Canadian Gov't, Others, Urge Federal Circuit to Accept Statutory Cover for CVD Expedited Reviews

The case stems from a January 2018 CVD order on certain softwood lumber from Canada. In March of that year, Commerce conducted an expedited CVD review for various Canadian lumber companies that were assigned the all-others rate. Producers Fontaine, Les Produits Forestiers D&G, Marcel Lauzon, North American Forest Products, Roland Boulanger, Lemay and all of their cross-owned affiliates received de minimis CVD rates, rendering them exempt from the CVD order.

A legal question loomed over the proceedings: Did Commerce have the right to conduct the expedited review? In its defense, Commerce relied on Section 103(a) of the URAA as the legal authority for its federal regulation, 19 C.F.R. § 351.214(k), and its use of CVD expedited reviews. In a previous opinion, CIT found that in Section 103(a) "Congress explicitly limited Commerce’s regulatory authority to enact provisions and did not 'encompass perceived international obligations that Congress did not implement through the URAA.'"

On remand, Commerce weighed various legal alternatives to back its use of the expedited reviews, but couldn't find a home in U.S. law for the expedited review process. The trade court then upheld this finding, ruling that the Canadian companies found to be excluded from the CVD order due to the expedited review should be reinstated as subject to it (see 2108190002).

The Canadian federal government, along with the governments of Quebec and New Brunswick and six Canadian companies, appealed to the Federal Circuit. In their opening brief, the plaintiff-appellants pushed for Section 103(a) as justification for the process, since it provides for officers of the U.S. government to issue regulations necessary to ensure that any part of the URAA is "appropriately implemented." This section is relevant since the U.S. signed the WTO Agreement on Subsidies and Countervailing Measures, a part of the URAA, which requires signatories to provide a procedure in their domestic CVD laws where non-individually examined respondents can get an expedited review.

"Although the URAA did not make an amendment to the CVD law that expressly covers expedited reviews, Congress recognized the U.S. obligation under Article 19.3 of the SCM Agreement, and, under section 103, provided authorization to Commerce to promulgate the necessary regulations to implement this requirement," the brief said. It's this congressional intent that allows for such an interpretation of the URAA to stand, the plaintiff-appellants said.

In support, the plaintiff-appellants relied on Federal Circuit rulings requiring that courts employ "traditional tools of statutory constructions" when using the Chevron analysis, such as text, structure and legislative history. "When the URAA framework is considered as a whole, including the 'text, structure, and legislative history,' and taking account of these canons of interpretation, one must conclude that Congress indeed intended there would be an expedited review procedure, and that section 103 provided the requisite authorization to issue implementing regulations," the brief said.

If the Federal Circuit finds that Section 103 is ambiguous, then step two of the Chevron analysis requires "judicial deference" to Commerce's reasonable interpretation of the statute that it administers, the plaintiff-appellants said. "Commerce is the only U.S. Government agency entrusted with administering the subsidy provisions of U.S. CVD law, and its reasonable interpretation of the URAA and [Statement of Administrative Action]’s provisions directed to the CVD law are therefore entitled to deference at step two," the brief said. "Commerce’s conclusion that the URAA and SAA provided Congressional authorization for an expedited review procedure embodied in an expedited review regulation is reasonable."