Opinion ID: 2796396
Heading Depth: 2
Heading Rank: 5

Heading: constitutionality of the cdsoa

Text: In SKF, we held that the constitutionality of the CDSOA’s petition support requirement under the First Amendment is assessed under the commercial speech doctrine. SKF, 447 F.3d at 1355. 9 Under this doctrine, the 9 Being bound by precedent, I accept this holding, but for the reasons that Judge Linn provided in his GIORGIO FOODS, INC. v. US 13 regulation must “directly advance[]” a substantial government interest. Id. (citing Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 566 (1980)). In SKF, we held that the petition support requirement directly advances the government interest in preventing dumping by rewarding parties who assist in antidumping enforcement. SKF, 447 F.3d at 1355. To avoid the constitutional challenge, the Court in SKF focused on whether a party “assists,” or takes action in support of the petition, not whether a party “expresses support” for the petition. See SKF, 556 F.3d at 1353. Giorgio argues that this case presents a related, but different constitutional question: whether it is constitutional to determine petition support entirely on the presence of a statement of explicit support. See Appellant’s Br. 57. The majority rejects this challenge on the basis that a statement of explicit support “has consequences” that are of “two types” that furthers the Government’s interest in enforcing the antidumping laws. Maj. Op. at 13. First, it influences Commerce’s decision as to whether the petition has the requisite industry support. Id. Second, it influences the ITC’s material injury determination. Id. These assertions reflect a fundamental misunderstanding on how antidumping investigations are conducted. The ITC questionnaire response does not affect whether Commerce initiates an investigation. 10 First, it thoughtful dissent, I believe that the CDSOA should be subjected to strict scrutiny, not evaluated under the commercial speech doctrine. SKF, 556 F.3d at 1370 (Linn, J., dissenting). 10 The majority fails to explain what “consequences” resulted from Giorgio’s answer to the petition support question. Importantly, it is not explained what difference, if any, Giorgio’s response had on the investigation. 14 GIORGIO FOODS, INC. v. US is Commerce, not the ITC, that makes the industry support (standing) determination. Commerce provides information to the ITC after an affirmative industry support determination is made. Id. § 1673a(d). Second, the ITC producer questionnaire is typically issued after Commerce initiates its investigation. Once Commerce makes its industry support determination, it cannot be changed. 19 U.S.C. § 1673a(c)(4). Thus, it is not the ITC’s task to determine if a petition has requisite industry support; Congress assigned that task to Commerce. Id. § 1673a(c)(1)(A)(ii). Congress provided Commerce with its own tools for making that determination: the petition and, if necessary, a poll of the domestic producers. 19 U.S.C. § 1673a(c)(4)(D). During Oral Argument, counsel for the ITC confirmed that Commerce determines industry support and that the ITC has no role in the determination. Court: “As I understand it, there’s a bright line rule for the initiation of these proceedings, which says there has to be 25 % support, cor- rect? And that’s not something the ITC administers . . . that’s a bright line rule at Commerce . . . and it’s based on the questionnaire” Counsel for the Commission interjects: “No sir, it is not based on the ques- tionnaire . . . that’s where the con- fusion enters in. . . . It’s Commerce’s obligation under the statute to initiate the investiga- tion. On the face of the petition there must be at least 25 % of in- GIORGIO FOODS, INC. v. US 15 dustry support, the industry must have supported that, or Commerce will reject the petition.” Oral argument at 23:40–24:40 available at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2 013-1304.mp3. Court: “So someone who checked oppose or don’t support isn’t counted in arriving at the 25 %?” Counsel for the Commission responded: “That is not part . . . they do their exercise separately from what the Commission does. The Commis- sion sends out its questionnaires after initiation.” Oral Argument at 24:44–25:00. The above demonstrates that petition support expressions, in ITC questionnaire responses, do not further the enforcement of antidumping laws. The majority solely relies on Commerce’s Notice of Initiation issued in the underlying investigation for its assertion that statements of “explicit” support in an ITC questionnaire response impact Commerce’s industry support determination. Maj. Op. at 13–14. There is, however, no showing precisely how Giorgio’s ITC questionnaire impacted Commerce’s initial industry support determination. The majority apparently believes that the Notice of Initiation evidences that Commerce considered Giorgio’s preliminary questionnaire response, and specifically points to certain comments made to Commerce under 19 U.S.C. § 1673a(c)(4)(E), which permits interest16 GIORGIO FOODS, INC. v. US ed parties to “submit comments or information on the issue of industry support.” The Notice states that Commerce received two “comments regarding industry support” on January 22, 1998. 63 Fed. Reg. 5361–62. The first was filed by a Chilean exporter asserting that the petitioners are not members of the applicable U.S. industry. Id. The second, an “expression of opposition,” was filed by Giorgio with respect to the investigation (petition) involving imports from India. 63 Fed. Reg. 5362. The majority speculates that this “expression of opposition” has to be Giorgio’s preliminary ITC questionnaire response. See Maj. Op. at 13–14. Giorgio’s comment was made pursuant to 19 U.S.C. § 1673a(c)(4)(E), which permits voluntary comments from interested parties concerning any aspect of an initiation, including industry support. It is unreasonable to conclude that Giorgio submitted its ITC questionnaire response for purposes of this comment period. Nor is there any evidence that Commerce consulted Giorgio’s ITC questionnaire response for purposes of this comment period. Conversely, the Notice makes no mention of opposition by Giorgio in connection with the Chile, China, and Indonesia petitions. 63 Fed. Reg. 5362. Borrowing the majority’s view, since the Notice states no opposition from Giorgio with respect to those investigations, one is forced to conclude that Giorgio supported those investigations. But this, too, would be speculation primarily because Commerce, by law, bases its industry support decision on the information provided in the petition. If the petition does not demonstrate the required industry support, the investigation is not initiated. The majority concludes that Giorgio’s “expression of opposition” and its preliminary ITC questionnaire response are the same document because they were filed on the same day. See Maj. Op. at 13–14. There are a number GIORGIO FOODS, INC. v. US 17 of plausible reasons that could explain the coincidence, such as parallel due dates for receipt of factual submissions. Indeed, the Chilean comment was also filed on the same day. 63 Fed. Reg. 5361. This does not mean that the Chilean exporter filed its comments via an ITC questionnaire response. It did not. The majority’s second “consequence” is an impact on the ITC’s material injury determination. Maj. Op. at 14– 15. Specifically, the majority asserts that Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 984 (Fed. Cir. 1994) requires that the ITC, “in every case,” take into account a producer’s publicly stated position in its ITC questionnaire response for the purpose of making injury determinations. Maj. Op. at 14. This assertion is not correct, and it ignores the facts of the case. First, this Court noted the difference between a threat of injury case (where views of the industry must be considered) and a material injury case. 11 Thus, we held that “the breadth of relevant factors in Trent Tube, a material injury case, does not govern in this threat of material injury case.” Suramerica, 44 F.3d at 984 (citing Trent Tube Div., Crucible Materials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807 (Fed. Cir. 1992)). Here, the ITC case is not a threat of injury case so the relevant factors relied on in Suramerica have no application. One needs look no further than this case as an example where the answer to the ITC industry support question has no impact on the merits determination. Unlike Suramerica, there is no 11 For “material” injury cases, the ITC “may” consider factors beyond those listed in the statute. 19 U.S.C. § 1677(7)(B). In “threat” cases, the ITC “shall” consider all relevant economic factors, including publicly declared industry support. 19 U.S.C. § 1677(7)(F)(i). See also Suramerica, 44 F.3d at 984 (describing statutory differences for material and threat cases). 18 GIORGIO FOODS, INC. v. US indication that the ITC relied on Giorgio’s answers to the support question while there is significant evidence that the ITC relied on the trade data provided in the responses to support a finding of material injury in this case. In this regard, Suramerica supports Giorgio’s assertion of a plausible claim. Having acknowledged that Suramerica did not compel the ITC to consider publicly declared support, the majority instead asserts that the ITC might consider it. Maj. Op. 14, n. 7. This assertion does not salvage the petition support requirement’s constitutionality. Under the commercial speech doctrine, a regulation “may not be sustained if it provides only ineffective or remote support for the government’s purpose.” Cent. Hudson Gas & Elec. Corp., 447 U.S. at 564. The Supreme Court has further explained that “[t]his burden is not satisfied by mere speculation or conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.” Edenfield v. Fane, 507 U.S. 761, 770–71 (1993). It is irrelevant whether the ITC might consider publicly declared support because Giorgio has raised an asapplied, not facial, challenge. Appellant’s Br. at 52. The question is not whether the ITC may, hypothetically, consider a producer’s publicly declared support; it is whether the ITC considered Giorgio’s support answers in this case. Dahnke-Walker Milling Co. v. Bondurant, 257 U.S. 282, 289 (1921) (“A statute may be invalid as applied to one state of facts and yet valid as applied to another.”). The majority offers no evidence that the ITC considered Giorgio’s support answer, or that the support answer otherwise alleviated any harm to a material degree. In sum, the majority bases its reasoning on the assertion that the ITC questionnaire industry support question has “two types” of consequences that directly advance a GIORGIO FOODS, INC. v. US 19 substantial government interest. Neither of these consequences is based in agency practice, agency regulations, or the trade statutes. Because neither Commerce nor the ITC rely on a producer’s answer to the petition support question to respectively establish industry support under 19 U.S.C. §1673a(c)(4)(A), or otherwise to affect the outcome of a material injury case, the petition support requirement does not “directly advance” a substantial government interest. 12 As such, the majority opinion renders the CDSOA petition support requirement unconstitutional under the First Amendment. Cent. Hudson Gas & Elec. Corp., 447 U.S. at 564. The majority also supports its holding by comparing the CDSOA to the False Claims Act, arguing that payments and attorney’s fees under the latter would not be available to a party like Giorgio who “sat on the sidelines and refused to take an open and active role in support of the government.” Maj. Op. at 16 (citation omitted). Such reliance is misplaced because the qui tam provision of the False Claims Act rewards parties that file an action. 31 U.S.C. § 3730(d). The CDSOA does not require that only petitioners may receive a distribution. Conversely, the eligibility of a qui tam plaintiff to qualify for proceeds does not hinge on a statement of “explicit support” for the action. In any event, the facts in this case show that Giorgio did not sit on the sidelines but rather took significant action and played an important role towards the issuance of the antidumping order. Giorgio’s second amended 12 Further, I have serious concerns regarding, but do not address, the constitutionality of the retroactive application of a statement of “explicit support” requirement to actions taken by U.S. producers two years prior to the enactment of the CDSOA. 20 GIORGIO FOODS, INC. v. US complaint, which we accept as true at this stage, states that Giorgio supported the preparation of the petition. It contributed over one million dollars ($ 1,000,000) for legal fees towards preparation of the petition and participation in proceedings before Commerce and the ITC—an amount greater than contributed by any of the petitioners. 13 J.A. 74, ¶ 34. Prior to filing the petition, Giorgio provided the petitioner with confidential information regarding its capacity, production, sales, pricing, and profitability. J.A. 75, ¶ 37. The petition incorporated much of the information that Giorgio provided, e.g., Giorgio’s closing of a production line for its largest can size due to the imports. J.A. 76, ¶ 41. After the petition was filed, Giorgio hosted two ITC staffers for a day-long field visit of the closed production line and reiterated its belief that the lowpriced imports caused its closure. J.A. 77, ¶ 43. This type of “plant visit” is distinct from a verification visit under 19 C.F.R. § 353.36(c). A plant visit is conducted to educate Commerce and ITC personnel on production processes and overall relevant industry practices. 13 Counsel for one of the petitioners appeared and argued that Giorgio’s lack of support for the India petition undermined the petitions involving imports from other countries. Counsel’s appearance and argument can best be understood in the context of CDSOA distributions. To the extent that Giorgio does not qualify for a distribution (at least $9 million), petitioners share of CDSOA money is significantly increased. This is an absurd result. Congress could not have contemplated a result where a U.S. producer submits a questionnaire response that details evidence of material injury and establishes in clear terms that it is a domestic producer of the like product that is adversely affected by virtue of dumped imports should not be entitled to a share of CDSOA money. GIORGIO FOODS, INC. v. US 21 In sum, Giorgio establishes a plausible claim that it is an ADP. For these reasons, I dissent.