Solar Energy Indus. Ass'n v. United States
| Decision Date | 16 November 2021 |
| Docket Number | Slip Op. 21-154,Court No. 20-03941 |
| Citation | 553 F.Supp.3d 1322 |
| Parties | SOLAR ENERGY INDUSTRIES ASSOCIATION, NextEra Energy, Inc., Invenergy Renewables LLC, and EDF Renewables, Inc., Plaintiffs, v. UNITED STATES, United States Customs and Border Protection, and Troy A. Miller, in His Official Capacity as Acting Commissioner of United States Customs and Border Protection, Defendants. |
| Court | U.S. Court of International Trade |
Matthew R. Nicely and Daniel M. Witkowski, Akin, Gump, Strauss, Hauer & Feld LLP, of Washington, D.C., argued for Plaintiffs Solar Energy Industries Association and NextEra Energy, Inc. With them on the briefs were James E. Tysse, Devin S. Sikes and Julia K. Eppard.
Amanda Shafer Berman, and John Brew, Crowell & Moring LLP, of Washington, D.C. and New York, N.Y., argued for Plaintiff Invenergy Renewables LLC. With them on the briefs were Larry F. Eisenstat and Frances Hadfield.
Christine M. Streatfeild and Kevin M. O'Brien, Baker & McKenzie LLP, of Washington, D.C., argued for Plaintiff EDF Renewables, Inc.
Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Defendants United States, United States Customs and Border Protection, and Troy A. Miller, in his Official Capacity as Acting Commissioner of United States Customs and Border Protection. With him on the briefs were Brian M. Boynton, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director, and Joshua E. Kurland, Trial Attorney.
Solar modules consist of cells that convert sunlight into electricity on both the front and the back of the cells.1 The court has on five occasions addressed ongoing litigation involving efforts by the President to withdraw an exclusion from safeguard duties on imported solar modules, duties which the President had imposed by proclamation to protect the domestic industry from serious injury suffered due to increased imports.2 Flowing from a new complaint, the case now before the court principally involves the most recent effort by the President in 2020, invoking Section 204 of the Trade Act of 1974 ("Trade Act") -- a separate track not adjudicated in the previous litigation -- to withdraw an exclusion from safeguard duties on imported solar modules. That section provides that if certain conditions are met, the President is authorized to "reduce, modify, or terminate" previously instituted safeguard measures. Plaintiffs Solar Energy Industries Association ("SEIA"), NextEra Energy, Inc. ("NextEra"), Invenergy Renewables LLC ("Invenergy"), and EDF Renewables, Inc. ("EDF-R")3 have initiated this suit to challenge Presidential Proclamation 10101, which withdrew the exclusion of bifacial solar panels from Section 201 safeguards on imported crystalline silicon photovoltaic ("CSPV") solar panels. Proclamation 10101 : To Further Facilitate Positive Adjustment to Competition from Imports of Certain Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled into Other Products), 85 Fed. Reg. 65,639 (Oct. 16, 2020) (" Proclamation 10101"); Complaint at 1, Dec. 29, 2020, ECF No. 2 ("Compl.").
Named as Defendants are the United States, United States Customs and Border Protection ("CPB"), and Troy A. Miller, in his Official Capacity as Acting CBP Commissioner (collectively "the Government.")
This case raises a number of questions regarding the interface of Proclamation 10101 with Sections 201–204 of the Trade Act. For example: (1) Do three letters (reflecting a majority of the domestic industry production) which seek the modification of safeguards constitute a petition as required by statute? (2) Is the requirement that a petition be submitted to the President satisfied by submission to the United States Trade Representative ("USTR")? (3) Does the Proclamation's withdrawal of the exclusion for bifacial modules violate the statutory temporal restrictions which must be met before new presidential action may be taken? (4) Was Proclamation 10101 issued in violation of the requirement that the President determine that an action will "provide greater economic and social benefits than costs"? (5) Can the word "modify" in Section 204(b)(1)(B) be read to permit increased restrictions on trade? The court concludes that with respect to the first four questions, the answer is "Yes." With respect to the fifth question, the answer is "No."
Plaintiffs allege that Proclamation 10101 violates Sections 201, 203 and 204 of the Trade Act and seek both a declaratory judgment that the proclamation is unlawful and the injunction of its enforcement. Compl. at 16–21. The Government has moved to dismiss Plaintiffs’ complaint; Plaintiffs oppose this motion and have moved separately for summary judgment. The Government in turn opposes Plaintiffs’ motion. The court concludes that the various procedural challenges posed by Plaintiffs to Proclamation 10101 are unpersuasive. However, the court also concludes that because Section 204(b)(1)(B) permits only trade-liberalizing modifications to existing safeguard measures, Proclamation 10101’s withdrawal of the exclusion of bifacial solar panels and increase of the safeguard duties on CSPV modules constituted both a clear misconstruction of the statute and action outside the President's delegated authority. The court now grants Plaintiffs’ motion for summary judgment and denies the Government's motion to dismiss.
Section 201 of the Trade Act of 1974 authorizes the executive branch to implement discretionary protective measures ("safeguards") to protect a domestic industry from the harm associated with an increase in imports from foreign competitors, and Sections 202 through 204 lay out the procedures for issuing such safeguards. 19 U.S.C. §§ 2251 – 54. Relevant here, Section 202 provides that upon petition from domestic entities or industries, the International Trade Commission ("ITC") may make an affirmative determination that imports have seriously injured, or threaten serious injury to, domestic industry. 19 U.S.C. § 2252. Once such a determination has been made, Section 203 permits the President to authorize safeguard measures to temporarily protect domestic industry from the identified harm. 19 U.S.C. § 2253.
For the duration of any safeguard measure, Section 204 provides that the ITC shall monitor "developments with respect to the domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition." 19 U.S.C § 2254(a)(1). If a safeguard duty is imposed for longer than three years, the ITC "shall submit a report on the results of the monitoring ... to the President and to the Congress not later than the date that is the mid-point of the initial period, and of each such extension, during which the action is in effect." 19 U.S.C § 2254(a)(2).
Upon receipt of this report, the President is authorized to reduce, modify, or terminate the safeguard measures according to either 19 U.S.C. § 2254(b)(1)(A) or 19 U.S.C. § 2254(b)(1)(B). The statute specifically provides that:
19 U.S.C. § 2254(b)(1).
Safeguard measures have a maximum duration of four years, unless extended for another maximum of four years based upon a new determination by the ITC. 19 U.S.C. § 2253(e)(1). In addition, measures resulting in the increase or imposition of duties on an article, the institution of a tariff-rate quota with respect to an article, the imposition or modification of qualitative import restrictions on an article, or limitations on the import of an article subject to international agreements face a two-year "cooling-off period," during which further action is restricted. 19 U.S.C. § 2253(e)(7)(A). Once terminated, such safeguard measures may not be re-imposed, nor may additional such measures be enacted on the same article, for at least two years following the date of termination. Id.
On January 23, 2018, President Trump issued Presidential Proclamation 9693, which imposed a safeguard measure under Section 203(a)(3) of the Trade Act on certain CSPV products. Proclamation 9693 : To Facilitate Positive Adjustment to Competition from Imports of Certain Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled into Other Products) and for Other Purposes, 83 Fed. Reg. 3,541 (Jan. 23, 2018) ("Proclamation 9693"). Proclamation 9693 imposed a duty on CSPV modules for a four-year period beginning on February 7, 2018. Id.
On February 14, 2018, USTR published a notice detailing the procedures to request a product exclusion. Procedures to Consider Additional Requests for Exclusion of Particular Products from the Solar Products Safeguard Measure, 83 Fed. Reg. 6,670 (USTR Feb. 14, 2018). Pursuant to these procedures, on June 13, 2019, USTR granted a number of requested...
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