Amicus Curiae Brief — SKF USA, Inc. v. Customs & Border Protection

Supreme Court, US

FILED

JAN 17 2010

OFFICE OF THE CLEAK

No. 09 - 767

IN THE

Supreme Court of the United States

SKF USA INC.,

Petitioner,

V.

UNITED STATES CUSTOMS AND BORDER PROTECTION, UNITED

STATES INTERNATIONAL TRADE COMMISSION, TIMKEN U.S.

CORPORATION, THE UNITED STATES, JAYSON P. AHERN,

ACTING COMMISSIONER, UNITED STATES CUSTOMS AND

BORDER PROTECTION, AND SHARA L. ARANOFF, CHA'’RMAN,

UNITED STATES INTERNATIONAL TRADE COMMISSION,

Respondents.

a

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Federal Circuit

BRIEF AMICUS CURIAE OF

KOYO CORPORATION OF U:S.A.

IN SUPPORT OF PETITIONER

JAMES H. HULME

Counsel of Record

JOHN M. GURLEY

NANCY A. NOONAN

DIANA DIMITRIUC QUAIA

ARENT FOX LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 857-6000

Counsel for Amicus Curiae Koyo

Corporation of U.S.A.

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES

INTEREST OF AMICUS CURIAE

ITT TINE << snc. scclcnonguaducbvennanianiaitmendentatbenieaatndsh 5

REASONS FOR GRANTING THE WRIT.................. 5

PPI sstailenstnscincduntsedecievnasadniniatndleckinbenioniaguts 10

I. The Federal Circuit Erred, As a Matter

Of Law, by Failing to Assess an Explicit

Viewpoint Based Discrimination

Against Political Speech Under the

Strict Scrutiny Standard

A. The Federal Circuit’s Decision

Violates Important First

Amendment Principles Established

By An Unbroken Series of This

Court’s Decisions Prohibiting

Viewpoint Discrimination Against

PRIUS MOIUN ccivcetcccoudeseccovecenesavconscnseresis 10

B. The Byrd Amendment Embodies

Classic Viewpoint Discrimination

Involving Political Speech ........................ 13

II. The Viewpoint Based Discrimination

Accomplished By the Byrd Amendment

Is Particularly Pernicious Because it

Occurred in the Course of a Formal

Procedure in Which the Government

Sought to Determine How to Exercise

its Authority and in Which All Citizens

Have an Equal Right to Participate and

ii

A. Speech Made By Private Parties in

the Course of a Formal

Governmental Decision-Making

Process Enjoys Heightened First

Amendment Protection .............cccccceeeeeeeees 15

B The Court Should Grant Review

Because of the Dangerous Nature of

the Precedent Established by the

Federal Circuit’s Incorrect First

Amendment Analysis................scceseceseeseees 19

I1l. The Federal Circuit’s “Reward” Theory

Fails Because in Trade Remedy

Investigations the Government Acts in

a Formal, Representative Capacity, and

Not As an Injured Party Seeking

NE... nnisiccnacedisevnsasemantiaeisalen Wate 21

A. The Government Was Acting in its

Representative Capacity in the ITC

FE occauscascctnssvasvincelaciecsndeien ee 22

B. The “Reward” Theory Is Invalid

Because There is No Connection

Between the Support Granted By a

Party in the Course of the Formal

I'l'C Investigation and the Amount

OF CHO BOTROTt HOCOIVOG ci vevcsccccessccsensoressses: 25

CAPPER UFR EI ES is sncvcsssetconsonsentevspasenesabenienueumenaenaneraen 27

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TABLE OF AUTHORITIES

Paws

Federal Cases

Arkansas Writers’ Project, Inc. v. Ragland, 481

Be ED CREE) cccccescccoes 1]

BE & K Constr. Co. v. NLRB, 536 U.S. 516

6. ce ssscceceees 18-19

Bill Johnson’s Restaurants, Inc. v. NLRB, 461

U.S. 731 (1983) ...... 19

Boos v. Barry, 485 U.S. 312 (1988) 15

California Motor Transp. Co. v. Trucking

Unlimited, 404 U.S. 508 (1972) | 5,17, 18

Citizens United v. FEC, 558 U.S . No. 08

205, slip op. at 32 (Jan. 21, 2010)........... 19

Eastern R.R. Presidents’ Conference v. Noerr

Motor Freight, Inc.,

365 U.S. 127 (1961) 5, 8, 16, 17

Hughes Aircraft Co. v. United States ex rel

Schumer, 520 U.S. 939 (1997) 2, 23

Illinois v. Krull, 480 U.S. 340 (1987) 21

Lac Vieux Desert Band of Lake Superior

Chippewa Indians v. Michigan Gaming

Control Board, 172 F.3d 397 (6th Cir.

1999), appeal after remand, 276 F.3d 876

(6th Cir. 2002)........ 20

LV

Leathers v. Medlock, 499 U.S. 4389 (1991) 2 oe

McDonald v. Smith, 472 U.S. 479 (1985) 16

Mills v. Alabama, 384 U.S. 214 (1966) 15

Minneapolis Star & Tribune Co. v. Minnesota

Comm of Revenue, 460 U.S. 575 (1983) 12

Perry v. Sindermann, 408 U.S. 593 (1972) ; LO

Professional Real Estate Investors, Ine. |

Columbia Pictures Indus., 508 U.S. 49

(1993). 16, 18

Regan v. Time, Inc., 468 U.S. 641 (1984) 2

Rosenberger v. Rector & Visitors of the Unt

of Va., 515 U.S 819 (1995) 7, 10

Simon & Schuster, Inc. v. Members of the N.Y

State Crime Victims Bd., 502 U.S. 105

(1991)..... saeeeed me , siadeen [. hho ae

SKF USA, Inc. v. U.S. Customs & Border

Prot., 556 F.3d 1337 (Fed. Cir.), en bank

rehearing denied, 583 F.3d 1340 (Fed. Cir

2OOY).. ere eee passim

Speiser v. Randall, 357 U.S. 513 (1958) ... 13

Suramerica de Aleaciones Laminadas

U/nited States. 44 F.3d 978 (Fed. Cir. 1994) 24

Turner Broad Svs In I - o4 ylZ L) S 622

(]4U94) 1)

\

U/nited Mine Workers of Am. v. Pennington

381 U.S. 657 (1965) Lo,

l/nited States v. National Treasury, employee ‘

Union, 513 U.S. 454 (1995)

Vermont Agency of Natural Res. v. United

States ex rel. Stevens. 529 U.S. 7/65 (2000) 22,

Constitutional Provisions

Ll) S. CONST. amend. |

Statutes

Continued Dumping and Subsidy Offset Act of

2000, Pub. L. No. 106-387, § l(a), § 1002

(2000) (previously codified at 19 U.S.

1675c) (2000 & Supp. 2006)

19 U.S.C. § 1675c(a) 3, 20, ;

19 U.S.C. § 1675c(b)(1) aes

19 U.S.C. § 1675c(b)(1)(A)

i9 ths Cc S 1675c(bv 1) 8 25. §

I9 U.S.C. § 1675e(d)(2) 3

19 USC. § 1675e¢e(d\(3)

Vi

Deticit Reduction Act of ZU005, Pub. RR No

109-171, Title VII, Subtitle F § 7601(a) i

19 U.S.C. § 1333(a) °26

19 U.S.C. § 1671 (2006)

19 U.S.C. § 1671b (2006) 24

19 U.S.C. § 1673 (2006)

19 U.S.C. § 1673b(b) (2006) 24

31 U.S.C. § 3730(b) (2006) 22

Regulatory Materials

19 C.F.R. § 159.61(a)-(c) (2009) 3

19 C.EP.R. § 207.8 (2009) .. 24

19 C.F.R. § 207.20-29 (2009) 24

Agency Determinations

Antidumping Duty Orders: Ball Bearings,

Cylindrical Roller Bearings, & Spherical

Plain Bearings, & Parts Thereof from

Japan, 54 Fed. Reg. 20904 (Dep't of

Commerce May 15, 1989) 2

vll

Other Authorities

Carol Rice Andrews, After BE & K: The

“Difficult Constitutional Question” of

Defining the First Amendment Right to

Petition Courts, 39 Hous. L. Rev. 1299

SEE ale dav es cuigiuiessuaneaicuasipaiaae aber ideas iesbeaseakonaste

Black’s Law Dictionary (8th ed. 2004) ....ccccccceeee 16

J. Boese, Civil False Claims and Qui Tam 22

Poe Ee oe ae),

Fiscal Year 2008 CDSOA Annual 23

Disbursement Report, available at

http://www.cbp.gov/linkhandler/cgov/trade/

priority trade/add cvd/cont dump/cdsoa 0

8/fy08 annual rep/final disbursement.ctt/f

SI SE OE ni aseins secnnnsceconecsecsssatevosens

Fiscal Year 2009 Annual CDSOA 4

Disbursement Report, available at

http://www.cbp.gov/linkhandler/cgov/trad

e/priority trade/add cvd/cont dump/cdsoa

09/report/disbursement.ctt/disbursement

BG RCER ATO Na Ei LU: RENNES De Ue e hn RE Re a 4-5

The Year in Trade 2007: Operation of the

Trade Agreements Program (59th Report),

USi et Pub. 4026 Giuly 2008) «nw... c.ccc.cnceseccensscsees

U.S. Customs and Border Protection FY 2009 4

Certifications Received, available at

http://www.cbp.gov/linkhandler/cgov/trade/

Vlll

priority trade/add cvd/cont dump/cdsoa O

9/09certs receive.ctt/O9certs receive.pdf ............. 5

]

INTEREST OF AMICUS CURIAE

Koyo Corporation of U.S.A. (“Koyo”)! is a

domestic manufacturer of products on which an

antidumping duty order is in place.2 Since 1975,

Koyo has manufactured tapered roller bearings and

ball bearings and continues to make substantial

investments in its bearings manufacturing facilities

in the United States.

The U.S. antidumping and countervailing duty

laws, Title VII of the Tariff Act of 1930,3 provide the

basis for U.S. Customs and Border Protection

(“Customs”) to assess antidumping duties on

imported merchandise subject to an antidumping

order. Like Petitioner SKF USA, Inc., Koyo was an

interested party that fully participated in the

antidumping investigation on Ball Bearings from

Japan (among twelve other antidumping and

countervailing duty investigations on ball bearings

and tapered roller bearings from various countries).

It responded to mandatory questionnaires from, and

The parties have consented to the filing of this Amicus

brief. Counsel of record for all parties received notice at least 10

days prior to the due date of the Amicus Curiae’s intention to

file this brief. Pursuant to Supreme Court Rule 37.6 Amicus

states that no counsel! for a party authored this brief in whole

or in part, and no counsel or party made a monetary

contribution intended to fund the preparation or submission of

this brief. No person other than Amicus Curiae or its counsel

made a monetary contribution to its preparation or submission.

“ Koyo’s parent company is JTEKT Corporation, a

manufacturer of bearmngs located in Japan, formerly known as Koyo

Seiko Ltd

319U.S.C. §§ 1671, 1673, et seq. (2006).

y)

a

provided a significant amount of information to, the

United States International Trade Commission

(“ITC”), the agency responsible in antidumping and

countervailing (“AD/CVD”) duty investigations for

determining whether a domestic industry has been

materially injured or threatened with material

injury by the relevant imports. As part of the ITC’s

formal investigation of whether domestic producers,

including Koyo, had suffered material injury, Amicus

stated in its ITC questionnaire response that it did

not support the petition for the imposition of

antidumping duties.

In 1989, after completion of the ITC

investigation, the U.S. Department of Commerce

issued the antidumping duty order on ball bearings

imported from Japan (the “Order”). Antidumping

Duty Orders: Ball Bearings, Cylindrical Roller

Bearings, & Spherical Plain Bearings, & Parts

Thereof From Japan, 54 Fed. Reg. 20904 (Dep’t of

Commerce May 15, 1989). In 2000, many years after

publication of that Order and therefore many years

after Koyo checked a box on its ITC questionnaire

opposing the petition, the AD/CVD duty law was

amended by the Continued Dumping and Subsidy

Offset Act (““CDSOA”) commonly known as the “Byrd

Amendment.” See Continued Dumping and Subsidy

Offset Act of 2000, Pub. L. No. 106-387, § l(a),

§ 1002 (2000), 19 U.S.C. § 1675c (2000 & Supp.

2006). The Byrd Amendment takes antidumping

duties collected under an antidumping duty order

and pays them to certain domestic producers, who

satisfy the “petition support” requirement. Under

the “support requirement,’ eligibility for Byrd

Amendment distributions is limited to “Affected

3

domestic producer[s]” (“ADPs”), who are defined as

petitioners or those who supported a petition that

led to an antidumping or countervailing duty order.

Id. § 1675c(b)(1). Customs annually publishes the

ADP lists in the Federal Register, along with a

notice of intent to distribute AD/CVD duties that

were collected in that fiscal year. Id. § 1675c(d)(2).

Each year, Customs distributes the duty collections,

on a pro rata basis, to the ADPs who filed the

required certifications with Customs, based on the

ADPs’ “qualifying expenditures” for that year. Id. §§

1675c(a), 1675c(b)(4), 1675c(d)(2)-(3); 19 C.F.R. §

159.61(a)-(c) (2009).

Koyo is excluded from the ADP lists and from the

distribution of duties because it does not satisfy the

“support requirement,” 1.e., publicly expressed

support for the petition in the course of the ITC

formal investigation.

Since 2001, domestic producers have had access

each year to a pro rata share of the AD/CVD duty

collections,so long as _ during’ the _ original

investigation (which may have occurred years before

2001), they publicly expressed the viewpoint that

they supported the petition for the imposition of an

antidumping duty order and such order was

imposed. Domestic producers who expressed the

opposite viewpoint, or no viewpoint, have not

received any Byrd Amendment distributions.

Domestic producers that compete with Koyo in the

U.S. market received Byrd Amendment

distributions, placing Koyo and other similarly

4

situated domestic producers at a_ significant

competitive disadvantage.‘

Although the CDSOA was repealed prospectively

in February 2006, Deficit Reduction Act of 2005,

Pub. L. No. 109-171, Title VII, Subtitle F § 7601(a),

it continues to apply to AD/CVD duties collected on

entries made and filed prior to October 1, 2007,

including the Order involved in this case. More than

250 AD/CVD duty orders affecting a variety of

industries were in effect at the time of the CDSOA

repeal.§ Determining the final AD/CVD duty

liability for entries made before October 1, 2007

under each preexisting order will be a long process,

such that the continuing harm to Koyo and other

similarly situated producers affected by the

discriminatory distributions under the CDSOA to

domestic competitors will continue for years to

come. For fiscal year 2009, more than 8,000

4 For example, the Fiscal Year 2008 CDSOA Annual

Disbursement Report for thirteen different AD/CVD orders

indicates that more than $17 million has been distributed to

Koyo’s competitors with regard to ball bearings and tapered

roller bearings. Available at

http://www.cbp.gov/linkhandler/cgov/trade/priority trade/add_c

vd/cont_dump/cdsoa_ 08/fy08 annual rep/final disbursement.ct

t/final_disbursement.pd* (amount aggregated from this report).

5 See The Year in Trade 2007: Operation of the Trade

Agreements Program (59th Report), USITC Pub. 4026, at App.

Table A-5 & A-7 (July 2008).

6 In fiscal year 2009 alone, Customs distributed

$247,718,477.35, with an additional $75,845,186.86 set aside

for distribution. See Fiscai Year 2009 Annual CDSOA

Disbursement Report, available at

http://www.cbp.gov/linkhandler/cgov/trade/priority trade/add _c

5

certifications were filed with Customs requesting

Byrd Amendment funds.’

Koyo’s claims for distributions under the Byrd

Amendment are pending before the Court of

International Trade. See e.g., Koyo Corp. of U.S.A. v.

United States, No. 06-00324 (Ct. Int'l Trade),

consolidated as Pat Huval Restaurant & Oyster Bar,

Inc v. USITC, Consol. No. 06-00290 (Ct. Int'l Trade).

INTRODUCTION

The Court of Appeals for the Federal Circuit

incorrectly applied the First Amendment to permit

viewpoint based discrimination against highly-

protected political speech in a formal governmental

proceeding. The decision of the Federal Circuit

conflicts with numerous decisions of this Court,

particularly with respect to its application of

intermediate tier scrutiny to review governmental

discrimination against core political speech made to

an administrative agency in the course of a formal

government proceeding. See e.g., Eastern R.R.

Presidents’ Conference v. Noerr Motor Freight, Inc.,

365 U.S. 127 (1961); California Motor Transp. Co. v.

Trucking Unlimited, 404 U.S. 508 (1972).

vd/cont_dump/cdsoa_09/report/disbursement.ctt/disbursement.

pdf.

7 See U.S. Customs and Border Protection FY 2009

Certifications Received, available at

http://www.cbp.gov/Jinkhandler/cgov/trade/priority trade/add_c

vd/cont_dump/cdsoa_09/09certs receive.ctt/O9certs receive.pdf.

6

The erroneous Federal Circuit decision will be

controlling authority for many other pending cases

over which it has exclusive appellate jurisdiction,

and that present the same issue. Current cases and

anticipated future cases collectively involve claims

exceeding $1 billion, as indicated in SKF USA, Inc.’s

Petition.

Unless this Court grants the Petition for a Writ of

Certiorari to review the judgment of the Federal

Circuit, this case will have an _ unprecedented

outcome by permitting the government acting in its

representative capacity to reward private parties

with money for supporting certain substantive policy

positions in a formal public process.

REASONS FOR GRANTING THE WRIT

The Byrd Amendment’s “petition support”

requiremert is a classic example of a viewpoint

discriminatwry restriction on political speech that

cannot survive strict scrutiny. The Petition should

be granted because the Federal Circuit’s decision®

upholding the restriction violates important First

Amendment principles established by an unbroken

series of this Court’s decisions that prohibit

viewpoint discrimination against political speech,

unless the government can point to a compelling

8 SKF USA, Inc. v. U.S. Customs & Border Prot., 556 F.3d

1337 (Fed. Cir.), en banc rehearing dented, 583 F.3d 1340 (Fed.

Cir. 2009)

7

governmental interest and demonstrate that the

approach taken is the least restrictive alternative.

See e.g. Rosenberger v. Rector & Visitors of the Univ.

of Va., 515 U.S. 819, 829 (1995); Simon & Schuster,

Inc. v. Members of the N.Y. State Crime Victims Bad.,

502 U.S. 105, 118 (1991). Although the Byrd

Amendment discriminates on its face among

members of a domestic industry based on a public

policy related viewpoint, the Federal Circuit ignored

this discrimination and erred as a matter of law by

assessing the statute under the intermediate

scrutiny standard. SKF, 556 F.3d at 1352, 1355.

The unconstitutionality of the statute is

particularly evident because the _ discrimination

occurred in the course of an official proceeding in

which a federal administrative agency received the

views of the public, including those of Petitioner and

of the Amicus, and made an important policy

decision. Repeated decisions of this Court

demonstrate that the First Amendment protection is

at its zenith in this context, when a member of the

public communicates with the government acting in

a representative capacity to inform the government

of its views about appropriate policy actions:

In a representative democracy such as

this, these branches of government [the

legislature and executive} act on behalt

of the people and, to a very large extent,

the whole concept of representation

depends upon the ability of the people

to make their wishes known to their

representatives. To hold that the

government retains the power to act in

this representative capacity and yet

8

hold, atthe same__ time, that the

people cannot freely inform’ the

government of their wishes would

impute to {the statute] a purpose to

regulate... political activity... .

Noerr, 365 U.S. at 137.

By conditioning receipt of a monetary payment

on the expression of a particular position to the

administrative agency charged with making a

decision, the Byrd Amendment’s petition support

requirement’ _—i restricts’ political speech and

communication with the government as decision-

maker. Yet the majority below improperly side-

stepped the application of strict scrutiny to assess

the statute. Instead, it decided to treat the Byrd

Amendment distributions as a “reward” and reached

the conclusion that this type of “reward” should be

permitted in a commercial context. SKF’, 556 F.3d at

1355. It then concluded that the “reward” should be

reviewed under the intermediate scrutiny standard

applicable to commercial speech, although no

available First Amendment rationale justified its

application to a viewpoint-based discrimination

against political speech made to the government

acting in its representative capacity.

As Petitioner has shown, in its effort to devise a

rationale, the majority's formulation conflicts in

several respects with principles established by prior

decisions of this Court. In particular, the majority

erred by asserting that a different standard applies

to “prohibitions” of speech and the type of

unvarnished viewpoint discrimination involved here,

and that a finding of benign purpose for the statute

Ss)

is sufficient to convert the standard of review from

strict scrutiny to intermediate scrutiny. /d. at 1349.

However, the majority’s theory of a saving “reward”

purpose is invalid because in trade remedy

investigations the government is not acting as a

litigant before a court, seeking to protect its

proprietary interest, but is acting in a representative

capacity, in a matter of public policy.

Finally, the decision below warrants review

because of the continuing harm the _ Byrd

Amendment will cause to scores of domestic

producers excluded from receiving benefits and the

potential danger this decision presents to critical

First Amendment rights if it is permitted to stand.

Koyo and other similarly situated domestic

producers, including those that are parties to more

than 41 cases pending in the lower court (over which

the Federal Circuit has exclusive jurisdiction), will

suffer continuous harm because some domestic

competitors will continue to receive a stream of Byrd

Amendment payments for many years to come.

At a broader level, the Federal Circuit’s decision

establishes a new and unwarranted exception to the

application of strict scrutiny to content-based

restrictions on political speech. The dissent warned

against the creation of “a whole new category of

speech — speech in circumstances that are ‘similar

to’ commercial speech” which is then subject “to

much less rigorous scrutiny under the First

Amendment than it would otherwise receive.” SKF,

583 F.3d at 1343. In characterizing the impact of

the panel’s decision as “far reaching,” the dissent

properly concluded that “[t]his case is simply too

LO

important to allow the majority’s incorrect First

Amendment analysis to stand,” Jd.

ARGUMENT

I. The Federal Circuit Erred, As a Matter Of

Law, by Failing to Assess an Explicit

Viewpoint Based Discrimination Against

Political Speech Under the Strict

Scrutiny Standard

A. The Federal Circuit’s Decision Violates

Important First Amendment Principles

Established By An Unbroken Series of

This Court’s Decisions Prohibiting

Viewpoint Discrimination Against

Political Speech

The First Amendment prohibits the government

from discriminating among speakers based on the

viewpoint they express, unless it can satisfy the

strict scrutiny standard. The government may not

discriminate based on viewpoint by disadvantaging

or burdening those who have an opposite view or by

requiring entities to utter a particular viewpoint to

qualify tor government benefits. See e.g., Zurner

Broad. Sys., Inc. v. FCC, 512 U.S. 622, 641 (1994);

Rosenberger, 515 U.S. at 829. A viewpoint-based

discrimination is presumed unconstitutional in these

circumstances and is subject to strict scrutiny even if

the political speech involves economic matters. See

Perry v. Sindermann, 408 U.S. 593, 597 (1972) (“[The

government] ... may not deny a benefit to a person

on a basis that infringes his constitutionally

protected interests-especially, his interest in freedom

of speech.”)

ll

The Court has recognized that preventing a

speaker from receiving monetary compensation can

curtail speech by eliminating an economic incentive

for the entity to speak. In Simon & Schuster, the

Court declared unconstitutional under the First

Amendment a statute that denied a criminal the

income from communications describing his crime

and required that these funds be deposited in a trust

account to be made available to victims of his crimes.

The underlying statute did not prohibit any speech.

Rather, it established “a financial disincentive to

create or publish works with a particular content.”

Simon & Schuster, 502 U.S. at 118.

In reaching this conclusion, the Court stated that

“{a] statute is presumptively inconsistent with the

First Amendment if it imposes a financial burden on

speakers because of the content of their speech.” Jd.

at 115. The Court quoted with approval its decision

in Arkansas Writers’ Project, Inc. v. Ragland, 481

U.S. 221, 230 (1987), where it had invalidated a

content-based magazine tax on the ground that such

“official scrutiny of the content of publications as the

basis for imposing a tax is entirely incompatible with

the First Amendment’s guarantee of freedom of the

press.”

As the Court explained, “This is a notion so

engrained in our First Amendment jurisprudence”

that it has found it “so ‘obvious’ as to not require

explanation.” Simon & Schuster, 502 U.S. at 115-16,

quoting Leathers v. Medlock, 499 U.S. 439, 447

(1991). This rule is but one manifestation of a far

broader principle: “Regulations which permit the

Government to discriminate on the basis of the

content of the message cannot be tolerated under the

12

First Amendment.” Simon & Schuster, 502 U.S. at

116, quoting Regan v. Time, Inc., 468 U.S. 641, 648-

49 (1984).

Simon & Schuster reinforced the conclusion of

Leathers that “the government’s ability to impose

content-based burdens on speech raises the specter

that the government may effectively drive certain

ideas or viewpoints from the marketplace.” 502 U.S.

at 116, quoting Leathers, 499 U.S. at 448-49.

The majority's decision, which purports to draw a

distinction between “prohibitions” of speech and

viewpoint discriminatory restrictions on speech, is

squarely inconsistent with this Court's. First

Amendment precedents. Moreover, the Court has

specifically rejected the majority's position that an

alleged benign governmental purpose can save this

type of viewpoint-based discrimination. The Court

has rejected the argument that discriminatory

financial treatment is suspect under the First

Amendment only when the legislature intends to

suppress certain ideas. “TOjur cases have

consistently held that ‘[ijllicit legislative intent 1s not

the sine qua non of a violation of the First

Amendment.” Simon & Schuster, 502 U.S. at 117,

quoting Minneapolis Star & Tribune Co. v.

Minnesota Comm’r of Revenue, 460 U.S. 575, 592

(1983).

Further, in United States v. National Treasury

Employees Union, the Court found that a

government “prohibition on compensation

unquestionably imposes a significant burden on

expressive activity” and “induces” those covered by

the statutory restriction “to curtail their expression”

13

in order to prevent adverse effects on their financial

situation. 513 U.S. 454, 468-70 (1995), citing Stmon

& Schuster. See also Speiser v. Randall, 357 U.S.

513 (1958), where the Court declared

unconstitutional a state law conditioning a tax

exemption to a signed declaration of loyalty to the

U.S. government. “To deny an exemption to

cla»mants who engage in certain forms of speech is

in effect to penalize them for such speech.” Td. at

518.

The Byrd Amendment’s “petition support”

requirement is virtually indistinguishable from the

unconstitutional limitations on speech at issue in

this line of cases, which establishes that restrictions

on payment for speech constitute infringements on

expression that must satisfy the strict scrutiny

standard in order to survive review.

B. The Byrd Amendment Embodies Classic

Viewpoint Discrimination Involving

Political Speech

The Byrd Amendment provides benefits to an

entity that “was a petitioner or interested party in

support of the petition with respect to which”

AD/CVD duties were ordered. 19 U.S.C.

§ 1675c(b)(1)(A). This provision explicitly directs the

ITC and Customs to discriminate among domestic

producers found to be injured by dumped imports in

the distribution of Byrd Amendment subsidies based

solely on whether a producer publicly expressed

“support” for a petition that led to an AD/CVD order.

Id. § 1675c(b)(1). Koyo was denied Byrd Amendment

distributions because like Petitioner SKF USA, in its

questionnaire response to the ITC many years before

14

the enactment of that law, Koyo did not check the

box asking whether it supported the petition. On its

face, the Byrd Amendment thus embodies a content-

based discrimination that both rewards entities

whose speech is consistent with a specific policy view

about the desirability of government action and

punishes those whose speech takes an opposing

point of view.

The majority rejected the government’s position

in this litigation that the Byrd Amendment’s petition

support requirement was not viewpoint

discriminatory. SKF, 556 F.3d at 1351. It did not,

however, assess the statute under the strict scrutiny

standard. Instead. the majority apphed the lesser

degree of constitutional protection afforded

commercial speech. It cited no authority that

permitted such use of the intermediate scrutiny

standard to assess the validity of political speech in

a public forum.

In sum, the Federal Circuit’s decision conflicts

with numerous decisions of this Court. The Petition

should be granted in light of the importance of the

First Amendment rights that have been violated by

the decision below.

15

II. The Viewpoint Based Discrimination

Accomplished By the Byrd Amendment Is

Particularly Pernicious Because it

Occurred in the Course of a Formal

Procedure in Which the Government

Sought to Determine How to Exercise its

Authority and in Which All Citizens Have

an Equal Right to Participate and be

Heard

A. Speech Made By Private Parties in the

Course of a Formal Governmental

Decision-Making Process Enjoys

Heightened First Amendment

Protection

First Amendment protections are at their zenith

when the communication at issue is political speech

that occurs in a public forum maintained by the

government. Boos v. Barry, 485 U.S. 312 (1988). As

this Court said in Mills v. Alabama, 384 U.S. 214,

218 (1966), “[T]here is. practically universal

agreement that a major purpose of [the First]

Amendment was to protect the free discussion of

governmental affairs.” Political speech in various

types of public forums, whether petitioning Congress

for taking a certain action or submissions to

government agencies in administrative proceedings,

implicates broader First Amendment protections: not

only the right to freedom of speech but also the right

to petition the government for redress of grievances.

See U.S. CONST. amend. I. The Byrd Amendment’s

petition support requirement impermissibly burdens

both fundamental rights, requiring a fortiori that the

16

statute be assessed under the strict scrutiny

standard.

This Court’s jurisprudence has long recognized

the vital nature of the right to petition the

government for redress of grievances. McDonald v.

Smith, 472 U.S. 479, 482 (1985) (“The right to

petition is cut from the same cloth as the other

guarantees of [the First Amendment] ...”); Noerr,

365 U.S. at 136; United Mine Workers of Am. v.

Pennington, 381 U.S. 657 (1965).9 The WNoerr-

Pennington line of cases is clearly meant to protect

the ability of the government acting in _ its

representative capacity to take measures that affect

competition and the ability of citizens to request or

oppose such government action without threat of

discrimination or retribution for the substantive

position they take. Noerr, 365 U.S. at 1837;

Professional Real Estate Investors, Inc. v. Columbia

Pictures Indus., 508 U.S. 49, 60-61 (1993). As the

Noerr Court noted, petitioning activity is by its

nature “directed toward obtaining governmental

action.” 365 U.S. at 140.

In Noerr the Court addressed an antitrust

challenge to a lobbying and publicity campaign.

Because lobbying and speech “raise[d] important

constitutional questions,” the Court held that

Congress did not intend the Sherman Act to “apply

9 See Carol Rice Andrews, After BE & K: The “Difficult

Constitutional Question” of Defining the First Amendment

Right to Petition Courts, 39 Hous. L. Rev. 1299, 1303-09, 1342-

43 (2003) (discussing the development of the right to petition

under the First Amendment and the application of the strict

scrutiny standard).

17

to the activities of the railroads at least insofar as

those activities comprised mere _ solicitation of

government action with respect to the passage and

enforcement of laws.” Jd. at 138. The Court was

concerned that

To hold that the government retains the

power to act in this representative

capacity and yet hold, at the same time,

that the people cannot freely inform the

government of their wishes would

impute to [the statute] a purpose to

regulate ... political activity....

Id. at 137.

The Court further explained that the “right of

petition is one of the freedoms protected by the Bill

of Rights, and we cannot, of course, lightly impute to

Congress an intent to invade these freedoms.” /d. at

138.

In Pennington, the Court extended the WNoerr

protection to lobbying efforts designed to influence

executive officials performing commercial and

political duties. 381 U.S. at 670. In California

Motor Transport Co. v. Trucking Unlimited, the

Court further extended the right to petition to

administrative agencies and courts: “The same

philosophy governs the approach of citizens or

groups of them to administrative agencies (which are

both creatures of the legislature, and arms of the

executive) and to courts, the third branch of

Government.” 404 U.S. 508, 510 (1972). Having

explained that the right to petition “extends to all

18

departments of the Government,” the Court

concluded that:

[I]t would be destructive of rights of

association and of petition to hold that

groups with common interests may not,

without violating the antitrust laws,

use the channels and procedures of

state and federal agencies and courts to

advocate their causes and points of view

respecting resolution of their business

and economic interests vis-a-vis their

competitors.

Id. at 510-11 (emphasis added).

The need for strict scrutiny on speech when the

government is acting in its representative capacity is

confirmed by Professional Real Estate Investors, 508

U.S. at 5. The Court stressed the First Amendment

protection on the free flow of communications to the

government:

We reasoned that “[t]he right of the

people to inform their representatives

in government of their desires with

respect to the passage or enforcement of

laws cannot properly be made to depend

upon their intent in doing so.” (citations

omitted).

In BE & K Constr. Co., the Court applied the

Noerr principles outside the competition context to

labor disputes. BE & K Constr. Co. v. NLRB, 536

19

U.S. 516, 525-527 (2002).!° Retracing the origins of

the Noerr doctrine, the Court affirmed its continued

application and the view that the government cannot

penalize a party for its protected speech absent both

objective and subjective evidence of bad faith. Most

recently, the Court relied on the Noerr line of cases

in holding unconstitutional under the _ First

Amendment a law that “placed restrictions on

political speech based on the speaker’s corporate

identity...” Citizens United v. FEC, 558 U.S. ___

No. 08-205, shp op. at 32 Wan. 21, 2010).

The majority acknowledged that SKF USA’s

opposition to the antidumping petition in the ITC

investigation is protected First Amendment activity.

SKF, 556 F.3d at 1354, citing Professional Real

Estate Investors and California Motor Transport.

Any action by an administrative agency to punish a

petitioner for exercising a fundamental

constitutional right to inform the government of its

views about appropriate policy actions must be

subject to the highest level of scrutiny, not some

lower intermediate form.

B. The Court Should Grant Review

Because of the Dangerous Nature of the

Precedent Established by the Federal

Circuit’s Incorrect First Amendment

Analysis

The Court should grant review because the

Federal Circuit’s decision would constitute an

19 See also Bill Johnson's Restaurants, Inc. v. NLRB,

461 U.S. 731 (1983), applying Noerr principles to the National]

Labor Relations Act.

20

important precedent permitting the government to

reward citizens with money for supporting in a

formal public process the substantive policy position

adopted by the government. This outcome is

unprecedented and the potential for abuse is

chilling.

As explained by the dissent, in Lac Vieux Desert

Band of Lake Superior Chippewa Indians uv.

Michigan Gaming Control Board, 172 F.3d 397 (6th

Cir 1999), appeal after remand, 276 F.3d 876 (6th

Cir. 2002), the Sixth Circuit overturned a similar

effort by a government to discriminate on the basis

of viewpoint regarding political speech that occurred

in a referendum process. SKF, 556 F.3d at 1376.

Lac Vieux supports SKF USA’s position here,

holding that the discriminatory ordinance at issue

was subject to strict scrutiny. 172 }.3d at 409-10.

Equally important, the injurious effects of the

Byrd Amendment will continue even after the last

distribution under this statute is 1iade. Domestic

producers in future AD/CVD proceedings may be

compelled to express a viewpoint in favor of

governmental action in order not to foreclose

potential future access to similar monetary benefits.

See id. at 407 (noting the chilling effect on speech as

“limit[ing|] the ability of persons or entities to take a

particular political position freely.”)

The fact that Congress has authorized the

government to award money to private parties that

take substantive positions that agree with a

particular policy outcome — here, the imposition of

duties — and to deny recovery to those who oppose

such action is a dangerous innovation whose legality

21

should be reviewed before it can serve as a precedent

supporting future actions by Congress _ to

discriminate based on viewpoint in the award of

money in other contexts. See I/llinois v. Krull, 480

U.S. 340, 352 (1987) (“[T]he greatest deterrent to the

enactment of unconstitutional statutes by a

legislature is the power of the courts to invalidate

such statutes.”).

Ill. The Federal Circuit’s “Reward” Theory

Fails Because in Trade Remedy

Investigations the Government Acts ina

Formal, Representative Capacity, and Not

As an Injured Party Seeking Redress

In assessing the Byrd Amendment under the

intermediate scrutiny standard, the majority

articulated two rationales, not advanced by the

government, that purportedly justified the

discrimination: that (1) the statute was designed to

reward parties who supported government policy in

enforcing U.S. trade laws, and (2)

petitioners/supporters of the imposition of an

AD/CVD order occupy the same position as plaintiffs

in qui tam actions. SKF, 556 F.3d at 1352. Neither

rationale is a valid basis for the majority’s First

Amendment analysis. Moreover, the government

expressly disclaimed before the Federal Circuit the

“reward” theory on which the majority decided the

case. Id. at 1350; SKF, 583 F.3d at 1342.

22

A. The Government Was Acting in its

Representative Capacity in the ITC

Proceeding

The majority's “reward” theory is rooted in the

incorrect premise that issuance of a remedial order

in an AD/CVD proceeding is equivalent to a

successful qui tam judgment. SAF, 556 F.3d at

1355-57. On that basis, the majority reasoned that a

Byrd Amendment distribution is properly considered

a bounty for supporters of the order. Jd. However,

the two proceedings are fundamentally different,

and the government acts in a different capacity in

the two proceedings.

A quit tam suit is “[aJn action brought under a

statute that allows a private person to sue for a

penalty, part of which the government .. . will

receive.” Black’s Law Dictionary 1282 (8th ed. 2004).

For example, the qui tam provision of the False

Claims Act, 31 U.S.C. § 3730(b) (2006) permits

private parties to combat fraud against the United

States by bringing a civil action against a person

who submitted a false claim. See eg. Hughes

Aircraft Co. v. United States ex rel. Schumer, 520

U.S. 939 (1997); Vermont Agency of Natural Res. v.

United States ex rel. Stevens, 529 U.S. 765 (2000).

Qui tam plaintiffs (“relators”) are volunteer

prosecutors, motivated by the prospect of personal

gain, that sue to redress a fraud against the

government in its proprietary capacity. While the

qui tam relator may obtain a portion of the penalty

as a bounty for prosecuting a successful action, it is

the government that is the injured party. Vermont

Agency, 529 U.S. at 772-73; see also Hughes Aircraft,

23

520 U.S. at 949 (relators “are motivated primarily by

prospects of monetary reward rather than the public

good”). In fact, the qui tam relators are not injured

by defendants’ conduct and lack direct standing." It

is a unique feature of qui tam statutes that relators

are granted derivative standing to sue to redress an

injury suffered by the government in its proprietary,

as opposed to representative, capacity. Vermont

Agency, 529 U.S. at 771. Further, the qui tam

relator’s “reward” is not contingent on the expression

of a particular viewpoint required by statute.

Unlike qui tam provisions, the Byrd Amendment

and the AD/CVD laws are not anti-fraud statutes.

In AD/CVD investigations, the government and

AD/CVD petition supporters play fundamentally

different roles than parties in a qui tam action. The

AD/CVD petition supporters seek to persuade a

federal agency, acting in its representative capacity,

that they have been directly injured by unfair

competition from foreign imports and to remedy that

injury through imposition of duties. Their

communication with the government in _ its

representative capacity is akin to the protected

petitioning activity under Noerr-Pennington.'? They

are seeking to enforce their own rights, not those of

the government. In doing so, they are compelled to

express a point of view to the ITC: that they support

the imposition of an AD/CVD order.

1! J. Boese, Civil False Claims and Qui Tam Actions 1-4

- 1-7 (3d. ed. 2006).

2 As noted supra at page 18, SKF USA's opposition to

the antidumping petition in the ITC investigation is protected

First Amendment activity under Noerr.

24

The ITC does not act as a private litigant seeking

recovery for fraudulent actions, but is a neutral fact-

finding and decision-making body with respect to

matters of trade policy. Specifically, in an AD/CVD

investigation, the ITC plays: (1) an investigative

role, in which it sends questionnaires to domestic

producers who may either support or oppose the

imposition of AD/CVD duties, analyzes this data,

conducts independent research, and issues a

comprehensive analysis; and (2) a decision-making

role, in which it determines the existence of material

injury to the domestic industry.'* The ITC conducts

the investigative and decision-making roles in its

representative capacity and may not share or decline

its responsibility. 14

A priori every completed investigation represents

the “successful enforcement of AD/CVD laws,”

regardless of whether it results in issuance of

AD/CVD orders or not. The ITC's statutory

responsibility is fulfilled by a determination of

whether there is a need for relief under the statutory

standards.

The majority thereby erred in finding that

petitioners “help” the government or take a position

“favorable to” the government. SKF, 556 F.3d at

'S See 19 C.F.R. §§ 207.8, 207.20-29 (2009); 19 U.S.C.

§§ 1671b, 1673b(b) (2006).

‘4 Similarly, “{iln making a determination of threat of

material injury, ITC must weigh industry views and views of

other interested parties, together with all other relevant

economic factors as appropriate... .” Suramerica de Aleaciones

Laminadas, C.A. v. United States, 44 F.3d 978, 984 (Fed. Cir.

1994),

1356-57. The majority’ analogy of Byrd

Amendment distributions to bounties is wrong and

cannot justify the statute’s discrimination against

protected speech.

B. The “Reward” Theory Is Invalid

Because There is No Connection

Between the Support Granted By a

Party in the Course of the Formal) ITC

Investigation and the Amount of the

Benefit Received

The language of the Byrd Amendment and the

manner in which distributions are made refute the

majority's “reward” theory. First, under the

majority’s reading of the statute, once an entity has

provided assistance to the ITC in an investigation, it

should be eligible for Byrd Amendment

distributions. Jd. at 1352. But that is not how the

statute operates. Instead, the qualifying

expenditures to which distributions are tied are not

based on a one-time determination. 19 U.S.C.

§§ 1675e(a), 1675c(b)(4), 1675e(d)(2)-(3). Rather,

Byrd Amendment distributions are made only to an

entity that meets the definition of “affected domestic

producer” each time it applies for benefits and has

“qualifying expenditures” at that time.

Second, eligibility for Byrd Amendment

distributions is not related to the information

provided to the ITC in the investigation, or its

quality/substance/volume, as would be expected if

the distribution mechanism actually functioned as a

“reward.” !® Further, responses to the ITC

‘9 In fact, an entity who merely checked the “petition support”

box in the ITC questionnaire can receive larger distributions

26

questionnaires are mandatory and a failure to

respond can result in a subpoena or other order to

compel the submission of records or information. 19

U.S.C. § 1333(a). The mandatory nature of the ITC

questionnaires is inconsistent with the majority's

reading of the statute.

Third, under the “reward” theory, once a party

has been determined to have assisted the ITC in an

investigation, it should be eligible for Byrd

Amendment distributions for as long as funds are

available. But that is not true for all such parties.

Section 1675c(b)(1) provides that a party who

supported and assisted in the original investigation

and then “ceased the production of the product

covered by the order or finding .. . shall not be an

affected domestic producer.” It thus will not be

eligible to receive distributions, even though it may

have qualifying expenditures that had not yet been

reimbursed through Byrd Amendment distributions.

19 U.S.C. § 1675c(b)(4). The fact that a company can

support the AD/CVD petition, and then receive no

benefits if it ceases to manufacture the covered

product at any time after the AD/CVD order is

issued, contradicts the majority’s depiction of the

statute’s purpose.

The Byrd Amendment permits members of the

domestic industry to receive subsidies from the

government (payment of part of the duties imposed

under an AD/CVD order) upon one condition -- if and

only if the producer publicly expressed support for

the petition in the course of the administrative

than an entity who supported the petition with significant

information and analysis.

27

proceeding. Jd. § 1675c(a). That is, to receive

monetary benefits from the government in its

representative capacity, a company need only check

a box on an ITC questionnaire when it responds to

compulsory process for production of information.

Accordingly, the Federal Circuit erred by basing its

decision on the fatally flawed “reward” theory.

CONCLUSION

The Petition for a Writ of Certiorari should be

eranted.

Respectfully submitted,

JAMES H. HULME

Counsel of Record

JOHN M. GURLEY

NANCY A. NOONAN

DIANA DIMITRIUC QUAIA

ARENT FOX LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 857-6000

COUNSEL FOR AMICUS CURIAE

KOYO CORPORATION OF U.S.A.

February 1, 2010