Invenergy Renewables LLC v. United States

• Decision Date: 05 December 2019
• Docket Number: Court No. 19-00192,Slip Op. 19-153
• Citation: 422 F.Supp.3d 1255
• Parties: INVENERGY RENEWABLES LLC, Plaintiff, and Solar Energy Industries Association, Clearway Energy Group LLC, EDF Renewables, Inc. and AES Distributed Energy, Inc., Plaintiff-Intervenors, v. UNITED STATES of America, Office of the United States Trade Representative, United States Trade Representative Robert E. Lighthizer, U.S. Customs and Border Protection, and Acting Commissioner of U.S. Customs and Border Protection Mark A. Morgan, Defendants, and Hanwha Q Cells USA, Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

422 F.Supp.3d 1255

INVENERGY RENEWABLES LLC, Plaintiff,andSolar Energy Industries Association, Clearway Energy Group LLC, EDF Renewables, Inc. and AES Distributed Energy, Inc., Plaintiff-Intervenors,

v. UNITED STATES of America, Office of the United States Trade Representative, United States Trade Representative Robert E. Lighthizer, U.S. Customs and Border Protection, and Acting Commissioner of U.S. Customs and Border Protection Mark A. Morgan, Defendants,andHanwha Q Cells USA, Inc., Defendant-Intervenor.

Slip Op. 19-153

Court No. 19-00192

United States Court of International Trade.

December 5, 2019

John Brew, Kathryn L. Clune, and Amanda Berman, Crowell & Moring LLP, of Washington, DC and New York, NY, argued for plaintiff, Invenergy Renewables LLC and plaintiff-intervenors, Clearway Energy Group LLC and AES Distributed Energy, Inc. With them on the brief were Larry Eisenstat, Robert LaFrankie, and Frances Hadfield.

Matthew R. Nicely and Daniel M. Witkowski, Hughes Hubbard & Reed LLP, of Washington, DC, argued for plaintiff-intervenor, Solar Energy Industries Association. With them on the brief were Dean A. Pinkert and Julia K. Eppard.

Kevin M. O'Brien and Christine M. Streatfeild, Baker & McKenzie LLP, of Washington, DC, argued for plaintiff-intervenor, EDF Renewables, Inc.

Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendants. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director.

John M. Gurley, Jackson Toof, and Friederike S. Görgens, Arent Fox LLP, of Washington, DC, argued for defendant-intervenor. With them on the brief was Diana Dimitriuc Quaia.

OPINION AND ORDER

Katzmann, Judge:

This case, generated by the American solar industry, raises fundamental questions of adherence by the Government to procedures for decision making required by statute. Through Presidential Proclamation 9693 on January 23, 2018, the President imposed safeguard duties, designed to protect domestic industry, on imported monofacial and bifacial solar panels but delegated authority to the Office of the U.S. Trade Representative ("USTR") to exclude products from the duties. 83 Fed. Reg. 3,541 -49 ("Presidential Proclamation"). After a lengthy process, USTR decided to exclude bifacial solar panels from safeguard duties. Exclusion of Particular Products From the Solar Products Safeguard Measure, 84 Fed. Reg. 27,684 -85 (June 13, 2019) ("Exclusion"). Four months later, however, USTR reversed course. It announced the Withdrawal, which reinstituted safeguard duties on certain bifacial solar panels, with only 19 days' notice to the public, without an opportunity for affected and/or interested parties to comment, and without a developed public record on which to base its decision. Withdrawal of Bifacial Solar Panels Exclusion to the Solar Products Safeguard Measure, 84 Fed. Reg. 54,244 -45 (USTR Oct. 9, 2019) ("Withdrawal"). Because this court instituted, and once renewed, a temporary restraining order ("TRO"), the Withdrawal has not yet gone into effect.

The question now before this court is whether a preliminary injunction ("PI") should issue where Plaintiffs allege that the United States ("the Government") violated the Administrative Procedure Act ("APA"), Title II-Relief From Injury Caused By Import Competition of the Trade Act of 1974 (herein "Section 201"),¹ and constitutional due process under the Fifth Amendment by failing to follow requisite procedures in withdrawing an exclusion to safeguard duties on solar products previously granted through notice-and-comment rulemaking. Plaintiff Invenergy Renewables LLC -- a renewable energy company-- ("Invenergy"),² joined by Plaintiff-Intervenors Solar Energy Industries Association ("SEIA"), Clearway Energy Group LLP ("Clearway"), EDF Renewables, Inc. ("EDF-R"), and AES Distributed Energy, Inc. ("AES DE") (collectively, "Plaintiffs"), challenges the Withdrawal by the Government. Plaintiffs ask the court to enjoin the Government from reversing, without adequate process, its decision to exclude bifacial solar panels³ from safeguard duties; that is, Plaintiffs ask the court to implement a PI to maintain the status quo until such time as the lawfulness of the Withdrawal is determined by final judgment.

This case emerges from a debate within the American solar industry between entities that rely on the importation of bifacial solar panels and entities that produce predominately monofacial solar panels in the United States. Plaintiffs here, who include consumers, purchasers, and importers of utility-grade bifacial solar panels, argue that the importation of bifacial solar panels does not harm domestic producers because domestic producers do not produce utility-scale bifacial solar panels; they thus oppose safeguard duties that they contend increase the cost of these bifacial solar panels. Domestic producers, however, contend that solar project developers can use either monofacial or bifacial solar panels, and thus safeguard duties are necessary to protect domestic production of solar panels. Both sides contend that their position better supports expanding solar as a source of renewable energy in the United States.

Invenergy, however, also makes clear that this suit does not call upon the court to decide the future of the solar industry. Instead, before the court is its challenge to the Withdrawal on process grounds. Invenergy's Mot. for PI at 14, Nov. 1, 2019, ECF No. 49. The soundness of the safeguard duties and whether they should apply to bifacial solar panels are not the subject of this suit. Rather, at stake here is whether USTR undertook reasoned decision making to implement the Withdrawal, as required by the APA, including provision for meaningful participation by interested parties. The Government must follow its own laws and procedures when it acts, and the court finds it likely that it did not do so in withdrawing the Exclusion without adequate process. The court thus determines that a PI is warranted. The court now grants Invenergy's motion for a PI to enjoin the United States, USTR, U.S. Trade Representative Robert E. Lighthizer, U.S. Customs and Border Protection ("CBP"), and CBP Acting Commissioner Mark A. Morgan (collectively "the Government") from implementing the Withdrawal.

BACKGROUND

I. Statutory Overview

Through Section 201, Congress provided a process by which the executive branch could implement temporary safeguard measures to protect a domestic industry from the harm associated with an increase in imports from foreign competitors. Trade Act of 1974 §§ 201-04, 19 U.S.C. §§ 2251 - 54 (2012). Section 201 dictates that, upon petitions from domestic entities or industries, the International Trade Commission ("ITC") may make an affirmative determination that serious injury or a threat of serious injury to that industry exists. 19 U.S.C. § 2252. The President may then authorize discretionary measures, known as "safeguards," to provide a domestic industry temporary relief from serious injury. 19 U.S.C. § 2253. The statute vests the President with decision making authority based on consideration of ten factors.⁴

19 U.S.C. § 2253(a)(2). Safeguard measures have a maximum duration of four years, unless extended for another maximum of four years based upon a new determination by the ITC. 19 U.S.C. § 2253(e)(1). The statute also outlines certain limits on the President's ability to act under this statute, including to limit new actions after the termination of safeguard measures regarding certain articles. See 19 U.S.C. § 2253(e). Further, the safeguard statute mandates that the President "shall by regulation provide for the efficient and fair administration of all actions taken for the purpose of providing import relief." 19 U.S.C. § 2253(g)(1).

The President issued the Presidential Proclamation on January 23, 2018, announcing a safeguard measure against imports of solar products after an affirmative determination of injury by the ITC. See also U.S. Int'l Trade Comm'n, Crystalline Silicon Photovoltaic Cells (Whether or not Partially or Fully Assembled into Other Products), Inv. No. TA-201-75, USITC Pub. 4739 (Nov. 2017) ("ITC Report"). The details of this proclamation are discussed further below. Notably, the Presidential Proclamation delegated the process of "exclusion of a particular product from the safeguard measure" to USTR. Presidential Proclamation at 3,541. Subsequently, USTR issued procedures for parties to follow in seeking exclusions from the safeguard measure. Procedures to Consider Additional Requests for Exclusion of Particular Products From the Solar Products Safeguard Measure, 83 Fed. Reg. 6,670 -72 (USTR Feb. 14, 2018) ("Exclusion Procedures"). These procedures were silent as to the revision, reconsideration, or withdrawal of exclusions once issued.

Through its Exclusion Procedures, USTR invited requests for exclusions and comments from interested persons. Id. at 6,671. The parties dispute whether this process constituted agency rulemaking pursuant to the APA. See Invenergy's Mot. for PI at 17; SEIA's Resp. to Invenergy's Mot. for PI at 7, Nov. 8, 2019, ECF No. 83; Def.'s Resp. to Invenergy's Mot. for PI at 2, Nov. 8, 2019, ECF No. 74; Q Cells' Resp. to Invenergy's Mot. for PI at 12, Nov. 8, 2019, ECF No. 84. Relevant here are the APA's requirements for notice-and-comment rulemaking by government agencies, which dictate the procedures to be followed by agencies when making certain legal or policy decisions. See, e.g., 5 U.S.C. §§ 551, 701 (2012). Furthermore, the APA provides broad judicial review of agency actions brought by "person[s] suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute." 5 U.S.C. § 702. The APA states that courts will "hold unlawful and set aside" agency action that is "arbitrary,...