Zenith Radio Corp. v. Matsushita Elec. Indus. Co., MDL No. 189. Civ. A. No. 74-2451.

• Decision Date: 26 June 1980
• Docket Number: MDL No. 189. Civ. A. No. 74-2451.
• Citation: 494 F. Supp. 1263
• Parties: ZENITH RADIO CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. et al. In re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION
• Court: U.S. District Court — Eastern District of Pennsylvania

494 F. Supp. 1263

ZENITH RADIO CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. et al. In re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION

MDL No. 189. Civ. A. No. 74-2451.

United States District Court, E. D. Pennsylvania.

June 26, 1980.

Edwin P. Rome (argued), John Hardin Young, Blank, Rome, Comisky & McCauley, Philadelphia, Pa., for plaintiff, Zenith Radio Corp.

Lance Gotthoffer (argued), Peter J. Gartland, Wender, Murase & White, New York City, for moving defendant.

MEMORANDUM AND ORDER

(1953 Treaty of Friendship, Commerce and Navigation with Japan)

EDWARD R. BECKER, District Judge.

In this memorandum we address the motion of defendant Sharp Electronics Corporation ("SEC") for summary judgment against Zenith Radio Corporation ("Zenith") on what remains of Zenith's claims under the Antidumping Act of 1916 ("the 1916 Act"), 15 U.S.C. § 72.¹ In our opinion and order of April 14, 1980, Pretrial Order No. 237, 494 F.Supp. 1190, (hereinafter cited as "Antidumping Opinion"), we dismissed the 1916 Act claims of National Union Electric Corporation, the other plaintiff in this antitrust litigation, and granted summary judgment in favor of the defendants on a major portion of Zenith's claims under the 1916 Act. An appeal of that opinion and order pursuant to 28 U.S.C. § 1292(b) is currently pending in the U.S. Court of Appeals for the Third Circuit, No. 80-8072. While we initially entertained some qualms as to whether we should hear a motion concerning the 1916 Act while our previous construction of the Act is on appeal, we have determined that in view of the remaining portion of Zenith's claim under the Act, SEC's motion is properly before us.²

SEC contends that Zenith's claims under the 1916 Act are barred by Article XVI(1) of the Treaty of Friendship, Commerce and Navigation between the United States and Japan, 4 U.S.T. 2063, T.I.A.S. No. 2863 (1953) ("the Treaty"). Article XVI(1) of the Treaty provides as follows:

Products of either Party shall be accorded, within the territories of the other Party, national treatment . . . in all matters affecting internal taxation, sale, distribution, storage and use.

The Parties to the Treaty are the two nations, the United States and Japan. The Treaty defines the term "national treatment" as follows:

The term "national treatment" means treatment accorded within the territories of a Party upon terms no less favorable than the treatment accorded therein, in like situations, to nationals, companies, products, vessels or other objects, as the case may be, of such Party.

Article XXII(1). Thus the treaty requires that products of Japan be accorded, in the United States, treatment upon terms no less favorable than that accorded, in like situations, to products of the United States.

The Antidumping Act of 1916 creates civil and criminal penalties for importing or selling, or assisting in importing or selling, articles in the United States at prices which are below the "actual market value or wholesale price of such articles" in the country of origin, after certain adjustments to the home market price are made. 15 U.S.C. § 72. By its terms, the Act has no application to articles manufactured in the United States. SEC is a New York corporation which resells in the United States products manufactured in Japan by its Japanese parent corporation, Sharp Corporation. Sharp Corporation, also a defendant, is a major manufacturer of consumer electronic products. SEC contends that its resale pricing decisions are restricted by the 1916 Act in a manner which discriminates between products which originate in Japan and those which originate in the United States, in violation of the Treaty.³

Zenith replies that SEC, as a corporation organized under the laws of the state of New York, has no standing to invoke the Treaty, citing Avigliano v. Sumitomo Shoji America, Inc., 473 F.Supp. 506 (S.D.N.Y.), aff'd on rehearing, 21 F.E.P. Cases 580 (S.D.N.Y.1979), appeal pending, No. 80-7418 (2d Cir.), and Spiess v. C. Itoh & Co. (America), Inc., 469 F.Supp. 1 (S.D. Tex.1979), appeal pending, No. 79-2382 (5th Cir.). Zenith also contends that, since the 1916 Act applies equally to any person who violates its prohibitions, whether domestic or foreign, the Act therefore does not discriminate in violation of the treaty. Finally, Zenith argues that SEC's reading of the Treaty would in effect repeal the 1916 Act with respect to each of the numerous countries with which the United States has entered into a treaty of friendship, commerce and navigation, see p. 1267 infra, even though nothing in the legislative history of Senate consideration of the Treaty suggests such a result.

Although SEC's motion raises some difficult questions, we need not and do not reach those questions, for we will deny the motion solely on the ground that the Senate, in approving the Treaty, never intended thereby to repeal the Antidumping Act of 1916.⁴ It is a "cardinal rule" of statutory construction that "repeals by implication are not favored." E. g., Tennessee Valley Authority v. Hill, 437 U.S. 153, 189, 98 S.Ct. 2279, 2299, 57 L.Ed.2d 117 (1978); United States v. United Continental Tuna Corp., 425 U.S. 164, 168, 96 S.Ct. 1319, 1323, 47 L.Ed.2d 653 (1976). In order for a subsequent enactment of Congress to constitute an implied repeal of an earlier statute, the intention of the legislature to repeal must be "clear and manifest." Morton v. Mancari, 417 U.S. 535, 551, 94 S.Ct. 2474, 2483, 41 L.Ed.2d 290 (1974). Not only is there nothing in the legislative history of Senate consideration of the Treaty to indicate that the Senate intended to repeal by implication any federal statute but, as Zenith correctly notes, there are clear indications to the contrary.

As Chief Justice Marshall explained in Foster v. Neilson, 27 U.S. (2 Pet.) 253, 314, 7 L.Ed. 415 (1829), a treaty provision which does not require specific measures by the political branches of government for its execution is enforceable in the courts as if it were a statute:

Our Constitution declares a treaty to be the law of the land. It is, consequently, to be regarded in courts of justice as equivalent to an act of the legislature, whenever it operates of itself, without the aid of any legislative provision.

The Treaty on which SEC relies has been recognized by the Courts to be self-executing. In re Fotochrome, Inc., 377 F.Supp. 26, 29 (E.D.N.Y.1974), aff'd, Fotochrome, Inc. v. Copal Company, Limited, 517 F.2d 512 (2d Cir. 1975); see also Oregon-Pacific Forest Products Corp. v. Welsh Panel Co., 248 F.Supp. 903, 910 (D.Or.1965). Since a self-executing provision of a treaty is legally equivalent to a federal statute, a treaty provision may operate as a repeal of a prior inconsistent federal statute. Cook v. United States, 288 U.S. 102, 119, 53 S.Ct. 305, 311, 77 L.Ed. 641 (1933); Whitney v. Robertson, 124 U.S. 190, 194, 8 S.Ct. 456, 458, 31 L.Ed. 386 (1888). Applying this principle, Judge Weinstein held in Fotochrome, supra, that "the 1953 Treaty with Japan and the 1970 United Nations Convention have superseded in small measure the 1938 Bankruptcy law." 377 F.Supp. at 31. Judge Weinstein consulted the clear language of Article IV(2) of the Treaty and of the United Nations Convention to hold that an award made by the Commercial Arbitration Association in Tokyo, Japan, which had the effect of a final judgment under Japanese law, would be enforceable in a bankruptcy proceeding in the United States courts, even though a domestic arbitration award would not have been enforceable under the circumstances presented in Fotochrome. The Second Circuit affirmed, relying solely on the United Nations Convention which, in the appellate court's view, had superseded the pertinent clause of the bilateral Treaty with Japan. 517 F.2d at 518 n.4.

While a self-executing treaty provision is "equivalent to an act of the legislature" in its legal effect, Foster v. Neilson, supra, we are aware of no decision holding that a treaty provision should be accorded any greater legal effect than a statute enacted by Congress. Hence we deem the principles governing the implied repeal of statutes by subsequent statutes to apply with equal force to subsequent treaty provisions. Under well-established principles concerning implied repeals, our inquiry is two-fold. First, we must examine the language of the statute and of the treaty to determine whether there is "a positive repugnancy" between them, Hill, supra, 437 U.S. at 190, 98 S.Ct. at 2299, quoting Wood v. United States, 41 U.S. (16 Pet.) 342, 363, 10 L.Ed. 987 (1842), which renders them irreconcilable. Second, we must examine the legislative history of the Treaty to determine whether there is "some affirmative showing of an intention to repeal," Hill, supra, quoting Mancari, supra.

Looking first to the language of the 1916 Act and of the Treaty, we do not find a "positive repugnancy" such as to amount to repeal by implication. Article XVI(1) of the Treaty appears to be directed against measures such as discriminatory excise taxes assessed only on products of foreign origin. The language of the treaty provision does not clearly reach a statute like the 1916 Act, which has as its predominant purpose the regulation of international commerce, but may also have an effect on the prices at which imported goods are sold within the United States. SEC concedes that Article XVI of the Treaty does not limit the power of the United States to regulate the importation of foreign goods. See n.3, supra. Nor, obviously, does it require that we view imported goods in all respects as though they originated in the United States. The definition of "national treatment" in Article XXII of the Treaty requires that foreign products be treated as favorably as domestic products only "in like situations," a qualifying phrase of indefinite scope. See also n.4, supra. We conclude that while the language of the Treaty is fairly susceptible of the interpretation...