Comeau Seafoods Ltd. v. US, Court No. 86-06-00751.

• Decision Date: 27 October 1989
• Docket Number: Court No. 86-06-00751.
• Parties: COMEAU SEAFOODS LTD., St. Mary's Bay Fisheries Ltd., National Sea Products Ltd., and Fisheries Council of Canada, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

724 F. Supp. 1407

COMEAU SEAFOODS LTD., St. Mary's Bay Fisheries Ltd., National Sea Products Ltd., and Fisheries Council of Canada, Plaintiffs, v. UNITED STATES, Defendant.

Court No. 86-06-00751.

United States Court of International Trade.

October 27, 1989.

O'Melveny & Myers (Richard G. Parker, Gary N. Horlick, Debra A. Valentine, Sheila J. Landers and Robert E. Sims), Washington, D.C., for plaintiffs.

Stuart E. Schiffer, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice (A. David Lafer), Washington, D.C., of counsel: Jean Heilman Grier, Attorney-Advisor, Office of the Chief Counsel for Intern. Trade, U.S. Dept. of Commerce, for defendant.

OPINION

TSOUCALAS, Judge:

Plaintiffs challenge the final affirmative countervailing duty determination by the United States Department of Commerce, International Trade Administration ("ITA" or "Commerce") in Certain Fresh Atlantic Groundfish from Canada, 51 Fed.Reg. 10,041 (Dep't Comm.1986) (final affirmative determination). The action is before the Court on plaintiffs' motion for judgment on the agency record pursuant to Rule 56.1 of the Rules of this Court.

Background

The North Atlantic Fisheries Task Force ("Task Force" or "petitioner")¹ filed a petition on August 5, 1985 with Commerce on behalf of the domestic industries which harvest and process fresh Atlantic groundfish ("groundfish"), in whole and in fillet form. A.R.Doc. 1 at 26. The petition alleged that the Canadian groundfish industry received benefits which constituted countervailable subsidies within the meaning of section 701 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1671 (1982 & Supp. V 1987). These benefits were provided by the Federal Government of Canada and by the provincial governments of Nova Scotia, Newfoundland, New Brunswick, Prince Edward Island, and Quebec. A.R. Doc. 1 at 26.

After reviewing the petition, Commerce concluded that sufficient grounds existed upon which to initiate a countervailing duty investigation to determine whether the Canadian producers of groundfish, in whole and in fillet form, received benefits which constituted subsidies within the meaning of the countervailing duty law. Certain Fresh Atlantic Groundfish from Canada, 50 Fed.Reg. 35,281 (Dep't Comm.1985) (initiation of investigation). Commerce preliminarily determined that countervailable benefits were provided, Certain Fresh Atlantic Groundfish from Canada, 51 Fed.Reg. 1010 (Dep't Comm.1986) (preliminary affirmative determination), and notified the United States International Trade Commission ("ITC") of its determination.² The estimated net subsidy was determined to be 6.85% ad valorem.³ 51 Fed.Reg. 1010 (preliminary).

On March 24, 1986, Commerce issued its final affirmative countervailing duty determination, finding that certain fresh whole Atlantic groundfish and certain fresh Atlantic groundfish fillets imported from Canada were receiving benefits which constituted subsidies under the countervailing duty law. 51 Fed.Reg. 10,041 (final). Commerce found fifty-five programs to confer subsidies: eleven federal programs, six joint federal-provincial programs, and thirty-eight provincial programs. 51 Fed. Reg. at 10,042 (final).

The ITC, subsequent to notification from Commerce, and after its own investigation, found that imports of certain fresh whole Atlantic groundfish from Canada were materially injuring an industry in the United States. See Certain Fresh Atlantic Groundfish from Canada, 51 Fed.Reg. 17,785 (Dep't Comm.1986) (countervailing duty order). Imports of certain fresh groundfish fillets, however, were found not materially injuring, threatening material injury to, or materially retarding the establishment of a U.S. industry. Id. Therefore, Commerce's countervailing duty order embraced only entries of fresh whole Atlantic groundfish from Canada. The estimated net subsidy was found to be 5.82% ad valorem. 51 Fed.Reg. at 10,041 (final).

Plaintiffs challenge the subsidy findings concerning four programs: two federal programs, one joint federal-provincial program and one provincial program.⁴ Plaintiffs contend that Commerce's findings regarding certain fresh whole Atlantic groundfish from Canada with respect to these programs are neither reasonable, nor supported by substantial evidence on the record, nor in accordance with law. The following issues are present before the Court for determination:

(1) whether Commerce's determination that the petition was filed "on behalf of an industry" pursuant to 19 U.S.C. § 1671a(b)(1) was reasonable, supported by substantial evidence on the record, and in accordance with law;

(2) whether plaintiffs' challenges are moot, therefore, judicially unreviewable; and,

(3) whether Commerce's affirmative determinations regarding the following programs are reasonable, supported by substantial evidence on the record, and in accordance with law:

(A) the Industrial and Regional Development Program;

(B) subsidiary agreements concluded pursuant to the Economic and Regional Development Agreements;

(C) loans from the Fisheries Loan Board for the fishing industry in the Province of Newfoundland; and,

(D) government equity infusions into National Sea Products Limited and Fishery Products International Limited.

Standard of Review

The standard of review in the instant action, commenced pursuant to 19 U.S.C. § 1516a(a)(2), (a)(3) (1982 & Supp. V 1987), is provided under 19 U.S.C. § 1516a(b)(1)(B) (1982) which requires the Court to hold unlawful any determination, finding, or conclusion found "to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." Substantial evidence "means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Matsushita Elec. Indus. Co. v. United States, 3 Fed.Cir. (T) 44, 51, 750 F.2d 927, 933 (1984) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216-217, 83 L.Ed. 126 (1938)). It is also well settled that

an agency's interpretation of a statute which it is authorized to administer is "to be sustained unless unreasonable and plainly inconsistent with the statute, and is to be held valid unless weighty reasons require otherwise." An agency's "interpretation of the statute need not be the only reasonable interpretation or the one which the court views as the most reasonable."

A1 Tech Specialty Steel Corp. v. United States, 11 CIT ___, ___, 661 F.Supp. 1206, 1208 (1987) (quoting ICC Indus. v. United States, 812 F.2d 694, 699 (Fed.Cir.1987)) (emphasis in original).

Standing

A countervailing duty proceeding is commenced whenever an interested party files a petition "on behalf of an industry, which alleges the elements necessary for the imposition of the duty ... and which is accompanied by information reasonably available to the petitioner supporting those allegations." 19 U.S.C. § 1671a(b)(1) (emphasis added).⁵

Plaintiffs contend that Commerce contravened § 1671a(b)(1) by simply assuming petitioners had standing without affirmatively establishing that the petition was, in fact, filed "on behalf of" the industry. Memorandum of Points and Authorities in Support of Plaintiffs' Motion for Judgment on the Agency Record at 15 ("Plaintiffs' Memorandum"). According to plaintiffs, the decision in Gilmore Steel Corp. v. United States, 7 CIT 219, 585 F.Supp. 670 (1984), requires that Commerce must dismiss petitions not proven to be affirmatively supported by a majority of the domestic industry.⁶ The Court disagrees with plaintiffs' reading of Gilmore.

The Gilmore court established that in order to file a valid petition, a petitioner must not only "be a member of the affected industry, i.e., be an `interested party,' it must also show that a majority of that industry backs its petition." 7 CIT at 226, 585 F.Supp. at 676. The court has since determined, however, that Commerce "has discretion to dismiss, but is not required to dismiss, petitions that are not shown to be actively supported by a majority of the domestic industry." Citrosuco Paulista, S.A. v. United States, 12 CIT ___, ___, 704 F.Supp. 1075, 1085 (1988) (emphasis added) (interpreting both Oregon Steel Mills Inc. v. United States, 862 F.2d 1541 (Fed.Cir.1988), and Gilmore); see also Sandvik AB v. United States, 13 CIT ___, ___, 721 F.Supp. 1322, 1328 (1989); Vitro Flex, S.A. v. United States, 13 CIT ___, ___, 714 F.Supp. 1229, 1235 (1989). Furthermore, the Citrosuco court affirmed the following position advanced by Commerce in Frozen Concentrated Orange Juice from Brazil, 52 Fed.Reg. 8324, 8325 (Dep't Comm.1987) (final determination):

there is nothing in the statute, its legislative history, or our regulations which requires that petitioners establish affirmatively that they have the support of a majority of their industries. In many cases, such a requirement would be so onerous as to preclude access to import relief under the antidumping and countervailing duty laws.

12 CIT at ___, 704 F.Supp. at 1085.

The Court in this action is impelled to ascribe to the reasoning advanced in Citrosuco. The legislative history of § 1671 makes clear that Congress intended petitions filed "to result in investigations being initiated unless the authority was convinced that the petition and supporting information failed to state a claim upon which relief could be granted under § 701 19 U.S.C. § 1671 or the petitioner did not provide information supporting the allegations which was reasonably available to him." S.Rep. No. 249, 96th Cong., 1st Sess. 2, reprinted in 1979 U.S.Code Cong. & Admin.News 381, 433.

Commerce examined the petition, and found it to meet these requirements. 50 Fed.Reg. at 35,282 (initiation). The petition contained sufficient evidence indicating the Canadian groundfish industry was in receipt of government assistance, potentially as part of a social welfare approach to the Canadian fishing industry. See A.R.Doc. 1 at 26-27....