Maple Leaf Fish Co. v. U.S.

• Citation: 762 F.2d 86
• Decision Date: 08 May 1985
• Docket Number: No. 85-534,85-534
• Parties: , 3 Fed. Cir. (T) 148 MAPLE LEAF FISH CO., Appellant, v. The UNITED STATES, Appellee. Appeal
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 86

762 F.2d 86

6 ITRD 2186, 3 Fed. Cir. (T) 148

MAPLE LEAF FISH CO., Appellant, v. The UNITED STATES, Appellee.

Appeal No. 85-534.

United States Court of Appeals,

Federal Circuit.

May 8, 1985.

David O. Elliott, Barnes, Richardson & Colburn, New York City, for appellant.

Michael P. Maxwell, Commercial Litigation Branch, Dept. of Justice, New York City, for appellee. With him on the brief were Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Washington, D.C., and Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, New York City.

Before RICH and DAVIS, Circuit Judges, and COWEN, Senior Circuit Judge.

DAVIS, Circuit Judge.

This "escape clause" case brings to us the narrow question whether frozen mushrooms were properly included in determinations by the International Trade Commission (ITC) and the President in imposing additional duties on "mushrooms, prepared and preserved" provided for in item 144.20 of the Tariff Schedules of the United States (TSUS). The Court of International Trade (Carman, J.) ruled that they were so included. Maple Leaf Fish Co. v. United States, 596 F.Supp. 1076 (1984). We agree and affirm.

I.

Sections 2251-53 of Title 19 of the U.S.Code (Sections 201-03 of Title II of the Trade Act of 1974) provide for import relief to a domestic industry injured or threatened by import competition due to increased quantities of competing imports. This is frequently referred to as the "escape clause." S.Rep. 1298, 93d Cong., 2d Sess. 119, [1974] U.S.Code Cong. & Ad.News 7263. The statute provides that in such a case a petition may be filed with the ITC (19 U.S.C. Sec. 2251(a)(1) ); that agency must then investigate, with public hearings, whether increased imports injure or threaten to injure a domestic injury producing an article like or directly competitive with the imported article. 19 U.S.C. Sec. 2251(b)(1), (c). The Act lists a number of specific factors to be considered (19 U.S.C. Sec. 2251(b)(2) ) but "[t]hose factors are not intended to be exclusive.... [T]he Commission is directed to take into account all economic factors it considers relevant." S.Rep. 1298, 93d Cong. 2d Sess. 121, [1974] U.S.Code Cong. & Ad.News 7265.

After it has finished its investigation the ITC makes a report to the President. 19 U.S.C. Sec. 2251(d). If the Commission finds serious injury or threat thereof it must recommend appropriate import relief and whether adjustment assistance is appropriate.

On receipt of an affirmative report from the ITC the President shall provide import relief "unless he determines that provision of such relief is not in the national economic interest of the United States." 19 U.S.C. Sec. 2252. The President is empowered to grant a number of types of relief, including increased duties, trade restrictions, etc., "or take any combination of such actions." 19 U.S.C. Sec. 2253. Nine factors are specified for the President to consider "in addition to such other considerations as he may deem relevant." 19 U.S.C. Sec. 2252(c). ¹

II.

In March 1980, the American Mushroom Institute (a trade association representing domestic canners and growers of mushrooms) filed a petition with the ITC under the "escape clause" legislation described in Part I, supra. The ITC commenced and pursued an investigation to determine whether mushrooms classifiable under item 144.20 of TSUS as "[m]ushrooms ... [o]therwise prepared or preserved" were being imported in such increased quantities as substantially to cause serious injury or the threat thereof to a like or competing domestic industry.

The ITC's report to the President began with the statement: "On the basis of the information developed in the course of the investigation, the Commission has determined ... that mushrooms, prepared or preserved, provided for in item 144.20 of the Tariff Schedules of the United States (TSUS), are being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof to the domestic industry producing an article like or directly competitive with the imported article." The report then recommended import relief taking the form of quantitative restrictions, or import quotas, for a 3-year period. The President accepted the Commission's determinations but decided to give import relief in the form of increased duties, and so proclaimed in October 1980. As a result, supplemental or cumulative duties were imposed on all mushrooms covered by item 144.20 of the TSUS.

Appellant Maple Leaf Fish Co. (Maple Leaf), a Canadian importer of frozen battered and breaded mushrooms, imported the mushrooms involved in this action and protested Customs' assessment of the increased duties. The protest was denied. Maple Leaf then filed this suit in the CIT in October 1981, challenging the assessment of the supplemental duties so far as such frozen and battered mushrooms are concerned. Appellant's position is, first, that such mushrooms were not included in the ITC's determinations and report and accordingly were beyond the scope of the President's power to award import relief as to them, and, second, that if those products were intended by the ITC to be covered by its report the investigation, evidence, and findings did not permit their inclusion. The matter came before the CIT on cross-motions for summary judgment. ² As we have indicated, supra, the court rejected both grounds in a comprehensive opinion.

III.

The initial inquiry is whether the ITC report covered frozen mushrooms (like appellant's) or whether it confined itself to canned mushrooms. Judge Carman read the report as including frozen mushrooms, and so do we.

The notice instituting the investigation broadly covered "mushrooms, prepared or preserved (provided for in item 144.20 of the Tariff Schedule of the United States (TSUS)", and the parties agree that appellant's frozen and battered mushrooms fall into that category of "mushrooms, prepared or preserved" and are blanketed by item 144.20. We have already pointed out that the opening paragraph of the ITC report expressly stated that its affirmative determination covered the same broad category. In addition, the first footnote in the joint views of three of the four participating ITC commissioners specifically says that "the subject imports in this case" are the class provided for in item 144.20, and then adds: "While the item includes mushrooms in jars and frozen mushrooms, 97 percent of all those imports are in cans. Furthermore, the vast majority of domestic production in these categories is canned as opposed to jarred or frozen" (emphasis added). This is a specific recognition of frozen mushrooms as included within the class covered by the report. Also, as the CIT observed, the views of those three commissioners contain a lengthy discussion of fresh mushrooms (as well as the canned variety) and there is nothing to indicate that, despite what the report literally says, frozen mushrooms were silently excluded in the end from the overall coverage. The heavy emphasis on the canned product is easily explainable as the result of the evident and acknowledged fact that, as the commissioners specifically note, 97 percent of all imports are canned. The upshot is that we are satisfied that the ITC (and therefore the President) intended to include appellant's type of mushrooms in the import relief granted. ³

IV.

Maple Leaf then says that, if this is so, the Commission--and therefore the President--violated statutory requirements because there is no adequate finding of injury to the frozen mushroom industry (as distinct from the canned mushroom industry). Appellant makes the argument as if the ITC had gone wildly beyond its own investigation to include frozen mushrooms, without the slightest basis in the record before it. The fact is, however, that a part of the report entitled "Information Obtained in the Investigation" contains a section headed "Dried, frozen and fresh mushrooms," giving in detail the statistics on imports of those particular varieties, including imports from Canada. We therefore have before us an ITC report which followed an investigation that actually included frozen mushrooms, and a report which (as we have held in Part III, supra ), covered frozen mushrooms in its final determinations.

The question then is to what extent the courts can review the challenged actions of the Commission and the President in such a case. The critical element is that the area of the "escape clause" legislation undoubtedly involves the President and his close relationship to foreign affairs, our nation's connections with other countries, and the external ramifications of international trade. More than that, Congress has vested the President with very broad discretion and choice as to what he decides to do affirmatively, or even whether he should do anything. See Part I, supra. Similarly, the ITC has great leeway to consider various factors--including all economic factors it deems relevant--bearing on its final determination "whether an article is being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported article." 19 U.S.C. Sec. 2251(b)(1)-(6). See Part I, supra.

In...