Import Motors Ltd v. US INT'L TRADE COM'N

• Decision Date: 22 January 1976
• Docket Number: Customs Appeal No. 76-3.
• Citation: 530 F.2d 940
• Parties: IMPORT MOTORS LIMITED, INC., et al., Appellants, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, and Engelhard Minerals & Chemicals Corp., Appellees.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

530 F.2d 940

IMPORT MOTORS LIMITED, INC., et al., Appellants, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, and Engelhard Minerals & Chemicals Corp., Appellees.

Customs Appeal No. 76-3.

United States Court of Customs and Patent Appeals.

Decision January 22, 1976.

Opinion February 3, 1976.

Harvey Kaye, Spencer & Kaye, Washington, D.C., attorney of record, for appellants.

Rex E. Lee, Asst. Atty. Gen., William Kanter, Michael H. Stein, Washington, D.C., attorneys of record, Appellate Section, Civil Division, for appellee Intern. Trade Commission.

David W. Plant, New York City, for appellee Engelhard Minerals & Chemical Corp.

MARKEY, Chief Judge.

To facilitate the proceedings of the Commission, the court hereby announces its decision on this appeal. An opinion will follow in due course.

DECISION

The appeal is dismissed.

The stay of further proceedings set forth in the Order of this court dated December 3, 1975 (530 F.2d 937 (CCPA 1975)), is vacated.

Before MARKEY, Chief Judge, and RICH, LANE and MILLER, Judges, and ROBERT L. KUNZIG, Judge, United States Court of Claims.

MARKEY, Chief Judge.

This is an appeal from an order of the Presiding Commissioner entered October 17, 1975, in the above-entitled proceeding before the United States International Trade Commission. The full Commission, after review, affirmed the Presiding Commissioner's order on November 18, 1975. In the decision announced January 22, 1976, 530 F.2d 941 (63 CCPA ___ (1976)), this court dismissed the present appeal, and vacated the stay of further proceedings set forth in the order of this court dated December 3, 1975, (530 F.2d 937, 63 CCPA ___ (1975)). This opinion expresses the reasons for the decision announced January 22, 1976.

Background

The "Notice of Investigation and Hearing" of the fundamental investigation was published in the Federal Register on July 23, 1975 (40 F.R. 30879). The notice recites that a complaint was filed with the United States International Trade Commission (Commission) on May 2, 1975, by Engelhard Minerals and Chemicals Corp. (Engelhard), alleging that the unlicensed importation and sale in the United States of Volkswagen, Audi, and Porsche 914 automobiles containing monolithic catalytic converters, and of replacement monolithic catalytic converters therefore, are unfair methods of competition and unfair acts within the meaning of § 337 of the Tariff Act of 1930, as amended by the Trade Act of 1974, 88 Stat. 2053, 19 U.S.C. § 1337,¹ by reason of the coverage of such monolithic catalytic converters by claims 1-4 in U.S. Patent No. 3,441,381 and claims 1, 2, 5, 6, 13, and 14 in U.S. Patent No. 3,565,830.² The notice named numerous entities as respondents,³ including the manufacturer, Volkswagenwerk A.G. (VWAG), the importer, Volkswagen of America, Inc. (VWoA), and the four appellants, Import Motors Ltd., Inc., World-Wide Volkswagen Corp., Riviera Motors, Inc., and Porsche Audi Northwest, Inc. Each appellant is a corporate entity independent and separate from the others and from VWAG and VWoA. Thus, each appellant is an independent distributor, and a major portion of each appellant's business is the purchase of Volkswagen, Audi, and Porsche 914 automobiles from VWoA and sale of such automobiles to retail dealers in the territory of the distributorship.

The notice also recites that "failure of a party to file a response to each of the allegations which are the subject of this investigation as set forth in this notice * * * may be deemed to constitute a waiver of its right to appear and contest such allegations and shall authorize the Commission, without further notice to that party, to find the facts to be as alleged and to enter an order containing such findings."

Each appellant then filed a response with the Commission.

Another independent distributor not involved in this appeal, Volkswagen Mid-America, Inc., one of the respondents in the notice, filed with the Commission a motion "to withdraw as a party" to the investigation. On October 17, 1975, the Presiding Commissioner entered an order granting the motion filed by Volkswagen Mid-America, Inc., and further ordering that all independent distributors be "discontinued as parties to this proceeding under Section 337(a) without prejudice to the aforesaid independent distributors to intervene at a later stage of this proceeding in the event a violation of Section 337(a) has been established as persons interested in the Commission's determination under Section 337(d), (e) and (f)." On October 21, 1975, the Presiding Commissioner issued an opinion explaining the reasons underlying the order of October 17, 1975. The full Commission then reviewed the Presiding Commissioner's order. In the Commission's order of November 18, 1975 (issued in written form on December 3, 1975), the Commission "concurred with the reasons set forth" in the Presiding Commissioner's opinion of October 21, 1975, incorporated the Presiding Commissioner's opinion in the Commission's order, and stated two additional reasons for discontinuing appellants "as parties to this proceeding without prejudice to the right of the aforesaid independent distributors including appellants to intervene at a later stage of this proceeding." (The Commission's order, and the Presiding Commissioner's opinion incorporated therein, appear as an Appendix herewith).

Appellants seek review of this action by the Presiding Commissioner, affirmed by the full Commission, discontinuing them as parties to the initial stage of the investigation but without prejudice to their right to intervene at a later stage.

Appellants' Contentions

Appellants, appealing as a unit represented by the same counsel, have basically three contentions: (1) that the Commission's order denying them participation in the initial stage of the investigation is "appealable now," i. e., that it is a "final determination" ripe for judicial review; (2) that they have an "unequivocal" right to such participation; and (3) that they have, at least, a conditional right to such participation (on this point, appellants urge that the Commission's order was an abuse of its discretion).

Appellants premise contention (1) on the "final determination" sentence in § 337(c) of the Tariff Act of 1930, as amended by the Trade Act of 1974, 88 Stat. 2054, 19 U.S.C. § 1337(c).⁴ "Any person adversely affected by a final determination of the Commission under subsection (d)⁵ or (e)⁶ may appeal such determination to the United States Court of Customs and Patent Appeals." At oral hearing (held January 16, 1976), counsel for appellants made it clear that contention (1) is based solely on the quoted "final determination" sentence of § 337(c), as amended, and not on any provision of the Administrative Procedure Act (now subchapter II of chapter 5 and chapter 7 of title 5, U.S.C.).

Appellants premise contentions (2) and (3) on the following sentence in § 337(c), as amended: "Each determination under subsection (d) or (e) shall be made on the record after notice and opportunity for a hearing in conformity with the provisions of subchapter II of chapter 5 of title 5 United States Code 5 USC 551-59, a portion of what was originally the act popularly known as the "Administrative Procedure Act"."

Commission's Contentions

Appellee United States International Trade Commission contends: (1) that its order discontinuing appellants in the initial stage of the investigation is not a "final determination" within the meaning of § 337(c), as amended, and that therefore, it is not presently appealable to this court; (2) that appellants do not have an unconditional right to such participation; and (3) that if appellants have a conditional right to such participation, nevertheless the Commission did not abuse its discretion because appellants' economic interests are adequately represented in the initial stage by the importer, VWoA, and the manufacturer, VWAG. (The Commission concedes that appellants, as independent distributors, have alleged sufficient economic interest to entitle them to participate if such interest were not otherwise represented.)

Engelhard's Contentions

Appellee Engelhard Minerals and Chemicals Corp. essentially agrees with the position taken by the Commission below and on appeal.⁷

OPINION

The dispositive issue is whether the Commission's order is ripe for judicial review under the new statute.⁸ Our first consideration is whether the order is intrinsically a "final determination" under § 337(c), as amended, and, if it is not, whether its effect upon appellants is the equivalent of a final determination. We find the Commission's order neither a "final determination" nor an equivalent thereof in its effect upon appellants.

The Commission's order is not intrinsically a "final determination of the Commission under subsection (d) or (e)." Strictly interpreted, that phrase refers to a final administrative decision on the merits, excluding or refusing to exclude articles from entry under subsection (d) or (e).⁹

Moreover, the legislative history as evidenced by the Senate Committee on Finance report (Report on Trade Reform Act of 1974, S. Rep. No. 93-1298, 93d Cong., 2d Sess. (1974), U.S.Code Cong. & Admin.News, p. 7186) indicates that a final decision of the Commission on the merits in favor of a complainant under subsection (d), (e), or (f) is not an appealable "final determination" until the Commission's decision has been referred to the President under § 337(g), as amended,¹⁰ and approved or not disapproved within the statutory 60-day period. The Senate Committee report, at 196-97, U.S.Code Cong. & Admin.News 1974, p. 7329, states:

Further, under section 337(c), as amended, the Committee would extend the right to judicial review of final Commission determinations (of whether there is a violation of section 337 or whether there is reason to believe there is a violation) to complainants before the Commission as well as continuing to permit owners,

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