Supreme Court of the United States

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1 No ================================================================ In The Supreme Court of the United States NSK CORP., et al., v. Petitioners, UNITED STATES INTERNATIONAL TRADE COMMISSION, et al., Respondents On Petition For Writ Of Certiorari To The United States Court Of Appeals For The Federal Circuit BRIEF OF 7 INTERNATIONAL TRADE LAW PROFESSORS AS AMICI CURIAE IN SUPPORT OF PETITIONERS WILLIAM G. DITTRICK Counsel of Record BAIRD HOLM LLP 1700 Farnam Street Suite 1500 Omaha, NE (402) wdittrick@bairdholm.com MATTHEW SCHAEFER Professor of Law UNIVERSITY OF NEBRASKA COLLEGE OF LAW P.O. Box Lincoln, NE March 27, 2014 ================================================================ COCKLE LEGAL BRIEFS (800)

2 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES... iv INTEREST OF AMICI CURIAE... 1 SUMMARY OF ARGUMENT... 2 ARGUMENT... 4 I. CAFC APPLYING ANEW THE CIT S SUBSTANTIAL EVIDENCE STANDARD OF REVIEW IN ANTIDUMPING AND COUNTERVAILING DUTY CASES IS IN- CONSISTENT WITH CONGRESSIONAL RECOGNITION AND FURTHERING OF CIT EXPERTISE AND CONGRESSIONAL INTENT TO AVOID DUPLICATIVE RE- VIEW... 4 A. CAFC s Applying Anew the Substantial Evidence Standard of Review is Inconsistent with Congressional Emphasis on CIT Expertise in the Field of International Trade Law... 5 B. CIT is a Specialized Court with All Judges Being International Trade Experts and, in Contrast, CAFC is not a Specialized Court with Few Judges that are Trade Experts... 7 C. Congress was Particularly Mindful of the Increased Importance of Complex Antidumping and Countervailing Duty Investigations When Indicating Its Intent to Have Expert Review of these Determinations... 9

3 ii TABLE OF CONTENTS Continued Page D. CAFC Applying Anew the Substantial Evidence Standard of Review is Inconsistent with Congressional Concern Over Duplicative, Redundant, and Lengthy Review of AD and CVD Determinations E. Atlantic Sugar Leads to the Anomalous Result that CIT Decisions are Subject to a More Searching Appellate Level Review than Bi-National Panels Under NAFTA Chapter II. CAFC APPLYING ANEW THE SUB- STANTIAL EVIDENCE STANDARD IS UNSUPPORTED BY PRIOR PRACTICE AT LAW, AND CAFC JUDGES ACKNOWL- EDGE ITS PROBLEMATIC NATURE THROUGH ITS GRADUAL WEAKENING AND INCONSISTENT APPLICATION A. CAFC s Adoption in Atlantic Sugar of Applying Anew the Substantial Evidence Standard Given to the CIT was Unsupported B. CAFC Itself Has Gradually Weakened Its Applying Anew Test By According CIT Decisions Varying Degrees of Deference but in an Uncertain and Inconsistent Manner CONCLUSION... 26

4 iii TABLE OF CONTENTS Continued Page APPENDIX LIST OF ACADEMIC SIGNA- TORIES... App. 1

5 iv TABLE OF AUTHORITIES Page CASES Ad Hoc Comm. of AZ-NM-TX-FL Producers of Gray Portland Cement v. United States, 1996 U.S. App. LEXIS (Fed. Cir. 1996) Altx, Inc. v. United States, 370 F.3d 1108 (Fed. Cir. 2004) AMS Assocs. v. United States, 737 F.3d 1338 (Fed. Cir. 2013) Atlantic Sugar, Ltd. v. United States, 744 F.2d 1556 (Fed. Cir. 1984)... passim Ausimont SpA v. United States, 90 Fed. Appx. 399 (Fed. Cir. 2004) Camargo Correa Metais, S.A. v. United States, 52 F.3d 1040 (Fed. Cir. 1995)... 8 Cleo Inc. v. United States, 501 F.3d 1291 (Fed. Cir. 2007) Consol. Bearings Co. v. United States, 412 F.3d 1266 (Fed. Cir. 2005) F.Lii de Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027 (Fed. Cir. 2000) Gerald Metals, Inc. v. United States, 132 F.3d 716 (1997) Grupo Indus. Camesa v. United States, 85 F.3d 1577 (Fed. Cir. 1996) Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 (Fed. Cir. 2003)... 24

6 v TABLE OF AUTHORITIES Continued Page Huvis Corp. v. United States, 570 F.3d 1347 (Fed. Cir. 2009) Micron Tech. v. United States, 117 F.3d 1386 (Fed. Cir. 1997) NEC Corp. v. United States, 151 F.3d 1361 (Fed. Cir. 1998) NEC Home Elecs. v. United States, 54 F.3d 736 (Fed. Cir. 1995) Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir. 2006)... 21, 22 Nippon Steel Corp. v. U.S. Int l Trade Comm n, 494 F.3d 1371 (Fed. Cir. 2007)... 2, 13 NSK Corp. v. U.S. Int l Trade Comm n, 716 F.3d 1352 (Fed. Cir. 2013)... 2, 13 NSK Corp. v. U.S. Int l Trade Comm n, 2013 U.S. App. LEXIS (Fed. Cir. Oct. 25, 2013)... 13, 18, 20 NSK Ltd. v. United States, 115 F.3d 965 (Fed. Cir. 1997) Papierfabrik August Koehler AG v. United States, 646 F.3d 904 (Fed. Cir. 2011) Royal Thai Gov t v. United States, 436 F.3d 1330 (Fed. Cir. 2006) SKF United States v. INA Walzlager Schaeffler KG, 180 F.3d 1370 (Fed. Cir. 1999)... 24

7 vi TABLE OF AUTHORITIES Continued Page Suramerica De Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978 (Fed. Cir. 1994)... 21, 22, 23, 25, 26 Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330 (Fed. Cir. 2002) Tak Fat Trading Co. v. United States, 396 F.3d 1378 (Fed. Cir. 2005) Target Corp. v. United States, 609 F.3d 1352 (Fed. Cir. 2010) Timken Co. v. United States, 1996 U.S. App. LEXIS 1350 (Fed. Cir. 1996) United States v. Haggar Apparel Co., 526 U.S. 380 (1999)... 8 United States Steel Group a Unit of USX Corp. v. United States, 96 F.3d 1352 (Fed. Cir. 1996) Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951)... 25, 26 Viraj Group v. United States, 476 F.3d 1349 (Fed. Cir. 2007) Wheatland Tube Co. v. United States, 495 F.3d 1355 (Fed. Cir. 2007) Zenith Elecs. Corp. v. United States, 99 F.3d 1576 (Fed. Cir. 1996)... 4, 15, 19, 26 Zhejiang Dunan Hetian Metal Co. v. United States, 652 F.3d 1333 (Fed. Cir. 2011)... 23

8 vii TABLE OF AUTHORITIES Continued Page STATUTES 19 U.S.C. 1516a (2012)... 2, 14, 18 Customs Courts Act of 1980, Pub. L. No , 94 Stat passim Federal Courts Improvement Act of 1982, Pub. L. No , 96 Stat Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. No , 118 Stat (2004) Trade Agreements Act of 1979, Pub. L. No , 93 Stat passim LEGISLATIVE HISTORY H.R. REP. NO (1979) H.R. REP. NO (1980), reprinted in 1980 U.S.C.C.A.N , 10, 20 S. REP. NO (1979) S. REP. NO (1979)... 6 S. REP. NO (1981), reprinted in 1982 U.S.C.C.A.N

9 viii TABLE OF AUTHORITIES Continued Page OTHER AUTHORITIES 126 CONG. REC. 27,063 (1980) (statement of Sen. DeConcini) ( Increase the availability of judicial review in the field of international trade in a manner which results in uniformity without sacrificing the expeditious resolution of import-related disputes. ) Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin and Assessment Rate in Certain Antidumping Duty Proceedings; Final Modification, 77 Fed. Reg (Feb. 14, 2012) Appeals Filed, by Category, U.S. CT. APPEALS FOR FED. CIRCUIT, gov/images/stories/statistics/fy%2013%20filings %20by%20category.pdf (last visited Mar. 5, 2014)... 3, 7, 15 Comments by Herb Shelley (former Tariff Commission and Treasury Department official), 10th Annual Judicial Conference of the Court of International Trade, 185 F.R.D. 395 (1997)... 10, 19 Daniel B. Pickard, The U.S. International Trade Commission and Trade Remedy Investigations: 10 Suggestions for Improvement, 4 GEO. MASON J. INT L COM. L. 37 (2012) Dispute Settlement: Settlements by Agreement, WORLD TRADE ORG., tratop_e/dispu_e/dispu_agreements_index_e.htm?id=a6 (last visited Mar. 4, 2014)... 11

10 ix TABLE OF AUTHORITIES Continued Page Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, 33 I.L.M. 1 (1994) Herbert C. Shelley, et al., The Standard of Review Applied by the United States Court of Appeals for the Federal Circuit in International Trade and Customs Cases, 45 AM. U. L. REV (1996)... 12, 17 Hon. Gregory W. Carman, A Critical Analysis of the Standard of Review Applied by the Court of Appeals for the Federal Circuit in Antidumping and Countervailing Duty Cases, 13 FED. CIR. B. J. 203 ( ) Hon. Gregory W. Carman, A Critical Analysis of the Standard of Review Applied by the Court of Appeals for the Federal Circuit in Antidumping and Countervailing Duty Cases, 17 ST. JOHN S J. LEGAL COMMENT. 177 (2003) Hon. Gregory W. Carman, A Suggested Revision of the Standard of Review that the Federal Circuit Applies to Appeals of Antidumping and Countervailing Duty Cases for the U.S. Court of International Trade, 36 J. MARSHALL L. REV. 727 ( )... 9 Judges of the United States Court of International Trade, U.S. CT. INT L TRADE, (last modified Sept. 26, 2013)... 8

11 x TABLE OF AUTHORITIES Continued Page Lucius B. Lau, Atlantic Sugar and De Novo Review on Appeal: The Right Answer for Appellate Review of Antidumping and Countervailing Duty Determinations, 13 FED. CIR. B. J. 221 ( ) Mark E. Wojcik & Lawrence Friedman, Setting Standards: Should the Federal Circuit Give Greater Deference to Decisions of the U.S. Court of International Trade in International Trade Cases?, 36 J. MARSHALL L. REV. 721 (2003) North American Free Trade Agreement, art. 1901, U.S-Can.-Mex., Dec. 17, 1992, 32 I.L.M. 289 (1993) Peter D. Enrenhaft, Remedies Against Unfair International Trade Practices, C536 A.L.I.- A.B.A. 551 (1990) Reports of the Proceedings of the Judicial Conference of the United States, Table B-8 U.S. Court of Appeals for the Federal Circuit Appeals Filed, Terminated, and Pending During 12-Month Period Ending September 30, 2013, available at gov/images/stories/the-court/statistics/fy13/ appeals%20filed%20term%20pend% pdf (last visited Jan. 20, 2014) The Fifteenth Annual Judicial Conference of the United States Court of Appeals for the Federal Circuit, 180 F.R.D. 467 (Oct. 1998)... 8

12 xi TABLE OF AUTHORITIES Continued Page Tokyo Round Agreements, in GATT, BISD (26th Supp.) (1980) Statutory Timetable for Antidumping and Countervailing Duty Investigations, U.S. INT L TRADE COMMISSION, remedy/documents/timetable.pdf (last visited Mar. 5, 2014) U.S. INT L TRADE COMM N, PUBLICATION NO. 4213, DRILL PIPES AND DRILL COLLARS FROM CHINA (2011), available at publications/701_731/pub4213.pdf... 12

13 1 INTEREST OF AMICI CURIAE 1 Professors of international trade law signing this brief, identified in App. 1, have a combined 131 years of law school teaching experience in the field of international trade law, a vast range of governmental experience in the field, including at the International Economic Affairs Office at the National Security Council (White House), the U.S. House of Representatives, the National Governors Association, the Canadian Department of External Affairs, the U.S. Competitiveness Council, and the World Trade Organization, and 34 years of private practice experience. This breadth of experience in academia, government, and private practice in the field of international trade law allow amici to make a unique assessment of the proper role of the Court of Appeals for the Federal Circuit in reviewing decisions of the specialized Court of International Trade in antidumping and countervailing duty cases. Amici professors of international trade law are concerned that the current standard of review applied by the Court of Appeals for the Federal Circuit runs counter to 1 Pursuant to this Court s Rule 37.6, amici curiae states that no counsel for any party authored this brief in whole or in part, and no person or entity other than amici curiae made a monetary contribution to the preparation or submission of this brief. Pursuant to Rule 37.3, amici curiae states that all parties were given timely notice of, and consented to the filing of this brief. Written evidence of Respondents consents accompanies this filing. Petitioner lodged a blanket consent with the Clerk of the Court.

14 2 Congressional intent and leaves parties to such cases facing considerable uncertainty and delay SUMMARY OF ARGUMENT In the 1979 Trade Agreements Act (TAA79) 2 and the Customs Courts Act of 1980 (CCA80), 3 Congress expressly created a substantial evidence standard of review for the Court of International Trade (CIT) to apply when reviewing antidumping (AD) and countervailing duty (CVD) determinations made by the International Trade Administration (ITA) and the International Trade Commission (ITC), but did not expressly create a standard of review for the Court of Appeals for the Federal Circuit (CAFC) to apply to CIT decisions in such cases. See 19 U.S.C. 1516a(b)(1)(B)(i) (2012). In 1984, CAFC held that it would review CIT decisions by applying anew the same standard of review as the CIT. Atlantic Sugar, Ltd. v. United States, 744 F.2d 1556, 1559 n.10 (Fed. Cir. 1984). Under this standard, the CAFC steps into the shoes of the CIT. NSK Corp. v. U.S. Int l Trade Comm n, 716 F.3d 1352, 1363 (Fed. Cir. 2013) (citing Nippon Steel Corp. v. U.S. Int l Trade Comm n, Trade Agreements Act of 1979, Pub. L. No , 93 Stat. 144 [hereinafter TAA79] (codified as amended in scattered sections of Title 19 of the United States Code). 3 Customs Courts Act of 1980, Pub. L. No , 94 Stat (codified as amended in scattered sections of Titles 19 and 28 of the United States Code).

15 3 F.3d 1371, 1378 (Fed. Cir. 2007)). This apparent de novo standard of review is inconsistent with both Congress recognition of CIT expertise and Congress creation of a structure to further advance CIT expertise in trade remedy matters expressed in the CCA80. AD and CVD determinations involve complex, detailed, and extensive factual matters and very intricate law, both domestically and internationally. Thus, unsurprisingly, Congress intended to have the most intensive review of those determinations handled by experts on the CIT. Congress has expressly recognized that CAFC is not a specialized court and less than 5% of CAFC s caseload is trade cases. 4 Atlantic Sugar s standard of review is also inconsistent with Congressional intent to reduce duplicative and redundant review of AD and CVD determinations and Congressional objectives to reduce the time frame for deciding AD and CVD cases. CAFC itself has admitted the misguided approach of Atlantic Sugar over the past two decades by beginning to accord an illdefined level of deference to CIT decisions. 5 Amici submits that CAFC has varied in the level of deference it enunciates, and has inconsistently applied these adjustments to its original Atlantic Sugar ruling, leaving trade litigants and lawyers facing considerable uncertainty. It is respectfully submitted 4 Appeals Filed, by Category, U.S. CT. APPEALS FOR FED. CIRCUIT, %2013%20filings%20by%20category.pdf (last visited Mar. 5, 2014). 5 See supra Part II.A-B.

16 4 that CAFC should be applying a misapprehended or grossly misapplied standard of review to CIT decisions in AD and CVD cases. Supreme Court clarification of the appropriate standard of review to be applied by CAFC is now critically necessary because of the split among CAFC judges and the decades of inconsistent CAFC jurisprudence ARGUMENT I. CAFC APPLYING ANEW THE CIT S SUB- STANTIAL EVIDENCE STANDARD OF REVIEW IN ANTIDUMPING AND COUNTER- VAILING DUTY CASES IS INCONSISTENT WITH CONGRESSIONAL RECOGNITION AND FURTHERING OF CIT EXPERTISE AND CONGRESSIONAL INTENT TO AVOID DUPLICATIVE REVIEW The interests of parties involved in AD and CVD proceedings, as well as the congressional purposes behind such laws, are best served by expert judgments. The Atlantic Sugar approach of CAFC applying anew the CIT s standard of review or, in other words, stepping into the shoes of the CIT, undercuts Congress decision to entrust detailed review of these complex decisions to the specialized expertise of the CIT. Judge Radar of the CAFC acknowledged this in his concurring opinion in Zenith Elecs. Corp. v. United States, 99 F.3d 1576, 1582 (Fed. Cir. 1996) (Rader, J., concurring) ( the Atlantic Sugar standard undercuts the benefits this court derives from the

17 5 experience and expertise of the Court of International Trade. ). Congress did not provide a specific standard of review for CAFC in such cases, and CAFC s Atlantic Sugar rule is inconsistent with Congressional recognition of CIT expertise and a Congressional scheme that sought to further advance that expertise, particularly in light of the expanded complexity of AD and CVD law and investigations. A. CAFC s Applying Anew the Substantial Evidence Standard of Review is Inconsistent with Congressional Emphasis on CIT Expertise in the Field of International Trade Law Congress obviously created the CIT to have exclusive jurisdiction over many international trade issues, including AD and CVD determinations, recognizing CIT s existing expertise and acknowledging that expertise would continue to grow with its exclusive jurisdiction over trade matters. A central purpose of the CCA80 was the re-emphasis and clarification of Congress intent that the expertise and national jurisdiction of the [CIT] be exclusively utilized in the resolution of conflicts and disputes arising out of the tariff and international trade laws. 6 6 H.R. REP. NO , at 28 (1980), reprinted in 1980 U.S.C.C.A.N. 3729, 3739.

18 6 While Congress recognized the expertise of the Court of Customs and Patent Appeals, 7 the expertise was not as focused and specialized as that of the Customs Court, the CIT s predecessor. Additionally, a few years later, Congress, in the Federal Courts Improvement Act of 1982, broadened the jurisdiction of the Court of Customs and Patent Appeals to include appeals from the Federal Claims Court, and renamed it the Court of Appeals for the Federal Circuit. 8 In creating the CAFC, Congress recognized that it would not be a specialized court but rather have a varied docket spanning a broad range of legal issues and types of cases. 9 Thus, when CAFC applies anew the same standard of review applied by the CIT or steps in the shoes of the CIT, it defeats Congressional intent to have the most intensive review of AD and CVD determinations conducted by a specialized court of experts in trade matters. 7 See S. REP. NO (1979). 8 Federal Courts Improvement Act of 1982, Pub. L. No , 141, 96 Stat S. REP. NO , at 6 (1981), reprinted in 1982 U.S.C.C.A.N. 11, 16 ( The Court of Appeals for the Federal Circuit will not be a specialized court, as that term is normally used. The Court s jurisdiction will not be limited to one type of case, or even to two or three types of cases. ).

19 7 B. CIT is a Specialized Court with All Judges Being International Trade Experts and, in Contrast, CAFC is not a Specialized Court with Few Judges that are Trade Experts Appeals from the CIT are only a small amount of the CAFC s work and do not allow CAFC judges to build up the same level of expertise over international trade matters particularly highly complex AD and CVD law and practices as the CIT judges. As stated above, in the most recent year, appeals from the CIT constituted only 5% of CAFC s cases. 10 CAFC judges have publicly admitted that the CAFC s caseload diversity, in contrast to the exclusivity of the CIT, does not allow it to claim expertise in trade matters. Judge Bryson of the CAFC addressed the issue, and stated: If I have a trade case on the morning s argument, I will tell you, I do not feel much like a specialist. I am struggling to catch up with the arguments that are being made. I, perhaps in five or ten years, may feel a bit more comfortable with it. This is terra incognita for me and it is, I think, for most of my colleagues. So, we venture into these areas 10 See Appeals Filed, by Category, supra note 4.

20 8 not with the confidence of an area well familiar to us, but this is alien territory. 11 Five of the active CIT judges have served at least 15 years on the CIT, and the four most recent CIT appointees all had extensive international trade law experience prior to their appointment. 12 Thus, the trend for new CIT judges is to come to the court with extensive experience and expertise in international trade law. As this Court has previously recognized, [t]he expertise of the [CIT]... guides it in making complex determinations in a specialized area of the law. United States v. Haggar Apparel Co., 526 U.S. 380, 394 (1999). Only two CAFC judges have a background in international trade law, unsurprisingly, given its caseload. Furthermore, CAFC itself acknowledges in Camargo Correa Metais, S.A. v. United States, 52 F.3d 1040, 1043 (Fed. Cir. 1995), the expertise [the CIT] develops and maintains from its exclusivity is impressive and noteworthy. CIT judges also become experts in the particular cases they oversee due to the unique and intensive role they serve in trade cases under the Congressional scheme especially during their review of ITA and ITC determinations in AD and CVD cases. As 11 The Fifteenth Annual Judicial Conference of the United States Court of Appeals for the Federal Circuit, 180 F.R.D. 467, 604 (Oct. 1998). 12 Judges of the United States Court of International Trade, U.S. CT. INT L TRADE, (last modified Sept. 26, 2013).

21 9 CIT Chief Judge Carmen described the process, the CIT examines these proceedings, going through extensive records, and determining where the records have substantial evidence to support them. In some cases, the records are not complete and the Court spends considerable amounts of time compiling the record. Indeed, it is not uncommon for the [CIT] to remand some cases back to the administrative agencies to get additional explanation and evidence to support their position. 13 C. Congress was Particularly Mindful of the Increased Importance of Complex Antidumping and Countervailing Duty Investigations When Indicating Its Intent to Have Expert Review of these Determinations Congress wisely expressed its intent to have experts conduct the primary review of trade remedy determinations given the factual complexity of AD and CVD investigations and the intricate law governing those trade remedy actions. AD and CVD law and investigations are the most complex topic in all of international trade law. Those practicing in the area devote much of their time to such cases given their 13 Hon. Gregory W. Carman, A Suggested Revision of the Standard of Review that the Federal Circuit Applies to Appeals of Antidumping and Countervailing Duty Cases for the U.S. Court of International Trade, 36 J. MARSHALL L. REV. 727, 731 ( ).

22 10 complexity and the need to develop expertise. Congress recognized the increasing importance of trade remedy measures at the time it enacted the TAA79 and created the CIT in the CCA80: [M]ultilateral negotiations have led to a significant decrease in tariff duties and consequently a diminishing importance in classification and valuation cases in the overall spectrum of international trade litigation. In their place other measures, such as antidumping and countervailing duty statutes, have assumed a greater importance. The net result has been a significant increase in the number of suits challenging governmental determinations in these areas. 14 In recent years, roughly half of all CIT cases deal with AD and CVD issues. 15 Practitioners in the field of antidumping in the mid-1970 s basically relied on two cases with little need for research given the dearth of detailed case law. However, in the aftermath of the TAA79, antidumping law expanded exponentially from the mid s. 16 Similarly, on the international level, the 14 H.R. REP. NO , at 19 (1980), reprinted in 1980 U.S.C.C.A.N. 3729, Determined based on search results from a query regarding AD and CVD cases on electronic databases. 16 See Comments by Herb Shelley (former Tariff Commission and Treasury Department official), 10th Annual Judicial Conference of the Court of International Trade, 185 F.R.D. 395, 436 (1997) [hereinafter Comments by Herb Shelley].

23 11 world trading system s rules on antidumping went from a few paragraphs in GATT Art. VI in the late 1940 s to over twenty pages of detailed treaty language and obligations after the 1979 Tokyo Round Agreements, and subsequently the 1994 World Trade Organization (WTO) Uruguay Round Agreements. 17 Due to the sensitivity of AD and CVD actions, it is no surprise that many WTO disputes concern these areas. Since the establishment of the WTO in 1995, there have been 102 disputes under the AD agreement, with the United States being defendant in 47 of those cases. 18 There have also been 102 cases under the Subsidies and CVD Agreement since creation of the WTO, and the United States has been a defendant in 31 of those cases. 19 On occasion, these cases led to a significant regulatory change, such as in 2012 when the Department of Commerce agreed to eliminate its practice of zeroing in antidumping margin calculations a practice that used to treat transactions involving negative dumping margins as a zero thus arguably inflating the margin of dumping in response to a series of lost cases as a defendant in 17 This occurred first with the Tokyo Round Anti-Dumping Code concluded in See Tokyo Round Agreements, in GATT, BISD (26th Supp.) (1980); Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, 33 I.L.M. 1 (1994). 18 See Dispute Settlement: Settlements by Agreement, WORLD TRADE ORG., agreements_index_e.htm?id=a6 (last visited Mar. 4, 2014). 19 Id.

24 12 WTO disputes. 20 Such disputes occasionally also led to the congressional repeal of statutory provisions, such as the 1916 Anti-Dumping Act that allowed for a private damages action in United States courts for dumping. 21 The interaction between increased WTO jurisprudence, WTO agreements, and United States statutes and regulations makes for a complex patchwork of rules. More importantly, the minutia involved in the calculations performed by the ITA in establishing dumping or subsidization and the extensive industry information considered by the ITC in injury determinations in AD and CVD cases add considerably to the complexity of the record and heighten the need for expert review of AD and CVD determinations. It is not uncommon for the briefs of the parties to the CIT to exceed 200 pages in these cases, 22 and ITC reports in such cases also often exceed 200 pages. 23 The 20 See Antidumping Proceedings: Calculation of the Weighted- Average Dumping Margin and Assessment Rate in Certain Antidumping Duty Proceedings; Final Modification, 77 Fed. Reg (Feb. 14, 2012). 21 See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. No , 2006, 118 Stat. 2434, 2597 (2004). 22 See Herbert C. Shelley, et al., The Standard of Review Applied by the United States Court of Appeals for the Federal Circuit in International Trade and Customs Cases, 45 AM. U. L. REV. 1749, 1791 (1996). 23 See, e.g., U.S. INT L TRADE COMM N, PUBLICATION NO. 4213, DRILL PIPES AND DRILL COLLARS FROM CHINA (2011), available at (at 256 pages).

25 13 records for the cases themselves can be thousands of pages. See NSK, 716 F.3d at For this reason, CAFC often remarks on the lengthy and complex nature of the records in these cases. See Nippon Steel, 494 F.3d at 1373 ( The complex procedural history of this sunset review spans more than six years and includes four determinations by the Commission and six opinions from the Court of International Trade. ); Altx, Inc. v. United States, 370 F.3d 1108, 1111 (Fed. Cir. 2004) ( This case has a long and complicated history, involving three determinations by the Commission and three corresponding Court of International Trade decisions. ). Not unexpectedly, CAFC judges also periodically express concerns about being able to appropriately conduct de novo review in such cases. See, e.g., NSK Corp. v. U.S. Int l Trade Comm n, 2013 U.S. App. LEXIS (Fed. Cir. Oct. 25, 2013) (Wallach, J., joined by Rader, J., and Reyna, J., dissenting from denial of the petition for rehearing en banc) (per curiam). D. CAFC Applying Anew the Substantial Evidence Standard of Review is Inconsistent with Congressional Concern Over Duplicative, Redundant, and Lengthy Review of AD and CVD Determinations Congress has shown a long-standing concern with the speed and efficiency of trade remedy laws and other international trade dispute resolution mechanisms. Concerns regarding speed and efficiency were among those at the forefront of the 96th Congress

26 14 during enactment of both TAA79 and CCA This is no surprise given, for example, that in CVD cases time lags were enormous in some cases due to sensitivity of government acting against programs adopted by other governments Thus, the TAA79 reduced the time limits for investigations and decisions in AD and CVD cases by the ITA and ITC. 26 At the same time, Congress greatly expanded possibilities for judicial review and mandated a specific standard of review for the specialized CIT to apply. 27 Amici asserts therefore that Congress has expressed a clear intent that judicial review not be a redundant and duplicative process. It is inconsistent with the intent of Congress and indeed the whole scheme of the TAA79 for CAFC to apply anew the CIT s standard of review. Redundancy and inefficiency result from the apply anew test, which was the very situation Congress sought to rectify through the TAA79. Congress explicitly eliminated de novo review by the CIT in AD and CVD cases, noting that de novo review was both time 24 See, e.g., 126 CONG. REC. 27,063 (1980) (statement of Sen. DeConcini) ( Increase the availability of judicial review in the field of international trade in a manner which results in uniformity without sacrificing the expeditious resolution of importrelated disputes. ). 25 Peter D. Enrenhaft, Remedies Against Unfair International Trade Practices, C536 A.L.I.-A.B.A. 551, 582 (1990) See id. 19 U.S.C. 1516a (2012).

27 15 consuming and duplicative. 28 The legislative history confirms that the advantage of requiring an evidentiary record and review on that record would be the reduction in redundant proceedings. 29 Congress could hardly have intended that duplication be eliminated at the level of CIT review only to have duplication and redundancy created at the level of CAFC review. Indeed, CAFC itself has been critical of this natural outcome of the Atlantic Sugar standard of review, noting that replication of the record review already performed effectively renders the [CIT] s review superfluous... [in] addition to adding unnecessary time and expense to the appeal process.... Zenith, 99 F.3d at 1583 (Rader, J., concurring). The average length of time between date of docketing and date of disposition by the CAFC for cases appealed from CIT exceeded 12 months each of the past three years, and has never been less than 11 months over the last decade. 30 This is quite a lengthy period of time given Congress tightened time frames in AD and CVD investigations by ITA and ITC. The regular timelines for AD and CVD investigations established by Congress are less than the 12 months duplicative CAFC review consumes S. REP. No , at 636 (1979). H.R. REP. NO , at 181 (1979). See Appeals Filed, by Category, supra note See Statutory Timetable for Antidumping and Countervailing Duty Investigations, U.S. INT L TRADE COMMISSION, (last visited (Continued on following page)

28 16 E. Atlantic Sugar Leads to the Anomalous Result that CIT Decisions are Subject to a More Searching Appellate Level Review than Bi-National Panels Under NAFTA Chapter 19 North American Free Trade Agreement (NAFTA) Chapter 19, borrowing from the original Canada-US Free Trade Agreement, allows interested parties to seek review of AD and CVD determinations of the ITA and ITC involving imports from Canada or Mexico by a bi-national panel rather than seek review by the CIT. 32 Rulings by Chapter 19 bi-national panels are only subject to appeal before an Extraordinary Challenge Committee (ECC) under a very limited standard of review that includes whether the bi-national panel has misapplied the appropriate standard of review. 33 Congressional approval of the Chapter 19 system in both the 1989 implementing act of the Canada-U.S. Free Trade Agreement and 1994 North American Free Trade Agreement Implementation Act is further indication that Congress does not intend that CIT-level decisions should be subject to identical review at the appellate level. Mar. 5, 2014) (noting a normal time frame of 280 days for an AD investigation and 205 for a CVD investigation). 32 See North American Free Trade Agreement, art. 1901, U.S-Can.-Mex., Dec. 17, 1992, 32 I.L.M. 289 (1993). 33 See id. at art

29 II. 17 CAFC APPLYING ANEW THE SUBSTAN- TIAL EVIDENCE STANDARD IS UNSUP- PORTED BY PRIOR PRACTICE AT LAW, AND CAFC JUDGES ACKNOWLEDGE ITS PROBLEMATIC NATURE THROUGH ITS GRADUAL WEAKENING AND INCON- SISTENT APPLICATION The CAFC s 1984 decision in Atlantic Sugar was not clearly supported by prior practice, and it has been subject to extensive criticism by CAFC judges, and in most academic reviews of the practice, 34 and even in a publication by a chief judge of the CIT. 35 It is no surprise then that in this instant case, CAFC was split in an en banc review of the apply anew 34 See Herbert C. Shelley, et al., The Standard of Review Applied by the United States Court of Appeals for the Federal Circuit in International Trade and Customs Cases, 45 AM. U. L. REV (1996); Daniel B. Pickard, The U.S. International Trade Commission and Trade Remedy Investigations: 10 Suggestions for Improvement, 4 GEO. MASON J. INT L COM. L. 37 (2012); Mark E. Wojcik & Lawrence Friedman, Setting Standards: Should the Federal Circuit Give Greater Deference to Decisions of the U.S. Court of International Trade in International Trade Cases?, 36 J. MARSHALL L. REV. 721 (2003); but see Lucius B. Lau, Atlantic Sugar and De Novo Review on Appeal: The Right Answer for Appellate Review of Antidumping and Countervailing Duty Determinations, 13 FED. CIR. B. J. 221 ( ). 35 See Hon. Gregory W. Carman, A Critical Analysis of the Standard of Review Applied by the Court of Appeals for the Federal Circuit in Antidumping and Countervailing Duty Cases, 13 FED. CIR. B. J. 203 ( ); Hon. Gregory W. Carman, A Critical Analysis of the Standard of Review Applied by the Court of Appeals for the Federal Circuit in Antidumping and Countervailing Duty Cases, 17 ST. JOHN S J. LEGAL COMMENT. 177 (2003).

30 18 standard, 36 and that the CAFC for several decades has gradually weakened its own application of the apply anew test, albeit in an uncertain and inconsistent manner. This inconsistent application has repeatedly chipped away at the reliability and predictability of the apply anew standard adopted by the Federal Circuit in Atlantic Sugar, creating confusion for international trade litigants and trade lawyers. Supreme Court consideration of the appropriate standard of review to be applied by CAFC is critically necessary because of the split among CAFC judges and the decades of inconsistent CAFC jurisprudence. A. CAFC s Adoption in Atlantic Sugar of Applying Anew the Substantial Evidence Standard Given to the CIT was Unsupported The Atlantic Sugar decision did not cite any legal authority when announcing the apply anew standard other than the provision of law providing the substantial evidence standard for the court, and all relevant references are to the CIT in that section of the law. See 19 U.S.C. 1516a(b)(1)(B)(i) (2012). The absence of citation to authority was unsurprising 36 See NSK Corp. v. U.S. Int l Trade Comm n, 2013 U.S. App. LEXIS (Fed. Cir. Oct. 25, 2013) (Wallach, J., joined by Rader, J., and Reyna, J., dissenting from denial of the petition for rehearing en banc) (per curiam).

31 19 given the case law on the topic was sparse and vague at best, and conflicting at worst. The reason for the sparse case law is that challenges to AD and CVD actions only started to occur with any great frequency with the enactment of the TAA79. Prior to TAA79, judicial review of Tariff Commission and of Treasury Department determinations at that time was a burdensome process for the importers and for the domestic industry. 37 In terms of discovering a clear standard for judicial review, one detailed academic examination found that such a standard did not exist: Prior to 1984 and the Atlantic Sugar case, the Federal Circuit was using many different standards and applying them interchangeably. In looking through the cases, the Federal Circuit did not really distinguish very strongly among cases or within the case what standard of review was being applied. 38 CAFC Judge Rader in Zenith stated that prior to 1979, CAFC s predecessor, the Court of Customs and Patent Appeals (CCPA), examined the administrative record in dumping cases but expressly accorded some deference to the prior review by the Customs Court. 99 F.3d at 1581 (Rader, J., concurring). Congressional intent indicates that the substantial evidence standard was intended only for the CIT. Congress reaffirmed the CIT s substantial evidence standard of review in AD and CVD cases originally Comments by Herb Shelley, supra note 11, at 436. Id. at 437.

32 20 created in the TAA79, when it enacted the CCA80. In doing so, it made clear that standard was only intended for the CIT. The House Report states, This legislation seeks to accomplish several major goals: The clarification of the record requirements and scope and standard of review for civil actions in the court of international trade. 39 The House Report later describes the statutory provision reiterating the standard of reviews as follows: Subsection (b) provides that the court of international trade shall review a civil action commenced under section 516a of the Tariff Act of 1930, as specified by subsection (b) of that section. 40 B. CAFC Itself Has Gradually Weakened Its Applying Anew Test By According CIT Decisions Varying Degrees of Deference but in an Uncertain and Inconsistent Manner In addition to inconsistently utilizing Atlantic Sugar s applying anew standard depending on the type of remand issued by the CIT, 41 CAFC itself has 39 H.R. REP. NO , at 28 (1980), reprinted in 1980 U.S.C.C.A.N. 3729, 3739 (emphasis added). 40 Id. at 59, reprinted in 1980 U.S.C.C.A.N. at 3771 (emphasis added). 41 See, e.g., NSK, 2013 U.S. App. LEXIS at *17 (Wallach, J., joined by Rader, J., and Reyna, J., dissenting from denial of the petition for rehearing en banc) ( Most notably, the CIT s remands to the ITC for additional explanation are reviewed deferentially for an abuse of discretion, but remands for additional (Continued on following page)

33 21 questioned the wisdom of Atlantic Sugar s apply anew standard through a gradual weakening of the standard by according varying levels of deference to CIT decisions. For about ten years following the CAFC decision in Atlantic Sugar, the court applied the apply anew standard to review of AD and CVD cases by the CIT without any deference to the CIT decision. Over time, however, the CAFC questioned its own non-deferential apply anew standard and began inconsistently applying several formulations of a more deferential standard. For over a decade, beginning with its 1994 decision in Suramerica De Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978 (Fed. Cir. 1994), CAFC frequently cited to a new due respect formulation. See, e.g., Magnesium Corp. of Am. v. United States, 166 F.3d 1364, 1368 (1999); Gerald Metals, Inc. v. United States, 132 F.3d 716, 719 (1997). Then, in 2006, CAFC abandoned the due respect language and replaced it with presumably an even more deferential formulation of great weight. Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir. 2006). In Nippon Steel, CAFC again recognized a lack of legal foundation for any standard of review prescribed by Congress for CAFC review of CIT determinations. Id. CAFC conceded that Congress did not specify a standard of review... in reviewing judgments of the Court of International Trade. Id. Yet, findings are reviewed de novo. There is no statutory or practical basis to distinguish the two. ).

34 22 the CAFC cited Atlantic Sugar for the applicable apply anew standard of appellate review and applied the same substantial evidence test applied by the CIT. Id. Contrary to the nondeferential apply anew test, however, CAFC then indicated that in undertaking its review, it would give great weight to the informed opinion of the [CIT]. Id. (citing Suramerica, 44 F.3d at 983). After the decision in Nippon Steel, the CAFC essentially abandoned the due respect formulation of deferential review in favor of the great weight formulation for several years and as recently as See Huvis Corp. v. United States, 570 F.3d 1347, 1351 (Fed. Cir. 2009) ( [W]e apply anew the same standard used by the [CIT]... however, we give great weight to the informed opinion of the [CIT]... [and] it is nearly always the starting point of our analysis. ) (citing Nippon Steel, 458 F.3d at 1351 (citations and internal quotation marks omitted)). See also Cleo Inc. v. United States, 501 F.3d 1291, 1296 (Fed. Cir. 2007) ( When performing a substantial evidence review, however, we give great weight to the informed opinion of the Court of International Trade. Indeed, it is nearly always the starting point of our analysis. ) (quoting Nippon Steel, 458 F.3d at 1351). However, interspersed throughout the due respect and the great weight formulations, and citing to both Nippon Steel and Suramerica, CAFC occasionally abandoned both of those deference formulations for a general call of deference to the informed opinion of the CIT. See Royal Thai Gov t v. United

35 23 States, 436 F.3d 1330, 1335 (Fed. Cir. 2006) ( While we essentially step into the shoes of the Court of International Trade and duplicate its review... in doing so we do not altogether ignore its informed opinion. ) (citing Suramerica, 44 F.3d at 983 (emphasis added)); Ausimont SpA v. United States, 90 Fed. Appx. 399, 402 (Fed. Cir. 2004) ( Our de novo posture requires that we step[ ] into the shoes of the [CIT] and duplicate its review for substantial evidence, however, this court will not ignore the informed opinion of the [CIT]. ) (emphasis added). Such cases indicate some deference to the CIT without ever mentioning either due respect or great weight in regard to the level of deference. To make matters more unclear for litigants, throughout the two decades of varied deference jurisprudence, CAFC has also in many cases solely cited the Atlantic Sugar apply anew standard without acknowledging any level of deference to the CIT. In other words, a significant number of cases completely disregard Suramerica and the subsequent precedent providing some deference to the CIT. See, e.g., AMS Assocs. v. United States, 737 F.3d 1338, 1342 (Fed. Cir. 2013) ( We review decisions of the trade court without deference, applying the same substantial evidence standard of review that the trade court itself applies in reviewing Commerce s determinations. ); see also Zhejiang Dunan Hetian Metal Co. v. United States, 652 F.3d 1333, 1340 (Fed. Cir. 2011); Papierfabrik August Koehler AG v. United States, 646 F.3d 904, 906 (Fed. Cir. 2011); Target Corp. v. United

36 24 States, 609 F.3d 1352, 1358 (Fed. Cir. 2010); Wheatland Tube Co. v. United States, 495 F.3d 1355, 1359 (Fed. Cir. 2007); Viraj Group v. United States, 476 F.3d 1349, 1354 (Fed. Cir. 2007); Consol. Bearings Co. v. United States, 412 F.3d 1266, 1269 (Fed. Cir. 2005); Tak Fat Trading Co. v. United States, 396 F.3d 1378, 1382 (Fed. Cir. 2005); Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003); Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed. Cir. 2002); F.Lii de Cecco di Filippo Fara S. Martino S.p.A. v. United States, 216 F.3d 1027, 1031 (Fed. Cir. 2000); SKF United States v. INA Walzlager Schaeffler KG, 180 F.3d 1370, 1374 (Fed. Cir. 1999); NEC Corp. v. United States, 151 F.3d 1361, 1374 (Fed. Cir. 1998); Micron Tech. v. United States, 117 F.3d 1386, (Fed. Cir. 1997); NSK Ltd. v. United States, 115 F.3d 965, 972 (Fed. Cir. 1997); United States Steel Group a Unit of USX Corp. v. United States, 96 F.3d 1352, 1356 (Fed. Cir. 1996); Ad Hoc Comm. of AZ-NM-TX-FL Producers of Gray Portland Cement v. United States, 1996 U.S. App. LEXIS 19074, 4 (Fed. Cir. 1996); Grupo Indus. Camesa v. United States, 85 F.3d 1577, 1578 (Fed. Cir. 1996); Timken Co. v. United States, 1996 U.S. App. LEXIS 1350, 3 (Fed. Cir. 1996); NEC Home Elecs. v. United States, 54 F.3d 736, 742 (Fed. Cir. 1995). Statistics also lend credence to the notion that deference is often not accorded to CIT decisions. For the 12-month period ending September 30, 2013,

37 25 35% of the CAFC cases appealed from the CIT were reversed. 42 The percentage of CIT reversals by CAFC was two to five times higher than all other sources of appeal to CAFC, including U.S. District Courts, the U.S. Court of Appeals for Veterans Claims, and the U.S. Court of Federal Claims. 43 This statistic shows an overwhelming lack of deference for the specialized expertise and the informed opinion of the CIT. CAFC s inconsistency in formulating and applying a consistent level of deference owed to the CIT provides little predictability for litigants seeking to appeal a CIT determination. Congress could hardly have sought to create additional procedural safeguards for litigants in the TAA79 and CCA80, only to have them subject to uncertain and inconsistently applied standards of deference. Of course, Atlantic Sugar s apply anew standard is fatally flawed and cannot be corrected by some uncertain level of deference. CAFC review should be based upon a misapprehended or grossly misapplied standard first recommended by the CAFC in its decision in Suramerica. 44 F.3d at 982 n.1 (citing Universal Camera 42 See Reports of the Proceedings of the Judicial Conference of the United States, Table B-8 U.S. Court of Appeals for the Federal Circuit Appeals Filed, Terminated, and Pending During 12- Month Period Ending September 30, 2013, available at cafc.uscourts.gov/images/stories/the-court/statistics/fy13/appeals% 20filed%20term%20pend% pdf (last visited Jan. 20, 2014). 43 Id.

38 26 Corp. v. NLRB, 340 U.S. 474, 491 (1951)). In Suramerica, the CAFC analogized CAFC review of CIT determinations in AD and CVD cases to the Supreme Court decision in Universal Camera when it was called on to review a review of administrative action by a federal appeals court. Id. In addition, the concurring opinions in Zenith also opined that the Universal Camera situation was sufficiently analogous to CAFC review of CIT determinations to apply the same standard of review. Zenith, 99 F.3d at (Plager, J., and Rader, J., concurring). Embracing the Supreme Court s approach in addressing duplicative review, the CAFC should intervene only in what ought to be the rare instance when the standard [applied by the applicable lower court] appears to have been misapprehended or grossly misapplied. Universal Camera, 340 U.S. at 491. Therefore, the misapprehended or grossly misapplied standard should apply to future CAFC review of CIT determinations to eliminate the duplicative review inherent in Atlantic Sugar s apply anew standard CONCLUSION Amici thus request that the Court accept certiorari in this case to overturn the standard of review adopted in Atlantic Sugar, particularly since CAFC has inconsistently applied the standard for decades. Atlantic Sugar is counter to Congressional intent to eliminate duplicative review and inconsistent with

39 27 congressional recognition and enhancement of CIT expertise in AD and CVD cases. Respectfully submitted, WILLIAM G. DITTRICK Counsel of Record BAIRD HOLM LLP 1700 Farnam Street Suite 1500 Omaha, NE (402) MATTHEW SCHAEFER Professor of Law UNIVERSITY OF NEBRASKA COLLEGE OF LAW P.O. Box Lincoln, NE

40 App. 1 APPENDIX LIST OF ACADEMIC SIGNATORIES Amici file this brief in their individual capacities, and not as representatives of the institutions with which they are affiliated. Padideh Ala i Professor of Law American University Washington College of Law Steve Charnovitz Associate Professor of Law George Washington University Law School William Davey Professor of Law University of Illinois College of Law Robert Howse Professor of Law New York University School of Law Petros Mavroidis Professor of Law Columbia University Law School Matthew Schaefer Professor of Law University of Nebraska College of Law Claire Wright Associate Professor of Law Thomas Jefferson School of Law