SCM Corp. v. United States

• Decision Date: 07 March 1980
• Docket Number: Court No. 77-4-00553.,C.R.D. 80-2
• Citation: 487 F. Supp. 96
• Parties: SCM CORPORATION, Plaintiff, v. UNITED STATES (Brother International Corporation, Party-In-Interest), Defendant.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

487 F. Supp. 96

SCM CORPORATION, Plaintiff, v. UNITED STATES (Brother International Corporation, Party-In-Interest), Defendant.

C.R.D. 80-2; Court No. 77-4-00553.

United States Customs Court.

March 7, 1980.

Frederick L. Ikenson, Washington, D. C., for plaintiff.

Alice Daniel, Asst. Atty. Gen., Washington, D. C., David M. Cohen, Director, Commercial Litigation Branch, New York City (Sheila N. Ziff, New York City, on the brief), for defendant.

Tanaka Walders & Ritger, Washington, D. C. (H. William Tanaka, Lawrence R. Walders and Wesley K. Caine, Washington, D. C., on the briefs), for party-in-interest.

RE, Chief Judge:

In this American manufacturer's action, plaintiff, a domestic manufacturer of typewriters, seeks to review the negative injury determination of the International Trade Commission in Portable Electric Typewriters From Japan, Investigation No. AA 1921-145 under the Antidumping Act of 1921, as amended (19 U.S.C. §§ 160, et seq. (1970)), ITC Pub. 732, 40 Fed.Reg. 27079 (1975).

In brief, under the Antidumping Act of 1921, a special dumping duty may be assessed upon imported merchandise that is being sold in the United States at less than its fair value. As stated in a prior opinion of the court in this case, an American manufacturer may file a petition with the Secretary of the Treasury to protest actual or threatened injury to an industry or the establishment of an industry. The Secretary has the duty to determine whether that class or kind of imported merchandise is being sold, or is likely to be sold in the United States or elsewhere, at less than fair value.

If the Secretary issues an affirmative finding of sales at less than fair value, the matter is referred to the International Trade Commission. The Commission must then determine whether an industry in the United States is being or is likely to be injured, or is prevented from being established, by reason of the less than fair value sales. If the Commission makes an affirmative finding of injury or likelihood of an injury, the Secretary of the Treasury must publish in the Federal Register notice of his determination as well as the findings of the Commission. Under the Antidumping Act these administrative decisions comprise the "dumping findings." As a consequence of the findings of "dumping," the imported merchandise is assessed with an additional "special dumping duty."

In this action, after receipt of the plaintiff's petition, the Secretary of the Treasury initiated an investigation which resulted in the publication of a determination that sales of portable electric typewriters from Japan were being or were likely to be sold at less than fair value. Thereupon the International Trade Commission conducted its investigation and rendered a negative determination, i. e., that an industry in the United States is not being or likely to be injured, or prevented from being established, by reason of the less than fair value sales. In summary, the Commission reached a negative injury determination, and therefore no dumping findings were published. See SCM Corporation v. United States (Brother International Corporation, Party-in-Interest), 435 F.Supp. 1224, 1225-1226, 79 Cust.Ct. 163 (1977).

This case has a long history. See SCM Corporation v. United States International Trade Commission et al., 404 F.Supp. 124 (D.D.C.1975); Id., 549 F.2d 812 (D.C.Cir. 1977) (reversing the dismissal by the district court, and remanding with instruction to retain jurisdiction until SCM brought action in the United States Customs Court to enable the Customs Court to determine whether it had jurisdiction to review a negative injury determination of the ITC in an American manufacturer's action under section 516 of the Tariff Act of 1930, as amended); SCM Corporation v. United States (Brother International Corporation, Party-in-Interest), 435 F.Supp. 1224, 79 Cust.Ct. 163 (1977) (motion for a three-judge panel denied); Id., 450 F.Supp. 1178, 80 Cust.Ct. 226 (1978) (upheld jurisdiction in the United States Customs Court); Id., 81 Cust.Ct. 159, C.R.D. 78-13 (1978) (motion for discovery); Id., 473 F.Supp. 791, 82 Cust.Ct. 351 (1979) (claim of executive privilege).

What is sought to be reviewed by the present cross-motions for summary judgment by plaintiff and defendant, respectively, is the negative injury determination made by the International Trade Commission. Specifically, plaintiff contends that the ITC erred in its interpretation of the term "injury," as it appears in the Antidumping Act of 1921. 19 U.S.C. § 160(a).

This is not the first case in this court which presents questions as to the scope and standard of judicial review of administrative determinations during dumping proceedings. This case, however, in addition to the scope and standard of review to be applied to an ITC negative injury determination, raises the question of the degree of specificity required by that determination in order that it may be properly reviewed by the court.

The scope or standard of judicial review of administrative action is often set forth in the applicable statute. No provision, however, is made in the case of judicial review of an ITC injury determination in a dumping proceeding. Although the Trade Agreements Act of 1979 provides that the Commission's final determinations, such as the one now before this court, are subject to judicial review under a "substantial evidence" test, the present action was commenced prior to the enactment of that provision.

Nevertheless, in a series of decisions, the Court of Customs and Patent Appeals has established that the scope of review applicable to the determinations of the United States Tariff Commission,¹ the predecessor of the ITC, is limited to whether the Commission acted within its delegated authority, correctly interpreted the statute, and correctly applied the law. Kleberg v. United States, 71 F.2d 332, 21 CCPA 110, T.D. 46446 (1933); City Lumber Co. v. United States, 311 F.Supp. 340, 64 Cust.Ct. 826 (1970), aff'd, 457 F.2d 991, 59 CCPA 89 (1972); Imbert Imports v. United States, 475 F.2d 1189, 60 CCPA 123 (1973). See also recent discussion by Judge Newman in Armstrong Bros. Tool Co. et al. v. United States, etc., 84 Cust.Ct. ___, 483 F.Supp. 312 (1980), appeal pending. In the case at bar, the fundamental question presented is whether the ITC correctly interpreted and applied the Antidumping Act of 1921 in making its negative injury determination.

In defining the proper role of judicial review of administrative action involving the exercise of discretion, the Supreme Court has stated that:

"In all cases agency action must be set aside if the action was `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law' or if the action failed to meet statutory, procedural, or constitutional requirements." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 413-414, 91 S.Ct. 814, 822, 28 L.Ed.2d 136 (1971).

In Overton Park, the question presented was whether the action of the Secretary of Transportation, pertaining to the construction of an interstate highway through a public park in Tennessee, was invalid without formal findings. The lower courts held, and the Supreme Court agreed, that, under the governing statute, the agency determination did not require formal findings; and, that the only hearing required was "nonadjudicatory, quasi-legislative" in nature. Nevertheless, the Supreme Court held that, even under the arbitrary and capricious standard of review, the reviewing court is required "to engage in substantial inquiry." The review function was explained as follows:

"Certainly, the Secretary's decision is entitled to a presumption of regularity. Citations. But that presumption is not to shield his action from thorough, probing, in-depth review.

. . . . .

"Scrutiny of the facts does not end, however, with the determination that the Secretary has acted within the scope of his statutory authority. . . . To make this finding that the determination was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The Court is not empowered to substitute its judgment for that of the agency." (Emphasis added.) 401 U.S. at 415-416, 91 S.Ct. at 823-824.

When the administrative determination is not based upon a record, courts have limited the scope of their inquiry to the administering authority's statement of the reasons for its determination. See cases cited in Suwannee Steamship Co. v. United States, 435 F.Supp. 389, 392-393, 79 Cust.Ct. 19 (1977). Thus, in Dunlop v. Bachowski, 421 U.S. 560 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975), the Supreme Court required the agency the Secretary of Labor to provide a statement of reasons, and the essential facts upon which the decision was based, even though neither the statute nor its legislative history said anything about either findings or reasons.

The Court reasoned that since a reviewing court was not authorized to substitute its judgment for that of the agency, the agency must indicate explicitly the basis upon which the discretionary action was taken. This will enable the court to determine, with a degree of certainty, whether or not the discretionary action taken by the agency was exercised in a manner that was neither arbitrary nor capricious. See Dunlop v. Bachowski, 421 U.S. at 571-572, 95 S.Ct. at 1859-1860, citing De Vito v. Shultz, 300 F.Supp. 381, 383 (D.D.C.1969).

Accordingly, however narrow the standard of judicial review, the Commission's determination is not shielded from a "thorough, probing, in-depth review." Furthermore, the court is required to engage in a "searching and careful" inquiry into the facts.

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