Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-12-01269/USCOURTS-ca13-12-01269-0/pdf.json

Parties Involved:
International Trade Commission
Appellee
MPB Corporation
Appellee
Schaeffler Group USA, Inc.
Appellant
Timken Company
Appellee
United States
Appellee
United States Customs and Border Protection
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

SCHAEFFLER GROUP USA, INC.,

Plaintiff-Appellant

v.

UNITED STATES, UNITED STATES CUSTOMS 

AND BORDER PROTECTION, INTERNATIONAL 

TRADE COMMISSION, THE TIMKEN COMPANY, 

MPB CORPORATION,

Defendants-Appellees

______________________ 

2012-1269

______________________ 

Appeal from the United States Court of International 

Trade in Nos. 06-CV-0432, 07-CV-0064, 07-CV-0477, 08-

CV-0387, 10-CV-0048, Judge Gregory W. Carman.

______________________ 

Decided: May 19, 2015

______________________ 

MAX FRED SCHUTZMAN, Grunfeld Desiderio Lebowitz 

Silverman & Klestadt LLP, New York, NY, argued for 

plaintiff-appellant. Also represented by ANDREW THOMAS 

SCHUTZ, KAVITA MOHAN, Washington, DC.

MARTIN M. TOMLINSON, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, Washington, DC, argued for defendants-appellees 

United States, United States Customs and Border ProtecCase: 12-1269 Document: 75-2 Page: 1 Filed: 05/19/2015
2 SCHAEFFLER GROUP USA, INC. v. US

tion. Also represented by JOYCE R. BRANDA, JEANNE E.

DAVIDSON, FRANKLIN E. WHITE, JR.; JESSICA MILLER,

SUZANNA HARTZELL-BALLARD, Office of Assistant Chief 

Counsel, United States Customs and Border Protection, 

Indianapolis, IN. 

PATRICK VINCENT GALLAGHER, JR., Office of the General Counsel, International Trade Commission, Washington, DC, argued for defendant-appellee International 

Trade Commission. Also represented by DOMINIC L.

BIANCHI, ROBIN LYNN TURNER, JAMES M. LYONS, NEAL J.

REYNOLDS. 

TERENCE PATRICK STEWART, Stewart & Stewart, 

Washington, DC, argued for defendants-appellees The 

Timken Company, MPB Corporation. Also represented by 

GEERT M. DE PREST, PATRICK JOHN MCDONOUGH. 

______________________ 

Before NEWMAN, O’MALLEY, and WALLACH, Circuit 

Judges.

Opinion for the court filed by Circuit Judge 

O’MALLEY. 

Concurring opinion filed by Circuit Judge WALLACH. 

O’MALLEY, Circuit Judge.

The Continued Dumping and Subsidy Offset Act of 

2000 (“CDSOA”) provided for the distribution of antidumping duties collected by the United States to “affected 

domestic producers” (“ADPs”) of the dumped goods. See 

Pub. L. No. 106–387, §§ 1001–03, 114 Stat. 1549, 1549A–

72 to –75 (codified at 19 U.S.C. § 1675c (2000)), repealed 

by Deficit Reduction Act of 2005, Pub. L. No. 109–171, 

§ 7601, 120 Stat. 4, 154 (Feb. 8, 2006). Schaeffler Group 

USA, Inc. (“Schaeffler”) appeals from the decision of the 

Court of International Trade (“CIT”) dismissing 

Schaeffler’s challenge to the constitutionality of the 

Case: 12-1269 Document: 75-2 Page: 2 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 3

CDSOA under the Due Process Clause of the Fifth 

Amendment of the U.S. Constitution. Schaeffler Grp. 

USA, Inc. v. United States, 808 F. Supp. 2d 1358 (Ct. Int’l 

Trade 2012). Because we find that Congress had a rational basis justifying the retroactive application of the

petition support requirement of the CDSOA, we affirm.

BACKGROUND

I 

Much of the background regarding how the CDSOA 

applies to producers of dumped goods has been explained 

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

Protection, 556 F.3d 1337 (Fed. Cir. 2009) (“SKF”). As in 

SKF, this appeal involves the petition support requirement of the now-repealed CDSOA. In an antidumping 

investigation, the International Trade Commission 

(“ITC”) must determine if the dumping of certain imports 

has materially injured or threatened material injury to 

the domestic industry. 19 U.S.C. § 1673 (2012). To assess 

material injury, the ITC sends questionnaires to foreign 

producers and exporters, as well as members of the domestic industry, seeking production and financial data. 

SKF, 556 F.3d at 1341. These questionnaires include a 

specific question asking the respondent to indicate whether they support, oppose, or take no position on the petition. Id. Relying on the information provided in these 

questionnaires, the ITC and the Department of Commerce

(“Commerce”) make final determinations that potentially 

lead to the imposition of an antidumping order. Id. The 

antidumping order imposes a duty on imported merchandise “in an amount equal to the amount by which the 

normal value exceeds the export price (or the constructed 

export price) for the merchandise,” and the United States 

Customs and Border Protection (“Customs”) agency 

collects these duties. 19 U.S.C. § 1673.

Under the CDSOA, rather than keep the collected 

duties in the United States Treasury, Customs distributCase: 12-1269 Document: 75-2 Page: 3 Filed: 05/19/2015
4 SCHAEFFLER GROUP USA, INC. v. US

ed the duties to eligible ADPs within the particular domestic industry at issue. 19 U.S.C. § 1675c(a),(e) (2000), 

repealed by Pub. L. No. 109–171, § 7601, 120 Stat. at 154. 

Only members of the domestic industry that qualified as 

ADPs were eligible to receive the CDSOA distributions. 

Id. § 1675c(b)(1). The CDSOA defined “affected domestic 

producer” as: 

[A]ny manufacturer, producer, farmer, rancher or 

worker representative (including associations of 

such persons) that—(A) was a petitioner or interested party in support of the petition with respect 

to which an antidumping duty order, a finding 

under the Antidumping Act of 1921, or a countervailing duty order has been entered, and (B) remains in operation.

Id. (emphasis added) (“petition support provision”). The 

CDSOA required the ITC to provide Customs with a list of 

all “petitioners and . . . persons” that indicated support for 

all antidumping orders in effect as of January 1, 1999. Id.

§ 1675c(d)(1). The CDSOA also required the ITC to 

provide Customs with the names of any petitioners that 

indicated support for antidumping orders issued after 

enactment of the CDSOA. Id. Customs then published 

annual lists of ADPs, including instructions for how 

eligible ADPs could make a claim for CDSOA distributions. SKF, 556 F.3d at 1345. Producers who were not on 

Customs’ annual list of ADPs could still seek CDSOA 

distributions, and Customs retained discretion over 

approval of such requests. The CDSOA applied to all 

antidumping and countervailing duties assessed and 

collected on entries between October 1, 2000, and October 

1, 2007, when Congress repealed the CDSOA. Deficit 

Reduction Act of 2005, Pub. L. No. 109–171, § 7601, 120 

Stat. at 154. Importantly, the repeal of the CDSOA was 

not retroactive—Congress stated that “[a]ll duties on 

entries of goods made and filed before October 1, 2007 . . . 

Case: 12-1269 Document: 75-2 Page: 4 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 5

shall be distributed as if [the CDSOA] had not been 

repealed.” Id. § 7601(b). 

II

Commerce initiated an antidumping investigation on 

antifriction bearings and parts thereof from the Federal 

Republic of Germany, France, Italy, Japan, Romania, 

Singapore, Sweden, Thailand, and the United Kingdom 

on April 27, 1988. Antifriction Bearings (Other than 

Tapered Roller Bearings) and Parts Thereof from France: 

Initiation of Antidumping Duty Investigation, 53 Fed. 

Reg. 15,074 (Apr. 27, 1988). The ITC instituted a material injury investigation on April 11, 1988. Antifriction 

Bearings (Other Than Tapered Roller Bearings) and Parts 

Thereof From the Federal Republic of Germany, France, 

Italy, Japan, Romania, Singapore, Sweden, Thailand, 

and the United Kingdom, 53 Fed. Reg. 11,917 (Apr. 11, 

1988). Schaeffler’s predecessor corporate entities INA 

USA Corp. (“INA”) and FAG Bearings Corp. (“FAG”)

participated in the investigations, but did not support the 

petition for any countries involved. The ITC eventually 

found a material injury to domestic industry, Views of the 

Commission, Antifriction Bearings (Other Than Tapered

Roller Bearings) and Parts Thereof from the Federal

Republic of Germany, France, Italy, Japan, Romania, 

Singapore, Sweden, Thailand, and the United Kingdom, 

USITC Pub. 2185 (May 1989), and Commerce instituted 

antidumping orders against certain classes of the relevant 

merchandise, Antidumping Duty Orders: Ball Bearings, 

Cylindrical Roller Bearings, and Spherical Plain Bearings 

and Parts Thereof From the Federal Republic of Germany, 

54 Fed. Reg. 20,900–11 (May 15, 1989).

The initial ITC list of qualifying ADPs sent to Customs included the antifriction bearings antidumping order 

issued on May 15, 1989. Customs then published its first 

notice of intent to distribute CDSOA funds on August 3, 

2001. Distribution of Continued Dumping and Subsidy 

Case: 12-1269 Document: 75-2 Page: 5 Filed: 05/19/2015
6 SCHAEFFLER GROUP USA, INC. v. US

Offset to Affected Domestic Producers, 66 Fed. Reg. 40,782, 

40,788, 40,796 (Aug. 3, 2001). Schaeffler, INA, and FAG 

were not identified as eligible ADPs on either the ITC list 

or Customs notice because INA and FAG failed to indicate 

their support for the petition in the questionnaires they 

submitted during the ITC’s material injury investigation. 

Schaeffler also did not appear as an ADP on any of the 

later notices of intent issued by Customs. 

Schaeffler filed a written request with the ITC on May 

4, 2007, seeking to be included as an ADP. Before receiving a response from the ITC, Schaeffler also filed a certification request with Customs on July 30, 2007, this time 

seeking a CDSOA distribution for fiscal year 2007. The 

ITC denied Schaeffler’s request on August 2, 2007, and 

Customs denied Schaeffler’s request on September 28, 

2007. Schaeffler again petitioned Customs for CDSOA 

distributions for fiscal years 2008 and 2009, and Customs 

denied both requests. 

Schaeffler also filed a series of complaints in the CIT 

between 2006 and 2009 seeking review of the determinations of the ITC and Customs, as well as challenging the 

constitutionality of the CDSOA. Schaeffler Grp., 808 F. 

Supp. 2d at 1359–60. The court stayed Schaeffler’s complaints pending resolution of the constitutional issues 

raised in Pat Huval Restaurant & Oyster Bar, Inc. v. 

United States. Schaeffler Grp., 808 F. Supp. 2d at 1359–

60. After we issued our decisions in SKF and P.S. Chez 

Sidney v. U.S. International Trade Commission, 409 F. 

App’x 327 (Fed. Cir. 2010), upholding the constitutionality 

of the CDSOA against First Amendment and equal protection challenges, the CIT consolidated Schaeffler’s 

complaints. The ITC and intervenors Timken Company 

and MPB Corporation (“Timken”) then moved to dismiss 

the complaints and sought judgment on the pleadings. 

Schaeffler Grp., 808 F. Supp. 2d at 1359–60.

Case: 12-1269 Document: 75-2 Page: 6 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 7

Schaeffler challenged the petition support requirement of the CDSOA under three provisions of the Constitution: (1) the free speech clause of the First Amendment 

as applied against Schaeffler; (2) the equal protection 

guarantees of the Due Process Clause of the Fifth 

Amendment as applied against Schaeffler; and (3) the 

substantive guarantees of the Due Process Clause of the 

Fifth Amendment. Id. at 1361. The CIT first held that 

Schaeffler failed to plead facts sufficient to distinguish its 

First Amendment and equal protection claims from those 

alleged and rejected in SKF. Id. at 1362–63. The CIT 

also concluded that the Supreme Court’s then-recent 

decisions in Snyder v. Phelps, 562 U.S. 443 (2011), and 

Citizens United v. Federal Election Commission, 558 U.S. 

310 (2010), did not undermine our analysis in SKF. 

Schaeffler Grp., 808 F. Supp. 2d at 1362–63. Schaeffler 

has not appealed the CIT’s First Amendment and equal 

protection determinations. 

The CIT further concluded that the CDSOA petition 

support requirement is not impermissibly retroactive 

under the Due Process Clause. Id. at 1363. Relying on its 

recent decision in New Hampshire Ball Bearing, Inc. v. 

United States, 815 F. Supp. 2d 1301 (Ct. Int’l Trade 2012), 

the court found “that ‘it would not be arbitrary or irrational for Congress to conclude that the legislative purpose of rewarding domestic producers who supported 

antidumping petitions . . . would be ‘more fully effectuated’ if the petition support requirement were applied both 

prospectively and retroactively.’” Id. (quoting N.H. Ball 

Bearing, 815 F. Supp. at 1309). Concluding that the 

retroactive reach of the petition support requirement in 

the CDSOA was “justified by a rational legislative purpose,” the court dismissed Schaeffler’s due process cause 

of action for failure to state a claim upon which relief can 

be granted. Id.

Schaeffler filed a timely notice of appeal on March 14, 

2012, challenging only the CIT’s Due Process Clause 

Case: 12-1269 Document: 75-2 Page: 7 Filed: 05/19/2015
8 SCHAEFFLER GROUP USA, INC. v. US

ruling.1 We have jurisdiction pursuant to 28 U.S.C. 

§ 1295(a)(5). 

DISCUSSION

I 

We review issues of constitutional interpretation de 

novo. Ashley Furniture Indus., Inc. v. United States, 734 

F.3d 1306, 1309 (Fed. Cir. 2013) (citations omitted). 

Economic legislation “come[s] to the Court with a presumption of constitutionality,” Concrete Pipe & Prods. of 

Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal., 

508 U.S. 602, 637 (1993), which is “extremely difficult to 

overcome,” Wheeler v. United States, 768 F.2d 1333, 1337 

(Fed. Cir. 1985); see also Commonwealth Edison Co. v. 

United States, 271 F.3d 1327, 1338 (Fed. Cir. 2001) (en 

banc). 

This is not the first appeal where our court has considered the constitutionality of the petition support requirement of the CDSOA. In SKF, the petitioner argued 

that the CDSOA violated the First Amendment because it 

authorized impermissible viewpoint discrimination, and 

violated the equal protection guarantees of the Due 

Process Clause because there was “no rational basis for 

distributing antidumping duties only to domestic producers who supported an antidumping petition, and excluding similarly situated domestic producers who opposed or 

took no position on a petition.” SKF, 556 F.3d at 1346. 

The SKF majority first concluded that the petition support provision was valid under the First Amendment. Id.

at 1349–60. Applying the doctrine of constitutional 

1 We stayed Schaeffler’s appeal pending the appeal 

in Ashley Furniture Industries, Inc. v. United States, 734 

F.3d 1306 (Fed. Cir. 2013). Upon our resolution of Ashley 

Furniture, we lifted the stay of Schaeffler’s appeal on 

February 20, 2014. 

 

Case: 12-1269 Document: 75-2 Page: 8 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 9

avoidance, the majority found that “the purpose of the 

[CDSOA’s] limitation of eligible recipients was to reward 

injured parties who assisted government enforcement of 

the antidumping laws by initiating or supporting antidumping proceedings,” and that “the reward construction 

of the [CDSOA] is reasonable.” Id. at 1352–53. The 

majority determined that SKF’s responses to the ITC 

questionnaires are protected speech, and analyzed the

“reward rationale” for the CDSOA under the commercial 

speech test outlined in Central Hudson Gas & Electric 

Corp. v. Public Service Commission of New York, 447 U.S. 

557, 461 (1980). SKF, 556 F.3d at 1354–60. Under the 

intermediate scrutiny of the Central Hudson test, the 

majority held that “the government has a substantial 

interest in rewarding those who assist in the enforcement 

of government policy” and that domestic industry participants that oppose petitions but still respond to the questionnaire provide information to the ITC and Commerce, 

but it was “rational for Congress to conclude that those 

who did not support the petition should not be rewarded,” 

in successful enforcement actions. Id. at 1357–59.

The SKF panel similarly analyzed the “reward rationale” under SKF’s equal protection challenge. Id. at 

1360. Applying rational basis review, the panel found 

“that the [CDSOA] is rationally related to the government’s legitimate purpose of rewarding parties who 

promote the government’s policy against dumping.” Id. 

Judge Linn wrote a lengthy dissent disagreeing with the 

majority’s First Amendment analysis. Id. at 1361–78 

(Linn, J., dissenting). Judge Linn, however, agreed with 

the majority that the CDSOA would survive rational basis 

review. Id. at 1378 n.8 (“I agree with the majority’s 

conclusion that, if the [CDSOA] were subject to rational 

basis review under the Equal Protection Clause, it would 

survive—though I do so for different reasons. Though the 

petition support requirement is not a good proxy for the 

seriousness of a domestic producer’s injury, I would not 

Case: 12-1269 Document: 75-2 Page: 9 Filed: 05/19/2015
10 SCHAEFFLER GROUP USA, INC. v. US

conclude, as the Court of International Trade did, that it 

is an irrational proxy.”). We affirmed in PS Chez Sidney

that “SKF is controlling with regards to all constitutional 

issues presented.” 409 F. App’x at 329; see also Ashley 

Furniture, 734 F.3d at 1310 (“SKF resolved the facial 

First Amendment challenge presented in these cases. We 

are bound to follow this precedent . . . .”).

As mentioned, the CIT previously upheld the petition 

support requirement as constitutional in the face of a Due 

Process Clause challenge in New Hampshire Ball Bearing. 

815 F. Supp. 2d at 1306–09. The CIT found that the 

petition support requirement had retroactive effect “in 

that it conditions the receipt of distributions on support 

decisions including support decisions that were made 

before the statute was passed.” Id. at 1307. Applying 

Supreme Court precedent from Usery v. Turner Elkhorn 

Mining Co., 428 U.S. 1, 15 (1976), and Pension Benefit 

Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 729 

(1984), the CIT concluded that the petitioner could not 

“meet the burden of showing that Congress acted arbitrarily and without a rational legislative purpose in 

retroactively applying the petition support requirement in 

the CDSOA.” N.H. Ball Bearing, 815 F. Supp. 2d at 1309. 

The CIT found that the “reward rationale” identified by 

the SKF panel justified the retroactive application of the 

CDSOA petition support requirement, even though the 

analysis in SKF did not separately address retroactivity. 

Id. The court determined that because “Congress provided a reward mechanism that was considerably more 

comprehensive than the one based only on a prospective 

scheme,” the “retroactive reach of the petition support 

requirement . . . is justified by a rational legislative 

purpose . . . .” Id.; see also id. (“It was not arbitrary or 

irrational for Congress to conclude that the legislative 

purpose of rewarding domestic producers who supported 

antidumping petitions . . . would be more fully effectuated 

if the petition support requirement were applied both 

Case: 12-1269 Document: 75-2 Page: 10 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 11

prospectively and retrospectively.” (internal citation 

omitted)).

II

A 

As an initial matter, the ITC argues that the CDSOA 

was not retroactive legislation under the test set out in 

Princess Cruises, Inc. v. United States, 397 F.3d 1358 

(Fed. Cir. 2005). The ITC states that, under the threefactor test described in Princess Cruises, the CDSOA did 

not impose any new duty or disability on Schaeffler’s past 

actions, Schaeffler could not have had settled expectations 

that it would receive distributions prior to enactment of 

the CDSOA, and there was an insufficient degree of 

connection between the CDSOA and Schaeffler’s past 

conduct. ITC Br. at 18–21. Schaeffler, Customs, and 

Timken, on the other hand, all agree that the CDSOA 

applied retroactively. 

We agree with Schaeffler, Customs, and Timken that 

the CDSOA applied retroactively. See Pat Huval Rest. & 

Oyster Bar, Inc. v. Int’l Trade Comm’n, No. 2012-1250, 

2015 WL 2108514, at *3–4 (Fed. Cir. May 7, 2015) (holding that the CDSOA is “retroactive in effect”). The court 

in Princess Cruises adopted the test for retroactivity from 

the Supreme Court’s opinion in Landgraf v. USI Film 

Products, 511 U.S. 244 (1994). The Landgraf court made 

clear, however, that when Congress “expressly prescribed

the statute’s proper reach . . . . there is no need to resort 

to judicial default rules.” Id. at 290; see also id. at 264 (In 

other words, “[w]here the congressional intent is clear, it 

governs.”). When a statute, on its face, applies retroactively, it is unnecessary for us to rely on the factors identified by Landgraf and Princess Cruises. 

Section 1675c(d)(1) states that the ITC must forward 

a list of ADPs to Customs “in the case of orders or findings 

in effect on January 1, 1999.” SKF, 556 F.3d at 1341 n.3. 

Case: 12-1269 Document: 75-2 Page: 11 Filed: 05/19/2015
12 SCHAEFFLER GROUP USA, INC. v. US

Commerce then used this list to determine the parties 

eligible for the initial CDSOA distributions based on their 

response to questionnaires predating the CDSOA. Id. 

Congress passed the CDSOA on October 28, 2000, thus it 

is clear on the face of the statute that the petition support 

requirement applied to conduct (i.e., responses to a questionnaire question) that occurred prior to enactment of 

the statute. The statute expressly has retroactive effect, 

so we need not rely on the Princess Cruises analysis to 

conclude that the CDSOA petition support requirement 

applies retroactively. Because this provision has retroactive effect, we must continue our analysis to determine if 

that retroactive effect violates the Due Process Clause of 

the Fifth Amendment.

B 

Schaeffler argues that the petition support requirement of the CDSOA violated the Due Process Clause by 

being impermissibly retroactive. In response, Customs

and Timken first question whether Schaeffler established 

that it had any property interest protected by the Due 

Process Clause. Customs Br. at 19–23. Customs and 

Timken contend that, to succeed on a Due Process Clause

challenge, the petitioner must first demonstrate that it

has a protected property interest. Customs and Timken 

claim that Schaeffler has only shown that it had a reliance interest in the pre-CDSOA antidumping laws remaining unchanged, or that it had a protected interest in 

the government not providing substantial economic 

assistance to its competitors—neither of which, according 

to Customs and Timken, is a sufficient property interest 

protected by the Due Process Clause. Schaeffler responds 

that it has a protected property interest because, when it 

checked the box to oppose a petition, it believed that it 

would not be subjecting itself to competitive harm 

through the aggrandizement of its competitors. Reply Br. 

at 2–6. 

Case: 12-1269 Document: 75-2 Page: 12 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 13

We recently addressed a similar dispute involving a 

Due Process Clause challenge to the retroactive effect of 

an amendment to the Tariff Act of 1930 regarding nonmarket economies. GPX Int’l Tire Corp. v. United States, 

780 F.3d 1136 (Fed. Cir. 2015). In GPX, the government 

similarly alleged that the petitioner lacked a vested right 

protected by the Due Process Clause, which, it argued,

precluded us from having to perform a rational basis 

analysis. We recognized that “the outcome of the due 

process analysis [does not] depend[] upon a determination 

that a vested right exists,” and that, although the “vested 

right analysis . . . may be relevant to the due process 

analysis, it is not a threshold test.” Id. at 1141 (citing 

Weaver v. Graham, 450 U.S. 24, 29–30 (1981) (“Evaluating whether a right has vested is important for claims 

under the Contracts or Due Process Clauses, which solely 

protect pre-existing entitlements.”)). Similarly, here, 

although the vested rights analysis requested by the 

government may be “relevant to the due process analysis,” 

we choose not to reach that question because we find that 

Congress had a rational basis for the retroactive effect of 

the petition support requirement. See Pat Huval, 2015 

WL 2108514, at *4 n.2 (declining to address “whether the 

competitive injury [under the CDSOA] claimed by the 

appellants constitutes a deprivation of a cognizable property interest of the sort sufficient to trigger procedural 

due process rights”). We, thus, assume without deciding, 

for purposes of our analysis, that Schaeffler had a protected property interest implicating the Due Process 

Clause. See, e.g., Dist. Attorney’s Office for the Third 

Judicial Dist. v. Osborne, 557 U.S. 52, 67 (2009) (assuming without deciding that the respondent “invoked the 

proper federal statute in bringing his claim,” because the 

Court’s “resolution of [respondent’s] claim does not require us to resolve this difficult issue”).

Case: 12-1269 Document: 75-2 Page: 13 Filed: 05/19/2015
14 SCHAEFFLER GROUP USA, INC. v. US

C 

Schaeffler challenges the retroactive application of the 

petition support requirement of the CDSOA as a violation 

of the Due Process Clause. “It is by now well established 

that legislative Acts adjusting the burdens and benefits of 

economic life come to the Court with a presumption of 

constitutionality, and that the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way.” Usery, 

428 U.S. at 15. Specifically, retroactive legislation is “not 

unlawful solely because it upsets otherwise settled expectations . . . even though the effect of the legislation is to 

impose a new duty or liability based on past acts.” Id. at 

16. 

The retrospective aspects of an Act of Congress must, 

however, meet the requirements of due process—the 

justification for the Act “must take into account the 

possibility that the [plaintiffs] may not have known of the 

danger . . . and that even if they did know of the danger 

their conduct may have been taken in reliance upon the 

current state of the law.” Id. at 17. Based on these 

considerations, the Supreme Court has established a test 

for analyzing retroactive economic legislation under the 

Due Process Clause—“the retroactive application of a 

statute” must be “supported by a legitimate legislative 

purpose furthered by rational means.” Gray, 467 U.S. at

729; see also General Motors v. Romein, 503 U.S. 181, 191 

(1992). The burden placed on retroactive legislation “is 

met simply by showing that the retroactive application of 

the legislation is itself justified by a rational legislative 

purpose.” Id. at 730. 

Under this analysis, the Supreme Court has, for example, upheld a retroactive requirement that mine owners provide compensation to former employees disabled 

due to black lung disease “bred during employment” as a 

“rational measure to spread the costs of the employees’ 

Case: 12-1269 Document: 75-2 Page: 14 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 15

disabilities,” Usery, 428 U.S. at 15–18; upheld retroactive 

amendments to ERISA enacted to prevent employers from 

withdrawing early from multiparty pension plans due to 

pending changes in the law that would impose larger

contributions from the employer as a rational means of 

preventing employers from “taking advantage of the 

lengthy legislating process,” Gray, 467 U.S. at 729–32;

upheld a retroactive statute passed by the Michigan 

legislature to “correct[] the unexpected results of the 

Michigan Supreme Court’s . . . opinion” involving payment of workers’ compensation benefits, Romein, 503 U.S. 

at 191; and upheld a retroactive change to an estate tax 

deduction as a rational approach taken to “correct what 

[Congress] reasonably viewed as a mistake” in the original provision of the Tax Code granting the deduction, 

United States v. Carlton, 512 U.S. 26, 31–34 (1994). See 

also Commonwealth Edison, 271 F.3d at 1344–45 (listing 

examples where the Supreme Court upheld retroactive 

legislation against a Due Process Clause challenge). And, 

as mentioned, we recently upheld a retroactive change to 

how antidumping and countervailing duties are applied to

non-market economies under the Tariff Act of 1930 

against a Due Process Clause challenge. GPX Int’l, 780 

F.3d at 1142–44 (noting five “considerations” relevant to 

the rational basis analysis under the Due Process Clause).

 Schaeffler thus has the burden to establish that 

Congress “acted in an arbitrary and irrational way” when 

it applied the petition support requirement of the CDSOA 

to conduct pre-dating the Act. Usery, 428 U.S. at 15. 

Schaeffler argues that the retroactive application of the 

CDSOA could not support a “legitimate legislative purpose,” Gray, 467 U.S. at 729, because rewarding speech 

that predated the Act would not assist the government in 

preventing dumping at the time of the CDSOA—the 

“reward rationale” would only support prospective application of the petition support requirement because a 

reward can only affect conduct once the industry had 

Case: 12-1269 Document: 75-2 Page: 15 Filed: 05/19/2015
16 SCHAEFFLER GROUP USA, INC. v. US

notice of the effect of choosing to support or not support a 

petition. Appellant Br. at 24–25. Schaeffler further 

argues that, in SKF, the panel explained that the petition 

support requirement incentivized, rather than rewarded,

domestic producers to support petitions. Reply Br. at 7–

12. And, because an incentive can only affect parties with 

notice of the incentive, the retroactive effect of the 

CDSOA’s petition support requirement would not be 

justified by a rational basis. Id. In response, Customs, 

the ITC, and Timken all argue that the rational basis 

identified in SKF is sufficient to justify retroactive application of the petition support requirement, and that the 

SKF majority clearly explained that the purpose of the 

petition support requirement was to reward support of 

petitions, not merely to incentivize future conduct.

Rational basis review of economic legislation under 

the Due Process Clause is highly deferential to Congress, 

and we hold that Schaeffler has failed to demonstrate 

that the retroactive application of the petition support 

requirement was not “supported by a legitimate legislative purpose furthered by rational means.” Gray, 467 

U.S. at 729; see also Pat Huval, 2015 WL 2108514, at *4–

6 (determining that “[t]he SKF court’s conclusion that the 

statute promoted a substantial governmental interest in a 

rational manner . . . is nonetheless squarely applicable 

here”). It is true that SKF involved a prospective equal 

protection challenge, and the scope of the rational basis 

analysis under the Equal Protection Clause may not 

always be coextensive with the rational basis analysis 

under the substantive component of the Due Process 

Clause, especially “[w]hen a law exhibits . . . a desire to 

harm a politically unpopular group.” See Lawrence v. 

Texas, 539 U.S. 558, 580–82 (2003) (O’Connor, J., concurring in the judgment) (noting that the government’s 

interest in promoting morality was considered a sufficient 

justification to uphold a state law criminalizing sodomy 

under a due process challenge in Bowers v. Hardwick, 478 

Case: 12-1269 Document: 75-2 Page: 16 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 17

U.S. 186 (1986), but not for rational basis review under 

the Equal Protection Clause). For review of the petition 

support requirement, however, we find that the rational 

basis justification identified by the SKF panel in its equal 

protection analysis also provides a sufficient rational 

basis under a due process challenge. See, e.g., Armour v. 

City of Indianapolis, 132 S. Ct. 2073, 2080 (2012) (citing 

to both due process and equal protection challenges in 

explaining the thrust of rational basis review); Zablocki v. 

Redhail, 434 U.S. 374, 407 (1978) (Rehnquist, J., dissenting) (same). And Schaeffler has failed to demonstrate that

a prospective analysis of the petition support requirement 

under rational basis review pursuant to equal protection 

grounds would differ from rational basis review under the

substantive aspects of the Due Process Clause in this 

case. The only question remaining is if the rational basis 

identified by the SKF panel justifies retroactive application of the petition support requirement under the Due 

Process Clause. 

Schaeffler claims that the SKF panel found the petition support requirement justified because it acted as an 

incentive for domestic parties to support an antidumping 

petition. But nowhere in the SKF opinion did the court 

state that the petition support requirement acted as an 

incentive—the panel bluntly stated that “the purpose of 

the Byrd Amendment’s limitation of eligible recipients 

was to reward injured parties who assisted government 

enforcement of the antidumping laws . . . .” SKF, 556 

F.3d at 1352; see also id. at 1353 (referring to its approach 

as the “reward justification,” and stating that “the language of the [CDSOA] is easily susceptible to a construction that rewards action . . . .”). The panel later reiterated 

that the “government has a substantial interest in rewarding those who assist in the enforcement of government policy.” Id. at 1355. Although Schaeffler is correct 

that the panel’s comparisons to qui tam and whistleblower actions may also potentially support an incentive 

Case: 12-1269 Document: 75-2 Page: 17 Filed: 05/19/2015
18 SCHAEFFLER GROUP USA, INC. v. US

justification for the CDSOA, these references, alone, do 

not abrogate the clear language of SKF, concluding that a 

“reward justification” provides the necessary rational 

basis to justify the petition support requirement under an 

equal protection challenge to the CDSOA. See Pat 

Huval, 2015 WL 2108514, at *6–7 (holding the reward 

justification to be a valid legislative purpose). We are 

bound by that unequivocal holding. Deckers Corp. v. 

United States, 752 F.3d 949, 959 (Fed. Cir. 2014) (“In this 

Circuit, a later panel is bound by the determinations of a 

prior panel, unless relieved of that obligation by an en 

banc order of the court or a decision of the Supreme 

Court.”).

Under the “reward justification” developed in SKF, we 

find that the retroactive application of the petition support requirement of the CDSOA is “supported by a legitimate legislative purpose furthered by rational means.” 

Gray, 467 U.S. at 729. Congress could have rationally 

decided to reward those parties that supported antidumping orders entered both before and after Congress enacted 

the CDSOA. See N.H. Ball Bearing, 815 F. Supp. 2d at 

1309 (“It was not arbitrary or irrational for Congress to 

conclude that the legislative purpose of rewarding domestic producers who supported antidumping petitions . . . 

would be more fully effectuated if the petition support 

requirement were applied both prospectively and retrospectively.” (internal citation omitted)). Producers that 

supported antidumping petitions before and after the 

CDSOA contributed equally to eventual antidumping 

orders, making it rational for Congress to have treated 

these two groups similarly when providing rewards. 

Congress could have rationally envisioned the petition

support requirement as a means of granting a reward to 

those parties that supported antidumping petitions even 

before Congress enacted the CDSOA. We conclude that 

the retroactive application of the petition support requirement of the CDSOA is justified by a rational basis 

Case: 12-1269 Document: 75-2 Page: 18 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 19

sufficient to meet the requirements of the Due Process 

Clause of the Fifth Amendment.

CONCLUSION

Because we conclude that the retroactive application 

of the petition support requirement of the CDSOA rationally relates to the government’s interest in rewarding

members of the domestic industry that supported antidumping petitions, we affirm the CIT’s determination 

that the petition support requirement does not violate the 

Due Process Clause of the Fifth Amendment. 

AFFIRMED

Case: 12-1269 Document: 75-2 Page: 19 Filed: 05/19/2015
United States Court of Appeals 

for the Federal Circuit ______________________ 

SCHAEFFLER GROUP USA, INC.,

Plaintiff-Appellant

v.

UNITED STATES, UNITED STATES CUSTOMS 

AND BORDER PROTECTION, INTERNATIONAL 

TRADE COMMISSION, THE TIMKEN COMPANY, 

MPB CORPORATION,

Defendants-Appellees

______________________ 

2012-1269

______________________ 

Appeal from the United States Court of International 

Trade in Nos. 06-CV-0432, 07-CV-0064, 07-CV-0477, 08-

CV-0387, 10-CV-0048, Judge Gregory W. Carman.

______________________ 

WALLACH, Circuit Judge, concurring. 

I agree the district court correctly dismissed the challenge of Schaeffler Group USA, Inc. (“Schaeffler”), under 

the Fifth Amendment’s Due Process Clause, to the Continued Dumping and Subsidy Offset Act of 2000 

(“CDSOA”), Pub. L. No. 106-387, §§ 1001–03, 114 Stat. 

1549, repealed by Deficit Reduction Act of 2005, Pub. L. 

No. 109-171, § 7601(a), 120 Stat. 4, 154 (2006). This 

court’s precedent requires that outcome. See SKF USA, 

Inc. v. U.S. Customs & Border Prot., 556 F.3d 1337, 1360 

(Fed. Cir. 2009) (holding the petition support requirement 

of the CDSOA was constitutional under both the First 

Case: 12-1269 Document: 75-2 Page: 20 Filed: 05/19/2015
2 SCHAEFFLER GROUP USA, INC. v. US

Amendment and Equal Protection Clause because it 

“furthers the government’s substantial interest in enforcing the trade laws”). I write separately because, in my 

view, SKF incorrectly concluded the retroactive application of the CDSOA rationally furthers a legitimate government interest, and SKF should therefore be overruled 

by this court sitting en banc. See Fed. Cir. R. 35(a)(1) 

(“[O]nly the court en banc may overrule a binding precedent.”). 

I. UNDER THE DUE PROCESS CLAUSE, THE RETROACTIVE 

APPLICATION OF A STATUTE MUST BE SUPPORTED BY A 

LEGITIMATE PURPOSE FURTHERED BY RATIONAL MEANS

The Constitution’s Due Process Clause provides that 

“[n]o person shall . . . be deprived of life, liberty, or property, without due process of law.” U.S. Const. amend. V. 

The Due Process Clause guarantees both “substantive due 

process” and “procedural due process.” United States v. 

Salerno, 481 U.S. 739, 746 (1987). Only substantive due 

process is at issue in this appeal. 

The Supreme Court has explained that the guarantee 

of substantive due process prevents the government from 

engaging in conduct, such as the enactment of legislation, 

“that ‘shocks the conscience,’ or interferes with rights 

‘implicit in the concept of ordered liberty.’” Id. (quoting 

Rochin v. California, 342 U.S. 165, 172 (1952); Palko v. 

Connecticut, 302 U.S. 319, 325–26 (1937)). Where no 

fundamental right is at issue, legitimate government 

action will normally be upheld so long as there is a rational basis for it. See Lawrence v. Texas, 539 U.S. 558, 

588 (2003) (Scalia, J., dissenting) (“[O]nly fundamental 

rights which are deeply rooted in this Nation’s history and 

tradition qualify for anything other than rational-basis 

scrutiny under the doctrine of substantive due process.”) 

(internal quotation marks omitted). Specifically, “in the 

field of national economic policy,” the Court has held the 

Due Process Clause will not serve to invalidate a retroacCase: 12-1269 Document: 75-2 Page: 21 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 3

tive statute so long as “the retroactive application of [the] 

statute is supported by a legitimate legislative purpose 

furthered by rational means.” Pension Benefit Guar. 

Corp. v. R.A. Gray & Co., 467 U.S. 717, 729 (1984) (emphases added). 

II. THE CDSOA’S RETROACTIVE APPLICATION IS NOT 

SUPPORTED BY A LEGITIMATE LEGISLATIVE PURPOSE 

FURTHERED BY RATIONAL MEANS

A. Stated Legislative Purpose

When Congress enacted the CDSOA in 2000, it explained the purpose of the legislation in a section titled 

“Findings of Congress”: 

Congress makes the following findings:

(1) Consistent with the rights of the United States 

under the World Trade Organization, injurious 

dumping is to be condemned and actionable subsidies which cause injury to domestic industries 

must be effectively neutralized. 

(2) United States unfair trade laws have as their 

purpose the restoration of conditions of fair trade

so that jobs and investment that should be in the 

United States are not lost through the false market signals.

(3) The continued dumping or subsidization of imported products after the issuance of antidumping 

orders or findings or countervailing duty orders 

can frustrate the remedial purpose of the laws by 

preventing market prices from returning to fair 

levels. 

(4) Where dumping or subsidization continues, 

domestic producers will be reluctant to reinvest or 

rehire and may be unable to maintain pension 

and health care benefits that conditions of fair 

trade would permit. Similarly, small businesses 

Case: 12-1269 Document: 75-2 Page: 22 Filed: 05/19/2015
4 SCHAEFFLER GROUP USA, INC. v. US

and American farmers and ranchers may be unable to pay down accumulated debt, to obtain working capital, or to otherwise remain viable.

(5) United States trade laws should be strengthened to see that the remedial purpose of those laws 

is achieved. 

Pub. L. No. 106–387, § 1002, 114 Stat. 1549 (2000) (codified at 19 U.S.C. § 1675c (2000)) (emphases added) 

(“CDSOA Findings”). These findings indicate the stated 

purpose of the CDSOA is to “strengthen[]” the trade laws 

so they may achieve their “remedial purpose,” CDSOA 

Findings ¶ 5, and that the purpose of United States unfair 

trade laws generally is “the restoration of conditions of 

fair trade,” id. ¶ 2; see also Gov’t Accountability Office, 

GAO-05-979, Issues and Effects of Implementing the 

Continued Dumping and Subsidy Offset Act 3 (2005), 

available at http://www.gao.gov/new.items/d05979.pdf 

(explaining that “in passing CDSOA, Congress aimed to 

strengthen the remedial nature of U.S. trade laws”). 

To the extent CDSOA distributions “restor[e] . . . conditions of fair trade,” CDSOA Findings ¶ 2, they do so 

differently than the antidumping and countervailing 

duties from which they are drawn. Antidumping duties 

by statute must be imposed “in an amount equal to the 

amount by which the normal value exceeds the export 

price (or the constructed export price) for the merchandise.” 19 U.S.C. § 1673; see also 19 U.S.C. § 1671(a) 

(Countervailing duties are to be imposed in an amount 

“equal to the amount of the net countervailable subsidy.”). 

By imposing a duty in an amount that offsets unlawfully 

low prices, these orders serve to “neutralize[]” the effects 

of dumping or actionable subsidies. See CDSOA Findings 

¶ 1. Because they apply generally to imported goods that 

compete with domestically produced goods, the duties 

serve to remedy harm to the domestic industry as a 

whole. 

Case: 12-1269 Document: 75-2 Page: 23 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 5

By contrast, CDSOA subsidies are drawn from the antidumping duties collected by United States Customs and 

Border Protection and redistributed to only those members of industry who supported the antidumping petition. 

See SKF, 556 F.3d at 1341–42; id. at 1351 (The CDSOA 

“did not compensate all injured domestic producers.”). 

Because antidumping and countervailing duties already 

help to restore conditions of fair trade by raising the price 

of imported goods to their fair value, an argument could 

be made that CDSOA distributions do not promote the 

restoration of fair trade but instead constitute a double 

remedy, an issue not addressed by the SKF court.1 

1 The extent to which the CDSOA promotes fair 

trade was called into question by the report of the World 

Trade Organization’s Appellate Body, which found the 

CDSOA “inconsistent with certain [United States treaty 

obligations under] the Anti-Dumping Agreement and the 

[Agreement on Subsidies and Countervailing Measures].” 

World Trade Organization, Report of the Appellate Body,

United States—Continued Dumping and Subsidy Offset 

Act of 2000, WT/DS234/AB/R ¶ 318(b) (Jan. 16, 2003)

(“Appellate Body Report”); see also Giorgio Foods, Inc. v. 

United States, No. 2013-1304, 2015 WL 1865702, at *14 

(Fed. Cir. Apr. 24, 2015) (Reyna, J., dissenting) 

(“[P]etition support expressions, in [U.S. International 

Trade Commission] questionnaire responses, do not 

further the enforcement of antidumping laws.”). The 

Appellate Body stated that “[o]ffset payments to ‘affected 

domestic producers’ when combined with anti-dumping 

duties operate to impose a double remedy in respect of 

dumped goods.” Appellate Body Report ¶ 43. The 

CDSOA was repealed after the Appellate Body’s ruling. 

Deficit Reduction Act of 2005, Pub. L. No. 109-171, 

 

Case: 12-1269 Document: 75-2 Page: 24 Filed: 05/19/2015
6 SCHAEFFLER GROUP USA, INC. v. US

There is little doubt that restoring conditions of fair 

trade is a legitimate government interest. However, even 

assuming the CDSOA as a whole promotes this interest, 

to survive substantive due process scrutiny the legitimate 

interest must be rationally furthered not only by the 

legislation as a whole, but also by the retroactive portion 

of the legislation. Gray, 467 U.S. at 730 (“‘The retroactive 

aspects of legislation, as well as the prospective aspects, 

must meet the test of due process, and the justifications 

for the latter may not suffice for the former.’” (quoting 

Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 17 

(1976)); Landgraf v. USI Film Prods., 511 U.S. 244, 266 

(1994) (“[A] justification sufficient to validate a statute’s 

prospective application under the [Due Process] Clause 

may not suffice to warrant its retroactive application.”) 

(internal quotation marks and citation omitted). 

The problem with the CDSOA is that the asserted explanation of how the retroactive portion of the legislation 

rationally furthers the government’s legitimate interest in 

restoring conditions of fair trade borders on the frivolous. 

In SKF, the government asserted the retroactive aspect of 

the CDSOA promotes the restoration of fair trade by 

compensating those who were injured by dumping, and 

petition support is merely a surrogate for injury. See 

SKF, 556 F.3d at 1351. In the government’s view, those 

members of the domestic industry that supported the 

petition are assumed to have suffered the greatest injury. 

Id. Although the SKF court upheld the law and agreed 

the CDSOA as a whole “was designed to compensate 

domestic producers injured by dumping,” the court rejected the government’s argument that the petition support 

requirement served only to identify those suffering the 

§ 7601(a), 120 Stat. 4, 154 (Feb. 8, 2006; effective Oct. 1, 

2007).

 

Case: 12-1269 Document: 75-2 Page: 25 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 7

greatest injury, finding this rationale “simply implausible 

in light of . . . the absence of any evidence in the legislative history that the support requirement was designed as 

a proxy for injury, and the availability of far more direct 

and accurate methods of measuring injury.” Id. at 1350, 

1351. 

The restoration of conditions of fair trade might have 

been rationally furthered by the retroactive portion of the 

CDSOA had Congress chosen to either compensate all 

injured industry members or allocate funds in some 

colorable relation to injury. However, petition support as 

a proxy for injury is far too inaccurate a measure if indeed 

it relates to injury at all. As explained by the dissent in 

SKF, “[A] domestic producer might oppose a petition to 

protect business relationships in foreign countries having 

nothing to do with the domestic market, or it might 

decline to support a petition for fear of retaliation in 

export markets.” SKF, 556 F.3d at 1374 (Linn, J., dissenting). Indeed, although not controlling on the issue of 

congressional intent, id. at 1352, the United States took 

the position before the World Trade Organization that 

“[t]he amount of the [CDSOA] distributions have [sic] 

nothing to do with the injury to the domestic producer or 

the recovery of ‘damages’ by the domestic producer.” 

World Trade Organization, Report of the Panel, United 

States—Continued Dumping and Subsidy Offset Act of 

2000, WT/DS217/R, WT/DS234/R ¶ 4.502 (Sept. 16, 2002), 

aff’d, Appellate Body Report (emphasis added). 

While “under the deferential standard of review applied in substantive due process challenges to economic 

legislation there is no need for mathematical precision in 

the fit between justification and means,” Concrete Pipe & 

Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for 

S. Cal., 508 U.S. 602, 639 (1993), an inappropriate means 

must, at some point, become unconstitutionally arbitrary, 

Washington v. Glucksberg, 521 U.S. 702, 735 (1997) 

(finding the means employed by the government to be “at 

Case: 12-1269 Document: 75-2 Page: 26 Filed: 05/19/2015
8 SCHAEFFLER GROUP USA, INC. v. US

least reasonably related” to “unquestionably important 

and legitimate” interests); see also Reno v. Flores, 507 

U.S. 292, 305 (1993) (The Due Process Clause “demands 

no more than a reasonable fit between government purpose . . . and the means chosen to advance that purpose.”) 

(internal quotation marks omitted) (emphasis added); cf. 

FCC v. Beach Comm’cns, Inc., 508 U.S. 307, 313–14 

(1993) (stating that a statutory classification will be 

upheld “if there is any reasonably conceivable state of 

facts that could provide a rational basis for [it]”) (emphasis added); Nordlingher v. Hahn, 505 U.S. 1, 11 (1992) 

(“[T]he relationship of the classification to its goal” must 

not be “so attenuated as to render the distinction arbitrary or irrational.”). The due process right may not 

require that Congress’s actions reflect “mathematical 

exactitude” in fitting means to ends, City of New Orleans 

v. Dukes, 427 U.S. 297, 303 (1976), but the connection 

between means and ends must be grounded on something 

more than an unreasonable, hypothetical connection that 

the United States has expressly disclaimed in related 

proceedings. 

Moreover, the problem the government was facing 

was not one that “may justify, if . . . not require, rough 

accommodations.” Heller v. Doe, 509 U.S. 312, 321 (1993) 

(quoting Metropolis Theatre Co. v. Chicago, 228 U.S. 61, 

69–70 (1913)). To the extent Congress’s purpose was to 

restore conditions of fair trade by neutralizing the effects 

of injurious dumping and actionable subsidies, “far more 

direct and accurate methods of measuring injury” were 

readily available to it. SKF, 556 F.3d at 1351. The present case is nothing like cases upholding acts of Congress 

as rationally related to a legitimate government interest 

despite the fact that the law was “not made with mathematical nicety.” City of Dallas v. Stanglin, 490 U.S. 19, 

21, 26 (1989) (internal quotation marks and citation 

omitted) (upholding a law restricting admission to certain 

dance halls to persons between the ages of fourteen and 

Case: 12-1269 Document: 75-2 Page: 27 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 9

eighteen to protect them from “detrimental influences of 

older teenagers and young adults”); Vance v. Bradley, 440 

U.S. 93 (1979) (upholding a law imposing mandatory 

retirement at age sixty for certain employees but not 

others); Dandridge v. Williams, 397 U.S. 471 (1970) 

(upholding a law limiting welfare benefits to $250 per 

month regardless of family size). 

Instead, it bears a closer resemblance to cases such as 

Plyler v. Doe, in which the Supreme Court found irrational a law that purportedly furthered a state’s interest in 

protecting itself from an influx of illegal immigrants by 

denying a free education to undocumented children. 457 

U.S. 202 (1982). The Court explained that because “[t]he 

dominant incentive for illegal entry into the State of 

Texas is the availability of employment,” charging tuition 

to undocumented children “constitutes a ludicrously 

ineffectual attempt to stem the tide of illegal immigration, 

at least when compared with the alternative of prohibiting the employment of illegal aliens.” Id. at 228–29 

(internal quotation marks and citation omitted). 

B. Other Conceivable Purposes

Considering the equal protection guarantees of the 

Fifth Amendment’s Due Process Clause, the Supreme 

Court has explained “it is entirely irrelevant for constitutional purposes whether the legislature was actually 

motivated by the conceived reason for the challenged 

distinction.” Beach Comm’cns, 508 U.S. at 315; see also 

id. at 313 (Legislation will be upheld “if there is any 

reasonably conceivable state of facts that could provide a 

rational basis” for it.). To the extent this principle applies 

to the substantive due process context, other conceivable 

Case: 12-1269 Document: 75-2 Page: 28 Filed: 05/19/2015
10 SCHAEFFLER GROUP USA, INC. v. US

government interests must be considered.2 See, e.g., 

Crider v. Bd. of Cnty. Comm’rs, 246 F.3d 1285, 1290 (10th 

Cir. 2001) (stating, in the context of a substantive due 

process challenge, that “under rational basis analysis, we 

look only to whether a reasonably conceivable rational 

basis exists”) (internal quotation marks and citation 

omitted); 37712, Inc. v. Ohio Dep’t of Liquor Control, 113 

F.3d 614, 620 (6th Cir. 1997) (“[I]f any conceivable legitimate governmental interest supports the contested ordinance, that measure is not ‘arbitrary and capricious’ and 

hence cannot offend substantive due process norms.”); 

California v. FCC, 905 F.2d 1217, 1238 (9th Cir. 1990) 

(“[U]nder the due process and equal protection clauses,” 

agency action will be upheld “if it has any conceivable 

rational basis.”). 

Although the “restoration of conditions of fair trade” 

by remedying unfair trade practices and neutralizing 

illegal dumping or subsidies may have been the stated 

purpose of Congress in enacting the CDSOA, it is not the 

only conceivable legitimate government interest that may 

be served by the CDSOA. The SKF court, for example, 

framed the legitimate interest somewhat differently, 

stating “the purpose of the [CDSOA’s] limitation of eligi2 It is not clear other conceivable purposes must be 

considered where, as here, the legislature has expressly 

stated the purposes of the law. See Zobel v. Williams, 457 

U.S. 55, 61 n.7 (1982) (The law’s “purposes were enumerated in the first section of the Act creating the dividend 

distribution plan . . . . Thus we need not speculate as to 

the objectives of the legislature.”). However, even if other 

conceivable reasons are considered, as they have been by 

the SKF court and the majority today, the retroactive 

portion of the CDSOA does not rationally further a legitimate government interest.

 

Case: 12-1269 Document: 75-2 Page: 29 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 11

ble recipients was to reward injured parties who assisted

government enforcement of the antidumping laws by 

initiating or supporting antidumping proceedings.” SKF, 

556 F.3d at 1352 (emphases added). The court explained 

that “by rewarding injured parties who assist in this 

enforcement,” the CDSOA “directly advances the government’s substantial interest in trade law enforcement.” Id.

at 1355 (emphasis added). 

This analysis conflates rewarding past action with incentivizing present or future action, as reflected in the 

inconsistent tenses used by the SKF court in its reasoning. Although the creation of a prospective incentive that 

rewards those who assist by providing petition support 

might be rationally expected to further the goal of enforcing trade policy, rewarding the pre-enactment choice of 

those who assisted by supporting a petition is gratuitous 

and unrelated to this goal, and thus arbitrary within the 

meaning of the Due Process Clause. 

The error in the SKF court’s reasoning is reflected in 

its comparison of CDSOA distributions to payments in qui 

tam or whistleblower actions and to the awarding of 

attorney fees to successful plaintiffs “who vindicate government policy” such as “in actions under Title VII.” Id.

at 1356. Payments in these actions are provided to relators, whistleblowers, or litigants who know of the reward 

in advance. They are therefore analogous to the prospective payments available under the CDSOA. However, the 

payments in these comparison actions are unlike the 

retroactive CDSOA distributions because the former 

operate as incentives to induce future activity that furthers the government’s legitimate interest. By contrast, 

the ex post provision of a reward for activity already 

undertaken cannot in any meaningful way further the 

government’s interest in enforcement of the trade laws.

To the extent SKF held the reward itself (as distinct 

from any object sought to be achieved via the provision of 

Case: 12-1269 Document: 75-2 Page: 30 Filed: 05/19/2015
12 SCHAEFFLER GROUP USA, INC. v. US

the reward) is a legitimate purpose, see SKF, 556 F.3d. at 

1352 (“[T]he purpose . . . was to reward.”), the Supreme 

Court has foreclosed this theory, see Zobel v. Williams, 

457 U.S. 55 (1982) (rejecting the argument that a bare 

reward that operates retrospectively and is unrelated to 

any present or future incentive effect rationally furthers a 

legitimate state interest). In Zobel, the Court considered 

a 1980 Alaska law that distributed state oil revenues to 

residents in proportion to “each year of residency [in 

Alaska] subsequent to 1959.” Id. at 57. Among the stated 

purposes of the legislation was “to encourage persons to 

maintain their residence in Alaska and to reduce population turnover in the state.” Id. at 61 n.7. In distinguishing the possible prospective incentive (based on the 

duration of residency following enactment) from the 

retroactive reward (based on the duration of residency 

prior to enactment), the Court first held there was no 

rational connection between the retroactive reward and 

the asserted interest:

Assuming, arguendo, that granting increased dividend benefits for each year of continued Alaska 

residence might give some residents an incentive 

to stay in the State in order to reap increased dividend benefits in the future, the State’s interest is 

not in any way served by granting greater dividends to persons for their residency during the 21 

years prior to the enactment. 

Id. at 62 (emphasis added). 

The Court then considered whether the reward itself, 

irrespective of any relationship to a present or future 

incentive, could constitute a legitimate interest. Citing 

precedent, the Court concluded that “[t]he last of the 

State’s objectives—to reward citizens for past contributions” “is not a legitimate state purpose.” Id. at 63. In a 

concurring opinion, Justice O’Connor explained that “[t]he 

Court’s opinion . . . insures that any governmental proCase: 12-1269 Document: 75-2 Page: 31 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 13

gram depending upon a ‘past contributions’ rationale will 

violate the Equal Protection Clause [because it does not 

further a legitimate purpose].”3 Id. at 73. 

3 In a related appeal, this court states “a legislative 

purpose to reward particular conduct is valid for its own 

sake, not just because it may have the effect of incentivizing particular conduct.” Pat Huval Rest. & Oyster Bar, 

Inc. v. Int’l Trade Comm’n, No. 2012-1250, 2015 WL 

2108514, at *6 (Fed. Cir. May 7, 2015). By way of example, it explains that “a legislative program retroactively 

providing benefits to veterans is justified as a reward to 

the veterans for their service; its rationality does not 

depend on whether the program induces others to join the 

military.” Id. The analogy fails. The veteran has a 

reasonable expectation that his services will be rewarded, 

as do employees generally. Until the CDSOA, there was 

no similar expectation that petition support would be 

rewarded, making the retroactive change capricious. This 

distinction is consonant with Zobel, in which the residents 

of Alaska could not have known, years before the enactment of the retroactive legislation, that a benefit would be 

forthcoming. Moreover, concerns of legislative favoritism 

are significantly diminished where benefits are dispersed 

evenly and widely across large numbers of individuals,

rather than concentrated in a small number of large 

corporations. See infra note 4 and accompanying text. 

The attempt in Pat Huval to distinguish Zobel collides 

with the latter’s express language. Compare Pat Huval, 

2015 WL 2108514, at *5 (“Nothing in Zobel suggests that 

its analysis is so broad as to render illegitimate any 

legislative action designed to reward conduct that preceded the enactment of the legislation.”) (emphases added), 

with Zobel, 457 U.S. at 63 (“The last of the State’s objectives—to reward citizens for past contributions” “is not a 

 

Case: 12-1269 Document: 75-2 Page: 32 Filed: 05/19/2015
14 SCHAEFFLER GROUP USA, INC. v. US

Cases cited by the majority where courts have upheld 

retroactive rewards (or the imposition of retroactive 

liability) as rationally related to a legitimate government 

interest are distinguishable. In Commonwealth Edison 

Co. v. United States, this court upheld as constitutionally 

permissible a portion of the Energy Policy Act of 1992 

that retroactively imposed “special monetary assessments 

on domestic utilities for the remediation of environmentally contaminated uranium processing facilities owned 

by the United States.” 271 F.3d 1327, 1329 (Fed. Cir. 

2001). The monetary assessments rationally furthered 

the legitimate interest of environmental cleanup. In 

addition, “Congress reasonably concluded that the utilities . . . contributed to the contamination” and the “utilities could have reasonably expected to be liable for a 

share of the remediation costs.” Id. at 1330; see also id. at 

1332 (“[T]here is no question that the processing of the 

utilities’ uranium caused . . . contamination . . . .”). In 

contrast to the undoubted environmental harm caused by 

the past actions of the utilities in Commonwealth Edison, 

no harm to trade law enforcement resulted from the past 

nonsupport of Schaeffler in any case where CDSOA 

distributions are at issue, since those distributions will be 

made only where an antidumping petition was successful 

notwithstanding Schaeffler’s failure to support it. 

In Turner Elkhorn, coal mine operators challenged 

the constitutionality of the Federal Coal Mine Health and 

Safety Act of 1969, which imposed potential liability on 

legitimate state purpose.”) (emphases added), and id. at 

73 (O’Connor, J., concurring) (“The Court’s opinion . . . insures that any governmental program depending 

upon a ‘past contributions’ rationale will violate the Equal 

Protection Clause” because, according to the Court, it 

lacks “any legitimacy.”) (emphases added). 

 

Case: 12-1269 Document: 75-2 Page: 33 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 15

the operators for black lung disease “caused by long-term 

inhalation of coal dust.” 428 U.S. at 6. The operators 

argued the law “spread[] costs in an arbitrary and irrational manner” that “[gave] an unfair competitive advantage to new entrants into the industry.” Id. at 18. 

The Court held it was “for Congress to choose” how to 

allocate the financial burden and that it was sufficient 

that the law “approache[d] the problem of cost spreading 

rationally.” Id. at 18–19. Unlike the law at issue in 

Turner Elkhorn, the purported rationality of the CDSOA 

is not based on Congress’s decision to impose liability on 

“those who have profited from the fruits of” activities that 

contributed to a societal problem. Id. at 18. There is

nothing in the record demonstrating harm, caused by 

Schaeffler’s nonsupport, that the retroactive aspect of the 

CDSOA remedies.

In Gray, Congress imposed retroactive “withdrawal 

liability” on employers who withdrew from a multiemployer pension plan beginning during the approximately five-month period before the statute was enacted into 

law. 467 U.S. at 725. Unlike the present case, the retroactive provisions in Gray were intended to address Congress’s concern “that employers would have an even 

greater incentive to withdraw if they knew that legislation to impose more burdensome liability on withdrawing 

employers was being considered.” Id. at 730–31. That is, 

the retroactivity was intended to induce employers to take 

the present action (or inaction) of remaining within the 

multi-employer pension plan, during the pendency of the 

legislation, in order to further the government’s underlying interest in “ensur[ing] that employees and their 

beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before 

sufficient funds have been accumulated in the plans.” Id.

at 720. 

In contrast to Gray, in which a present incentive rationally furthered a legitimate legislative purpose, the 

Case: 12-1269 Document: 75-2 Page: 34 Filed: 05/19/2015
16 SCHAEFFLER GROUP USA, INC. v. US

retroactive portion of the CDSOA creates no present 

incentive to support government enforcement of the trade 

laws. Moreover, unlike the disadvantaged groups in 

Commonwealth Edison, Turner Elkhorn, and Gray, the 

group disadvantaged by the retroactive portion of the 

legislation in the present matter did not cause the harm 

remedied by the retroactive application of the legislation. 

In instances where CDSOA distributions are made, it is 

not clear there is any petition-related harm to remedy.

Given the context of the CDSOA, which diverges substantially from past cases in which government action has 

been upheld under rational basis scrutiny, this court must 

remain vigilant to the possibility that Congress’s “responsivity to political pressures poses a risk that it may be 

tempted to use retroactive legislation as a means of 

retribution against unpopular groups or individuals” or of 

favoritism toward preferred groups. Landgraf, 511 U.S. 

at 266; see also E. Enters. v. Apfel, 524 U.S. 498, 549 

(1998) (Kennedy, J., concurring in the judgment and 

dissenting in part) (“Groups targeted by retroactive laws, 

were they to be denied all protection, would have a justified fear that a government once formed to protect expectations now can destroy them.”); United States v. Carlton, 

512 U.S. 26, 32 (1994) (upholding a retroactive law where 

“[t]here [was] no plausible contention that [Congress] 

acted with an improper motive”). 

According to the Government Accountability Office

(“GAO”), “[f]ive companies, including [the] Timken [Company (“Timken”), MPB Corporation (a subsidiary of Timken), and the Torrington Company (acquired by Timken 

in 2003)], received nearly half of the total [CDSOA] payments, or about $486 million,” while the remaining half 

was distributed among 765 beneficiaries. See GAO-05-

Case: 12-1269 Document: 75-2 Page: 35 Filed: 05/19/2015
SCHAEFFLER GROUP USA, INC. v. US 17

979, at 29 & n.39.4 Since the GAO report, over $100 

million in additional CDSOA funds were received by 

Timken alone. See The Timken Co., Annual Report at 88 

(Form 10-K) (Dec. 31, 2014) ($112.8 million in CDSOA 

distributions received for years 2006 through 2010). It is 

a simple matter to determine which companies “checked 

the box” in support of a past petition, and this case therefore presents a situation where a retroactive statute “‘may 

be passed with an exact knowledge of who will benefit 

from it.’” Landgraf, 511 U.S. at 267 n.20 (quoting Charles 

B. Hochman, The Supreme Court and the Constitutionality of Retroactive Legislation, 73 Harv. L. Rev. 692, 693 

(1960)). 

Because the SKF court incorrectly applied the rational basis test to the facts before it, that case should be 

overruled en banc.

4 It may not be coincidental that the original House 

and Senate sponsors of the CDSOA were Rep. Ralph 

Regula and Sen. Mike DeWine, both of Ohio, where 

Timken has been incorporated since 1904. See Statements on Introduced Bills and Joint Resolutions, 145 

Cong. Rec. S497-01 (Jan. 19, 1999) (statement of Sen. 

Mike DeWine); The Timken Co., Annual Report (Form 10-

K) (Dec. 31, 1999). Rep. Nancy Johnson of Torrington, CT 

was a co-sponsor of the House bill. 146 Cong. Rec. H9708 

(Oct. 11, 2000) (statement of Rep. Nancy Johnson). 

 

Case: 12-1269 Document: 75-2 Page: 36 Filed: 05/19/2015