ALBERTA PORK PRODUCERS'MARKETING BD. v. US

• Decision Date: 07 August 1987
• Docket Number: Court No. 85-09-01257.
• Citation: 669 F. Supp. 445
• Parties: ALBERTA PORK PRODUCERS' MARKETING BOARD, et al., Plaintiffs, The Canadian Meat Council, and Its Members, Plaintiff-Intervenors, v. UNITED STATES, Defendant, National Pork Producers Council and Wilson Foods Corporation, Defendant-Intervenors.
• Court: U.S. Court of International Trade

669 F. Supp. 445

ALBERTA PORK PRODUCERS' MARKETING BOARD, et al., Plaintiffs, The Canadian Meat Council, and Its Members, Plaintiff-Intervenors, v. UNITED STATES, Defendant, National Pork Producers Council and Wilson Foods Corporation, Defendant-Intervenors.

Court No. 85-09-01257.

United States Court of International Trade.

August 7, 1987.

COPYRIGHT MATERIAL OMITTED

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Cameron, Hornbostel & Butterman (William K. Ince and Caren Z. Turner), Washington, D.C., for plaintiff.

Arnold & Porter (Alan O. Sykes and Lawrence A. Schneider), Washington, D.C., for plaintiff-intervenor.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Dept. of Justice, Commercial Litigation Branch (Elizabeth C. Seastrum); Douglas Riggs, General Counsel, U.S. Dept. of Commerce, Washington, D.C., for defendant.

Thompson, Hine & Flory (Mark R. Sandstrom), Washington, D.C., for defendant-intervenor.

MEMORANDUM OPINION AND ORDER

DiCARLO, Judge:

Plaintiffs bring an action under section 516A of the Tariff Act of 1930, as amended, 19 U.S.C. §§ 1516a(a)(2)(A)(i)(II) and 1516a(a)(2)(B) (Supp.III 1985), contesting the final affirmative subsidy determination by the United States Department of Commerce, International Trade Administration (Commerce) in Live Swine and Fresh, Chilled and Frozen Pork Products from Canada, 50 Fed.Reg. 24,097 (1985), and the final affirmative injury determination by the International Trade Commission (Commission) in Live Swine and Pork From Canada, Inv. No. 701-TA-224 (Final), USITC Pub. 1733 (1985), as those determinations relate to imports of Canadian live swine. Jurisdiction is provided under 28 U.S.C. §§ 1581(c) and 2631(c) (1982). Commerce's determination is sustained in part and remanded in part; the Commission's determination is remanded.

I. BACKGROUND

In response to a petition filed by the National Pork Producers Council, representing domestic producers of live swine, and joined in by the Wilson Foods Corporation, a domestic producer of fresh, chilled and frozen pork, Commerce initiated a countervailing duty investigation, concerning imports of live swine and fresh, chilled and frozen pork from Canada, covering the period April 1, 1983 to March 31, 1984. 49 Fed.Reg. 47,079 (1984). Since Canada is a "country under the Agreement" within the meaning of section 701(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1671(b) (1982), the Commission was required to determine whether an industry in the United States is materially injured, or is threatened with material injury, by reason of imports of that merchandise. 19 U.S.C. § 1671(a)(2) (1982 & Supp. III 1985).

The Commission made a preliminary determination that there was a reasonable indication that an industry in the United States was materially injured by reason of imports of live swine and fresh, chilled and frozen pork from Canada. Live Swine and Pork from Canada, Inv. No. 701-TA-224 (Preliminary), USITC Pub. No. 1625 (1984). Commerce extended the time for making its preliminary subsidy determination based on a finding that the investigation was "extraordinarily complicated" under 19 U.S.C. § 1671b(c)(1)(B)(i) (1982). Commerce issued its preliminary determination on March 26, 1985, finding that certain benefits granted by the Canadian federal and provincial governments constitute subsidies within the meaning of section 1671(a)(1). Live Swine and Fresh, Chilled and Frozen Pork from Canada, 50 Fed. Reg. 25,097 (1985). In June, 1985 Commerce issued a final affirmative subsidy determination as to twenty-three Canadian federal and provincial programs. 50 Fed. Reg. 25,097.

In its final determination the Commission affirmed its preliminary determination that the domestic industry producing live swine was materially injured by reason of imports of live swine from Canada. However, in a reversal of its preliminary findings, the Commission held that there was no material injury or threat of material injury to the domestic pork industry by reason of imports of Canadian fresh, chilled and frozen pork. USITC Pub. 1733. The Court affirmed the Commission's negative determination regarding fresh, chilled and frozen pork in National Pork Producers Council v. United States, 11 CIT ___, 661 F.Supp. 633 (1987). Plaintiffs, representing Canadian live swine producers, challenge various aspects of Commerce's subsidy determination and the Commission's injury determination, as those determinations relate to live swine.

II. DISCUSSION

A. The Commerce Determination

Plaintiffs argue that Commerce incorrectly concluded that seven programs conferred countervailable subsidies to Canadian swine producers since those programs do not provide subsidies "to a specific enterprise or industry, or group of enterprises or industries" within the meaning of 19 U.S.C. § 1677(5)(B) (1982). Plaintiffs say that Commerce improperly applied the "specificity test" to six farm income stabilization plans, one federal and five provincial, and to the Record of Performance (ROP) program for hogs, a joint Canadian federal/provincial herd testing program designed to help producers improve the quality of breeding stock. Plaintiffs also challenge Commerce's finding that the Ontario Farm Tax Reduction Program confers a countervailable regional subsidy, and argue that in any event Commerce improperly calculated the amount of that subsidy. At oral argument plaintiffs withdrew their claim that Commerce must reduce the bonding/deposit rate to account for the elimination of certain payments to hog producers in fiscal year 1985, since that claim was the subject of a pending administrative review.

In countervailing duty cases the standard of review is not de novo. Zenith Radio Corp. v. United States, 437 U.S. 443, 98 S.Ct. 2441, 57 L.Ed.2d 337 (1978). Rather, the standard is provided under 19 U.S.C. § 1516a(b)(1)(B) (Supp. III 1985), which states: "The court shall hold unlawful any determination, finding, or conclusion found— ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." The substantial evidence standard "frees the reviewing courts of the time-consuming and difficult task of weighing the evidence, it gives proper respect to the expertise of the administrative tribunal and it helps promote the uniform application of the statute." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1027, 16 L.Ed.2d 131 (1966) (footnote omitted).

Substantial evidence is more than a mere scintilla. See Carlisle Tire & Rubber Co. v. United States, 10 CIT ___, 622 F.Supp. 1071 (1985). It means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Federal Trade Comm'n v. Indiana Federation of Dentists, 476 U.S. 447, 106 S.Ct. 2009, 2015, 90 L.Ed.2d 445 (1986); see Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938). Provided the determination is supported by a reasonable evaluation of the evidence on the record, "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Matsushita Electric Industrial Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984). Accordingly, the Court must give "tremendous deference" to the findings of the agency charged with making determinations under the statute. Smith-Corona Group v. United States, 713 F.2d 1568, 1571 (Fed.Cir.1983); Carlisle Tire & Rubber Co., 622 F.Supp. at 1075. Substantial weight is also given to the statutory interpretations of the agency administering the countervailing duty law. Georgetown Steel Corp. v. United States, 801 F.2d 1308 (Fed.Cir.1986); see American Lamb Co. v. United States, 785 F.2d 994, 1001 (1986) ("A reviewing Court must accord substantial weight to an agency's interpretation of a statute it administers."); Canadian Meat Council v. United States, 11 CIT ___, 661 F.Supp. 622, 625 (1987) (Commerce's statutory interpretation given weight when "based on a permissible construction of the statute").

Plaintiffs' argument that Commerce erred in its finding that seven programs conferred countervailable subsidies, calls into question Commerce's application of the specificity test, which is used to determine whether governmental benefits constitute domestic subsidies under section 1677(5)(B). The specificity test has been the subject of broad analysis in prior decisions of the Court. See PPG Industries, Inc. v. United States, 11 CIT ___, 662 F.Supp. 258 (1987); Cabot Corp. v. United States, 9 CIT ___, 620 F.Supp. 722 (1985), appeal dismissed, 788 F.2d 1539 (Fed.Cir.1986), reh'g denied, May 22, 1986. These decisions have established that "domestic subsidies must be provided to a `specific enterprise or industry, or group of enterprises or industries' to be countervailable." PPG Industries, 662 F.Supp. at 264 (quoting 19 U.S.C. § 1671(5)(B)). In distinguishing between subsidies that are provided to a specific group of industries and subsidies that are not so provided, "the appropriate standard focuses on the de facto case by case effect of benefits provided to recipients rather than on the nominal availability of benefits." Cabot, 620 F.Supp. at 732. As stated recently by the Court in PPG Industries:

Although general availability may be a manifestation that a program has not conferred a benefit upon a specific recipient, general availability is not the statutory test. It is merely one of several relevant factors to be considered in determining whether or not a benefit or competitive advantage has been conferred upon a "specific enterprise or industry, or group of enterprises or industries."

662 F.Supp. at 265; see Al Tech Specialty Corp. v. United States, 11 CIT ___, 661 F.Supp. 1206, 1212 (1987); Can-Am Corp. v. United States, 11 CIT ___, 664 F.Supp. 1444, 1448 (1987).

1. Federal Agricultural Stabilization Act Benefits

Approximately 83% of the countervailable...