INTERNATIONAL TRADE DECISIONS OF
THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL
CIRCUIT DURING THE
YEAR 1987*
CHARLENE BARSHEFSKY**
MICHAELJ. FIRTH***
TABLE OF CONTENTS
I. Introduction ..........................................
II. Jurisdiction and Standing .............................
III. Standard of Review ...................................
IV. Antidumping and Countervailing Duties ...............
V. Section 337 of the Tariff Act of 1930 ..................
VI. Custom s ..............................................
VII. Conclusion ...........................................
1167
1169
1180
1183
1196
1198
1206
INTRODUCTION
This Article reviews decisions of the United States Court of Appeals for the Federal Circuit (Federal Circuit) during 1987 in the
field of international trade. The cases are considered in the context
of the three main statutory schemes over which the Federal Circuit
has jurisdiction in this field: antidumping and countervailing duties;1 unfair trade actions under section 337 of the Tariff Act of
1930;2 and customs.8 In addition, certain issues relating to jurisdic-
tion and to standard of review run across the statutory schemes, and
@ 1988 Charlene Barshefsky & Michael J. Firth
Partner, Steptoe & Johnson, Washington, D.C., B.A. 1972 University of Wisconsin;
J.D. 1975 Catholic University.
*** Solicitor, Linklaters & Paines, London; B.A. 1980, B.C.L. 1981, M.A. 1984, Oxford
University; M.A. 1985 City of London Polytechnic.
1. See Section IV, infra.
2. See Section V, infra.
3. See Section VI, znfra.
*
1167
1168
THE AMERICAN UNIVERSITY LAW REVIEW[Vol. 37:1167
4
these have been grouped together in separate sections below.
One of the more striking aspects of the decisions, taken as a
whole, is the extent to which the Federal Circuit defers to the agencies responsible for the administration of the statutory schemes, and
upholds the appealed decisions. Of the twenty-two decisions reviewed in this Article,5 nineteen were in cases on appeal from the
Court of International Trade (CIT), and three were on direct appeal
from the International Trade Commission (ITC). 6 The Federal Cir7
cuit affirmed the CIT decisions in all but two of the nineteen cases,
and upheld an appealed agency determination in all but three
cases. 8 There were no cases in which the Federal Circuit reversed
the CIT when the CIT had upheld the agency determination. 9
The Federal Circuit is a United States Court of Appeals. As such,
it has a clear role to play in the development of federal law in general and international trade law in particular. Although deference to
the agencies charged with the administration of the law is entirely
proper, and indeed necessary to the smooth-running of that administration, it may be questioned whether deference to the extent illustrated by the cases under review always results in the law being
developed in the way most conducive to efficient administration and
certainty of application. The authors see two dangers, in particular,
in too great a deference to agency practice. First, that the court
might miss opportunities to correct, or to impose greater discipline
4. See Sections II & III, infra.
5. This survey, however, does not review cases that the Federal Circuit disposed of
without issuing a written opinion.
6. See 28 U.S.C. § 1295 (1982) (describing jurisdiction of Federal Circuit). Section
1295 provides that the Federal Circuit has exclusive jurisdiction of appeals from a final decision of the United States Court of International Trade and to review the final determinations
of the United States International Trade Commission relating to unfair practices in import
trade made under § 337 of the Tariff Act of 1930 (19 U.S.C. § 1337 (1982)).
7. See Matsushita Elec. Indus. v. United States, 823 F.2d 505, 510 (Fed. Cir. 1987)
(holding CIT's finding of irreparable injury to Japanese television set exporter clearly erroneous and vacating preliminary injunction based on such finding); Sacilor, Acieries et Laminoirs
de Lorraine v. United States, 815 F.2d 1488, 1490-91 (Fed. Cir.) (holding that European steel
manufacturer's challenge to Secretary of Commerce's denial of request to exceed import
levels as stated in trade agreement should have been dismissed for lack of jurisdiction, and
because claims were moot), cert. denied, 108 S. Ct. 285 (1987). Without finding that the CIT
had necessarily been wrong in the result, the Federal Circuit vacated and remanded another
CIT decision in W.T. Moberly, Inc. v. United States, 825 F.2d 391, 392 (Fed. Cir. 1987)
(faulting CIT for providing unduly narrow definition of "unitary construction").
8. E.C. McAfee A/C Bristol Metal Indus. of Canada v. United States, 832 F.2d 152
(Fed. Cir. 1987); LSI Computer Sys., Inc. v. United States Int'l Trade Comm'n, 832 F.2d 588,
4 U.S.P.Q.2d 1705 (Fed. Cir. 1987); Bingham & Taylor Div., Va. Indus. v. United States, 815
F.2d 1482 (Fed. Cir. 1987); see also W.T. Moberly, Inc. v. United States, 825 F.2d 391. 392
(Fed. Cir. 1987) (remanding to CIT for further consideration). Seven cases did not involve an
adjudication on the merits of an original agency decision, so that the "three cases" referred to
are actually three of fifteen.
9. But see W.T. Moberly, Inc. v. United States, 825 F.2d 391, 392 (Fed. Cir. 1987).
19881
INTERNATIONAL TRADE DECISIONS
1169
on, agency practice. Second, that by focusing on agency practice in
the case before it, the court might fail to consider the wider consequences the case may have for the statutory scheme in question, international trade law as a whole, or federal law generally.
In each area of the 1987 case law considered in this Article, the
decisions of the Federal Circuit can be seen, on the whole, to be
consistent with prior law or to develop naturally from it. Where,
however, aspects of decisions may give rise to concerns of the nature suggested above, these are indicated in the relevant section
below.
II.
JURISDICTION
The jurisdictional decisions of the Federal Circuit during the year
have been generally unadventurous, and decisions on new jurisdictional issues tended to reach common sense results. In two cases,
the court examined the standing of a plaintiff to bring an action
when it had not participated in the administrative proceedings being
challenged. In one, the court rejected an importer's argument
which would have widened the court's jurisdiction under 28 U.S.C.
section 1581(i), and denied standing.' 0 In the second, based on a
different jurisdictional statute, the court found that the plaintiff had
standing. I I In another case, the court reached an arguably unduly
restrictive finding denying standing to a foreign importer who
brought an action under the Steel Import Stabilization Act. 12 Issues
going to standing in that case included legislative intent, mootness,
and the requirement that relief be "likely" to follow from a
favorable decision of the court. Two further jurisdictional cases
dealt with points arising in the customs area. One examined the
requirement that duties be paid prior to the commencement of a
customs protest action.13 In the other, the court disposed of an unmeritorious jurisdictional challenge to the importer's claim for a re14
fund of duties.
The jurisdiction of the CIT is set forth at section 1581 of 28
10. See Miller & Co. v. United States, 824 F.2d 961, 963-64 (Fed. Cir. 1987), cert. denied,
108 S. Ct. 773 (1988).
11. See LSI Computer Sys., Inc. v. United States Int'l Trade Comm'n, 832 F.2d 588, 591,
4 U.S.P.Q.2d 1705, 1709 (Fed. Cir. 1987) (finding that plain language of § 337(c) ofTariffAct
gives all persons adversely affected by ITC decisions right to appeal).
12. See Sacilor, Acieries et Laminoirs de Lorraine v. United States, 815 F.2d 1488, 149091 (Fed. Cir.) (finding that party had no standing to challenge Secretary of Commerce's determination), cert. denied, 108 S. Ct. 285 (1987).
13. Nature's Farm Prods., Inc. v. United States, 819 F.2d 1127 (Fed. Cir. 1987).
14. E.C. McAfee A/C Bristol Metal Indus. of Canada v. United States, 832 F.2d 152
(Fed. Cir. 1987).
1170
THE AMERICAN UNIVERSITY LAw REVIEW[Vol.
37:1167
U.S.C. subsections 1581(a) to 1581(i) describe the various situations in which actions may be commenced in the CIT. Most of these
subsections refer to actions arising from determinations made
under specific statutory provisions, but subsection 1581(i) is expressed in general terms to give the CIT jurisdiction over a wide
range of matters not otherwise specified.1 5
In Miller & Co. v. United States,1 6 the Federal Circuit considered the
relationship between subsection 1581(i) and one of the provisions
dealing with a particular statute, subsection 1581 (c). 1 7 The plaintiff,
Miller, had challenged a final determination of the International
Trade Administration (ITA) relating to Brazilian pig iron of which
Miller was an importer.' 8 The challenged determination had been
made following an administrative review of a countervailing duty order as then required by section 1675(a)(1) of 19 U.S.C. 19 Miller alleged that the ITA lacked authority to enforce the final
determination because it had not completed its review within the
statutory time period. 20 The jurisdictional difficulty faced by Miller
in seeking review, however, was Miller's failure to participate in the
21
ITA proceedings.
The case reached the Federal Circuit following the CIT's dismis15.
28 U.S.C. § 1581(i) provides:
(i) In addition to the jurisdiction conferred upon the Court of International
Trade by subsections (a)-(h) of this section and subject to the exception set forth in
subsection (j) of this section, the Court of International Trade shall have exclusive
jurisdiction of any civil action commenced against the United States, it agencies, or
its officers, that arises out of any law of the United States providing for (1) revenue from imports or tonnage;
(2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;
(3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or
(4) administration and enforcement with respect to the matters referred to in
paragraphs (1)-(3) of this subsection and subsections (a)-(h) of this section.
16. 824 F.2d 961 (Fed. Cir. 1987), cert. denied, 108 S. Ct. 773 (1988).
17. See Miller & Co. v. United States, 824 F.2d 961, 963-64 (Fed. Cir. 1987), cert. dented,
108 S. Ct. 773 (1988). 28 U.S.C. § 1581(c) provides that the CIT has exclusive jurisdiction of
any civil action commenced under § 516A of the Tariff Act of 1930. Section 516A of the
Tariff Act of 1930 corresponds to 19 U.S.C. § 1516a (1982).
18. Miller & Co., 824 F.2d at 962.
19. The ITA published its final determination at 48 Fed. Reg. 9,923 (1984). See. .dler &
Co., 824 F.2d at 962. The review requirement has now been removed. Annual reviews are
now conducted only upon request. 19 U.S.C. § 1675(a) was amended by the Trade and Tariff
Act of 1984, Pub. L. No. 98-573, 611(a)(2)(A), 98 Stat. 2948, 3031.
20. Miller & Co., 824 F.2d at 962. 19 U.S.C. § 1675(a)(1) (1982) provides for a review to
be carried out "[a]t least once during each 12 month period beginning on the anniversary of
the date of publication of a countervailing duty order." In this case the order was made on
April 4, 1980. See 45 Fed. Reg. 23,045 (1980). The intention to review the periodJanuary 1
to December 31, 1981 was announced onJuly 7, 1983. See 48 Fed. Reg. 31,280 (1983). The
final results were not published until March 16, 1984. See 49 Fed. Reg. 9,923 (1984).
21. Miller & Co., 824 F.2d at 962. See infra note 27 (discussing jurisdictional requirements for obtaining review).
19881
INTERNATIONAL TRADE DECISIONS
1171
sal of Miller's complaint on the grounds that it had no jurisdiction
under section 1581 (i).-22 In affirming the CIT's decision, the Federal
Circuit held that Miller had no standing to bring the proceeding.
The court did not reach, therefore, the merits of Miller's
23
complaint.
The Federal Circuit commenced its discussion of the jurisdictional provisions by stating that jurisdiction under section 1581 (i) is
inappropriate when jurisdiction under another subsection of section
1581 is or could have been available, unless the remedy provided
' 24
under the other subsection would be "manifestly inadequate.
Thus, the court held that it was necessary first to examine the availability of section 1581(c).25 Section 1581(c) 26 gives the CIT jurisdiction over actions commenced under 19 U.S.C. section 1516a, which
in turn lists the reviewable determinations and the jurisdictional requirements for obtaining review. 27 One such reviewable determination is a final determination under section 1675, the section under
which the administrative review was conducted in this case. 28 Miller
22. Miller & Co. v. United States, 648 F. Supp. 9, 10 (Ct. Int'l Trade 1986), aft'd, 824
F.2d 961 (Fed. Cir. 1987), cert. denied, 108 S. Ct. 773 (1988). In an earlier decision, apparently
not appealed by Miller, the CIT denied a motion by Miller to amend its pleading to claim
jurisdiction under § 1581(c) because Miller had not participated in the ITA proceedings.
Miller & Co. v. United States, 598 F. Supp. 1126, 1127 (Ct. Int'l Trade 1984).
23. Miller & Co., 824 F.2d at 964. The CIT had reached the merits and had held that the
ITA had not acted beyond its authority in issuing its final determination after the statutory
time period. Miller & Co. v. United States, 648 F. Supp. 9, 10 (Ct. Int'l Trade 1986), aff'd.
824 F.2d 961 (Fed. Cir. 1987), cert. denied, 108 S. Ct. 773 (1988). The court stated that the
time limits of § 1675(a) are not jurisdictional. Id (citing Ambassador Div. of Florsheim Shoes
v. United States, 748 F.2d 1560 (Fed. Cir. 1984); Philip Bros., Inc. v. United States, 630 F.
Supp. 1317 (Ct. Int'l Trade 1986)). The CIT thought a suit to compel timely action might be
the "appropriate response to a failure to comply" with the time limits. Id. at n.2.
24. Miller & Co., 824 F.2d at 963.
25. Id.
26. See supra note 17 (describing § 1581(c)).
27. Miller & Co., 824 F.2d at 963. 19 U.S.C. § 1516a provides, in pertinent part:
(a)(2) Review of determinations on record
(A) In general.-Within thirty days after(i) the date of publication in the Federal Register of(I) notice of any determination described in clause (ii), (iii), (iv), or (v)
of subparagraph (B),
an interested party who is a party to the proceeding in connection with which the
matter arises may commence an action in the United States Court of International
Trade by filing a summons, and within thirty days thereafter a complaint ....
contesting any factual findings or legal conclusions upon which the determination is
based.
(B) Reviewable determinations.The determinations which may be contested under subparagraph (A) are as
follows:
(iii) A final determination ... under section 1675 of this title.
28. Miller & Co., 824 F.2d at 963. See supra notes 19-20 and accompanying text.
1172
THE AMERICAN UNIVERSITY LAW REVIEW[Vol.
37:1167
had argued that section 1581(c) only applied to actions contesting
the merits of an ITA order, but the court disagreed. 29 The court
stated that under section 1581(c) of 28 U.S.C. and section 1516a of
19 U.S.C., "the proceduralcorrectness of a countervailing duty determination, as well as the merits, are subject to judicial review." 3 0 Furthermore, the court noted that Miller's challenge to the ITA's view
of the period for which duties could be assessed involved a "legal
conclusion" which was, as such, specifically reviewable under section 1516a(a)(2)(A) of 19 U.S.C. and, therefore, reviewable under
section 1581(c) of 28 U.S.C. 3 1 The court, however, declared that
section 1516a(a)(2) (A) only gives standing to an interested party actually involved in the administrative proceeding in the ITA.3 2 Miller
had not participated in the ITA proceedings and therefore had no
standing under section 1581 (c).33
Having found that Miller had no standing under section 1581 (c),
the court turned to section 1581 (i).34 Because a remedy would have
existed under section 1581(c), Miller bore the burden of proof to
demonstrate that the remedy was manifestly inadequate.3 5 The
court held that Miller's "allegations of financial harm, or assertions
that an agency failed to follow a statute, do not make the remedy
established by Congress manifestly inadequate." 3 6 The court also
cited a similar importer's use of the remedy in section 1581 (c) as
persuasive of its adequacy.3 7 Miller thus failed to demonstrate that
the remedy under section 1516(c) was manifestly inadequate, and
29. Miller & Co., 824 F.2d at 963-64.
30. Id. at 964 (emphasis added) (citing Montgomery Ward & Co. v. Zenith Radio Corp.,
673 F.2d 1254, 1260 (C.C.P.A.), cert. denied, 459 U.S. 943 (1982); American Air Parcel Forwarding Co. v. United States, 718 F.2d 1546, 1551 (Fed. Cir. 1983), cert. denied, 466 U.S. 937
(1984)).
31. Id. See supra note 27 (discussing 19 U.S.C. § 1516a).
32. Miller & Co., 824 F.2d at 964.
33. Id.
34. Id.
35. The court noted at the start of its analysis that § 158 1(i) jurisdiction is inapplicable
when jurisdiction under another subsection of § 1581 is or could have been available or unless the remedy afforded under that other subsection would be "manifestly inadequate." Id.
at 963. The party asserting § 158 1(i) jurisdiction bears the burden to show how the remedy
would be manifestly inadequate. Id. In this case, Miller had to demonstrate that even if it had
availed itself of the remedy of § 1581 (c), such remedy would have been manifestly inadequate.
Id. at 964.
36. Id. (citing American Air Parcel Forwarding Co. v. United States, 718 F.2d 1546,
1550-51 (Fed. Cir. 1983), cert. denied, 466 U.S. 937 (1984)).
37. Id. Another importer of Brazilian pig iron had used § 158 1(c) in Philipp Bros., Inc.
v. United States, 630 F. Supp. 1317, 1323-24 (Ct. Int'l Trade 1986), appeal dismissed, 86-1122
(Fed. Cir:*July 18, 1986). In that case the importer had raised the same substantive issue as
Miller (i.e., that the final determination made on an annual review should be unenforceable
because the ITA had not completed the review within the statutory time period), but the CIT
had rejected the importer's argument on the merits.
19881
INTERNATIONAL TRADE DECISIONS
1173
consequently failed to establish jurisdiction under section 1581 (i).3s s
The result was, therefore, that Miller was not permitted to proceed under section 1581(i) because a remedy existed under section
1581(c)-and yet Miller could not proceed under that subsection
because it had failed to participate in the ITA proceedings. While it
is not clear from the opinion whether Miller's failure to participate
at the ITA stage resulted from its own negligence, or default, or
from some other reason,3 9 there are nonetheless good policy reasons for the court's result. Section 1581(c) limits jurisdiction to in40
terested parties who are parties to the agency proceedings.
Section 1581(i) provides jurisdiction in addition to, and not as an alternative to, section 1581(c). 4 ' For the Federal Circuit to have allowed Miller to proceed under section 1581(i) would have been to
allow Miller to "circumvent the specific requirements of jurisdiction" 42 laid down by the legislature in section 1581(c).
From the point of view of a party who did not participate before
the agency, it is interesting to compare the result reached in Miller
with the result reached by a different panel of the Federal Circuit
construing another jurisdictional statute, subsection 1337(c) of 19
U.S.C. 4 3 LSI Computer Systems v. ITC 44 concerned an ITC investigation under section 1337 of 19 U.S.C. (usually referred to as "section
337"). 4 5 Pursuant to a complaint by Southwest Laboratories, Inc.
38. Miller & Co., 824 F.2d at 964.
39. Miller would probably have lost on the merits anyway. See supra note 37 and accompanying text (discussing court's treatment of similar issue in other case).
40. Specifically, the combination of 19 U.S.C. § 1516a with 28 U.S.C. § 1581(c) imposes
this requirement. See Miller & Co. v. United States, 824 F.2d 961, 963 (Fed. Cir. 1987), cert.
denied, 108 S. Ct. 773 (1988).
41. United States v. Uniroyal, Inc., 687 F.2d 467, 472 (C.C.P.A. 1982); Miller & Co. v.
United States, 598 F. Supp. 1126, 1129-31 (Ct. Int'l Trade 1984).
42. Miller & Co. v. United States, 598 F. Supp. 1126, 1129-31 (Ct. Int'l Trade 1984).
43. See LSI Computer Sys., Inc. v. United States Int'l Trade Comm'n, 832 F.2d 588, 4
U.S.P.Q.2d 1705 (Fed. Cir. 1987) (construing § 1337(c)). 19 U.S.C. § 1337 codifies section
337 of the Tariff Act of 1930. The jurisdictional provision, subsection 1337(c), grants "any
person adversely affected by a final determination of the [ITC]" made under specified subsections of section 1337 the right of appeal to the United States Court of Appeals for the Federal
Circuit. 19 U.S.C. § 1337(c) (1982). The corresponding jurisdictional provision in Title 28
U.S.C. (section 1295 of which sets forth the jurisdiction of the Federal Circuit) is 28 U.S.C.
§ 1295(a)(6) (1982).
44. 832 F.2d 588, 4 U.S.P.Q.2d 1705 (Fed. Cir. 1987).
45. Section 1337(a) provides:
(a) Unfair methods of competition and unfair acts in the importation of articles
into the United States, or in their sale by the owner, importer, consignee, or agent of
either, the effect or tendency of which is to destroy or substantially injure an industry, efficiently and economically operated, in the United States, or to prevent the
establishment of such an industry, or to restrain or monopolize trade and commerce
in the United States are declared unlawful, and when found by the Commission to
exist shall be dealt with, in addition to any other provisions of law, as provided in this
section.
19 U.S.C. § 1337(a) (1982). A common predicate "unfair act" is the (alleged) infringement of
1174
THE AMERICAN UNIVERSITY LAw REvIEw[Vol. 37:1167
(Southwest), the owner of a United States patent on lighting
switches, the ITC instituted an investigation against a number of
foreign producers who were allegedly infringing Southwest's patent.46 LSI, a United States company, made circuits used by the foreign producers, but made no attempt to intervene, was not a
respondent in the section 337 investigation, nor was at any time a
party to the administrative proceeding before the ITC. 47 The Administrative Law Judge (ALJ) for the ITC found that certain products, including those which used LSI components, did not infringe
the patent. 48 The full Commission, however, reversed the ALJ on
that point, finding that lighting switches of all respondents infringed
the patent, and that there was a violation of section 337.49 The consequent exclusion order 50 encompassed LSI's products when they
were components of the infringing products. 5 1 LSI then appealed
the ITC's final determination to the Federal Circuit, and the ITC
52
and Southwest, as an intervenor, moved to dismiss LSI's appeal.
LSI, although it did not participate in the ITC proceedings, argued it had standing to appeal because it was "any person adversely
affected" by the ITC's final determination within the meaning of
section 337. 5 3 The court first noted that neither the ITC nor Southwest refuted the contention that LSI was "adversely affected" by the
ITC determination. 54 The court, therefore, stated that the issue on
appeal turned on whether LSI was a "person" entitled to appeal
under section 337.55 The court summarily rejected the contention
of Southwest and the ITC that the court should acknowledge a general rule that one who is not a party in an administrative proceeding
cannot appeal the results of the proceedings.5 6 The court stated
that there was a specific statutory provision in section 337 governing
a U.S. patent, which occurred in the case of LSI Computer Sys., Inc. v. United States Int'l
Trade Comm'n, 832 F.2d 588, 4 U.S.P.Q.2d 1705 (Fed. Cir. 1987). See also infra Section V.
46. LSI Computer Sys., Inc. v. United States Int'l Trade Comm'n, 832 F.2d 588, 588, 4
U.S.P.Q.2d 1705, 1706 (Fed. Cir. 1987).
47. Id., 4 U.S.P.Q.2d at 1706.
48. Id. at 589, 4 U.S.P.Q.2d at 1706.
49. Id., 4 U.S.P.Q.2d at 1706. The ALJ found that the products of certain respondents
did not infringe the patent. Id.
50. See 19 U.S.C. § 1337(d) (1982) (giving ITC power to issue exclusion order that bars
entry of products into United States which violate Tariff Act).
51. LSI Computer Sys., Inc. v. United States Int'l Trade Comm'n, 832 F.2d 588, 589, 4
U.S.P.Q.2d 1705, 1706 (Fed. Cir. 1987).
52. Id., 4 U.S.P.Q.2d at 1706.
53. Id., 4 U.S.P.Q.2d at 1706. See supra note 45 (setting forth jurisdictional requirements
of § 337).
54. LSI Computer, 832 F.2d at 589, 4 U.S.P.Q.2d at 1706.
55. Id., 4 U.S.P.Q.2d at 1706.
56. Id., 4 U.S.P.Q.2d at 1706.
1988]
INTERNATIONAL TRADE DECISIONS
1175
who may obtain judicial review of a final ITC determination.5 7
Southwest and the ITC further argued that "persons," as used in
section 337, should be construed as equivalent to "party. 5 8s The
court also rejected this approach. 5 9 To decide who was a "person"
under the statute, the court applied the "plain meaning" rule for
construing explicit statutory language, 6° and decided that the plain
meaning of "person" was inconsistent with limiting it to "parties in
the proceeding below." 61 Furthermore, the court found that the
legislative history showed no clear congressional intent contrary to
the plain meaning of the statute as interpreted by the court. 62 Finally, the court rejected an argument by Southwest and the ITC that
failing to construe "person" as "party" would lead to judicial
chaos. 63 The court pointed out that the plain meaning of section
337 still requires the "person" to prove that he is adversely affected by
the Commission's final determination. 64 Accordingly, the court dismissed the ITC's and Southwest's motions and permitted LSI to
proceed with the appeal. 6 5
In the customs field, the Federal Circuit examined a number of
other aspects ofjurisdiction. In Nature's Farm Products, Inc. v. United
States,66 the Federal Circuit considered the statutory requirement
that duties be paid prior to the commencement of a protest action in
the CIT.6 7 The plaintiff, Nature's Farm, protested the amount of
duties assessed on certain imported canned mushrooms pursuant to
57. Id., 4 U.S.P.Q.2d at 1706.
58. Id., 4 U.S.P.Q.2d at 1706.
59. See id. at 590-91, 4 U.S.P.Q.2d at 1708-09 (analyzing whether LSI fell within "person" definition in § 337).
60. Id. See Burlington No. R.R. Co. v. Oklahoma Tax Comm'n, 107 S. Ct. 1855, 1860
(1987) (stating that if language of statute is unambiguous and there is no clear legislative
history to show contrary intention, language of statute is controlling); United States v. James,
106 S. Ct. 3116, 3122 (1986) (stating that in absence of clearly expressed contrary legislative
intent, language of statute is conclusive); Garcia v. United States, 456 U.S. 70, 75 (1984)
(stating that only most extraordinary showing of contrary intentions of Congress could justify
limitation on "plain meaning" of statutory language); Ocean Drilling & Exploration Co. v.
United States, 600 F.2d 1343, 1347-48 (Ct. Cl. 1979) (stating that language of statute has
ordinary meaning unless there is persuasive and clear showing that Congress intended language in statute to differ from ordinary meaning).
61. LSI Computer Sys., Inc. v. United States Int'l Trade Comm'n, 832 F.2d 588, 590, 4
U.S.P.Q.2d 1705, 1706 (Fed. Cir. 1987).
62. Id. at 590-91, 4 U.S.P.Q.2d at 1707-08.
63. Id. at 591, 4 U.S.P.q.2d at 1708.
64. Id., 4 U.S.P.Q.2d at 1708 (emphasis in original).
65. Id. at 591-92, 4 U.S.P.Q.2d at 1708.
66. 819 F.2d 1127 (Fed. Cir. 1987).
67. Nature's Farm Prods., Inc. v. United States, 819 F.2d 1127, 1127-28 (Fed. Cir. 1987).
The relevant statute is 28 U.S.C. § 2637(a) (1982) which provides: "A civil action contesting
the denial of a protest under section 515 of the TariffAct of 1930 may be commenced.., only
if all liquidated duties, charges, or exactions have been paid at the time the action is commenced ......
1176
THE AMERICAN UNIVERSITY LAW REVIEW[Vol.
37:1167
section 515 of the Tariff Act of 1930.68 Following the Customs Service's denial of the protest, Nature's Farm had 180 days in which to
commence an action in the CIT contesting that denial. 69 Nature's
Farm commenced the action on the 180th day, and its counsel
mailed a check for the disputed amount to the Customs Service on
the same day. 70 The Federal Circuit, affirming the decision of the
CIT, held that the CIT lacked jurisdiction because the duties had
71
not "been paid" at the time Nature's Farm commenced the action.
The court did not decide the issue whether the sum was considered
"paid" when the plaintiff mailed the check or when the government
72
received it because neither interpretation assisted Nature's Farm.
In Sacilor,Acieries et Laminoirs de Lorrainev. United States,73 the Federal Circuit considered whether foreign manufacturers had standing
74
to bring an action under the Steel Import Stabilization Act (SISA).
In Sacilor, the plaintiffs, who are European producers of steel pipe
(collectively "Sacilor"), contracted with the All American Pipeline
Company (AAPL) to supply 320,000 tons of a certain type of pipe
for use in a construction project in the United States. 75 Imports of
pipe from Europe are governed and quantitatively restricted both by
SISA and an agreement between the European Economic Community (EEC) and the United States, known as the Arrangement on
European Communities' Export of Pipes and Tubes to the United
States of America (Arrangement). 76 Both SISA and the Arrangement allow for the export by the EEC of additional quantities of
68.
69.
Nature's Farm Prods., 819 F.2d at 1127.
Id. See 28 U.S.C. § 2636 (1982) which provides in part
(a) A civil action contesting the denial, in whole or in part, of a protest under
section 515 of the Tariff Act of 1930 is barred unless commenced in accordance with
the rules of the Court of International Trade (1) within one hundred and eighty days after the date of mailing of notice of
denial of a protest under section 515(a) of such Act; or
(2) within one hundred and eighty days after the date of denial of a protest by
operation of law under the provisions of section 515(b) of such Act.
70. Nature's Farm Prods., 819 F.2d at 1127.
71. Id. at 1128 (emphasis added).
72. Id.
73. 815 F.2d 1488 (Fed. Cir.), cert. denied, 108 S. Ct. 285 (1987).
74. Sacilor, Acieries et Laminoirs de Lorraine v. United States, 815 F.2d 1488, 1491
(Fed. Cir.) (finding that foreign plaintiff lacks standing to bring § 805(b)(3) action), cert. denied,
108 S. Ct. 285 (1987). See Steel Import Stabilization Act § 802(c)(3), 19 U.S.C. § 2253 (West
Supp. IV 1986) (finding that extensive unfair trade practices by international steel producers
have contributed to economic problems of American steel industry).
75. Sacilor, 815 F.2d at 1489.
76. The Arrangement on European Communities' Export of Pipes and Tubes to the
United States of America is in the form of an exchange of letters dated October 21, 1982, as
clarified by another exchange of letters onJanuary 10, 1985. See UnitedStates-European Communities Steel Pipe and Tube Imports Agreement. Hearingon S. 1035 Before the Subcomm. on International
Trade of the Senate Comm. on Finance, 98th Cong., Ist Sess. 1, 58-60 (1983) (reprinting letter of
Oct. 21, 1982); 28 O.J. EUR. COMM. (No. L9) 2-8 (1985) (reprinting letter ofJan. 10, 1985).
1988]
INTERNATIONAL TRADE DECISIONS
1177
steel pipes and tubes to the United States if the Secretary of Commerce determines that a "short supply" or "emergency market situation" exists.77 The EEC (as opposed to the particular interested
company) may request such a determination, and did so specifically
for the sale of pipes by Sacilor to AAPL. 78 The Secretary denied the
request, and Sacilor (not the EEC) appealed to the CIT, which dismissed the petition on the grounds, inter alia, that the Secretary's
determination was not reviewable. 79 The Federal Circuit reversed,
holding that the CIT lacked jurisdiction8 0 both because Sacilor
lacked standing and because the claims were moot.8 1
The court held that the claims were moot because the contract
between Sacilor and AAPL contained a force majeure clause which
relieved Sacilor from any obligation to deliver, given the events
which had occurred. 8 2 In addition, AAPL had been able to obtain
all the pipe it needed from other producers.8 3 The court noted that
"[s]ince AAPL now has the required pipe and the contractual obligations of Sacilor and AAPL are a nullity, there is no live case or
84
controversy to be resolved by Sacilor's suit."
77. Steel Import Stabilization Act § 805(b)(3), 19 U.S.C. § 2253 (West Supp. IV 1986);
see United States-EuropeanCommunities Steel Pipe and Tube Imports Agreement: HearingBefore the Subcomm. on International Trade of the Senate Comm. on Finance, 98th Cong., 1st Sess. 1, 59 (1983)
(letter of Oct. 21, 1982 from Malcom Baldrige, Secretary of Commerce, to Vicomte Etienne
Davignon, Vice-President of the European Communities) (confirming agreement to allow increased shipment of steel pipes and tubes by EEC producers when U.S. producers are unable
to meet demand for supply).
78. Sacilor, Acieries et Laminoirs de Lorraine v. United States, 815 F.2d 1488, 1489
(Fed. Cir.), cert. denied, 108 S.Ct. 285 (1987).
79. Sacilor, Acieries et Laminoirs de Lorraine v. United States, 613 F. Supp. 364, 369-70
(Ct. Int'l Trade 1985), vacated, 815 F.2d 1488 (Fed. Cir.), cert. denied, 108 S.Ct. 285 (1987).
80. Sactlor, 815 F.2d at 1490. The CIT assumed jurisdiction on the basis of 28 U.S.C.
§ 1581(i)(3),(4) (1982). See supra note 15.
81. Saclor, 815 F.2d at 1490.
82. Id. at 1489, 1491.
83. Id. at 1491. The other producers were apparently both domestic and foreign. Id. at
1490.
84. Id. at 1491. This is a curious statement. It would, of course, be valid if the suit had
been between Sacilor and AAPL. Sacilor's complaint, however, was that the Secretary's determination was arbitrary, capricious, and a denial of due process rights. Id. at 1489. That controversy had not been resolved and was still live. Sacilor had lost the opportunity of
(presumably) valuable sales to AAPL as a result of the allegedly unlawful determination. See
id. at 1489, 1491 (indicating Sacilor's desire to sell to AAPL). Sacilor made the point that the
possibility of recovery of money damages against the Secretary through a suit in the Claims
Court presented a sufficiently live controversy for the Federal Circuit to decide the issue. Id.
at 1491. The court rejected this argument, stating that "[n]o such claims were presented to
the trial court and this court will not render an advisory opinion on claims that were not or
could not be raised below." Id. Sacilor, however, was not asking for the court's advisory
opinion on money damages against the Secretary. See id. at 1489 (requesting court to determine whether Secretary acted arbitrarily and capriciously). Sacilor was requesting an adjudication of the lawfulness of the Secretary's determination. Id. That adjudication necessarily
preceded any action by Sacilor against the Secretary for money damages because if the Secretary's determination was lawful, a damage action could not possibly succeed. Id. at 1489,
1491. There is clear authority, both in the Supreme Court and in other circuits, that the
1178
THE AMERICAN UNIVERSITY LAW REVIEW[Vol.
37:1167
Apart from the mootness issue, in order for Sacilor to have standing to challenge the Secretary's determination, the court stated that
relief from the injury must be "likely" to follow from a favorable
decision. 8 5 The court noted that relief would not necessarily follow
in this case because export of the pipe was contingent on the EEC
issuing the required export licenses. 8 6 Furthermore, the court held
that "it would be contrary to the entire purpose of the Act to allow
foreign producers to challenge a decision made pursuant to a regulatory scheme designed to protect American steel producers from
87
foreign imports.
In E.C. McAfee A/C Bristol Metal Industries of Canada v. United
States, 8 the Federal Circuit, affirming the CIT, disposed of an unpossibility of a future action to recover money damages prevents an existing action concerning the lawfulness of certain conduct from becoming moot. See, e.g., Liner v. Jafco, Inc., 375
U.S. 301, 305-06 (1964) (finding that when party obtaining injunction executes bond to protect enjoined party from damages arising from injunction, validity of injunction is not moot
when enjoined party may seek to recover under bond); American Can Co. v. Mansukhani, 742
F.2d 314, 320 (7th Cir. 1984) (finding same); Meyers v.Jay St. Connecting R.R., 288 F.2d 356,
359-60 (2d Cir.) (finding same), cert.
denied, 368 U.S. 828 (1961); cf. Alton & S. Ry. v. International Ass'n of Machinists & Aerospace Workers, 463 F.2d 872, 879-80 (D.C. Cir. 1972) (stating that "while an 'effective remedy' for the immediate dispute is not obligatory, there must
be at least a capacity for a declaration of legal right concerning a future projection of the
actual dispute that precipitated the litigation.").
85. Sacilor, Acieries et Laminoirs de Lorraine v. United States, 815 F.2d 1488, 1490-91
(Fed. Cir.) (citing Allen v. Wright, 468 U.S. 737, 751 (1984)), cert. denied, 108 S. Ct. 285
(1987).
86. Id. at 1491. Apparently the record contained nothing indicating that the EEC would
issue the licenses. Id. Nonetheless, this is rather an odd finding in light of the fact that it was
the EEC that originally requested the determination in Sacilor's favor. Id. at 1489.
87. Id. at 1491. To have standing, the court said, the interest which the party seeks to
protect must be within the "zone of interests" to be protected by the statute or constitutional
guarantee. Id. (citing Clarke v. Securities Indus. Assoc., 107 S. Ct. 750, 755 (1987) (quoting
Association of Data Processing Orgs., Inc. v. Camp, 397 U.S. 150, 153 (1970))). Whether a
plaintiff falls within the "zone of interest" depends on whether Congress intended him "to be
relied upon to challenge agency disregard of the law." Id. (citing Clarke, 107 S. Ct. at 757
(quoting Block v. Community Nutrition Inst., 467 U.S. 340, 347 (1984))). The court found no
such interest evident in this case. Id. It is difficult to understand, however, why a foreign
producer should not be relied upon to challenge an agency decision when the foreign producer is the party primarily aggrieved by it. See Clarke, 107 S. Ct. at 757 (noting that plaintiffs
seeking review of agency decisions should be persons complaining about decisions and need
not be plaintiffs for whose benefit Congress acted). Furthermore, the EEC-U.S. Arrangement
was not one-sided. The court's opinion gives the impression that the regulatory scheme was
designed solely for the benefit of United States producers, but this is erroneous. In addition
to extensive consultation provisions the Arrangement benefitted EEC producers and hmited
U.S. producers' rights in two ways. First, the Arrangement anticipated the withdrawal of all
pending antidumping and countervailing duty petitions and an undertaking by United States
producers to refrain from filing any petitions seeking import relief under United States law.
Second, the EEC could terminate the Arrangement if United States producers filed any additional petitions. See United States-European Communities Steel Pipe and Tube Imports Agreement:
Hearing on S.1035 Before the Subcomm. on InternationalTrade of the Senate Comm. on Finance, 98th
Cong., Ist Sess. 1, 58-60 (1983) (reprinting letter of Oct. 21, 1982, in particular paragraphs C
and F); 28 O.J. EUR. COMM. (No. L9) 2-8, 13-31 (1985) (reprinting letter ofJan. 10, 1985, in
particular articles 8, 10, 12, and 13).
88. 832 F.2d 152 (Fed. Cir. 1987).
1988]
INTERNATIONAL TRADE DECISIONS
1179
meritorious jurisdictional challenge by the United States Government.8 9 McAfee was the customhouse broker for the importer,
Bristol.9 0 Entry documents identified the importer of record as
"E.C. McAfee for the account of Bristol Metals Limited." 9 1 E.C.
McAfee A/C Bristol Metal Industries of Canada Ltd. (McAfee A/C
Bristol) filed a classification challenge with the CIT.9 2 The action
was settled and judgment was entered in favor of McAfee A/C Bristol. 9 3 As a result of the settlement and judgment, certain refunds
were due from Customs. 9 4 Customs, however, refused to pay the
refunds, claiming a right of setoff with respect to other amounts due
to Customs from McAfee on behalf of persons other than Bristol. 95
Counsel then filed a motion in the name of "Bristol" for an order
requiring the government to pay over the refunds. 9 6 The CIT
granted the motion and ordered the government to pay a refund for
97
the amount of the judgment.
On appeal to the Federal Circuit, the government argued that
Bristol lacked standing under two theories. 98 First, the government
contended that Bristol lacked standing because it was not a party to
the action. 9 9 The Federal Circuit rejected this argument and noted
that it was of "no substantive consequence" whether the motion was
brought in the name of "Bristol" or "McAfee A/C Bristol."100 The
court reasoned that any question that Bristol could not itself file the
motion was "purely technical."'u 0 Second, the government argued
that the motion must be considered a contractual claim for breach
of the settlement agreement and that, as such, the CIT had no jurisdiction. 0 2 The Federal Circuit again rejected this argument, holding that Bristol's motion did not present a claim for breach of
contract, but requested enforcement of the court's original judgment favoring McAfee A/C Bristol.103 The government also lost on
89. E.C. McAfee A/C Bristol Metal Indus. of Canada v. United States, 832 F.2d 152, 155
(Fed. Cir. 1987).
90. Id. at 153.
91. Id.
92. Id.
93. Id.
94. Id.
95. Id.
96. Id.
97. E.C. McAfee A/C Bristol Metal Indus. of Canada v. United States, 650 F. Supp. 1026,
1027-28 (Ct. Int'l Trade), aff'd, 832 F.2d 152 (Fed. Cir. 1987).
98. E.G. McAfee A/C Bristol Metal Indus. of Canada v. United States, 832 F.2d 152, 153
(Fed. Cir. 1987).
99. Id.
100. Id.
101. Id.
102. Id.
103. Id.
1180
0
the merits.'
THE AMERICAN UNIVERSITY LAW REVIEW[VoI.
37:1167
4
III.
STANDARD
OF REVIEW
This section examines several cases in which the Federal Circuit
considered the appropriate standard of review to apply in given situations. In one case, the agency decision lacked a specific express
finding.10 5 Another case addressed the basis upon which damages
should be awarded on an injunction bond. 0 6 The court also considered a refusal to revoke an antidumping order, 0 7 and a finding
of no infringement in a section 337 unfair trade action.' 0 8 In all
cases the court characterized its review function in a manner fully
consistent with standard principles of administrative law.' 0 9
Whatever standard of review was being applied, however, the court
accorded considerable weight to the decisions below. The Federal
Circuit was loath to substitute its judgment, and indeed did not do
SO.
In Ceramica Regiomontana, S.A. v. United States," 0 the court found
that the ITA decision under review met the substantial evidence
standard even though the ITA failed to articulate expressly its reliThe Federal
ance on certain data used in rendering its decision.'
112
Circuit also affirmed the CIT decision which upheld the ITA.
The Federal Circuit noted that "a reviewing court, in dealing with a
determination or judgment which an administrative agency alone is
authorized to make, must judge the propriety of [that determination] solely by the grounds invoked by the agency."' 13 Although the
agency's published determinations lacked a particular express finding, 14 the Federal Circuit held that the agency's reasoning was dis104. Id. at 154-55. See infra notes 358-70 and accompanying text (discussing merits of
case).
105. Ceramica Regiomontana, S.A. v. United States, 810 F.2d 1137 (Fed. Cir. 1987).
106. Zenith Radio Corp. v. United States, 823 F.2d 518 (Fed. Cir. 1987).
107. American Permac, Inc. v. United States, 831 F.2d 269 (Fed. Cir. 1987).
108. Tandon Corp. v. United States Int'l Trade Comm'n, 831 F.2d 1017 (Fed. Cir. 1987).
109. See id. at 1019 (stating Federal Circuit must review cases appealed from ITC under
"substantial evidence" standard as articulated in APA); see also Administrative Procedure Act,
5 U.S.C. § 706(2)(E) (1982) (stating that reviewing court shall set aside all agency determinations of fact unsupported by substantial evidence).
110. 810 F.2d 1137 (Fed. Cir. 1987).
Ceramica Regiomontana, S.A. v. United States, 810 F.2d 1137, 1139 (Fed. Cir.
I11.
1987).
112. Ceramica Regiomontana, S.A. v. United States, 636 F. Supp. 961, 969 (C.I.T. 1986),
aft'd, 810 F.2d 1137 (Fed. Cir. 1987).
113. CeramicaRegiomontana, 810 F.2d at 1139 (quoting SEC v. Chenery, 332 U.S. 194, 196
(1947)).
114. Id. The ITA had rejected subsidy benefit figures provided by the exporters and had
used other figures instead without expressly finding that the alternative figures were the "best
information available." Id. See also infra notes 209-15 and accompanying text.
19881
INTERNATIONAL TRADE DECISIONS
1181
cernable and that the CIT had not interjected any new grounds for
the decision.1 15 The court stated that an agency's decision of "less
than ideal clarity" may be upheld "if the agency's path may reason1 16
ably be discerned."
In Zenith Radio Corp. v. United States, 1 7 the Federal Circuit applied
the abuse of discretion standard to consider the novel issue 1 8 of the
basis on which the CIT should award damages on an injunction
bond. The court considered decisions of other circuits and noted
that the abuse of discretion standard is applied when reviewing a
district court's refusal to award damages. 1 9 The Federal Circuit reviewed the factors applied by the CIT to deny damages and held
that the CIT had not abused its discretion even though the Federal
Circuit might have reached a different conclusion in weighing the
20
factors relied upon by the CIT.'
In American Permac, Inc. v. United States, 121 an American importer
and West German manufacturer of dry cleaning equipment sought
revocaton of an antidumping duty order. 22 On appeal to the Federal Circuit, the plaintiff challenged the decision of the CIT on the
ground that it was unsupported by substantial evidence. 2 3 The
Federal Circuit noted 124 that although a decision of the CIT was
before it, because the decision of the CIT was based upon the findings of the ITC, it was necessary for the court first to determine
12 5
whether the ITC's findings are supported by substantial evidence.
115. Ceramica Regonmontana, 810 F.2d at 1139.
116. Id. (quoting Bowman Transp. v. Arkansas-Best Freight Sys., 419 U.S. 281, 286
(1974); Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 595 (1945)).
117. 823 F.2d 518 (Fed. Cir. 1987).
118. Zenith Radio Corp. v. United States, 823 F.2d 518, 521 (Fed. Cir. 1987). This issue
had not previously been addressed by this court. Id.
119. Id (citing Coyne-Delaney Co. v. Capital Dev. Bd., 717 F.2d 385, 392 (7th Cir. 1983);
Kansas ex reL Stephan v. Adams, 705 F.2d 1267, 1270 (10th Cir. 1983); Page Communications
Eng'rs, Inc. v. Froehlke, 475 F.2d 994, 997 (D.C. Cir. 1973)).
120. Id. at 522.
121. 831 F.2d 269 (Fed. Cir. 1987).
122. American Permac, Inc. v. United States, 831 F.2d 269, 271 (Fed. Cir. 1987).
123. Id. at 273. Section 1516 of Title 19 of the United States Code provides
(1) Remedy.-The court shall hold unlawful any determination, finding, or conclusion found (A) in an action brought under paragraph (1) of subsection (a) of this section, to be
arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law,
or (B) in an action brought under paragraph (2) of subsection (a) of this section, i.e.
antidumping or countervailing duty orders, to be unsupported by substantialevidence on
the record, or otherwise not in accordance with law.
Id. (emphasis added). See also Administrative Procedure Act, 5 U.S.C. § 706(2)(e) (1982) (providing that reviewing court must set aside agency decision unsupported by substantial
evidence).
124. American Permac, 831 F.2d at 273 (citing Matsushita Elec. Indus. Co. v. United States,
750 F.2d 927, 932 (Fed. Cir. 1984)).
125. Id. at 273.
1182
THE AMERICAN UNIVERSITY LAW REVIEW[Vol. 37:1167
The court reviewed the ITC's decision, found that it was supported
by substantial evidence, 126 and consequently affirmed the CIT deci1 27
sion sustaining the ITC determination.
Tandon Corp. v. ITC 1 28 involved consideration of the standard of
review applicable in a section 337 case.' 29 The "substantial evidence" standard applies by virtue of 19 U.S.C. section 1337(c). 30
The court noted that there is a significant difference' 3 ' between the
"substantial evidence" standard and the "clearly erroneous" standard, 13 2 and that Congress intended that "greater weight and final-
ity be accorded to [the ITC's] findings as compared with those of a
trial court." 1 33 The court further noted that the Court of Customs
and Patent Appeals had been criticized for using "a more rigorous
standard of review on the question of obviousness (i.e., was the decision 'clearly contrary to the weight of the evidence) in Solder Removal
Co. v. ITC."' 3 4 The Federal Circuit also made it clear that in a section 337 case the ITC's "primary responsibility is to administer the
trade laws, not the patent laws."' 35 The court quoted a further passage from the Senate Report 3 6 which stated "[t]he [ITC's] findings
neither purport to be nor can they be, regarded as binding interpre-
37
tations of the U.S. patent laws in particular factual contexts."'
The court concluded that its "appellate treatment of decisions from
138
the [ITC] does not estop fresh consideration by other tribunals."'
On reviewing the ITC's findings in light of these remarks, the court
126.
Id. at 275-76.
127. Id. at 276.
128. 831 F.2d 1017 (Fed. Cir. 1987).
129. See supra note 45.
130. Section 1337(c) of Title 19 of the United States Code provides that review shall be
conducted in accordance with Chapter 7 of Title 5, 19 U.S.C. § 1337(c) (1982). See supra note
43. Pursuant to Chapter 7 of Title 5 of the United States Code, the reviewing court must hold
unlawful and set aside agency action, findings, and conclusions that are unsupported by substantial evidence. 5 U.S.C. § 706(2)(E) (1982).
131. Tandon Corp. v. ITC, 831 F.2d 1017, 1019 (Fed. Cir. 1987) (citing Stem, Review of
Findings of Administrative Judges and Juries: A ComparativeAnalysis, 58 HARV. L. REv. 70, 80-89
(1944); Consolo v. FMC, 383 U.S. 607, 619-20 (1966)).
132. Id. at 1019; cf.Fed. R. Civ. P. 52. Rule 52 of the Federal Rules of Civil Procedure
provides that in actions tried upon the facts without a jury, findings of fact shall not be set
aside unless clearly erroneous.
133. Tandon Corp., 831 F.2d at 1019.
134. Id. at 1019 (citing Solder Removal Co. v. ITC, 582 F.2d 628 (CCPA 1978) (quoting
Senate Report No. 466, 96th Cong., 1st Sess. 26 (1979)).
135. Id This is a useful reminder. It is easy to forget that § 337 is not drafted solely to
apply to cases of patent infringement, but is drafted so as to apply to any "unfair methods of
competition and unfair acts in the importation of articles into the United States ...." See
supra note 45.
136. See supra note 134.
137. Tandon Corp., 831 F.2d at 1019.
138. Id. (citing Lannom Mfg. Co. v. ITC, 799 F.2d 1572, 1577-78 (Fed. Cir. 1986)). The
possibility of a patent infringement action exists wholly apart from § 337.
1988]
INTERNATIONAL TRADE DECISIONS
1183
found them to be supported by substantial evidence, and affirmed
the ITC's decision that the plaintiff's patent was not infringed by
certain imported double-sided floppy disk drives.' 3 9
IV. ANTIDUMPING AND COUNTERVAILING DUTY
Certain issues arising from the CIT and Federal Circuit's jurisdiction in antidumping and countervailing duty matters have already
been discussed. 140 This section reviews decisions of the Federal
Circuit on elements of the antidumping and countervailing duty
process.' 4 1 On the whole, the cases illustrate the deference paid by
the Federal Circuit to the administration of the trade laws by the
agencies, both from a substantive and a procedural point of view. In
three of the cases reviewed in this section, it seems that this deference may have led the court into the dangers referred to in the introduction to this Article. In one case which concerned the ITA's
"less than fair value" determination in an antidumping case involving nonmarket economy countries, the court rejected arguments by
the importer challenging the ITA's basis for determining fair value,
139. Tandon Corp., 831 F.2d at 1019.
140. See supra notes 15-42 and accompanying text (examining Miller & Co. v. United States).
141. Sections 1671-1671h of Title 19 of the United States Code relate to countervailing
duties. Sections 1673-1673g relate to antidumping. In broad outline, the procedure on a
petition by an interested party up to the issue of a final affirmative antidumping or countervailing duty order is as follows, ignoring possible extensions and certain other contingencies
which may occur.
1. An interested party files a petition with both the ITC and the ITA. 19 U.S.C.
§§ 1671a(b), 1673a(b) (1982).
2. Within 20 days after stage one the ITA must examine the petition for sufficiency.
19 U.S.C. § 1671a(c), 1673a(c) (1982).
3. If the petition is accepted at stage two, then within 45 days after stage one the
ITC must make a preliminary determination, inter alia, as to whether an industry in
the United States has been injured. 19 U.S.C. H4 1671b(a), 1673b(a) (1982).
4. If the determination at stage three is affirmative, then within 85 days (160 days in
the antidumping procedure) after stage one, the ITA must make a preliminary determination in countervailing duty cases as to whether a subsidy has been provided with
respect to the merchandise at issue (as to whether the merchandise is being or is
likely to be sold at less than fair value (LTFV) in the antidumping procedure). 19
U.S.C. 44 1671b(b), 1673b(b) (1982).
5. If the determination at stage four is affirmative, liquidation of entries of the merchandise is suspended and a cash deposit or bond must be posted for each entry
concerned for the amount of estimated duty determined at stage four. 19 U.S.C.
§ 1671b(d), 1673b(d) (1982).
6. If the determination at stage five is affirmative, then within 75 days after stage
five, the ITA must make a final subsidy (or LTFV) determination. 19 U.S.C.
§§ 1671d(a), 1673d(a) (1982).
7. If the determination at stage six is affirmative, then within the later of 120 days
after stage four or 45 days after stage six, the ITC must make a final injury determination. 19 U.S.C. §§ 1671d(b), 1673d(b) (1982).
8. If the determination at stage seven is affirmative, then within seven days after
stage seven, a final affirmative countervailing duty (or antidumping) order is published which directs Customs to assess the appropriate duty. 19 U.S.C. §§ 1671e,
1673e (1982).
1184
THE AMERICAN UNIVERSITY LAW
REvIEw[Vol. 37:1167
and thereby arguably missed an opportunity to bring greater certainty to the structure and application of antidumping law in this
area.1 4 2 In two other cases, both concerning revocation of antidumping orders, the ITA had been guilty of inordinate delay following publication of tentative decisions to revoke, but the court
again did not use the opportunity to impose greater discipline on
arguably lax administrative practice.' 43 These cases may be contrasted with a decision by the court concerning cumulation of imports in antidumping and countervailing duty cases, in which the
court reversed ITC practice in this area following rather detailed
analysis. 144 Nonetheless, the cases are consistent with those in Section III of this Article in which the court reiterated that agency determinations are entitled to deference even in situations when
different results could have been reached .145
A.
Elements of a Determination
There is often a delay of at least several months between the time
an aggrieved party files an antidumping or countervailing duty petition, and the time liquidation of entries of the merchandise in question is suspended and deposits of estimated duty required.' 4 6 In
certain circumstances,14 7 however, antidumping duties can be applied retroactively for a period of ninety days prior to the ITA's pre48
liminary "less than fair value" (LTFV) determination.
The ITA must make certain findings before it can apply antidumping duties retroactively. 49 The ITA must determine that
142. ICC Indus. v. United States, 812 F.2d 694 (Fed. Cir. 1987). See infra notes 152-81
and accompanying text.
143. See Matsushita Elec. Indus. Co. v. United States, 823 F.2d 505, 510 (Fed. Cir. 1987)
(refusing to enjoin ITA from conducting further administrative reviews after tentative decision to revoke antidumping order); UST, Inc. v. United States, 831 F.2d 1028, 1032-33 (Fed.
Cir. 1987) (rebuking agency without sanction for delaying antidumping reviews).
144. See Bingham & Taylor Div., Va. Indus. v. United States, 815 F.2d 1482, 1487 (Fed.
Cir. 1987) (reversing ITC's decision on unfair trade petition). See infra notes 182-208 and
accompanying text (discussing Bingham & Taylor).
145. See supra notes 109-39 and accompanying text (describing proper standard of
review).
146. An idea of the delay may be gained from the summary in note 141, supra.
147. The circumstances are statutorily defined "critical circumstances." See 19 U.S.C.
§ 1673b(e) and 19 U.S.C. § 1673(e)(a)(3). See also infra note 149.
148. Cf supra note 141, stages one-four.
149. See ICC Indus. v. United States, 812 F.2d 694, 697 (Fed. Cir. 1987) (discussing standards for ITA to impose retroactive antidumping duty). 19 U.S.C. § 1673d(a)(3) provides:
§ 1673d. Final determinations
(a) Final determination by administering authority.(3) Critical circumstances determinations.-If the final determination of the administering authority is affirmative then that determination, in any investigation in
which the presence of critical circumstances has been alleged under section 1673b(e)
of this title, shall also contain a finding of whether-
1988]
INTERNATIONAL TRADE DECISIONS
1185
there have been massive imports of the merchandise.' 5 0 The ITA
must also find either a history of dumping the merchandise in question, or find that the importer knew or should have known the goods
were imported at LTFV.' 5 '
In ICC Industries v. United States, 152 the CIT upheld the retroactive
imposition of antidumping duties on imports of potassium permanganate from the People's Republic of China (PRC). 153 The importer, ICC Industries, appealed this decision to the Federal
Circuit.' 54 At issue in the case was whether the importer knew or
should have known that it was importing the merchandise at
LTFV.' 55 Further, the court also addressed whether, in addition to
the final determination as to material injury required in any event
before duties could be imposed,' 5 6 a second separate "material injury" determination was required by statute' 5 7 with respect to the
"massive imports" requirement.' 58 The ITC had not made such a
separate determination in this case. 1 59
With regard to the first issue, ICC Industries' principal argument
was that it could not know that the goods were being imported at
LTFV because it was impossible to anticipate the ITA's basis for
determining fair value, and that such a finding was not supported by
substantial evidence.' 6 0 The main difficulty with regard to the
LTFV determination was that the goods came from a nonmarket
economy (NME), the PRC. The court explained that "fair value is
intended to be an estimate of foreign market value,"' 16 1 and that the
level of dumping is the excess of the foreign market value over the
United States selling price.' 6 2 The problem with NME countries is
that there is no home market price with which the United States
(A)(i) there is a history of dumping in the United States or elsewhere of the class or
kind of merchandise which is the subject of the investigation, or
(ii) the person by whom, or for whose account, the merchandise was imported
knew or should have known that the exporter was selling the merchandise which is
the subject of the investigation at less than its fair value, and
(B) there have been massive imports of the merchandise which is the subject of the
investigation over a relatively short period.
150. 19 U.S.C. § 1673d(a)(3)(B) (1982).
151. 19 U.S.C. § 1673d(a)(3)(A)(i) & (ii) (1982).
152. 812 F.2d 694 (Fed. Cir. 1987).
153. ICC Indus. v. United States, 812 F.2d 694, 694 (Fed. Cir. 1987).
154. Id.
155. Id. at 695.
156. 19 U.S.C. § 1673d(b)(l)(A)(i) (1982). See supra note 141 stage 7.
157. Id. See 19 U.S.C. § 1673d(b)(4)(A) (1982).
158. See supra notes 149-50 and accompanying text.
159. ICC Indus. v. United States, 812 F.2d 694, 695 (Fed. Cir. 1987).
160. Id. at 697.
161. Id. See 19 C.F.R. § 353.1 et seq.
162. ICC Indus., 812 F.2d at 697. See 19 U.S.C. § 1673.
1186
THE AMERICAN UNIVERSITY LAW REVIEW[VoI.
37:1167
price can be compared.1 63 In such cases, therefore, the ITA has to
identify "surrogate" producers in market economy countries for
purposes of comparison.1 6 4 The court recognized that "the uncertainty of not knowing which country will be chosen by the ITA as the
surrogate country is seemingly unfair to an importer of goods from
NME countries," but stated that this was "not enough to exempt
importers from the reach of the statute." 165
The Federal Circuit also found substantial evidence in the administrative record to support the ITA's finding that the importer knew
or should have known that the imports were sold at LTFV. 16 6 This
evidence included ICC Industries' knowledge that another source of
the chemical, Spain, was a non-NME and that prices of the PRC
product were twenty-two percent less than the Spanish product during the relevant period, and forty percent less than the domestic
product. 16 7 Furthermore, for the six months preceding the investigation, average monthly imports from the PRC were 21,000 pounds,
whereas imports in the period after the investigation started,' 68 but
before the ITA's preliminary determination was published, 16 9 dra163. ICC Indus., 812 F.2d at 697.
164. Id. at 698-99. See 19 U.S.C. § 1677b(c)( 1). The court referred to numerous other
authorities in its full discussion of the basis on which an LTFV determination should be made
in the case of an NME country, including the legislative history of amendments to the antidumping laws specifically to deal with NME countries. See id. (citing inter aia Georgetown
Steel Corp. v. United States, 801 F.2d 1308 (Fed. Cir. 1986); Horlick & Shuman, Nonmarket
Economy Trade and U.S. Antidumping/CountervailingDuty Laws, 18 INT'L LAw, 807, 818 (1984)).
165. ICC Indus. v. United States, 812 F.2d 694, 698 (Fed. Cir. 1987). The authors have
considerable sympathy with the importer's position. The statute, 19 U.S.C. § 1677b(c), contains no guidance for the ITA regarding the choice of the surrogate and the guidance provided by the regulations, 19 C.F.R. § 353.8, is limited. Essentially, the choice is in the ITA's
discretion. That the exercise of this discretion is surrounded by uncertainty for both importer
and foreign producer is dramatically illustrated by the Soviet Potash antidumping investigation. Potassium Chloridefrom the U.S.S.R., 49 Fed. Reg. 35,849 (ITA 1984) (Preliminary); 50
Fed. Reg. 4,562 (ITA 1985) (Final). In that case, the ITA's preliminary determination, using
the Federal Republic of Germany as the surrogate, found a dumping margin of 187.03%. 49
Fed. Reg. 35,849. In the final determination, however, the ITA used Canada as the surrogate,
and found a margin of only 1.77%. 50 Fed. Reg. 4,562.
166. ICC Indus. v. United States, 812 F.2d 694, 698 (Fed. Cir. 1987).
167. Id. It is difficult to see why this is a relevant point. In the simplest case, dumping is a
measure of the price differential, if any, between the foreign producer's United States price
and its home market price (or the price in a surrogate country in the case of an NME producer). See supra note 162 and accompanying text. That computation has nothing to do with
the issue whether the exporter's United States price undercuts the price of United States domestic producers. See Comment, Economically Meaningful Markets: An AlternativeApproach to Define "Like Product" and "Domestic Industry" under the Trade Agreements of 1979, 73 VA. L. REV. 1459,
1459 n.6 (1987). It is entirely possible for a foreign producer to be "dumping," but selling to
the United States at prices above those of domestic producers. Id. at 1463. Conversely, a
foreign producer may undercut domestic producers and not be found to have been dumping.
Id. In short, price undercutting is relevant at the ITC "material injury" phase, but it is not
relevant for purposes of the LFTV determination the ITA is called upon to make. See supra
note 141, stages 3 and 7.
168. The investigation started on February 22, 1983.
169. The preliminary determination was published on August 9, 1983.
1988]
INTERNATIONAL TRADE DECISIONS
1187
matically increased to 577,621 pounds in April 1983, 110,892
pounds in June 1983, and 428,132 pounds in July 1983.170 These
increases were the result of orders placed after the initiation of the
antidumping investigation. 17 ' Finally, of course, the importer knew
1 72
of the initiation of the investigation.
The second issue in the case was whether a second material injury
73
determination was required with regard to "massive imports."'
The importer argued that the ITC had to make one material injury
finding under section 1673d(b) (1)(A) (i) of 19 U.S.C., 174 and another
such finding under section 1673d(b)(4)(A).175 The court noted that
this statutory interpretation was different from that of the ITC and
that, although the importer's position might be one possible interpretation, the agency's interpretation should be upheld unless it was
"unreasonable and plainly inconsistent with the statute" and is valid
"unless weighty reasons require otherwise." 176 Moreover, the court
added, the agency's interpretation need not be the only reasonable
interpretation of the statute nor, in the court's view, the most rea170. ICC Indus. v. United States, 812 F.2d 694, 696 (Fed. Cir. 1987).
171. Id. at 698-99. It can be argued that this is entirely reasonable commercial behavior,
given the uncertainty surrounding the ITA's surrogate choice. See supra note 165 (discussing
effect of surrogate choice on dumping margin).
172. ICC Indus., 812 F.2d at 696.
173. Id. at 699.
174. Id. at 697. Section 1673d(b)(1) of Title 19 of the United States Code provides:
§ 1673d. Final determinations
(a) Final determination by administering authority.(3) Critical circumstances determinations.ilf the final determination of the administering authority is affirmative then that determination, in any investigation in
which the presence of critical circumstances has been alleged under section 1673b(e)
of this title, shall also contain a finding of whether- (A)(i) there is a history of dumping in the United States or elsewhere of the class or kind of merchandise which is the
subject of the investigation, or
(ii) the person by whom, or for whose account, the merchandise was imported
knew or should have known that the exporter was selling the merchandise which is
the subject of the investigation at less than its fair value, and
(B) there have been massive imports of the merchandise which is the subject of the
investigation over a relatively short period.
19 U.S.C. § 1673d(b)(l) (1982).
175. ICC Indus. v. United States, 812 F.2d 694, 697 (Fed. Ci-. 1987). Section
1673d(b)(4)(A) of Title 19 of the United States Code provides:
(4) Certain additional findings.(A) If the finding of the administering authority under subsection (a)(2) of this
section is affirmative, then the final determination of the Commission shall include a
finding as to whether the material injury is by reason of massive imports described in
subsection (a)(3) of this section to an extent that, in order to prevent such material
injury from recurring, it is necessary to impose the duty imposed by section 1673 of
this title retroactively on those imports.
19 U.S.C. § 1673d(b)(4)(A) (1982).
176. ICC Indus., 812 F.2d at 699 (citing Melamine Chemicals, Inc. v. United States, 732
F.2d 924, 928 (Fed. Cir. 1984) and numerous other authorities).
1188
THE AMERICAN UNIVERSITY LAw
REVIEW[Vol. 37:1167
sonable. 177 The court also referred to the legislative history of the
"critical circumstances" provision noting inter alia that it was designed "to deter exporters whose merchandise is subject to an investigation from circumventing the intent of the law by increasing
their exports to the United States during the period between initiation of an investigation and a preliminary determination by the
[ITA]." 17 8 The court noted that the ITC must make the material
injury finding (in which it would in any event have to consider the
"massive imports" along with all other imports) before it addresses
the question of critical circumstances, so it was reasonable to interpret the statute as requiring the same material injury finding to be
used for both. 179 The court concluded that the ITC's interpretation
was consistent with the congressional goal of providing relief within
the time limitations of the process. 8 0° Accordingly, the court rejected the arguments of the importer and affirmed the judgment of
the CIT upholding the agency determination.' 8
In another case, involving two different interpretations of a statutory provision, the Federal Circuit did not defer to the ITC interpretation. Bingham & Taylor Division, Virginia Industries, Inc. v. United
States'8s 2 concerned the relationship between the antidumping and
countervailing duty injury determination provisions.18 3 In this case,
iron construction castings from a number of countries, including
Brazil, were the subject of contemporaneous antidumping investigations, while the same Brazilian product (alone) was also the subject
of a countervailingduty investigation. 8 4 When the ITC investigates
like products from a number of exporting countries, 19 U.S.C. section 1677(7)(C)(iv) 185 provides that the effect of these imports on
the United States domestic industry should be cumulated in making
177. Id. (citing Consumers Prods. Div., SCM Corp. v. Silver Reed Am., Inc., 753 F.2d
1033, 1039 (Fed. Cir. 1985)).
178. Id. at 700 (citing H.R. REP. No. 317, 96th Cong., 1st Sess. 63, reprintedin 1979 U.S.
CODE CONG. & ADMIN. NEWS 449 (1979)). Given the importers' knowledge, this explanation
could have been tailor-made for the circumstances of the present case.
179. Id.
180. Id.
181. Id.
182. 815 F.2d 1482 (Fed. Cir. 1987).
183. Bingham &Taylor Div., Va. Indus. v. United States, 815 F.2d 1482, 1483, 1487 (Fed.
Cir. 1987) (requiring cumulative assessment of imports subject to antidumping investigation
together with imports subject to countervailing duty investigation).
184. Id. at 1483-84.
185. 19 U.S.C. § 1677 (1982) provides in pertinent part as follows:
For purposes of this subtitle(7) Material injury.(B) Volume and consequent impact.-In making its determinations under sec-
1988]
INTERNATIONAL TRADE DECISIONS
1189
a "material injury" determination.' 6 In Bingham & Taylor, the ITC
cumulatively assessed the effect of imports for the purposes of the
injury determination in the antidumping investigation.1 87 The ITC
found that there was a reasonable indication that iron construction
castings from all countries concerned, including Brazil, were causing material injury to the domestic industry.1 8 In the countervailing
duty investigation, however, the ITC looked at the Brazilian castings
alone and found no indication of material injury.' 8 9 The petitioners
appealed to the CIT. 190 The CIT remanded to the ITC 191 and the
ITC appealed to the Federal Circuit.1 9 2 At issue before the CIT and
the Federal Circuit was the question whether 19 U.S.C. section
1677(7)(C)(iv) requires "cumulation of imports from two or more
countries of like products 'subject to investigation' . . . regardless of
93
whether the investigations relate to dumping, subsidies, or both."'
Put simply, the issue was whether all the like product imports from
all countries involved in the antidumping investigations should have
been cumulated with the Brazilian imports for the purpose of the
countervailingduty injury determination.
The Federal Circuit first examined the statutory language but
tions 1671b(a), 167ld(b), 1673b(a), and 1673d(b) of this title, the Commission shall
consider, among other factors(i) the volume of imports of the merchandise which is the subject of the
investigation,
(ii) the effect of imports of that merchandise on prices in the United States for
like products, and
(iii) the impact of imports of such merchandise on domestic producers of like
products.
(C) Evaluation of volume and of price effects.-For purposes of subparagraph
(B)(i) Volume.-...
(ii) Price.-..
( ) Cumulation.-For purposes of clauses (i) and (ii), the Commission shall cumulatwvdy assess the volume and effect of importsfrom two or more countries of like products subject to
investigaton if such imports compete with each other and with like products of the
domestic industry in the United States market. (emphasis added).
186. For purposes of the ITC material injury determination, cumulation involves aggregating volume and price data with respect to imports from two or more countries. Bingham &
Taylor Div., Va. Indus. v. United States, 815 F.2d 1482, 1484 n.4 (Fed. Cir. 1987). For further discussion of ITC injury determinations, see Mock, Cumulation of Import Statistics in Injury
Investigations Before the International Trade Commission, 7 Nw. J. INT'L L. & Bus. 433, 434-39
(1986).
187. Bingham & Taylor Div., Va. Indus. v. United States, 815 F.2d 1482, 1483-84 (Fed.
Cir. 1987).
188. Id.
189. Id. Only the Brazilian iron was subject to a countervailing duty investigation, though
it was exactly the same iron as that subject to the antidumping investigation. Id.
190. Id. at 1484.
191. Id. See 627 F. Supp. 793 (CIT 1986).
192.
Bingham & Taylor Div. 815 F.2d at 1484 n.5.
193. Bingham & Taylor Div., Va. Indus. v. United States, 627 F. Supp. 793, 795 (Ct. Int'l
Trade 1986).
1190
THE AMERICAN UNIVERSITY LAW REVIEW[Vol. 37:1167
found that the statute afforded no clear conclusion as to the correct
interpretation.19 4 The court then turned to the legislative history of
the provision. 9 5 Congress enacted this subsection to eliminate inconsistencies in ITC practice. 19 6 Some Commissioners had cumulated imports and some had not.19 7 The provision had been enacted
to mandate cumulation whenever the statutory criteria are met and
-to eliminate ITC discretion in this respect.' 98 The court also noted
that, in discussing the provision, Congress had used generic language which described collectively both types of investigations. ' 9
The court next examined the placement of the provision within the
legislation and found that Congress included the cumulation provision in the general part of the statute that refers to both types of
unfair trade practice, rather than in the provisions dealing with one
or the other.2 0 0 The court also noted that the material injury provisions for both antidumping and countervailing duty investigations
are substantially the same.2 0 1 Furthermore, the same statute that
provided for cumulation of imports also facilitated the process of
holding simultaneous antidumping and countervailing duty investigations.2 0 2 On these grounds the Federal Circuit concluded that it
would be improper "to engraft onto the statute a prohibition
against cross-cumulation." 20 3 The court pointed out that "[t]he
same imports subjected to the same tests should naturally yield the
'20 4
same results.
The ITC had argued that, because the statute afforded two reasonable interpretations, the court should defer to the agency interpretation.2 0 5 Although the court accepted the "general rule... that
an interpretation by the agency charged with the administration of
the statute is entitled to great weight where the interpretation is
194. Bingham & Taylor Div., 815 F.2d at 1484. The court noted, however, that the reading
given by the CIT seemed the more natural interpretation. Id.
195. Id. at 1485. Congress enacted the cumulative assessment provision as part of the
Trade and Tariff Act of 1984. Id.
196. Id.
197. Id. (stating that most Commissioners have applied cumulation under certain circumstances, although articulating various criteria) (quoting H.R. REP. No. 725, 98th Cong., 2d
Sess. 37, reprintedin 1984 U.S. CODE CONG. & ADMIN. NEws 4910, 5127, 5164)). In practice,
the ITC had only ever cumulated for purposes of one type of investigation. Id. The ITC had
never cross-cumulated from antidumping to countervailing duty investigations. Id.
198. 19 U.S.C. § 1677(7)(C)(iv) (1982); see also Bingham & Taylor Div., 815 F.2d at 1485.
199. Bingham & Taylor Div., 815 F.2d at 1485-86.
200. Id. at 1486.
201. Id.
202. 19 U.S.C. § 1671d(a)(1) (1982).
203. Bingham & Taylor Div., 815 F.2d at 1487.
204. Id.
205. Id. at 1484.
1988]
INTERNATIONAL TRADE DECISIONS
1191
both consistent and longstanding, ' 20 6 the court found no consistent
interpretation or longstanding practice by the ITC evident in this
instance. 20 7 Further, because the ITC interpretation "leads to incongruous results," the court did not defer to agency
20 8
interpretation.
In Ceramica Regiomontana, S.A. v. United States,20 9 the ITA had
found that Mexican government figures on certain benefits paid to
exporters of ceramic tile under the Mexican government's Certificado de Devolucion de Impuesto (CEDI) 21 0 program were grossly
understated. 21 1 Accordingly, in calculating the extent of benefits in
the course of a countervailing duty investigation, the ITA adopted a
methodology based on the maximum CEDI benefits. 21 2 The exporters appealed unsuccessfully to the CIT and later to the Federal Circuit, arguing that the Mexican government's figures should be used
as a matter of law because they were "verified." 213 They offered no
evidence in support of this contention. 21 4 The Federal Circuit affirmed the CIT and held that under the circumstances the ITA was
not required to use the figures supplied by the Mexican
21 5
government.
B.
Revocation
There are two routes to revocation illustrated by the 1987 cases,
one via the ITA, and the other via the ITC.
Under 19 U.S.C. section 1675(a), the ITA is required to review, at
least annually, the basis and amount of duty to be assessed under an
antidumping order. 21 6 Following such a review, the ITA may revoke
206. Id. at 1487 (citing United States v. National Ass'n of Sec. Dealers, 422 U.S. 694, 719
(1975)).
207. Id.
208. Id.
209. 810 F.2d 1137, 1138 (Fed. Cir. 1987); see also supra notes 110-16 (discussing significance of Ceramica Regiomontana regarding standard of review).
210. Pursuant to this program, the Mexican government issues a certificate in an amount
equal to a percentage of the value of the exported merchandise. Ceramica Regiomontana,
S.A. v. United States, 636 F. Supp. 961,963 (Ct. Int'l Trade 1986). The CEDI certificates may.
be used to pay a variety of federal tax liabilities, such as payroll taxes, value added taxes,
federal income taxes, and import duties. Id. FromJanuary 1, 1982 through August 25, 1982,
the CEDI rate was 15% of the value of exports, and zero for the remainder of 1982 because
the Mexican government suspended the CEDI program for all exports on or after August 26,
1982. Id. The ITA determined that this program, implemented by the Mexican government,
constituted a countervailable subsidy. Id.
211. Ceramica Regiomontana, S.A. v. United States, 810 F.2d 1137, 1138 (Fed. Cir.
1987).
212. Id.
213. Id.
214. Id.
215. Id.
216. Reviews are no longer mandatory. See supra note 19; 19 U.S.C. § 1675(a) (1982 &
1192
THE AMERICAN UNIVERSITY LAW REVIEW[Vol.
37:1167
the order.21 7 Two cases in 1987 involved inordinate delay by the
ITA in issuing a final decision to revoke an antidumping order after
the agency had published a tentative decision to do so.
In Matsushita Electric IndustrialCo. v. United States,21 8 a tentative revocation decision was published on August 18, 1983, following the
second administrative review under 19 U.S.C. section 1675(a), 2 19
22 0
during which the ITA found no dumping by Matsushita.
Notwithstanding publication of this decision, the ITA initiated third,
fourth, fifth, sixth and seventh administrative reviews, the last on
April 18, 1986.221 Matsushita then commenced an action in the CIT
seeking preliminary and permanent equitable relief, inter alia, to enjoin the ITA from conducting administrative reviews after August
18, 1983 and to require the ITA to determine whether final revocation of the order was warranted. 2 2 2 The CIT granted a preliminary
injunction and the ITA appealed to the Federal Circuit. 2 23 The Federal Circuit opined that the injunction should be upheld if Matsushita had shown: "(1) that it will be immediately and irreparably
injured; (2) that there is a likelihood of success on the merits;
(3) that the public interest would be better served by the relief requested; and (4) that the balance of hardship on all the parties favors [Matsushita]." 224 The court held that the CIT's finding of
irreparable injury to Matsushita was "clearly erroneous" and that
the preliminary injunction must therefore be reversed. 22 5 The CIT
had based its finding of irreparable injury on Matsushita's "expenditure of effort in both human and other resources" 226 which would
be necessary for Matsushita to comply with the ITA's demands for
Supp. 1985); see also Matsushita Elec. Indus. v. United States, 823 F.2d 505, 506 (Fed. Cir.
1987) (noting that results of such review must be published in Federal Register).
217. 19 U.S.C. § 1675(c) (1982 & Supp. III 1985). Regulations providing for the revocation procedure are codified at 19 C.F.R. § 353.54 (1986). The revocation of an antidumping
duty order is presaged by the ITA's publication of a "Notice of Tentative Determination to
Revoke or Terminate." 19 C.F.R. § 353.54(e) (1986). The Secretary must then determine
whether revocation is warranted. 19 C.F.R. § 353.54(f) (1986).
218. 823 F.2d 505 (Fed. Cir. 1987).
219. Matsushita Elec. Indus. v. United States, 823 F.2d 505 (Fed. Cir. 1987).
220. Id. at 507.
221. Id.
222. Id.
223. Id. at 506.
224. Id. at 509 (quoting Zenith Radio Corp. v. United States, 710 F.2d 806, 809 (Fed. Cir.
1983)); see FED. R. Civ. P. 65 (setting forth criteria for preliminary injunctions).
225. Matsushita, 823 F.2d at 509-10. The Federal Circuit's finding regarding irreparable
injury obviated the need to review the three remaining elements necessary to uphold the CIT
injunction. Id.
226. See id. at 509 (citing Matsushita Elec. Indus. v. United States, 645 F. Supp. 939, 942
(Ct. Int'l Trade 1986)). The court further noted that Matsushita would not be recompensed
for this expenditure of effort even if the antidumping order were eventually revoked. Id.
1988]
INTERNATIONAL TRADE DECISIONS
1193
data in the numerous reviews. 227 The Federal Circuit discounted
the CIT's finding and noted that the expense and effort entailed in
the defense of litigation do not constitute "irreparable injury," 228
and that "the ordinary consequences" of antidumping duty procedures fall short of irreparable harm.229 The Federal Circuit had little sympathy with Matsushita's situation, which was "the direct
result of its having participated in predatory pricing behavior in violation of the antidumping statute." 230 The court also noted that the
CIT could have directed the ITA to complete the reviews by a speci2 31
fied date but had not done so.
UST, Inc. v. United States,23 2 a similar case, involved an antidumping order on non-bicycle roller chain. 233 A tentative determination
to revoke was published on September 1, 1983, following administrative reviews for the period April 1, 1979 to March 31, 1981.234
The ITA initiated administrative reviews for subsequent periods and
in August 1986, with the tentative revocation determination still not
final, UST petitioned the CIT for equitable relief. 235 The court denied a preliminary injunction for the same reason that the Federal
Circuit reversed the injunction in Matsushita 2 6-because the "massive amounts of time and other resources" 23 7 required to prepare
the administrative review questionnaires do not constitute irreparable harm.238 On appeal to the Federal Circuit, the court held that
Matsushita controlled, and affirmed the CIT's denial of a preliminary
injunction. 23 9 Notwithstanding the denial of the injunction, the
Federal Circuit rebuked the ITA, saying:
we are concerned about Commerce's lengthy and seemingly unwarranted delay in completing administrative reviews of antidumping orders. The failure promptly to determine whether to
227. Id.
228. Id. (citing FTC v. Standard Oil Co. of Cal., 449 U.S. 232 (1980)).
229. Id. (citing Toshiba Corp. v. United States, 657 F. Supp. 534, 535 (Ct. Int'l Trade
1987); UST, Inc. v. United States, 648 F. Supp. 1, 5 (Ct. Int'l Trade 1986)).
230. Id.
231. Id. Although the CIT did not impose such a deadline in Matsushita, the Federal Circuit noted other instances in which the CIT required the ITA to complete its reviews by a
specified date. Id. at 509-10.
232. 831 F.2d 1028 (Fed. Cir. 1987).
233. UST, Inc. v. United States, 831 F.2d 1028, 1029-30 (Fed. Cir. 1987).
234. Id. at 1030.
235. Id. (stating writ of mandamus compelling Commerce Department to complete ad-
ministrative review and publish its final determination).
236. Matsushita Elec. Indus. v. United States, 823 F.2d 505, 509-10 (Fed. Cir. 1987). The
Federal Circuit in Matsushita cited the CIT's denial of UST's request for equitable relief. Id. at
509.
237. UST, Inc. v. United States, 648 F. Supp. 1, 4 (Ct. Int'l Trade 1986).
238, Id. at 5.
239, UST, Inc. v. United States, 831 F.2d 1028, 1031 (Fed. Cir. 1987).
1194
THE AMERICAN UNIVERSITY LAw REVIEW[Vol.
37:1167
make final a tentative decision to revoke is particularly troublesome. The companies subject to antidumping orders from which
they seek relief understandably are frustrated and angry when
they seem unable to obtain an expeditious decision on their claim.
The result is that they are impelled to seek judicial assistance,
would be unnecessary
thereby producing additional litigation that240
if Commerce moved with proper dispatch.
Finally, the court noted that the ITA apparently misunderstood its
decision in Freeport Minerals Co. v. United States.24 1 The court explained that Freeport Minerals required that the data upon which the
ITA relies in determining whether to make final a tentative determination to revoke must be current only up to the date of publication
of the "Notice of Tentative Determination to Revoke or Terminate." 24 2 The court explained that to require otherwise-that the
data be current up to the date of the final determination-would
make it impossible for the ITA ever to render a final determination
243
on revocation.
American Permac, Inc. v. United States 244 also involved revocation
procedure, although in this case the procedure had not reached the
stage of a tentative decision to revoke. 24 5 This case also highlights
the importance of the "division of labor" between the ITA (which
makes the LTFV determination) and the ITC (which makes the injury determination).
The plaintiffs in American Permac were the importers, distributors,
and West German manufacturers (Boewe Maschinenfabrik) of dry
cleaning machinery 24 6
(hereinafter
collectively
referred
to
as
Boewe). In 1972, the United States Tariff Commission issued an
antidumping finding against Boewe.2 4 7 In May 1984, Boewe filed a
request with the ITC for an administrative review under procedures
set forth in 19 U.S.C. section 1675(b). 24 8 One possibility, following
such a review, is that the antidumping order may be revoked pursuant to section 1675(c), 249 and this is what Boewe intended to
achieve. During the review proceedings, Boewe officers testified
240. Id.
241. 776 F.2d 1029 (Fed. Cir. 1985).
242. UST, Inc., 831 F.2d at 1032.
243. Id. at 1032-33.
244. 831 F.2d 269 (Fed. Cir. 1987).
245. American Permac, Inc. v. United States, 831 F.2d 269, 270-71 (Fed. Cir. 1987) (summarizing plaintiff's challenge to ITC determination of material injury).
246. Id. at 271.
247. Id.
248. Id. The determination which was reviewed pursuant to this request was the Tariff
Commission's (now ITC's) injury determination made under 19 U.S.C. § 1673d(b).
249. 19 U.S.C. § 1675(c) (1982 & Supp. III 1985) (providing for revocation of countervailing or antidumping duty order following review).
1988]
INTERNATIONAL TRADE DECISIONS
1195
that removal of the antidumping order would have no effect on
Boewe pricing structure because its pricing policy is uniform for the
same models throughout the world. 250 They also testified that limitations on Boewe production capacity would prevent any material
increase in exports to the United States beyond current projections.2 5 1 The ITC had determined, however, that "West German
imports of dry cleaning machinery would materially injure the domestic industry if the antidumping duty order covering these imports were modified or revoked." 25 2 On Boewe's appeal, both the
2 53
CIT and the Federal Circuit upheld the ITC's determination.
The Federal Circuit stated that in considering whether an antidumping order should be revoked
the ITC conducts an inquiry that has two phases. First,it forecasts
the likely behavior of the foreign exporters and the importers in
the event the order is revoked or modified .... Second, the ITC
considers the impact of the imports on the United States industry
to determine whether they will cause material injury or threat of
254
material injury to the domestic industry.
The court also pointed out that in a section 1675(b) review "the
ITC must assume that dumping will resume if the antidumping orderis revoked
or cancelled."' 25 5 Citing the CIT in Matsushita, the court explained
that this assumption was based on the "bifurcated nature" of the
administration of the antidumping laws. 2 56 The court pointed out
that there were two alternative revocation avenues open to
Boewe. 2 57 Boewe could either petition the ITC to review the injury
determination, as it had done, or it could request that the ITA review and eliminate its determination that dumping is taking
258
place.
With these principles in mind, the Federal Circuit reviewed the
ITC's conclusion that the plaintiff's imports would materially injure
the domestic industry if the antidumping order were revoked, and
held that the ITC's decision was supported by substantial
250. American Permac, Inc., v. United States 831 F.2d 269, 271 (Fed. Cir. 1987) (emphasizing that its pricing policy does not include dumping margins).
251. Id.
252. Id.
253. Id. at 274; see also id. at 272.
254. Id. at 274.
255. Id. (emphasis added).
256. Id.
257. Id.
258. Id. at 275 n.6. Because the ITC cannot determine whether dumping is occurring
(such a determination is the province of the ITA), the Commission must (in considering injury) assume that dumping will resume if the antidumping order is revoked. See supra text
accompanying note 192.
1196
THE AMERICAN UNIVERSITY LAW REVIEW[Vo1.
37:1167
evidence. 25 9
V.
SECTION
337
OF THE TARIFF ACT OF
1930
Under section 337 of the Tariff Act of 1930, the ITC may prevent
or restrain unfair acts or unfair methods of competition in the importation of articles into the United States. 2 60 The Act provides for
an investigation into the allegedly unfair acts upon the petition of a
domestic producer or upon the ITC's own initiative. 2 6 1 Affirmative
recommendations of the ITC may be disapproved by the President
for policy reasons. 26 2 Absent executive disapproval, the ITC's determination becomes final. 26 3 Remedies specified in the Act include
permanent exclusion orders 26 4 and cease and desist orders. 26 5
In Fischer & Porter Co. v. United States International Trade Commission,266 the Federal Circuit considered the injury standard for the
purpose of section 337.267 Section 337 is violated when unfair
methods of competition or unfair acts have an effect or tendency to
destroy or substantially injure a domestic industry. 268 Patent infringement claims are often predicate unfair acts for the purpose of
section 337 petitions. 2 69 In Fischer, the plaintiff Fischer alleged that
certain unitary flangeless electromagnetic flowmeters made in West
Germany by Krohne Messtechnik GmbH & Co. K.G. (Krohne) and
imported into the United States violated section 337.27o The ALJ
had found both that there was an unfair trade practice, by reason of
infringement of one of Fischer's patents, and that such practice had
the effect or tendency to destroy or substantially injure a domestic
industry. 2 7 1 The ITC, however, found that the imports infringed
the patent, but had no effect or tendency to substantially injure; thus
there was no violation of section 337.272 Fischer appealed to the
27
Federal Circuit for reinstatement of the ALJ's decision. "
259. American Permac, Inc., 831 F.2d at 275-76.
260. Tariff Act of 1930, 19 U.S.C. § 1337 (1982 & Supp. III 1985).
261. Id. § 1337(b)(1).
262. Id. § 13 3 7(g)(2 ).
263. Id. § 1337(g)(4).
264. Id. § 1337(d)-(e).
265. Id. § 1337(f).
266. 831 F.2d 1574 (Fed. Cir. 1987).
267. Fischer & Porter Co. v. United States Int'l Trade Comm'n, 831 F.2d 1574, 1577-81
(Fed. Cir. 1987); see also supra note 45 (setting out text of § 337(a)).
268. Fischer & Porter Co., 831 F.2d at 1576 n.1.
269. Id. at 1576.
270. Id.
271. Id.
272. Id. The trade legislation would remove the injury requirement in cases of patent,
trademark, and copyright violations. See H.R. 3, 100th Cong., 1st Sess. § 172, 133 CONG. Rxc.
16,971 (1986) (§ 401 as passed by the Senate).
273. Fischer & Porter Co., 831 F.2d at 1576.
1988]
INTERNATIONAL TRADE DECISIONS
1197
The Federal Circuit noted that it was not reviewing the correctness of either the ALJ's decision or the ITC's reversal, 274 but was
instead reviewing the ITC decision under the "substantial evidence"
standard 275 and viewed the ALJ's decision as merely part of the record before the ITC. 276 The Federal Circuit upheld ITC conclusions
on several issues of law. The ITC found that the infringement of
intellectual property rights does not necessarily trigger section 337
violations. 277 It also found that petitioners alleging infringement of
intellectual property rights have a smaller quantum of proof of injury than is required in non-intellectual property cases. 278 The ITC
further concluded that determination of injury to a domestic industry is fact specific and not necessarily controlled by precedent, 279
and that there were non-infringing substitutes in the relevant market in Fischer. Therefore, a causal connection between infringing imports and Fischer's lost sales could not be assumed. 28 0
The Federal Circuit examined "effect to substantially injure" and
"tendency to substantially injure" in turn. 2 8 ' As to the former,
Fischer argued that the ITC had improperly discounted or rejected
certain of its evidence and that the ITC failed to follow Federal Circuit precedent in Textron Inc. v. United States InternationalTrade Com-
mission 282 with regard to the proper quantum of proof standard.
With regard to the first argument, the court reviewed the evidence
and concluded that the ITC had not rejected the evidence, but
274. Id. at 1577.
275. Id. 19 U.S.C. § 1337(c) (1982 & Supp. III 1985) directs the Federal Circuit to review
the ITC final determination in accordance with the Administrative Procedure Act. Id. (citing
Administrative Procedure Act, 5 U.S.C. § 706 (1982) (noting that ITC determination will be
upheld, unless arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law or unsupported by substantial evidence)); Coming Glass Works v. United States Int'l
Trade Comm'n, 799 F.2d 1559, 1564-68, 230 U.S.P.Q. 822, 825-28 (Fed. Cir. 1986) (presenting appellate function in connection with appeals from ITC particularly in context of reviewing injury determinations).
276. Fischer & Porter Co., 831 F.2d at 1577.
277. Id. (citing Coming Glass Works v. United States Int'l Trade Comm'n, 799 F.2d 1559,
1566, 230 U.S.P.Q. 822, 826-27 (Fed. Cir. 1986); Textron, Inc. v. United States Int'l Trade
Comm'n, 753 F.2d 1019, 1028, 224 U.S.P.Q. 625, 631 (Fed. Cir. 1985); Akzo N.V. v. United
States Int'l Trade Comm'n, 808 F.2d 1471, 1486, 1 U.S.P.Q. 2d 1241, 1250 (Fed. Cir. 1986),
cert. denied, 107 S. Ct. 2490 (1987)).
278. Id. (citing Textron, Inc. v. United States Int'l Trade Comm'n, 753 F.2d 1019, 1029,
224 U.S.P.Q 625, 632 (Fed. Cir. 1985); Bally/Midway Mfg. v. United States Int'l Trade
Comm'n, 714 F.2d 1117, 1124, 219 U.S.P.Q. 97, 102 (Fed. Cir. 1983)).
279. Id. (citing Coming Glass Works v. United States Int'l Trade Comm'n, 799 F.2d 1559,
1568, 230 U.S.P.Q. 822, 828 (Fed. Cir. 1986)).
280. Id.
281. Id. at 1578.
282. 753 F.2d 1019, 224 U.S.P.Q. 625 (Fed. Cir. 1985); see also supra note 278 and accompanying text (stating that lesser quantum of proof is required in intellectual property based
cases).
1198
THE AMERICAN UNIVERSITY LAW REVIEW[Vol. 37:1167
merely made improper extrapolations therefrom. 283 Overall, absent
the improper extrapolation, Fischer failed to give specific details of
its sales figures for the products in question, 2 84 or to show a shift in
market share from Fischer to Krohne. 28 5 The court found that
although Fischer could have supplied the domestic industry data to
the ITC it refused to do so even when the ITC gave it a second
chance. 2 86 Fischer then cited Textron in an effort to circumvent the
deficiencies in its evidence. 28 7 The Federal Circuit held that
Fischer's reliance on Textron was misplaced. 28 8 The court interpreted the Textron reduced quantum of proof as lessening the required degree of injury suffered in the market, not as lessening the
"quality and quantum of evidence necessary to establish thefacts on
which the injury determination is based. ' 28 9 The Federal Circuit
held that Fischer "was required to support its assertion of injury
with evidence of good quality and sufficient quantity to amount to a
preponderance." 2 90 Textron could not and did not change this burden. 29 1 The burden was on Fischer to prove injury, not on Krohne
to disprove injury. 29 2 The court added that Fischer's failure to put
data in its possession into a usable form was not excused merely
293
because it would have been an expensive undertaking.
With regard to the meaning of the phrase "tendency to substantially injure," the court held that "mere suspicions" that something
will occur are not enough. 29 4 Accordingly, the court upheld the
2 95
ITC's determination on the issue of injury.
VI.
CUSTOMS
Goods being imported into the United States are subject to vari283. Fischer &Porter Co., 831 F.2d at 1579, 1580-8 1.
284. Id. at 1578. Fischer had supplied data dealing with total sales of magnetic flowmeters. The "domestic industry" in question (the industry covered by the patent), however, only
related to some of its flowmeters. Id. It was impossible to tell what Fischer's sales figures
were for the products in question without making unwarranted extrapolations. Id. at 1579.
285. Id. at 1580. Similarly, Fischer had produced data showing a decline in its United
States market share for all magnetic flowmeters, without restricting it to the domestic industry
for purposes of the patent, and, furthermore, it had applied pre-patent market share data to
the post-patent period. Id. at 1579-80.
286. Id. at 1579.
287. Id. at 1580. See supra note 278 and accompanying text.
288. Fischer & Porter Co., 831 F.2d at 1580.
289. Id.
290. Id. at 1581, see Steadman v. SEC, 450 U.S. 91, 99-100, reh'g denied, 451 U.S. 933
(1981).
291. Fischer & Porter Co., 831 F.2dat 1581.
292. Id.
293. Id.
294. Id.
295. Id. In finding no injury, the court mooted the patent issues and therefore vacated the
ITC determination regarding patent issues. Id.
1988]
INTERNATIONAL TRADE DECISIONS
1199
ous customs laws 2 96 and importers and handlers of those goods are
subject to certain government regulations. 29 7 Issues that arise in
the customs field may include the classification of goods under certain tariff headings, their valuation for duty assessment purposes,
and the proper handling of those goods through the Customs entry
process. 2 98 This past year, the specific issues presented in cases
before the Federal Circuit in the customs field were disposed of by
the court in a common-sense manner, and the resulting decisions
were essentially noncontroversial. This straightforward analytic approach was also used in the one case in which the Federal Circuit
reached a decision adverse to the agency. 29 9
A.
"Substantial Transformation"
An issue which recurs in a number of different customs-related
contexts is that of "substantial transformation."3 0 0 Goods which
originate in one country may pass through a number of intermediate countries on their way to the United States. If the goods are
"substantially transformed" in an intermediate country, then that
country, as opposed to the original exporting country, may be regarded as the goods' country of origin for purposes of U.S. Customs
laws. Such a change of country of origin may give rise to more
favorable customs treatment for the imported product. For example, import restrictions may apply to goods whose country of origin
is one particular country but may be inapplicable to goods whose
country of origin is another. Alternatively, "substantial transformation" may result in the goods receiving a different TSUS 30 1 classification, which may in turn result in a more favorable rate of duty on
2
the imported merchandise. 30
In Coastal States Marketing, Inc. v. United States,3 0 3 the Federal Cir296. See E. McGOVERN, INTERNATIONAL TRADE REGULATION 30 (1986) (describing customs
procedure).
297. See 19 C.F.R. §§ 19.1-19.49 (1987) (listing regulations for customs warehouses,
container stations, and controlling of merchandise therein).
298. E. McGOVERN, supra note 296, at 131.
299. See supra notes 88-104 and accompanying text and infra notes 358-70 and accompanying text (discussing E.C. McAfee A/C Bristol Metal Indus. v. United States).
300. See Coastal States Mktg., Inc. v. United States, 646 F. Supp. 255, 257 (Ct. Int'l Trade
1986) (citing examples of substantial transformations), aff'd, 818 F.2d 860 (Fed. Cir. 1987).
301. See 19 U.S.C. § 1202 (1982) (listing TariffSchedules of the United States). An up-todate version of the Tariff Schedules is published periodically by the ITC.
302. In Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556 (1908), the
Supreme Court set out the legal standard for determining whether a processing operation
substantially transforms an article. In that case, the Court recognized that although all manufacturing results in some change to the product, something more is needed before substantial
transformation is effected. "A new and different article must emerge, one having a distinctive
name, character, or use." Id. at 562.
303, 818 F.2d 860 (Fed. Cir. 1987), aff'g, 646 F. Supp. 255 (Ct. Int'l Trade 1986).
1200
THE AMERICAN UNIVERSITY LAw REVIEW[Vol. 37:1167
cuit affirmed a CIT decision 30 4 which had held that the mixing of
Italian fuel oil No. 5 with Soviet gas oil No. 2 did not result in substantial transformation of the Russian oil.3 0 5 Accordingly, the Soviet Union, not Italy, was treated as the country of exportation of
the Russian oil for duty assessment purposes.3 0 6 The CIT noted,
first, that the substantial transformation rules are more stringent
3 0 7 Citwhen they involve merchandise from Communist countries.
ing Belcrest Linens v. United States, 30 8 the court also noted that the test
"centered upon changes in the character, appearance, identity or
use of merchandise as a result of processes performed in intermediary countries." 3 0 9 The court held that the plaintiff failed to show
any such changes.3 10 The plaintiff did not claim that any processing
was carried out other than the simple mixing of the two oils,311 nor
that the value of the Russian oil was thereby increased.3 1 2 Both
Russian and Italian products were classified under the same TSUS
item,3 13 and the court noted that the blend could also have been
classified as such. 3 14 Although noting that a change in classification
is not a controlling factor, 31 5 the court found that the same tariff
classification of the products (i.e., before and after mixing) could indicate that "the imported blend was not a new and different prod304. Coastal States Mktg., Inc. v. United States, 646 F. Supp. 255, 259-60 (Ct. Int'l Trade
1986), aff'd 818 F.2d 860 (Fed. Cir. 1987). The reasoning discussed in the text is that of the
CIT. The Federal Circuit affirmed on the basis of the CIT's reasoning without adding substantive discussion of its own.
305. Coastal States Mktg. v. United States, 818 F.2d 860,860 (Fed. Cir. 1987), a]J'g 646 F.
Supp. 255, 259-60 (Ct. Int'l Trade 1986).
306. Coastal States Mktg., 646 F. Supp. at 260. General Headnotes 3(e) and 3(0, TSUS,
require products of Communist countries to be assessed separately from goods of other countries. 19 U.S.C. § 1202(e), (f) (1982). Customs assessed duties on the Soviet oil separately
from duties on the Italian oil, treating the shipment as "commingled articles" under General
Headnote 7, TSUS. CoastalStates Mktg., 646 F. Supp. at 261. Customs was able to determine
the precise amounts of oil subject to each rate of duty by virtue of documentation provided by
the plaintiff. Id. at 256.
307. Coastal States Mktg., 646 F. Supp. at 257.
308. 741 F.2d 1368 (Fed. Cir. 1984), aff' 6 Ct. Int'l Trade 204, 573 F. Supp. 1149 (Ct.
Int'l Trade 1983).
309. Coastal States Mktg, 646 F. Supp. at 257. In a footnote the court noted the difficulty
the Belcrest Linens court had in perceiving how the test differed from the substantial transformation test in other areas, but pointed out that the test has its own lineage and case law. Id. at
257 n.3. In the text, the court held that only decisions dealing with Headnote 3(e), TSUS,
duty applicable to products of Communist countries, are controlling. Id.
310. Id.at 259.
311. Id. The mixing was carried out as follows: the ship involved took on a quantity of
the Soviet oil at a Soviet port, it sailed to Italy where the Italian oil was simply added to the
same tanks already containing the Soviet oil, and the two oils were mechanically mixed. Id. at
256. The ship then sailed to and unloaded at New York. Id.
312. Id. at 259.
313. Id. (classifying both under item 475.10 TSUS).
314. Id.
315. See id. (citing Rolland Freres, Inc. v. United States, 23 C.C.P.A. 81, 89 (1935)).
1988]
INTERNATIONAL TRADE DECISIONS
1201
uct. ' 3 1 6 Further, the fact that the Russian oil could be referred to as
"gas oil" rather than "fuel oil" was not determinative. The court
noted that a changed name is the weakest evidence that a product
has had a substantial transformation. 317 In addition, although gas
oil is a specific type of fuel oil, it is not used for a substantially different purpose than is fuel oil generally. 318 Accordingly, the oil loaded
in the Soviet Union was "a product of" the Soviet Union.31 9
Mast Industries v. United States was another substantial transformation case, this time involving operations performed in Hong Kong
on textiles originating in the People's Republic of China.3 20 In this
case, however, the court had a regulation before it which specifically
described what constituted substantial transformation of the products involved. 32 ' The Federal Circuit, affirming the CIT, construed
the regulation to require both dyeing and printing of the fabrics
before substantial transformation could occur. 322 The fabrics in
question were dyed but not printed and therefore were not substantially transformed.3 23 In construing the regulation, the Federal Circuit reviewed the plain language of the regulation,3 24 Customs'
interpretation of it,32 5 and the legislative history of the provision as
well as the mischief intended to be remedied.3 26 None of these factors supported the plaintiff's position, and the court, therefore, held
that the product had not undergone substantial transformation. 327
316. Id.
317. Id. (citing National Juice Prods. Ass'n v. United States, 628 F. Supp. 978, 989 (Ct.
Int'l Trade 1986)).
318. Id. The court referred to relevant ASTM standards. Id.
319. Id. at 260.
320. 822 F.2d 1069, 1071 (Fed. Cir. 1987), aff'g 652 F. Supp. 1531 (Ct. Int'l Trade 1987).
321. Mast Indus. v. United States, 822 F.2d 1069, 1071-72 (restating relevant regulations
of 19 C.F.R. § 12.130(b), (e) (1987)).
322. Id. at 1073.
323. Id.
324. Id. at 1072 (citing Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S.
102, 108 (1980)). The court gave the plain language of the regulation considerable weight.
Id.
325. Id. The court noted that the United States Customs Service's interpretation of the
regulation receives substantial weight when applicable. Id. (citing Bowles v. Seminole Rock &
Sand Co., 325 U.S. 410 (1945)).
326. Id. at 1073-74, 1077.
327. Id. at 1074. Another "substantial transformation" case, not discussed in the text, was
National Corn Growers Ass'n v. von Raab, 814 F.2d 651 (Fed. Cir. 1987), aff'g 650 F. Supp.
1007 (Ct. Int'l Trade 1986). In that case, the National Corn Growers Association challenged
a Customs Service ruling that anhydrous ethanol dehydrated in a beneficiary country from
hydrous ethanol produced elsewhere was eligible for duty free treatment as "a new or different article of commerce... produced... in the beneficiary country." Id. at 652; see Caribbean
Basin Economic Recovery Act, 19 U.S.C. § 2703(a) (Supp. IV 1986) (establishing standards
for duty free treatment of"[g]rowth, product, or manufacture ofbeneficiary countries"). The
Federal Circuit, however, found the issue moot in light of the Tax Reform Act of 1986, 19
U.S.C. § 2703 note (Ethyl Alcohol and Mixtures Thereof for Fuel Use), which dictated that
1202
THE
AMERICAN UNIVERSITY
B.
LAW REvIEw[Vol. 37:1167
Classification
The Federal Circuit considered a number of classification issues
during 1987. Classification is the process by which goods are assigned to a particular tariff item, which, in turn, specifies any duty
that may be payable upon entry of the product into the United
States. 3 28 Problems often arise in the classification area because
tariff schedule designations can often be rather exacting and highly
descriptive in nature rather than product-specific in a generic. 3 29
The following discussion contains examples of the Federal Circuit's
approach to problems of classification.
W. Y. Moberly, Inc. v. United States33 0 concerned the proper classification of imported components for drilling rigs. There were three
possibilities: TSUS items 664.05, 3 3 1 652.98332 or 652.94.333 Customs classified the components under TSUS item 652.98 (parts of
structures) whereas the plaintiff, Moberly, argued for classification
under 664.05 (parts of boring machinery), or 652.94 ("structural
units" such as girders).3 34 The CIT agreed with Customs, preferring 652.98 over 664.05 as a matter of construction. 33 5 The CIT
also rejected item 652.94 (structural units) because it required the
merchandise to be of "unitary construction."3 3 6 As interpreted in
Frost Railway Supply Co. v. United States,33 7 "unitary construction" in
turn required that the article consist of no more than one piece of
metal. 3 38 The Federal Circuit vacated and remanded the case to the
CIT to reconsider whether the components might fall within
such anhydrous ethanol did not meet the duty free requirements. NationalCorn Growers Ass'n,
814 F.2d at 652.
328. See J. BARTON & B. FISHER, INTERNATIONAL TRADE AND INVESTMENT 396 (1986)
(describing process of customs classification).
329. Id. at 396-400.
330. 825 F.2d 391 (Fed. Cir. 1987), vacating 645 F. Supp. 282 (Ct. Int'l Trade 1986).
331. W.Y. Moberly, Inc. v. United States, 825 F.2d 391, 392 (Fed. Cir. 1987) (describing
relevant items as "boring and extracting machinery... and parts thereof").
332. Id. (describing items as "towers, lattice masts ....frameworks ....other structures
and parts of structures").
333. Id. (describing items as "columns, pillars, parts, beams, girders, and similar structural units").
334. Id.
335. Id. The CIT relied on General Interpretative Rule 10 (ij) which was interpreted inJ.
Ray McDermott & Co. v. United States, 354 F. Supp. 280 (Cust. Ct. 1972) as requiring classification of similar components as parts of a part (i.e., parts of a structure) under 652.98, rather
than as parts of a whole article (part of a boring machine) under 664.05. 1'. Y. Moberly, Inc.,
825 F.2d at 392. General Interpretative Rule 10(ij) provides that "a provision for 'parts' of an
article covers a product solely or chiefly used as a part of such article but does not prevail over
a specific provision for such part." Id. at 392 n.*.
336. H'. Y Moberly, Inc., 825 F.2d at 392.
337. 39 C.C.P.A. 90, 95 (1951), cited in W Y Moberly, Inc., 825 F.2d at 392.
338. WY Moberly, Inc., 825 F.2d at 392.
1988]
INTERNATIONAL TRADE DECISIONS
1203
652.94. 3 39 The court rejected the CIT interpretation of Frost, explaining that the case "does not support the conclusion that an article formed of multiple pieces of metal cannot be of unitary
construction." 340 The Federal Circuit's conclusion was consistent
with other decisions of the CIT. 34 1 The court pointed out that a
further requirement for classification under item 652.94 was that the
article "must also provide vertical or horizontal support to a structure" 34 2 and remanded to the CIT to reconsider the classification in
34 3
light of the court's opinion.
At issue in A. N. Deringer,Inc. v. United States 34 4 was the proper classification of reverse osmosis maple sap concentrators, the question
being whether they are properly classified under TSUS Item 661.95
as filtering and purifying machines for liquids, 34 5 as contended by
the government, or under 666.20 as sugar making machinery (or
parts thereof) 346 or under 666.00 as agricultural or horticultural implements not specially provided for,34 7 as contended by the plaintiff.34 8 Having found that the concentrators did indeed both purify
and filter, 3 49 the Federal Circuit, affirming the CIT, disposed of the
plaintiff's arguments by invoking headnote 1 of Subpart A of TSUS
Schedule 6, Part 4 which states, in effect, that Item 661.95 is the
correct classification in the event other provisions in the same part,
which includes Items 666.20 and 666.00, also describe the merchan3 50
dise in question.
In DRI Industries v. United States,35 1 the plaintiff DRI challenged
Customs Service's classification of tool chests as "luggage" under
TSUS Item 706.22.352 The CIT upheld Customs and the Federal
Circuit affirmed on the basis of the CIT's opinion. 3 53 Principally at
339.
Id. at 393.
340. Id.
341. See, e.g., Alyeska Pipeline Serv. Co. v. United States, 643 F. Supp. 1128, 1131 (Ct.
Int'l Trade 1986) (finding girder structures to be single units); Nissho-Iwai Am. Corp. v.
United States, 641 F. Supp. 808, 811 (Ct. Int'l Trade 1986) (classifying bridge sections as one
unit);J. Ray McDermott & Co. v. United States, 354 F. Supp. 280, 283 (Cust. Ct. 1972) (holding that parts of girder constitute single unit).
342. W. Moberly, Inc., 825 F.2d at 393 (citing Nissho Iwai Am. Corp. v. United States,
641 F. Supp. 808, 811 (Ct. Int'l Trade 1986)).
343. Id.
344. 832 F.2d 592 (Fed. Cir. 1987), aff'g 656 F. Supp. 670 (Ct. Int'l Trade 1986).
345. TSUS Item 661.95.
346. TSUS Item 666.20.
347. TSUS Item 666.00.
348. A.N. Deringer, Inc. v. United States, 832 F.2d 592, 592-93 (Fed. Cir. 1987).
349. Id. at 593.
350. Id.
351. 832 F.2d 155 (Fed. Cir. 1987), aff'g 657 F. Supp. 528 (Ct. Int'l Trade 1987).
352. DRI Indus. v. United States, 832 F.2d 155, 156 (Fed. Cir. 1987).
353. Id.
1204
THE AMERICAN UNIVERSITY LAw REVIEW[Vol.
37:1167
issue was the construction of headnote 2(a)(ii) to TSUS Schedule 7,
Part I, Subpart D.3 54 DRI argued that the classification was wrong
because, first, the one common characteristic of all the examples
listed in the headnote was their use in connection with travel,3 5 5 and
second, that the headnote "excludes articles which were primarily
designed for a purpose other than that of being carried with a person from one place to another." 3 56 Both the CIT and the Federal
Circuit rejected these arguments in upholding the Customs Service
3 57
classification.
C. Miscellaneous Matters
In E.C. McAfee A/C Bristol Metal Industries v. United States,3 58 the
Federal Circuit considered the circumstances in which the government is permitted to set off refunds due to an importer against sums
owed to the government by that importer or its agent. 3 59 The government contended that the matter depended on the legal interpretation of the applicable regulation.3 60 McAfee A/C Bristol
contended that the CIT's decision not to allow setoff should not be
overturned unless the CIT had "abused its discretion,"3 6 1 and in
any event that the CIT had correctly concluded that the setoff regulation did not apply because the party entitled to the refund was not
3 62
indebted to the government.
The Federal Circuit rejected the notion that the CIT had any discretion.3 63 Such discretion would only exist if there were cross obligations between the parties. 3 64 Here, the CIT had ordered that
354. Id. Headnote 2(a)(ii) includes the phrase "and like containers and cases designed to
be carried with the person" in its description of those items to be considered as luggage and
therefore under its scope. Tariff Schedules of the United States, Schedule 7, Part 1, Subpart
D (1983).
355. DRI Indus., 832 F.2d at 156.
356. Id.
357. Id. In another case, not discussed in the text, the Federal Circuit affirmed, on the
basis of the CIT's decision which itself upheld a Customs classification, that certain imported
bell jars were properly classified under TSUS Item 548.05 as "[a]rticles not specially provided
for, of glass" rather than under TSUS Item 548.01 as "[tiubes and tubing with ends
processed: containing over 95 percent silica by weight ..
" Heraeus Amersil, Inc. v. United
States, 811 F.2d 1503, 1503 (Fed. Cir. 1987).
358. 832 F.2d 152 (Fed. Cir. 1987), aff'g 650 F. Supp. 1026 (Ct. Int'l Trade 1986). See
supra notes 88-104 and accompanying text (discussing jurisdiction and standing in case).
359. E.C. McAfee A/C Bristol Metal Indus. v. United States, 832 F.2d 152 (Fed. Cir.
1987).
360. Id. at 154. The relevant regulation was 19 C.F.R. § 24.72 (1987) which permitted the
government to set off any debts an importer owed it from any judgments the importer was
granted against it.
361. E.C. McAfee 832 F.2d at 154.
362. Id.
363. Id.
364. Id. (citing Fuller v. Fasig-Tipton Co., 587 F.2d 103, 106 (2d Cir. 1978); Melamed v.
1988]
INTERNATIONAL TRADE DECISIONS
1205
refunds be made to "McAfee A/C Bristol," but there was no debt
owed by Bristol, and so there could be no setoff.3 65 Accordingly,
the CIT had no discretion.3 66 The Federal Circuit agreed, however,
that the setoff regulation did not even apply. 3 67 The judgment was
in favor of "McAfee A/C Bristol."3 68 The government sought to set
it off against a debt due from "McAfee A/C another," and did not
assert any debt due from "McAfee A/C Bristol" or from "Bristol."
There was therefore no cross obligation due and no legal basis for
setoff under the regulation.3 69 Finally, the court rejected the government's argument that the decision would lead to "chaos in the
3 70
administration of the customs laws."
Ameritrade Corp. v. Cames3 7 ' concerned the revocation of a bonded
warehouse license. The Federal Circuit, affirming the CIT,37 2 held
that although warehouse proprietors are not held strictly liable for
any violations of Customs Service regulations which may occur,
there is "an expectation of reasonable care in operating under a
bonded warehouse license." 373 Ameritrade had appealed a Customs Service decision revoking its license, on the ground that the
decision was unsupported by substantial evidence.3 74 The CIT had
determined, however, that Ameritrade's president had signed numerous false withdrawal documents and that Ameritrade had sold
almost 2900 cases of bonded liquor to an unbonded warehouse
which then sold the cases into United States commerce without paying any duties. 375 The Federal Circuit agreed that Ameritrade had
full responsibility to ensure that its merchandise was handled and
disposed of in compliance with applicable customs regulations.3 76
Though Ameritrade had argued that there was no evidence of its
complicity in the fraud perpetrated by the buyer of its goods-sellLake County Nat'l Bank, 727 F.2d 1399, 1404 (6th Cir. 1984); In re Diplomat Elec., Inc., 499
F.2d 342, 346 (5th Cir. 1974)).
365.
366.
Id.
Id.
367. Id.
368.
Id.
369. Id.
370. Id.
371.
372.
831 F.2d 260 (Fed. Cir. 1987).
Ameritrade Corp. v. Carnes, 637 F. Supp. 1213 (Ct. Int'l Trade 1986), aff'd, 831 F.2d
260 (Fed. Cir. 1987).
373. Ameritrade Corp. v. Carres, 831 F.2d 260, 261 (Fed. Cir. 1987).
374. Id. The CIT has review of such decisions by virtue of 19 C.F.R. § 19 .3(g) (1985),
which reads "(g) Review by the Court of InternationalTrade. Any proprietor adversely affected by
a decision of the Regional Commissioner may appeal the decision in the Court of International Trade."
375.
Ameritrade Corp., 831 F.2d at 261.
376. Id The Customs Service found violations of 19 C.F.R. §§ 19.3(e)(2) and 19.6(b)(1)
which provided the proper procedure for removal of goods from a warehouse and appropriate sanctions for violating that procedure.
1206
THE AMERICAN UNIVERSITY LAw REVIEW[Vol.
37:1167
ing the diverted liquor 3 77-the Federal Circuit held that the record
supported a finding that Ameritrade "conducted its business with
respect to the diverted liquor with reckless disregard of the Customs
regulations."
378
CONCLUSION
The Federal Circuit was five years old this year. As such, it is a
relatively young court and often does not have a body of its own
authority on which to rely. Not surprisingly, therefore, it has exercised its role cautiously, and continued to accord both CIT and
agency decisions considerable deference,3 7 9 as illustrated by its
1987 opinions in the international trade area.
377. Ameritrade Corp., 831 F.2d at 261.
378. Id.
379. See Kuhn, InternationalTrade Law Developments in the United States Court of Appeals for the
Federal Circuit During the Year 1985, 35 AM. U.L. REV. 1073, 1096 (1986) (noting that Federal
Circuit's decisions of 1986 indicate strong deference to CIT decisions).