduc	t	stha	twou	ldno	trequ	i	re
sub	s	tan	t	ia	lre	too	l	ingo	fe	i	the	rfac	i	l	i	tyino	rde	rtore	s	t	ruc	tu	remanu	fac	tu	r	ingp	r	io	r	i	t	ie	sandthe
Sec	re	ta	ryconc	lude	stha	tthe	rei	sas	ign	i	f	ican	tpo	ten	t	ia	lfo	rtheman	ipu	la	t	iono	fp	r	iceo	r
p	roduc	t	ion	.”19C	.F	.R	.§351	.401	(	f	)	(1	)	.
7TheDepa	r	tmen	t	’	sdec	i	s	ionto“co	l	lap	se”Y	iehPhu	iEn	te	rp	r	i	seCo	.	,L	td	.(“Y	iehPhu	i”	)
w	i	thSynni	suncha	l	lenged	.
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Comme	rced	i	scu	s	sedi	t	sdec	i	s	ionina“Co	l	lap	s	ing Memo	randum	,”inwh	ichi	tf	i	r	s	t
de	te	rm	inedtha	tP	ro	spe	r	i	ty	,Y	iehPhu	i	,andSynnwe	rea	l	la	f	f	i	l	ia	tedw	i	th	inthemean	ingo	fsec	t	ion
771	(33	)o	ftheTa	r	i	f	fAc	t	,19U	.S	.C	.§1677	(33	)	. F	ina	lA	f	f	i	l	ia	t	ionandCo	l	lap	s	ing Memo	randum
a	t3-4(	June2,2016	)(C	.R	.Doc	.595	)(P	.R	.Doc	.379	)(“Co	l	lap	s	ing Mem	.”	);seea	l	soF	ina	l
De	te	rm	ina	t	ion,81Fed	. Reg	.a	t35	,314;F	ina	lDec	i	s	ion Mem	.a	t24-28	.	8 TheDepa	r	tmen	tthen
foundtha	tbecau	seP	ro	spe	r	i	ty	,Y	iehPhu	i	,andSynneacha	l	readymanu	fac	tu	redme	rchand	i	se
w	i	th	inthescopeo	ftheinve	s	t	iga	t	ion	,thep	roduce	r	shave“p	roduc	t	ionfac	i	l	i	t	ie	sfo	rs	im	i	la	ro	r
iden	t	ica	lp	roduc	t	sanddono	trequ	i	resub	s	tan	t	ia	lre	too	l	ingo	fthe	i	rfac	i	l	i	t	ie	sino	rde	rtore	s	t	ruc	tu	re
manu	fac	tu	r	ingp	r	io	r	i	t	ie	s	.” Co	l	lap	s	ing Mem.a	t5-6(c	i	t	ing19C	.F	.R	.§351	.401	(	f	)	(1	)	)	. Nopa	r	ty
cha	l	lenge	sthe	sea	spec	t	so	ftheDepa	r	tmen	t	’	sco	l	lap	s	ingana	ly	s	i	s	.
Comme	rcenex	tcon	s	ide	redwhe	the	r“as	ign	i	f	ican	tpo	ten	t	ia	lfo	rtheman	ipu	la	t	iono	fp	r	ice
o	rp	roduc	t	ion”ex	i	s	tedbe	tweentheth	reecompan	ie	s	.See19C	.F	.R	.§351	.401	(	f	)	(2	)	. The
Depa	r	tmen	t	’	sregu	la	t	ionl	i	s	t	sth	reefac	to	r	stha	tmaybecon	s	ide	redinde	te	rm	in	ingwhe	the	rthe	re
i	sa“	s	ign	i	f	ican	tpo	ten	t	ia	lfo	rman	ipu	la	t	ion”o	fdump	ingma	rg	in	sbya	f	f	i	l	ia	tedcompan	ie	s	. The	se
fac	to	r	sa	re	:
(	i	) Theleve	lo	fcommonowne	r	sh	ip	;
(	i	i	) Theex	ten	ttowh	ichmanage	r	ia	lemp	loyee	so	rboa	rdmembe	r	so	fonef	i	rm
s	i	tontheboa	rdo	fd	i	rec	to	r	so	fana	f	f	i	l	ia	tedf	i	rm	;and
(	i	i	i	) Whe	the	rope	ra	t	ion	sa	rein	te	r	tw	ined	,sucha	sth	roughthesha	r	ingo	fsa	le	s
in	fo	rma	t	ion	,invo	lvemen	tinp	roduc	t	ionandp	r	ic	ingdec	i	s	ion	s	,thesha	r	ing
o	ffac	i	l	i	t	ie	so	remp	loyee	s	,o	rs	ign	i	f	ican	tt	ran	sac	t	ion	sbe	tweenthea	f	f	i	l	ia	ted
p	roduce	r	s	.
8Comme	rcep	re	sen	tedi	t	sana	ly	s	i	sfo	ri	t	sdec	i	s	iontocomb	ineP	ro	spe	r	i	tyT	iehEn	te	rp	r	i	se
Co	.	,L	td	.(“P	ro	spe	r	i	ty”	)w	i	ththeY	iehPhu	i	/Synnen	t	i	tyinasepa	ra	tememo	randum	,inco	rpo	ra	ted
byre	fe	rence	,becau	seo	fthep	re	senceo	fbu	s	ine	s	sp	rop	r	ie	ta	ryin	fo	rma	t	ion	.
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Con	so	l	.Cour	tNo	.16	-00138 Page17
19C	.F	.R	.§351	.401	(	f	)	(2	)	. Th	i	sl	i	s	to	ffac	to	r	si	snon	-exhau	s	t	iveandre	f	lec	t	stheDepa	r	tmen	t	’	s
pos	i	t	iontha	tco	l	lap	s	ingde	te	rm	ina	t	ion	sa	reh	igh	lyfac	t	-	spec	i	f	icanda	retobemadeona
ca	se	-by-ca	seba	s	i	s	.F	ina	lRu	le,62Fed	.Reg	.a	t27	,345	-46	.
Ineva	lua	t	ingthef	i	r	s	tfac	to	riden	t	i	f	iedin§351	.401	(	f	)	(2	)	,theleve	lo	fcommon
owne	r	sh	ip	,Comme	rcede	te	rm	inedtha	tas	ign	i	f	ican	tleve	lo	fcommonowne	r	sh	ipex	i	s	t	edbe	tween
P	ro	spe	r	i	tyandSynnba	sedonP	ro	spe	r	i	ty’	shav	ingbeenasha	reho	lde	rinSynn	.Co	l	lap	s	ing Mem	.
a	t6-7	. Comme	rcere	jec	tedP	ro	spe	r	i	ty	’	sa	rgumen	ttha	tth	i	s§351	.401	(	f	)	(2	)fac	to	rwe	ighed
aga	in	s	tco	l	lap	s	ingduetoP	ro	spe	r	i	ty	’	shav	ingso	ldi	t	sowne	r	sh	ipin	te	re	s	tinSynnsub	sequen	tto
thePO	I	,no	t	ingtha	t“	theDepa	r	tmen	ti	sob	l	iga	tedtocon	s	ide	rin	fo	rma	t	ionconce	rn	ing
c	i	rcum	s	tance	stha	tex	i	s	tedandeven	t	stha	toccu	r	redon	lydu	r	ingthePO	I	.”Id	.
Comme	rcenex	tana	ly	zedthesecond§351	.401	(	f	)	(2	)fac	to	r	,“	theex	ten	ttowh	ich
manage	r	ia	lemp	loyee	so	rboa	rdmembe	r	so	fonef	i	rms	i	tontheboa	rdo	fd	i	rec	to	r	so	fana	f	f	i	l	ia	ted
f	i	rm	.”Co	l	lap	s	ing Mem	.a	t7.Comme	rcefoundtha	tthese	rv	iceo	fP	ro	spe	r	i	ty	’	scha	i	rmana	sone
o	fSynn	’	sth	reeboa	rdmembe	r	scon	s	t	i	tu	teds	ign	i	f	ican	tmanage	r	ia	love	r	lapbe	tweenP	ro	spe	r	i	ty
andSynndu	r	ingthePO	I	.Id	.	9
Comme	rcethentu	rnedtothef	ina	lfac	to	rin§351	.401	(	f	)	(2	)	,theex	ten	ttowh	ichthe
ope	ra	t	ion	so	fP	ro	spe	r	i	tyandSynnwerein	te	r	tw	ined	.Co	l	lap	s	ing Mem	.a	t7	.Comme	rcede	ta	i	led
theex	ten	ttowh	ichga	lvan	iz	ingse	rv	ice	spe	r	fo	rmedbyP	ro	spe	r	i	tyfo	rSynnpu	r	suan	ttoato	l	l	ing
ag	reemen	taccoun	tedfo	rSynn	’	sove	ra	l	lp	roduc	t	iono	fCOREdu	r	ingthePO	I	.Id	. Comme	rce
fu	r	the	rno	tedhowth	i	s“	to	l	l	ing	/ga	lvan	iz	ingcon	t	rac	t”g	ran	tedSynnce	r	ta	inacce	s	stoP	ro	spe	r	i	ty	’	s
book	sandreco	rd	s	.Id	. Nex	t	,Comme	rcede	ta	i	ledco	ld	-	ro	l	l	ingse	rv	ice	stha	tSynnpe	r	fo	rmedfo	r
9Th	i	sin	fo	rma	t	ionwa	st	rea	teda	scon	f	iden	t	ia	la	ttheadm	in	i	s	t	ra	t	iveleve	l	. Howeve	r	,
P	ro	spe	r	i	ty	’	sb	r	ie	fbe	fo	rethecou	r	td	i	sc	lo	se	sth	i	sin	fo	rma	t	iontothepub	l	ic	.SeeP	ro	spe	r	i	ty	’	s
B	r	.18	.
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Con	so	l	.Cour	tNo	.16	-00138 Page18
P	ro	spe	r	i	typu	r	suan	ttoapu	rcha	seandsa	leag	reemen	tdu	r	ingthePO	I	.Id	. Comme	rceca	lcu	la	ted
thepe	rcen	tagetha	tthe	seco	ld	-	ro	l	l	ingse	rv	ice	srep	re	sen	tedo	fthe“ove	ra	l	lco	ld	-	ro	l	l	ingse	rv	ice	s
SynnIndu	s	t	r	ia	lp	rov	idedtoa	l	lcu	s	tome	r	s	.”Id	.F	ina	l	ly	,Comme	rceno	tedtheex	ten	ttowh	ich
Synn	’	sf	inanc	ia	ls	ta	temen	t	sre	f	lec	tedsa	le	stoP	ro	spe	r	i	tyandpu	rcha	se	sf	romP	ro	spe	r	i	tydu	r	ing
thePO	I	.Id	.a	t8-9	.
Comme	rcefoundtha	tthe“	[t	]o	l	l	inga	r	rangemen	t	sandpu	rcha	seandsa	leag	reemen	t	s
be	tweenP	ro	spe	r	i	tyT	iehandSynnIndu	s	t	r	ia	l[we	re	]ind	ica	t	ive”o	fin	te	r	tw	inedope	ra	t	ion	s	.Id	.
a	t7	.Comme	rceconc	ludedtha	tP	ro	spe	r	i	ty	,“bymean	so	fowne	r	sh	ip	,ove	r	lapp	ingmanagemen	t	,
andin	te	r	tw	inedope	ra	t	ion	sbe	tweeni	t	se	l	fandSynnIndu	s	t	r	ia	l	,[wa	s	]inapo	s	i	t	ionto man	ipu	la	te
p	r	iceo	rp	roduc	t	ion	.”Id	.a	t8	.
P	ro	spe	r	i	tycha	l	lenge	stheDepa	r	tmen	t	’	sdec	i	s	iontoco	l	lap	seP	ro	spe	r	i	tyw	i	ththeY	ieh
Phu	i	/Synnen	t	i	tybya	rgu	ing	,inpa	r	t	,tha	tce	r	ta	ino	ftheDepa	r	tmen	t	’	s“	in	te	r	tw	inedope	ra	t	ion	s	”
f	ind	ing	sa	reno	tsuppo	r	tedbysub	s	tan	t	ia	lev	idence	.P	ro	spe	r	i	ty	’	sB	r	.21	;P	ro	spe	r	i	ty	’	sRep	ly
B	r	.7-9	.P	ro	spe	r	i	typo	in	t	storeco	rdev	idencetha	tce	r	ta	infac	t	sre	l	iedonbyComme	rcewe	re
ba	sedonda	tafo	rca	lenda	ryea	r2014	,ra	the	rthanonda	tacove	r	ingthePO	I(Ap	r	i	l1	,2014
th	rough Ma	rch31	,2015	)	,a	stheDepa	r	tmen	thadc	la	imed	.P	ro	spe	r	i	ty	’	sB	r	.21	;P	ro	spe	r	i	ty	’	s
Rep	lyBr	.7-9	.P	ro	spe	r	i	tya	l	soh	igh	l	igh	t	sreco	rdev	idenceshow	ingtha	ttheen	t	i	re	tyo	fthe
co	ld	-	ro	l	l	ingse	rv	ice	sp	rov	idedbySynnfo	rP	ro	spe	r	i	tytookp	lacep	r	io	rtothePO	I	,ra	the	rthan
du	r	ingi	t	,a	sComme	rcehadconc	ludedintheCo	l	lap	s	ing Memo	randum	.P	ro	spe	r	i	ty	’	sB	r	.21	;
P	ro	spe	r	i	ty	’	sRep	lyB	r	.8	.
Rega	rd	ingthet	im	ingo	ftheco	ld	-	ro	l	l	ingse	rv	ice	stha	tSynnpe	r	fo	rmedfo	rP	ro	spe	r	i	ty,
de	fendan	tadm	i	t	stha	tComme	rceinco	r	rec	t	lys	ta	tedintheCo	l	lap	s	ing Memo	randumtha	tthe
co	ld	-	ro	l	l	ingse	rv	ice	sSynnp	rov	idedfo	rP	ro	spe	r	i	tyoccu	r	reddu	r	ingthePO	I	. De	f	.	’	sOpp	’n43
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(acknow	ledg	ingtha	t“P	ro	spe	r	i	tyi	sco	r	rec	ttha	tth	i	sf	igu	red	idno	tpe	r	ta	intothepe	r	iodo	f
inve	s	t	iga	t	ion”	)	. De	fendan	ta	l	soacknow	ledge	stha	ttheda	tade	ta	i	l	ingSynn	’	ssa	le	stoP	ro	spe	r	i	ty
andi	t	spu	rcha	se	sf	romP	ro	spe	r	i	tywe	refo	rca	lenda	ryea	r2014	,ra	the	rthanfo	rthePO	I	,a	sfound
byComme	rce	.Id	.a	t44	. De	fendan	tfu	r	the	racknow	ledge	stha	thadComme	rceexam	inedthe
pu	rcha	se	sandsa	le	stha	ttookp	lacebe	tweenSynnandP	ro	spe	r	i	tydu	r	ingthePO	Ira	the	rthan
du	r	ingthe2014ca	lenda	ryea	r	,thes	ign	i	f	icance	,inpe	rcen	tagete	rm	s	,o	fthe	sepu	rcha	se	sandsa	le	s
“mayhavebeenlowe	r	.”Id	.a	t44	-45	.Wh	i	lede	fendan	tacknow	ledge	son	lytha	tthes	ign	i	f	icance
o	fthepu	rcha	se	sandsa	le	s“mayhavebeenlowe	rdu	r	ingtheove	ra	l	lpe	r	iodo	finve	s	t	iga	t	ion	,”id	.	,
reco	rdev	idencedemon	s	t	ra	te	sthepu	rcha	se	sandsa	le	sbe	tweenSynnandP	ro	spe	r	i	tywe	reinfac	t
le	s	ss	ign	i	f	ican	tove	rthePO	Ithanove	rca	lenda	ryea	r2014	.SeeP	ro	spe	r	i	ty	’	sB	r	.21	. Thu	si	t
canno	tbesa	idtha	tu	s	ingca	lenda	ryea	rda	ta	,a	soppo	sedtoPO	Ida	ta	,hadnopo	ten	t	ia	ltoa	f	fec	t
thef	ina	lde	te	rm	ina	t	ion	.
De	fendan	ta	rgue	stha	t,de	sp	i	tethee	r	ro	r	si	tacknow	ledge	s	,thecou	r	tshou	ldru	letha	tthe
sub	s	tan	t	ia	lreco	rdev	idences	t	i	l	lsuppo	r	t	stheDepa	r	tmen	t	’	sco	l	lap	s	ingde	te	rm	ina	t	ion	. De	f	.	’	s
Opp	’n33	-45	. De	fendan	ta	rgue	stha	t“evend	i	s	rega	rd	ingthein	fo	rma	t	iontha	twa	sou	t	s	idethe
per	iodo	finve	s	t	iga	t	ion	,the	rewa	ss	ign	i	f	ican	tev	idencesuppo	r	t	ingin	te	r	tw	inedope	ra	t	ion	sonthe
reco	rd	.”Id	.a	t40	-41(c	i	t	ingCe	ram	icaReg	iomon	tana	,S	.A	.v	.Un	i	tedS	ta	te	s,810F	.2d1137	,1139
(Fed	.C	i	r	.1987	)	)	. Thecou	r	td	i	sag	ree	s	. Becau	seth	i	sCou	r	t	,l	ikeanycou	r	trev	iew	inganagency
act	ion	,mu	s	tconduc	ti	t	srev	iewacco	rd	ingtothef	ind	ing	so	ffac	tandtherea	son	ingtheagency
pu	t	sfo	r	th	,theDepa	r	tmen	t	’	sco	l	lap	s	ingdec	i	s	ioncanno	tbesu	s	ta	inedacco	rd	ingtotheapp	l	icab	le
s	tanda	rdo	frev	iew	.SeeSECv	.Chene	ryCo	rp.	,332U	.S	.194	,196(1947	)	. Becau	sethe
co	l	lap	s	ingdec	i	s	ionwa	sba	sedone	r	roneou	sf	ind	ing	so	ffac	t	,thecou	r	tmu	s	to	rde	rComme	rceto
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recon	s	ide	rtha	tdec	i	s	ionandreachanewde	te	rm	ina	t	ionba	sedonf	ind	ing	stha	ta	resuppo	r	tedby
sub	s	tan	t	ia	lev	idenceonthereco	rdo	ftheinve	s	t	iga	t	ion	.
D	. Comme	rceApp	l	iedFac	t	sO	the	rw	i	seAva	i	lab	le	,andanAdve	r	seIn	fe	rence	,Ba	sedonan
Inva	l	idF	ind	ingtha	tP	ro	spe	r	i	ty M	i	sc	la	s	s	i	f	iedtheY	ie	ldS	t	reng	tho	fCe	r	ta	inCORESa	le	s
Th	roughque	s	t	ionna	i	re	si	s	sueddu	r	ingtheinve	s	t	iga	t	ion	,Comme	rcesough	ttoa	sce	r	ta	in
thephy	s	ica	lcha	rac	te	r	i	s	t	ic	so	fthere	sponden	t	s	’sub	jec	tme	rchand	i	se	,inc	lud	ingthey	ie	lds	t	reng	th
o	feachind	iv	idua	lp	roduc	t	.Seegene	ra	l	lyIn	i	t	ia	lAn	t	idump	ingDu	tyQue	s	t	ionna	i	refo	rP	ro	spe	r	i	ty
T	iehEn	te	rp	r	i	seCo	.	,L	td	.a	tB	-11toB	-12	,C	-9toC	-10(Aug	.7	,2015	)(P	.R	.Doc	.97	);seea	l	so
Memo	randumRega	rd	ingCo	r	rec	t	iontoY	ie	ldS	t	reng	thF	ie	ldo	fIn	i	t	ia	lQue	s	t	ionna	i	re
(Aug	.14	,2015	)(P	.R	.Doc	.102	)(“	Yie	ldS	t	reng	th Mem	.	”	)	. Comme	rceu	sedtherepo	r	tedphy	s	ica	l
cha	rac	te	r	i	s	t	ic	sinapp	ly	ingp	roduc	t	-	spec	i	f	icmode	l	-ma	tch	ingc	r	i	te	r	iatha	ti	tthenu	sedwhen
compa	r	ingU	.S	.p	r	icetono	rma	lva	lue	.
Unde	rsec	t	ion776	(a	)	(2	)o	ftheTa	r	i	f	fAc	t	,19U	.S	.C	.§1677e	(a	)	(2	)	,Comme	rcei	sd	i	rec	ted
gene	ra	l	lytou	se“	fac	t	so	the	rw	i	seava	i	lab	leinreach	ingtheapp	l	icab	lede	te	rm	ina	t	ionunde	rth	i	s
sub	t	i	t	le”i	fapa	r	ty	:
(A	) w	i	thho	ld	sin	fo	rma	t	iontha	tha	sbeenreque	s	tedbytheadm	in	i	s	te	r	ing
au	tho	r	i	ty...unde	rth	i	ssub	t	i	t	le	,
(B	) fa	i	l	stop	rov	idesuchin	fo	rma	t	ionbythedead	l	ine	sfo	rsubm	i	s	s	iono	fthe
in	fo	rma	t	iono	rinthefo	rmandmanne	rreque	s	ted	,sub	jec	ttosub	sec	t	ion	s
(c	)	(1	)and(e	)o	fsec	t	ion1677mo	fth	i	st	i	t	le	,
(C	) s	ign	i	f	ican	t	lyimpede	sap	roceed	ingunde	rth	i	ssub	t	i	t	le	,o	r
(D	) p	rov	ide	ssuchin	fo	rma	t	ionbu	tthein	fo	rma	t	ioncanno	tbeve	r	i	f	ieda	s
p	rov	idedinsec	t	ion1677m	(	i	)o	fth	i	st	i	t	le	[	.	]
19U	.S	.C	.§1677e	(a	)	(2	)	.Re	ly	inguponc	lau	se	s(B	)and(D	)	,Comme	rcefoundtha	tP	ro	spe	r	i	ty
fa	i	ledtosubm	i	tce	r	ta	inin	fo	rma	t	ionw	i	th	inapp	l	icab	let	imel	im	i	t	sandfa	i	ledtop	rov	ideve	r	i	f	iab	le
in	fo	rma	t	ion	.F	ina	lDec	i	s	ion Mem.a	t18(“Thu	s	,wede	te	rm	ine	,ba	sedonou	rf	ind	ing	sa	tthesa	le	s
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ve	r	i	f	ica	t	ion	,tha	tPT[i	.e	.	,P	ro	spe	r	i	ty	]fa	i	ledtosubm	i	tthereque	s	tedin	fo	rma	t	ionw	i	th	inthe
app	l	icab	let	imel	im	i	t	s	,andfa	i	ledtop	rov	idein	fo	rma	t	iontha	tcou	ldbeve	r	i	f	ied	.”	).	10
Th	i	si	s	suea	ro	sef	romthewayinwh	ichP	ro	spe	r	i	tyc	la	s	s	i	f	ied	,w	i	th	inoneo	fs	ixca	tego	r	ie	s
de	f	inedintheDepa	r	tmen	t	’	sque	s	t	ionna	i	re	,ce	r	ta	ino	fi	tsCOREp	roduc	t	sacco	rd	ingtoy	ie	ld
s	t	reng	th	.Id	.a	t11-19	. Comme	rcein	te	rp	re	tedi	t	sownin	s	t	ruc	t	ion	stomeantha	tre	sponden	t	smu	s	t
c	la	s	si	fyp	roduc	t	sacco	rd	ingto m	in	imumy	ie	lds	t	reng	tha	sspec	i	f	iedbyanapp	l	icab	leindu	s	t	ry
s	tanda	rd	,whe	reonepe	r	ta	inedtothep	roduc	tbe	ingrepo	r	ted	.Seeid.a	t13	. Therepo	r	t	ingo	f
y	ie	lds	t	reng	thwa	stobeinun	i	t	so	fpound	spe	rsqua	reinch(“p	s	i”	)	,conve	r	tedwhe	renece	s	sa	ry	.
SeeY	ie	ldS	t	reng	th Mem	.a	t1-2	. A	tve	r	i	f	ica	t	ion	,Comme	rcefoundtha	tP	ro	spe	r	i	tyhad
m	i	sc	la	s	s	i	f	iedce	r	ta	ino	fi	t	sp	roduc	t	sinrepo	r	t	ingsa	le	sintheda	taba	se	sbyp	lac	ingthe	sep	roduc	t	s
inthew	rongy	ie	lds	t	reng	thca	tego	ry	.F	ina	lDec	i	s	ion Mem.a	t13	;Ve	r	i	f	ica	t	iono	ftheSa	le	s
Re	spon	se	so	fP	ro	spe	r	i	tyT	iehEn	te	rp	r	i	seCo	.	,L	td	.a	t9(Ap	r	.13	,2016	)(P	.R	.Doc	.341	)
(C	.R	.Doc	.568	)	.Comme	rcefound	,fu	r	the	r	,tha	t“	[b	]ecau	sethequan	t	i	tyandco	s	t	so	fthem	ixo	f
p	roduc	t	sinc	ludedinthewe	igh	ted	-ave	ragem	ixo	fthem	i	s	repo	r	tedCONNUM	s[i	.e	.	,con	t	ro	l
numbe	r	s	]we	reinco	r	rec	t	,therepo	r	tedco	s	twa	sd	i	s	to	r	tedfo	rtho	seCONNUM	s	.” M	in	i	s	te	r	ia	l
E	r	ro	r Memo	randumConce	rn	ingtheF	ina	lDe	te	rm	ina	t	ionintheAn	t	idump	ingDu	tyInve	s	t	iga	t	ion
o	fCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sf	romTa	iwana	t1-2(	Ju	ly19	,2016	)
10Comme	rcefoundtha	tSynna	l	som	i	srepo	r	tedy	ie	lds	t	reng	thfo	rce	r	ta	ino	fi	t	shome
ma	rke	tsa	le	s	. F	ina	lDec	i	s	ion Mem	.a	t19	;Sa	le	sVe	r	i	f	ica	t	ionRep	.fo	rSynna	t9.IntheF	ina	l
De	te	rm	ina	t	ion	,Comme	rceapp	l	iedfac	t	so	the	rw	i	seava	i	lab	lew	i	thanin	fe	renceadve	r	setoSynn
fo	rthesa	le	si	tfoundtohavebeenm	i	s	repo	r	ted	.F	ina	lDec	i	s	ion Mem	.a	t19	. A	sfac	t	so	the	rw	i	se
ava	i	lab	lew	i	thanadve	r	sein	fe	rence	,Comme	rce“a	s	s	ignedtoSynn	,intheco	s	tda	taba	se	,theco	s	t	s
a	s	soc	ia	tedw	i	ththeh	ighe	s	tTOTCOM[i	.e	.	,to	ta	lco	s	to	fmanu	fac	tu	r	ing	]fo	rce	r	ta	insa	le	sinthe
g	roupo	finco	r	rec	t	lycodedsa	le	s	.”Id	.Thei	s	sueo	fa	l	legedm	i	s	repo	r	t	ingbySynni	sno	tbe	fo	re
thecou	r	t	.Synni	sno	tapa	r	tytoth	i	sac	t	ion	,andne	i	the	rP	ro	spe	r	i	tyn	o	rY	iehPhu	icha	l	lengedthe
Depa	r	tmen	t	’	sdec	i	s	iontoapp	lyfac	t	so	the	rw	i	seava	i	lab	lew	i	thanadve	r	sein	fe	rencetoSynn	’	s
homema	rke	tsa	le	stha	tComme	rcefoundtohavebeenimp	rope	r	lyrepo	r	ted	.
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Con	so	l	.Cour	tNo	.16	-00138 Page22
(P	.R	.Doc	.386	)(“	M	in	i	s	te	r	ia	lE	r	ro	r Mem	.”)	;seea	l	soF	ina	lDec	i	s	ion Mem	.a	t19(exp	la	in	ingtha	t
“becau	setheco	s	t	sfo	rtheCONNUM	sw	i	th‘6	’and‘7	’m	in	imumspec	i	f	iedy	ie	lds	t	reng	th	sa	re
inco	r	rec	t	lycom	ing	led	,welackthein	fo	rma	t	ionnece	s	sa	rytorecodetheco	s	t	sfo	rthem	i	scoded
g	roupo	fCONNUM	s”	)	.
Comme	rceadd	i	t	iona	l	lyfoundtha	tP	ro	spe	r	i	tyd	idno	tcoope	ra	tetothebe	s	to	fi	t	sab	i	l	i	tyin
re	spond	ingtotheDepa	r	tmen	t	’	sin	fo	rma	t	ionreque	s	tand	,ba	sedontha	tf	ind	ing	,u	sedanadve	r	se
in	fe	renceunde	r19U	.S	.C	.§1677e	(b	)inse	lec	t	ingf	romthefac	t	so	the	rw	i	seava	i	lab	le	.F	ina	l
Dec	i	s	ion Mem.a	t19. A	sanadve	r	sein	fe	rence	,Comme	rcea	s	s	igned	,intheco	s	tda	taba	se	,the
co	s	t	sa	s	soc	ia	tedw	i	ththeh	ighe	s	tva	r	iab	leandto	ta	lco	s	to	fmanu	fac	tu	r	ingf	romthepopu	la	t	iono	f
a	l	lCONNUM	sa	f	fec	tedbythea	l	legedm	i	sc	la	s	s	i	f	ica	t	iona	ssub	s	t	i	tu	tein	fo	rma	t	ioninca	lcu	la	t	ing
thewe	igh	ted	-ave	ragedump	ingma	rg	in	.Id	.	;M	in	i	s	te	r	ia	lE	r	ro	r Mem.a	t5	.
Be	fo	rethecou	r	t	,P	ro	spe	r	i	tyc	la	im	stha	ttheDepa	r	tmen	t	’	sf	ind	ingtha	tP	ro	spe	r	i	ty
m	i	sc	la	s	s	i	f	iedthey	ie	lds	t	reng	tho	fce	r	ta	insa	le	so	fCOREi	sno	tsuppo	r	tedbysub	s	tan	t	ia	l
ev	idence	.P	ro	spe	r	i	ty	’	sB	r	.25-29	;P	ro	spe	r	i	ty	’	sRep	lyB	r	.10-16	.P	ro	spe	r	i	tya	rgue	stha	t
Comme	rce	,the	re	fo	re	,d	idno	thaveau	tho	r	i	tyunde	r19U	.S	.C	.§1677e	(a	)	(2	)tou	sefac	t	s
o	the	rw	i	seava	i	lab	leo	ranadve	r	sein	fe	rence	.P	ro	spe	r	i	ty	’	sB	r	.32	-43;P	ro	spe	r	i	ty	’	sRep	ly
B	r	.20	-23	.P	ro	spe	r	i	tycon	tend	stha	ti	tpe	rm	i	s	s	ib	lyin	te	rp	re	tedtheDepa	r	tmen	t	’	sin	s	t	ruc	t	ion	sto
a	l	lowi	ttoc	la	s	s	i	fyeacho	fi	t	sCOREp	roduc	t	sacco	rd	ingtooneo	fi	t	sownin	te	rna	lspec	i	f	ica	t	ion	s
fo	ry	ie	lds	t	reng	th	.P	ro	spe	r	i	ty	’	sB	r	.26-29	;P	ro	spe	r	i	ty	’	sRep	lyB	r	.11	-16	.P	ro	spe	r	i	tysubm	i	t	stha	t
i	ttookth	i	sapp	roachwheneve	ranin	te	rna	lm	in	imumspec	i	f	ica	t	ionfo	ry	ie	lds	t	reng	thex	i	s	tedini	t	s
P	roduc	tCod	ingSy	s	tem	,ra	the	rthanay	ie	lds	t	reng	thm	in	imumspec	i	f	iedbyas	tanda	rd	s
o	rgan	iza	t	ion	.P	ro	spe	r	i	ty	’	sRep	lyB	r	.10	. Acco	rd	ingtoP	ro	spe	r	i	ty	,theon	lyin	s	tance	sinwh	ichi	t
d	idno	tu	sethey	ie	lds	t	reng	tha	sspec	i	f	iedini	t	sownin	te	rna	lP	roduc	tCod	ingSy	s	temwa	swhe	re
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Con	so	l	.Cour	tNo	.16	-00138 Page23
i	t	sin	te	rna	lsy	s	temd	idno	tspec	i	fyam	in	imumy	ie	lds	t	reng	th	.Id	.P	ro	spe	r	i	tys	ta	te	stha	tintho	se
in	s	tance	si	trepo	r	tedthey	ie	lds	t	reng	thu	s	ingthe m	in	imumy	ie	lds	t	reng	thspec	i	f	iedinas	tanda	rd
towh	ichthep	roduc	tcon	fo	rmed	,a	sse	tbyanin	te	rna	t	iona	ls	tanda	rd	so	rgan	iza	t	ion	.Id	.
Re	spond	ingtotheDepa	r	tmen	t	’	sque	s	t	ionna	i	re	,P	ro	spe	r	i	tysubm	i	t	tedin	fo	rma	t	ion
rega	rd	ingi	t	sU	.S	. ma	rke	tandhomema	rke	tsa	le	so	fCORE	.SeeP	ro	spe	r	i	tyT	iehEn	te	rp	r	i	seCo	.	,
L	td	.	’	sSec	t	ion	sB	-DQue	s	t	ionna	i	reRe	spon	se	s(Oc	t	.14	,2015	)(P	.R	.Doc	s	.136	-40	)
(C	.R	.Doc	s	.95	-113	)	.Ini	t	sque	s	t	ionna	i	rere	spon	se	s	,P	ro	spe	r	i	tyexp	la	inedtheP	roduc	tCod	ing
Sy	s	temtha	ti	tu	sedintheno	rma	lcou	r	seo	fbu	s	ine	s	s	.Id	.a	tB	-10toB	-11	,C	-6toC	-7(exp	la	in	ing
th	a	ttheP	roduc	tCod	ingSy	s	temi	su	sedtode	s	igna	teva	r	iou	sp	roduc	tcha	rac	te	r	i	s	t	ic	s	,inc	lud	ingthe
mechan	ica	lcha	rac	te	r	i	s	t	ic	s(	sucha	sy	ie	lds	t	reng	th	)	,o	fP	ro	spe	r	i	ty	’	sp	roduc	t	ion	)	.11 P	ro	spe	r	i	tya	l	so
s	ta	tedtha	t“	they	ie	lds	t	reng	tho	fthesub	jec	tme	rchand	i	seso	ldineachhome ma	rke	tsa	leha	sbeen
repo	r	te	dinthe‘CSTRENH	’[i	.e	.	,y	ie	lds	t	reng	th	]f	ie	ldinthehomema	rke	tda	taba	se	,in
acco	rdancew	i	ththeaboveme	thodo	logy[i	.e	.	,theY	ie	ldS	t	reng	th Memo	randum	]	.	”Id	.a	tB	-17
toB	-18;seea	l	soid	.a	tC	-13toC	-14(	repo	r	t	ingy	ie	lds	t	reng	tho	fU	.S	. ma	rke	tsa	le	sinthesame
fa	sh	ion	)	.P	ro	spe	r	i	typ	rov	idedComme	rce	,pu	r	suan	ttotheDepa	r	tmen	t	’	sin	s	t	ruc	t	ion	s	,acompu	te	r
f	i	leandp	r	in	tou	tde	ta	i	l	ingP	ro	spe	r	i	ty	’	sU	.S	.andhomema	rke	tsa	le	sdu	r	ingthePO	I	.Seeid.
a	tEx	.B	-1(P	ro	spe	r	i	ty	’	shomema	rke	tsa	le	sf	i	lelayou	tandsamp	lep	r	in	t	)	.
1	. Reco	rdEv	idenceDoe	sNo	tSuppo	r	ttheDepa	r	tmen	t	’	sF	ind	ingtha	tP	ro	spe	r	i	ty M	i	s	repo	r	tedthe
Y	ie	ldS	t	reng	tho	fCe	r	ta	inSa	le	so	fCORE
Re	so	lv	ingthei	s	suebe	fo	rethecou	r	trequ	i	re	sexam	ina	t	iono	fthein	s	t	ruc	t	ion	sComme	rce
i	s	suedtoP	ro	spe	r	i	tytoa	sce	r	ta	inwhe	the	rtheDepa	r	tmen	t	’	sfac	tua	lf	ind	ingtha	tP	ro	spe	r	i	ty
11P	ro	spe	r	i	tysubm	i	t	tedfo	rthereco	rdacopyo	fi	t	sP	roduc	tCod	ingSy	s	temini	t	s
Sec	t	ionAque	s	t	ionna	i	rere	spon	se	s	. P	ro	spe	r	i	tyT	iehEn	te	rp	r	i	seCo	.	,L	td	.	’	sSec	t	ionA
Que	s	t	ionna	i	reRe	spon	se	sa	tEx.A	-24(Sep	t	.16	,2015	)(P	.R	.Doc	s	.121-22	)(C	.R	.Doc	s	.43	-63	)	.
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“m	i	s	repo	r	ted”y	ie	lds	t	reng	thi	sava	l	idone	,i	.e	.	,onesuppo	r	tedbysub	s	tan	t	ia	lreco	rdev	idence	.
Thecou	r	tconc	lude	stha	ti	ti	sno	tava	l	idf	ind	ing	. TheDepa	r	tmen	t	’	sin	s	t	ruc	t	ion	sdono	tp	rec	lude
are	sponden	tf	romrepo	r	t	ing(	i	.e	.	,“cod	ing”	)y	ie	lds	t	reng	thacco	rd	ingtomanu	fac	tu	re	r	’	s
spec	i	f	ica	t	ion	sra	the	rthananex	te	rna	l	,e	s	tab	l	i	shedindu	s	t	rys	tanda	rd	.Toi	l	lu	s	t	ra	teth	i	spo	in	t	,the
cou	r	tse	t	sfo	r	thbe	lowthein	s	t	ruc	t	ion	sComme	rcei	s	suedpe	r	ta	in	ingtotherepo	r	t	ingo	fy	ie	ld
s	t	reng	thandana	lyze	seachpa	rag	raphthe	re	in	.
F	IELDNUMBER3	.7	: Y	IELDSTRENGTH
F	IELDNAME	: CSTRENH	/U
DESCR	IPT	ION	: Y	ie	ldS	t	reng	th
1= M	in	imumspec	i	f	iedy	ie	lds	t	reng	thunde	r25	,000p	s	i
3= M	in	imumspec	i	f	iedy	ie	lds	t	reng	tho	f>=25	,000p	s	ibu	t<35	,000p	s	i
4= M	in	imumspec	i	f	iedy	ie	lds	t	reng	tho	f>=35	,000p	s	ibu	t<=50	,000p	s	i
5= M	in	imumspec	i	f	iedy	ie	lds	t	reng	tho	f>50	,000p	s	ibu	t<65	,000p	s	i
6= M	in	imumspec	i	f	iedy	ie	lds	t	reng	tho	f>=65	,000p	s	ibu	t<=80	,000p	s	i
7= M	in	imumspec	i	f	iedy	ie	lds	t	reng	thove	r80	,000p	s	i
Fo	rexamp	le	,unde	rASTMA1079	,them	in	imumspec	i	f	iedy	ie	lds	t	reng	th
fo	r“De	s	igna	t	ionCPg	rade780T	/500Y”i	s500 MPa	,wh	ichconve	r	t	sto
app	rox	ima	te	ly72	,519p	s	i	,sofo	rtha	tp	roduc	t	,youwou	ldrepo	r	tcode“6	.”
Whe	renom	in	imumy	ie	lds	t	reng	thi	srequ	i	red	,bu	tatyp	ica	lm	in	imumi	s
iden	t	i	f	iedw	i	th	inthespec	i	f	ica	t	ionf	romas	tanda	rd	so	rgan	iza	t	ionsucha	s
ASTM(e	.g	.	,unde	rASTMA653	,thetyp	ica	lrangeo	fy	ie	lds	t	reng	th	sfo	r
“De	s	igna	t	ionCSTypeA”i	siden	t	i	f	ieda	s25	,000p	s	ito55	,000p	s	i	,
y	ie	ld	ingatyp	ica	lm	in	imumo	f25	,000p	s	i	,wh	ichintu	rnfa	l	l	sunde	r
repo	r	t	ingcode“3”	)	.
I	fnosuchrequ	i	remen	t	so	rgu	idanceonm	in	imumspec	i	f	iedy	ie	lds	t	reng	th
i	siden	t	i	f	iedinthespec	i	f	ica	t	ionfo	rthep	roduc	tinque	s	t	ion	,exp	la	inin
de	ta	i	lyou	rra	t	iona	lefo	ru	s	ingoneo	ftheaboverepo	r	t	ingcode	storepo	r	t
th	i	sf	ie	ldfo	rthep	roduc	t(dono	tc	rea	teadd	i	t	iona	lrepo	r	t	ingcode	s	)	.
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Con	so	l	.Cour	tNo	.16	-00138 Page25
F	ina	l	ly	,p	rov	ideacha	r	ttha	tiden	t	i	f	ie	sa	l	lo	fthespec	i	f	ica	t	ion	s	/g	rade	s	/
type	s	/de	s	igna	t	ion	sinyou	rcompa	r	i	sonma	rke	tandU	.S	.ma	rke	tsa	le	s
da	taba	se	s	. A	f	te	riden	t	i	fy	inginthef	i	r	s	tco	lumnthecomp	le	te
spec	i	f	ica	t	ion	/g	rade	/	type	/de	s	igna	t	ioniden	t	i	f	ica	t	ion(	e	.g	.,“ASTMA653
De	s	igna	t	ionSSg	rade230”	)	,iden	t	i	fyinsub	sequen	tco	lumn	sthea	l	lowab	le
rangeo	fca	rboncon	ten	t	,them	in	imumspec	i	f	iedy	ie	lds	t	reng	th(	inpound	s
pe	rsqua	reinch	)	,them	in	imumspec	i	f	iedten	s	i	les	t	reng	th(	inpound	spe	r
squa	reinch	)	,andthem	in	imumspec	i	f	iede	longa	t	ionpe	rcen	tage	.Fo	rtho	se
va	lue	sinth	i	scha	r	ttha	ta	reba	sedonnon	-manda	to	rygu	idancep	rov	idedin
thespec	i	f	ica	t	ion(	sucha	sfo	rthem	in	imumy	ie	lds	t	reng	thfo	rtheASTM
A653CSTypeAp	roduc	t	sre	fe	rencedabove	)	,p	laceth	reea	s	te	r	i	sk	snex	tto
theva	lueinque	s	t	ion(	e	.g	.,“25	,000***”	)	.
Y	ie	ldS	t	reng	thMem	. a	t1	-2.	12 Thefau	l	tComme	rcefoundw	i	thP	ro	spe	r	i	ty	’	srepo	r	t	ingwa	s
con	f	inedtoag	roupo	fsa	le	so	fCOREtha	tP	ro	spe	r	i	tyc	la	s	s	i	f	ieda	scode7ba	sedontheabove
in	s	t	ruc	t	ion	s(“M	in	imumspec	i	f	iedy	ie	lds	t	reng	thove	r80	,000p	s	i”	)in	s	teado	fcode6(“M	in	imum
spec	i	f	iedy	ie	lds	t	reng	tho	f>=65	,000p	s	ibu	t<=80	,000p	s	i”	)	,wh	ichComme	rcebe	l	ievedwa	sthe
co	r	rec	tre	spon	se	.13 F	ina	lDec	i	s	ion Mem	.a	t13	.Comme	rcefoundtha	tth	i	soccu	r	redwhe	rethe
COREa	ti	s	suehadam	in	imumspec	i	f	iedy	ie	lds	t	reng	tho	fexac	t	ly80	,000p	s	i	,wheny	ie	ld
s	t	reng	thwa	sde	te	rm	inedacco	rd	ingtothespec	i	f	ica	t	ion	sinane	s	tab	l	i	shedin	te	rna	t	iona	ls	tanda	rd	.
Id	.(conc	lud	ingtha	tthe m	i	s	repo	r	t	ingo	fm	in	imumspec	i	f	iedy	ie	lds	t	reng	thoccu	r	red“a	tthecu	sp
o	ftheCONNUMcu	to	f	f”	)	. Thesa	le	sComme	rcefoundtohavebeenm	i	s	repo	r	teda	scode7
invo	lvedme	rchand	i	sec	la	s	s	i	f	iedinP	ro	spe	r	i	ty	’	sin	te	rna	lP	roduc	tCod	ingSy	s	tema	shav	inga
12Sevenday	sa	f	te	rtheIn	i	t	ia	lAn	t	idump	ingQue	s	t	ionna	i	rewa	si	s	suedtoP	ro	spe	r	i	ty	,
Comme	rcei	s	suedtheY	ie	ldS	t	reng	th Memo	randum	,wh	ichmadeam	ino	rrev	i	s	iontothetab	leon
y	ie	lds	t	reng	th	.See Memo	randumRega	rd	ingCo	r	rec	t	iontoY	ie	ldS	t	reng	thF	ie	ldo	fIn	i	t	ia	l
Que	s	t	ionna	i	re(Aug	.14	,2015	)(P	.R	.Doc	.102	)	. Therev	i	s	iondoe	sno	ta	f	fec	tthecou	r	t	’	s
ana	ly	s	i	s	.
13Theindu	s	t	ryspec	i	f	ica	t	ionspe	r	ta	in	ingtotheCONNUM	stha	tComme	rcede	te	rm	ined
we	reinco	r	rec	t	lyc	la	s	s	i	f	iedincode7in	s	teado	fcode6we	reAS1397	/G550	,ASTMA653	/SS80	,
ASTMA755	/SS80	,ASTMA792	/SS80	,ASTMA792	/SS80C	l	,andASTMA792M	/SS550	. See
M	in	i	s	te	r	ia	lE	r	ro	r Memo	randumConce	rn	ingtheF	ina	lDe	te	rm	ina	t	ionintheAn	t	idump	ingDu	ty
Inve	s	t	iga	t	iono	fCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sf	romTa	iwana	t1(	J	u	ly19	,2016	)
(P	.R	.Doc	.386	)	.
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Con	so	l	.Cour	tNo	.16	-00138 Page26
mechan	ica	lp	rope	r	tyg	radeo	f“S	t	ruc	tu	ra	l(YS>80K	s	i	)	,”i	.e	.	,a	shav	ingam	in	imumspec	i	f	ied
y	ie	lds	t	reng	thg	rea	te	rthan80	,000p	s	i	.SeeP	ro	spe	r	i	ty	’	sB	r	.9	-11	,27	-28	.
Thef	i	r	s	tp	rob	lemw	i	ththeDepa	r	tmen	t	’	s m	i	sc	la	s	s	i	f	ica	t	ionf	ind	ingi	stha	tComme	rced	id
no	tde	f	ineini	t	sque	s	t	ionna	i	rethemean	ingo	fthete	rm“M	in	imumspec	i	f	iedy	ie	lds	t	reng	th”a	s
u	sedini	t	stab	leo	fy	ie	lds	t	reng	thca	tego	r	ie	s(“code	s”	)	.SeeY	ie	ldS	t	reng	th Mem	.a	t1-2	. A	sa
re	su	l	t	,th	i	ste	rmcou	ldbereadtore	fe	rtothey	ie	lds	t	reng	tha	s“	spec	i	f	ied”bythemanu	fac	tu	re	ro	r
a	s“	spec	i	f	ied”byas	tanda	rd	so	rgan	iza	t	ion	.Second	,thefou	rpa	rag	raph	stha	tfo	l	lowdono	t
na	r	rowthemean	ingo	fthete	rm“M	in	imumspec	i	f	iedy	ie	lds	t	reng	th”inthewaytha	tComme	rce
a	s	sumed	. Thecou	r	ti	sno	tawa	reo	fanyo	the	rreco	rdin	fo	rma	t	iontha	td	idso	,andde	fendan	t
po	in	t	stonone	.
Thef	i	r	s	tpa	rag	raphtha	tfo	l	low	sthetab	lecon	s	i	s	t	so	fas	ing	lesen	tence	:“Fo	rexamp	le	,
unde	rASTMA1079	,the m	in	imumspec	i	f	iedy	ie	lds	t	reng	thfo	r‘De	s	igna	t	ionCPg	rade
780T	/500Y	’i	s500 MPa	,wh	ichconve	r	t	stoapp	rox	ima	te	ly72	,519p	s	i	,sofo	rtha	tp	roduc	t	,you
wou	ldrepo	r	tcode‘6	’	.” Y	ie	ldS	t	reng	th Mem	.a	t2	. Wh	i	leth	i	ssen	tencere	fe	r	stoanindu	s	t	ry
s	tanda	rd	,ASTMA1079	,i	tdoe	ssoon	lya	sanexamp	le	,no	ta	sad	i	rec	t	ivetoc	la	s	s	i	fyp	roduc	t	s
u	s	ingon	lyy	ie	lds	t	reng	thspec	i	f	ica	t	ion	sob	ta	inedf	romindu	s	t	rys	tanda	rd	s	.In	s	tead	,theexamp	le
i	sd	i	rec	tedtotheconve	r	s	iono	f MPa(megapa	sca	l	s	)topound	spe	rsqua	reinch	. Thesen	tence
doe	sno	ts	ta	tetha	ton	lytheu	seo	fy	ie	lds	t	reng	thspec	i	f	ica	t	ion	sine	s	tab	l	i	shedin	te	rna	t	iona	l
indu	s	t	rys	tanda	rd	s	,no	tmanu	fac	tu	re	r	’	sspec	i	f	ica	t	ion	s	,a	reaccep	tab	le	.
Thesecondpa	rag	raphfa	i	l	stocommun	ica	tetha	ton	lyex	te	rna	ls	tanda	rd	sw	i	l	lsu	f	f	ice
becau	sei	ti	sno	tevenacomp	le	tesen	tence	.Seeid	.(“	Whe	renom	in	imumy	ie	lds	t	reng	thi	s
requ	i	red	,bu	tatyp	ica	lm	in	imumi	siden	t	i	f	iedw	i	th	inthespec	i	f	ica	t	ionf	romas	tanda	rd	s
o	rgan	iza	t	ionsucha	sASTM(e	.g	.	,unde	rASTMA653	,thetyp	ica	lrangeo	fy	ie	lds	t	reng	th	sfo	r
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‘De	s	igna	t	ionCSTypeA	’i	siden	t	i	f	ieda	s25	,000p	s	ito55	,000p	s	i	,y	ie	ld	ingatyp	ica	lm	in	imumo	f
25	,000p	s	i	,wh	ichintu	rnfa	l	l	sunde	rrepo	r	t	ingcode‘3	’	)	.”	)	. Evenwe	rethecou	r	ttoove	r	lookthe
g	ramma	t	ica	lp	rob	lem	,i	ts	t	i	l	lwou	ldconc	ludetha	tthetex	tdoe	sno	tadd	re	s	stheque	s	t	ionth	i	sca	se
po	se	s	. Theexamp	leinthepa	ren	the	t	ica	ladd	re	s	se	showtorepo	r	ta“	typ	ica	l m	in	imum”y	ie	ld
s	t	reng	thwhe	reon	lya“	typ	ica	lrange	,”andno	taniden	t	i	f	iedrequ	i	redm	in	imumy	ie	lds	t	reng	th	,i	s
g	iven	. The	rei	snod	i	scu	s	s	iono	fwha	tcon	s	t	i	tu	te	sape	rm	i	s	s	ib	lespec	i	f	ica	t	ionw	i	th	intheun	ive	r	se
o	fpo	s	s	ib	lespec	i	f	ica	t	ion	s	.
Theth	i	rdpa	rag	raph	,as	ing	lesen	tence	,in	s	t	ruc	t	stha	t“	[	i	]	fnosuchrequ	i	remen	t	so	r
gu	idanceonm	in	imumspec	i	f	iedy	ie	lds	t	reng	thi	siden	t	i	f	iedinthespec	i	f	ica	t	ionfo	rthep	roduc	tin
que	s	t	ion	,exp	la	ininde	ta	i	lyou	rra	t	iona	lefo	ru	s	ingoneo	ftheaboverepo	r	t	ingcode	storepo	r	tth	i	s
f	ie	ldfo	rthep	roduc	t(dono	tc	rea	teadd	i	t	iona	lrepo	r	t	ingcode	s	)	.”Id	.Th	i	ssen	tencei	sd	i	rec	tedto
as	i	tua	t	ioninwh	ichap	roduc	tspec	i	f	ica	t	ioncon	ta	inednom	in	imumy	ie	lds	t	reng	thspec	i	f	ica	t	iono	r
gu	idance	. He	re	,m	in	imumy	ie	ldspec	i	f	ica	t	ion	sex	i	s	tedinthemanu	fac	tu	re	r	’	sspec	i	f	ica	t	ionand
tha	to	ftheindu	s	t	rys	tanda	rd	,and	,the	re	fo	re	,th	i	ssen	tencei	sinapp	l	icab	leto	,anddoe	sno	tre	so	lve	,
thei	s	suebe	fo	rethecou	r	t	. Mo	reove	r	,inu	s	ingtheun	spec	i	f	icph	ra	se“	iden	t	i	f	iedinthe
spec	i	f	ica	t	ionfo	rthep	roduc	tinque	s	t	ion	,”thesen	tencesugge	s	t	stha	tComme	rcein	tendedab	road
mean	ingtothewo	rd“	spec	i	f	ica	t	ion	.”
Thefou	r	thandf	ina	lpa	rag	raphcon	ta	in	stwore	fe	rence	stoindu	s	t	rys	tanda	rd	s	,bu	teach
re	fe	rencei	sp	re	sen	tedon	lya	sanexamp	le	.Seeid. L	ikethep	reced	ingpa	rag	raph	s	,i	tdoe	sno	t
ind	ica	teanin	ten	ttop	roh	ib	i	tare	sponden	tf	romu	s	ingamanu	fac	tu	re	r	’	sspec	i	f	ica	t	ionfo	ry	ie	ld
s	t	reng	th	.
I	tm	igh	tbea	rguedtha	ttheexamp	le	sg	iveninthefou	r	thpa	rag	raphandthef	i	r	s	ttwo
pa	rag	raph	ssugge	s	ttha	ton	lyspec	i	f	ica	t	ion	spub	l	i	shedbyin	te	rna	t	iona	ls	tanda	rd	sbod	ie	swe	re
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in	tended	. Bu	teveni	ftha	tin	te	rp	re	ta	t	iono	fthein	s	t	ruc	t	ion	swe	recon	s	ide	red	,a	rguendo,tobethe
mo	rerea	sonab	lein	te	rp	re	ta	t	ion	,i	twou	ldno	tsu	f	f	icetoju	s	t	i	fytheadve	r	seac	t	ionComme	rcetook
aga	in	s	tP	ro	spe	r	i	ty	. Thelacko	fspec	i	f	ic	i	tya	r	i	s	ingf	romtheb	read	tho	fthete	rm	sComme	rceu	sed
(	e	.g	.,“M	in	imumspec	i	f	iedy	ie	lds	t	reng	th”and“	spec	i	f	ica	t	ionfo	rthep	roduc	tinque	s	t	ion	”	)and
f	romtheab	senceo	fde	f	in	i	t	ion	sfo	rtho	sete	rm	sconv	ince	sthecou	r	ttha	tP	ro	spe	r	i	ty	’	s
in	te	rp	re	ta	t	iono	ftheDepa	r	tmen	t	’	srepo	r	t	ingin	s	t	ruc	t	ion	swa	sno	tun	rea	sonab	le	.I	tfo	l	low	stha	t
Comme	rce	,onth	i	sreco	rd	,wa	sno	tju	s	t	i	f	iedinre	so	r	t	ingtotheu	seo	fthefac	t	so	the	rw	i	se
ava	i	lab	le	.Hav	ingno	treque	s	tedy	ie	lds	t	reng	thin	fo	rma	t	ionon	lyinthefo	rmo	fy	ie	lds	t	reng	tha	s
spec	i	f	iedbyas	tanda	rd	so	rgan	iza	t	ion	,Comme	rcewa	sno	tsuppo	r	tedbysub	s	tan	t	ia	lev	idenceon
thereco	rdwheni	tfound	,pe	r19U	.S	.C	.§1677e	(a	)	(B	)	,tha	tP	ro	spe	r	i	tyfa	i	ledtop	rov	idereque	s	ted
y	ie	lds	t	reng	thin	fo	rma	t	ion	.Fo	rthesamerea	son	,Comme	rcecou	ldno	tpe	rm	i	s	s	ib	lyf	indtha	tthe
in	fo	rma	t	ionP	ro	spe	r	i	tysubm	i	t	ted“cou	ldno	tbeve	r	i	f	ied	”w	i	th	inthemean	ingo	f19U	.S	.C	.
§1677e	(a	)	(D	)	. Becau	sethedec	i	s	iontore	so	r	ttothefac	t	so	the	rw	i	seava	i	lab	lewa	sinco	r	rec	t	,so
toowa	sthedec	i	s	iontoinvokeanadve	r	sein	fe	renceba	sedonana	l	legedfa	i	lu	rebyP	ro	spe	r	i	ty“	to
coope	ra	tebyno	tac	t	ingtothebe	s	to	fi	t	sab	i	l	i	tytocomp	lyw	i	thareque	s	tfo	rin	fo	rma	t	ion”f	rom
Comme	rce	,id	.§1677e	(b	)	.S	imp	lys	ta	ted	,P	ro	spe	r	i	tycomp	l	iedw	i	ththein	s	t	ruc	t	ion	sa	s
Comme	rcew	ro	tethem	.
TheDepa	r	tmen	t	’	srea	son	ingtha	tP	ro	spe	r	i	tycou	ldhavecon	su	l	tedComme	rcefo	r
c	la	r	i	f	ica	t	iono	fthein	fo	rma	t	ionreque	s	t	,seeF	ina	lDec	i	s	ion Mem	.a	t13,doe	sno	tconv	incethe
cou	r	ttha	tComme	rceac	tedp	rope	r	lyinu	s	ingthefac	t	so	the	rw	i	seava	i	lab	leo	ranadve	r	se
in	fe	rence	. Becau	seComme	rced	idno	te	f	fec	tua	teini	t	sin	s	t	ruc	t	ion	si	t	sc	la	imedin	ten	t	ionto
con	f	iney	ie	lds	t	reng	threpo	r	t	ingtoy	ie	lds	t	reng	thspec	i	f	ica	t	ion	sine	s	tab	l	i	shedindu	s	t	rys	tanda	rd	s	,
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P	ro	spe	r	i	tyd	idno	tac	tun	rea	sonab	lyinin	te	rp	re	t	ingtheDepa	r	tmen	t	’	sin	s	t	ruc	t	ion	stoa	l	lowi	tto
u	semanu	fac	tu	re	r	’	sspec	i	f	ica	t	ion	sfo	rth	i	spu	rpo	seo	rinno	treque	s	t	ingc	la	r	i	f	ica	t	ion	.
De	fendan	t	-	in	te	rveno	r	sa	rgue	,s	im	i	la	r	ly	,tha	tP	ro	spe	r	i	tywa	s“a	ttheve	rylea	s	tneg	l	igen	t”
by“	fa	i	l	ingtocon	f	i	rmi	t	sunde	r	s	tand	ing”o	fthein	s	t	ruc	t	ion	sfo	rrepo	r	t	ingy	ie	lds	t	reng	thw	i	th
Comme	rceandtha	ti	twa	sP	ro	spe	r	i	ty	’	s“	re	spon	s	ib	i	l	i	tytolookbeh	indi	t	sin	te	rna	lp	roduc	tcod	ing
sy	s	temandrepo	r	tphy	s	ica	lcha	rac	te	r	i	s	t	ic	sfo	reachsa	leba	sedonComme	rce	’	smode	lma	tch	.”
De	f	.	-	In	t	s	.	’Opp	’n30	. Becau	sethein	s	t	ruc	t	ion	sonthe	i	rfaced	idno	trequ	i	reP	ro	spe	r	i	tytocodei	t	s
p	roduc	t	sfo	ry	ie	lds	t	reng	thba	sedonane	s	tab	l	i	shedindu	s	t	rys	tanda	rd	,thecou	r	tre	jec	t	s
de	fendan	t	-	in	te	rveno	r	s	’no	t	iontha	tP	ro	spe	r	i	tywa	srequ	i	redinth	i	sc	i	rcum	s	tancetoseek
c	la	r	i	f	ica	t	ion	.I	fComme	rcei	stotakeanac	t	ionadve	r	setoapa	r	tyfo	rana	l	legedfa	i	lu	retocomp	ly
w	i	thanin	fo	rma	t	ionreque	s	t	,i	tmu	s	tfu	l	f	i	l	li	t	sownre	spon	s	ib	i	l	i	tytocommun	ica	tei	t	sin	ten	tintha	t
reque	s	t	.Inth	i	sin	s	tance	,thepo	s	s	ib	i	l	i	tytha	tare	sponden	twou	ldno	tin	te	rp	re	tthein	s	t	ruc	t	ion	s
acco	rd	ingtotheDepa	r	tmen	t	’	ssub	jec	t	iveandund	i	sc	lo	sedin	ten	twa	safo	re	seeab	lecon	sequence
o	fthewayComme	rced	ra	f	tedtho	sein	s	t	ruc	t	ion	s	.
De	fendan	tandde	fendan	t	-	in	te	rveno	r	sa	rguetha	ttheDepa	r	tmen	t	’	sin	s	t	ruc	t	ion	sd	idno	t
pe	rm	i	tP	ro	spe	r	i	tytou	sep	roduce	r	-	spec	i	f	iccode	sfo	rrepo	r	t	ingy	ie	lds	t	reng	th	. De	f	.	’	s
Opp	’n18	-24;De	f	.	-	In	t	s	.	’ Opp	’n13-15	,16	-18	.Acco	rd	ingtode	fendan	t	-	in	te	rveno	r	s	,the
Depa	r	tmen	t	’	sque	s	t	ionna	i	re“	in	s	t	ruc	t	ion	sve	ryc	lea	r	lyrequ	i	re	[d	]therepo	r	t	ingo	f MSYS[i	.e	.	,
m	in	imumspec	i	f	iedy	ie	lds	t	reng	th	]ba	sedonindu	s	t	ryspec	i	f	ica	t	ion	spub	l	i	shedby‘	s	tanda	rd	s
o	rgan	iza	t	ion	ssucha	sASTM	.	’” De	f	.	-	In	t	s	.	’Opp	’n13	. Th	i	sa	rgumen	tove	r	look	sthelacko	f
c	la	r	i	tyinthein	s	t	ruc	t	ion	sontha	tpo	in	t	. De	fendan	ta	rgue	stha	t“	‘	inrepo	r	t	ingy	ie	lds	t	reng	th	,a	s
s	tee	lp	roduc	t	sa	recommon	ly(	i	fno	tv	i	r	tua	l	lyexc	lu	s	ive	ly	)manu	fac	tu	redtova	r	iou	ss	tanda	rd	s	,
{P	ro	spe	r	i	ty}wa	srequ	i	redtocodey	ie	lds	t	reng	thpu	r	suan	ttothem	in	imumy	ie	lds	t	reng	threqu	i	red
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o	fthes	tanda	rdtowh	ichthep	roduc	twa	sp	roducedandno	ttheac	tua	ly	ie	lds	t	reng	tho	fthe
p	roduc	ti	t	se	l	f	.	’”De	f	.	’	sOpp	’na	t19(quo	t	ingF	ina	lDec	i	s	ion Mem.a	t13	)	. Th	i	sa	rgumen	tm	i	s	se	s
thema	rkbecau	seP	ro	spe	r	i	ty	,ra	the	rthanc	la	im	ingtohaverepo	r	tedy	ie	lds	t	reng	thba	sedonac	tua	l
y	ie	lds	t	reng	th	,c	la	imedtha	ti	trepo	r	tedy	ie	lds	t	reng	thacco	rd	ingtoi	t	sownmanu	fac	tu	r	ing
spec	i	f	ica	t	ion	s	.SeeP	ro	spe	r	i	ty	’	sRep	lyB	r	.10	.
De	fendan	ta	l	soa	rgue	stha	tP	ro	spe	r	i	tye	r	roneou	s	ly“	readeachpa	rag	rapho	fthe
in	s	t	ruc	t	ion	sini	so	la	t	ion”andfa	i	ledtocon	s	ide	r“whe	the	rsub	sequen	tpa	rag	raph	sp	rov	ided
add	i	t	iona	lin	fo	rma	t	iontha	twou	ldc	la	r	i	fyate	rmcon	ta	inedinap	r	io	rpa	rag	raph	.” De	f	.	’	sOpp	’n
a	t19-20	. Thecou	r	t	’	sind	iv	idua	lana	ly	s	i	so	fthefou	rin	s	t	ruc	t	iona	lpa	rag	raph	s	,p	re	sen	tedabove	,
demon	s	t	ra	te	sthef	lawinth	i	stex	tua	la	rgumen	t	.
2	.Comme	rce Mu	s	tCo	r	rec	tI	t	sE	r	ro	rintheRede	te	rm	ina	t	ionuponRemand
Becau	seComme	rceinvokedi	t	sau	tho	r	i	tytou	sefac	t	so	the	rw	i	seava	i	lab	leandanadve	r	se
in	fe	renceacco	rd	ingtoaninva	l	idf	ind	ingtha	tm	i	s	repo	r	t	ingonthepa	r	to	fP	ro	spe	r	i	tyoccu	r	red	,
Comme	rcemu	s	ttakeapp	rop	r	ia	teco	r	rec	t	iveac	t	ionandrev	i	seacco	rd	ing	lythea	f	fec	ted
we	igh	ted	-ave	ragedump	ingma	rg	in(i	.e	.	,e	i	the	ra ma	rg	info	rthecomb	ined
Y	iehPhu	i	/P	ro	spe	r	i	ty	/Synnen	t	i	tyo	r	,shou	ldi	tbenece	s	sa	ryo	rapp	rop	r	ia	tefo	rComme	rceto
reve	r	sei	t	sco	l	lap	s	ingdec	i	s	ion	,fo	rP	ro	spe	r	i	ty	)	.	14 Indo	ingso	,Comme	rcemayno	tu	sefac	t	s
o	the	rw	i	seava	i	lab	lea	sasub	s	t	i	tu	tefo	rin	fo	rma	t	iontha	ti	snowontheadm	in	i	s	t	ra	t	ivereco	rdo	fthe
14Comme	rcei	sno	trequ	i	redtomakeanyco	r	rec	t	iveac	t	iontotheDepa	r	tmen	t	’	su	seo	f
fac	t	so	the	rw	i	seava	i	lab	lew	i	thanadve	r	sein	fe	rencefo	rc	la	imede	r	ro	r	sbySynninrepo	r	t	ingy	ie	ld
s	t	reng	th	.Synnha	sno	tappea	redinth	i	sac	t	ion	,andne	i	the	rP	ro	spe	r	i	tyno	rY	iehPhu	icon	te	s	tthe
app	l	ica	t	iono	ffac	t	sava	i	lab	lew	i	thanadve	r	sein	fe	rencetoce	r	ta	ino	fSynn	’	shomema	rke	tsa	le	s	.
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inve	s	t	iga	t	ion	.Sub	jec	ttothe	serequ	i	remen	t	s	,thetypeo	fco	r	rec	t	iveac	t	ioni	sama	t	te	rfo	r
Comme	rcetodec	ide	.15
IV	.CONCLUSIONAND ORDER
Fo	rtherea	son	sd	i	scu	s	sedinthefo	rego	ing	,thecou	r	tremand	stoComme	rcethedec	i	s	ion
pub	l	i	sheda	sCe	r	ta	inCo	r	ro	s	ion	-Re	s	i	s	tan	tS	tee	lP	roduc	t	sF	romTa	iwan	:F	ina	lDe	te	rm	ina	t	iono	f
Sa	le	sa	tLe	s	sThanFa	i	rVa	lueandF	ina	lA	f	f	i	rma	t	iveDe	te	rm	ina	t	iono	fC	r	i	t	ica	lC	i	rcum	s	tance	s	,in
Pa	r	t,81Fed	.Reg	.35	,313(	In	t	’	lT	radeAdm	in	.June2	,2016	)(“	F	ina	lDe	te	rm	ina	t	ion”	)	,a	s
amended,Ce	r	ta	inCo	r	ro	s	ion	-Res	i	s	tan	tS	tee	lP	roduc	t	sF	romInd	ia	,I	ta	ly	,thePeop	le	’	sRepub	l	ic
o	fCh	ina	,theRepub	l	ico	fKo	reaandTa	iwan	:AmendedF	ina	lA	f	f	i	rma	t	iveAn	t	idump	ing
De	te	rm	ina	t	ionfo	rInd	iaandTa	iwan	,andAn	t	idump	ingDu	tyO	rde	r	s,81Fed	.Reg	.48	,390(	In	t	’	l
T	radeAdm	in	.Ju	ly25	,2016	)	.Ini	t	snewde	te	rm	ina	t	ion	,Comme	rcemu	s	t	:(1	)co	r	rec	ti	t	s
e	r	roneou	sdec	i	s	ionno	ttomakead	ju	s	tmen	t	sinY	iehPhu	i’	sandSynn	’	shomema	rke	tsa	le	sp	r	ice	s
toaccoun	tfo	rreba	te	sg	ran	tedtothecompan	ie	s	’homema	rke	tcu	s	tome	r	s	;(2	)recon	s	ide	ri	t	s
dec	i	s	iontoco	l	lap	seP	ro	spe	r	i	tyw	i	ththeY	iehPhu	i	/Synnen	t	i	tyanden	su	retha	tanynewdec	i	s	ion
i	sba	sedonf	ind	ing	ssuppo	r	tedbysub	s	tan	t	ia	lreco	rdev	idence	;and(3	)co	r	rec	tthee	r	ro	r	sre	su	l	t	ing
f	romtheDepa	r	tmen	t	’	sun	law	fu	ldec	i	s	iontou	sethefac	t	so	the	rw	i	seava	i	lab	leandanadve	r	se
in	fe	rencepe	r	ta	in	ingtothey	ie	lds	t	reng	thc	la	s	s	i	f	ica	t	ionandcod	ingo	fP	ro	spe	r	i	ty	’	shomema	rke	t
andU	.S	.ma	rke	tsa	le	s	.
The	re	fo	re	,uponcon	s	ide	ra	t	iono	fa	l	lpape	r	sandp	roceed	ing	shadhe	re	in	,andupondue
de	l	ibe	ra	t	ion	,i	ti	she	reby
15Thecou	r	tleave	si	ttoComme	rcetode	te	rm	inewhe	the	ri	ti	se	s	sen	t	ia	ltoreopenthe
reco	rdtoso	l	ic	i	tadd	i	t	iona	lco	s	tin	fo	rma	t	ion	.
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ORDERED tha	ttheF	ina	lDe	te	rm	ina	t	ionbe	,andhe	rebyi	s	,se	ta	s	idea	sun	law	fu	land
remandedfo	rrecon	s	ide	ra	t	ionandrede	te	rm	ina	t	ioninacco	rdancew	i	thth	i	sOp	in	ionandO	rde	r	;i	t
i	sfu	r	the	r
ORDEREDtha	tComme	rcesha	l	lf	i	le	,w	i	th	in90day	sf	romtheda	teo	fth	i	sOp	in	ionand
O	rde	r	,anewde	te	rm	ina	t	ionuponremand(“RemandRede	te	rm	ina	t	ion”	)tha	tcon	fo	rm	stoth	i	s
Op	in	ionandO	rde	randrede	te	rm	ine	sma	rg	in	sa	snece	s	sa	ry	;i	ti	sfu	r	the	r
ORDEREDtha	tp	la	in	t	i	f	f	sandde	fendan	t	-	in	te	rveno	r	seachmayf	i	lecommen	t	sonthe
RemandRede	te	rm	ina	t	ionw	i	th	in30day	so	fthef	i	l	ingo	ftheRemandRede	te	rm	ina	t	ion	;andi	ti	s
fu	r	the	r
ORDEREDtha	tde	fendan	tmayre	spondtothea	fo	remen	t	ionedcommen	t	sw	i	th	in15day	s
f	romtheda	teonwh	ichthela	s	tcommen	ti	sf	i	led	.
/	s	/ T	imo	thyC	.S	tanceu
T	imo	thy C	.S	tanceu	,Ch	ie	fJudge
Da	ted	:
NewYo	rk	,NewYo	rk
Janua	ry23	,2018
Case 1:16-cv-00138-TCS Document 78 Filed 01/23/18 Page 32 of 32