Florex v. US

• Decision Date: 06 January 1989
• Docket Number: Court No. 87-05-00686.
• Citation: 705 F. Supp. 582
• Parties: FLOREX, et al., Plaintiffs, v. The UNITED STATES, Defendant, and Floral Trade Council of Davis, California, Defendant-Intervenor.
• Court: U.S. Court of International Trade

705 F. Supp. 582

FLOREX, et al., Plaintiffs, v. The UNITED STATES, Defendant and Floral Trade Council of Davis, California, Defendant-Intervenor.

Court No. 87-05-00686.

United States Court of International Trade.

January 6, 1989.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Duncan, Allen and Talmage, Leslie Alan Glick, Washington, D.C., for plaintiffs.

John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch (Elizabeth C. Seastrum), Civ. Div., U.S. Dept. of Justice; Duane W. Layton, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce; Judith M. Czako, Office of General Counsel, U.S. Intern. Trade Com'n, Washington, D.C., for defendant.

Stewart & Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr. and Jimmie V. Reyna, Washington, D.C., for defendant-intervenor.

OPINION

RESTANI, Judge:

This matter is before the court on plaintiffs' motion for judgment on the agency record. At issue are the final determinations of the International Trade Administration of the Department of Commerce (ITA) and the International Trade Commission (ITC) involving fresh cut flowers from Mexico. Plaintiffs are various producers in Mexico who were respondents in the agency investigations. The court will first address the issues arising out of the final affirmative ITA determination in Certain Fresh Cut Flowers from Mexico, 52 Fed. Reg. 6361 (March 3, 1987).

A. ITA Issues.

1. Standing

a. Interested Party

Plaintiffs challenge the ITA's determination that Floral Trade Council of Davis (FTC) is both an interested party and represents the relevant domestic fresh cut flower industry. 19 U.S.C. § 1673a(b)(1) (Supp. IV 1986) reads as follows:

(b) Initiation by petition

(1) Petition requirements

An antidumping proceeding shall be commenced whenever an interested party described in subparagraph (C), (D), (E), or (F) of section 1677(9) of this title files a petition with the administering authority, on behalf of an industry which alleges the elements necessary for the imposition of the duty imposed by section 1673 of this title, and which is accompanied by information reasonably available to the petitioner supporting those allegations. The petition may be amended at such time, and upon such conditions, as the administering authority and the Commission may permit.¹

As to the first requirement, that the petitioner be an interested party, plaintiffs assert the petitioner did not allege in its petition facts sufficient to establish that it qualifies as an interested party under section 1677(9)(E) or (F), that is, that it is a trade association, a majority of whose members produce or wholesale the fresh cut flowers under investigation. FTC is a trade association. In its petition, FTC alleged that a majority of its members produced a product like that subject to investigation. Thus, FTC made the necessary allegations. At the petition sufficiency stage, ITA proceedings are ex parte. It is inappropriate to accept submissions by respondents at this stage. See United States v. Roses, Inc., 706 F.2d 1563 (Fed. Cir.1983).² Finding no reason to doubt the correctness of the allegations made by petitioners at the initial stage, ITA accepted FTC's representations as to its status as an interested party.

During the proceedings, respondents challenged the allegations of FTC. All parties agree that standing may be challenged subsequent to the initial ex parte stage of the proceedings. At a hearing before ITA, FTC alleged that 100% of its members grow fresh cut flowers. Plaintiffs now state that FTC has never alleged that this 100%, or even the statutorily required majority, produces or wholesales at least one of the seven cut flowers subject to the simultaneous flower investigations or the three flowers involved with regard to Mexico. In fact, FTC alleged at the hearing before ITA that ITC had information on a flower-by-flower basis, which information would illuminate the issue of FTC's relation to the totality of growers. Such information might also indicate which of FTC's members grew the particular flowers at issue, or FTC could have provided such information if ITA had considered this a serious issue. Although respondents mentioned the need for further investigation as to this issue in their prehearing brief, Public Record Document Number (PR) 105 at 2, in their post-hearing brief, plaintiffs did not cite to any particular information on this issue or request ITA to review data from ITC on this subject.³ Thus, it would not have been clear to the agency whether plaintiffs were adhering to their objections in the face of FTC's statements at the hearing.

It is at least a theoretical possibility, based on the record before the ITA, that less than a majority of the members of FTC produce or wholesale one or more of the flowers under investigation. But this case may only be judged on the record before the court. No evidence was produced indicating that FTC was not an interested party and certainly no members of the domestic industry opposed the petition on this, or any other ground. The only relief available would be to remand on the basis of inadequacy of investigation. It would seem inappropriate under the circumstances of this investigation, including the manner in which plaintiffs presented this argument, to remand this action to the agency to investigate the speculation of respondent in an effort to determine if a technical defect exists as to petitioner's standing. Any such defect likely was easily amendable.⁴

Clearly, the standing provision is intended to protect the domestic industry and to save ITA the effort of investigating unsupported petitions.⁵ Presumably respondents also are not meant to be harassed by frivolous petitions, but without some evidence of record suggesting that FTC is not an interested party, or that ITA clearly erred by failing to investigate further, the statutory purposes of the standing provisions would not be served by remand for investigation of this point. ITA's position that it was not required to undertake further investigation on this issue seems well taken based on the facts of this particular case. The agency is not required to investigate every possibility. Furthermore, Citrosuco Paulista, S.A. v. United States, 12 CIT ___ at ___, 704 F.Supp. 1075 at 1084 (1988) indicates that interested party problems do not, in every case, require a new petition and investigation, because ITA may commence proceedings sua sponte. What limits may exist as to ITA's discretion in this area need not be addressed here because of the factors discussed supra and those mentioned in the following section. The record in this case does not indicate lack of standing on this basis. Based on the facts of this case, there is no adequate reason for remand for further investigation of this issue.

b. Representation of the Domestic Industry

Plaintiffs also allege that FTC did not act "on behalf" of the domestic industry because only 92 of its members signed the petition filed herein and because these 92 members represent a small part of the cut flower industry. FTC is composed of 260 growers of fresh cut flowers. There are alleged to be from 500 to several thousand commercial growers of fresh cut flowers in the United States.⁶

The fact that only 92 FTC members signed the petition does not indicate that other members of the industry do not support the petition. ITA's position is that it need not look beyond the petition as to this element of standing unless information is produced indicating that the domestic industry does not support the petition. Representativeness is not defined by the statute. Unfair trade proceedings are very expensive, thus, they are often brought by trade associations as opposed to individuals. Individuals may file petitions. The filing of a petition by a trade association, however, is normally some indication, in itself, of industry support. Certainly it is unlikely that FTC would file a petition if the majority of its members opposed it. Based on the ITA record, a majority of FTC's membership would seem to constitute a large fraction of the domestic flower industry, if one views the industry on a grower by grower basis. In addition, ITA did not receive one U.S. industry submission indicating opposition to the petition. Thus, ITA appears to have acted reasonably in accepting the petition as representative of the industry's view and in adhering to that position.

The one case cited by plaintiffs on this point is inapposite. Gilmore Steel Corp. v. United States, 7 CIT 219, 585 F.Supp. 670 (1984) involved the issue of whether ITA may terminate an investigation when industry opposition indicates the petition is not being prosecuted on behalf of the industry. In Gilmore, the court indicated that in the face of such manifest opposition the investigation could be terminated as to the concerned national industry. The case was remanded, however, for a decision on whether the petitioner represented a regional industry.⁷ Absolutely none of this indicates that ITA's view, that it may accept the petitioner's allegations as to its representation of industry views until industry lack of support is demonstrated, is erroneous.

c. Action by ITC

The court finds no indication that ITC erred in finding FTC had standing. Plaintiffs raised the issue in their reply brief before this court of whether ITC should have found lack of representativeness because plaintiffs deduced from information before ITC that FTC represents a small portion of the producers of the three flowers from Mexico subject to investigation. ITC seems to defer in most matters to ITA, on the issue of standing. At least, in the first instance, ITA should make the ruling on standing as part of its petition sufficiency determination. Had ITC's investigation raised indications of lack of industry support, it might be appropriate to pursue the issue of the proper roles of ITA and ITC on this...