Silfab Solar, Inc. et al v. United States et al

Slip Op. 18-15
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Timothy C. Stanceu, Chief Judge
Court No. 18-00023
OPINION AND ORDER
[Denying plaintiffs’ motion for a temporary restraining order and a preliminary injunction]
Dated: March 5, 2018
Jonathan T. Stoel and Mitchell P. Reich, Hogan Lovells US, LLP, of Washington, D.C.,
argued for plaintiffs. With them on the brief were Craig A. Lewis, Michael G. Jacobson, and
Robert B. Wolinksky.
Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington D.C., argued for defendant United States. With him
on the brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, Tara K. Hogan, Assistant Director, and Joshua E. Kurland, Trial Attorney.
John D. Henderson, Attorney-Advisor, Office of the General Counsel, U.S. International
Trade Commission, of Washington, D.C., argued for defendant U.S. International Trade
Commission. With him on the brief was Andrea C. Casson, Assistant General Counsel for
Litigation.
Timothy C. Brightbill, Wiley Rein LLP, of Washington, D.C., for defendant-intervenor
SolarWorld Americas, Inc. With him on the brief were Laura El-Sabaawi and Usha
Neelakantan.
SILFAB SOLAR, INC., et al.,
Plaintiffs,
v.
UNITED STATES, et al.,
Defendants,
and
SOLARWORLD AMERICAS,
INC., et al.,
Defendant-Intervenors.
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Matthew J. McConkey, Mayer Brown LLP, of Washington, D.C., for defendant-
intervenor Suniva Inc.
Stanceu, Chief Judge: Plaintiffs Silfab Solar, Inc., Heliene, Inc., Canadian Solar (USA),
Inc., and Canadian Solar Solutions, Inc. move for a temporary restraining order and preliminary
injunction to prohibit defendants from subjecting plaintiffs’ products to “safeguard” measures, in
the form of temporary import duties, that the United States recently imposed on imports of
certain crystalline silicon photovoltaic (“CSPV”) cells and certain products (including
“modules”) that contain such cells.
Because plaintiffs have failed to demonstrate a likelihood that they will succeed on the
merits of their claims, and because they have not demonstrated that the imposition of the
equitable relief they seek would be in the public interest, the court denies their motion.
I. B ACKGROUND
A. The Parties to this Litigation
Plaintiffs Silfab Solar, Inc., Heliene, Inc., and Canadian Solar Solutions, Inc. are
Canadian producers and exporters of CSPV modules, which are products that incorporate CSPV
cells and that are intended for use in the residential, commercial, and industrial generation of
solar electricity. Compl. ¶¶ 8, 9, 11 (Feb. 7, 2018), ECF Nos. 2 (public), 16 (conf.). Plaintiff
Canadian Solar (USA), Inc. is a U.S. importer of solar cells and modules, including products
from Canadian Solar Solutions, Inc. Id. ¶ 10.
Plaintiffs have named as defendants in this action the United States, U.S. Customs and
Border Protection (“CBP”) and its acting Commissioner, the U.S. International Trade
Commission (the “Commission” or the “ITC”) and its Chairman, and the Office of the United
States Trade Representative and the U.S. Trade Representative (collectively, the “USTR”). Id.
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¶¶ 12-18. Defendant-intervenors Suniva Inc. (“Suniva”) and SolarWorld Americas, Inc.
(“SolarWorld”) are U.S. manufacturers of CSPV cells and modules.
B. The President’s Proclamation
President Trump issued Proclamation 9693 of January 23, 2018, “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” (the
“Proclamation”), which went into effect on February 7, 2018. Proclamation No. 9693, 83 Fed.
Reg. 3541 (Jan. 25, 2018) (the “Proclamation”). The Proclamation, issued under section 203 of
the Trade Act of 1974 (the “Trade Act”), 19 U.S.C. § 2253,1 imposed (with certain exceptions
not applicable here) temporary “safeguard” duties on import entries of “CSPV cells (whether or
not partially or fully assembled into other products),” to which the Proclamation refers as “CSPV
products.” Id.
The temporary duties are to remain in effect for a four-year period beginning on the
effective date (i.e., February 7, 2018). Id. at 3549. The duties are imposed in the ad valorem
rates of 30%, if entered from February 7, 2018 through February 6, 2019, 25%, if entered from
February 7, 2019 through February 6, 2020, 20%, if entered from February 7, 2020 through
February 6, 2021, and 15%, if entered from February 7, 2021 through February 6, 2022. Id.
Under a “tariff-rate quota,” the Proclamation exempts from the safeguard duties an annual
aggregate quantity of 2.5 gigawatts of CSPV cells, but not cells assembled into modules or other
products. Id.
1 All citations to the United States Code herein are to the 2012 edition except where
otherwise indicated.
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C. Administrative Actions Preceding the Issuance of the Proclamation
Effective May 17, 2017, the Commission initiated an investigation, Investigation
No. TA-201-75, in response to a petition filed by Suniva pursuant to which an entity representing
a U.S. industry may request a “safeguard” action under sections 201 to 203 of the Trade Act “for
the purpose of facilitating positive adjustment to import competition.” 19 U.S.C § 2252(a)(1).
Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled Into Other
Products); Institution and Scheduling of Safeguard Investigation and Determination That the
Investigation Is Extraordinarily Complicated, 82 Fed. Reg. 25,331 (June 1, 2017). The petition
was later joined by SolarWorld.
On November 17, 2017, the Commission transmitted to the President its report on the
investigation, in which it reached an affirmative determination under section 202(b) of the Trade
Act, 19 U.S.C. § 2252(b), that CSPV products “are being imported into the United States in such
increased quantities as to be a substantial cause of serious injury to the domestic industry
producing an article like or directly competitive with the imported article.” Crystalline Silicon
Photovoltaic Cells (Whether or not Partially or Fully Assembled into Other Products), USITC
Pub. No. 4739, Inv. No. TA-201-75 at 1 (Nov. 2017), available at
https://www.usitc.gov/publications/safeguards/pub4739-vol_i.pdf (last visited Mar. 5, 2018)
(“Views of the Commission”). On November 27, 2017, the USTR requested additional
information from the Commission under section 203(a)(5) of the Trade Act, 19 U.S.C.
§ 2253(a)(5). The ITC responded in a “supplemental report” on December 27, 2017, “that
identified unforeseen developments that led to the importation of CSPV products into the United
States in such increased quantities as to be a substantial cause of serious injury.” Proclamation
¶ 4.
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D. Commencement of this Action and the Filing of the Motion
Plaintiffs filed their complaint in redacted form on February 7, 2018 and, on the same
day, filed their redacted motion for a temporary restraining order and preliminary injunction.
Compl.; Pls.’ Mot. for TRO and Prelim. Inj. (Feb. 7, 2018), ECF No. 10. On February 9, 2018,
following the court entering a protective order, plaintiffs filed unredacted versions of the
complaint and their motion, which contained business-related information for which they claim
confidential treatment. Pls.’ Mot. for TRO and Prelim. Inj. (Feb. 9, 2018), ECF No. 17 (conf.).
Plaintiffs seek a declaratory judgment that the Proclamation as applied to them is contrary to law
and an order enjoining the United States from taking any action to impose or enforce the
Proclamation on products from Canada covered by the Proclamation and from collecting any
tariffs from plaintiffs pursuant to it. Proposed Prelim. Inj. Order (Feb. 7, 2018), ECF No. 10-16
(“Proposed Order”).
The court held a telephone conference with the parties on February 12, 2018. With the
agreement of the parties, the court scheduled an oral argument for February 26, 2018 on the
issues of whether plaintiffs have shown a likelihood of success on the merits and whether a
temporary restraining order or preliminary injunction would be in the public interest. Order
(Feb. 12, 2018), ECF No. 22. The court held oral argument on February 26, 2018.
II. DISCUSSION
A. Subject Matter Jurisdiction
This action arises out of sections 201-203 of the Trade Act, which provide for the
imposition by the President of safeguard measures, including temporary import duties, to
facilitate the adjustment of a domestic industry to import competition. Sections 201-203 provide
for tariffs and duties for a reason other than the raising of revenue, i.e., to facilitate that
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adjustment. The court, therefore, exercises jurisdiction according to section 201 of the Customs
Courts Act of 1980, 28 U.S.C. § 1581(i)(2), under which the Court of International Trade is
empowered to review a “civil action commenced against the United States . . . or its officers . . .
that arises out of any law of the United States providing for . . . tariffs, duties, fees, or other taxes
on the importation of merchandise for reasons other than the raising of revenue.”
B. Factors to Be Considered for a Temporary Restraining Order and Preliminary Injunction
A party may obtain a temporary restraining order or preliminary injunction if it
demonstrates that it will incur irreparable harm in the absence of such order or injunction, that it
is likely to succeed on the merits of the action, that the balance of hardships favors the
imposition of temporary equitable relief, and that the temporary restraining order or injunction is
in the public interest. Wind Tower Trade Coal. v. United States, 741 F.3d 89, 95 (Fed. Cir. 2014)
(factors for considering motion for preliminary injunction); Qingdao Taifa Group Co. v. United
States, 581 F.3d 1375, 1378 (Fed. Cir. 2009) (same); see 13 James Wm. Moore, et al., Moore’s
Federal Practice § 65.36 (3d ed. 2015) (factors for considering application for temporary
restraining order). In analyzing a request for injunctive relief under these factors, “[n]o one
factor, taken individually, is necessarily dispositive, because the weakness of the showing
regarding one factor may be overborne by the strength of the others.” Belgium v. United States,
452 F.3d 1289, 1292-93 (Fed. Cir. 2006) (internal quotation marks and citations omitted).
Rather, the Court of Appeals for the Federal Circuit (the “Court of Appeals”) has identified a
“sliding scale” under which, for example, a greater showing of potential irreparable harm results
in a lesser burden on plaintiffs to show a likelihood of success on the merits. Id. at 1293 (citing,
inter alia, Corus Group PLC v. Bush, 26 CIT 937, 942, 217 F. Supp. 2d 1347, 1353-54 (2002)).
However, even if a party can show that it will be irreparably harmed, “the party must . . .
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demonstrate that it has at least a fair chance of success on the merits for a preliminary injunction
to be appropriate.” Wind Tower Trade Coal., 741 F.3d at 96 (citing Qingdao Taifa, 581 F.3d
at 1381) (internal quotation marks and citation omitted).
For the reasons discussed in this Opinion and Order, the court concludes that plaintiffs
have not demonstrated that they have a fair chance to succeed on the merits of any of their three
claims. The court further concludes that they have failed to show that the equitable relief they
seek would be in the public interest. Therefore, even were the court to presume, without
deciding, that plaintiffs would be able to demonstrate that they will incur irreparable harm absent
the relief they seek, and that the balance of hardships is in their favor, they still would not qualify
for this relief. In this case, there are no facts in dispute as to the merits of their claims, and the
court is able to assess their likelihood of success by considering pure questions of law stemming
from the interpretation of the applicable statutes. While arguing that their showing of likelihood
of success on the merits should be viewed on a sliding scale based on a strong showing of
irreparable harm, they have failed to show that the statutory interpretations on which they have
based their claims are plausible.
C. Plaintiffs’ Claims in this Litigation
Plaintiffs assert three claims in their complaint. The claims have in common a contention
that the President acted without congressional authority in issuing the Proclamation. The first
claim identifies a flaw in the proceedings leading up to the issuance of the Proclamation, and the
other two pertain to an aspect of the President’s determination itself. Plaintiffs maintain that the
court must declare the Proclamation unlawful, and prohibit the implementation of the
Proclamation, in response to each of these claims.
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First, plaintiffs claim, in Count 1 of their complaint, that the President and the U.S. Trade
Representative violated sections 201 and 203 of the Trade Act by adopting a safeguard measure
upon a report of the ITC that did not comply with subsection (e) of section 202 of the Trade Act.
Compl. ¶ 54. Section 202(e)(1) directs that the Commission, if making an affirmative
determination that imports were a substantial cause of serious injury to a domestic industry, as it
did in the proceeding resulting in the issuance of the Proclamation, “shall also recommend the
action that would address the serious injury, or threat thereof, to the domestic industry and be
most effective in facilitating the efforts of the domestic industry to make a positive adjustment to
import competition.” 19 U.S.C. § 2252(e)(1). Plaintiffs point out that the ITC’s report did not
provide, on behalf of the Commission as a whole, a recommended action to address the serious
injury to the domestic industry. See Proclamation ¶ 5 (“The ITC did not recommend an action
within the meaning of section 202(e) of the Trade Act (19 U.S.C. 2252(e)).”).
Second, plaintiffs claim (in Count 2) that the Proclamation, by including the tariff-rate
quota on CSPV cells not assembled into modules or other products, violated section 312(d) of
the North American Free Trade Agreement Implementation Act (the “NAFTA Implementation
Act”), North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182,
107 Stat. 2057 (1993) (codified at 19 U.S.C. §§ 3301-3473), under which a global safeguard
action taken under the Trade Act affecting imports of an article of Canada or Mexico
“proclaiming a quantitative restriction shall permit the importation of a quantity or value of the
article which is not less than the quantity or value of such article imported into the United States
during the most recent period that is representative of imports of such article, with allowance for
reasonable growth.” 19 U.S.C. § 3372(d). Maintaining that the tariff-rate quota is a
“quantitative restriction” within the meaning of § 3372(d), Compl. ¶ 57, plaintiffs claim that the
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adoption and implementation of the Proclamation is contrary to the NAFTA Implementation Act,
id. ¶ 60.
Third, in Count 3 of their complaint, citing section 311(a) of the NAFTA Implementation
Act, 19 U.S.C. § 3371(a), and section 312(a) and (b) of the NAFTA Implementation Act,
19 U.S.C. § 3372(a)-(b), plaintiffs claim that the President lacked authority to impose a
restriction on CSPV products from Canada because the ITC found that imports from Canada did
not account for a substantial share of total imports and did not contribute importantly to the
serious injury, or threat thereof, caused by imports. Compl. ¶¶ 62-67. In support of this claim,
they submit that section 203(a) of the Trade Act, 19 U.S.C. § 2253(a), provides that the President
may impose a safeguard measure only after receiving from the Commission an affirmative
finding of serious injury. Id. ¶ 62.
D. Plaintiffs Have Not Shown a Likelihood of Success on the Merits for their Claims
1. Plaintiffs Have Not Shown a Likelihood of Success for the Claim Asserted in Count 1
In the report of its investigation, the four Commissioners of the ITC were unanimous in
finding that CSPV products were being imported into the United States in such increased
quantities as to be a substantial cause of serious injury to the domestic industry. Views of the
Commission at 5 n.2 (“The Commission’s affirmative serious injury determination is unanimous,
reflecting the views of Chairman Rhonda K. Schmidtlein, Vice Chairman David S. Johanson,
and Commissioners Irving A. Williamson and Meredith M. Broadbent.”). In a section entitled
“Remedy Recommendations,” the Commission’s report states that “[i]n order to address the
serious injury to the domestic industry producing CSPV products and be most effective in
facilitating the efforts of the domestic industry to make a positive adjustment to import
competition, the Commission recommended a series of actions.” Id. at 2.
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The report described the recommendation of Chairman Schmidtlein as consisting of a
tariff-rate quota on CSPV cells, with a 10% in-quota rate the first year, 9.5% in year two, 9% in
year three, and 8.5% in year four. Id. She recommended an in-quota volume level of 0.5
gigawatts in the first year, 0.6 in year two, 0.7 in year three, and 0.8 in year four. Id. For cells,
the out-of-quota rate would be 30% for the first year, 29% in year two, 28% in year three,
and 27% in year four. Id. For CSPV modules, she recommended a tariff of 35% for the first
year, 34% for year two, 33% for year three, and 32% for year four. Id.
Vice Chairman Johanson and Commissioner Williamson joined in a recommendation that
also consisted of a tariff-rate quota on cells and a tariff on modules. Id. Their recommended
tariff-rate quota on cells would not increase tariffs for in-quota entries but would impose an
out-of-quota tariff of 30% for the first year and decrease by five percentage points each
subsequent year. Id. The in-quota volume would be 1 gigawatt, increasing to 1.2 in year two,
1.4 in year three, and 1.6 in year four. Id. For CSPV modules, they recommended a tariff of
30% for the first year, 25% for year two, 20% for year three, and 15% for year four. Id.
Commissioner Broadbent did not recommend a tariff-rate quota or a tariff,
recommending instead a quantitative restriction of imports of CSPV products, including cells
and modules, set at 8.9 gigawatts for the first year and increasing by 1.4 gigawatts per year in
each of the subsequent three years. Id. at 3. She recommended that the quantitative restriction
be administered by the sale of import licenses at public auction, with the proceeds, as permitted
by law, going to provide development assistance to domestic CSPV producers, and she also
recommended trade adjustment assistance to the U.S. companies and workers. Id.
In Count 1, plaintiffs seek judicial invalidation of the Proclamation based on a claim of a
procedural flaw in the ITC report on which the President based his action. Plaintiffs rely on
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various provisions in the Trade Act, including in particular section 202(e)(1), 19 U.S.C.
§ 2252(e)(1) (“If the Commission makes an affirmative determination under subsection (b)(1) of
this section, the Commission shall also recommend the action that would address the serious
injury, or threat thereof, to the domestic industry and be most effective in facilitating the efforts
of the domestic industry to make a positive adjustment to import competition.”).
Two decisions of the Court of Appeals have considered similar challenges in cases
involving presidential proclamations issued under the “escape clause” provisions,
sections 201-203, of the Trade Act. Maple Leaf Fish Co. v. United States, 762 F.2d 86
(Fed. Cir. 1985) involved a claim that an escape clause presidential proclamation on imported
“mushrooms, prepared or preserved” was based on an ITC injury finding that did not apply to
frozen mushrooms, the product plaintiff imported. The Court of Appeals affirmed the judgment
of this Court, which was based on a conclusion that the ITC’s injury determination did in fact
apply to frozen mushrooms. Corus Group PLC v. International Trade Commission,
352 F.3d 1351 (Fed. Cir. 2003) involved a similar claim, which was that the President’s escape
clause proclamation on imported steel products was invalid as to tin mill steel products because
the ITC’s injury determination as to those products was not supported by three votes and
therefore was a negative determination, not an affirmative injury determination as required for a
valid safeguard measure under the Trade Act. The Court of Appeals affirmed, in relevant part,
the judgment of this Court, which was based on a conclusion that three commissioners had in
fact voted in favor of an affirmative injury finding as to the tin mill products. Id. at 1361-64.
The Court of Appeals also concluded that, contrary to the plaintiffs’ claim, the Commission’s
determination was adequately explained. Id. at 1364.
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While having similarities to Maple Leaf Fish and Corus Group, this case differs from
those cases in a significant respect: the claimed procedural flaw here does not pertain to the
ITC’s affirmative injury finding but instead to the ITC’s failure to reach a remedy
recommendation that was on behalf of the Commission as a whole. The ITC’s report to the
President contained three different, and alternative, recommended actions. The issue the Count 1
claim presents is whether the ITC’s failure to reach agreement on, and report to the President, a
recommended remedy that was on behalf of the Commission confined the discretion of the
President to order the safeguard measure. If it did, then the action of the Commission and,
thereby, plaintiffs’ Count 1 claim, are judicially reviewable. See Corus Group, 352 F.3d at 1359.
If it did not, then plaintiffs’ Count 1 claim is not judicially reviewable because it is thereby
reduced to a challenge to a decision Congress committed to the President’s discretion. Id.
at 1358 (“The Supreme Court has established that where the President has complete discretion
whether to take an action in the first place, courts are without authority to review the validity of
an agency recommendation to the President regarding such action” (quoting Dalton v. Specter,
511 U.S. 462, 469-70 (1994).). It is well established that a court, when presented a claim that the
President exceeded delegated authority, may not review a decision by the President that
Congress has committed to the President’s discretion. See United States v. George S. Bush &
Co., 310 U.S. 371 (1940); Michael Simon Design, Inc. v. United States, 609 F.3d 1335, 1338
(Fed. Cir. 2010) (citing Dalton, 511 U.S. at 469-70); Motion Systems Corp. v. Bush,
437 F.3d 1356 (Fed. Cir. 2006).
In section 330(d)(2) of the Tariff Act of 1930, 19 U.S.C. § 1330(d)(2), Congress
addressed the situation in which the Commission reaches an affirmative injury determination
under 19 U.S.C. § 2252(b) “and a majority of the commissioners voting are unable to agree on a
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finding or recommendation described in section 2252(e)(1) of this title . . . (hereafter in this
subsection referred to as a ‘remedy finding’).” 19 U.S.C. § 1330(d)(2). Congress provided that
in such a situation, a remedy finding supported by fewer than a majority of commissioners shall
be treated as the “remedy finding of the Commission” for purposes of 19 U.S.C. § 2253 if there
is one remedy finding supported by a plurality of three commissioners, id. § 1330(d)(2)(A) or, if
there are two remedy findings, each supported by a group of at least three commissioners, id.
§ 1330(d)(2)(B), the “remedy finding of the Commission” will be one of those two remedy
findings, as determined according to provisions thereunder, id. § 1330(d)(2)(B)(i) and (ii). In
this way, the statute distinguishes between a “remedy finding” supported by one or more
commissioners and a “remedy finding of the Commission” for purposes of 19 U.S.C. § 2253.
The remedy finding of Vice Chairman Johanson and Commissioner Williamson was one
vote short of qualifying as a “remedy finding of the Commission,” and the other two remedy
findings each fell short by two votes. The court, therefore, presumes plaintiffs are correct in
asserting, Compl. ¶ 53, that “[t]he ITC did not recommend an action within the meaning of
section 202(e) of the Trade Act [19 U.S.C. § 2252(e)] before the President issued the
Proclamation,” as required by that provision, id. ¶ 54. The question, then, is whether plaintiffs
are likely to succeed on the merits of their Count 1 claim, which is that “[b]y adopting a
safeguard measure in the absence of a recommendation by the Commission, the President . . .
violated the express requirements of sections 201 and 203 of the Trade Act,” and that “[a]ny
actions taken by CBP to implement or enforce the Proclamation against Plaintiffs are ultra vires
and unlawful,” id. Plaintiffs argue that “[t]he Act’s text, its structure, its purpose, and decades of
historical practice all make clear that a Commission recommendation is an essential precondition
for the President to impose safeguard measures under section 201 of the Trade Act.” Mem. in
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Supp. of Pls.’ Mot. for TRO and Prelim. Inj. 23 (Feb. 7, 2018), ECF Nos. 10-1 (public), 17-1
(conf.) (“Pls.’ Br.”). Below, the court considers whether plaintiffs are likely to succeed on their
arguments grounded in the Act’s “text” and “structure,” its “purpose,” and “historical practice.”
On “text” and “structure,” sections 201(a) and 203(a) of the Trade Act, which contain
similar language, are informative on the question presented by the claim in Count 1.
Section 201(a) provides:
If the United States International Trade Commission . . . determines under
section 2252(b) of this title that an article is being imported into the United States
in such increased quantities as to be a substantial cause of serious injury, or the
threat thereof, to the domestic industry producing an article like or directly
competitive with the imported article, the President, in accordance with this part,
shall take all appropriate and feasible action within his power which the President
determines will facilitate efforts by the domestic industry to make a positive
adjustment to import competition and provide greater economic and social
benefits than costs.
19 U.S.C. § 2251(a) (emphasis added). Similarly, section 203(a)(1)(A) provides as follows:
After receiving a report under section 2252(f) of this title [i.e., the report of the
Commission] containing an affirmative finding regarding serious injury, or the
threat thereof, to a domestic industry, the President shall take all appropriate and
feasible action within his power which the President determines will facilitate
efforts by the domestic industry to make a positive adjustment to import
competition and provide greater economic and social benefits than costs.
19 U.S.C. § 2253(a)(1)(A) (emphasis added). A condition precedent to the President’s taking
“all appropriate and feasible action within his power” is an affirmative injury or threat
determination of the ITC under section 202 of the Trade Act. Thus, in both sections 201(a)
and 203(a)(1)(A), the exercise of the President’s discretion is expressly conditioned on an
affirmative injury or threat finding by the ITC. But in neither section 201(a) nor
section 203(a)(1)(A) did Congress expressly condition the President’s authority to act on the
President’s being provided a “remedy finding of the Commission” within the meaning
of 19 U.S.C. § 1330(d)(2). While both sections expressly condition presidential action on an
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affirmative injury or threat finding, any conclusion that the President could not act in the absence
of a “remedy finding of the Commission,” 19 U.S.C. § 1330(d)(2), can be reached only by
implication. This contrast, by itself, casts some doubt on the plaintiffs’ statutory interpretation.
Plaintiffs interpret sections 201(a) and 203(a)(1)(A) of the Trade Act in a way that permits their
interpretation, despite the specific reference to an affirmative finding of injury or threat. They
submit that the statute, in various places, limits the President’s discretion in the way they posit.
Among the provisions to which they direct the court’s attention are paragraph (e)(1) of
section 202 of the Trade Act, 19 U.S.C. § 2252(e)(1) (which directs the ITC to recommend “the
action that would address the serious injury, or threat thereof, to the domestic industry”),
paragraph (e)(6) of that section (mentioning “the recommendation required to be made” by the
ITC), and section 203(a)(2)(A), 19 U.S.C. § 2253(a)(2)(A) (directing the President, “[i]n
determining what action to take,” to “take into account,” inter alia, “the recommendation and
report of the Commission.”).
Plaintiffs argue that the words “report under section 2252(f) of this title” as they appear
in section 203(a)(1)(A), 19 U.S.C. § 2253(a)(1)(A), must be read to mean a report that complies
in every respect with 19 U.S.C. § 2252(f), which in turn must be read to mean an ITC report that
contains a remedy finding qualifying as a remedy finding of the Commission, and not merely
multiple remedy findings by one or more commissioners that do not so qualify. Reply in Supp.
of Pls.’ Mot. for TRO and Prelim. Inj. 8 (Feb. 27, 2018), ECF No. 46 (“Pls.’ Reply Br.”).
Plaintiffs’ interpretation places too much weight on the word “under,” the ordinary meaning of
which connotes “pursuant to,” or similar such words, but does not connote “in full compliance
with.” See e.g., Michael Simon Design, 609 F.3d at 1341 (finding that “[a] recommendation
does not cease to be made ‘under’ section 3005 simply because the recommendation is assertedly
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contrary to the substantive requirements of that provision,” as “Congress frequently provides for
review of a decision made ‘under’ a statute; in such cases, it would be nonsensical to say that the
jurisdiction of the reviewing body is limited to instances in which the underlying decision
construes and applies the statute correctly.”). The word “under” also appears in § 2252(f)(2)(B),
which provides that “[t]he Commission shall include in the report . . . the following: . . . If the
determination under subsection (b) of this section [the injury or threat finding] is affirmative, the
recommendations for action made under subsection (e) of this section and an explanation of the
basis for each recommendation.”2 19 U.S.C. § 2252(f)(2) (emphasis added). Even though the
Commission’s recommendations did not constitute, as specified in subsection (e)(1), a
recommendation by the Commission of “the action that would address the serious injury, or
threat thereof, to the domestic industry,” it does not necessarily follow that the three alternative
recommendations were not made “under subsection (e).” In contrast to plaintiffs’ strained
interpretation of 19 U.S.C. § 2253(a)(1)(A), the ordinary meaning of the words “[a]fter receiving
a report under section 2252(f) of this title containing an affirmative finding regarding serious
injury” connotes a report that contains, necessarily, an affirmative injury or threat finding, but
not necessarily one that also contains a recommendation qualifying as a “remedy finding of the
Commission” for purposes of § 1330(d)(2) and qualifying as a recommendation of “the action
that would address the serious injury, or threat thereof, to the domestic industry” as required by
§ 2252(e)(1).
2 The use of the plural term “recommendations” in 19 U.S.C. § 2252(f)(2)(B) is not
inconsistent with plaintiffs’ construction. When providing a single remedy recommendation
under 19 U.S.C. § 2252(e)(1), the Commission may make an additional recommendation. See id.
§ 2252(e)(4).
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Plaintiffs rely on Corus Group in concluding that “the President cannot act under
section 201 if he receives a report that lacks the elements—including a recommendation—that
section 202(f) states that ‘the Commission report must contain.’” Pls.’ Reply Br. 8 (quoting
Corus Group, 352 F.3d at 1362). They argue that “Corus held that a court may ‘set aside’ the
President’s action under section 201 if the Commission’s report lacks an ‘explanation for the
conclusions reached,’ as ‘require{d}’ by section 202(f)(2)(A); indeed, the court scrutinized
whether that explanation was ‘internally consistent’ before upholding the President’s action.” Id.
(citing Corus Group, 352 F.3d at 1361-64). Plaintiffs surmise that “[i]f the absence of an
‘internally consistent’ explanation required by section 202(f)(2)(A) was grounds for ‘set{ting}
aside’ the President’s action in Corus, then a fortiori the absence of any ‘recommendation’
required by section 202(f)(2)(B) is grounds for invalidating the President’s action here.” Id.
This argument is unconvincing. The Court of Appeals in Corus Group was addressing a claim
that a defect affecting the Commission’s affirmative injury determination, specifically, the lack
of an adequate explanation, invalidated the President’s proclamation. Plaintiffs’ Count 1 claim is
not analogous to the one considered (and rejected) in Corus Group. The Trade Act
unquestionably makes an affirmative injury or threat determination a condition for presidential
action under the escape clause provisions, and the Court of Appeals considered an internally
consistent explanation for that determination (on the part of each commissioner voting in the
affirmative) to be a requirement of the statute and principles of administrative law. Corus
Group, 352 F.3d at 1362-63. Because it did not involve the issue of whether an ITC report
containing a remedy recommendation qualifying as a “remedy finding of the Commission,”
19 U.S.C. § 1330(d)(2), is accorded status in the Trade Act equivalent to that of an affirmative
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Court No. 18-00023 	Page 18
injury or threat determination, Corus Group does not address the central question posed by
plaintiffs’ Count 1 claim.
With respect to section 201(a) of the Trade Act, 19 U.S.C. § 2251(a), plaintiffs argue that
in providing that “the President, in accordance with this part, shall take all appropriate and
feasible action,” this provision must be read to mean that a presidential action issued without a
remedy finding of the Commission is not action taken “in accordance with this part.”3 Pointing
to the President’s obligation under section 203(a)(2)(A) of the Trade Act, 19 U.S.C.
§ 2253(a)(2)(A), to consider “the recommendation and report of the Commission,” they submit
that the President’s issuing the Proclamation absent a remedy finding of the Commission was not
an action “in accordance with this part.” This argument, while a possible reading of
section 201(a), presumes the very principle plaintiffs seek to establish, i.e., that under the escape
clause provisions of the Trade Act a remedy finding of the Commission is essential to the
exercise of the President’s discretion in imposing a safeguard remedy.
Plaintiffs’ argument that “the Act’s purpose” compels an interpretation under which a
remedy finding of the Commission is needed for presidential action is likely to fare no better
than their argument on plain meaning. Stated in fundamental terms, the Act’s purpose is to
authorize the President to take “all appropriate and feasible action,” 19 U.S.C. § 2253(a)(1)(A),
in response to the ITC’s determining that “an article is being imported into the United States in
such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the
domestic industry producing an article like or directly competitive with the imported article,” id.
§ 2252(b)(1)(A). The President is to take the action that “the President determines will facilitate
3 The reference to “this part” is to “Part 1-Positive Adjustment by Industries Injured by
Imports” of “Subchapter II-Relief from Injury Caused by Import Competition.” Part 1 consists
of sections 201-205 of the Trade Act of 1974, 19 U.S.C. §§ 2251-2255.
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Court No. 18-00023 	Page 19
efforts by the domestic industry to make a positive adjustment to import competition and provide
greater economic and social benefits than costs.” Id. § 2253(a)(1)(A). Under plaintiffs’
interpretation, the Commission’s inability to reach agreement on a remedy finding supported by
at least three commissioners would preclude the President from acting at all, despite the ITC’s
finding of “serious injury, or the threat thereof,” id., to the domestic industry, which is the very
problem the statute was enacted to address. The practical effect of plaintiffs’ interpretation is
that the lack of an ITC remedy recommendation would negate the ITC’s affirmative injury or
threat determination. In other words, the President, even though presented with a situation in
which a domestic industry is incurring serious injury, would be powerless to respond. For the
sole reason that the ITC could not agree on a remedy, that industry would receive no remedy. In
this way, plaintiffs’ interpretation would interfere with, rather than further, the statutory purpose.
Of course, the President, once presented with an ITC finding that a domestic industry is
incurring serious injury or threat, retains the discretion either to take the action that is
“appropriate and feasible,” id. § 2253(a)(1)(A), or to take no action. But in the latter case, the
President must decide, and report to Congress on his reasons for deciding, that “there is no
appropriate and feasible action to take under subsection (a)(1) of this section [id. § 2253(a)(1)]
with respect to a domestic industry.” Id. § 2253(b)(2). The President has discretion, therefore,
to decide that there is no appropriate and feasible action that will facilitate the domestic
industry’s efforts to adjust positively to import competition and provide greater economic and
social benefits than costs. The Commission’s failure to obtain three votes for a single remedy
recommendation is not the equivalent of a presidential determination that no such remedy exists.
The investigation of CSPV products is a case in point: the four Commissioners voted
unanimously that serious injury was occurring to the domestic industry making these products,
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Court No. 18-00023 	Page 20
and they offered three different recommendations to address that injury. Notably, in enacting
19 U.S.C. § 2253(a)(1)(A) and (b)(2), Congress did not specify the lack of a single
recommended remedy on the part of the Commission as a reason why the President may exercise
the discretion not to take action.
Plaintiffs argue that a remedy finding on behalf of the Commission is essential to the
operation of other provisions of the Trade Act. Specifically, they argue that subparagraph (2)(A)
of § 2253(a), by directing that “[i]n determining what action to take under paragraph (1), the
President shall take into account . . . the recommendation and report of the Commission,”
imposes on the President a duty that is “impossible for” the President “to fulfill in the absence of
such a recommendation.” Pls.’ Br. 24. According to plaintiffs, the lack of a remedy finding on
behalf of the Commission also makes impossible the President’s compliance with a provision in
19 U.S.C. § 2253(b)(1), which directs the President, on the day of taking action under
§ 2253(a)(1), to transmit a report to Congress describing the action being taken and the reasons
therefor. Specifically, they submit that the ITC’s failure to provide a remedy finding on behalf
of the Commission made it impossible for the President to comply with the following directive
of § 2253(b)(1): “If the action taken by the President differs from the action required to be
recommended by the Commission under section 2252(e)(1) of this title, the President shall state
in detail the reasons for the difference.” Id.
Plaintiffs also note that the absence of a remedy finding on behalf of the Commission
renders inoperative the congressional override procedure of 19 U.S.C. § 2253(c). Under that
procedure, Congress, within 90 days of submission of the report to Congress, may enact a joint
resolution (as specified in 19 U.S.C. § 2192(a)(1)(A)) setting aside any remedy the President
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Court No. 18-00023 	Page 21
imposes that differs from the ITC’s recommendation under § 2252(e)(1), or the decision not to
impose a remedy, and imposing the ITC’s recommendation instead. Pls.’ Br. 25-27.
Plaintiffs correctly point out that the Commission’s failure to provide, in the words of
19 U.S.C. § 1330(d)(2), a “remedy finding of the Commission” frustrated or defeated certain of
the functions of the statute. The President is not in a position to consider a remedy
recommendation provided on behalf of the Commission when the Commission did not provide
one (although, in this case, the President was free to consider the three alternative remedies
offered by commissioners and adopted one similar to that supported by the plurality). Nor could
the President explain to Congress, “in detail,” id. § 2253(b)(1), his reasons for imposing a
remedy differing from the one the Commission offered, when none was offered. Nevertheless,
from the standpoint of an analysis conducted according to Corus Group, 352 F.3d at 1359, of the
availability of judicial review over the ITC’s and the President’s actions, the court must conclude
that the Commission’s failure to provide a “remedy finding of the Commission” did not confine
the President’s discretion in any way.
As to the congressional override provision in particular, the absence from the ITC’s
report of a remedy finding of the Commission, rather than confining the President’s discretion,
confined the discretion of Congress to invoke its override authority. Plaintiffs argue that without
resort to the override provision of 19 U.S.C. § 2253(c), Congress would be impaired in
exercising its constitutionally-vested authority to regulate foreign commerce. Pls.’ Br. 28-31;
Pls.’ Reply Br. 11 (citing U.S. Const. art. 1, § 8, cl. 3). The disabling of the override mechanism
is not insignificant. But to attach to it the significance plaintiffs advocate, the court must
conclude that Congress intended to preclude the President from acting to remedy the injury or
threat when the ITC report lacked a qualifying remedy recommendation of the Commission,
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Court No. 18-00023 	Page 22
despite the anomalous result the court has identified, in which serious injury is found to exist but
the President, paradoxically, is powerless to act. As the court discussed previously, the textual
indications in the statute are to the contrary. Moreover, the legislative history confirms that
Congress did not intend to foreclose presidential action in the absence of a qualifying ITC
recommendation.
As enacted in 1974, the escape clause provisions of the Trade Act also contained a
congressional override provision. Congress enacted the current section 330(d)(2) of the Tariff
Act of 1930, 19 U.S.C. § 1330(d)(2), in the Tax Reform Act of 1976, Pub. L. No. 94-455,
§ 1801(a), (b), 90 Stat. 1520, 1762-63 (1976). The Conference Report for that legislation
explained that under then-current § 1330(d),
if a majority of the Commissioners on the International Trade Commission voting
on an escape clause or market disruption case under section 201 or 406 of the
Trade Act of 1974, respectively, cannot agree on an injury determination or a
remedy finding or recommendation, then the President may consider the
“findings” agreed upon by one-half the number of Commissioners voting to be the
“findings” of the Commission. If the Commission is equally divided into two
groups, the President may consider the finding of either group to be the finding of
the Commission.
H.R. Rep. No. 94-1515, at 530-31 (1976) (Conf. Rep.), reprinted in 1976 U.S.C.C.A.N. 4118,
4228-29 (“Conference Report”). Prior to the 1976 amendment, Congress could override an
escape clause determination of the President only when the President declined to adopt a remedy
finding supported by a majority of voting commissioners. If the Commission was equally
divided into two groups, each supported by one-half the number of commissioners voting, and
the President chose the remedy finding of one of those two groups, chose a different remedy, or
chose to deny relief, there could be no congressional override.
The Senate Report for the Tax Reform Act explained the reason for amending
section 330(d). Because it is instructive as to the reason for the amendment, the court quotes it at
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length. After summarizing the congressional override provision in the Trade Act of 1974, the
Senate Report stated that:
Under the Trade Act of 1974, if the Congress prefers the remedy recommended
by the Commission rather than the relief proposed by the President, or if the
President declines to grant relief, a majority of those present and voting of both
Houses may pass a resolution within 90 Congressional working days requiring the
President to implement the remedy recommended by the Commission.
This was the manner in which the Trade Act was intended to work.
However, in two of the six escape clause cases under the Trade Act in which the
Commission found by a majority vote that injury existed, the Commission was
unable to reach majority agreement with respect to a remedy. In such cases, even
though a majority of the Commission agree that an industry is being injured,
because the Commission cannot agree as to what kind of relief is appropriate, the
Congressional override mechanism of the Trade Act fails to function. When the
Commissioners are unable to reach, through compromise, a common position
with respect to remedy, the Congress is deprived of its opportunity to override the
decision of the President and to reinstate the recommendation of the Commission.
In such a situation, the President is free to deny import relief—for reasons which
may be rooted in foreign policy without adequate regard to sound economics—
without fear of being overridden by the Congress. The result is that an industry
which may be found by the Commission to be entitled to import relief has been
deprived of that relief, without good reason.
S. Rep. No. 94-938, pt. 2, at 57-58 (1976), reprinted in 1976 U.S.C.C.A.N. 4030, 4083 (“Senate
Report”). Having explained in this way the problem being addressed, the Senate Report then
discussed the solution to the problem as set forth in the Senate bill, as follows:
The Committee’s amendment would increase the probability that if there
is a majority vote for injury, there would be a majority finding on a remedy. The
Committee’s amendment would:
(1) Change the number of Commissioners from six to seven (see section
2403);
(2) Permit only those Commissioners who vote for injury to vote for a
remedy;
(3) Require that a recommendation by a plurality of the number of
Commissioners voting for remedy be considered the Commission’s
recommendation for import relief;
(4) Require that a recommendation by any group of Commissioners voting
for remedy be considered the Commission’s recommendation for
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Court No. 18-00023 	Page 24
import relief if the Commissioners are divided into two or more equal
groups; and
(5) Provide that a Commissioner whose term has expired may continue in
office until his successor has been nominated by the President and
confirmed by the Senate (see section 2403).
Id. The conferees considered the Senate bill in the absence of a provision in the House bill. The
final bill as agreed to in conference adopted only the change in paragraph (5) (although the
change in paragraph (2) would be adopted in an amendment to section 202 of the Trade Act
in 1988). The final Tax Reform Act of 1976 included a modified version of the measures in
paragraphs (3) and (4), as the Conference Report explained:
Conference agreement.—Under the conference agreement, if a majority of
the Commissioners voting on an escape clause or market disruption case cannot
agree on a remedy finding, then the remedy finding agreed upon by a plurality of
not less than 3 Commissioners shall be treated as the remedy finding of the
Commission for the purposes of the Congressional override in sections 202
and 203 of the Trade Act of 1974. If the Commission is tied on the remedy vote,
and each voting group includes not less than 3 Commissioners, then (1) if the
President takes the action recommended by one of those groups, the remedy
finding agreed upon by the other group shall, for purposes of the Congressional
override, be treated as the remedy finding of the Commission, or (2) if the
President takes action which differs from the action agreed upon by both such
groups, the remedy finding agreed upon by either such group may be considered
by the Congress as the remedy finding of the Commission for purposes of the
Congressional override. It is the intention of the conferees that this apply only for
purposes of implementing the Congressional override in sections 202 and 203 of
the Trade Act of 1974. It is not intended that this provision affect in any way the
rules of procedure of the International Trade Commission.
Further, the conferees strongly urge the Commissioners to reach majority
agreement on all determinations, findings, and recommendations in all cases.
Conference Report at 530-31.
The Senate and Conference Reports show that Congress was aware that in some cases
under then-current law the Commission might agree that a domestic industry is undergoing
serious injury or threat but might not reach majority agreement on a remedy finding and that the
congressional override provision of section 203(c) of the Trade Act would not function in that
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Court No. 18-00023 	Page 25
instance. The solution agreed upon at conference allowed the congressional override mechanism
to function in some instances in which the Commission did not reach majority agreement on a
remedy finding. For example, under the prior law the override was not available in the case of
an evenly-divided Commission, with one half of voting commissioners supporting one remedy
finding and the other half supporting another. That was because the President, not Congress,
could choose which of the two would be regarded as the remedy finding of the Commission.
Under the 1976 amendment, in the event that three commissioners support a remedy finding not
imposed by the President (whether the President grants relief or not), that remedy finding is
available for adoption by the Congress. Where two groups of three commissioners support
different remedy findings, and the President chooses to adopt the remedy finding of one group,
Congress may impose the remedy the President did not choose, and it may impose either one
should the President choose to impose a different remedy or none at all.
Still, the solution adopted in the 1976 amendment did not ensure that a remedy finding of
the Commission would be available in every escape clause proceeding: the override provision
required that at least one remedy finding be supported by a group of three commissioners. The
Senate and Conference reports did not state or suggest that the President could not act to remedy
the serious injury or threat in those cases in which the congressional override provision was not
available. Notably, the Congress, in amending section 330(d) of the Tariff Act, did not intend
that its changes would confine the discretion of the President under the escape clause provisions
of the Trade Act of 1974. The Senate Report made this point explicitly:
This section amends section 330(d) of the Tariff Act of 1930, relating to
the voting procedures of the Commissioners in import relief cases. The
committee states that nothing contained in this section, or in any other provision
of the amendment, is intended to alter the eligibility criteria for import relief
under the Trade Act of 1974. . . . In addition, the committee states that nothing
contained in this section, or in any other provision of the amendment, is intended
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Court No. 18-00023 	Page 26
to change the legal authority of the President under present law to select the type
and level of import relief to be provided to an industry, be it the form of relief
recommended by the Commission, a modification of the Commission’s
recommendation, or a denial of relief altogether.
Senate Report at 57 (emphasis added).
In their brief and in their reply brief, plaintiffs point to other language in the Senate
Report, as follows:
International Trade Commission (Title XXIV)
The voting procedures of The International Trade Commission in import
relief cases are changed to insure that the Congress will have an opportunity to
override import relief decisions of the President under sections 201 and 406 of the
Trade Act of 1974. The Commission membership is to be increased from six to
seven members, and certain other procedural and organizational changes are to be
made with respect to the Commission.
Senate Report at 4-5; see Pls.’ Br. 29; Pls.’ Reply Br. 13. This language appears in the
“Summary” at the beginning of the Senate Report, which summarizes all the changes in the
Senate bill. The more specific, and far more detailed, discussion in the body of the Senate
Report, which clarifies that the changes in the Senate bill were intended to “increase the
probability that if there is a majority vote for injury, there would be a majority finding on a
remedy,” id. at 58, is more instructive as to what the Senate bill was trying to achieve. Also
instructive to the interpretation of the Senate Report is the nature of the changes the Senate bill
actually would have made. None of the changes would do what plaintiffs argue Congress
intended: to prohibit presidential action, or to continue to prohibit presidential action, in the
absence of remedy finding of the Commission.
Plaintiffs also cite a statement by Senator Ribicoff, the sponsor of the 1976 amendment,
that the change was intended to “correct the serious problems that have developed in connection
with ‘escape clause’ actions under the Trade Act of 1974’ and ‘make sure that the escape clause
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Court No. 18-00023 	Page 27
works in the future the way Congress originally intended it to.’” Pls.’ Br. 29 (quoting 122 Cong.
Rec. 24,725 (1976) (statement of Sen. Ribicoff)) (emphasis omitted). This language sheds no
light on whether Congress ever intended to deny the President authority to impose a safeguard
action in the absence of a remedy finding of the Commission.
According to plaintiffs, legislative history of the Customs Courts Act of 1980 confirms
their interpretation of the escape clause statute. They argue that “the drafters wrote that the
Trade Act ‘specif{ies} that the President may not act until he has received advice from the
International Trade Commission (ITC) or the U.S. Trade Representative.’” Pls.’ Reply Br. 13
(quoting H.R. Rep. No. 96-1235, at 31 (1980), reprinted in 1980 U.S.C.C.A.N. 3729, 3743).
The quoted language is from the report of the House Judiciary Committee on the legislation that
established the Court of International Trade and is on the topic of the jurisdiction the new court
should have. An examination of the quoted sentence in the context in which it appears in the
House report reveals that plaintiffs have misinterpreted the word “advice” in the quoted sentence.
It was not a specific reference to a remedy finding of the Commission in an escape clause action.
Nor was the intended meaning of the word “advice” one confined to “recommendations.” In the
report, the House Judiciary Committee was referring generally to statutes authorizing the
President to take actions to protect the United States and American manufacturers against injury
due to the importation of foreign goods and not in particular to sections 201-203 of the Trade
Act. 4 The context of the discussion was an explanation of the reasons for deleting certain
4 The paragraph reads as follows:
Pursuant to his statutory authority, the President may take certain actions
to protect the United States and American manufacturers against injury due to the
importation of foreign goods. These statutes specify that the President may not
act until he has received advice from the International Trade Commission (ITC)
(continued . . .)
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Court No. 18-00023 	Page 28
jurisdictional provisions in the original version of the House bill, H.R. 6394. H.R. Rep.
No. 96-1235 at 31-32. One of the jurisdictional provisions being deleted, section 1581(d), would
have granted the new court jurisdiction to review, following publication of a final presidential
decision, “the advice, findings, recommendations, and determinations of the International Trade
Commission under section[s] 131, 201, 202, 203, 304, 406, and 503 of the Trade Act of 1974,
section[s] 336 and 338 of the Tariff Act of 1930, and section 22 of the Agricultural Adjustment
Act, solely for the purpose of determining the procedural regularity of such actions.” Id.
at 31 n.9 (emphasis added).
Plaintiffs argue, further, that the 1988 amendments to the escape clause provisions in the
Trade Act, made as part of the Omnibus Trade and Competitiveness Act of 1988, confirm that
Congress intended to foreclose presidential discretion to impose a safeguard measure in the
absence of a qualifying ITC recommendation. Pls.’ Br. 29; Pls.’ Reply Br. 13. As alluded to
previously, Congress amended section 202, adding the limitation in current paragraph (e)(6),
which provides that only the commissioners who agreed to the affirmative injury or threat
determination “are eligible to vote on the recommendation required to be made under
paragraph (1) [the recommendation of ‘the action that would address the serious injury or threat
thereof’] or that may be made under paragraph (3) [directing the ITC to specify the ‘type,
amount, and duration of the action’ it recommends].” 19 U.S.C. § 2252(e)(6). In paragraph (6),
Congress referred to the remedy finding of the Commission as a requirement, but under the
(. . . continued)
or the U.S. Trade Representative (USTR). Current law does not provide for the
judicial review of the substantive advice rendered by the ITC or the U.S. Trade
Representative.
H.R. Rep. No. 96-1235, at 31 (1980) (emphasis added), reprinted in 1980 U.S.C.C.A.N. 3729,
3743.
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Court No. 18-00023 	Page 29
pre-1988 statute it already was treated as a requirement. 5 Nothing in the 1988 amendment or its
legislative history6 indicates that Congress intended to make a qualifying remedy finding of the
ITC a prerequisite to presidential action to address the serious injury or threat.
Plaintiffs’ argument that their statutory interpretation is supported by “decades of
historical practice” is also unconvincing. Pls.’ Br. 23. Plaintiffs argue that the Proclamation is
“unprecedented” in acting in the absence of a remedy finding of the Commission, positing that
past practice has guided the Supreme Court in determining questions of presidential authority.
Pls.’ Br. 30 (citing Medellin v. Texas, 552 U.S. 491, 531 (2008)). 7 In support of their argument,
plaintiffs indicate their disagreement with the ITC’s contention that this action is not
5 The escape clause provisions in the 1974 version of the Trade Act (which renamed the
“U.S. Tariff Commission” the “U.S. International Trade Commission”) directed that the
Commission, if reaching an affirmative injury finding, “shall . . . find the amount of the increase
in, or imposition of, any duty or import restriction on such article which is necessary to prevent
or remedy such injury.” 19 U.S.C. § 2251(d)(1)(A) (1976) (emphasis added). The President had
discretion to impose a different remedy, or no remedy. Id. § 2252(a), (b).
6 The report of the Senate Finance Committee explains that the new limitation on voting
procedures, which restored a prior ITC practice that had not recently been followed, would, first,
prevent commissioners who disagreed with the affirmative injury or threat finding from skewing
the recommendation to make it less effective. “Second, the provision improves the likelihood
that the ITC will make a unified recommendation to the President regarding actions to be taken.”
S. Rep. No. 100-71, at 56 (1987). The Finance Committee stated that it “believes that it is
important to have a consensus from the ITC on the actions recommended.” Id. Nothing in the
Senate report indicates that Congress ever intended to deprive the President of authority to
impose a remedy to address the serious injury or threat in the absence of such consensus.
7 Medellin is inapposite. In that case, the Supreme Court considered an “unprecedented”
exercise of purported presidential power undertaken absent congressional authorization, finding
that Congress had never “acquiesced” to the President’s authority to unilaterally direct state
courts to implement non-self-executing treaty obligations. Medellin v. Texas, 552 U.S. 491,
531-32 (2008). In this case, the President acted pursuant to an express mandate from Congress,
which directed that “the President shall take all appropriate and feasible action within his power
which the President determines will facilitate efforts by the domestic industry to make a positive
adjustment to import competition and provide greater economic and social benefits than costs.”
19 U.S.C. § 2253(a)(1)(A).
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unprecedented. 8 The court need not decide this question. In this case, the question of past
practice has no bearing on whether plaintiffs have shown a likelihood of success on the merits of
their Count 1 claim, which presents an issue of statutory interpretation. Moreover, the President
was under no obligation to explain in the Proclamation why his decision either did or did not
accord with past practice.
In summary, plaintiffs’ statutory interpretation encounters serious difficulties when
considered according to the plain meaning, purpose, and legislative history of the escape clause
provisions. The likely outcome is a conclusion that the ITC’s decision was not judicially
reviewable because the absence of a remedy finding of the Commission in the ITC’s report did
not confine the President’s discretion to issue the Proclamation. Therefore, plaintiffs have failed
to show a likelihood of success for the claim they assert in Count 1 of their complaint.
2. On their Count 2 Claim, Plaintiffs Are Unlikely to Demonstrate that the Tariff-Rate Quota on
CSPV Cells Violated the NAFTA Implementation Act
In Count 2, plaintiffs claim that the Proclamation cannot lawfully be applied to them
because it imposes a safeguard action including a tariff-rate quota that fails to comply with the
NAFTA Implementation Act. Compl. ¶¶ 55-60. Section 312(d) of the NAFTA Implementation
Act provides as follows:
Any action taken under this section proclaiming a quantitative restriction shall
permit the importation of a quantity or value of the article which is not less than
the quantity or value of such article imported into the United States during the
most recent period that is representative of imports of such article, with allowance
for reasonable growth.
19 U.S.C. § 3372(d).
8 The Commission filed a brief in support of a motion to dismiss the Commission as a
defendant in this case. See Mot. to Dismiss and Mem. in Supp. of Mot. to Dismiss of Def. U.S.
Int’l Trade Commission (Feb. 20, 2018), ECF No. 33. Because plaintiffs have not had the
opportunity to respond to this motion, the court does not consider the ITC’s motion at this time.
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As a threshold consideration, plaintiffs are faced with an issue of standing on which they
may not be able to prevail. They do not allege that they produce or export CSPV cells, which is
the “article” that is the subject of the tariff-rate quota in the Proclamation. See Compl.
¶¶ 8, 9, 11. Three of the four plaintiffs—Silfab Solar, Inc., Heliene, Inc., and Canadian Solar
Solutions, Inc.—are Canadian producers of CSPV modules. Id. Regarding cells, the only fact
they allege that relates to the production, exportation, or importation of cells is that plaintiff
Canadian Solar (USA), Inc. is a U.S. importer of solar cells, but they do not allege that these are
Canadian cells. Id. ¶ 10. The complaint further alleges, however, that “no Canadian
company . . . produces CSPV cells that are not assembled into other products.” Id. ¶ 4. Plaintiffs
argue, unpersuasively, that the “entire safeguard constitutes a tariff-rate quota” as it “imposes a
30% tariff on solar products and then exempts a quota of certain solar products from that tariff.”
See Pls.’ Reply Br. 14-15 (emphasis in original) (citations omitted).
Even were plaintiffs able to establish standing to assert their Count 2 claim, they still
would be unlikely to prevail because they have not demonstrated that their interpretation of
19 U.S.C. § 3372(d) to encompass the tariff-rate quota in the Proclamation is correct. To be
inconsistent with § 3372(d), a safeguard measure must be a “quantitative restriction” and it must
fail to “permit the importation” of the specified quantity or value of the affected article.
The individual subsections of section 312 of the NAFTA Implementation Act, 19 U.S.C.
§ 3372, all pertain to presidential actions “under chapter 1 of title II of the Trade Act of 1974
[19 U.S.C. § 2251 et seq.],” i.e., under the escape clause provisions of sections 201-205 of the
Trade Act. 19 U.S.C. § 3372(a), (b), (c), (d) (referring to “[a]ny action taken under this
section.”]). In section 203(a)(3) of the Trade Act, Congress identified “tariff-rate quota[s]” and
“quantitative restriction[s]” as separate remedies. 19 U.S.C. § 2253(a)(3)(B), (C). Specifically,
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Congress plainly authorized the President to proclaim a tariff-rate quota in § 2253(a)(3)(B) and
to proclaim any quantitative restriction in § 2253(a)(3)(C). Even if, theoretically, some forms of
tariff-rate quotas may be described as “quantitative restrictions,” plaintiffs are unlikely to make
the case that Congress, in 19 U.S.C. § 3372(d), intended to preclude actions such as the
tariff-rate quota in question, which places no “restriction” on the quantity or value of solar cells
that may be imported. And contrary to plaintiffs’ argument that the entire safeguard measure is a
quantitative restriction, the Proclamation places no restriction on the quantity or value of any
solar cell product that may be imported, be it cell or module.
Plaintiffs argue that section 312(d) must be read in concert with NAFTA article 802.5(b),
which provides that “[n]o Party may impose restrictions . . . that would have the effect of
reducing imports of such good from a Party below the trend of imports of the good from that
Party over a recent representative base period with allowance for reasonable growth.” See North
American Free Trade Agreement, Can.-Mex.-U.S., art. 802.5(b), Dec. 8-17, 1992, 32 I.L.M. 289
(1993), available at https://www.nafta-sec-alena.org/Home/Texts-of-the-Agreement/North-
American-Free-Trade-Agreement?mvid=2 (last visited Mar. 5, 2018) (the “NAFTA”). Plaintiffs
also argue that a tariff-rate quota is a “textbook example of a quantitative restriction,” citing the
General Agreement on Tariffs and Trade 1947 (“GATT”) and a U.S. submission to a World
Trade Organization panel in a dispute with the European Communities on banana importations.
Pls.’ Br. 32. (citing Second Written Submission of the United States, European Communities—
Regime for the Importation, Sale and Distribution of Bananas, ¶¶ 82-85, WTO Doc. WT/DS27
(Sept. 27, 2007), available at
https://ustr.gov/sites/default/files/uploads/Countries%20Regions/africa/agreements/pdfs/dispute_
settlement/ds27/asset_upload_file841_13273.pdf (last visited Mar. 5, 2018)). Plaintiffs argue
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that “the Proclamation ‘permit{s} the importation’ of a dramatically reduced . . . ‘quantity {and}
value of’ Canadian CSPV products” because “[t]he Proclamation’s duties will make it
prohibitively expensive for Plaintiffs to continue selling CSPV products in the United States.”
Id. at 33. According to plaintiffs, “[t]he word ‘permit’ means not only ‘to consent to expressly or
formally’ but also ‘to make possible’ as a practical matter,” so “measures that do not formally
prohibit importation, but effectively make importation impossible, are widely understood as
prohibitions in international trade law.” Pls.’ Reply Br. 16-17. These arguments suffer from the
same flaws. They interpret 19 U.S.C. § 3372(d) contrary to plain meaning and to the different
treatment of tariff-rate quotas and quantitative restrictions in 19 U.S.C. § 2253(a)(3). Again,
19 U.S.C. § 3372(d) requires measures to “permit” importation of a specified quantity or value of
an article. Neither the duties on modules nor the out-of-quota duties on cells fail to “permit”
importation.
3. Plaintiffs Are Unlikely to Demonstrate that the Proclamation Is Ultra Vires for Failing to
Exempt CSPV Products from Canada from the Safeguard Measure
Plaintiffs’ Count 3 claim is that defendants violated section 312(b) of the NAFTA
Implementation Act because the Proclamation failed to exclude Canadian imports of CSPV
products from the global safeguard. See Compl. ¶¶ 61-67 (citing, inter alia, 19 U.S.C.
§§ 3371(a), 3372(a)-(b)). Plaintiffs make three supporting arguments: (1) that the President was
required to exempt Canada from the global safeguard because the ITC found that imports from
Canada did not “account for a substantial share of total imports” and did not “contribute
importantly to the serious injury, or threat thereof, caused by imports,” Pls.’ Br. 34 (citing
19 U.S.C. §§ 3371(a), 3372(a)-(b); NAFTA art. 802.1); (2) that where the “contribute
importantly” determination of the ITC is negative, section 203(a) of the Trade Act, 19 U.S.C.
§ 2253(a), which requires an affirmative injury or threat finding by the ITC before the President
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may act, “forbids the President from taking action against a NAFTA country to redress such
injury,” Pls.’ Br. 35 (citing 19 U.S.C. § 2253(a)); and (3) that because “Canadian imports plainly
do not constitute a ‘substantial share’ within the meaning of” 19 U.S.C. § 3372(a)(1), the
President could not have concluded otherwise without violating § 3372(a), Pls.’ Br. 35 (citing
19 U.S.C. § 3372(a)(1)). Because these arguments are flawed, plaintiffs are unlikely to succeed
on the merits of their Count 3 claim.
a. The NAFTA Implementation Act Permits, But Does Not Require, the President to Exempt
Imports from a NAFTA Country from a Global Safeguard
Plaintiffs argue that “a NAFTA country must be excluded from a global safeguard action
unless imports from that country ‘account for a substantial share of total imports’ and ‘contribute
importantly to the serious injury, or threat thereof, caused by imports.’” Pls.’ Br. 34 (citing
19 U.S.C. §§ 3371(a), 3372(a)-(b); NAFTA art. 802.1). Plaintiffs misinterpret the NAFTA
Implementation Act. When certain conditions are present, the President may exclude imports of
a NAFTA country from a global safeguard action under the Trade Act. But the statute does not
provide that the President must do so. Instead, the statute provides that the President “shall
exclude” the imports from a NAFTA country if the President determines either that (1) imports
from the NAFTA country do not account for a substantial share of total imports, or (2) imports
from a NAFTA country, considered individually, or in exceptional circumstances imports from
NAFTA countries considered collectively, do not contribute importantly to the serious injury, or
threat thereof, found by the Commission. 19 U.S.C. § 3372(a)-(b). The President did not reach
either of those negative determinations and stated in the Proclamation that he reached affirmative
determinations on each. Proclamation ¶ 7. The ITC found under section 311(a) of the NAFTA
Implementation Act, 19 U.S.C. § 3371(a), that imports of CSPV products from Canada do not
account for a substantial share of total imports and do not contribute importantly to the serious
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injury caused by the imports. Views of the Commission at 67.9 But under section 312(b) of the
NAFTA Implementation Act, those findings did not bind the President. See 19 U.S.C. § 3372(b).
The plain language of the NAFTA Implementation Act, therefore, is contrary to plaintiffs’
statutory interpretation. The Statement of Administrative Action accompanying the NAFTA
Implementation Act confirms this conclusion:
Sections 311 and 312 of the bill implement the global action provisions of
[NAFTA] Article 802. They authorize the President, in the case of a global action
under sections 201-204 of the Trade Act of 1974, to exclude imports of a
Canadian or Mexican good when certain conditions are met.
* * *
Under section 312, the President must exclude NAFTA imports from a
global safeguard action if he makes a negative determination that imports from a
NAFTA country account for a substantial share of total imports or imports from a
NAFTA country or countries contribute importantly to the serious injury or threat
of serious injury.
H.R. Doc. No. 103-59 at 564-65 (1993).
Plaintiffs argue that the Proclamation violates the NAFTA. Pls.’ Br. 35-36. International
agreements may aid in the interpretation of the ambiguous statutes implementing them, but there
is no ambiguity in section 312(b). See 19 U.S.C. § 3372(b) (“the President shall exclude from
such action imports from a NAFTA country if the President makes a negative determination
under subsection (a)(1) or (2) of this section with respect to imports from such country”
(emphasis added)).
Plaintiffs also argue that the use of the word “find” in section 311(a) demonstrates that
Congress “wished to authorize the Commission to make a conclusive judgment” because when
Congress “wished the Commission’s judgment to be merely advisory, it used the word
9 Chairman Schmidtlein dissented. “She finds that under section 311(a) . . . U.S. imports
of CSPV products from Canada account for a substantial share of total imports and contribute
importantly to the serious injury caused by imports.” Views of the Commission at 67 n.387.
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‘recommend.’” Pls.’ Br. 36. This argument fails to explain why Congress would require the
President to make the same “substantial share of total imports” and “contribute importantly to the
serious injury” determinations, see 19 U.S.C. § 3372(a), that it required the Commission to
make, see 19 U.S.C. § 3371(a). Were the Commission’s findings binding on the President,
Congress would not have done so, yet section 312(b) requires the President to exclude from a
global safeguard remedy “imports from a NAFTA country if the President makes a negative
determination under subsection (a)(1) or (2) of this section.” 19 U.S.C. § 3372(b).
Finally, plaintiffs argue that past presidential safeguard proclamations have established a
practice of excluding imports from NAFTA countries from the global safeguard when the
Commission makes negative “substantial share of total imports” and “contribute importantly to
the serious injury” findings. Pls.’ Br. 37-38. If such a practice exists, it is not relevant to the
statutory interpretation issue presented by plaintiffs’ Count 3 claim.
b. The Requirement for an Affirmative Injury Determination in the Trade Act Did Not Require
the President to Exempt Canadian CSPV Products from the Scope of the Proclamation
Plaintiffs argue that the report of the ITC, which found that imports of CSPV products
from Canada do not “contribute importantly” to the serious injury the ITC found to exist, did not
contain “an affirmative finding regarding serious injury” within the meaning of
section 203(a)(1)(A) of the Trade Act, 19 U.S.C. § 2253(a)(1)(A), and accordingly “forbids the
President from taking action against a NAFTA country to redress such injury.” Pls.’ Br. 35.
This argument misinterprets the relationship between the two statutes. It presumes, incorrectly,
that a negative finding by the ITC under section 311(a)(2) of the NAFTA Implementation Act,
19 U.S.C. § 3371(a)(2) (the “contribute importantly” finding), is equivalent to a negative injury
determination under section 202(b)(1) of the Trade Act, 19 U.S.C. § 2252(b)(1). It is not.
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In an investigation under section 202 of the Trade Act, the Commission is required to
“determine whether an article is being imported into the United States in such increased
quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic
industry.” 19 U.S.C. § 2252(b)(1)(A). If the Commission makes an affirmative injury or threat
determination, then section 311(a) of the NAFTA Implementation Act requires the Commission
to also find whether “(1) imports of the article from a NAFTA country . . . account for a
substantial share of total imports; and (2) imports of the article from a NAFTA
country . . . contribute importantly to the serious injury, or threat thereof, caused by imports.”
19 U.S.C. § 3371(a). These “substantial share” and “contribute importantly” findings are distinct
from, and subsequent to, the Commission’s injury or threat determination. That is, the
Commission’s section 311(a) findings are made only if, and after, the Commission makes an
affirmative determination of injury or threat under section 202(b)(1) of the Trade Act. See
19 U.S.C. § 3371(a). If the Commission makes a negative injury or threat determination under
section 202(b)(1) of the Trade Act, then the occasion of making the “substantial share” and
“contribute importantly” findings under the NAFTA Implementation Act never arises. See id.
A negative ITC determination under 19 U.S.C. § 2252(b)(1) binds the President, but a negative
ITC finding under 19 U.S.C. § 3371(a)(2) does not. It does not negate the affirmative injury
determination as it applies to the NAFTA country such that the President must exclude the
NAFTA country from a global safeguard action.
c. The President’s Determinations under Section 312(a) are Not Subject to Judicial Review
Plaintiffs’ third argument in support of its Count 3 claim is that the President could not
conclude on this record that Canadian imports constitute a substantial share of total imports
without violating § 3372(a). Pls.’ Br. 35, 38-42. This argument is also unlikely to succeed.
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Determinations of the President that Congress has committed to the President’s discretion are not
subject to judicial review. Dalton, 511 U.S. at 477; George S. Bush & Co., 310 U.S. at 380.
Plaintiffs argue that “where Congress has imposed discernible statutory limits on the
President’s authority, the courts have time and again made clear it is the courts’ obligation to
determine whether the President has ‘clear{ly} misconstrue{ed}’ the statutory language or
‘act{ed} outside delegated authority.’” Pls.’ Br. 38 (quoting Corus Group, 352 F.3d at 1361
(quoting Maple Leaf Fish, 762 F.2d at 89)). They argue, further, that the President misconstrued
the meaning of the term “substantial share” as used in the NAFTA Implementation Act, Pls.’
Reply Br. 18, asserting that “a country that supplies only 2% of imports and is the ninth-largest
supplier of an article does not account for a ‘substantial share’ of imports as those words are
used in the NAFTA Implementation Act,” id. at 17-18 (citations omitted). The NAFTA
Implementation Act, in the section applying to the Commission’s determinations (19 U.S.C.
§ 3371), provides that “[i]n determining whether imports from a NAFTA country, considered
individually, account for a substantial share of total imports, such imports normally shall not be
considered to account for a substantial share of total imports if that country is not among the
top 5 suppliers of the article subject to the investigation, measured in terms of import share
during the most recent 3-year period.” 19 U.S.C. § 3371(b)(1). By using the word “normally,”
Congress indicated that this criterion was not a specific limitation that was binding even on the
ITC. At its essence, plaintiffs’ argument is directed at the fact-related determination that the
President made under § 3372(a)(1). Plaintiffs do not present a colorable claim that the President
misconstrued the NAFTA Implementation Act or acted outside delegated authority.
The determination the President made under § 3372(a)(1) was one of two determinations,
pursuant to § 3372(a)(1) and (a)(2) respectively, that call for the President to exercise judgment
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on matters Congress confined to the President’s discretion. The exercise of the President’s
judgment in making those determinations is not subject to review by the court. See George S.
Bush & Co., 310 U.S. at 377-80 (holding that a statute requiring the President to find that the
rates of duty and changes are “necessary to equalize such differences in costs of production”
before taking action afforded the President discretion such that the exercise of the President’s
judgment was beyond judicial review); Motion Systems, 437 F.3d at 1361-62 (holding
unreviewable a presidential decision to deny import relief under section 421 of the Trade Act
of 1974 despite also concluding that the Trade Act placed some restriction on the President’s
discretion to grant or deny import relief). Here, as courts have held in similar situations, “the
President’s findings of fact and the motivations for his action are not subject to review.” Corus
Group, 352 F.3d at 1361 (quoting Maple Leaf Fish, 762 F.2d at 89).
E. The Public Interest Does Not Weigh In Favor of an Injunction
To obtain a temporary restraining order or preliminary injunction, plaintiffs must
demonstrate that the equitable relief requested would be in the public interest. Wind Tower
Trade Coal., 741 F.3d at 95; see also 11A Charles Alan Wright, Arthur R. Miller & Mary Kay
Kane, Federal Practice and Procedure § 2948.4 (3d ed. 2013) (noting that “preliminary relief will
be denied if the court finds that the public interest would be injured were an injunction to be
issued”). Plaintiffs have not met that burden.
Plaintiffs argue that the public interest is “served by ensuring that the {Executive}
complies with the law.” Pls.’ Br. 42 (quoting SKF USA Inc. v. United States, 28 CIT 170, 176,
316 F. Supp. 2d 1322, 1329 (2004)). SKF is inapposite. That case involved a statutory
injunction against liquidation of entries subject to an antidumping duty order, issued under
19 U.S.C. § 1516a(c)(2). Duties on such entries are secured by cash deposits of estimated
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antidumping duties. See SKF, 28 CIT at 173, 316 F. Supp. 2d at 1326. The issue in that case
was whether the injunction remained in effect through appeals. See SKF, 28 CIT at 174-87,
316 F. Supp. 2d at 1327-38. Here, plaintiffs ask the court to enjoin defendants immediately from
“taking any action to impose or enforce” the Proclamation and to enjoin CBP from the
“collection of any tariff from the Plaintiffs” pursuant to the Proclamation. See Proposed Order.
Plaintiffs ask the court to enter such an injunction with “only a nominal bond” or reliance “on
plaintiffs’ existing continuous bonds.” Pls.’ Reply Br. 22-23. This could expose the government
to the risk of being unable to collect safeguard duties owed once the entries are liquidated should
it ultimately prevail in this litigation.
Plaintiffs also argue that the public has an interest in “enforcing ‘compli{ance} with this
country’s treaty obligation.’” Pls.’ Br. 42 (quoting Robles Antonio v. Barrios Bello,
No. 04-12794-GG, 2004 WL 1895123 at *3 (11th Cir. Jun. 10, 2004) (per curiam)). Similarly,
plaintiffs contend that the issuance of the injunction they seek would “protect the public’s
interest in Congress’s oversight role under the Trade Act.” Id. But as discussed earlier in this
Opinion and Order, plaintiffs cannot demonstrate a likelihood of success on the merits of the
claims underlying these assertions.
Plaintiffs argue, further, that the public interest would be served by an injunction because
the Proclamation “harms workers, industries, and consumers in the United States” as “Canadian
CSPV products support jobs in the U.S. solar sector.” Id. at 43 (directing the court’s attention to
letters written by various governmental officials). This argument invites the court to consider
matters of public policy that are beyond the scope of the judicial review of this action. These are
matters the President was tasked with considering when determining whether a contemplated
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action “provide[s] greater economic and social benefits than costs,” 19 U.S.C. § 2253(a)(1)(A), a
determination Congress confined to the President’s discretion.
III. CONCLUSION AND O RDER
Plaintiffs have failed to show that they are likely to succeed on the merits for any of their
claims and that the equitable relief they seek would be in the public interest. Having failed to
meet two essential requirements for the issuance of a temporary restraining order or preliminary
injunction, the court must deny their motion. Therefore, upon consideration of their motion,
upon all papers and proceedings had herein, and upon due deliberation, it is hereby
ORDERED that plaintiffs’ motion for a temporary restraining order and a preliminary
injunction be, and hereby is, denied; and it is further
ORDERED that the caption shall be amended to the form in which it appears on this
Opinion and Order.
/s/Timothy C. Stanceu
Timothy C. Stanceu, Chief Judge
Dated: March 5, 2018
New York, New York
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