Lumber Litigants Answer Judge's Question About Loper Bright's Impact on Cohen's d Test

Filers included consolidated plaintiffs led by Resolute FP Canada; Canadian parties, including the Canadian government; petitioner Sierra Pacific Industries and its subsidiary, Seneca Sawmill Company; and petitioner Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (Coalition).

Petitioners Sierra Pacific and Coalition argued Loper Bright doesn’t change the standard of review the trade court should apply to the case.

“Importantly, while Loper Bright overruled Chevron and deference to ‘permissible’ interpretations of ambiguous statutes, the Supreme Court retained other general legal principles and deference doctrines that are important to this Court’s review of Commerce’s [differential pricing method],” Coalition said.

Loper Bright still held that deference should be granted when Congress has delegated broad discretion to an agency, as is the case regarding antidumping and countervailing duty reviews, it and Sierra Pacific argued. They said the U.S. Court of Appeals for the Federal Circuit also has explained that the legislature uses general, “nonspecific statutory language” when it wants to delegate, and “the Federal Circuit explained the term ‘substantially dependent’ used by Congress in section 771B of the Tariff Act of 1930, as amended, is general in nature.”

Sierra Pacific argued that Loper Bright also “specifically reaffirmed that” under the Administrative Procedure Act, judicial review of an agency’s “‘policymaking and factfinding’ [is] deferential.” And it noted that Loper Bright didn’t impact stare decisis.

In turn, the Canadian parties took the opposite position, saying that “[t]he mandate of Loper Bright applies with full force” to the present litigation because CAFC has held Commerce’s differential pricing method is only Commerce’s interpretation of relevant law. Because Chevron has been struck down, the court therefore must use “all of the traditional tools of statutory construction” to determine the “best” interpretation of the law.

They explained the differential pricing method is an “interpretative rule” created by Commerce.

“With each of the three tests that form part of the [differential pricing method], Commerce purports to interpret a particular statutory precondition for application of” average-to-transaction price comparison, it said.

First, it said, the Cohen’s d test “reflects Commerce’s interpretation” of the law instructing it to determine whether prices “differ significantly,” it said. Second, the ratio test allows Commerce to establish a “‘pattern’ of prices that differ significantly,” and, third, the meaningful-difference test “provides Commerce’s interpretation of whether such differences ‘cannot be taken into account’ using an average-to-average (‘A-A’) or transaction-to-transaction (‘T-T’) methodology.”

With the Loper Bright ruling, the court is now required to determine whether each step of Commerce’s three-part test is the best interpretation of statute; and they “clearly” aren’t, the Canadian parties said.

And, finally, the consolidated plaintiffs also said that Loper Bright applies to the differential pricing method. They said the department “has expected deference to interpret the law and has treated as ‘reasonable’ its resort to A-T without explaining, as the statute requires, why monthly A-A comparisons could not take into account a detected pattern of significant price differences that were entirely a function of periods of time.”

Commerce hadn’t provided any “lawful justification” for its use of the test, they said. And they argued the test itself “is unlawful according to the most basic elements of statutory interpretation.”

Specifically, they said that the Tariff Act only allows the department to use a method other than A-A “if” two conditions are met: a demonstration of a “pattern of export prices … that differ significantly among purchasers, regions or periods of time,” and an explanation as to why those differences can’t be analyzed using the A-A or transaction-to-transaction method.

They argued that the department “skipped” that second step “by relying on a defective statistical test that has nothing to do with dumping.”

And they took issue with certain ways Commerce had interpreted the first step. For example, they argued that it acted unreasonably when it considered all three categories under which prices could differ -- “purchasers, regions, or periods of time” -- together when determining whether a “pattern” of fluctuating prices existed. Instead, the department “should have looked for a ‘pattern’ in each of the three categories separately,” they claimed.

“Aggregating them is contrary to the statute’s plain language which separates the categories by the conjunction ‘or,’” they said.