PPG Industries, Inc. v. U.S., No. 88-1175

• Decision Date: 22 March 1991
• Docket Number: No. 88-1175
• Citation: 928 F.2d 1568
• Parties: PPG INDUSTRIES, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, Vitro Flotado, S.A. and Vidrio Plano de Mexico, S.A., Defendants.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1568

928 F.2d 1568

13 ITRD 1065

PPG INDUSTRIES, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee Vitro Flotado, S.A. and Vidrio Plano de Mexico, S.A., Defendants.

No. 88-1175.

United States Court of Appeals Federal Circuit.

March 22, 1991.

Rehearing Denied April 17, 1991.

Suggestion for Rehearing In Banc

Declined May 20, 1991.

Terence P. Stewart, Stewart & Stewart, Washington, D.C., argued for plaintiff-appellant. With him on the brief were Eugene L. Stewart, David Scott Nance and William A. Fennell.

A. David Lafer, Atty., Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for defendant-appellee. With him on the brief were John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director and Velta A. Melnbrencis, Asst. Director. Also on the brief were Robert H. Brumley, Gen. Counsel, M. Jean Anderson, Chief Counsel for International Trade and Lisa B. Koteen, Acting Sr. Counsel for Policy, Office of the Gen. Counsel for International Trade, U.S. Dept. of Commerce, of counsel.

David A. Amerine, Brownstein Zeidman & Schomer, Washington, D.C., argued for defendants. With him on the brief was Irwin P. Altschuler.

Before NIES, Chief Judge, ^* SMITH, Senior Circuit Judge, ^** and MICHEL, Circuit Judge.

NIES, Chief Judge.

This appeal is from the decision of the United States Court of International Trade in PPG Indus., Inc. v. United States, 11 CIT 344, 662 F.Supp. 258 (1987), upholding the determination of the International Trade Administration (ITA or agency) that unprocessed float glass from Mexico was not subject to countervailing duties under 19 U.S.C. Sec. 1303(a) (1982) by reason of certain programs instituted by the government of Mexico, namely, the Trust Fund for the Coverage of Exchange Risks (FICORCA) and the sale of natural gas at controlled prices. The trial court concluded that the administrative record did not establish that the benefit from these programs constituted a "bounty or grant" within the meaning of section 1303(a) as a matter of law or fact. We affirm.

I

The issue in this appeal broadly concerns what type of domestic subsidy received by a foreign producer from its government gives rise to a countervailing duty under 19 U.S.C. Sec. 1303 upon importation of its goods into the United States. ¹ The goods in question, "float glass," a type of flat glass, were imported from Mexico during the period January 1 to September 30, 1983. See Unprocessed Float Glass From Mexico, 48 Fed.Reg. 56095 (Dec. 19, 1983) (Preliminary Affirmative Countervailing Duty Determination). In pertinent part, Section 1303 provides:

[W]henever any country ... shall pay or bestow, directly or indirectly, any bounty or grant upon the manufacture or production or export of any article or merchandise produced in such country, then upon the importation of such article or merchandise into the United States, there shall be levied and paid, in all such cases, in addition to any duties otherwise imposed, a duty equal to the net amount of such bounty or grant....

Under this part of the statute the question would be phrased in terms of what is a "bounty or grant." However, because of the interrelationship of section 1303 and 19 U.S.C. Sec. 1677, ² the following provision of section 1677(5) is also pertinent:

The term "subsidy" has the same meaning as the term "bounty or grant" as that term is used in section 1303 of this title, and includes, but is not limited to, the following:

(A) Any export subsidy described in Annex A to the Agreement (relating to illustrative list of export subsidies).

(B) The following domestic subsidies, if provided or required by government action to a specific enterprise or industry, or group of enterprises or industries, whether publicly or privately owned, and whether paid or bestowed directly or indirectly on the manufacture, production, or export of any class or kind of merchandise:

(i) The provision of capital, loans, or loan guarantees on terms inconsistent with commercial considerations.

(ii) The provision of goods or services at preferential rates.

(iii) The grant of fund or forgiveness of debt to cover operating losses sustained by a specific industry.

(iv) The assumption of any costs or expenses of manufacture, production, or distribution.

19 U.S.C. Sec. 1677(5) (1982). ³ From this provision it becomes clear that the countervailing duty statute contemplates two types of subsidies which give rise to additional duties: (1) export subsidies, that is, a benefit conferred only on goods that are exported, all of which are countervailable unless de minimis, and (2) domestic subsidies which may or may not be countervailable. With respect to the latter type of subsidy, the ITA has interpreted the statute to require that a domestic subsidy must be provided to a "specific enterprise or industry, or group of enterprises or industries" to be countervailable. See Certain Steel Products From Belgium, 47 Fed.Reg. 39304, 39328 (1982) (Appendix 4). Under this standard, the FICORCA program and Natural Gas pricing policies established by the Mexican government did not constitute, per ITA, a countervailable "bounty or grant" within the purview of Section 1303 because they were not directed by their terms to the float glass industry or a group of specific industries nor, in actual implementation, did the programs in fact bestow a benefit on a specific industry or group.

II Standard of Review

The Supreme Court has instructed that the courts must defer to an agency's interpretation of the statute an agency has been charged with administering provided its interpretation is a reasonable one. As the Supreme Court has succinctly stated: "When faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration." Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); accord K Mart v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 1817, 100 L.Ed.2d 313 (1988); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 131, 106 S.Ct. 455, 461, 88 L.Ed.2d 419 (1985); Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984); Georgetown Steel Corp. v. United States, 801 F.2d 1308, 1318 (Fed.Cir.1986); Kester v. Horner, 778 F.2d 1565, 1569 (Fed.Cir.1985) ("To sustain an agency's construction of its authority, we need not find that its construction is the only reasonable one, or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings."), cert. denied, 479 U.S. 854, 107 S.Ct. 190, 93 L.Ed.2d 123 (1986); Corning Glass Works v. United States Int'l Trade Comm'n, 799 F.2d 1559, 1565 (Fed.Cir.1986). Moreover, the Secretary of Commerce through the ITA has been given great discretion in administering the countervailing duty laws. As we noted in Smith Corona Group v. United States, 713 F.2d 1568, 1571 (Fed.Cir.1983) in discussing the Secretary's comparable authority under the antidumping law:

The Tariff Act of 1930, as amended by the Trade Agreements Act of 1979, establishes an intricate framework for the imposition of antidumping duties in appropriate circumstances. The number of factors involved, complicated by the difficulty in quantification of these factors and the foreign policy repercussions of a dumping determination, makes the enforcement of the antidumping law a difficult and supremely delicate endeavor. The Secretary of Commerce ... has been entrusted with responsibility for implementing the antidumping law. The Secretary has broad discretion in executing the law.

These considerations are equally applicable to administration of the countervailing duty statute. ⁴ As this court's predecessor has repeatedly opined, countervailing duty determinations involve complex economic and foreign policy decisions of a delicate nature, for which the courts are woefully ill-equipped. United States v. Hammond Lead Prods., Inc., 440 F.2d 1024, 1030, 58 CCPA 129, cert. denied, 404 U.S. 1005, 92 S.Ct. 565, 30 L.Ed.2d 558 (1971); United States v. Zenith Radio Corp., 562 F.2d 1209, 1216, 64 CCPA 130 (1977), aff'd, 437 U.S. 443, 98 S.Ct. 2441, 57 L.Ed.2d 337 (1978).

The Supreme Court's direction in Chevron, 467 U.S. at 844-45, 104 S.Ct. at 2782-83, could not be clearer:

We have long recognized that considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations

"has been consistently followed by this Court whenever decision as to the meaning or reach of a statute has involved reconciling conflicting policies, and a full understanding of the force of the statutory policy in the given situation has depended upon more than ordinary knowledge respecting the matters subjected to agency regulations. See, e.g., National Broadcasting Co. v. United States, 319 U.S. 190 [63 S.Ct. 997, 87 L.Ed. 1344 (1943) ]; Labor Board v. Hearst Publications, Inc., 322 U.S. 111 [64 S.Ct. 851, 88 L.Ed. 1170 (1944) ]; Republic Aviation Corp. v. Labor Board, 324 U.S. 793 [65 S.Ct. 982, 89 L.Ed. 1372 (1945) ]; Securities & Exchange Comm'n v. Chenery Corp., 332 U.S. 194 [67 S.Ct. 1575, 91 L.Ed. 1995 (1947) ]; Labor Board v. Seven-Up Bottling Co., 344 U.S. 344 [73 S.Ct. 287, 97 L.Ed. 377 (1953) ].

"... If this choice represents a reasonable accommodation of conflicting policies that were committed to the agency's care by the statute, we should not disturb it unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned." United States v. Shimer, 367 U.S. 374, 382, 383 [81 S.Ct. 1554, 1560, 6 L.Ed.2d 908] (1961).

Accord, Capital Cities Cable, Inc. [v. Crisp ], ante [467 U.S. 691], at 699-700 [104 S.Ct. 2694, 2700-2701, 81 L.Ed.2d 580 (1984) ].

This particular...