SUBSTANTIAL EVIDENCE IN THE LAW OF
INTERNATIONAL TRADE: MEANINGFUL
JUDICIAL REVIEW OF ANTIDUMPING ACTIONS
OR PERPETUATION OF THE YO-YO EFFECT?
Bryan A. Edens *
INTRODUCTION
The ultimate issue within the current United States international
trade administrative framework is not whether there should be any judicial review--international trade law is, after all, a judicial process; some
level of judicial review exists ipso facto.1 Rather, the questions are: as a
matter of policy, what is the proper scope of judicial review to be exercised by the trade courts as judicial bodies? As a matter of policy, is the
statutorily-mandated "substantial evidence" standard of review "meaningful" judicial review of agency decision making, or is legislative modification required? Should the U.S. Court of International Trade
("CIT") have the authority to direct a negative determination of injury
by the International Trade Commission ("Commission" or "ITC") in an
antidumping action? Furthermore, as the role of the federal international trade judiciary2 becomes an integral part of general international
trade law, as reflected by its expanding specialized jurisdiction, what role
3
should it play vis-A-vis the central trade agencies?
*
J.D. candidate Benjamin N. Cardozo School of Law, 2008. The author wishes to thank
Professor Marci Hamilton, Benjamin N. Cardozo School of Law, Professor David Schoenbrod,
New York Law School, and Kate MacMillan, Executive Editor-Cardozo Public Law, Policy, &
Ethics Journal, for their guidance in preparing this Note.
1 Louis Jaffe described the presumption of a right to judicial review of agency action even
where there is statutory ambiguity or silence as "the teaching of our history and tradition" and
"our common law." Louis L. JAFFE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION 336
(1965). The Administrative Procedure Act codifies the presumption of reviewability of agency
decisions:
Except so far as (1) statutes preclude judicial review or (2) agency action is by law
committed to agency discretion - . . . . Any person suffering legal wrong because of
any agency action, or adversely affected or aggrieved by such action within the meaning of any relevant statute, shall be entitled to judicial review thereof.
Administrative Procedure Act § 10(a), 60 Stat. 243 (1946), 5 U.S.C. § 1009(a).
2 Collectively, the U.S. Court of International Trade and the Court of Appeals for the
Federal Circuit.
3 Namely, the International Trade Commission and the International Trade Administration
of the Department of Commerce.
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As a preliminary analysis, this Note examines the judicial remedies,
specifically the scope of the CIT's remand power in the area of antidumping ("AD") law, where the court's judicial powers are at their
most restricted.' This Note ultimately concludes that in light of the
potentially dire consequences of unfettered executive discretion in restricting trade, more substantive and less formalistic judicial review is
appropriate. That is, the CIT must have the power to remand agency
decisions with specific instructions to reach a judicially determined result. This Note proceeds by determining whether the statutory review
procedures, specifically antidumping actions in the CIT, are meaningful
safeguards against executive discretion in the international trade law of
the United States.
Section I outlines the current trade regime in the United States and
considers the levels of interaction between the various entities. Section
II provides a historical progression of American trade law and the antidumping remedy. Section III presents the central argument that the
CIT should have the power to direct agency decision-making through
employing the power to remand with instructions to reach a judicially
determined outcome, i.e., reverse. Section IV outlines the "yo-yo effect"
and analyzes both the need for and the alternatives to such a power.
Section V examines whether the CIT acted ultra vires in exercising such
a power when it directed the Commission to enter a negative material
injury determination in the Nippon Steel v. United States5 antidumping
cases. Section V considers whether the CIT has the power of outright
reversal under 19 U.S.C. § 1516a6 based on past dicta by the Court of
Appeals for the Federal Circuit ("Federal Circuit" or "CAFC") and a
policy analysis of administrative law.
4 See Tariff Act of 1930, § 516A(b)(2), 19 U.S.C § 1516a(b)(2). The court's decisionmaking authority is limited to the record developed before the administrative agency.
5
458 F.3d 1345 (rehearing denied Oct. 27, 2006). This is the most recent case in that
6
19 U.S.C. § 1516a (2006). Section 151 6 a provides details of judicial review in counter-
line.
vailing duty ("CVD") and antidumping duty proceedings, including the statutory standards of
review applicable to CIT review.
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
I.
433
THE U.S. INTERNATIONAL TRADE LEGAL
REGIME AND DELEGATION
A.
Structure of the Modern Trade Regime
The modern United States international trade regime consists of
Congress, an administrative bureaucracy, which consists of executive
agencies, such as the Department of Commerce ("Commerce" or
"DOC"), independent regulatory agencies, such as the International
Trade Commission, a specialized judiciary composed of the United
States Court of International Trade ("CIT"), and the United States
Court of Appeals for the Federal Circuit. In international trade policy,
Congress has traditionally been responsive to pressure from interest
groups that advocate policies addressing import relief for domestic industry from both fair and unfair trading practices, especially in impor7
tant constituent industries such as steel and agriculture.
Although the CIT is an Article III court of limited and specialized
subject matter jurisdiction, it functions basically in the same way as federal courts of general jurisdiction. 8 However, it is recognized that every
substantive field of regulation develops its own body of case law governing judicial review in that area and, as such, "the intensity and character of judicial review will vary from one field to the next." 9 The CIT's
evolution from an Article I legislative court to the Article III Customs
Court to its current Article III incarnation has been explored at length
elsewhere, but some background is relevant as to the scope of judicial
review. "
In 1980, Congress established a "comprehensive system of judicial
review of civil actions arising from import transactions, utilizing the specialized expertise of the United States Customs Court and the United
States Court of Customs and Patent Appeals."'" The overall design was
to "ensure greater efficiency in judicial resources and uniformity in the
7
See
STEPHEN
D.
COHEN, ROBERT
A.
BLECKER &
PETER
D.
WHITNEY, FUNDAMENTALS
OF U.S. FOREIGN TRADE POLICY 152-180 (2003) [hereinafter COHEN ET AL.].
8 CIT's jurisdiction is defined by statute. See 28 U.S.C. § 1581 (2006).
9 Ronald M. Levin, Scope-Of-Review Doctrine Restated: An Administrative Law Section Report, 38 ADMIN. L. REV. 239, 241 (1986).
10 See Exparte Bakelite Corporation, 279 U.S. 438 (1929) (holding that the customs courts
were legislative courts under Article I of the Constitution); see generally PATRICK C. REED, THE
ROLE OF FEDERAL COURTS IN U.S. CUSTOMS & INTERNATIONAL TRADE LAW (1997).
11 H.R. Rep. No. 1235, 96th Cong., 2d Sess. at 20 (1980). See also S. Rep. No. 466, 96th
Cong., 1st Sess. (i979); Customs Court Act of 1980, Pub. L. No. 96-417 (1980); REED, supra
note 10, at 154.
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judicial decision-making process," and to give "aggrieved parties better
access to judicial review of [an administrative] action arising out of an
import transaction." 12 Congress also changed the court's name from the
"Customs Court" to the "United State Court of International Trade,"
since the new name "more accurately describe[d] the court's clarified
and expanded jurisdiction and its new judicial functions relating to international trade." 13 The primary role of these courts is to exercise judicial review over the decisions made by the increasingly complex web of
administrative agencies.
In the wake of the Reciprocal Trade Agreements Act, 4 the legislative branch has consistently delegated more authority to the executive
branch as international trade has become a larger and more complex
part of the U.S. economic system. Because the Executive's policy inclinations lean toward free trade and globalism and away from policies
limiting import-induced injury to domestic industry, whose interests
the legislature is elected to represent, Congress maintains a healthy distrust of the Executive in areas involving international trade policy.15
Why then does Congress continue to delegate broad authority to the
executive?
B.
Delegation in the Law of InternationalTrade
The Supreme
delegation in 1892
international trade
broad discretionary
Court of the United States addressed the issue of
in MarshallField & Co. v. Clark, one of the earliest
cases involving judicial review of a statute granting
power to the President.' 6 The Court recognized the
prevailing law of the time: "[t]hat congress CANNOT DELEGATE legislative power to the president is a principle universally recognized as vital
to the integrity and maintenance of the system of government ordained
by the constitution."' 7 The Court, however, upheld the statute, which
delegated to the President broad authority to suspend duty-free importation of certain articles from countries imposing unreasonable import re12 H.R. Rep. No. 1235, at 20.
13 Id.
14 See Reciprocal TariffAct, ch. 474, 48 Stat. 943, 19 U.S.C. §§ 1351 - 1354 (2000). This
is also popularly known as the Reciprocal Tariff Act.
15 See COHEN ET AL., supra note 7, at 143-144.
16 143 U.S. 649 (1892).
17 Id. at 692.
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
435
strictions on U.S. goods 8 on the basis of a series of statutes promulgated
from 1790 to the date of decision, stating:
[I] t is often desirable, if not essential, for the protection of the interests
of our people against the unfriendly or discriminating regulations established by foreign governments ...to invest the [P]resident with
large discretion in matters arising out of the execution of statutes relating to trade and commerce with other nations.' 9
The Supreme Court reemphasized the principle that the executive
has a constitutional role in international trade pursuant to its Article II
foreign relations power in United States v. Curtiss-Wright Corp.2" In support of the holding in Curtiss-Wright,Justice Sutherland wrote that the
President is the "sole organ of the federal government in the field of
international relations" and the "constitutional representative of the
United States with regard to foreign nations."2i
By design, the legislature is generous in diffusing the responsibility
and political accountability over to incessantly demanding private sector
interest groups.2 2 Professor Jerry Mashaw has argued that broad delegation to administrative agencies is a means of facilitating responsiveness
to voter preferences, expressed in presidential elections, thereby maintaining an executive branch that is accountable to the populace.2 3 Proponents of delegation also defend it on the theory that in complex areas,
such as international trade law, agencies are composed of officials, insulated from the public scrutiny, with the ability to solve problems expediently and with the requisite technical expertise in fact-finding and
decision-making.2 4 Furthermore, supporters argue that judicial review
18 For a thorough discussion of the similar, yet modern and controversial, so-called "market
access" or Section 301 laws and their progeny, see
LAW AND POLICY 85-113 (2001).
MICHAEL
K. YOUNG,
UNITED STATES TRADE
19 Marshall Field, 143 U.S. at 691.
299 U.S. 304, 319-20 (1936) (holding that it was not an unconstitutional delegation of
20
legislative power for Congress to empower the President to prohibit the sale of arms to a foreign
nation engaged in conflict).
21 Id.
22
See
23
Jerry L. Mashaw, Prodelegation: Why Administrators Should Make Political Decisions, 1
YOUNG,
supra note 18, at 144.
YALE J.L. ECON & ORG.
24
See
81, 95-99 (1985).
DAVID SCHOENBROD, POWER WITHOUT RESPONSIBILITY:
PEOPLE THROUGH DELEGATION
(1993).
How
CONGRESS ABUSES
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of agency actions is a safeguard on liberty that justifies the gains of administrative law and minimizes or eliminates the dangers. 2 5
C.
Scope ofjudicial Review in a Delegation Based Scheme
The CAFC described the scope of judicial review of an agency decision by the specialized trade judiciary not in terms of strict separation
of powers principles, but rather as a partnership, saying that "agencies
and courts together constitute a 'partnership' in furtherance of the public interest, and are 'collaborative instrumentalities of justice.' "26 In
such a partnership, division of responsibility is opaque in practice. A
court's function in exercising judicial review is often described as "control[ling] the lawfulness of agency action" and "permitting the court to
control the lawfulness of agency action without allowing it to displace
agency responsibility. ' 27 Defined in terms of legislative delegation, Walter Gellhorn wrote:
[E]xcept possibly in those relatively rare instances where the legislature
has provided for de novo judicial review, the legislative delegation of
power to an agency is ... [a] recognition and direction that the agency
rather than the judiciary is to exercise the delegated power or authority. Therefore the court's role on review is not to decide the case according to the court's view of the merits but, instead, to determine
whether the agency has acted within the discretion delegated to it. 28
The law of international trade, however, is necessarily colored by
its unique position in the framework of the larger administrative system
and is not entirely elucidated by traditional administrative law concepts.
II.
TARIFFS:
A
HISTORICAL PERSPECTIVE OF TENSIONS BETWEEN
LIBERALIZED TRADE AND PROTECTION
Globalization has created an environment in which global imports
of merchandise reached 9.25 trillion USD in 2004.29 United States
id.
Greater Boston Television Corp. v. FCC, 444 F.2d 841, 851-52 (D.C. Cit. 1970) (cita-
25 See
26
tions omitted), cert. denied, 403 U.S. 923 (1971).
27 PETER L. STRAUSS, AN INTRODUCTION TO ADMINISTRATIVE JUSTICE IN THE UNITED
STATES
239 (1989).
28 WALTER GELLHORN ET AL., ADMINISTRATIVE LAw: CASES AND MATERIALS
917 (7th ed.
1979).
29
WTO, International Trade Statistics, available at http://www.wto.org/englishlres_elstatis
_elits2005-elsection3-eliiiO2.xls.
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
437
merchandise imports accounted for nearly fifteen percent of the world's
total in 2004.30 Perhaps the real inconvenient truth of modern times is
that not every citizen will benefit from trade liberalization, especially in
the short term.3 1 Therefore, the incentives for the government to limit
imports through either temporary import restraints in response to "fair"
but damaging foreign competition or through the imposition of import
barriers, remain compelling.
Historically, United States international trade policy has consisted
of internal policymaking constructed on a foundation of governmental
objectives, laws, and actions designed to influence the flows of imports
32
and exports in contemplation of the particular policy objectives.
United States policy objectives have rested largely with a legislature that
has periodically assuaged public fears by adopting policies contrary to
free market principles.3 3 As a global superpower, the U.S. has a high
marginal propensity to import and, despite reluctance after World War
II, has demonstrated a general willingness to engage in liberal trade policies in pursuit of what political scientists call "hegemony." 34 The particular complexities and idiosyncrasies of U.S. trade policy are the natural
result of its constitutional system and apparent conflicting policy initiatives between the political branches. In the past, legislators responded to
outside pressure with restrictive tariffs designed to protect domestic industries. As this Section will illuminate, the results were often disastrous
and far-reaching.
30
Id.
See More Pain than Gain,
THE ECONOMIST, Sep 14, 2006; see also Jagdish Bhagwati,
Arvind Panagariya, and T.N. Srinivasan, The Muddles over Outsourcing, JOURNAL OF EcoNOMIC PERSPECTIVES, Fall 2004; Paul Samuelson, Where Ricardo and Mill Rebut and Confirm
31
Arguments of Mainstream Economists Supporting Globalization, JOURNAL
SPECTIVES, Summer 2004.
32
OMY
33
34
See generally
ROBERT M. STERN,
U.S.
OF ECONOMIC PER-
TRADE POLICIES IN A CHANGING WORLD ECON-
(1989).
See generally id.
Political scientists use the term hegemony to define the leadership position of a single state
in the global system. See CHARLES P.
KINDLEBERGER, THE WORLD IN DEPRESSION
1929-1939
289 n.1 (1986). Kindleberger candidly conceptualized the word hegemony as the responsibility
held by either singular or multiple powerful states to maintain open markets for distress goods,
to provide liquidity in a financial crisis, etc. The ultimate role of a hegemon in the global system
is, therefore, that of a patron promoting stability, macroeconomic and otherwise. See id.
438
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A.
[Vol. 6:431
Early American Trade Law
The first substantive piece of legislation passed by the first Congress in 1789 related to tariffs. 3 The legislative intent of the statute was
to impose duties in "support of government, for the discharge of the
debts of the United States, and the encouragement and protection of
manufactures
"36 Though it enumerated specific tariff provisions
on goods ranging from Madeira wine to teas imported from China and
India, pickled fish, and snuff,37 the rates were low enough that fiscal
considerations were satisfied, but there was little discouragement of imports. 38 The stage was set for a debate revolving around trade.
Alexander Hamilton, in his capacity as Secretary of the Treasury,
wrote his Report on Manufactures39 as candid advocacy for protectionist
policies, 4" only to be defeated by James Madison and Thomas Jefferson,
who argued that prohibitive tariffs would not be in the nation's interest. 4 1 Madison and Jefferson, predictably as founders of the Democratic-Republican Party and as Virginians, further argued that any
incremental power allocation to the central government should be minimal.4 2 For the next 140 years, the debate lingered, yielding multiple
tariff rises and reductions. Shortly after the War of 1812, a widespread
35 Tariff Act of July 4, 1789, ch. 2, 1 Star. 24 (1789).
36 Id.
37 Id. at 25.
38 Id, Duties were prescribed in either cents, in range from one cent on cocoa to fifty cents
on dried fish, or ad valorem based on the value of the goods, e.g., ranging from five percent to
fifteen percent on carriages. Naturally, fifteen percent duties would have a more drastic effect on
limiting imports than those set at the lower end of the range.
39 One commentator has argued that Hamilton's advocacy of tariffs was not highly protectionist due to the inconsistencies in his belief that tariffs were a crucial source of revenue and his
fear that imports would be discouraged, thereby eliminating revenue. See Douglas A. Irwin, The
Aftermath of Hamiltons "Report on Manufactures", 64 THE JOURNAL OF ECONOMIC HISTORY 3,
800-821 (2004).
40 See NOBLE E. CUNNINGHAM, Jefferson vs. Hamilton, Confrontations That Shaped a Nation
66-72 (2000).
41 See THOMAS
JEFFERSON, REPORT ON THE PRIVILEGES AND RESTRICTIONS ON THE COM-
MERCE OF THE UNITED STATES IN FOREIGN COUNTRIES (1793), available at http://www.yale.
edu/lawweb/avalon/jeffrep2.htm.
42 Jefferson said:
And I am not for transferring all the powers of the States to the general government,
& all those of that government to the Executive branch. I am for a government rigorously frugal & simple, applying all the possible savings of the public revenue to the
discharge of the national debt ....
The Jefferson Papers, Thomas Jefferson to Elbridge Gerry, January 26, 1799, draft available at
http://memory.loc.gov/cgibin/query/r?ammem/mtj:@field(DOCID+@it(tjO90014)).
20081 SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
439
and ominous practice of congressional logrolling developed, whereby
certain members accepted large tariff raises on certain goods in exchange
for support of higher duties on commodities produced by important
constituencies, and this led to the politically divisive passage of the economically destructive "Tariff of Abominations" in 1828. 4 3
B.
U.S. Emergence from the Great War and Onset
of the Great Depression
The U.S. emerged from World War I as an industrial superpower,
a major net capital exporter, and the world's most important market for
semifinished goods and raw materials.4 4 Though the European
macroeconomic infrastructure lay in embers, the U.S. investment community had financed much of the war. United States financiers were
exuberant to find themselves creditors of a British debt to the tune of
$3.3 billion as well as diversified global loans of $6.4 billion. 45 President Woodrow Wilson's Fourteen Points program called for the expedient removal "of all economic barriers and the establishment of an
equality of trade conditions among all nations consenting to the
peace."
46
The economic boom of the early 1920s was due in large part to the
innovation of the domestic automotive industry, but the boom was substantiated by a free trade environment.4 7 This liberal trade joie de vivre
would not last, however, and as the international community "turned to
protect its national private interests, the world public interest went
down the drain, and with it the private interests of all."' 48 The latter
part of the 1920s brought drastic deflationary pressures in the agricultural sector as the U.S. began to experience the effects of the global
43 Tariff of 1828, ch. 111, 4 Star. 308 (1828). Thereafter, tariffs were reduced by Congress
in 1833 and fluctuated according to which party controlled Congress. See COHEN ET AL., supra
note 7, at 29-30.
44 RAYMOND F. MIKESELL, UNITED STATES ECONOMIC POLICY AND INTERNATIONAL RELATIONS
8 (1952).
45 KINDLEBERGER,
supra note 34, at 41 (citing League of Nations Balances of Payments,
1930, at 30 (1932)).
46 JOHN M. DOBSON, Two CENTURIES OF TARIFFS: THE BACKGROUND AND EMERGENCE
OF THE U.S. INTERNATIONAL TRADE COMMISSION 51
(1976).
47 The automotive industry consisted of not only automobiles, but associated "support"
industry including roadbuilding, gas stations, oil refineries, and the spread of suburbs.
DLEBERGER, supra note 34, at 44.
48 Id. at 292.
KIN-
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spread of the Great Depression.4 9 Congress and the Hoover administration responded with sweeping quotas, tariffs, and exchange depreciation.5 0 Rising tariffs, concurrent with rampant speculation and global
overproduction, led to a deep agricultural depression that some argue
contributed significantly to the October 1929 stock market crash, the
decline in industrial output, and the banking collapse. 5 1 The implementation of the new agricultural tariffs further resulted in a political
scramble by interest groups and organized labor to achieve similar ends
for manufactured goods and more congressional logrolling. 52
Meanwhile, global tariffs were on the rise. Parts of Europe pursued
a protectionist agenda to shield the young countries carved out of the
Austro-Hungarian Empire.5 3 Europe and others, including the United
States, implemented protectionist tariffs to protect domestic industry
against "exchange dumping," which is the surge of exports from countries with depreciated currencies.5 4 France raised its tariff on automobiles to one hundred percent, effectively closing that market to a
significant source of economic growth.5 5 In an attempt to negotiate a
"tariff truce," the League of Nations held the World Economic Conference in Geneva in 1927.56 Such a truce was reached among the
League's European members with a view toward ultimate reductions,
however it was stillborn. The participants ultimately lacked sufficient
political capital at home and soon reneged on concessions. 57 Furthermore, the economically powerful United States was not a member of the
League, and the governing Republicans favored tariffs as an effective
protectionist measure.5 8
Following his inauguration in 1929, President Hoover called a special session of Congress to propose measures that would assist farmers
who were suffering from deflationary pressures in the agricultural sec49
Id. at 91.
50
Id.
Id. at 70.
51
52 COHEN ET AL.,
supra note 7, at 32.
supra note 34, at 61.
53
KINDLEBERGER,
54
55
Id.
Id.
56
Id. at 64. The United States was not a member of the League of Nations and did not
participate in the Conference.
57
58
Id. at 64-65.
Id.
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
441
tor." 9 Congress passed and Hoover signed the Smoot-Hawley Tariff
Act 6" into law despite formal protests of more than thirty countries and
62
1
the advice of 1,000 economists. 6 The Act doubled ad valorem tariffs
63
on 3,200 import categories to a weighted average of over fifty percent.
Global retaliation was widespread and pronounced. Reprisals ranged
from a Swiss boycott of U.S. exports to an Italian increase in tariffs on
U.S. automobiles; Cuba, Mexico, France, Australia and New Zealand all
instituted new tariffs against U.S. goods.64 Economists generally agree
that the mutual restriction of foreign markets on global goods and U.S.
domestic deflation not remedied by agricultural tariffs, combined with
European defaults on war debts, set the stage for the Great Depression.65
The passage of Smoot-Hawley as sweeping legislation, as opposed to a
targeted remedy for agriculture, was the result of logrolling by special
interest and labor; the error was in perceiving the law as a sovereign
remedy for all.66 The damage done by this responsiveness to special
interests, without the leveling effect of judicial review, is a clear illustration that "[t]o manage pressure is to govern; to let pressures run wild is
67
to abdicate.
59 Hoover promised relief during his 1928 presidential campaign, and therefore made good
on his promise. The Smoot-Hawley Act, however, was not limited to the agricultural sector.
KINDLEBERGER, supra note 34, at 64.
60 Act ofJune 17, 1930, ch. 497, 46 Stat. 590; see also 19 U.S.C. §§ 1301 et seq (repealed).
61 Act of June 17, 1930, ch. 497, 46 Stat. 590. U.S. imports between 1929 and 1932
cascaded by seventy percent. For an in-depth and insightful discussion of the reasons and effects
of Smoot-Hawley, see COHEN ET AL., supra note 7, at 32-34.
62 Ad valorem tariffs are imposed as a percentage of the value of the subject good(s).
63 See KINDLEBERGER, supra note 34.
64 See id
65 See id.; see also BEN S. BERNANKE, ESSAYS ON THE GREAT DEPRESSION (2000). The large
bank failures, including that of the Bank of the United States, are arguably the real cause of the
Depression being more than a simple recession. The contributing factors to those failures are
considered by the monetarists to be the defaults and runs on banks that arose from the restriction in the money supply and lack of liquidity. Arguably, these problems find their fulcrum in
the global tariff wars.
UNITED STATES
See generally MILTON FRIEDMAN, A MONETARY HISTORY OF THE
(1971).
66 E. E. SCHATTSCHNEIDER, POLITICS, PRESSURES AND TARIFFS: A STUDY OF FREE PRIVATE ENTERPRISE IN PRESSURE POLITICS AS SHOWN BY THE 1929-1930 REVISION OF THE
TARIFF 283-284 (1935) (stating, "To manage pressure is to govern; to let pressures run wild is to
abdicate.").
67 Id. at 283.
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The Reciprocal Trade Agreements Act of 1934 and Star-Kist Foods
In this context, Congress began freely delegating broad discretionary authority to the executive branch in matters involving international
trade relations. In response to the Smoot-Hawley debacle, the executive
branch leveraged a willingness by Congress to insulate itself from special
interest groups, essentially "letting the administration serve as the lightning rod for petitions from the private sector requesting import protection"" into a passage of the Reciprocal Trade Agreements Act ("RTAA")
of 1934.69 The RTAA represented the first time the Executive had congressionally sanctioned power to both negotiate bilateral agreements
with foreign nations and to implement reduction in tariffs (of up to fifty
percent) in return for like concessions. 70 Before its enactment, the Executive was permitted only to make trade policy promises subject to formal approval by Congress, thus creating a lack of proper negotiating
credibility vested in the President. 71 In essence, the RTAA was advance
authority granted to the executive by Congress. 72 The average ad
valorem tariff rate in the United States dropped from over fifty percent
in 1930 to about thirty-seven percent in 1939. 73
The RTAA suffered a constitutional challenge in Star-Kist Foods,
Inc. v. United States,7 4 in which an American producer cited Panama
Refining Co. v. Ryan 75 and A.L.A. Schechter Poultry Corp. v. United
States76 as support for the proposition that the RTAA was null and void
as an unconstitutional delegation of legislative powers by the Congress
to the President of the United States. 77 The United States Court of
68 COHEN ET AL., supra note 7, at 34.
69 19 U.S.C.
70
§§
1351 et seq (2000).
Id.
71 Kenneth W. Dam, Cordell Hull, The Reciprocal Trade Agreements Act, and the WTO, 1
N.Y.U. J.L. & Bus. 709, 713 (2005).
72 Id.
73 MIKESELL, supra note 44, at 63.
74 275 F.2d 472 (1959) (holding 1934 RTAA not an unconstitutional delegation by Congress to the President).
75 293 U.S. 388 (1935) (Cardozo, J. dissenting) (holding section 9(c) of Title I of the National Industrial Recovery Act of June 16, 1933, 15 U.S.C. § 709(c), a delegation of legislative
powers by Congress to the executive in unconstitutional excess of boundaries of delegation).
76 295 U.S. 495 (1935) (Cardozo, J. concurring) (holding section 3 of the National Industrial Recovery Act invalid because its impermissible delegation of legislative authority by Congress gave the President virtually unfettered discretion).
77 Star-Kist Foods, 275 F.2d 472.
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
443
Customs and Patent Appeals ("CCPA")78 granted review. 79 The plaintiff, an American producer of canned tuna fish, filed a protest pursuant
to section 516(b) of the Tariff Act of 193080 objecting to the assessment
of import by the Collector of Customs. 8 The collector assessed the
goods in accordance with the proper provision, as modified by a trade
agreement negotiated with Iceland.8 2 Star-Kist argued that the RTAA,
under which the agreement was negotiated, was an unconstitutional delegation of legislative powers by Congress to the President of the United
States. 8 3 Applying the "intelligible principle" standard,8 4 the CCPA
held that the RTAA was not an unconstitutional delegation of authority
to the President. 85 The decision in Star-Kist Foods was a judicial green
light for the development of the administrative decision-making apparatus as it applies to trade law and judicial review thereof. The RTAA,
perhaps ironically, remains an example of the executive branch's ability
to cure the ills of congressionally-enacted protectionist policies.8 6 The
effect of the CCPA's decision in Star-Kist Foods was to allow the liberalized trade policies of the executive, in the form of lower tariffs, to prevail. However, Star-Kist Foods does not clarify the judiciary's role in
"effectively" reviewing either Congressional legislation or action by
agencies, especially those that perform delegated quasi-legislative, quasijudicial functions. Perhaps more pointedly, there is a near complete
78
The Act of Mar. 2, 1929 expanded the jurisdiction of the former Court of Customs
Appeals and renamed it the Court of Customs and Patent Appeals ("CCPA") to reflect its new
provenance over the registration of patents and trademarks. REED, supra note 10, at 113 (1997).
The successor to the CCPA is the modern Court of Appeals for the Federal Circuit ("CAFC"),
which was created subsequent to the Federal Courts Improvement Act of 1982. Pub. L. No. 97164, 96 Stat. 25 (1982).
79 Star-KistFoods, 275 F.2d at 473. The Supreme Court of the United States had the power
to review all CCPA decisions under the Tariff Act of 1930, § 647, 46 Stat. 762. From the
perspective of authority on constitutional matters, a Supreme Court affirmation would be conclusive on the matter, however as a practical matter, at the time, the Supreme Court granted
certiorari to a very small number of customs related cases. See REED, supra note 10, at 115-116.
80 19 U.S.C § 1516a.
81 Star-Kist Foods, 275 F.2d at 473-4.
82
Id.
83
Id. at 474-75.
A precise discussion of this standard is beyond the scope of this brief historical introduc-
84
tion to delegation in matters of trade. For an interesting perspective, see Travis H. Mallen,
Rediscovering the Nondelegation Doctrine Through a Unified Separation of Powers Theory, 81 NoTRE DAME L. REv. 419, 419 (2005).
85 Star-Kist Foods, 275 F.2d at 482.
86 Kenneth W. Dam, Cordell Hull, The Reciprocal Trade Agreements Act, and the WTO, 1
N.Y.U. J.L. & Bus. 709, 713 (2005).
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absence of legal safeguards against a repetition of the historical experience of the Smoot-Hawley Tariff Act of 1930, namely "the realization
that the Congress was not able to act on imports for the benefit of the
'8 7
general public interest."
D.
Antidumping
Tariffs, perhaps having been identified by voters as transparently
anti-consumer, are no longer as favored in international trade law as
they once were. 8" As tariffs melt away, the mirror image of the protectionism race of the Smoot-Hawley era has occurred, in large part due to
the positive implications of GATT/WTO system and the subsequent
rapid expansion of the global trading system.8 9 Tariffs have yielded
more sophisticated, more "judicialized" processes, the most visible being
antidumping actions. Trade practice at the agency level over the past
several decades has proven antidumping actions to be powerful weapons
in any arsenal. 90 Indeed, Professor Andreas Lowenfeld states that antidumping law has been criticized as "growling] into quasi-permanent
protectionism."' Even a series of AD actions will not likely send a
87
DR.
ERNST-ULRJCH PETERSMAN, CONSTITUTIONAL FUNCTIONS AND CONSTITUTIONAL
(1991) (citing JACKSON at 1573 n.6).
88 See Raj Bhala, Rethinking Antidumping Law, 29 GW J. INT'L L. & ECON. 1 (1995).
89 Raj Bhala stated the following:
PROBLEMS OF INTERNATIONAL ECONOMIC LAW
Between 1947, when the General Agreement on Tariffs and Trade (GATT) entered
into force, and 1994, the eve of the entry into force of the Uruguay Round agreements, average tariffs in industrial countries plunged from 40% to 6.3%. As a result of
the Uruguay Round, that average will fall to just 3.9% and the percentage of industrial products (by value) that receive duty-free treatment will rise from 20% to 43%.
Id, at 3.
90 The Department of Commerce and International Trade Commission statistics show the
power of antidumping:
Only eighty-four U.S. antidumping orders, applicable to exporters from twenty-three
countries, were in effect in 1980. These orders affected just 131 categories of merchandise in the Harmonized Tariff Schedule (HTS), or 3.43% of U.S. imports. By
1990 there were 197 orders applicable to exporters from forty-two countries. n9
These orders affected 219 categories of merchandise in the HTS, or 9.59% of U.S.
imports. In addition, the U.S. Department of Commerce (DOC) found dumping in
over 90% of all antidumping petitions filed during this period. Between 1985 and
1992 the DOC terminated only 2% of all U.S. antidumping cases because of a lack of
dumping. Similarly, the U.S. International Trade Commission (ITC) found that injury existed in just under 60% of all cases.
Id. at 3-4.
91 This criticism is explained in the context of sunset reviews of AD orders, or lack thereof,
thereby extending AD orders into the distant future. See
TIONAL ECONOMIC LAw 289 (2002).
ANDREAS LOWENFELD, INTERNA-
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445
sovereign nation on the warpath, yet the abuse of import trade laws,
especially antidumping, "represents one of the most ominous threats to
a liberal trading regime. '9 2 Antidumping actions can serve a valuable
purpose. Such a regime creates the need to balance barriers to trade
with positive efforts in order to liberalize trade. Judicial review is a powerful method by which to ensure agencies with great power and little
transparency are not operating with impunity.
III.
JUDICIAL REVIEW OF ANTIDUMPING ACTIONS BY THE
A.
CIT
The Role of JudicialReview in Administrative Law
Former Chief Judge of the CIT Edward D. Re wrote that "[a]ny
examination of the role of the United States Court of International
Trade in the overall scheme of United States customs and international
trade statutes must begin with an understanding of the nature and purpose of judicial review."' 93 Any analysis of the problem requires a brief
discussion of judicial review in administrative law.
Professor Richard Stewart classically identified the task of administrative law as legitimating "through controlling rules and procedures,
the exercise of power over private interests by officials not otherwise
formally accountable." 94 Legislative standards, administrative decisional
procedures, and judicial review are commonly identified as the methods
by which to strap unaccountable administrators to the will of both the
legislature and its electoral base. 95 The modern observer may have
trouble imagining, however, that only the relatively recent "creative early
years" and "reforming dynamism rarely seen on so grand a scale" of the
New Deal produced the layers of administrative bureaucracy that com92
A thorough discussion of the economic implications of antidumping on American con-
sumers is outside the scope of this brief article. Stiglitz offers as a solution that economists
remain watchful and persist in educating policymakers. See e.g., Joseph E. Stiglitz, Dumping on
Free Trade: The U.S. Import Trade Laws, 64 SouTHERN ECONOMIC JOURNAL 2, 402-424
(1997).
93 Edward D. Re, Foreword: The United States Court of International Trade in a World of
Transition, 22 L. & POL. INT'L Bus 643, 644 (1991).
94 Richard B. Stewart, The Reformation ofAmerican Administrative Law, 88 HARV. L. REv.
1667 (1975).
95 Id.; see also Jerry L. Mashaw, Structuring a "Dense Complexity": Accountability and the
Project of Administrative Law," Issues in Legal Scholarship, The Reformation of American Administrative Law (2005): Article 4, available at http://www.bepress.com/ils/iss6/art4.
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pose the framework of international trade law. 96 Agencies are thoroughly engrained in modern federal practice. The growth of the
administrative process has been the "characteristic instrument of political and economic reform. '97 Even as recently as 1985, then Attorney
General Edwin Meese earned a faux nomination for "charter membership in the Administrative Law Flat Earth Society" after making comments that criticized delegation and exhibited doubt in the
administrative state. 98
One enduring misconception of administrative law in the United
States is that during the period between 1787 and the late nineteenth
century the national government was one of "courts and parties." 99 Judicial review in the context of trade, however, is a relatively recent phenomenon. In his benchmark treatise on judicial review of
administrative action, Louis Jaffe explained that judicial review was virtually unknown until the early twentieth century.10 0
Though the judiciary is often perceived in a staunchly compliant
role in the constitutional system of checks and balances, the actual situation is much more nuanced. The role of the judiciary has been described concomitantly as an intra-governmental control mechanism and
as a forum for the redress of private grievances, both of which are lega96
See James 0. Freedman,
AMERICAN GOVERNMENT
CRISIS AND LEGITIMACY: THE ADMINISTRATIVE PROCESS AND
35 (1978). The framework of international trade law is discussed
infra.
97 JAFFE,
supra note 1, at 3.
98 Bernard Schwartz, Administrative Law Cases During 1985, 38 ADMIN. L. REv. 293
(1986). In a speech to the Federal Bar Association, Meese denigrated the agencies as composed
of "anonymous members" and doubted agency power in the Constitutional scheme: "In the
tripartite Scheme of government, a body with enforcement powers is part of the executive branch
of government." See Address by Attorney General Edwin Meese III to the Federal Bar Association (September 13, 1985), 3 (on file at Cornell Law Review).
99 See Jerry L. Mashaw, Recovering American Administrative Law: Federalist Foundations
1787-1801, 115 YALE L.J. 1256, 1258 (April 2006). Mashaw acknowledges the conventional
view of the history of administrative law, but his argument evolves into a dissertation into the
nuances of common law actions providing judicial review. Ultimately, Mashaw determines that
Federalist administrative law is not altogether divergent from its current state.
100 JAFFE, supra note 1, at 337 (1965). Jaffe argued, "the Supreme Court of the [1870s,
1880s, and 1890s] appears to have entertained considerable doubt, in the absence of statutory
provision, as to the propriety of judicial control of 'executive' action." Theodore Lowi has
echoed Jaffe's historical analysis: "Delegation did not become a widespread practice or constitutional problem until government began to take on regulatory functions. The first century was
one of government dominated by Congress and virtually self-executing laws." THEODORE J.
Low, THE END OF LIBERALISM 94 (1969).
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
447
cies of the historical antecedents of judicial review.' l° One suggestion is
the assignment to the judiciary of the role of a supervisor striving for
three objectives within the framework of judicial review: comprehensiveness, simplicity, and predictability. 0 2 Jaffe elaborates:
The availability of judicial review is the necessary condition, psychologically if not logically, of a system of administrative power which
purports to be legitimate, or legally valid. Except for that uncertain
ambit of powers directly granted to the Presidency by the Constitution, administrative power is delegated by a representative legislature
to the President, to his administration, and to the so-called independent agencies. These delegations may be exceptionally broad and may,
indeed should, be taken to grant enormous room for the improvisation and consolidation of policy; but unless we are to abandon the
premise that parliamentary grant is an expression of popular consent
0 3
to the exercise of power, a delegation of power implies some limit.
Judicial review is, therefore, an integrative solution for concerns
about delegation and its negative pressures on both constitutional structures and on private rights that are within the specific sphere of international trade law.
B.
Judicial Review and Antidumping Actions
Congress has not fully abdicated its role in trade policymaking. It
was the combination of the General Agreement on Tariffs and Trade
("GATT") negotiations and another economic recession in the late
1970s that prompted Congress to legislate new trade restrictions. 0 4 In
its implementation of the results of the Tokyo Round of Multilateral
Trade Negotiations ("MTN"), Congress asserted its own trade policy
powers with the enactment of the Trade Agreements Act of 1979.115
That Act updated the Tariff Act of 1930 significantly. Specifically, it
added Title VII, relating to antidumping. Current CIT Chief Judge
101 Jaffe describes an antecedent English dualized system of both prerogative writs that served
as a mechanism of intra-governmental control and of English courts as fora that afforded private
remedies against public officials who exceeded their authority. See JAFFE, supra note 1, at 15355, 329-334.
102
103
104
105
Id. at 152.
Id. at 320.
See RFED, supra note 10, at 154.
Id.
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Jane A. Restani describes the statutory scheme of judicial review of antidumping actions:
It is in the areas of antidumping and countervailing duties that the
effects of judicial review are most obvious. This is also an area in
which the scope and standards for judicial review are well defined in
the statute and have been refined further by the courts. In the unfair
trade area Congress has established a statutory scheme that sets forth
specific objective criteria for the ITC (as to injury) and the Department of Commerce (as to the existence and amount of dumping or
subsidization) to utilize in making their determinations. The scheme
provides a framework for executive decision-making which is amenable to judicial review. The details of the provisions limit the discretion
of the administering agencies and the mere availability of judicial review serves as a restraining force on the executive branch.'" 6
The relevant agencies in an antidumping investigation are the
Commission and the International Trade Association within Commerce.
Commerce is statutorily assigned the role of determining whether the
imported merchandise is being introduced into the domestic market at
less than fair market price, i.e. dumped goods, and if it is indeed less
than the fair market price, by what margin.'1 7 The Commission makes
the determination whether "an industry in the United States is materially injured, or is threatened with material injury, or the establishment
of an industry in the United States is materially retarded, by reason of
imports, or sales" of dumped goods. 108 Both agencies make preliminary
and final determinations.' 9 If the Commission makes either a preliminary or final determination that there is no material injury to a domestic
U.S. industry, the investigation is terminated.' ° If Commerce makes a
106
Hon. Jane A. Restani, A Review of Recent Decisions of the United States Court ofAppeals for
the Federal Circuit: Introductory Comment: JudicialReview in International Trade: Its Role in the
Balance Between Delegation by Congress and Limitation of Executive, 37 Am. U.L. REv. 1075,
1084 (1988).
107 See 19 U.S.C. § 1673 (2000) (stating that if the DOC "determines that a class or kind of
foreign merchandise is being, or is likely to be, sold in the United States at less than its fair
value" and the ITC makes an affirmative injury determination, then a special duty shall be
imposed on such merchandise "equal to the amount by which the normal value exceeds the
export price (or the constructed export price) for the merchandise.").
108 19 U.S.C. § 1673d(b)(1).
109 See 19 U.S.C. § 1673b(a)(1) (providing for preliminary ITC AD injury determination);
19 U.S.C. %. 1673b(b)(1)(A), 1673d(a) (describing preliminary and final AD determinations).
10 See 19 U.S.C. § 1673b(a)(1) (preliminary determination), 1673d(c)(2) (AD final
determination).
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
449
determination in the negative, or finds a de minimis dumping margin,
the investigation likewise ends."' If both the Commission and Commerce issue final affirmative determinations, Commerce publishes an
antidumping order directing imposition of duties in the amount of the
12
determined dumping margin."
Historically, judicial review was not available for injury found by
the Commission, 1 3 and was also in doubt for negative dumping determinations." 4 In the 1970s, as part of a resurgence in international
trade, Congress pulled back on some of its delegation to the executive
by providing a complex structure of judicial review.'
In addition,
powerful steel interests lobbied aggressively for heightened judicial review as the only method for curtailment of agency discretion, counterbalancing what they argued amounted to the "emasculation of the
remedies prescribed by Congress to combat foreign unfair trade practices." ' 1 6 The result of those efforts was the legislative assignment of
exclusive jurisdiction over challenges to a final determination by either
17
agency in connection with an antidumping action to the CIT.'
Though the complex statutory scheme has grown in sophistication
and volume over its tenure, "limitation on agency discretion under the
antidumping and countervailing duties statutes is not as great as it
might appear given the detail in the statutes.""' Judge Restani further
clarified that:
[T]here are numerous methodological approaches to making determinations which are neither specifically authorized nor specifically barred
by the statutes. As these approaches are utilized over time, however,
they become so established that the agency may have to justify deviation from the practice. On the other hand, agency interpretations of
the trade statutes which are found to be reasonable are not likely to be
held invalid. Furthermore, the statute requires the courts to deter'''
See 19 U.S.C. § 1673d(c)(2); see also 19 U.S.C. § 1673d(a)(4) (directing a negative deter-
mination in the case of de minimis dumping margin for purposes of final determination).
112 19 U.S.C. § 1673d(c)(2) (subject to the procedures outlined in § 1673e).
113 Formerly the Tariff Commission.
114 LOWENFELD,
supra note 91, at 287.
115 See id. at 287.
116
INT'L
John Mangan, Trade Agreements Act of 1979: A Steel Industry Perspective, 18 LAw & POL'Y
Bus. 241, 277 (1986).
117 See 28 U.S.C. § 1581(c) (2000) ("The Court of International Trade shall have exclusive
jurisdiction of any civil action commenced under section 516A of the Tariff Act of 1930.").
118 Restani, supra note 106, at 1084.
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mine if the agency's determinations are unsupported by substantial
evidence or, in some instances, to judge them on an arbitrary or capricious standard. Thus, the courts do not substitute their views of the
evidence of record for those of the agency. There are relatively few
cases where the Court of International Trade has found the factual
underpinnings of a determination missing. A larger group of cases
have been remanded for further explication of the basis for decision. ii9
In this context, meaningful judicial review is indispensable.
C.
SubstantialEvidence Standardas Applied by the CIT
The CIT reviews most actions brought before it for substantial evi12
dence on the record.
The substantial evidence standard has been described as one of the
most stable and satisfactory features of administrative law.12 1 There is
an element of certitude in the application of the standard, its precise
meaning remains elusive and has been the subject of much academic
discussion. Though the judiciary has struggled to pinpoint its practical
meaning,122 this adaptability has arguably had an essential function in
the standard's endurance in the delicate cooperation between the trade
23
agencies and courts.1
The classic and enduring definition of "substantial evidence" derives from the U.S. Supreme Court's decision in Universal Camera v.
NLRB: "substantial evidence is more than a mere scintilla. It means
such relevant evidence as a reasonable mind might accept as adequate to
' "The reviewing court must take into account
support a conclusion."124
119 Id. at 1084-1085 (emphasis added).
120 Pursuant to 28 U.S.C. § 2640(b) and 19 U.S.C. § 1516a(b)(1)(B) ("Remedy. The court
shall hold unlawful any determination, finding, or conclusion found... to be unsupported by
substantial evidence on the record, or otherwise not in accordance with law."); see Restani, supra
note 106, at 1084 n.66. The court applies an arbitrary, capricious, or abuse of discretion standard in certain actions, such as a determination not to commence an investigation. See also 19
U.S.C. § 1516a(b)(1)(A); Restani, supra note 106, at 1084 n.66; 5 U.S.C. § 706(2)(E).
121 See generally K. DAVIS & R. PIERCE, ADMINISTRATIVE LAw (3rd ed. 1996).
122 See Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 619-20 (1966) (stating that
substantial evidence is "something less than the weight of the evidence").
123 Universal Camera Corp. v. NLRB, 340 U.S. 474, 488-89 (1951) ("[A] formula for judicial review of administrative action may afford grounds for certitude but cannot assure certainty
of application.
) (stating also that "[i]t cannot be too often repeated that judges are not
automata.").
124 Id. at 477-78 (quoting Consol. Edison Co. v. Labor Bd., 305 U.S. 197, 229 (1938)).
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
451
contradictory evidence in the record,"' 1 25 but "the possibility of drawing
two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence."' 126 The court does not review questions of fact anew, but rather
reviews agency decision for the evidentiary validity of its findings. 127 In
theory, such a flexible standard is advantageous across the board. Under
the substantial evidence standard, an unbiased and perfectly informed
court would consider the decisions of neutral expert agencies that make
sound, well-supported decisions in the greater public interest. However,
the reality is closer to Judge Bazelon's evaluation:
We stand on the threshold of a new era in the history of the long and
fruitful collaboration of administrative agencies and reviewing courts.
For many years, courts have treated administrative policy decisions
with great deference ... with a nod in the direction of the "substantial
evidence" test, and a bow to the mysteries of administrative expertise .... To protect [fundamental interests] from administrative arbitrariness, it is necessary . . . to insist on strict judicial scrutiny of
administrative action.128
Scholars expressed dissatisfaction with the standard's application
and scope throughout the period of its expansive adoption in administrative law.12 9 However, in context of the history of judicial review of
agency decision-making, the substantial evidence standard represented a
balance between concerns over limited judicial protection, and the constitutional and practical barriers to "transfer[ring] to courts the responsibility for ascertaining and assaying matters[,] the significance of which
lies outside judicial competence."' 130 The substantial evidence test was
lauded as an "exceedingly important" stage of development in judicial
review of administrative decisions by Congress during committee evalu125
Am. Textile Manufacturers v. Donovan, 452 U.S. 490, 523 (1981)
(citing Universal
Camera Corp., 340 U.S. at 487-88) (stating also that "the requirement for canvassing 'the whole
record' in order to ascertain substantiality does not furnish a calculus of value by which a reviewing court can assess the evidence").
126 Id. at 523 (citing Consolo, 383 U.S. at 620).
127
Universal Camera, 340 U.S. at 477 (stating that "the very smoothness of the 'substantial
evidence' formula as the standard for reviewing the evidentiary validity of the Board's findings
established its currency.").
128 Envtl. Def. Fund v. Ruckelshaus, 439 F.2d 584, 597-98 (D.C. Cir. 1971).
129
Universal Camera, 340 U.S. at 482.
130
Id. at 480 (citing S. 915, H.R. 6324, 76th Cong. (1st Sess.) § 5(a)).
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ation prior to its "unquestioning, [even] uncritical" unanimous passage
31
of the Administrative Procedure Act ("APA").1
Congress clearly intended the judiciary to closely scrutinize the
"practice of agencies to rely upon 'suspicion, surmise, implications, or
plainly incredible evidence,' and indicate[d] that courts are to exact
higher standards 'in the exercise of their independent judgment' and on
consideration of 'the whole record.' "132 The Supreme Court concluded
in Universal Camera that both the APA and the Taft-Hartley Act mandated an expanded judicial role of the Court of Appeals for the Second
Circuit's review of administrative decisions by the National Labor Relations Board ("NLRB") 133 under the substantial evidence standard. The
trade judiciary is therefore responsible to follow both Congressional intent and Supreme Court authorization.
D.
SubstantialEvidence and Remand with Instructions to Reach a
Judicially Determined Result
An expanded judicial role by the judiciary at large is clearly appropriate, even under substantial evidence review. In Allentown Mack Sales
& Service, Inc. v. NLRB, 134 the U.S. Supreme Court reversed the Court
of Appeals for the D.C. Circuit and remanded with instructions to deny
enforcement of an NLRB order requiring collective bargaining with the
union. 135 The Court described the substantial evidence test 136 as "objective," and further stated that there was "no room within it for deference to an agency's eccentric view of what a reasonable fact-finder ought
to demand."' 1 37 Based on the decision in Allentown, one scholar questioned the Supreme Court's level of deference to agency discretion. 138
In determining that the judgment of the Court of Appeals was not sup131
See id. at 482; 5 U.S.C. §§ 1001 et seq.
132
Universal Camera, 340 U.S. at 484 (citing the report of the Senate Judiciary Committee).
The NLRB serves as a specific example of more general administrative decision-making
133
for the purposes of this Note.
134 522 U.S. 359 (1998). The case involved a poll of company employees by new owners to
determine whether the union retained majority support. The union then filed an unfair labor
practices complaint, alleging the employer lacked the "objective reasonable doubt" required to
poll. As to this issue, the Court upheld the NLRB "objective reasonable doubt" standard but
rejected the Board's decision applying the new standard so as to find the poll unjustified.
135
136
Id.
Substantial evidence was the applicable standard for the appellate court under review.
137
Allentown Mack, 522 U.S. at 377.
138 BERNARD SCHWARTZ,
TIVE LAW
ROBERTO L. CORRADA
671-72 (6th ed. 2006).
& J.
ROBERT JR, BROWN, ADMINISTRA-
2008] SUBSTANTIAL EVIDENCE & INTERVATIONAL TRADE
453
ported by substantial evidence on the record as a whole, it has been
observed that the Court "re-review[ed] [] the factual record in the case"
and "reconstruct [ed] I] the probity of witness evidence," all of which
"clearly flies in the face of the substantial evidence rule." 13 9 Even
the
Supreme Court reverses with instructions to reach a judicially determined result.
Although the role of the trade judiciary may necessarily grow as a
result of the proper application of its mandate, the answer is not revolution. The solution is for the CIT to be recognized by the appellate
courts as having the power to reverse with instructions to reach a judicially determined result.
IV.
AN
EXPANDED ROLE FOR THE INTERNATIONAL
TRADE JUDICIARY?
A.
The Power to Remand with Instructions to Reach a Judicially
Determined Result: Ending the "Yo-Yo Effect"
An expanded role for the Court of International Trade in final antidumping determinations, under substantial evidence, is no different
than for the generalized judiciary. In the international trade context,
the Tariff Act of 1930"0° clarifies that where the judiciary finds that an
agency's decision is unsupported by substantial evidence, the appropriate remedy is to remand the case for further proceedings.' 4 1 Furthermore, where a reviewing court reaches such a determination, it usually
does remand with instructions for the agency to reconsider in light of
the court's opinion. 14 2 The typical disposition of the CIT is to remand
in accordance with such principles. 1 43 However, it is very atypical for
14 4
the CIT to remand with specific instructions.
However, the judiciary has been loath to apply the remand power
ad absurdum, in a never ending game of inter-branch ping pong. 145 The
APA instructs a reviewing court to "compel agency action unlawfully
139
Id.
See 19 U.S.C. § 1516(a)(3) (2000).
Id. ("If the final disposition of an action brought under this section is not in harmony
with a published determination of the [agency], the matter shall be remanded to the [agency] for
disposition consistent with the final disposition of the court.").
142 See REED, supra note 10, at 266.
143 See id.
144 See id.
145 The judiciary has disparagingly labeled the practice of endless remand as "the yo-yo effect." Such a practice is a significant drain on both judicial and agency resources.
140
141
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withheld or unreasonably delayed," and to "hold unlawful and set aside
agency action, findings, and conclusions found to be .... unsupported
by substantial evidence ....
146 Though clearly there will be some
147
separation of powers concerns,
on its face, the APA appears to allow
both remand for agency action consistent with the court's opinion generally, but also remand with affirmative, specific instructions to reach a
determined result, i.e., reverse an agency decision.
Perhaps in recognition of the significant drain on both agency and
judicial resources of the so-called "yo-yo effect," reviewing courts, if only
rarely, have remanded agency determinations with instructions to reach
a judicially determined result. 148 In McDonnell Douglas Corp. v.
NASA,' 4"9 the District Court for the District of Columbia determined
that it was unnecessary to remand for determination of a legal conclusion or for what NASA argued were "inadequacies in the record and
procedural deficiencies."' 510 The court stated that the agency was not
"entitled to a second bite of the apple just because it made a poor decision-if that were the case, administrative law would be a never ending
loop from which aggrieved parties would never receive justice."''
The CIT reached a similar determination in a Trade Adjustment
Assistance' 5 2 case, United Electrical, Radio, and Machine Workers v. Martin. 5 3 That case arrived at the CIT on the back end of four successive
remands to the U.S. Department of Labor for failure to articulate a
rationale supported by substantial evidence for its denial of trade adjustment assistance. 54 Upon final determination, the CIT found that Labor had relied on false data and used "protean reasoning" to force a
negative determination and therefore that no purpose would be served
146
5 U.S.C. § 706 (2000).
147 The specifics of these concerns are beyond the scope of this particular article, but compel-
ling for another study.
148 See McDonnell Douglas Corp. v. NASA, 895 F. Supp. 316, 319 (D.D.C. 1995) (followed by McDonnell Douglas v. NASA, 981 F. Supp. 12 (D.D.C. 1997), overruled on other
grounds.
149
Id. (the applicable standard of review was arbitrary and capricious).
Id.
Id. at 319.
152 See Trade Act of 1974, %. 221-249, 19 U.S.C. §§ 2271-2321 (workers' adjustment assistance); Trade Act of 1974, §§ 251-268, 5§ 271-274, 19 U.S.C. § 2341-2354, §§ 2371-2374
(adjustment assistance for firms and communities).
153 15 Ct. Int'l Trade 299 (1991).
154 Id. at 300-01. The court found severe procedural and investigative deficiencies in the
agency's record.
150
151
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
455
by yet another remand.' 55 On that basis, the CIT directed a determina56
tion that the workers be eligible for Trade Adjustment Assistance.'
B.
Alternative Methods ofJudicial Control on Agencies
While it is true that alternative controls on bureaucratic discretion
exist, such controls only perpetuate the yo-yo effect and thus do not
serve the legislative goals of expediency of action and governmental resource conservation. One academic suggests that through the power of
remand alone, courts exercise profound control on executive bureaucracy with the tangible costs imposed on agencies through adverse decisions. 157 He points to the ability of repeated remand, either actual or
potential, to strain agency operating budgets and personnel resources
during "compliance efforts." ' 158 While this statistic may be relevant in a
more general study, it glaringly fails to account for the arguably more
59
significant strain on thin judicial operating budgets and personnel.
Advocacy of such a control on agency discretion is misplaced. The
threat of a remand battle of attrition based on a contest of budgets is not
a control because of the limited resources of the judiciary relative to
agencies.
C.
Expanded Role for the Judiciary?
From an international law perspective, a legislated expansion of the
role of the judiciary is clearly within the acceptable boundaries of
United States obligations under the 1994 Anti-Dumping Agreement. 6 °
Article 13, which outlines requirements of judicial review in member
states, provides only the inchoate requirement that each member state of
the WTO that has antidumping laws "shall maintain judicial, arbitral or
administrative tribunals or procedures for the purpose, inter alia, of the
155 Id. at 309.
156 Id. at 308-09.
157 ISAAC UNAH, THE COURTS OF INTERNATIONAL TRADE, JUDICIAL SPECIALIZATION, ExPERTISE, AND BUREAUCRATIC POLICY-MAKING 176 (1998).
158 Id.
159 Agency employees are legion compared to the small number of judicial employees of the
trade judiciary. For example, each CIT judge typically has only two law clerks. The Department of Commerce's International Trade Administration, one of the several agencies with responsibility in trade, has an estimated discretionary budget of $412 million in 2008. See Budget
of the United States Government, FY 2008, Department of Commerce, availableat http://www.
whitehouse.gov/omb/budget/fy2008/commerce.html.
160 See LOWENFELD, supra note 91, at 288.
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prompt review of administrative actions relating to final determinations
and reviews."' 6 ' As Professor Lowenfeld notes,
[n]othing is stated about the scope of review-i.e., facts as well as law,
or compliance with the Agreement-but the principle is firmly set out
that whether the reviewing authority is a court or some other kind of
tribunal, it must be independent of the authorities responsible for the
determination subject to review. 162
Furthermore, advocacy of an expanded role of the judiciary in antidumping matters has been convincingly argued from the perspective of
affording more deference to CIT decisions by the Court of Appeals for
the Federal Circuit. 1 63 Although an expanded role may be necessary,
specific legislative change to the standard of review and other drastic
measures are as yet unnecessary. A subtle change in application of the
substantial evidence standard that would result in the ability for the CIT
to remand with affirmative instructions, i.e., to reverse, is more
appropriate.
V.
NIPPON STEEL AND THE
CIT's
POWER OF REVERSAL
The decision of the Court of Appeals for the Federal Circuit in
Nippon Steel Corp. v. United States'64 raised, but did not decide, the
scope of Court of International Trade authority to reverse under 19
U.S.C. § 1516a. In Nippon Steel, the United States argued that the CIT
acted ultra vires in directing the Commission to enter a negative material
injury determination, and asserted that section' 1516a does not permit
the CIT to reverse a determination of the Commission, directly or indirectly. 16 5 The Nippon Steel cases exhibited the effects of the yo-yo ef161
Agreement on Implementation of Article VI of the General Agreements on Tariffs and
Trade 1994 (Anti-Dumping Agreement), availableat http://www.wto.org/english/resce/bookspe/analytic-index e/antidumpingO4_e.htm#articlel3 (last visited 18 March 2007); see also
LOWENFELD, supra note 91, at 288.
162 LOWENFELD, Supra note 91, at 288.
163 See Herbert C. Shelley, Alice A. Kipel, Anne Talbot & Keith R. Marino, The Standardof
Review Applied by the United States Court ofAppeals for the Federal Circuit in InternationalTrade
and Customs Cases, 45 AM. U. L. REv. 1749 (1996).
164 Nippon Steel Corp. v. United States (Nippon VI), 458 F.3d 1345, 1359 (Fed. Cir. 2006)
(rehearing en banc denied) [hereinafter Nippon V1].
165 Id at 1359. That issue was subsidiary to the disposition of the case, but central to the
questions presented in this Note. Perhaps ironically, in view of the steel industry's aggressive
support of judicial review of agency decisions, the industry comprised both sides of the case.
Nippon Steel Corp. was joined by NKK Corp., Kawasaki Steel Corp., and Toyo Kohan Co. as
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
457
fect. Furthermore, the Court of Appeals for the Federal Circuit, in
reversing the CIT, cited conflicting authorities on the issue of whether
the CIT has the power of outright reversal, i.e., the power to remand
with instructions to reach a judicially determined outcome. This Section argues that the proper authority is Atlantic Sugar, Ltd. v. United
66
States.1
A.
A BriefHistory of the Nippon Steel Cases
The procedural history of Nippon Steel spans six years and includes
four Commission determinations, four CIT opinions, and two CAFC
167
opinions; such a length of time is atypical of most trade litigation.
The Nippon Steel cases were a line of antidumping cases which initially
arose out of a final Commission determination that domestic industry
was materially injured by certain specialized steel products used in the
manufacture of tin cans. 168 On review of that determination, the CIT
remanded to the Commission with instructions that it reconsider certain data inaccuracies, provide an explanation of certain methodologies
and bases for determination of its ultimate conclusion, and reassess its
causation determination. 169 On remand, the Commission again determined the question of material injury to the domestic injury in the
17
affirmative. °
On appeal, the CIT again found the Commission's analysis of
both import price effects on the domestic industry as defective. 17 1 Citing alternative reasoning such as compartmentalized negotiations among
U.S. and Japanese producers, market share advantages held by U.S. domestic producers, and supply chain disadvantages on the part of Japanese importers, the CIT found that "lower priced subject imports did
not have a material effect on domestic prices" and therefore that the
Plaintiff-Appellees, and the United States was joined by the heavyweight, Mittal Steel U.S.A ISG
Inc. as Defendant-Appellant.
166 744 F.2d 1556 (D.C. Cir. 1984) (reh' denied).
167 See Nippon VI, 458 F.3d at 1348 (describing the procedural history as "voluminous").
168 See Tin- and Chromium-Coated Steel Sheet From Japan, 65 Fed. Reg. 50,005, Inv. No.
731-TA-860, Final Determination (August 2000).
169 Nippon Steel Corp. v. United States (Nippon 1), 182 F. Supp. 2d 1330, 1356 (Ct. Int'l
Trade 2001).
170 Tin- and Chromium-Coated Steel Sheet From Japan, USITC Pub. 3493, Inv. No. 731TA-860 (Remand) (Mar. 2002).
171 Nippon Steel Corp. v. United States (Nippon II), 223 F. Supp. 2d 1349 (Ct. Int'l Trade
2002) (stating the record reflected that market conditions were such that the effect of subject
imports on domestic prices did not cause material harm).
458
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Commission determination was unsupported by substantial evidence on
the record. 7 2 Furthermore, stating that the Commission had "demonstrated an unwillingness or inability to address the substantial claims
made by the respondents or the concerns expressed by the court in Nippon I" left the "only reasonable conclusion from the evidence on the
record [ ] that subject imports were not a material cause of injury." 173
The CIT therefore found "remand for reconsideration or recalculation"
unnecessary and directed the Commission to enter a negative material
74
injury determination.
On judicial appeal, the Federal Circuit found that "to the extent
the Court of International Trade engaged in refinding the facts (e.g., by
determining witness credibility), or interposing its own determinations
on causation and material injury ... [it] exceed[s] its authority ' 175 and
176
held that the refusal to remand was an abuse of the CIT's discretion.
The CAFC therefore vacated and ordered a remand to the
Commission. 177
On the second remand, the Commission again reached an affirmation determination of material injury.'7 8 Nippon Steel, et al, again appealed to the Court of International Trade. 179 The CIT again found the
Commission's affirmative determination to be unsupported by substantial evidence.' 8 ° The CIT pointed to the same respective negotiation
isolation and market share analysis as in Nippon II; it also added more
analysis of why the record indicated that the price effects of subject imports were insignificant and that causation of any material injury could
172
Id. at 1371.
173
Id. at 1371-72
Id. at 1371-72.
174
175 Referring to a disagreement regarding testimony made by purchasers on the reasons for
increased purchases of subject imports.
176 Nippon Steel Corp. v. Int'l Trade Comm'n (Nippon II1, 345 F.3d 1379 (Fed. Cir. 2003).
177 Albeit with a slight air of matronly disapproval aimed at the Commission:
[W]e assume the Commission in its further proceeding and resulting opinion will
attend to all the points made by the [CIT]... Despite the [CIT's] statement that the
Commission either cannot or will not respond, we are confident it can and will.
Whether on remand the Commission reopens the evidentiary record, while clearly
within its authority, is of course solely for the Commission itself to determine.
Id. at 1381-82.
178 Tin- and Chromium-Coated Steel Sheet From Japan, USITC Pub. 3674, Inv. No. 731TA-860 (Second Remand) (Feb. 2004).
179 Nippon Steel Corp. v. United States (Nippon [VM,350 F. Supp. 2d 1186 (Ct. Int'l Trade
2004).
180
Id.
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
459
not have been caused by subject imports. 81 Therefore, citing INS v.
Elias-Zacarias'8 2 as support, the CIT held that the record "fully supports
' 183
a negative determination and will not support an affirmative one."
The CIT further held that "because the Commission is unable to obtain
new evidence to significantly supplement the record, due to the passage
of time and other reasons, further investigation or reconsideration in
this matter is futile" and once again remanded "with instructions to
18 4
issue a negative material injury determination."'
The Commission entered a negative material injury determination,
as instructed, but stated its decision was "dictated by the [CIT's] findings in Nippon IV it is not, however, the determination we would have
made in the absence of those findings."'185 Though the ultimate disposition of the case supports this position, the Commission's statement does
not appear to be more than an objection to having its determination
reversed and the outcome imposed by judicial decree.
On yet another appeal to the CIT, a different defendant/intervenor, International Steel Group ("ISG"),1 86challenged the Commission's negative material injury determination, asserting that the record
18 7
supported an affirmative threat of material injury determination.
The CIT sustained the negative material injury determination, finding
embedded flaws but that the Commission's ultimate negative determination was "reasonable" and thus supported by substantial evidence.' 8 8
The United States and Mittal Steel appealed the decision in Nippon V to
the Federal Circuit. 189
181 Id. at 1221.
182 502 U.S. 478, 481 (stating that "[t]o reverse the [agency's] finding we must find that the
evidence not only supports that conclusion, but compels it.
183 Nippon IV, 350 F. Supp. 2d at 1222.
184 Id.
185 Tin- and Chromium-Coated Steel Sheet from Japan (Views on Remand), USITC Pub.
3751, Inv. No. 731-TA-860 (Final) (Dec. 2004) at 1.
186 During the course of the overall proceedings, ISG merged with existing party Weirton and
was then substituted as defendant-intervenor. Subsequently, ISG-Weirton merged with Mittal
U.S.A effective April 2005. For the details of the merger that created the world's largest steel
company, see Lakshmi Mittal's $19 Billion Year, Forbes.com, available at http://www.forbes.
com/billionaires/2005/03/10/cxpm_0310mittal-bilO5.html (last visited February 1, 2007).
187 Nippon Steel Corp. v. United States (Nippon V), No. 00-09-00479, slip op. 05-38 (Ct.
Int'l Trade 2005).
188 Id. at *6 (finding the Commission's analysis and conclusions reasonable and that the
Commission did not shirk its statutory obligations).
189 Nippon VI, 458 F.3d 1345.
460
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Though the court acknowledged Congress' genius in creating "a
highly specialized system for resolving antidumping allegations, which
recognizes and exploits each participant's area of expertise," expertise as
a basis of decision-making authority was not dispositive to the outcome
of the case.' 90 In fact, the Federal Circuit praised the CIT's "extremely
thorough, careful examination of the record," further stating that "[the
CAFC could] accept that the Court of International Trade may well
have conducted a better analysis than did the [ITC], and that [the
CAFC] would have reached the same conclusion as the trade court if
deciding the case in the first instance."' 91 However, in a discernibly
reprimanding tone, the Federal Circuit reminded the CIT of the deference to agency expertise inherent in the substantial evidence standard:
The [CIT's] rejection of [an ITC calculation error] is permissible, indeed required, under the substantial evidence standard of review,
which intends that a reviewing court correct exactly this type of obvious error. However, when the totality of the evidence does not illuminate a black-and-white answer to a disputed issue, it is the role of the
expert factfinder-here the majority of the Presidentially-appointed,
Senate-approved Commissioners-to decide which side's evidence to
believe. So long as there is adequate basis in support of the Commission's choice of evidentiary weight, the [CIT], and this court, review190
Id. at 1350. Though as a policy matter, Congress must be prepared to consider the
relative and comparative expertise of both the Commission as well as the CIT. The court refers
to the expertise of the Commissioners in foreign relations, trade negotiations, and economics,
but it is not clear that the Commissioners have either a comparative or absolute advantage over
the CIT judges. Though the CIT judges review the record compiled by experts at the Commission, such consideration is particularly necessary as the court continues to act beyond the scope
of its former role as Customs Court and engages in increasingly sophisticated decision-making in
matters of both international trade and customs. A certain quantum of expertise is necessary for
judicial review.
191 Id. at 1358. Compare with the confessional tone of CAFC Judge Bryson's comments at
the Fifteenth Annual Judicial Conference of the United States Court of Appeals for the Federal
Circuit:
If I have a trade case on the morning's argument. (sic] I will tell you, I do not feel
much like a specialist. I am struggling to catch up with the arguments that are being
made. I, perhaps in five or ten years, may feel a bit more comfortable with it. This is
terra incognita for me and it is, I think, for most of my colleagues. So, we venture into
these areas not with the confidence of an area well familiar to us, but this is alien
territory.
Hon. Gregory W. Carman, A CriticalAnalysis of the Standard of Review Applied by the Court of
Appeals for the Federal Circuit in Antidumping and Countervailing Duty Cases, 17 ST. JOHN'S
J.LEGAL COMMENT 177, 190 (2003) (citing 180 F.R.D. 467, 604 (Oct. 1998)).
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
461
ing under the substantial evidence standard, must defer to the
Commission.192
The Federal Circuit held that the CIT exceeded its authority in
assessing credibility and reweighed evidence, and therefore reversed both
Nippon IV and Nippon V.193 The CAFC also set aside the negative
material injury determinations, and directed the CIT to "reinstate the
Commission's affirmative material injury determination."
The Federal Circuit Bar Journal described the decision in Nippon
as "indicative of its commitment to the propriety of statutorily
IV'
assigned roles. In so holding, the Court is encouraging a more efficient
1 95
system aimed at avoiding repetitious fact-finding by the judiciary."
The ultimate disposition of the Nippon Steel cases was that the CIT
erred in concluding that the Commission's negative material injury determinations were unsupported by substantial evidence. This appears to
be legally justified under the current understanding of the substantial
evidence test.
B.
Scope of the CIT's Authority to Reverse
The CAFC raised but did not decide the issue of whether section
1516a permits the CIT to reverse a determination of the Commission,
stating that it was irrelevant to the disposition of the case. The CAFC
determined in Nippon V:
Because . . .substantial evidence supports the Commission's original
affirmative material injury determination, we need not and do not
decide the scope of Court of International Trade authority to reverse
under §1516a. It may well be that, in another situation, the trade
court may be faced with a Commission determination that is unsupported by substantial evidence, and for which a remand would be
"futile."
19 6
192
Nippon VI, 458 F.3d at 1358-59.
193
Id. at 1359.
194
The comment was published in 2004, before the final disposition of the case in Nippon
V. It is reasonable to presume that the same commentary applies to the final disposition since
the two CAFC cases are substantially similar in their outcomes.
195 See FederalCircuit Refuses To Allow The Court OfInternationalTrade To Perform Functions
Statutorily Assigned To The International Trade Commission, 13 FED. CIR. B.J. 555, 561-62
(2004).
196
Nippon VI, 458 F.3d at 1359 (citing the CIT's declaration in Nippon IV, 350 F. Supp. 2d
at 1222).
462
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[
The CAFC, however, twice commented on the CIT's authority to
reverse under section 1516a before publishing its opinion in Nippon VI.
The cases are inconsistent on the issue. On the one hand, the Federal
Circuit asserted in Altx, Inc. v. United States1 97 that:
Section 1516a' 98 limits the Court of International Trade to affirmances and remand orders; an outright reversal without a remand
does not appear to be contemplated by the statute: "If the [Court of
International Trade's] final disposition of an action brought under this
section is not in harmony with the published determination . . .[of]
the Commission, the matter shall be remanded to ...the Commis-
sion, as appropriate, for disposition consistent with the final disposition of the [Court of International Trade]."' 99
The Federal Circuit cited its own decision in Nippon III as support
for this proposition. 20 0 The Federal Circuit is incorrect in this assertion.
The CAFC in Nippon III was confronted with a situation where the
CIT abused its discretion by re-reviewing facts and was therefore reversed. Assuming, arguendo, that the crucial words "[o]n the present
record" were omitted from the holding in Nippon III and that the
CAFC panel purported to issue a broad holding specifying that agency
remand was the sole remedy for the Court of International Trade, it
could have done so. 20 1 The holding in Nippon III, however, applies
only to the facts of that case and therefore does not apply where the CIT
is "correct" in its decision that an agency determination is unsupported
by substantial evidence on the record.20 2
On the other, in another case, the CAFC has affirmed the power of
the CIT to reverse outright. Also in dicta, the Federal Circuit stated in
Atlantic Sugar, Ltd. v. United States2 3 that
197 370 F.3d 1108, 1111 (D.C. Cit. 2004) (citing Nippon 11, 345 F.3d at 1381). Note the
choice to cite Nippon III.
198 19 U.S.C. § 1516a. Section 151 6 a provides details of judicial review in countervailing
duty ("CVD") and antidumping duty proceedings, including the statutory standards of review
applicable to CIT review.
199 Alx, Inc., 370 F.3d at 1111 n.2 (the content bracketed in the quotation is bracketed in
the source and was not edited by the author).
200
Id.
201
See Nippon II, 345 F.3d at 1381. It is not clear from the case law or available statutes
whether the Federal Circuit has such authority. Even the CAFC is not immune from reversal for
exceeding its authority.
202
See id.
203
744 F.2d 1556 (D.C. Cit. 1984) (rehg denied).
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
463
If ... evidence [on the record for injury determination] is insubstantial, then the reviewing court must either reverse the ITC's determination or remand the case for further fact-finding. Implicit in such a
reversal or remand would be the reviewing court's finding that some
person or institution, whether the parties or ITC or all, inadequately
collected and/or interpreted the data.20 4
Atlantic Sugar may indeed not be the ideal source of dicta with any
precedential or predictive value. It has been heavily criticized for
originating without support the "apply anew" standard of review exercised by the CAFC over CIT decisions. 2 5 However, criticism has been
leveled toward other problems in the case. The statement that the CIT
has the authority to reverse on the basis of misinterpretation of data is
clear. Furthermore, the approach in Atlantic Sugar is more consistent
with the traditional administrative law approach to reversal by a court in
the position of the CIT. As Professor Jaffe noted of the substantial evidence test:
[U]nderlying the vexed word "substantial" is the notion or sense of
fairness ....
I would say, then, that the judge may-indeed must-
reverse if as [s]he conscientiously sees it the finding is not fairly supported by the record; or to phrase it more sharply, the judge must
reverse if [s]he cannot conscientiously escape the conclusion that the
finding is unfair.2" 6
The CAFC has twice answered the question of whether the CIT
has the authority to reverse outright. Although the answers are inconsistent, the CIT's authority to reverse outright or remand with instructions
was affirmed in Atlantic Sugar and is supported by the policy of admin204
205
Id. at 1561 (emphasis added).
See Suramerica De Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 983 (citing
Atlantic Sugar, 744 F.2d at 1559 n.10, for the Federal Circuit's assertion: "We review [the Court
of International Trade's] review of an ITC determination by applying anew [section
1516a(b)(1)-(B)'s] express judicial review standard.") (the content bracketed in the quotation is
bracketed in the source and was not edited by the author); see also Zenith Electronics v. United
States, 99 F.3d 1576, 1580 ("[T]he statute invoked by Atlantic Sugar as the sole explanation for
[the Federal Circuit's] . . . standard of review in fact refers only to the standard of review for the
Court of International Trade. Section 1516a(b) does not refer to any other court. Section
1516a therefore does not supply a standard of review for this court on appeal.").
206 Louis L. Jaffe, Judicial Review: "SubstantialEvidence on the Whole Record", 64 HARv. L.
REv. 1233, 1239 (1951) (explaining the duty of a reviewing judge applying the substantial
evidence test) (emphasis added).
464
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[
istrative law. Where continuous remand would be futile or result in an
ongoing yo-yo between judiciary and agency, the judiciary must have
the power to instruct the agency to reach a determined result. Furthermore, such judicial authority is necessary and serves the greater good in
the modern trade system.
CONCLUSION
An international trade regime regulating the importation of goods
and domestic competition of goods without meaningful judicial review
represents a danger to the free trade and market-based system upon
which this nation relies. Whether by action of Congress acting detrimentally on behalf of its interested constituencies, as in the case of the
Smoot-Hawley Act, or reflected in the delegated powers of administrative agencies, the political branches pose potential deleterious effects on
the trade system when allowed to make decisions unconstrained by judicial review. Congress delegates broad authority in international trade
law to the executive branch and its expert agencies in recognition of
both their expertise in fact-finding and analysis, and out of reluctance to
serve as a lighting rod to its constituencies for unpopular policies.
Recognizing these maxims, "Congress [has] created a highly specialized system for resolving antidumping allegations, which recognizes
and exploits each participant's area of expertise. "207 It is impossible to
advocate, much less to foresee, a dismantling of such a system. However, the evolution of the CIT's involvement in areas outside its traditional core competencies, including in antidumping actions, must be
recognized by the system. Such recognition enhances judicial accuracy,
efficiency, and ensures an overall balancing, which in turn serves the
greater good and reduces the chance that legislative logrolling or Executive hubris can severely damage the economy. The legislative recasting
of the statutory substantial evidence standard of review in antidumping
actions is certainly not the answer; no actual legislative change is necessary. Rather, the trade judiciary, and specifically the CIT, must have
the power to channel agency action through outright reversal or remand
with specific instructions to reach a judicially determined result. Such
power is even more important in the current regime since there is no
meaningful alternative control presented by a budget-draining endless
cycle of remand, known as the yo-yo effect. Some commentators char207
Nippon VT 458 F.3d at 1350.
2008] SUBSTANTIAL EVIDENCE & INTERNATIONAL TRADE
465
acterize the yo-yo effect as a positive control on agency decision-making;
however, such a cycle is in dire contradistinction with Congress' expressed intent to reduce that very strain that such commentators suggest
is a control.
Practically, despite the potential separation of powers issues
presented, the CIT must have the power to reverse an agency's determination. "Reverse" does not simply refer to the power to remand for
consideration not inconsistent with the court's final disposition. More
specifically, in those cases where another remand would be "futile, ' 208 or
where the agency record "fully supports a negative determination and
will not support an affirmative one, ' 2°9 the Court of International Trade
must have the power to remand with specific instructions that the
agency reach an outcome in line with a judicial determination, e.g. a
negative material injury determination. Such a power is in line with
federal jurisprudence, including Allentown Mack Sales & Service, Inc. v.
NLRB, 210 McDonnell Douglas Corp. v. NASA, 2 1' and Atlantic Sugar, Ltd.
21 2
v. United States.
208
209
210
211
212
Nippon IV, 350 F. Supp. 2d at 1222.
Id.
Allentown Mack, 522 U.S. 359.
McDonnell Douglas, 895 F. Supp. 316.
Ad. Sugar, Ltd, 744 F.2d 1556.