Comm. Overseeing Action for Lumber Int'l Trade Investigations or Negotiations v. United States

• Decision Date: 19 November 2020
• Docket Number: Consol. Court No. 19-00122,Slip Op. 20-167
• Citation: 483 F.Supp.3d 1253
• Parties: COMMITTEE OVERSEEING ACTION FOR LUMBER INTERNATIONAL TRADE INVESTIGATIONS OR NEGOTIATIONS, Plaintiff, and Fontaine Inc., et al., Consolidated Plaintiffs, v. UNITED STATES, Defendant, and Fontaine Inc., et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

483 F.Supp.3d 1253

COMMITTEE OVERSEEING ACTION FOR LUMBER INTERNATIONAL TRADE INVESTIGATIONS OR NEGOTIATIONS, Plaintiff,

and

Fontaine Inc., et al., Consolidated Plaintiffs,

v.UNITED STATES, Defendant,andFontaine Inc., et al., Defendant-Intervenors.

Slip Op. 20-167

Consol. Court No. 19-00122

United States Court of International Trade.

November 19, 2020

Sophia J.C. Lin, Picard Kentz & Rowe LLP, of Washington, DC, argued for Plaintiff Committee Overseeing Action for Lumber International Trade Investigations or Negotiations. With her on the brief were Lisa W. Wang, Andrew W. Kentz, David A. Yocis, Nathanial M. Rickard, Whitney M. Rolig, Heather N. Doherty, and Zachary J. Walker.

Alan G. Kashdan, McDermott Will & Emery LLP, of Washington, DC, argued for Consolidated Plaintiff/Defendant-Intervenor Government of Canada. With him on the brief were Joanne E. Osendarp, Lynn G. Kamarck, Dean A. Pinkert, Daniel M. Witkowski, Julia K. Eppard, and Stephen R. Halpin, III, Hughes Hubbard & Reed LLP, of Washington, DC.

Nancy A. Noonan, Arent Fox LLP, of Washington, DC, argued for Consolidated Plaintiff/Defendant-Intervenor Government of Québec. With her on the brief were Matthew J. Clark and Aman Kakar.

Elliot J. Feldman and Mark B. Lehnardt, Baker Hostetler, LLP, of Washington, DC, for Consolidated Plaintiff/Defendant-Intervenor Fontaine Inc.

John R. Magnus, TradeWins LLC, of Washington, DC, for Consolidated Plaintiff/Defendant-Intervenor Mobilier Rustique (Beauce) Inc.

Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant United States. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was Nikki Kalbing, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

Stephan E. Becker, Aaron R. Hutman, and Moushami P. Joshi, Pillsbury Winthrop Shaw Pittman LLP, of Washington, DC, for Defendant-Intervenor Government of New Brunswick.

Yohai Baisburd, Jonathan M. Zielinski, and James E. Ransdell, Cassidy Levy Kent (USA) LLP, of Washington, DC, for Defendant-Intervenor Scierie Alexandre Lemay & Fils Inc.

Edward M. Lebow, Haynes and Boone, LLP, of Washington, DC, for Defendant-Intervenors Les Produits Forestiers D & G Ltée and Marcel Lauzon Inc.

Richard L.A. Weiner, Rajib Pal, and Alex L. Young, Sidley Austin LLP, of Washington, DC, for Defendant-Intervenors North American Forest Products Ltd., Parent-Violette Gestion Ltée, and Le Groupe Parent Ltée.

OPINION AND ORDER

Barnett, Judge:

In this case, the court considers whether the U.S. Department of Commerce ("Commerce" or "the agency") was authorized to create an expedited review process to determine individual countervailing duty ("CVD") rates for exporters not individually examined in an investigation.¹ This process is distinct from annual reviews, new shipper reviews, and sunset reviews that readers may often encounter and that are expressly provided for by statute. Here, Commerce established the expedited review process by regulation and the court must determine whether the statutory authority identified by Commerce provides a legal basis for that regulation. As discussed herein, the court concludes that the answer is no and remands the determination for Commerce to either identify an alternative basis for the regulation or take other action in conformity with this opinion.

This consolidated case is before the court on a motion for judgment on the agency record pursuant to U.S. Court of International Trade ("USCIT") Rule 56.2 filed by Plaintiff Committee Overseeing Action for Lumber International Trade Investigations or Negotiations ("Plaintiff" or "the Coalition"). Confidential Pl.'s Rule 56.2 Mot. for J. on the Agency R. and accompanying Confidential Mem. in Supp. of Pl.'s Rule 56.2 Mot. for J. on the Agency R. ("Coalition Br."), ECF No. 101. Plaintiff, an association of domestic manufacturers, producers, and wholesalers of softwood lumber products, Compl. ¶ 9, ECF No. 2, challenges Commerce's final results in the CVD expedited review of certain softwood lumber products from Canada, see Certain Softwood Lumber Products From Canada , 84 Fed. Reg. 32,121 (Dep't Commerce July 5, 2019) (final results of CVD expedited review) (" Final Results of Expedited Review "), ECF No. 99-5, and accompanying Issues and Decision Mem. ("I & D Mem."), C-122-858 (June 28, 2019), ECF No. 99-6.² Plaintiff argues, inter alia , that Commerce exceeded the congressional grant of rulemaking authority set forth in section 103(a) of the Uruguay Round Agreements Act ("URAA" or "the Act"), Pub. L. No. 103-465, 108 Stat. 4809 (1994), when the agency promulgated the regulation governing CVD expedited reviews, 19 C.F.R. § 351.214(k), pursuant to that statutory provision. Coalition Br. at 14–32; see also Pl. [Coalition's] Reply Mem. in Supp. of Rule 56.2 Mot. for J. on the Agency R. ("Coalition Reply") at 2–12, ECF No. 127.

For the reasons discussed herein, the court agrees that Commerce exceeded its relied-upon authority and remands the matter to the agency for Commerce to reconsider the statutory basis for its regulation.³

BACKGROUND

I. The Uruguay Round Agreements Act

Congress enacted the URAA on December 8, 1994. Pub. L. No. 103-465, 108 Stat. 4809 (1994). The Act, which became effective on January 1, 1995, amended the domestic antidumping ("AD") and CVD laws in connection with several international trade agreements referred to as the Uruguay Round Agreements. See 19 U.S.C. §§ 3511(a)(1), (d), & 3501(7). Relevant here, one such agreement is the Agreement on Subsidies and Countervailing Measures ("SCM Agreement"). Id. § 3511(d)(12) ; see generally Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1869 U.N.T.S. 14, Annex 1A, SCM Agreement. Pursuant to Article 19.3 of the SCM Agreement:

When a countervailing duty is imposed in respect of any product, such countervailing duty shall be levied, in the appropriate amounts in each case, on a non-discriminatory basis on imports of such product from all sources found to be subsidized and causing injury, except as to imports from those sources which have renounced any subsidies in question or from which undertakings under the terms of this Agreement have been accepted. Any exporter whose exports are subject to a definitive countervailing duty but who was not actually investigated for reasons other than a refusal to cooperate, shall be entitled to an expedited review in order that the investigating authorities promptly establish an individual countervailing duty rate for that exporter.

SCM Agreement, art. 19.3 (emphasis added).

The Statement of Administrative Action ("SAA") accompanying the URAA discussed the statutory amendments to Title VII of the Tariff Act of 1930 considered necessary to implement Article 19.3. See URAA, SAA, H.R. Doc. No. 103–316, vol. 1, at 941–42 (1994), reprinted in 1994 U.S.C.C.A.N. 4040 at 4250–51. Prefacing those changes, the SAA explained that, under pre-URAA law, "Commerce normally calculate[d] a country-wide [CVD] rate applicable to all exporters unless there [was] a significant differential in CVD rates between companies or if a state-owned company [was] involved." Id. at 941, reprinted in 1994 U.S.C.C.A.N. 4040 at 4250. The SAA further explained that, pursuant to Article 19.3 of the SCM Agreement, an "exporter whose exports are subject to a CVD order, but which was not actually investigated for reasons other than a refusal to cooperate, shall be entitled to an expedited review to establish an individual CVD rate for that exporter." Id. The SAA then discussed several changes to U.S. trade laws effected by sections 264, 265, and 269⁴ of the URAA. Id. at 941–42, reprinted in 1994 U.S.C.C.A.N. 4040 at 4251. Those changes included Commerce's calculation of individual CVD rates for exporters and producers that were individually investigated in an investigation or administrative review, an all-others rate for those that were not individually examined, and, in certain circumstances, a country-wide CVD rate. See id. The SAA did not, however, discuss any implementation of CVD expedited reviews.⁵

Congress expressly approved the SAA in the URAA. See 19 U.S.C. § 3511(a)(2). Further, the SAA "shall be regarded as an authoritative expression by the United States concerning the interpretation and application of the Uruguay Round Agreements and this Act [i.e., the URAA] in any judicial proceeding in which a question arises concerning such interpretation or application." Id. § 3512(d).

II. Implementing Regulations

Section 103 of the URAA delegated authority to Commerce, among others, to promulgate interim and final regulations implementing the provisions of the Act. 19 U.S.C. § 3513. This section provides:

(a) Implementing actions

After December 8, 1994—

(1) the President may proclaim such actions, and

(2) other appropriate officers of the United States Government may issue such regulations, as may be necessary to ensure that any provision of this Act, or amendment made by this Act , that takes effect on the date any of the Uruguay Round Agreements enters into force with respect to the United States is appropriately implemented on such date. Such proclamation or regulation may not have an effective date earlier than the date of entry into force with respect to the United States of the agreement to which the proclamation or regulation relates.

(b) Regulations—

Any interim regulation necessary or appropriate to carry out any action proposed in the statement of administrative action approved under section 3511(a) of this title to implement an agreement described in section 3511(d)(7), (12), or (13) of this title shall be issued not later than 1 year after the date on which the agreement enters into force with respect to the United States.

Id. (emphasis added).⁶

On May 11, 1995,...