PPG Industries, Inc. v. US

Decision Date07 April 1989
Docket NumberCourt No. 87-01-00035.
Citation712 F. Supp. 195,13 CIT 297
PartiesPPG INDUSTRIES, INC., Plaintiff, v. UNITED STATES, Defendant, Vitro Flotado, S.A. and Vidrio Plano De Mexico, S.A., Defendant-Intervenors.
CourtU.S. Court of International Trade

Stewart and Stewart, Eugene L. Stewart and Terence P. Stewart, David Scott Nance, Geert De Prest, William A. Fennel, Washington, D.C., for plaintiff.

John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, Platte B. Moring, III, Washington, D.C., for defendant.

Brownstein, Zeidman & Schomer, Irwin P. Altschuler, David R. Amerine, Washington, D.C., for defendant-intervenors Vitro Flotado, S.A. and Vidrio Plano De Mexico, S.A.

OPINION

CARMAN, Judge:

Plaintiff moves for judgment on the agency record pursuant to Rule 56.1 of the Rules of this Court, seeking reversal and a remand of the final results of an administrative review of a suspension agreement in Unprocessed Float Glass From Mexico; Final Results of Countervailing Duty Administrative Review, 51 Fed.Reg. 44,503 (Dec. 10, 1986). Defendant and defendant-intervenor oppose the motion and seek this Court's affirmance of the determination.

BACKGROUND

The United States International Trade Administration, Department of Commerce (ITA or Commerce), published an agreement suspending a countervailing duty investigation on unprocessed float glass from Mexico. Unprocessed Float Glass From Mexico; Suspension of Countervailing Duty Investigation, 49 Fed.Reg. 7,264 (Feb. 28, 1984). On October 2, 1985 and February 28, 1986, plaintiff formally requested Commerce to conduct two separate administrative reviews1 which Commerce completed in accordance with section 751 of the Tariff Act of 1930 as amended. 19 U.S.C. § 1675 (1982 & Supp. V 1987). Commerce upheld the suspension agreement in Unprocessed Float Glass From Mexico; Final Results of Countervailing Duty Administrative Review, 51 Fed.Reg. 44,503 (1986). It is from this determination that plaintiff seeks relief.

CONTENTIONS OF THE PARTIES

Plaintiff contends as follows:

1. It should not be precluded from raising the issues concerning the countervailability of the FICORCA2 and Mexican Natural Gas Program in this case, since the decision in PPG Industries Inc. v. United States, 11 CIT ___, 662 F.Supp. 258 (1987) (PPG I), has no direct or collateral estoppel effect;
2. The FICORCA benefits program is countervailable under the principle adopted by this Court in Cabot Corp. v. United States, 9 CIT 489, 620 F.Supp. 722 (1985) (Cabot I), appeal dismissed, 788 F.2d 1539 (1986), vacated in part, 1986 WL 25437 by order dated November 20, 1986, and in PPG I;
3. The sale of natural gas by Mexico to Mexican float glass producers at artificially low prices should have been held countervailable;
4. The determinations by Commerce regarding the receipts of CEDIS3 by members of the Vitro group were unsupported by substantial evidence and were otherwise contrary to law;
5. The ITA violated its statutory authority by its failure to investigate an allegation of subsidization through the lease of land on preferred terms that was supported by substantial evidence;
6. The ITA was required by law to terminate the suspension agreement covering imports of float glass since the agreement did not cover all the subsidies received by Mexican exporters, and could not be effectively monitored.

Brief in Support of Motion for Judgment on the Agency Record For Plaintiff PPG Industries, Inc. (Plaintiff's Brief) at 1-4.

Defendant, United States, contends that plaintiff is precluded from raising the issues concerning the countervailability of the FICORCA and natural gas programs urging arguments sounding in the legal theories of stare decisis and collateral estoppel. Defendant further urges that the determination of Commerce that the signatories of the suspension agreement did not receive CEDIS was supported by substantial evidence in the record and was otherwise in accordance with law. Lastly defendant asserts that plaintiffs provided insufficient information for Commerce to initiate an investigation of preferential land leases. Consequently, defendant maintains, Commerce was not obligated to terminate the suspension agreement covering float glass from Mexico. Defendant-intervenor generally joins in the contentions of the defendant.

DISCUSSION

The standard which this Court must apply in reviewing a countervailing duty investigation is whether the investigation is supported by substantial evidence on the record or is otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1982).

The interpretation of the laws administered by Commerce should be sustained if that interpretation is reasonable. United States v. Zenith Radio Corp., 64 CCPA 130, C.A.D. 1195, 562 F.2d 1209 (1977), aff'd, 437 U.S. 443, 98 S.Ct. 2441, 57 L.Ed. 2d 337 (1978); American Lamb Company v. United States, 4 Fed.Cir. (T) 47, 785 F.2d 994 (1986). Furthermore, this Court should not reject the interpretation of a statute or regulation administered by the Agency unless it has compelling reasons so to do. Wilson v. Turnage, 791 F.2d 151, 155-56 (Fed.Cir.1986), cert. denied, 479 U.S. 988, 107 S.Ct. 580, 93 L.Ed.2d 583 (1986).

The Supreme Court has held, with regard to judicial review of an agency's construction of a statute it administers, that absent direct Congressional instruction as to the precise question at issue, the question for the Court to decide is whether the agency's interpretation is based upon a permissible construction of the statute. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Where the agency's interpretation of a statute represented a reasonable accommodation of manifestly competing interests, it was entitled to deference. Id. at 865, 104 S.Ct. at 2793. Since Commerce administers the trade laws and its implementing regulations, it is entitled to deference in its reasonable interpretations of those laws and regulations. This should not suggest the vacation of meaningful judicial review, but rather a recognition that administrative agencies must be permitted to effectively employ their administrative expertise in carrying out their legislative mandates.

The Supreme Court in Chevron stated in part:

Arguments over policy that are advanced by the parties create the impression that a party is now waging in a judicial forum a specific policy battle which was lost in the agency ... but one which was never waged in the Congress. Such policy arguments are more properly addressed to legislators or administrators, not to judges.... An agency to which Congress has delegated policymaking responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration's views of wise policy to inform its judgments. While agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices—resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency charged with the administration of the statute in light of everyday realities.
When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency's policy, rather than whether it is a reasonable choice within a gap left open by Congress, the challenge must fail.... The responsibilities for assessing the wisdom of such policy choices and resolving the struggle between competing views of the public interest are not judicial ones: `Our Constitution vests such responsibilities in the political branches.'

467 U.S. at 864-65, 104 S.Ct. at 2792-93, quoting TVA v. Hill, 437 U.S. 153, 195, 98 S.Ct. 2279, 2302, 57 L.Ed.2d 117 (1978).

While this Court must defer to an agency in its policy determinations, this Court must nevertheless follow its mandate from Congress to implement effective and meaningful judicial review. 19 U.S.C. § 1516a(b)(1)(B).

ISSUE PRECLUSION

In considering such terms as res judicata, collateral estoppel and claim preclusion, the United States Court of Appeals for the Federal Circuit has adopted the following analysis:

We will be guided by the Restatement (Second) of Judgments (1982) which, in introductory note to § 13, provides the following basic statement:
The principal concepts developed in this Chapter are: merger—the extinguishment of a claim in a judgment for plaintiff (§ 18); bar—the extinguishment of a claim in a judgment for defendant (§ 19); and issue preclusion —the effect of the determination of an issue in another action between the parties on the same claim (direct estoppel) or a different claim (collateral estoppel) (§ 27). The term "res judicata" is here used in a broad sense as including all three of these concepts. When it is stated that "the rules of res judicata are applicable," it is meant that the rules as to the effect of a judgment as a merger or a bar or as a collateral or direct estoppel are applicable.

Young Engineers, Inc. v. United States Int'l Trade Comm'n, 2 Fed.Cir. (T) 9, 19, 721 F.2d 1305, 1314 (1983).4

Defendant United States, citing Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979), urges that plaintiff should be precluded from relitigating issues in a second action that were necessary for the outcome of a first action, even though the first action may have been based upon a different cause of action. Defendant's Memorandum in Opposition to Plaintiff's Motion For Judgment Upon the Agency Record (Defendant's Memorandum) at 12. Defendant points out that the Court of Appeals has identified four circumstances which must be present for issue preclusion to take effect.

(i) the issue previously adjudicated is identical with that now presented,
(ii) that the issue was "actually
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