Regiomontana v. U.S., 95-1026

• Decision Date: 06 September 1995
• Docket Number: No. 95-1026,95-1026
• Parties: Ceramica REGIOMONTANA, S.A., Plaintiff-Appellant, and Ceramicas y Pisos Industriales de Culiacan, S.A. de C.V. and Industrias Intercontinental, S.A., Plaintiffs, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1579

64 F.3d 1579

17 ITRD 1682

Ceramica REGIOMONTANA, S.A., Plaintiff-Appellant and Ceramicas y Pisos Industriales de Culiacan, S.A. de C.V. and Industrias Intercontinental, S.A., Plaintiffs, v. The UNITED STATES, Defendant-Appellee.

No. 95-1026.

United States Court of Appeals Federal Circuit.

Sept. 6, 1995.

Before NEWMAN, CLEVENGER, and RADER, Circuit Judges.

Steven P. Kersner, Ross & Hardies, Washington, DC, argued for, plaintiff-appellant. With him on the brief were Jeffrey S. Neeley and Roger Banks.

Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Department of Justice, argued, for defendant-appellee. With her on the brief were Frank W. Hunger, Assistant Attorney General and David M. Cohen, Director. Also on the brief were Stephen J. Powell, Chief Counsel for Import Administration, Berniece A. Browne, Senior Counsel, and Boguslawa B. Thoemmes, Attorney-Advisor, Office of the Chief Counsel for Import Administration, Department of Agriculture.

Opinion of the court filed by Circuit Judge RADER. Dissenting opinion filed by Circuit Judge CLEVENGER.

RADER, Circuit Judge.

Ceramica Regiomontana, S.A., Ceramicas y Pisos Industriales de Culiacan, S.A. de C.V., and Industrias Intercontinental, S.A.

                (collectively Ceramica) challenged the International Trade Administration's (ITA's) imposition of duties on ceramic tile imported after April 23, 1985, in the United States Court of International Trade.  The Court of International Trade denied the challenge.  Ceramica Regiomontana, S.A. v. United States, 853 F.Supp. 431, 439 (Ct.Int'l Trade 1994) (Ceramica I ).   Ceramica appeals from the Court of International Trade's entry of final judgment.  Ceramica Regiomontana, S.A. v. United States, 861 F.Supp. 150 (Ct.Int'l Trade 1994) (Ceramica II ).   Because ITA lacked statutory authority to impose these countervailing duties, this court reverses and remands
                

BACKGROUND

The United States countervailing duty laws protect domestic industries from unfair foreign competition. When a foreign government provides a subsidy to a foreign importer for the manufacture, production, or export of goods, ITA may impose a countervailing duty on imports of those goods. 19 U.S.C. Sec. 1671(a) (1988), as amended by Uruguay Round Agreements Act, Pub.L. No. 103-465, Sec. 262, 108 Stat. 4809, 4910 (1994). The countervailing duty equals the amount of the subsidy. Id.

Before ITA may impose countervailing duties, the International Trade Commission (ITC) must make an affirmative injury determination. Id. ITC must find that the imports caused, or threatened to cause, material injury to a domestic industry, or that the imports materially retarded the establishment of a domestic industry. Id.

Before 1980, Title 19 did not require an injury determination for dutiable goods. See Tariff Act of 1930, ch. 497, Sec. 303, 46 Stat. 590, 687, as amended by Trade Act of 1974, Pub.L. No. 93-618, Sec. 331(a)(1), 88 Stat. 1978, 2049 (1975) (codified as amended at 19 U.S.C. Sec. 1303(a)(1) (1976)). An early version of the countervailing duty law provided:

Whenever any country ... shall pay or bestow ... any bounty or grant upon the manufacture or production or export of any article or merchandise manufactured or produced in such country ... then upon the importation of such article or merchandise into the United States ... there shall be levied and paid ... in addition to any duties otherwise imposed, a duty equal to the net amount of such bounty or grant, however the same be paid or bestowed.

19 U.S.C. Sec. 1303(a)(1) (1976).

The Trade Act of 1974 authorized the President to negotiate an international subsidies code with the United States' trading partners to set uniform conditions for imposing countervailing duties. Trade Act of 1974, Sec. 102(b), 88 Stat. at 1982-83. The Subsidies Code, signed in 1979, arose out of the Tokyo Round of the General Agreement on Tariffs and Trade (GATT) negotiations (1973-1979). See Agreement of Interpretation and Application of Articles VI, XVI, & XXIII of the GATT (Subsidies Code), reprinted in II Bruce E. Clubb, United States Foreign Trade Law 648-49 (1991). Article VI of the GATT requires a finding of material injury to a domestic industry before imposition of countervailing duties. The General Agreement on Tariffs and Trade, Oct. 30, 1947, art. VI, Sec. 6(a), reprinted in Law and Practice Under the GATT, ch. I.A., at 14 (Kenneth R. Simmonds & Brian H.W. Hill eds. 1994). By acceding to the Subsidies Code, the United States agreed to incorporate GATT's Article VI material injury requirement into its national countervailing duty law for all proceedings involving its signatory partners. Subsidies Code, art. I, reprinted in Clubb, supra, at 650.

In 1979, Congress amended the countervailing duty laws to comply with United States obligations under the Subsidies Code. Trade Agreements Act of 1979, Pub.L. No. 96-39, 93 Stat. 144 (codified as amended in scattered sections of 19 U.S.C.) (the 1979 Act). The 1979 Act, however, left the existing countervailing duty law in place, in amended form, to apply to countries that did not sign the Subsidies Code or an equivalent agreement. 19 U.S.C. Sec. 1303(a)(1) (1988) (repealed 1994). ^* The 1979 Act amended For "countries under the Agreement," the 1979 Act provided a new statutory provision for imposition of countervailing duties. 1979 Act, Sec. 701, 93 Stat. at 151 (codified at 19 U.S.C. Sec. 1671). This provision applies to countries that signed the Subsidies Code or have since assumed substantially equivalent obligations by agreement with the United States. 19 U.S.C. Sec. 1671(a) (setting forth requirements for imposing countervailing duties); 19 U.S.C. Sec. 1671(b) (defining "country under the Agreement"). Thus, as of 1980, and during the time at issue in this case, the United States had two standards for countervailing duties: section 1671 for "countries under the Agreement" and section 1303 for all others.

                section 1303(a)(1) to specifically exclude any "article or merchandise which is the product of a country under the Agreement."   1979 Act, Sec. 103(a), 93 Stat. at 190
                

The major difference between the two standards of title 19 is the injury determination requirement. Section 1303 authorizes imposition of countervailing duties without an injury determination. 19 U.S.C. Sec. 1303(a)(1), (b). Section 1671, however, bars imposition of countervailing duties until after ITC makes an injury determination. 19 U.S.C. Sec. 1671(a).

In 1982, ITA issued a countervailing duty order on ceramic tile imported from Mexico. Final Affirmative Countervailing Duty Determination; Ceramic Tile from Mexico and Countervailing Duty Order, 47 Fed.Reg. 20,012 (Dep't Comm.1982). Because Mexico was not at that time a "country under the Agreement" within the meaning of 19 U.S.C. Sec. 1671(b), ITA issued the order under section 1303. See id. at 20,015. Accordingly, ITC did not conduct a material injury determination.

On April 23, 1985, Mexico and the United States signed the Understanding Between the United States and Mexico Regarding Subsidies and Countervailing Duties (the Understanding). Effective on that date, the United States Trade Representative officially designated Mexico a "country under the Agreement." Determination Regarding the Application of Certain International Agreements, 50 Fed.Reg. 18,335, 18,335-36 (U.S. Trade Rep.1985).

On June 29, 1988, ITA initiated an administrative review of the 1982 Order. Initiation of Antidumping and Countervailing Duty Administrative Reviews; Construction Casting From Brazil, 52 Fed.Reg. 23,330, 23,330-31 (Dep't Comm.1987). This review covered entries of ceramic tile imported between January 1, 1986 and December 31, 1986. Id. ITA published its final results in 1989. Ceramic Tile From Mexico; Final Results of Countervailing Duty Administrative Review, 54 Fed.Reg. 19,930 (Dep't Comm.1989). ITA determined that Ceramica owed countervailing duties for tile imported during the review period and instructed Customs to assess the duties. Id. at 19,932.

Ceramica challenged the final results in the Court of International Trade. Ceramica argued that ITA lacked authority to impose the countervailing duties on tile imported after April 23, 1985--the date Mexico became a "country under the Agreement." Once Mexico became a "country under the Agreement," Ceramica asserted, ITA could only assess duties under section 1671. Section 1671 requires an injury determination. Because ITC had not conducted an injury determination, Ceramica concluded that ITA must revoke the outstanding countervailing duty order as of April 23, 1985.

The Court of International Trade denied Ceramica's challenge and remanded on different grounds. Ceramica I, 853 F.Supp. at 439. After consideration of ITA's remand results, the Court of International Trade entered final judgment dismissing the case. Ceramica II, 861 F.Supp. at 150. Ceramica appeals.

DISCUSSION

The issue on appeal is whether ITA has authority to impose countervailing duties on ceramic tile imported from Mexico after April 23, 1985--the date Mexico became a "country under the Agreement" as defined by section 1671(b)--absent an injury determination. Put another way, this court must This court reviews issues of statutory interpretation de novo. Chaparral Steel Co. v. United States, 901 F.2d 1097, 1100, 8 Fed.Cir. (T) 101, 105 (1990). "If the statutory language is clear, then 'that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.' " Id. at 1101 (quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984)).

decide whether Mexico's change in status to a "country under the Agreement" deprives ITA of statutory authority to assess duties on ceramic tile imported after the status change, based on an order properly issued before the status change under ...