Opinion ID: 209810
Heading Depth: 3
Heading Rank: 1

Heading: Commerce's Inherent Authority

Text: The trial court found that Commerce acted lawfully when it initiated and conducted reviews of [the yearly administrative reviews]. TKS, 473 F.Supp.2d at 1355. It rationalized that, [u]nder ... circumstances [of fraud], Commerce has the inherent authority to self-initiate a review of its prior determinations to purge them of fraudulent data. [4] Id. TKS argues, on cross-appeal, that the trial court erred in determining that Commerce possessed authority to initiate and conduct the changed circumstances review. It contends that Commerce is limited to the exercise of powers that have been expressly delegated to it by Congress, and [ ] Commerce cannot exercise whatever inherent authority it may have in a manner that is contrary to the statute. TKS Br. at 44 (internal citation omitted). Appellants counter that the trial court correctly concluded that Commerce possesses inherent authority to cleanse its proceedings from the taint of fraud. We begin with the recognition that administrative agencies are generally limited to the exercise of powers delegated them by Congress. Civil Aeronautics Bd. v. Delta Air Lines, Inc., 367 U.S. 316, 322, 81 S.Ct. 1611, 6 L.Ed.2d 869 (1961) ([T]he determinative question is not what the Board thinks it can do but what Congress has said it can do.); FAG Italia S.p.A. v. United States, 291 F.3d 806, 816 (Fed.Cir. 2002) ([T]he Supreme Court has noted that `an agency literally has no power to act ... unless and until Congress confers power upon it.' (quoting La. Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 374, 106 S.Ct. 1890, 90 L.Ed.2d 369 (1986))). Thus, as we concluded in FAG Italia, for example, Commerce may not conduct a duty absorption inquiry whenever it chooses, because the statute specifically provides for those inquiries only during the second or fourth year after the publication of an antidumping duty order. 291 F.3d at 814 (quoting 19 U.S.C. § 1675(a)(4)). The rationale for such a rule is straightforward: The fact that Commerce is empowered to take action in certain limited situations does not mean that Commerce enjoys such power in other instances. Id. at 817. TKS relies heavily on this principle, arguing primarily that because the statute authorizing reviews of changed circumstances sets forth only three situations in which such reviews are appropriate, none of which encompasses the situation here, Commerce acted contrary to the statute when it initiated a changed circumstances review of TKS's fraudulent conduct. Section 1675(b)(1) of 19 U.S.C. provides for [r]eviews based on changed circumstances in the following situations: (A) a final affirmative determination that resulted in an antidumping duty order under this subtitle or a finding under the Antidumping Act, 1921, or in a countervailing duty order under this subtitle or section 1303 of this title, (B) a suspension agreement accepted under section 1671c or 1673c of this title, or (C) a final affirmative determination resulting from an investigation continued pursuant to section 1671c(g) or 1673c(g) of this title. While TKS is correct, and the parties do not dispute, that § 1675(b)(1) does not expressly provide for a changed circumstances review of the type conducted here, we think it is misleading to focus narrowly on the statutory definition of changed circumstances to describe Commerce's conduct or interest in this proceeding. [5] As its name suggests, § 1675(b)(1) is intended to facilitate the review of certain determinations when the circumstances have changed sufficiently from the time that the determination was originally made such that it may no longer be appropriate. That is different from the situation at issue here  i.e., when the circumstances that led to the determination have changed only because the true circumstances, previously concealed by fraud, have come to light. Thus, Commerce's focus was not on changed circumstances in the sense of § 1675(b)(1). Instead, Commerce's reconsideration was just that  a reopening and reconsideration of its previously-conducted yearly administrative reviews based on newly revealed information of TKS's fraudulent conduct, which raised questions about the integrity of the original proceedings. This Commerce had a right to do  apart from the statutory authority of § 1675(b)(1). The prohibition against doing something not authorized by statute is altogether different from the power to reconsider something that is authorized by statute. The power to reconsider is inherent in the power to decide. See Trujillo v. Gen. Elec. Co., 621 F.2d 1084, 1086 (10th Cir.1980) ([T]he power to decide in the first instance carries with it the power to reconsider.). For this reason, the courts have uniformly concluded that administrative agencies possess inherent authority to reconsider their decisions, subject to certain limitations, regardless of whether they possess explicit statutory authority to do so. Macktal, 286 F.3d at 825-26 ([I]t is generally accepted that in the absence of a specific statutory limitation, an administrative agency has the inherent authority to reconsider its decisions.) (collecting cases); Alberta Gas Chems., Ltd. v. Celanese Corp., 650 F.2d 9, 12 (2d Cir.1981) (discussing the inherent power of any administrative agency to protect the integrity of its own proceedings); Bookman v. United States, 197 Ct.Cl. 108, 453 F.2d 1263, 1265 (1972) ([I]t is the general rule that `[e]very tribunal, judicial or administrative, has some power to correct its own errors or otherwise appropriately to modify its judgment, decree, or order.' (citation omitted)). An agency's power to reconsider is even more fundamental when, as here, it is exercised to protect the integrity of its own proceedings from fraud. Alberta Gas, 650 F.2d at 12; see also Elkem Metals, Com. v. United States, 193 F.Supp.2d 1314, 1321 (Ct. Int'l Trade 2002) (A finding that the ITC has the authority to reconsider a final determination is particularly appropriate where after-discovered fraud is alleged.). As the Second Circuit observed in Alberta Gas, It is hard to imagine a clearer case for exercising this inherent power [to reconsider] than when a fraud has been perpetrated on the tribunal in its initial proceeding. 650 F.2d at 13. [6] An agency's inherent authority to reconsider its decisions is not without limitation, however. An agency cannot, for example, exercise its inherent authority in a manner that is contrary to a statute. Macktal, 286 F.3d at 825; Bookman, 453 F.2d at 1265 (observing agency's authority to reconsider absent contrary legislative intent or other affirmative evidence indicating lack of such power). Thus, an agency obviously lacks power to reconsider where a statute forbids the exercise of such power. Similarly, in situations where a statute does expressly provide for reconsideration of decisions, the agency is obligated to follow the procedures for reconsideration set forth in the statute. See, e.g., Civil Aeronautics Bd., 367 U.S. at 329, 81 S.Ct. 1611 ([W]e are not deciding that the Board is barred from reconsidering its initial decision. All we hold is that, if the Board wishes to do so, it must proceed in the manner authorized by statute.). The agency must also give notice to the parties of its intent to reconsider, and such reconsideration must occur within a reasonable time. Macktal, 286 F.3d at 826 (citing Bookman, 453 F.2d at 1265). Finally, an agency may not reconsider in a manner that would be arbitrary, capricious, or an abuse of discretion. 5 U.S.C. § 706(2)(a); Macktal, 286 F.3d at 826. These limitations on the exercise of inherent power are uncontroversial and are not at issue in this case. Here, no statute prohibited Commerce's review, nor were there procedures specified in any applicable statutory provision that Commerce failed to follow. While Commerce labeled its proceeding as a changed circumstances review, its actions, as discussed supra, are not properly characterized as such. For this reason, the trial court was not required to decide whether Commerce's actions were consistent with § 1675(b)(1). Instead, the trial court correctly ruled that Commerce, under the circumstances presented, acted within its inherent authority to protect the integrity of its proceedings from fraud. We agree with that ruling and hold that Commerce possesses inherent authority to protect the integrity of its yearly administrative review decisions, and to reconsider such decisions on proper notice and within a reasonable time after learning of information indicating that the decision may have been tainted by fraud. [7] In this case, Commerce acted within a reasonable time after learning of the fraud, gave the parties proper notice, and thus, acted lawfully under its inherent authority in reconsidering the 1997-1998 administrative review. [8]