Petitioners Reply Brief — Committee to Preserve American Color Television v. United States

No. 82-2045

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1983

COMMITTEE TO PRESERVE AMERICAN COLOR TELEVISION

(a.k.a. COMPACT) AND THE IMPORTS COMMITTEE, TUBE

DIVISION,

ELECTRONIC INDUSTRIES ASSOCIATION,

Petitioners,

¥.

UNITED STATES OF AMERICA,

Respondent.

On Petition For Writ Of Certiorari To The

United States Court Of Appeals For The Federal Circuit

PETITIONERS’ REPLY BRIEF

Pau. D. CuLLEN

Counsel of Record

NORMAN G. KNopF

RogBert L. MEUSER

COLLIER, SHANNON,

Ritt & Scorr

OF COUNSEL: 1055 Thomas Jefferson St., N.W.

WiwuraM F. Fox Washington, D.C. 20007

Wituiam D. ApPLER (202) 342-8400

CoLLiER, SHANNON, Attorneys for Petitioners

Ritt & Scorr

1055 Thomas Jefferson St., N.W.

Washington, D.C. 20007

PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C. (202) 347-8203

i

TABLE OF CONTENTS

Page

TN is ia i oes ce eve cee 1

1. Petitioners’ First Question Presented ........... 2

2. Petitioners’ Second Question Presented ......... 3

3. This Proceeding Will Not Become Moot ......... 6

8

Ree eg ieee

ii

TABLE OF AUTHORITIES

CASES:

American Textile Manufacturers Institute, Inc. v. Dono-

We, Se es I ee a,

Burlington Truck Lines, Inc. v. United States, 371 U.S.

apt HE EA

Citizens to Preserve Overton Park, Inc. v. Volpe, 401

Ae oe i a

Smith-Corona — Consumer Products Division,

SCM Corp. v. United States, Appeal No. 82-24

re EF, Ee si oc cc ks

Southern Pacific Terminal Co. v. ICC, 219 U.S. 498

Bk CO a Man te Ne

war os Engineering Co. v. McCorkle, 416 U.S. 115

C2 ROR ARREST Oe heen es apes

United States v. A. N. Deringer, Inc., 593 F.2d 1015

ee BO oie hice a,

United States v. Cajo Trading, Inc., 403 F.2d 268

(C.C.P.A.), cert. denied, 393 U.S. 827 (1968) ....

United States v. C.O. Mason, Inc., 51 C.C.P.A. 107,

C.A.D. 844, cert. denied, 379 U.S. 999 (1965) ....

Weinstein v. Bradford, 423 U.S. 147 (1975) ..........

STATUTES:

19 U.S.C. § 1614 (1976 & Supp. V 19681) ..-..........

We ee OE CRD 6 ecco cnc c es cesse 2, 3, 4,

me UG, § 1661G@) Gupp. V 1962) .................-

LEGISLATIVE HISTORY:

S. Rep. No. 249, 96th Cong., 1st Sess., reprinted in 1979

=. Wome Cone. & Ad. News $8) ..............

ADMINISTRATIVE MATERIALS:

7... (eto, O68 ed, Ree. 27,006 (1088) .........-. ...

Oe FO TO Tr Ce kon cc

~] =«]

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1983

No. 82-2045

COMMITTEE TO PRESERVE AMERICAN COLOR TELEVISION

(a.k.a. COMPACT) aNpD THE ImporRTs COMMITTEE, TUBE

DIVISION,

ELECTRONIC INDUSTRIES ASSOCIATION,

Petitioners,

ge

UNITED STATES OF AMERICA,

Respondent.

On Petition For Writ Of Certiorari To The

United States Court Of Appeals For The Federal Circuit

PETITIONERS’ REPLY BRIEF

INTRODUCTION

The government does not challenge petitioners’

representations that the issues sought to be reviewed are

of major importance, as they govern the implementation

of the entire antidumping/countervailing duty programs.

Congress has determined that dumping and subsidization

of imports distort free market forces, injure American

industries and eliminate jobs and employment opportuni-

ties for American workers. Just as it has regulated the

business conduct of domestic firms through the antitrust

laws, Congress has sought, through the antidumping and

countervailing duty laws, to regulate the conduct of for-

eign producers who choose to sell in this market. The

2

antidumping/countervailing duty regulatory regime is of

potential application to all imported merchandise. To date

more than 180 administrative findings are in place. Those

findings presently cover billions of dollars of trade in

products affecting virtually every sector of the economy,

including agricultural commodities, basic manufactures,

and high technology products. Petition (“Pet.”) 3-4. The

importance and widespread impact of the issues raised in

this litigation are readily apparent.

1. Petitioners’ First Question Presented

The government’s opposition reinforces the critical

need to resolve fundamental differences as to how Con-

gress intended the antidumping and countervailing duty

statutes to be administered. Petitioners contend that the

1979 amendments to the antidumping law conferred un-

conditional rights upon interested domestic parties to

participate in the administrative assessment of

antidumping and countervailing duties and to appeal as-

sessment determinations to the United States Court of

International Trade. Those rights were created specifi-

cally for the benefit of domestic industries and workers

injured by dumped and subsidized imports. Pet. 13-16.

The government responds by asserting that the Secre-

tary of Commerce may circumscribe the rights created in

the 1979 reforms by virtue of a general compromise provi-

sion (19 U.S.C. § 1617 (1976) (“section 617”)) first enacted

in 1922 and never previously used in an antidumping

proceeding. The government would have us believe that

interested domestic parties have no interest in the assess-

ment of antidumping duties, asserting that the “govern-

ment is compromising its own rights” when it executes

settlement agreements. Brief for the United States in

Opposition (“Br. in Opp.”) n.9. It contends that “[pleti-

tioners are strangers to these [settlement] agreements,”

3

which do not involve “the rights of third parties.” Jd.

Although all evidence of Congressional intent is to the

contrary (Pet. 13-14 & n.14), the government seeks to

elevate this once obscure compromise authority to co-

equal status with the specific procedures in the antidump-

ing law. Br. in Opp. 10.

The United States Court of Appeals for the Federal

Circuit attempts to resolve these diametrically opposed

positions by agreeing with the government that the Sec-

retary has unfettered discretion either to assess duties

under the 1979 legislation with all of its attendant pro-

cedural safeguards, or to compromise the same duties

without so much as giving domestic interests notice and

the opportunity for comment. No attempt to harmonize

these conflicting statutes is made; nor is there any at-

tempt to provide guidelines as to the appropriate circum-

stances in which one or the other statute should be ap-

plied.

This case will permit the Court to resolve these

fundamentally different views regarding the essential

nature of the antidumping remedy. It is critical to the

proper administration of this vital statute that the Court

determine whether mandatory provisions of a statute

may be selectively negated without recognizable stand-

ards, without notice to the holders of substantial rights,

and without even the semblance of judicial supervision.

2. Petitioners’ Second Question Presented

Petitioners allege that the report and recommendation

required by section 617 were fraudulently prepared and

that procedural compliance with that provision was a

sham. These allegations were detailed and specific and, in

the procedural posture of this case, must be deemed true

and construed in a light favorable to petitioners. Pet. 18

n.16.

4

Fairly read, the decision below stands for the proposi-

tion that such allegations are “not proper for judicial

inquiry” regardless of sufficiency. Petitioners’ Appendix

(“Pet. App.”) 5a & 8a. Even the government’s opposition

does not defend the correctness of this holding (Br. in

Opp. 15), but merely seeks to justify the results on other

grounds.'

Implicit in the Federal Circuit’s refusal to find jurisdic-

tion over allegations of bad faith is its determination to

accord extreme deference to agency action, particularly

where foreign policy implications are perceived. The

court below not only would permit the Secretary to de-

prive domestic interests of the elaborate procedural safe-

guards of the 1979 law, it would also allow him carte

blanche authority to ignore even the limited protections

afforded by section 617.2 The Federal Circuit’s excessive

‘In its opposition, the government advances a number of factual

considerations not of record upon which it speculates the Secretary

could have relied in his compromise determination. Br. in Opp. 12-15.

These “post hoc rationalizations,” of course, provide no basis to

justify the Secretary’s conduct. Citizens to Preserve Overton Park,

Inc. v. Volpe, 401 U.S. 402, 419 (1971), quoting Burlington Truck

Lines, Inc. v. United States, 371 U.S. 156, 168-169 (1962). The facts

of record as pleaded in the complaint, and necessarily accepted by the

court below as true in the posture of this case, are that the statutorily

mandated report was not timely provided to the Secretary; com-

pliance with statutory procedures was a sham: and the entire com-

promise process was carried out in bad faith in an effort to justify a

result that had been preordained for political reasons. It was these

facts into which the court below held it had no jurisdiction to inquire.

*The Federal Circuit went so far as to assert that “the Secretary

{in deciding to compromise] is not limited solely to the factors ex-

plicated in these [statutory] reports.” Pet. App. 7a. The government

has taken the position that since the Secretary is not limited in his

settlement decision to consideration of the factors spelled out in the

Statutory report, “the validity of certain factors in the report is of

little, if any, relevance.” Br. in Opp. 13-14. The proposition that an

5

deference has been manifested in other decisions as well.

In Smith-Corona Group, Consumer Products Division,

SCM Corp. v. United States, Appeal No. 82-24 (C.A.F.C.

Aug. 9, 1983), the new Federal Circuit found that “the

foreign policy repercussions of a dumping determina-

tion, makes the enforcement of the antidumping law a

difficult and supremely delicate endeavor” (Slip op. at 4

(emphasis added)) and that the decisions of the Secretary

are entitled to “tremendous deference,” id. at 36.

The Federal Circuit’s holding that allegations of bad

faith administrative conduct are not justiciable is contra-

ry to the vast weight of authority and accepted principles

of American jurisprudence. Pet. 17-20. Its extreme de-

ference to the agency charged with the administration of

a regulatory statute because of perceived foreign policy

implications poses basic questions as to the proper bal-

ance between the needs of the executive and the mandate

of Congress.

The antidumping law is not a foreign policy tool of the

executive. It does not stem from the President’s con-

stitutional authority to conduct foreign policy, but rather

from Congress’ power to regulate interstate and foreign

administrator may consider criteria in addition to those established

in a relevant statute is, in itself, rather dubious. Citizens to Preserve

Overton Park v. Volpe, 401 U.S. 402, 412; American Textile Manu-

facturers Institute, Inc. v. Donovan, 452 U.S. 490, 508-11 (1981).

Even if the Secretary is permitted to consider factors in addition to

those required by section 617, there is no authority for the proposi-

tion that the bona fides of the report and recommendation specifically

mandated by that statute may be ignored by a reviewing court. The

Federal Circuit’s excessive deference to the Secretary has enabled

him to circumvent not only the extensive procedural safeguards of

the 1979 amendments, but the limited procedures of section 617 as

well.

6

commerce. This Court may find that the foreign policy

implications of the antidumping law require that some

balance be struck in its administration and judicial

enforcement. But the blind deference of the Federal Cir-

cuit strikes no balance. Rather, it ignores the regulatory

nature of the statute and permits selective enforcement

of the antidumping law to become a tool of foreign policy.

It further relegates the judiciary to the role of a passive

witness to agency action without jurisdiction to ensure

proper implementation of the Congressional mandate.

The extreme measure of declaring that allegations of bad

faith in the administration of a key Congressional regula-

tory program are nonjusticiable warrants review by this

Court so that definite guidelines for the reviewing re-

sponsibilities of the new Federal Circuit may be estab-

lished.

3. This Proceeding Will Not Become Moot

Contrary to the assertions of the government, this

action will not become moot upon liquidation of the cus-

toms entries covered by the April 28, 1980 settlement

agreements. The agency action under challenge falls

clearly within the exception to the mootness doctrine

governing conduct which is capable of repetition yet

evading review. Southern Pacific Terminal Co. v. ICC,

219 U.S. 498, 515 (1911).

Judicial review of future use of this compromise author-

ity may be avoided by the prompt liquidation of the com-

promised customs entries. Liquidation normally occurs

within six weeks of entry into the customs territory of the

United States, S. Rep. No. 249, 96th Cong., 1st Sess. 67,

reprinted in 1979 U.S. Code Cong. & Ad. News 381, 453,

a duration far shorter than even expedited judicial

proceedings. Thus, a future compromise will evade re-

view because liquidations made pursuant to settlement

7

will moot any controversy prior to litigation.’ B.g., Super

Tire Engineering Co. v. McCorkle, 416 U.S. 115, 125-26

(1974).

The government’s obvious intention to employ section

617 in the future makes this controversy likely to re-occur

and injure petitioners. The government’s brief demon-

strates that it fully intends to utilize the general com-

promise authority of section 617 in the future. Br. in Opp.

10. It seeks unfettered discretion to choose between com-

promise and use of the enforcement proceedings man-

dated by the antidumping law. It further seeks to insulate

its enforcement decisions from participation by in-

terested domestic parties or effective judicial review.

T.D. 71-76, the Japanese television dumping finding,

remains in force, see 48 Fed. Reg. 37,506 (1983), and the

imposition of antidumping duties on current and future

imports of Japanese television receivers could be com-

promised. Moreover, antidumping investigations of color

television receivers imported from Taiwan and the Re-

public of Korea have been initiated at the behest of mem-

bers of petitioners, 48 Fed. Reg. 23,879 (1983), and

antidumping duties potentially due on imports covered by

those proceedings could also be compromised. Petitioners

therefore have a “reasonable expectation” that section

*The government’s Suggestion that future compromise will not

evade review because of the injunctive power of the courts is, at best,

specious. It contends that, “as the lengthy history of this and related

litigation demonstrates, . . . it is clear that an aggrieved party witha

likelihood of success on the merits could obtain injunctive relief to

prevent implementation of the settlement until such time as he has

obtained judicial review.” Br. in Opp. n.7. If this Court denies cer-

tiorari in this proceeding, however, few, if any, aggrieved parties

could show a likelihood of success on the merits in future cases so as to

obtain the grant of injunctive relief.

8

617 will again be employed to compromise liability for

antidumping duties imposed for their benefit. Weinstein

v. Bradford, 423 U.S. 147, 149 (1975); Super Tire Engi-

neering Co. v. McCorkle, 416 U.S. 115, 125-27 (1974).

Moreover, there is some authority that liquidations

made pursuant to the settlement agreements are not final

and conclusive as to petitioners. Although a dispositive

precedent does not exist, the United States Court of

Customs and Patent Appeals (“CCPA”) has held liquida-

tions void ab initio where premised upon an unlawful

legal foundation.‘ United States v. Cajo Trading, Inc.,

403 F.2d 268 (C.C.P.A.), cert. denied, 393 U.S. 827 (1968)

(liquidations void when based upon invalid Presidential

proclamation); United States v. C.O. Mason, Inc., 51

C.C.P.A. 107, C.A.D. 844, cert. denied, 379 U.S. 999

(1965) (liquidations void when based upon unconstitution-

al statute). If petitioners prevail on the merits, the

liquidations could be held void under the authority of Cajo

andMason.’ The present liquidations accordingly will not

moot this controversy.

CONCLUSION

The decision of the United States Court of Appeals for

the Federal Circuit fundamentally alters the statutory

‘Petitioners sought injunctions of any implementation of the

settlement agreements because of the absence of a dispositive ruling

on the void liquidations doctrine.

>The government asserts that this action will become moot upon

completion of liquidation, citing 19 U.S.C. § 1514(a) (1976 & Supp. V

1981). Br. in Opp. 8. The government’s reliance on section 1514 is

misplaced. Section 1514 governs only the rights of importers to

contest liquidations. In United States v. A.N. Deringer, Inc., 593

F.2d 1015 (C.C.P.A. 1979), the CCPA found that Congress had

effectively eliminated the force of Cayo and Mason in the realm of an

importer’s protest under section 1514, but the court expressly re-

9

scheme enacted by Congress for antidumping and

countervailing duty proceedings and raises important

questions as to the role of the new Federal Circuit in

overseeing the administration of these important stat-

utes. The issues presented in this petition have wide-

ranging implications affecting billions of dollars of im-

ports of products involving virtually every sector of the

United States economy. The petition for a writ of cer-

tiorari should be granted.

Respectfully submitted,

Paut D. CuLLEN

Counsel of Record

NorMAN G. Knopr

RosBert L. MEusER

CoLLieR, SHANNON,

Ritt & Scorr

OF COUNSEL: 1055 Thomas Jefferson St., N.W.

WILLIAM F. Fox Washington, a... 20007

WituiaM D. ApPLER (202) 342-8400

COLLIER, SHANNON, Attorneys for Petitioners

Ritt & Scorr

1055 Thomas Jefferson St., N.W.

Washington, D.C. 20007

September 1983

jected the government’s invitation to overrule C ajo and Mason in

other potential applications. Jd. at 1020. Liquidations remain open to

challenge by interested parties (other than importers) who rely on

jurisdictional provisions other than section 1514. The government’s

claim of finality accordingly must fail, for petitioners are not impor-

ters and can rely on 28 U.S.C. § 1581(i) (Supp. V 1981) as the

jurisdictional basis for their challenge to these void liquidations.