NSK Corp. v. United States International Trade Commission

LOURIE, DYK, PROST, MOORE, and O’MALLEY, Circuit Judges,

concurring in the denial of the petition for rehearing en banc.

We concur in the decision of the court not to rehear this case en banc. Contrary to the urgings of the dissenters from the denial of rehearing en banc, there is no legal justification for this court to adopt a rule requiring deference to the substantial evidence determinations of the Court of International Trade.

1. Under the Administrative Procedure Act (“APA”), when district courts review agency action for substantial evidence, and the district court decisions are reviewed by courts of appeals, the appellate courts conduct a nondeferential second level of substantial evidence review, applying the same standard as the district court.

Every circuit has adopted that position, including this court. See Associated Fisheries of Maine, Inc. v. Daley, 127 F.3d 104, 109 (1st Cir.1997); City of New York v. Shalala, 34 F.3d 1161, 1166 (2d Cir.1994); Farley v. Celebrezze, 315 F.2d 704, 705-06 (3d Cir.1963); Leftwich v. Gardner, 377 F.2d 287, 288 (4th Cir.1967); Knox v. Finch, 427 F.2d 919, 920 (5th Cir.1970); Lubrizol Corp. v. Train, 547 F.2d 310, 317 (6th Cir.1976); Hanson v. Espy, 8 F.3d 469, 472 (7th Cir.1993); First Nat’l Bank of Fayetteville v. Smith, 508 F.2d 1371, 1374 (8th Cir.1974); Asarco, Inc. v. EPA, 616 F.2d 1153, 1161 (9th Cir.1980); Thom*952as Brooks Chartered v. Burnett, 920 F.2d 634, 644 (10th Cir.1990); Druid Hills Civic Ass’n v. Federal Highway Admin., 772 F.2d 700, 714 (11th Cir.1985); Polcover v. Sec’y of the Treasury, 477 F.2d 1223, 1226 (D.C.Cir.1973); cf. Rio Grande, El Paso and Santa Fe R. Co. v. Dep’t of Energy, 234 F.3d 1, 6 (Fed.Cir.2000) (“Because we review the agency action on the identical basis as did the district court, no particular deference is accorded to the conclusions of the district court.” (internal quotation marks omitted)).

2. The dissenters rely heavily on the Supreme Court’s decision in Universal Camera v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). That case, however, addressed the special role of the Supreme Court in the review of agency action. The Court declared that in such cases it will confine itself to deciding whether courts of appeals have “misapprehended or grossly misapplied” the proper standard of review. Id. at 491, 71 S.Ct. 456. The Court did not suggest that the “misapprehended or grossly misapplied” standard should apply to court of appeals review of district courts in administrative review proceedings.

All the courts of appeals that have addressed the issue have read Universal Camera as applying to the Supreme Court’s role in the process, not the role of the courts of appeals. See Celebrezze v. Bolas, 316 F.2d 498, 501 (8th Cir.1963) (Blackmun, J.); Ward v. Celebrezze, 311 F.2d 115, 116 (5th Cir.1962); Roberson v. Ribicoff 299 F.2d 761 (6th Cir.1962). Those courts have treated the Supreme Court’s remarks in Universal Camera as referring to its own role vis-á-vis the courts of appeals, not the role of all second-level reviewing courts.

That is the correct reading of the pertinent passage from Universal Camera. The full text of the Court’s pertinent remarks in that case is as follows:

Our power to review the correctness of application of the present standard ought seldom to be called into action. Whether on the record as a whole there is substantial evidence to support agency findings is a question which Congress has placed in the keeping of the Courts of Appeals. This Court will intervene only in what ought to be the rare instance when the standard appears to have been misapprehended or grossly misapplied.

Universal Camera, 340 U.S. at 490-91, 71 S.Ct. 456. The references to “our power” and the intervention of “this Court” speak to the Court’s self-imposed limits on its reviewing authority; the Court effectively announced that it would not exercise that power frequently in such cases, and certainly not to make routine corrections of wrong decisions in substantial evidence agency review cases. That announcement is entirely consistent with the Court’s regular characterization of its role as not being a court of error. None of that applies to courts of appeals, which are decidedly courts of error.

That view of Universal Camera is buttressed by the Supreme Court’s decision in FTC v. Standard Oil Co., 355 U.S. 396, 78 S.Ct. 369, 2 L.Ed.2d 359 (1958). There, citing Universal Camera among other decisions, the Court explained that it had no intention of conducting review of the evidence in the case based on the Court’s “usual rule of non-interference where conclusions of Circuit Courts of Appeals depend on appreciation of circumstances which admit of different interpretations.” Standard Oil Co., 355 U.S. at 400-01, 78 S.Ct. 369. That statement, like the similar statement in Universal Camera, refers to the Court’s special (and necessarily limited) role in judicial review of agency action; *953it does not suggest a limited role for second-level reviewing courts engaged in judicial review of administrative action.

A major problem with relying on Universal Camera as the basis for deferring to the Court of International Trade in substantial evidence cases is that it proves too much. If Universal Camera requires deference in second-tier substantial evidence review cases, it requires that deference in all such cases, not just trade cases coming from the Court of International Trade. So if we rely on Universal Camera as the basis for adopting a deferential standard in Court of International Trade cases, our rationale is necessarily contrary to all the other circuits (and at least in tension with our own decision in the Rio Grande case, cited above).

8. There is nothing in the statutes providing for review of agency action by the Court of International Trade that makes that kind of review different from conventional APA review. The pertinent review provisions of the trade statutes track the APA. At the time it enacted those statutes, Congress expressed a desire that agency review by the Court of International Trade and this court would be modeled on APA review. And the Court of Customs and Patent Appeals (“CCPA”), our predecessor in second-level administrative review in trade cases, approved the use of APA-type review in antidumping cases, including the “duplicative” second review of the substantial evidence issue.

Prior to the enactment of the Trade Agreements Act of 1979, which established the main components of the current system of judicial review in antidumping cases, the Customs Court and the CCPA (on review of Customs Court decisions) were both given very limited authority to review decisions of the Treasury Department and the Tariff Commission (predecessors to the Commerce Department and International Trade Commission, respectively). Ordinarily, those courts were not even permitted to review the agencies’ decisions for substantial evidence; review was limited, normally, to certain purely legal issues. See City Lumber Co. v. United States, 59 C.C.P.A. 89, 457 F.2d 991, 994 (1972); Kleberg & Co. v. United States, 71 F.2d 332 (CCPA 1933). An exception to that highly deferential review by both reviewing courts was in cases in which the administrative record was deemed inadequate, in which case the Customs Court would conduct de novo review, creating a record of its own, which would then be reviewed deferentially by the CCPA. See Armstrong Bros. Tool Co. v. United States, 67 C.C.P.A. 94, 626 F.2d 168, 169 n. 2 (1980) (citing ASG Indus., Inc. v. United States, 67 C.C.P.A. 11, 610 F.2d 770 (1979)). In those cases in which there was an adequate administrative record and review was conducted on that record, the scope of the review in the Customs Court and in the CCPA appeared to be the same, with the CCPA not deferring to the conclusion of the Customs Court as to the lawfulness of the agency’s action. See, e.g., Imbert Imports, Inc. v. United States, 60 C.C.P.A. 123, 475 F.2d 1189 (1973).

Because of congressional dissatisfaction with the scope of judicial review of anti-dumping orders pursuant to the Trade Act of 1974, the Trade Agreements Act of 1979 created the scheme that is now in place. Congress made clear that the Customs Court was not to conduct de novo review of the pertinent administrative determinations, but was to review those determinations pursuant to traditional principles of administrative law, i.e., the APA. The legislative history of the 1979 Act explains:

Section 516A would make it clear that traditional administrative law principles are to be applied in reviewing antidump-ing and countervailing duty decisions *954where by law Congress has entrusted the decision-making authority in a specialized, complex economic situation to administrative agencies.... Review of determinations listed in subsection (a)(2) would proceed upon the basis of a formal administrative record and the standard of review provided is “unsupported by substantial evidence on the record or otherwise not in accordance with law” [i.e., language taken directly from the APA],

S.Rep. No. 96-249, at 252 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 638. Neither the 1979 Act nor the legislative history adverted to the standard of review to be applied by the CCPA in reviewing Customs Court decisions.1 However, various features of the legislation support the inference that, while both the Customs Court and the CCPA were expected to defer to the agencies, the CCPA was not supposed to defer to the Customs Court. Of particular significance in that regard are: (1) Congress’s decision to adopt the APA standard for Customs Court review of the agency decisions; Congress’s determination that Customs Court review should be limited and based on the administrative record; and (3) Congress’s failure to suggest any deviation from standard APA practice for second-tier review support. Indeed, in a decision issued shortly after the 1979 Act, that is how the CCPA characterized its role in the review process. See Armstrong Bros., 626 F.2d at 170 (“[W]e conclude that the issue before this court, in this case is properly stated to be whether the Customs Court correctly held that the Commission’s determination is supported by substantial evidence in the record.... [T]he sole standard of review of factual determinations of injury or likelihood of injury in antidumping cases [is] whether the Commission’s determination is supported by substantial evidence.”). Thus, as of the time that the Customs Court was converted to the Court of International Trade and the CCPA was succeeded by this court, it appears that it was settled that judicial review of antidumping determinations was to be conducted pursuant to APA-type standards and that the review conducted by the trial court and by the second-tier reviewing court would be the same — determining whether there was substantial evidence in the record before the agency to justify the agency’s determination. Under those circumstances, it is not surprising that, four years after Armstrong Bros., this court adopted the Atlantic Sugar de novo standard as the proper standard for our review of Court of International Trade decisions in substantial evidence cases.

As noted, the standards for review of administrative action set forth in section 1516a(b) are exactly the standards set forth in section 706 of the APA. Section 1516a(b) identifies certain determinations, findings, and conclusions that are to be held unlawful if found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 19 U.S.C. §§ 1516a(b)(1)(A), 1516a(b)(1)(B)(ii) (the *955same language that is found in the APA, 5 U.S.C. § 706(2)(A)), and it identifies other determinations, findings, and conclusions (including Commission findings as to material injury, at issue here), that are to be held unlawful if “unsupported by substantial evidence,” 19 U.S.C. § 1516a(b)(1)(B)(i) (the same language that is found in the APA, 5 U.S.C. § 706(2)(E)). See also 28 U.S.C. § 2640(b) (specifying section 1516a(b) as providing the standard of review in antidumping and countervailing duty cases). There is thus every reason to believe that Congress intended the judicial review process in the trade area to track the more general review process in district courts and courts of appeals under the APA. If that is so, the APA rule regarding de novo consideration of the issue of substantial evidence by courts of appeals comes into play.

4. Nor is there anything anomalous or peculiar about a court of appeals applying a de novo standard when reviewing a trial court’s determination regarding the sufficiency of evidence on which a particular tribunal based its decision.

Besides all the APA cases involving see-ond-tier substantial evidence review of administrative action, there are several important categories of cases in which courts of appeals routinely conduct de novo review of trial court decisions as to the sufficiency of the evidence. For example, when a court of appeals reviews a district court’s grant or denial of JMOL, the court of appeals does not defer to the trial court’s decision. In reviewing the sufficiency of the evidence, the court of appeals applies the same standard that the trial court applied. Similarly, in the summary judgment context, the court of appeals does not defer to the trial court’s determination that the plaintiffs evidentiary showing was insufficient to avoid summary judgment. While the summary judgment decision, like the JMOL decision, may involve facts, it presents a legal issue as to the sufficiency of those facts under the governing legal standard. The same is true of an administrative substantial evidence review.

5. The dissenters argue that in light of the special expertise of the Court of International Trade, it would be sound policy to defer to the Court of International Trade’s substantial evidence decisions. Whether that is so or not, it is not the system that Congress created in 1979. Under these circumstances, a change in our review process is a matter that is appropriately left to legislative action, not judicial modification. Moreover, it is important to note that in conducting de novo review of substantial evidence determinations, this court does not ignore the decisions of the Court of International Trade; instead, as we have stated on numerous occasions, we pay close attention to the Court of International Trade’s analysis. See Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed.Cir.2006) (“[W]e give great weight to the informed opinion of the Court of International Trade.... Indeed, it is nearly always the starting point of our analysis.” (internal quotation marks omitted)); Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 983 (Fed. Cir.1994) (“Although reviewing anew the ITC determination, this court will not ignore the informed opinion of the Court of International Trade. That court reviewed the record in considerable detail. Its opinion deserves due respect.”). Thus, it is incorrect to suggest that the Atlantic Sugar standard renders superfluous the Court of International Trade’s decisions on issues of substantial evidence.

In sum, the Atlantic Sugar standard of review is consistent with principles of judicial review of administrative action as well as judicial review principles applied in oth*956er contexts, and the trade statutes make clear that Congress intended to apply those principles to this court’s review of the decisions of the Court of International Trade. There is thus no need or justification for this court to jettison the Atlantic Sugar rule.

. The dissenting opinion refers to a statement from the legislative history of the 1979 Act indicating Congress’s intent to "eliminate de novo review of assessments made pursuant to the antidumping and countervailing duty laws.” H.R.Rep. No. 96-317, at 181 (1979). The context of that statement and other similar statements in the legislative history makes clear that the reports were referring to eliminating de novo review of the agency's determinations, not eliminating de novo appellate review of the trial court’s substantial evidence rulings. Shortly after the quoted material, the report explains that “the bill generally provides for a standard of review whereby the administrative level determination is upheld unless unsupported by substantial evidence." Id. (emphasis added); see also S.Rep. No. 96-249, at 247-48 (1979).