Federal Circuit Says Commerce Has Statutory Authority to Conduct Expedited CVD Reviews

The Commerce Department has the statutory authority to conduct expedited countervailing duty reviews, the U.S. Court of Appeals for the Federal Circuit held April 25. Reversing a Court of International Trade ruling overturning the agency's authority to carry out such reviews, Judges Timothy Dyk, Jimmie Reyna and Richard Taranto said the legal ground for the review process is found in the Uruguay Round Agreements Act's enactment of certain provisions that favor individual company determinations and the URAA's "grant of regulatory-implementation power to Commerce."

Taranto, the opinion's author, added that it's clear why an expedited process may be needed to ensure the individualized determination preference of the statute is implemented. The regulation gives companies a process to secure individual determinations immediately following the imposition of a CVD order, possibly dropping the number of companies seeking individual examinations. "The net result may enhance the efficiency of the agency process as a whole, including by making it more practicable for Commerce (with fewer requesters) to make individual determinations in the proceeding before publishing the CVD order," the judge said.

"My clients are pleased by the unanimous, favorable decision," said Ed Lebow, counsel for the Canadian companies that had argued in favor of the review process, led by Marcel Lauzon. "The court’s ruling and interpretation of the interplay between the international agreements, the implementing law and the statement of administrative action are also consistent with the fast track negotiation and legislative process."

Certain Canadian softwood lumber exporters or producers requested an expedited CVD review of the order covering their products after receiving the all-others rate. The companies received de minimis CVD rates, rendering them exempt from the order, though the question of whether Commerce had the right to conduct such a review lingered over the proceedings. The trade court found this statutory authority not to exist, declaring that the URAA did not work as a legal home for the regulation (see 2108190002). The producers, led by Fontaine and the Government of Canada, appealed.

The appellate court said that statutory authority for the expedited reviews does exist under the URAA's enactment of Section 1677f-1(e), which provides as a "general rule" that Commerce set an individual rate for each known exporter or producer of subject merchandise. A subset of this law says the agency can depart from that rule if there are a large number of these companies, making the individual rates "not practicable." This would allow Commerce to calculate individual rates for a reasonable number of exporters or producers via sampling or set a single country-wide rate.

The Federal Circuit ruled that the Statement of Administrative Action accompanying the URAA serves as the link between the expedited-review process and Section 1677f-1(e). The SAA amended the Tariff Act of 1930 to provide for expedited CVD reviews in order to enact part of the Subsidies Agreement, saying that the URAA eliminates the preference for a country-wide rate to establish a general rule in favor of individual rates for each exporter or producer. "In that way, the SAA links expedited reviews to" Section 1677f-1(e), the court said.

The Committee Overseeing Action for Lumber International Trade Investigations or Negotiations said that statute limits Commerce's review options to just three possibilities: examine all exporters, examine a statistically valid number of exporters or examine exporters accounting for the largest volume of the merchandise that can reasonably be examined. This exclusivity bars individual examinations of companies based on their asking for individual rates, the committee said. Taranto rejected the claim, finding that nothing in the statute defined all permissible options for Commerce to take.

The judge added that the committee's claim actually cuts against the purpose of a different part of the law, Section 1677m, which sometimes requires this exact action of Commerce. This law says that the agency shall establish an individual rate for any company not initially individually examined that submits the information requested of examined companies.

"We can now get our ‘day in court’ on an issue, not yet addressed in the appeals, that would if properly adjudicated yield a de minimis subsidy calculation and should lead to (Canadian firm Mobilier Rustique) being fully excluded from the CVD proceeding like the other exporters with de minimis subsidy rates," counsel for Rustique John Magnus told Trade Law Daily.

(Committee Overseeing Action for Lumber International Trade Investigations or Negotiations v. United States, Fed. Cir. # 22-1021, dated 04/25/23l Judges: Timothy Dyk, Jimmie Reyna and Richard Taranto; Attorneys: Jy Cheh Sophia Lin of Pickard Kentz for plaintiff-appellee Committee Overseeing Action for Lumber International Trade Investigations or Negotiations; Mark Lehnardt of Law Offices of David Simon for plaintiff-appellants led by Fontaine; Edward Lebow of Haynes & Boone for plaintiffs-appellants led by Marcel Lauzon; Joanne Osendarp of McDermot Will for plaintiff-appellant Government of Canada; Richard Weiner of Sidley Austin for plaintiffs-appellants led by North American Forest Products; Yohai Baisburd of Cassidy Levy for plaintiff-appellant Scierie Alexandre Lemay & Fils; Nancy Noonan of ArentFox for plaintiff-appellant Government of Quebec; John Magnus of TradeWins for plaintiff-appellant Mobilier Rustique; Stephan Becker of Pillsbury Winthrop for plaintiff-appellant Government of Province of New Brunswick; and Elizabeth Speck for defendant-amicus curiae U.S. govenrment)