Sneaker Circus, Inc. v. Carter

• Decision Date: 20 September 1978
• Docket Number: No. 77-C-1135.,77-C-1135.
• Citation: 457 F. Supp. 771
• Parties: SNEAKER CIRCUS, INC., Blazer Sports International, Inc., and Bob Wolf Associates, Inc., Plaintiffs, v. Jimmy CARTER, President of the United States, Robert S. Strauss, Special Representative for Trade Negotiations, Stephen J. Lande, Deputy Special Representative for Trade Negotiations, and United States International Trade Commission, Defendants.
• Court: U.S. District Court — Eastern District of New York

457 F. Supp. 771

SNEAKER CIRCUS, INC., Blazer Sports International, Inc., and Bob Wolf Associates, Inc., Plaintiffs, v. Jimmy CARTER, President of the United States, Robert S. Strauss, Special Representative for Trade Negotiations, Stephen J. Lande, Deputy Special Representative for Trade Negotiations, and United States International Trade Commission, Defendants.

No. 77-C-1135.

United States District Court, E. D. New York.

September 20, 1978.

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Vincenti & Schickler, by Vito Vincenti and Jonathan S. Gaynin, New York City, for plaintiffs.

David G. Trager, U. S. Atty., E.D.N.Y., by Joan M. Dolan, Asst. U. S. Atty., Brooklyn, N. Y., for defendants.

Collier, Shannon, Rill, Edwards & Scott, by Lauren R. Oldak, and Daniel S. Kozma, Washington, D. C., and Skadden, Arps, Slate, Meagher & Flom, New York City, for intervenor defendant American Footwear Industries Ass'n.

MEMORANDUM DECISION

COSTANTINO, District Judge.

This is an action to set aside two Orderly Marketing Agreements ("OMAs") negotiated by the Special Trade Representative ("STR") pursuant to the Trade Act of 1974, Pub. L. 93-618, Jan. 3, 1975, 88 Stat. 1978, 19 U.S.C. § 2101 et seq. ("the Act"). The agreements were negotiated with the governments of Taiwan and South Korea, and they deal with the number of pairs of non-rubber athletic footwear that those two countries will export to the United States.

The plaintiffs are, respectively, a retailer, wholesaler and importer of the type of footwear covered by the OMAs. They originally brought this action in June of 1977, seeking injunctive relief to enjoin the signing of the OMAs. By Memorandum and Order dated June 10, 1977, this court dismissed the case for lack of subject matter jurisdiction, finding that exclusive jurisdiction over the controversy lay with the Customs Court. The United States Court of Appeals for the Second Circuit reversed that determination and remanded the case for further proceedings. Sneaker Circus, Inc. v. Carter, 566 F.2d 396 (2d Cir. 1977).¹

In accordance with the Court of Appeals decision, this court held a hearing, the initial purpose of which was to determine standing and ripeness² and whether preliminary injunctive relief should be granted. Just prior to the close of plaintiffs' case, the court, pursuant to Rule 65(a), Fed. R. Civ. P., consolidated the hearing on standing, ripeness and the preliminary injunction with the trial on the merits.

Plaintiffs allege three general grounds to set aside the OMAs. They claim that (1) the International Trade Commission ("ITC"), in making its "good cause" determination, failed to comply with § 201 of the Act, 19 U.S.C. § 2251³; (2) that the President failed to comply with §§ 202 and 203 of the Act, 19 U.S.C. §§ 2252 and 2253; and (3) that the OMAs violate the Treaties of Friendship, Commerce and Navigation between the United States and the Republic of Korea, entered into force November 7, 1957. 8 U.S.T. 2217, TIAS No. 3974, and the United States and the Republic of China, entered into force November 30, 1948, 63 Stat. 1300, TIAS No. 1871,⁴ the General Agreement on Tariffs and Trade, entered into force for the United States January 1, 1948, 61 Stat. Parts 5 and 6, TIAS 1700, and § 1 of the Sherman Act. Before reaching the merits of plaintiffs' claims, the court must decide three preliminary issues: (1) whether the plaintiffs have standing to maintain this lawsuit; (2) whether the action is ripe for adjudication; and (3) whether the court has personal jurisdiction over the defendants.⁵

I. Standing

In Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 151, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970) ("Data Processing"), the Supreme Court recognized that "generalizations about standing to sue are largely worthless as such." The one generalization that the Court found to be valid, however, is that under Article III of the Constitution, the federal judicial power is limited to "cases" and "controversies." In terms of the Article III case or controversy requirement, the question with respect to standing is whether the plaintiffs have "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues" to the court. Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962).⁶ Put another way, "when a plaintiff's standing is brought into issue the relevant inquiry is whether, assuming justiciability of the claim, the plaintiff has shown an injury to himself that is likely to be redressed by a favorable decision." Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38, 96 S.Ct. 1917, 1924, 48 L.Ed.2d 450 (1976) ("Simon"). See also Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). The injury which must be shown is some "threatened or actual injury" to the plaintiff, Linda R. S. v. Richard D., 410 U.S. 614, 617, 93 S.Ct. 1146, 35 L.Ed.2d 536 (1973), which "fairly can be traced to the challenged action of the defendant," Simon, supra, 426 U.S. at 41, 96 S.Ct. at 1926 (emphasis added). The test articulated in these cases has been referred to as "injury in fact," see, e. g., Data Processing, supra, 397 U.S. at 152, 90 S.Ct. 827, and it is clear that these plaintiffs have shown such injury.

In addition to the fact that the allegations in the complaint are sufficient to establish the standing of these plaintiffs to maintain this action, see Second Amended Complaint ¶¶ 3-5, 29, the evidence offered at trial fairly supports those allegations. Plaintiffs have shown that since the effective date of the OMAs they have been unable to have orders filled in Korea and Taiwan because the monthly factory quotas of their manufacturers had already been filled, as a result of which orders placed with the plaintiffs by their customers have been cancelled. See, e. g., Transcript at 29-35, 230, 390-92. Plaintiffs have also shown that after the effective date of the OMAs the cost to them of the footwear increased rather substantially, see, e. g., Transcript at 38, 258.

Plaintiffs have therefore shown the requisite injury to establish standing, especially in light of the statement by the Supreme Court that "`an identifiable trifle is enough for standing . . .,'" United States v. SCRAP, 412 U.S. 669, 689, 93 S.Ct. 2405, 2417, 37 L.Ed.2d 254 n. 14 (1973), quoting from Davis, Standing: Taxpayers and Others, 35 U. Chi. L. Rev. 601, 613. In addition, the injury which plaintiffs have shown can fairly be traced to the challenged actions of the defendants. See Simon, supra, 426 U.S. at 41, 96 S.Ct. 1917. Indeed, the injury shown here is far more direct than the injury in other cases in which plaintiffs have been found to have standing. See, e. g., Planned Parenthood of Central Missouri v. Danforth, 428 U.S. 52, 96 S.Ct. 2831, 49 L.Ed.2d 788 (1976); United States v. SCRAP, supra. Moreover, the injury shown is likely to be redressed by a favorable decision, Simon, supra, 426 U.S. at 38, 96 S.Ct. 1917, since if the court sets the OMAs aside, the quotas established thereunder would likewise be set aside and the plaintiffs would once again be able to obtain as much footwear as they desire. Thus it is clear that plaintiffs meet the traditional "injury in fact" test for standing.

All parties here assert that in addition to an injury in fact, plaintiffs must show that they are "arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question," Data Processing, supra, 397 U.S. at 153, 90 S.Ct. at 830, before they can be found to have standing. Notwithstanding the fact that all parties urge the application of the "zone of interests" test to this case, the court concludes that to apply it here would be inappropriate.

Data Processing, supra, the case in which the "zone of interests" test was first enunciated, was a suit brought pursuant to § 10 of the Administrative Procedure Act, 5 U.S.C. § 701 ("APA"). It is clear, both from Data Processing and subsequent cases that the test established therein applies to cases brought under the APA. See Simon, supra, 426 U.S. at 38, 96 S.Ct. 1917; id. at 65, 96 S.Ct. 1917 (concurring opinion of Brennan, J.,); Sierra Club v. Morton, 405 U.S. 727, 733, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). Since the instant action is not brought pursuant to the APA, see Second Amended Complaint ¶ 1, the court need not apply the "zone of interests" test.⁷

Assuming arguendo that the "zone of interests" test does apply to this case, the plaintiffs here would still have standing. The test, as set forth in Data Processing, supra, 397 U.S. at 153, 90 S.Ct. at 830, is whether plaintiffs are "arguably within the zone of interests to be protected or regulated" (emphasis added) by the statute in question. Whatever may be said about whether plaintiffs' interests are within the zone to be protected by the Trade Act, see Plaintiffs' Memorandum Concerning Plaintiffs' "Standing to Sue" and Whether This Action is "Ripe for Adjudication" at 22-29; Intervenor Defendant's Reply to Plaintiffs' Memorandum on Standing and Ripeness and Opposition to Plaintiffs' Motion for a Preliminary Injunction at 7-13, it is clear that those interests are arguably within the zone to be regulated by the Act. The Act in general, and § 2251 et seq. in particular, are specifically aimed at regulating imports in order to benefit domestic industry. See 19 U.S.C. § 2102 (4). The plaintiffs, as stated at the outset, are directly involved in the business of selling imported non-rubber footwear and are clearly in the "marketing chain" of such footwear. Cf. Harry H. Price & Sons, Inc. v. Hardin, 425 F.2d 1137, 1140 (5th Cir. 1970). The court therefore is satisfied that these plaintiffs would meet the "zone of interests" test were that test applied to this case.

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