Mid Continent Steel & Wire, Inc. v. United States

Slip Op. 21-4
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Claire R. Kelly, Judge
Consol. Court No. 15-00213
OPINION AND ORDER
[Sustaining Commerce’s decision to use a simple average to calculate a pooled
standard deviation as part of its differential pricing analysis in its antidumping duty
investigation of certain steel nails from Taiwan.]
Dated: January 8, 2021
Adam H. Gordon and Ping Gong, The Bristol Group PLLC of Washington, DC, for
plaintiff and consolidated defendant-intervenor Mid Continent Steel & Wire, Inc.
Bruce M. Mitchell, Ned H. Marshak, Andrew T. Schutz, and Dharmendra Choudhary,
Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP of Washington, DC, and New
York, NY, 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 Corp., President Industrial Inc.,
and Liang Chyuan Industrial Co., Ltd.
Mikki Cottet, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for defendant. Also on the brief were
MID CONTINENT STEEL & WIRE, INC.
ET AL.,
Plaintiff and Consolidated
Plaintiffs,
v.
UNITED STATES,
Defendant,
and
PT ENTERPRISE INC. ET AL.,
Defendant-Intervenors and
Consolidated Defendant-
Intervenors.
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Jeffrey Bossert Clark, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was
Vania Wang, Attorney, Office of the Chief Counsel for Trade Enforcement &
Compliance, U.S. Department of Commerce of Washington, DC.
Kelly, 	Judge: 	Before 	the 	court 	is 	the 	U.S. 	Department 	of 	Commerce’s
(“Commerce”) second remand redetermination in the antidumping duty (“ADD”)
investigation of certain steel nails from Taiwan, pursuant to the court’s order
implementing the Court of Appeals for the Federal Circuit’s (“Court of Appeals”)
mandate in Mid Continent Steel & Wire, Inc. v. United States, 940 F.3d 662 (Fed.
Cir. 2019) (“Mid Continent III”) rev’g in part 41 CIT __, 219 F. Supp. 3d 1326 (2017)
(“Mid Continent I”). See also Mid Continent Steel & Wire, Inc. v. United States, 41
CIT 	__, 	273 	F. 	Supp. 	3d 	1161 	(2017) 	(“Mid 	Continent 	II”); 	Final 	Results 	of
Redetermination Pursuant to Court Order, June 16, 2020, ECF No. 144-1 (“Second
Remand Results”); Order, Dec. 3, 2019, ECF No. 132 (“Order”).
The court remanded to Commerce for further proceedings in conformity with
Mid Continent III, see Order, where the Court of Appeals found wanting, for several
reasons, Commerce’s explanation of its use of a simple average when determining the
pooled standard deviation in its Cohen’s d test. 	See Mid Continent III, 940 F.3d at
673–75. 	The Court of Appeals observed that: Commerce failed to address that the
relevant part of the literature Commerce itself cites, calls for the use of weighted
averages; Commerce’s statement that simple averaging will not “skew” the outcome
of its analysis, was conclusory; Commerce neither supported its dismissal of PT’s
charge that simple averages would distort the outcome of its Cohen’s d test, nor
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explained why simple averaging was preferable; and, Commerce appeared to assume
that weighted averaging must be done by counting the number of transactions, as
opposed to quantities, sold within every transaction. See id.
On remand, Commerce reconsiders whether its “calculation of the pooled
standard deviation based on a simple average of the variances determined for the test
and comparison groups was appropriate,” and finds that it is. 	Second Remand
Results at 4–17. Commerce explains that a simple average of the variances for each
group accurately represents pricing behaviors within each group because it is the
group pricing that matters, and not the individual pricing amongst all sales, for the
purposes of its analysis. See id. at 15–17, 35–36. Thus, using a simple average of the
variances within each group in the pooled standard deviation, as the denominator in
the Cohen’s d analysis, will not mask possible targeted dumping that only exists
within one group. 	See id. 	Conversely, a weighted average, based either on the
number of transactions, sales volume or value, would skew the results towards the
group with greater transactions or sales volume or value (and thus dilute the results
from the other group). 	See id. at 2, 15–17. 	Commerce, therefore explains that a
simple average is preferable because the purpose of the analysis is to identify masked
dumping within the test group. 	See id. at 8, 14–17. 	For the following reasons, the
court sustains Commerce’s decision to use a simple average to calculate the pooled
standard deviation.
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BACKGROUND
On June 25, 2014, in response to a petition filed by Mid Continent, Commerce
initiated an ADD 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). 	Commerce selected Taiwanese exporters PT Enterprise
Inc. et al.’s (“PT”) 1 and its affiliated producer, Pro-Team, and Quick Advance, Inc.
and its affiliated producer, Ko’s Nails Inc., as mandatory respondents for the
investigation. 	See Certain Steel Nails from Taiwan, 79 Fed. Reg. 78,053, 78,054
(Dep’t Commerce Dec. 29, 2014) (preliminary determination of sales at less than fair
value, 	postponement 	of 	final 	determination) 	(“Prelim. 	Results”); 	Decision
Memorandum 	for 	the 	Preliminary 	Determination 	in 	the 	Antidumping 	Duty
Investigation of Certain Steel Nails from Taiwan at 2, PD 225, bar code 3247845-01
1 PT Enterprise Inc., Pro-Team Coil Nail Enterprise Inc., Unicatch Industrial Co.,
Ltd., WTO International Co., Ltd., Zon Mon Co., Ltd., Hor Liang Industrial Corp.,
President Industrial Inc. and Liang Chyuan Industrial Co., Ltd.
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(Dec. 17, 2014) (“Prelim. Decision Memo”); 2 see also Section 777A of the of the Tariff
Act of 1930, as amended 19 U.S.C. § 1677f-1(c)(2)(B) (2012). 3
On 	December 	29, 	2014, 	Commerce 	issued 	its 	negative 	preliminary
determination. See Prelim. Results, 79 Fed. Reg. at 78,053; see also Prelim. Decision
Memo at 1. Commerce applied its differential pricing analysis and determined that,
although 41.73 percent of PT’s U.S. sales passed the Cohen’s d test, a meaningful
difference did not exist in the dumping margins that would result from using the
standard 	average-to-average 	(“A-to-A”) 	methodology 	and 	the 	alternate 	mixed
methodology. See Prelim. Decision Memo at 12. Commerce accordingly applied the
standard A-to-A methodology to all of PT’s sales, and preliminarily determined that
respondents’ steel nails from Taiwan “are not being, or are not likely to be, sold in the
United States at less than fair value.” 	Id. at 1. 4 	Commerce preliminarily assigned
2 On October 16, 2015, Defendant submitted indices to the public and confidential
administrative records underlying Commerce’s Final Results. These indices are
located on the docket at ECF No. 17. All further references in this opinion to
administrative 	record 	documents 	are 	identified 	by 	the 	numbers 	assigned 	by
Commerce in those indices and preceded by “PD” and “CD” to denote public or
confidential documents.
3 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.
4 Commerce uses what it refers to as a differential pricing analysis to determine
whether there is a pattern of prices for comparable merchandise which differed
significantly and then considers whether those differences can be taken into account
using 	an 	A-to-A, 	a 	transaction-to-transaction 	or 	an 	average-to-transaction
methodology. See 19 U.S.C. § 1677f-1. Specifically, the statute provides:
(footnote continued)
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PT a weighted-average dumping margin of 0.00 percent. See Prelim. Results, 79 Fed.
Reg. at 78,054.
On May 20, 2015, Commerce issued its final determination. 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 for the Affirmative Final Determination in the
Less than Fair Value Investigation of Certain Steel Nails from Taiwan, May 13, 2015,
ECF No. 17 (“Final Decision Memo”). 	As an initial matter, Commerce determined
that it made ministerial errors which impacted the dumping margins it calculated in
the Prelim. Results. 	See Final Results, 80 Fed. Reg. at 28,960. 	Additionally,
Commerce made other adjustments, including changes to the margin calculation. See
Final Decision Memo at 1; Final Results, 80 Fed. Reg. at 28,960; Mid Continent I, 41
The 	administering 	authority 	may 	determine 	whether 	the 	subject
merchandise is being sold in the United States at less than fair value by
comparing the weighted average of the normal values to the export
prices (or constructed export prices) of individual transactions for
comparable merchandise, if--
(i) 	there is a pattern of export prices (or constructed export prices)
for 	comparable 	merchandise 	that 	differ 	significantly 	among
purchasers, regions, or periods of time, and
(ii) 	the administering authority explains why such differences cannot
be taken into account using a method described in paragraph [19
U.S.C. § 1677f-1(1)(A)(i) or (ii)].
19 U.S.C. § 1677f-1(d)(1)(B). 	In its analysis, Commerce creates a ratio where the
numerator is the difference between the mean of the test group’s prices and the mean
of the comparison group’s prices and the denominator is the “pooled” variance of the
test and comparison groups. See Mid Continent III, 940 F.3d at 671. Mid Continent
III found wanting Commerce’s explanation for its decision to use simple averaging to
calculate the pooled variance as opposed to weighted averaging. See id. at 673–675.
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CIT at __, 219 F. Supp. 3d at 1331. Commerce determined that 42.27 percent of PT’s
U.S. sales had passed the Cohen’s d test, and accordingly applied the mixed
methodology, 	by 	which 	Commerce 	applies 	the 	average-to-transaction 	(“A-to-T”)
method to PT’s sales that passed the Cohen’s d test and the A-to-A method to PT’s
sales that did not pass the Cohen’s d test, to calculate a respondent’s weighted-
average dumping margin. 	See Final Decision Memo at 19. 	Commerce determined
that a meaningful difference existed between the resultant A-to-A margin and mixed
methodology margin, so it applied the mixed methodology (A-to-T) to calculate PT’s
weighted-average dumping margin. See Final Decision Memo at 15–17. Commerce
subsequently assigned PT a weighted-average dumping margin of 2.24 percent. See
Final Results, 80 Fed. Reg. at 28,961. 	The final determination resulted in an ADD
order on subject nails from Taiwan. 	See Certain Steel Nails from the Republic of
Korea, Malaysia, the Sultanate of Oman, Taiwan, and the Socialist Republic of
Vietnam, 80 Fed. Reg. 39,994, 39,994–97 (Dep’t Commerce July 13, 2015) ([ADD]
orders). 5
5 On September 4, 2015, Mid Continent Steel & Wire, Inc. (“Mid Continent”)
challenged Commerce’s final determination. 	See Compl., Sept. 4, 2015, ECF No. 9.
On September 18, 2015, PT moved to intervene as a defendant-intervenor, see Con.
Mot. to Intervene as of Right, Sept. 18, 2015, ECF No. 11, which the court granted.
See Order, Sept. 21, 2015, ECF No. 15. 	Later, Mid Continent’s challenge was
consolidated with a challenge by PT in Ct. No. 15-00220, a parallel proceeding
involving the same parties, facts and record. 	See Joint Status Report & Proposed
Briefing Schedule at 2, Nov. 16, 2015, ECF No. 18; Order, Nov. 16, 2015, ECF No. 19.
All of the issues raised in either Mid Continent’s or PT’s original complaints have
(footnote continued)
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On March 23, 2017, the U.S. Court of International Trade (“CIT”) sustained
Commerce’s determination including its decision to use a simple average to calculate
the pooled standard deviation. See Mid Continent I, 41 CIT at __, 219 F. Supp. 3d at
1340–43. 	On October 3, 2019, the Court of Appeals vacated and remanded in part
the CIT’s judgment sustaining Commerce’s decision. See Mid Continent III, 940 F.3d
at 675. 	The Court of Appeals disagreed with PT’s challenge to Commerce’s use of
zeroing and Commerce’s requirement to have a Cohen’s d coefficient of at least 0.8,
and thus sustained this court’s ruling upholding Commerce on those issues. See Mid
Continent III, 940 F.3d at 672. However, the Court of Appeals instructed the CIT to
remand to Commerce to provide additional reasoning in support of its decision to use
a simple average to calculate the pooled standard deviation. 	See id. at 673–75. 	On
December 3, 2019, the CIT remanded to Commerce to provide further explanation in
accordance with the Court of Appeals’ directive. 	See Order, Dec. 3, 2019, ECF No.
132.
On March 3, 2020, Commerce released its draft remand redetermination and
invited the parties to comment. 	See Draft Results of Redetermination Pursuant to
been resolved before this court, and the Court of Appeals, but for the issue of whether
Commerce’s decision to use a simple average (as opposed to weighted average) to
calculate the pooled standard deviation was reasonable. See generally Mid Continent
I, 41 CIT __, 219 F. Supp. 3d 1326; Mid Continent II, 41 CIT __, 273 F. Supp. 3d 1161;
Mid Continent III, 940 F.3d 662.
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Court Order [Mid Continent III], PRRs 3–5, bar codes 3949998-01–03 (Mar. 3, 2020). 6
On March 19, 2020, PT and Mid Continent submitted comments to Commerce. 	See
Second Remand Results at 3. 	On April 9, 2020, Commerce gave the parties an
opportunity to submit factual information to rebut, clarify or correct the information
contained in the comments submitted on March 19, 2020. 	See id. 	On May 4, 2020,
Mid Continent submitted new factual information in response to PT’s comments. See
id. 	On June 16, 2020, Commerce published its Second Remand Results. 	See
generally id. It continues to find that it was justified in using a simple average of the
variances to calculate the pooled standard deviation. See generally id. 7
6 On June 23, 2020, Defendant submitted indices to the public and confidential
administrative 	records 	underlying 	Commerce’s 	Second 	Remand 	Results. 	These
indices are located on the docket at ECF Nos. 147-2 and 147-3, respectively. All
further references in this opinion to administrative record documents are identified
by the numbers assigned by Commerce in those indices and preceded by “PRR” and
“CRR” to denote public or confidential documents.
7 PT filed comments on the Second Remand Results on July 28, 2020, see Pl. [PT]’s
Cmts. on Remand Results, July 28, 2020, ECF No. 150, and Mid Continent and
Commerce each filed a reply to PT’s comments on the remand results. 	See Pl. &
Consol. Def.-Intervenor [Mid Continent]’s Rely to Cmts. on Remand Results, Sept.
10, 2020, ECF No. 154; Def.’s Resp. to Cmts. on Remand Results, Sept. 10, 2020, ECF
No. 155. Later, PT made a motion to file additional comments, see Mot. for Leave to
File Add. Cmts., Sept. 16, 2020, ECF No. 156, which the court granted. 	See Order,
Oct. 8, 2020, ECF No. 164. PT filed additional comments on October 15, 2020, see Pl.
[PT]’s Add. Cmts. on Remand Results, Oct. 15, 2020, ECF No. 165 (“PT.’s Add.
Cmts.”), and Mid Continent and Commerce each filed a reply to the additional
comments. See Def. [U.S.]’s Reply to Cmts. on Remand Results, Oct. 22, 2020, ECF
No. 166; Pl. & Def.-Intervenor [Mid Continent]’s Reply to Cmts. on Remand Results,
Oct. 22, 2020, ECF No. 167.
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JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i), and 28
U.S.C. § 1581(c) (2012), 8 which grant the court authority to review actions contesting
the final determination in an investigation of an ADD 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 (Zhangzhou) Co. v.
United States, 38 CIT __, __, 968 F. Supp. 2d 1255, 1259 (2014) (quoting Nakornthai
Strip Mill Public Co. v. United States, 32 CIT 1272, 1274, 587 F. Supp. 2d 1303, 1306
(2008)).
DISCUSSION
In the results of its second remand redetermination, Commerce again decides
to calculate a simple average of the variances in its Cohen’s d analysis, because in the
present context it is more accurate to assign the test and comparison groups equal
weight. 	See Second Remand Results. 	PT contends that a simple average is
inconsistent with the statute and unreasonable as applied to this case, while the use
of a weighted average is consistent with the statute, reasonable and produces a more
accurate result. See Pl. [PT]’s Cmts. on Remand Results, July 28, 2020, ECF No. 150
(“PT’s Br.”). For the following reasons, Commerce’s decision is sustained.
8 Further citations to Title 28 of the U.S. Code are to the 2012 edition.
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In its second remand redetermination, Commerce again examines whether
PT’s sales reflect a “pattern of export prices” for “comparable merchandise that
differ[ed] significantly among purchasers, regions, or periods of time” and whether
the differences 	can 	be 	“taken 	into 	account” 	using 	an 	A-to-A 	or 	A-to-T
methodology. 	See Second Remand Results at 5. 	Commerce determines whether
there is a pattern of export prices using a test known as Cohen’s d, which tests
differences among subsets within a complete set of data. See id.; Mid Continent III,
940 F.3d at 671. 	The subsets here are called the test group and the comparison
group. 	See Mid Continent III, 940 F.3d at 671. 	The Cohen’s d test requires
Commerce to create a ratio in which the numerator is the difference between the
mean of the test group’s prices and the mean of the comparison group’s prices. 	See
Mid Continent III, 940 F.3d at 671. The denominator is the “pooled” variance of the
test and comparison groups. See Mid Continent III, 940 F.3d at 671. 	Although the
pooled variance could either be a weighted average or a simple average, Commerce
chooses in its analysis to use a simple average. See Second Remand Results at 15–
16; see also Final Decision Memo at 28–29. 	Ultimately, Commerce divides the
difference in the mean by the pooled variance to determine the Cohen’s d coefficient.
See Mid Continent III, 940 F.3d at 671. If the Cohen’s d coefficient is 0.8 or greater,
Commerce 	will 	deem 	the 	test 	group’s 	pricing 	significantly 	different 	from 	the
comparison group’s pricing for purposes of meeting the “pattern” condition. See Mid
Continent III, 940 F.3d at 671.
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In the Second Remand Results, Commerce further explains that it uses a
simple average, rather than a weighted average, for the pooled standard deviation to
calculate an average of the comparison and test group’s pricing behaviors that equally
reflects both groups:
[T]he purpose of Commerce’s Cohen’s d test is to determine whether U.S.
prices differ significantly among purchasers, regions, or time periods –
i.e., 	do 	prices 	to 	each 	purchaser, 	region, 	or 	time 	period 	differ
significantly from all other prices of the comparable merchandise.
Although 	these 	are 	all 	prices 	in 	the 	U.S. 	market 	made 	by 	the
respondent, this analysis requires that these prices be subdivided into
separate 	distinct 	groups 	to 	consider 	separately 	whether 	the
respondent’s pricing behavior for sales to one specific group differs from
its pricing behavior for all other sales. In other words, these prices, all
of which are used to evaluate: 1) a respondent’s pricing behavior in the
U.S. market; and 2) whether the respondent is dumping, are now
considered to represent two distinct pricing behaviors which may differ
significantly. For the purpose of this particular analysis, Commerce
finds that these two distinct pricing behaviors are separate and equally
rational, and each is manifested in the individual prices within each
group.
Second Remand Results at 8–9, 32. Commerce reasons that the appropriate yardstick
by which to gauge the difference in the means between the groups is a simple average
of each group’s standard deviation, rather than one that weights the deviation based
on the individual sales. 	See id. at 9–10. 	Commerce explains, given the objective of
comparing pricing behavior of two distinct groups of sales, weight-averaging by sales
volume or value (or number of transactions), would inappropriately move the pooled
standard deviation toward the pricing behavior of either the test or comparison group.
See Second Remand Results at 7–9, 14–16, 32. Thus, in its Second Remand Results,
Commerce continues to find that using a simple average is preferable to a weighted
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average, and Commerce further addresses the specific points for which the Court of
Appeals ordered further explanation. See generally id.
In using a simple average, Commerce acknowledges that the Cohen’s d
literature supports the use of a weighted average, but further explains that the
literature varies depending on the given context. See Second Remand Results at 32–
33 (invoking the literature produced by Cohen, Ellis and Coe); Mid Continent III, 940
F.3d at 673–74 (the Court of Appeals found Commerce’s argument to be deficient
because “Commerce said that it was simply using a widely accepted statistical test;
yet it did not acknowledge that the only cited literature source for the relevant aspect
of the test itself calls for the use of weighted averages.”). In this context, Commerce
examines a company’s pricing behavior within a group of sales, and therefore, the
effect of the standard deviation within that group should not be diluted by the effect
of the standard deviation within another group. 9 See Second Remand Results at 33–
36. 	Commerce explains that the pricing behaviors categorized by purchaser, region
or time period are “equally genuine,” and thus deserve equal weight. 	See id. at 32.
Commerce’s analysis of the literature and the varying alternatives to calculate a
pooled standard deviation implicates the Court of Appeals’ second and third concerns
regarding whether the simple average or the weighted average will skew the results
9 Further, Commerce states that the relevant literature deals with sampled data,
thus PT’s emphasis on “statistical significance and inferences, including sample size”
as taken from the literature is misplaced in this context because Commerce is not
conducting any sampling, but rather is “calculate[ing] means and variances of the
U.S. prices [which] are the actual values of the entire population of U.S. sales.” See
Second Remand Results at 37–38.
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and why a simple average is more accurate than a weighted average. 10 	See Mid
Continent III, 940 F.3d at 674.
Commerce also confronts the examples PT provided to the Court of Appeals,
and the Court of Appeals referenced in its holding, which PT argues prove that simple
averaging to get the pooled variance distorts the results of the Cohen’s d test. 	See
Second Remand Results at 10–14; Mid Continent III, 940 F.3d at 674. 	As a
preliminary matter, Commerce claims, as it did in the Final Decision Memo, that PT
relies upon a flawed assumption in the use of its examples. 	Namely, Commerce
claims that PT’s examples rest on the assumption that the standard deviation will
increase with the group size. 11 	The Court of Appeals noted that Commerce’s
determination that the assumption PT was purportedly making—that standard
deviation will increase with the group size—is not always true was unsupported and,
in any event, did not substitute for an explanation of why using the weighted-average
methodology would distort the results. 	See Mid Continent III, 940 F.3d at 674. 	PT
refutes Commerce’s characterization of its argument and states unequivocally “that
10 Further, Commerce explains that contrary to PT’s contentions, the term “skew” as
used in statistical analysis is not relevant here because Commerce is not sampling
data, it is using all available data. 	See Second Remand Results at 38. 	Commerce
simply uses “skew” in a generic sense to discuss the appropriate weight to be given to
each subset of data relevant to calculating the variances. See id.
11 Commerce states that “[t]he Department disagrees with Respondents’ argument
that 	using 	a 	simple 	average 	rather 	than 	a 	weighted 	average, 	by 	number 	of
observations, undervalues the pooled standard deviation, which thereby distorts the
results of the Cohen’s d test. Respondents’ conclusion is based on its assumptions that
the number of observations and the variance of the U.S. prices to the test groups will
both be smaller than the number of observations and the variance of the U.S. prices
to the comparison groups.” See Final Decision Memo at 29.
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PT’s proposed methodology has nothing to do with ‘the assumption that the standard
deviation increases as the size of the group increases.’” 	PT’s Br. at 34. 	Indeed, PT
provides other examples to illustrate its point that Commerce’s characterization of
its argument is incorrect and that its approach is reasonable while Commerce’s is not.
See PT’s Br. at Ex. 1. 	Thus, PT and Commerce agree that the standard deviation
does not necessarily increase as the sample size increases. 	See Second Remand
Results at 11–12; PT’s Br. at 34.
Nonetheless, PT’s examples do not demonstrate that Commerce’s approach is
unreasonable. PT claims its examples show that using a simple average is objectively
unreasonable, but it offers no explanation in support of its assertion, other than
pointing out that the use of a simple average results in a dumping margin for PT,
while the use of a weighted average produces a de minimis rate. 	See PT’s Br. at 3,
8–12. 	In response to the Court of Appeals concerns, Commerce explains how its
approach effectuates its statutory objective. 	Commerce further states that PT’s
argument that Commerce’s choice of methodology may produce different results does
not on its own demonstrate that Commerce’s chosen methodology is unreasonable.
See Fujitsu Gen. v. United States, 88 F.3d 1034, 1043 (Fed. Cir. 1996) (“To survive
judicial 	scrutiny, 	an 	agency's 	construction 	need 	not 	be 	the 	only 	reasonable
interpretation or even the most reasonable interpretation.”).
Finally, although the Court of Appeals found that Commerce’s view—that
simple averaging was more predictable, while weighted averaging can conceal
manipulation—appeared to be based on the assumption that weight averaging must
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be done by counting the number of transactions, as opposed to quantities, see Mid
Continent III, 940 F.3d at 674, Commerce now explains that that distinction is
immaterial. See Second Remand Results at 15–16. Commerce states that no matter
how it weights the smaller group, either by volume, value or number of transactions,
using a weighted average “would improperly give preference to one pricing behavior
over another.” 12 See id. at 16.
Before the court, PT supplies various examples as to why, in its view, weighted-
averaging leads to reasonable results and a simple average does not. See PT’s Br. at
8–16. 	Defendant argues that PT’s examples and arguments relying on these
examples are barred by the doctrine of exhaustion. 	See Second Remand Results at
18–25. 	“[T]he Court of International Trade shall, where appropriate, require the
exhaustion of administrative remedies.” 28 U.S.C. § 2637(d). Where the doctrine of
exhaustion applies, and a party fails to exhaust its remedies by not raising a
particular issue(s) in the case brief to the agency, those issues cannot be considered
by the court. See id.; Consol. Bearings Co. v. United States, 348 F.3d 997, 1003 (Fed.
Cir. 2003) (citations omitted). 	The purpose of exhaustion is to afford the agency an
opportunity to consider an interested party’s concerns before the courts review the
agency determination for reasonableness. 	See Jacobi Carbons AB v. United States,
41 CIT __, __, 222 F. Supp. 3d 1159, 1170 (2017).
12 Commerce further states that this preference would “vary wildly for the same
purchaser, region or time period for different products.” See Second Remand Results
at 16.
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Much 	of 	the 	information 	to 	which 	Defendant 	objects 	further 	illustrates
arguments that PT already made. 13 	To the extent that these examples provide
further illustrations of PT’s examples provided to the Court of Appeals and considered
by Commerce, they are not barred by the doctrine of exhaustion. 	See Apex Frozen
Foods Private Ltd. v. United States, 41 CIT __, __, 208 F. Supp. 1398, 1404 (2017)
(“Apex”) (finding that plaintiffs “fully developed and squarely addressed” the relevant
issue in prior litigation with the government). To the extent that PT seeks to
illustrate insights beyond those illustrated in the examples previously supplied, those
arguments are barred by the doctrine of exhaustion.
Nonetheless, as further examples they do no more than reveal that the results
of a simple average and weighted average pooled standard deviation are different.
See PT’s Br. at 17–18 (presenting and explaining Table 1, which shows the number
of times that the simple average and weighted average produced different results).
Although PT repeatedly concludes that the weighted average results are reasonable,
while 	the 	simple 	average 	results 	are 	not, 	it 	offers 	no 	analysis 	of 	why 	its
13 PT justifies its submission as a response to Commerce’s argument that PT’s
examples are “cherry-picked” and as further evidence that Commerce’s use of the
simple 	average 	is 	unreasonable. 	See 	Consol. 	Pl. 	[PT’s] 	Add. 	Cmts. 	on
Redetermination at 1–2, Oct. 15, 2020, ECF No. 165. Commerce first raised the point
that the examples were cherry-picked in its draft results for the second remand
redetermination, see Draft Results of Redetermination Pursuant to Ct. Order at 12,
PRRs 3–5, bar codes 3949998-01–03 (Mar. 30, 2020), and therefore Defendant argues
PT could have raised its additional information in response to the draft results. See
Zehejiang Mach. Imp. & Exp. Corp. v. United States, 44 CIT __, __, Slip Op. 20-122
at 26–30 (Aug. 21, 2020) (finding that plaintiff failed to exhaust its remedies on a
particular issue where Commerce raised the issue in its preliminary results and
plaintiff failed to respond).
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pronouncements are accurate. See, e.g., PT’s Br. at 19 (“examples of [simple average]
results being more reasonable than [weighted average] results, if they exist at all, are
much harder to find”); see also, e.g., id. at 23 (“for certain scenarios Commerce’s
[simple average] methodology does not work”). 	The one point that PT appears to
make with these visuals is that the test group may have a similar price spread as the
comparison group in cases where the test group nonetheless passes the Cohen’s d test
using a simple average. See PT’s Br. at Exs. 2, 3 & 4. Implicit in this point is a view
that the test group should have a different spread from the comparison group in order
to have a passing score for Cohen’s d. 	It is unclear to the court why PT’s implicit
assumption should be true. The very point that Commerce makes to support its use
of a simple average is that the test group and the comparison group are two distinct
groups and the price variances within them need to be considered independently. The
statute tasks Commerce with determining whether there are U.S. prices that differ
significantly among purchasers, regions or periods of time; and therefore, Commerce
examines the pricing behaviors for those distinct groups. See Second Remand Results
at 8–9, 32; Def.’s Resp. to Cmts. on Remand Redetermination at 15–16, Sept. 10, 2020,
ECF No. 155 (“Def.’s Resp.”). 	The court fails to see how the existence of similar price
spreads among sales within the two groups necessarily means that the overall pricing
behaviors of the two groups are the same.
For 	similar 	reasons 	PT’s 	arguments 	regarding 	analysis 	of 	variance 	or
“ANOVA” fail to persuade the court that Commerce’s approach is unreasonable.
Again, in its comments before this court PT includes arguments that Defendant
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claims PT failed to exhaust before the agency. See PT’s Br. at 34–39. PT argues that
the statistical principles upon which the Cohen literature relied support the use of a
weighted average for the pooled standard deviation. 	See id. at 34–36. More
specifically PT argues that the statistical concept ANOVA “establishes universal
relationships between the spread of a batch of data. . . and the spreads within
subgroups of that batch.” See id. at 35. Thus PT contends ANOVA supports the use
of weighted average. 	See id. at 34–36. 	Defendant argues that PT failed to exhaust
its argument regarding ANOVA before Commerce and therefore should not be
allowed to raise the issue before the court. See Def.’s Resp. at 23–25. Although, PT
did not use the phrase analysis of variance or ANOVA in its comments on the draft
remand redetermination, it did argue Commerce’s approach did not comport with the
statistical principles underlying the Cohen’s d analysis. See Pl. [PT]’s Cmts. on Draft
Redetermination at 16–19 & Ex. 2, PRR 9, bar code 3955836-01 (Mar. 19, 2020).
But again, even allowing PT to make the more detailed argument in this court
does not convince the court that Commerce’s approach is unreasonable. 	Commerce
considered the arguments for using a weighted average, including the literature cited
by PT explaining that statistical principles supported the use of a weighted average.
See generally Second Remand Results; see also Fujitsu, 88 F.3d at 1039 (noting the
deference 	due 	to 	Commerce’s 	expertise 	for 	determinations 	involving 	“complex
economic and accounting decisions of a technical nature”). Commerce concluded that,
given the task before it as provided in the statute, it would rely on the simple average
because
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in the context of the Cohen’s d test, the U.S. prices to each purchaser,
region or time period separately and equally represent the respondent’s
pricing behavior, which itself is determined by the respondent’s rational
economic goal of maximizing the benefits accruing to the respondent.
Second Remand Results at 36. 	Therefore, PTs arguments concerning ANOVA as
support for the use of a weighted average have been addressed by Commerce. 	For
the foregoing reasons, Commerce’s choice to use a simple average for the pooled
standard deviation is reasonable.
CONCLUSION
For the foregoing reasons, it is
ORDERED that Commerce’s Second Remand Results is sustained. Judgment
will enter accordingly.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated: 	January 8, 2021
New York, New York
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