Three cases being argued next month at the Federal Circuit attracted amicus briefs. One of these cases is Stupp Corporation v. United States. In it, Stupp Corporation appeals a judgment of the Court of International Trade, which sustained the Department of Commerce’s finding upholding the application of a particular test in the differential pricing analysis to calculate antidumping margins. This is our argument preview.
In its opening brief, SeAH Steel Corp. made several arguments. First, it argued that “Commerce failed to identify any texts that support its proposed use of Cohen’s d when the assumptions described by Professor Cohen are not satisfied.” Second, in response to the concern “that the manner in which Commerce calculated Cohen’s d could result in affirmative findings of patterns when there are only insignificant differences in U.S. prices,” SeAH Steel contends Commerce wrongly asserted that “the ‘meaningful difference’ test . . . addressed any such concern.” Third, SeAH Steel argued, “Commerce’s assertion that its use” of Differential Pricing Analysis “‘only’ changed the comparison methodology in 21 or 22 percent of cases is . . . misleading.” Lastly, SeAH argued, “there is no reason to expect a rule-of-thumb based on observations of heights or IQs to provide any meaningful threshold for SeAH’s U.S. prices.”
In its response brief, the United States argued that “Commerce addressed the three concerns raised by” the Federal Circuit in a prior decision. First, the government argued, Commerce’s Differential Pricing Analysis “as whole reasonably compensates for” the possibility of inaccurate results produced by non-normal data sets. Second, the government explained how Commerce argued the “the ratio test and meaningful difference test would compensate for any potential issues” related to “data sets with small numbers of sales.” Third, the government argued, “the Cohen’s d test continues to operate effectively” in the circumstance of “data sets with small variance.”
In its separate response brief, Welspun Tubular argued the Federal Circuit should affirm the judgment of the Court of International Trade because it “correctly held that Commerce’s use of the Cohen’s d test as part of the differential pricing analysis is a reasonable method to address the criteria set forth in” the statute. Welspun Tubular explained that, because “[t]here is no statutory language telling Commerce how to detect patterns of U.S. prices that differ significantly among purchasers, regions, or time periods,” Congress “left a gap in the statute for Commerce to fill.” According to Welspun Tubular, “Commerce filled that gap” using “its differential pricing analysis, which reasonably implements the text of the statute and the legislative intent of unmasking situations where targeted dumping may be occurring.”
In its reply brief, SeAH Steel reiterated its position. It also suggested that the government effectively argues that “Commerce was permitted to disregard the assumptions required by Professor Cohen’s text for use of the d statistic, because its analysis considered the full population, and not just a sample.” But, according to SeAH Steel, the government’s “argument is . . . fundamentally dishonest.” SeAH Steel argued that “Professor Cohen’s general statements about effect sizes in a population . . . simply have no bearing on the proper use of the d statistic.”
One amicus brief was filed by the Government of Canada; Canfor Corporation; Canadian Forest Products, Ltd.; Canford Wood Products Marketing, Ltd.; J.D. Irving Limited; Resolute FP Canada Inc.; Tolko Industries Ltd.; Tolko Marketing and Sales Ltd.; and West Fraser Mills Ltd. The brief supports reversal. For support, it discussed concerns with Commerce’s use of the Cohen’s d test. For example, it argued that “Commerce’s Cohen’s d test is not a reasonable test to identify significant difference between groups of prices, because it does not reliably measure what it purports to measure.”
Oral argument is scheduled to be heard on Wednesday, March 5. We will keep track of this case and report on any developments.