Slip Op. 06-123
UNITED STATES COURT OF INTERNATIONAL TRADE
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ONTARIO FOREST INDUSTRIES ASSOC. :
and ONTARIO LUMBER MANUFACTURERS :
ASSOC., :
:
Plaintiffs, :
:
v. : Before: Pogue, Judge
: Ct. No. 06-00156
THE UNITED STATES OF AMERICA, :
and SUSAN C. SCHWAB, :
:
Defendants, :
:
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OPINION
Decided: August 2, 2006
[Plaintiffs’ motion for expedition denied; proposed Defendant-
Intervenor’s motion to intervene granted; action dismissed.]
Baker & Hostetler, LLP (Elliot Jay Feldman, Michael Steven Snarr,
Bryan Jay Brown, and John Burke) for Plaintiffs;
Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director,
Jeanne E. Davidson, Deputy Director, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice (Stephen Carl Tosini, Trial
Attorney) for Defendant United States;
Dewey Ballantine LLP (Harry L. Clark, Kevin M. Dempsey, John W.
Bohn, and David A. Bentley) for proposed Defendant-Intervenor.
Pogue, Judge: This case presents the questions of whether the
Court of International Trade has jurisdiction to issue a writ of
mandamus compelling the United States Trade Representative (“USTR”)
to appoint a member to an Extraordinary Challenge Committee – a
reviewing authority in the North American Free Trade Agreement
binational review system – and, if so, whether such a writ should
be entered. Pending before the court are (1) Plaintiffs’ motion
Ct. No. 06-00156 Page 2
for expedited consideration; (2) the Coalition for Fair Lumber
Imports Executive Committee’s (“Coalition”) motion to intervene;
(3) the Defendants’ and Coalition’s motions to dismiss for lack of
jurisdiction and failure to state a claim; and (4) Plaintiffs’
motion for judgment on the agency record.
For the reasons set forth below the court denies Plaintiffs’
motion for expedited consideration; grants the Coalition’s motion
to intervene; grants the Defendants’ and Coalition’s motions to
dismiss for lack of jurisdiction; and denies Plaintiffs’ motion for
judgment on the agency record.
BACKGROUND
Under United States trade laws, the Department of Commerce
(“Commerce”) is responsible for investigating whether foreign goods
are being dumped into the United States or are benefitting from a
countervailable subsidy. See 19 U.S.C. § 1671 (2000) et seq. If
so, the International Trade Commission (“ITC”) must investigate
whether such dumping or subsidization causes, or threatens to
cause, material injury to a U.S. industry. If Commerce finds that
dumping or subsidization has occurred, and the ITC finds that
dumping or subsidization causes, or threatens to cause, material
injury to a domestic industry, interested parties1 may, each year,
1
The statutes define "interested party" to include, “a
foreign manufacturer, producer, or exporter, or the United States
(footnote continued)
Ct. No. 06-00156 Page 3
upon the anniversary of the original findings, request an
administrative review to adjust the dumping or countervailing duty
in light of the importers' actual then current conduct. See 19
U.S.C. § 1675.
When goods originate from a nation that is party to the North
American Free Trade Agreement (“NAFTA”), interested parties to the
investigation or administrative review have two options for seeking
a review or appeal of a final determination by the ITC or Commerce.
Parties may elect to seek review by appealing either to a NAFTA
“binational panel” or to the United States Court of International
Trade. Because there are alternative avenues for appeal, the NAFTA
Implementation Act provides a framework so that these two avenues
of review do not collide. See, e.g., Am. Coal. for Competitive
Trade v. Clinton, 128 F.3d 761, 761-63 (D.C. Cir. 1997).
Specifically, the NAFTA Implementation Act both precludes the
commencement of any action before the Court of International Trade
within thirty days of a notice of a final determination and
importer, of subject merchandise or a trade or business
association a majority of the members of which are producers,
exporters, or importers of such merchandise”; “the government of
a country in which such merchandise is produced or manufactured
or from which such merchandise is exported”; "a manufacturer,
producer, or wholesaler in the United States of a domestic like
product"; "a certified union or recognized union or group of
workers which is representative of an industry engaged in the
manufacture, production, or wholesale in the United States of a
domestic like product"; and "a trade or business association a
majority of whose members manufacture, produce, or wholesale a
domestic like product in the United States." 19 U.S.C. §
1677(9)(A)-(E) (1994)
Ct. No. 06-00156 Page 4
requires that any interested party seeking binational panel review
file notice of review with the NAFTA Secretariat within thirty days
of that determination. See 19 U.S.C. § 1516a(a)(5)(B); Desert
Glory, Ltd. v. United States, 29 CIT ___, ___, 368 F. Supp. 2d
1334, 1337 (2005); N.D. Wheat Comm’n v. United States, 28 CIT
___,___, 342 F. Supp. 2d 1319, 1321-23 (2004). See also S. Rep.
No. 100-509, at 33-34 (1988), reprinted in 1988 U.S.C.C.A.N. 2395,
2428. Once a review is requested before a binational panel, no
action contesting the determination in question may be brought
before the Court of International Trade, 19 U.S.C. § 1516a(g)(2),
except as to certain constitutional issues not at issue here, 19
U.S.C. § 1516a(g)(4)(B),2 or where other statutory exceptions
apply, 19 U.S.C. § 1516a(g)(3); cf. 28 U.S.C. § 1584. If no review
is requested before a NAFTA binational panel, parties may seek
review of the determination before the Court of International Trade
2
In addition, review of a determination challenged “on the
grounds that any provision of, or amendment made by, the North
American Free Trade Agreement Implementation Act implementing the
binational dispute settlement system under chapter 19 of the
NAFTA, or the United States-Canada Free-Trade Agreement
Implementation Act of 1988 implementing the binational panel
dispute settlement system under chapter 19 of the Agreement,
violates the Constitution” is available in the United States
Court of Appeals for the District of Columbia Circuit so long as
that review is commenced following the completion of the
binational review process. See 19 U.S.C. § 1516a(g)(4)(A); Am.
Coal. for Competitive Trade, 128 F.3d at 765. Even though these
actions may only be raised in U.S. courts, the NAFTA
Implementation Act still requires that they be raised after
completion of the binational review process. See 19 U.S.C. §
1516a(g)(4)(C); Am. Coal. for Competitive Trade, 128 F.3d 761,
765-66 (D.C. Cir. 1997).
Ct. No. 06-00156 Page 5
so long as an action is commenced within thirty days following
expiration of the stay defined in 19 U.S.C. § 1516a(a)(2)(B)(5).3
NAFTA binational panels are comprised of five members. In
addition, the government of each nation that is a party to NAFTA
(“NAFTA government”) is required to maintain a roster of twenty-
five potential panelists. See North American Free Trade Agreement,
U.S.-Can.-Mex., Dec. 17, 1992, annex 1901.2(1), 32 I.L.M. 289, 687
(1993). When a panel is requested, the NAFTA governments involved
in the matter (“the parties”) select two panelists from each of
their requisite rosters; the parties appoint the fifth panelist by
agreement or, if the parties fail to agree, the parties decide by
lot which of them may select from its roster the last panelist.
Id. "If an involved Party fails to appoint its members to a panel
within 30 days . . . such panelists shall be selected by lot on the
31st . . . day . . . from the Party's candidates on the roster."
NAFTA annex 1901.2(2), 32 I.L.M. 289, 687.
The panel applies “the general legal principles that a court
of the importing Party otherwise would apply to a review of a
determination of the competent investigating authority[,]”
including the standard of review used by courts of that country.
3
The NAFTA binational review system is largely predicated on
the rules and procedures of the binational panel review system
created by the United States - Canada Free Trade Agreement
("CFTA"). See North American Free Trade Agreement Implementation
Act Statement of Administrative Action (“SAA”), reprinted in H.
R. Doc. No. 103-159, at 194 (1993). CFTA preceded NAFTA.
Ct. No. 06-00156 Page 6
NAFTA Art. 1904(3), 32 I.L.M. at 683; see also NAFTA annex 1911, 32
I.L.M. at 691-93. The panel is empowered to sustain or remand the
determination under review, NAFTA Art. 1904(2), 32 I.L.M. at 683,
and its findings are binding on the participating governments with
respect to the matter at issue. NAFTA art. 1904(9), (11), (15), 32
I.L.M. at 683-84; 19 U.S.C. § 1516a(g)(2). See also S. Rep. No.
100-509, at 31 (1988), reprinted in 1988 U.S.C.C.A.N. 2395, 2426
("Because binational panels act as a substitute for U.S. courts in
deciding whether a determination is consistent with U.S. law, the
Committee intends binational panel decisions to be implemented in
the same manner that court decisions are implemented under the
current law.").4
Upon completion of the Panel's review, the responsible NAFTA
Secretary must cause to be published a "Notice of Final Panel
Action" in the Federal Register. See Rules and Procedure for
Article 1904 Binational Panel Reviews, 59 Fed. Reg. 8686, 8698
(Dep't Commerce Feb. 23, 1994) (North American Free Trade
Agreement). Decisions of panels may only be reviewed by an
Extraordinary Challenge Committee (“ECC”). NAFTA art.
1904(11)&(13), 32 I.L.M. at 683; 19 U.S.C. § 1516a(g)(2); see also
4
Moreover, NAFTA requires the member states “amend [their]
statutes or regulations to ensure that existing procedures
concerning the refund, with interest, of antidumping or
countervailing duties operate to give effect to a final panel
decision that a refund is due[.]” NAFTA art. 1904(15)(a), 32
I.L.M. at 684.
Ct. No. 06-00156 Page 7
NAFTA annex 1904.13, 32 I.L.M. at 688. Whereas binational panels
may be convened upon the request of any interested party to the
agency proceedings, an ECC may convene only upon request of a NAFTA
party itself, i.e., either the government of Canada, Mexico, or the
United States. NAFTA art. 1904(13), 32 I.L.M. at 683; NAFTA annex
1904.13, 32 I.L.M. at 688. Once convened, an ECC may only set
aside a panel’s findings where:
(a)(i) a member of the panel was guilty of gross
misconduct, bias, or a serious conflict of interest, or
otherwise materially violated the rules of conduct; (ii)
the panel seriously departed from a fundamental rule of
procedure, or (iii) the panel manifestly exceeded its
powers, authority or jurisdiction set out in this
Article, for example by failing to apply the appropriate
standard of review, and (b) any of the actions set out in
subparagraph (a) has materially affected that panel’s
decision and threatens the integrity of the binational
panel review process.
NAFTA art. 1904(13), 32 I.L.M. at 683.
NAFTA parties have either thirty days from the issuance of a
Notice of Final Panel Action, or thirty days from the time the
party discovers a violation, to request an ECC (provided that the
request for an ECC is commenced within two years of the panel
decision). See Rules and Procedure for Article 1904 Extraordinary
Challenge Committees, 59 Fed. Reg. 8702, 8708 (Dep't Commerce Feb.
23, 1994) (North American Free Trade Agreement). NAFTA provides
that the involved NAFTA governments shall establish an ECC within
fifteen days of such a request. See NAFTA annex 1904.13, 32 I.L.M.
at 688. Each ECC is comprised of three members. Id. Each of the
Ct. No. 06-00156 Page 8
involved governments selects one member for an ECC from rosters of
potential ECC members each nation is required to maintain;5 the
third and final member is selected by the party chosen by lot. Id.
Following a final review by an ECC, the responsible NAFTA secretary
causes to be published a "Notice of Completion of Panel Review" and
the members of the panel are "discharged from their duties." Rules
and Procedure for Article 1904 Binational Panel Reviews, 59 Fed.
Reg. 8686, 8698 (Dep't Commerce Feb. 23, 1994) (North American Free
Trade Agreement); see also Rules and Procedure for Article 1904
Extraordinary Challenge Committees, 59 Fed. Reg. 8702, 8711 (Dep't
Commerce Feb. 23, 1994) (North American Free Trade Agreement).
In addition to extensive rules and timing requirements
specified, see, e.g., NAFTA annex 1904.13(1), 32 I.L.M. at 688
(providing for the creation of ECCs within 15 days of a request);
id. at 1904.13(2) (providing that the rules of procedure shall
provide a decision of the committee within 90 days of
establishment), NAFTA requires the NAFTA governments to establish
rules of procedure for both panels and ECCs, NAFTA art. 1904(14),
32 I.L.M. at 684; NAFTA annex 1904.13(2), 32 I.L.M. at 688; see
5
The roster for binational panelists and ECC members are
different. Whereas binational panelists need only be of "good
character, high standing and repute, and shall be chosen strictly
on the basis of objectivity, reliability, sound judgment and
general familiarity with international trade law," NAFTA annex
1901.2(1), 32 I.L.M. at 687, NAFTA requires that U.S. members of
an ECC be "judges or former judges of the federal judicial court
of the United States." NAFTA Annex 1904.13, 32 I.L.M. at 688.
Ct. No. 06-00156 Page 9
also 19 U.S.C. § 3435. To safeguard the integrity of the
binational panel system, NAFTA further provides that where a
Party's domestic law (a) has prevented the establishment
of a panel . . . ; (b) has prevented a panel . . . from
rendering a final decision; [or] (c) prevented the
implementation of the decision . . . or denied it binding
force and effect which respect to the particular matter
that was before the panel[,]
after consultation, a "special committee" convenes to determine
whether a violation has occurred. NAFTA art. 1905(1), 32 I.L.M. at
684. While the "special committee" meets, the parties may stay all
ongoing proceedings before panels and ECCs. See Rules and
Procedure for Article 1904 Binational Panel Reviews, 59 Fed. Reg.
8686, 8698 (Dep't Commerce Feb. 23, 1994) (North American Free
Trade Agreement); see also Rules and Procedure for Article 1904
Extraordinary Challenge Committees, 59 Fed. Reg. 8702, 8711 (Dep't
Commerce Feb. 23, 1994) (North American Free Trade Agreement). In
the event the special committee finds that a party's domestic law
has violated NAFTA in one of the manners specified above, the
aggrieved party may suspend Article 1904. See NAFTA art. 1905(8),
32 I.L.M. at 684-85. In such event, all matters involving a
determination by Commerce or the ITC pending before a binational
panel (or ECC) may be transferred to the Court of International
Trade. See 19 U.S.C. § 1516a(g)(12)(B); see also 19 U.S.C. §
1516a(g)(3)(A)(v)&(vi).
As implemented into United States law, the United States Trade
Representative (“USTR”) “is the only officer of the United States
Ct. No. 06-00156 Page 10
Government authorized to act on behalf of the United States
Government in making any selection or appointment of an individual
to . . . panels or committees convened under [NAFTA] chapter 19 .
. . that is to be made solely or jointly by the United States
Government” pursuant to the Agreement. 19 U.S.C. § 3432(d). The
NAFTA Implementation Act further specifies that:
The selection of individuals [for] . . . appointment by
the Trade Representative for service on the panels and
committees convened under chapter 19 . . . shall be made
on the basis of the criteria provided in paragraph 1 of
Annex 1901.2 and paragraph 1 of Annex 1904.13 and shall
be made without regard to political affiliation.
19 U.S.C. § 3432(a)(1)(E).6
6
Section 3432 of Title 19 further mandates that the USTR
follow other substantive and procedural requirements relevant for
selecting panelists and committee members.
NAFTA Annex 1904.13 provides:
Extraordinary Challenge Procedure
(1) The involved Parties shall establish an extraordinary
challenge committee, composed of three members, within 15
days of a request pursuant to Article 1904(13). The
members shall be selected from a 15-person roster
comprised of judges or former judges of a federal
judicial court of the United States or a judicial court
of superior jurisdiction of Canada, or a federal judicial
court of Mexico. Each Party shall name five persons to
this roster. Each involved Party shall select one member
from this roster and the involved Parties shall decide by
lot which of them shall select the third member from the
roster.
(2) The Parties shall establish by the date of entry into
force of the Agreement rules of procedure for committees.
The rules shall provide for a decision of a committee
within 90 days of its establishment.
(3) Committee decisions shall be binding on the Parties
with respect to the particular matter between the Parties
that was before the panel. After examination of the legal
(footnote continued)
Ct. No. 06-00156 Page 11
In rendering assistance to ECCs, the NAFTA Implementation Act
provides to district courts the authority to compel testimony and
depositions of persons found within the United States, and
production of documents found within the United States. See 19
U.S.C. § 3433.
B.
This case arises from the much litigated imposition of
countervailing duties on softwood lumber from Canada. Plaintiffs,
Ontario Forest Industries Association and the Ontario Lumber
Manufacturers Associations represent producers of softwood lumber
from Canada currently subject to countervailing duties pursuant to
Certain Softwood Lumber Products from Canada, 67 Fed. Reg. 36,070
(Dept. Commerce May 22, 2002) (notice of amended final affirmative
countervailing duty determination and notice of countervailing duty
order). Following issuance of the final determination in that CVD
and factual analysis underlying the findings and conclusions
of the panel's decision in order to determine whether one of
the grounds set out in Article 1904(13) has been established,
and on finding that one of those grounds has been established,
the committee shall vacate the original panel decision or
remand it to the original panel for action not inconsistent
with the committee's decision; if the grounds are not
established, it shall deny the challenge and, therefore, the
original panel decision shall stand affirmed. If the original
decision is vacated, a new panel shall be established pursuant
to Annex 1901.2.
32 I.L.M. at 688.
Ct. No. 06-00156 Page 12
investigation, Plaintiffs (among others) timely appealed the final
determination to a NAFTA binational panel. After five remands, on
March 17, 2006 the panel affirmed Commerce’s fifth remand
determination which found that the subsidy was de minimis (and
therefore not countervailable). See In re: Certain Softwood Lumber
Products from Canada: Final Affirmative Countervailing Duty
Determination, Secretariat File No. USA-CDA-2002-1904-03, pg. 4
(Mar. 17, 2006) (decision of panel on fifth remand determination),
available at http://www.nafta-sec-alena.org/app/DocRepository/
1/Dispute/english/NAFTA_Chapter_19/USA/ua02035e.pdf. In accordance
with this decision, the responsible NAFTA Secretary issued a Notice
of Final Panel Action on March 28, 2006. Disagreeing with the
Panel’s decision(s), the United States, less than a month after the
Notice of Final Panel Action, filed a request for an ECC
challenging the Panel’s decision.
Contemporaneously with the Panel’s final action and the United
States’ request for an ECC, the United States and Canada commenced
settlement discussions and entered into a tentative settlement
agreement. Under the basic terms of the tentative agreement, "the
Parties will take steps to terminate all litigation by the entry
into force of the Agreement[.]" Basic Terms of a Canada-United
States Agreement on Softwood Lumber 3 (Apr. 27, 2006), Attach. A to
Def's Resp. Ct.'s Order of May 26, 2006. Acknowledging that those
discussions might moot the United States' challenge before the ECC,
Ct. No. 06-00156 Page 13
the United States and Canada sent a joint notice to interested
parties advising that:
On April 27, 2006, the Government of the United States
and the Government of Canada announced an agreement to
resolve the softwood lumber dispute. In light of that
agreement, our two Governments agreed that [the ECC
proceedings] would be suspended. . . . The proposed
Notice advises participants that the briefing schedule
set by the Rules is suspended, such that participants
need not file briefs or other submissions unless and
until they receive notice that either Canada or the
United States has decided that this proceedings should
move forward.
Letter from Hugh Cheetham, Senior Counsel/Deputy Director DFAIT and
William L. Busis, Associate General Counsel, USTR, to Caratina L.
Altson, NAFTA Secretariat, United States Section, pg. 1 (May 12,
2006) (In the Matter of Certain Softwood Lumbers Products from
Canada: Final Affirmative Countervailing Duty Determination: ECC-
2006-1904-01USA) (“Suspension Notice”), Attach. C to Def's Resp.
Ct.'s Order May 26, 2006.
In accordance with this notice and the ongoing settlement
discussions, to date, neither the United States, nor the
Government of Canada (“Canada”), has selected its member for the
ECC or otherwise taken any measure with respect to the
establishment or suspension7 of an ECC.
7
Strictly speaking, nothing in the NAFTA rules provides for
the suspension of an ECC except when a special committee is
convened upon allegations that a party’s domestic law is
frustrating the functioning of the binational panel review
system. See NAFTA art. 1904-1905, 32 I.L.M. at 683-85.
Ct. No. 06-00156 Page 14
C.
Plaintiffs filed their complaints on May 16, 2006. Along
with their complaint, Plaintiffs filed a motion to set an expedited
briefing schedule and a motion for expedited consideration. The
court granted, in part, Plaintiffs’ motion for an expedited
briefing schedule but reserved judgment on their motion for
expedited consideration. See Order of May 25, 2006.
Plaintiffs’ complaint, and subsequent filings, charge that
under NAFTA, an ECC must be formed 15 days after a request is
received. Because the USTR has failed to appoint the U.S. member,
the complaint claims, she has violated the rules of NAFTA and her
obligations under 19 U.S.C. § 3432. Plaintiffs, therefore, seek a
writ of mandamus compelling the USTR to either a) appoint a member
to the ECC or, in the alternative, b) compel the USTR to have the
matter transferred to this Court if the proceedings are suspended
pursuant to Article 1905. Compl. 12; see also Letter from Elliot
J. Feldman, Michael S. Snarr & Ronald J. Baumgarten, Counsel to the
Ontario Forest Indus. Ass’n and the Ontario Lumber Mfrs. Ass’n, to
The Honorable Caratina Alston, U.S. Secretary, NAFTA Secretariat,
U S. Section, 1-2 (May 16, 2006) (Regarding Certain Softwood Lumber
Products from Canada Final Affirmative Countervailing Duty
Determination, Secretariat File No ECC-2006-1904-01 USA Notice Of
Request To Transfer Proceedings To U.S. Court Of International
Trade In The Event Of NAFTA Article 1905 Suspension Of Article 1904
Ct. No. 06-00156 Page 15
Binational Panel System).
After the complaint was filed, the Coalition – which
represents a group of United States producers of softwood lumber
constituting a significant percentage of domestic producers, see
Second Mot. Intervene of Coalition for Fair Lumber Imports
Executive Committee 1-2 -- filed a motion to intervene. Because
the motion was not “accompanied by a pleading setting forth the
claim or defense for which intervention [was] sought,” this court
denied that motion without prejudice pursuant to USCIT R. 24. See
Order of June 14, 2006 (citing USCIT R. 24(c)). Before the
Defendants filed their first responsive pleading, the Coalition re-
filed a motion to intervene, this time accompanied by a pleading
and a motion to dismiss the complaint for lack of subject matter
jurisdiction and failure to state a claim. The Defendants also
filed a motion to dismiss for lack of subject matter jurisdiction
and failure to state a claim.
I. Expedition
As appropriately recognized by Plaintiffs, accelerating a case
for disposition has two independent parts: expedited briefing and
expedited consideration. The latter, at issue here, is governed by
Ct. No. 06-00156 Page 16
USCIT R. 3(g).8
Largely restating the order of precedence as established in
the Court’s charter, current USCIT R. 3(g) provides that:
Unless the court, upon motion for good cause or upon its
own initiative determines otherwise in a particular
action, the following actions shall be given precedence,
in the following order, over other actions pending before
the court, and expedited in every way:
8
When Congress created the Court of International Trade in
1980, it established an order of precedence by which certain
subject matters would be granted priority over others. See Pub.
L. 96-417, Title III, § 402(29)(G), 94 Stat. 1727, 1739 (1980).
This original order of precedence, however, was short-lived. In
1984, finding that over the previous “two hundred years various
Congresses ha[d] acted in an ad hoc and random fashion to grant
‘priority’ to particular and diverse types of cases” which
resulted in “so many expediting provisions . . . that it [was]
impossible for courts to intelligently categorize cases,”
Congress decided to “wipe[] the slate clean of such priorities
with certain narrow exceptions.” H. Rep. No. 98-985, at 1
(1984), as reprinted in 1984 U.S.C.C.A.N. 5779, 5779. Believing
that the “courts themselves were in the best position to
prioritize their dockets,” Freedom Commc’ns Inc. v. FDIC, 157
F.R.D. 485, 486 (C.D. Cal. 1994), Congress repealed all its prior
precedence-setting provisions and granted:
each court of the United States [authority to]
determine the order in which civil actions are heard
and determined, except that the court shall expedite
the consideration of any . . . action for temporary
or preliminary injunctive relief, or any other
action if good cause therefor is shown.
28 U.S.C. § 1657(a) (emphasis added). Congress further provided
that “‘good cause’ is shown if a right under the Constitution of
the United States or a Federal Statute . . . would be maintained
in a factual context that indicates that a request for expedited
consideration has merit.” Id.
Reacting to the repeal of its precedence statute, and
invoking its new discretionary authority under section 1657(a),
the court adopted USCIT R. 3(g).
Ct. No. 06-00156 Page 17
(1) An action seeking a temporary or preliminary
injunctive relief;
(2) An action involving the exclusion of perishable
merchandise or redelivery of such merchandise;
(3) An action described in 28 U.S.C. § 1581(c) to
contest a determination under section 516A of the
Tariff Act of 1930;
(4) An action described in 28 U.S.C. § 1581(a) to
contest the denial of a protest, in whole or in
part, under [s]ection 515 of the Tariff Act of
1930, involving the exclusion or redelivery of
merchandise;
(5) An action described in 28 U.S.C. § 1581(b) to
contest a decision of the Secretary of Treasury
under section 516 of the Tariff Act of 1930[;]
(6) Any other action which the court determines,
based upon motion and for good cause shown,
warrants expedited treatment.9
Plaintiffs’ claims do not rest on any enumerated grounds specified
by subparagraphs 1 through 5. Therefore, in order to grant
expeditious consideration of this matter, the court must find that
“good cause” exists within the meaning of either the prefatory
language, i.e., “[u]nless the court, upon motion for cause or upon
its own initiative determines otherwise in a particular action,”
or subparagraph 6.
In construing the language of Rule 3(g), the court’s
interpretation is both bounded and guided by Congressional
mandate. See 28 U.S.C. § 2071 (“The Supreme Court and all courts
established by Act of Congress may from time to time prescribe
9
Paragraph 6 was added on March 21, 2006 and became
effective April 10, 2006. It appears to the court that this
amendment aimed to reinforce the objectives of the prefatory
language, although there is some redundancy between the prefatory
language and the language of subparagraph 6.
Ct. No. 06-00156 Page 18
rules for the conduct of their business. Such rules shall be
consistent with Acts of Congress and rules of practice and
procedure prescribed under [28 U.S.C. § 2072].” (emphasis added));
28 U.S.C. § 1585 (conferring the Court of International Trade all
powers in law equity conferred on district courts); 28 U.S.C. §
2633(b)(“The Court of International Trade shall prescribe rules
governing . . . procedural matters.”). Accord Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 392 (1990) (“We therefore interpret
Rule 11 according to its plain meaning, in light of the scope of
the congressional authorization.” (citation omitted)). As noted
above, Congress has provided that “good cause” is found where (1)
a claim of right arises “under the Constitution of the United
States or a Federal Statute . . . [and 2] in a factual context
that a request for expedited consideration has merit.” 28 U.S.C.
§ 1657(a). The text, most “notably the reference to a ‘factual
context’, suggests that Congress contemplated case-by-case
decision making” applying the standard. Freedom Commc’ns Inc.,
157 F.R.D. at 486.
In elucidating the “good cause standard,” the legislative
history of section 1657(a) provides that “good cause” should be
found: “[1] in a case in which failure to expedite would result in
mootness or deprive the relief requested of much of its value, [2]
in a case in which failure to expedite would result in
Ct. No. 06-00156 Page 19
extraordinary hardship to a litigant,[10] or [3] actions where the
public interest in enforcement of the statute is particularly
strong.” H. Rep. No. 98-985, at 6 (1984), as reprinted in 1984
U.S.C.C.A.N. 5779, 5784 (footnotes omitted). Providing an example
of when this criteria is met, both the statute and legislative
history invoke cases brought under the Freedom of Information Act
(“FOIA”) as paradigmatic examples of “good cause.” Congress
reasoned that prompt adjudication of FOIA cases (a) foster the
important goal of creating an informed citizenry; (b) involve
remedies of a “transitory” nature, i.e., that delay could render an
information request “of no value at all;” and (c) do not “involve
extended discovery or testimony and therefore do not burden court
dockets for extensive periods of time.” Id. at 5-6 (1984), as
reprinted in 1984 U.S.C.C.A.N. at 5783-84. These interests
notwithstanding, however, Congress also “wish[ed] to preclude
clearly frivolous lawsuits from being granted expedited treatment
merely by involving a statutory cause of action which had been
given expedited status.” Id. at 5, as reprinted in 1984
U.S.C.C.A.N. at 5783.
10
The House Report specifically noted in a footnote that “a
case challenging denial of disability benefits on which the
(footnote continued)
plaintiff is dependent for subsistence” presents an example of
good cause. H. Rep. No. 98-985, at 6 n.8 (1984), as reprinted in
1984 U.S.C.C.A.N. 5779, 5784 n.8. However, under the Rule’s
current formulation, cases challenging the denial of trade
adjustment assistance are not afforded a specific priority.
Ct. No. 06-00156 Page 20
Applying these principles here, the court cannot conclude that
expedition is warranted. Plaintiffs do make a claim of right
accruing under a federal statute, 19 U.S.C. 3432(a)(1)(E), and the
Due Process Clause of the Fifth Amendment of the United States
Constitution. See Compl. 10-12. However, even if the court were
to assume jurisdiction over the question, the Plaintiffs’ case, if
not frivolous, at least appears to lack the legal basis necessary
to compel expedition.11
Plaintiffs contend that the USTR has violated section
3432(a)(1)(E) by failing to appoint an ECC member within the time
frame provided in NAFTA. That provision provides, in relevant
part,
The selection of individuals under this section for
. . . appointment by the Trade Representative for
service on the panels and committees convened under
chapter 19 . . . shall be made on the basis of the
criteria provided in paragraph 1 of Annex 1901.2 and
paragraph 1 of Annex 1904.13 and shall be made
without regard to political affiliation.
19 U.S.C. § 3432(a)(1)(E)(emphasis added). Essentially, Plaintiffs
read the word “criteria” to incorporate not only the appointees’
11
Of course, in considering whether a claim is “clearly
frivolous,” a court should also consider whether a claim of
jurisdiction is frivolous. Cf. U.S. Ass'n of Imps. of Textiles &
Apparel v. United States, 413 F.3d 1344, 1348-49 (Fed. Cir. 2005)
(considering a claim that the matter was not ripe in its
consideration of the likelihood of success on the merits). The
court further notes that this inquiry must be superficial – if
the court were to exhaustively research and determine the merits
of a claim for purposes of expedition, it would be, in effect,
prioritizing that case.
Ct. No. 06-00156 Page 21
credentials as stated in NAFTA but also the time period in which
appointments must be made.
Although section 3432(a)(1)(E) does incorporate some
requirements of NAFTA by direct reference as to the qualifications
of the “individuals,” nowhere does it incorporate any requirement
as to the time when the USTR must make appointments. To the
contrary, section 3432(a)(1)(E)’s invocation of the “political
affiliation” of the appointee, and section 3432(a)(2)’s description
of the qualifications of individuals, suggest that section
3432(a)(1)(E) only establishes parameters as to the credentials of
the appointments. Indeed, section 3432(a)(1)(E) does not require
the appointment of anyone at all. Cf. 19 U.S.C. § 3432(b)(4) (“At
such time as the Trade Representative proposes to appoint a judge
. . . .”).
Nor do Plaintiffs establish that the other considerations for
expedited consideration are met. It is hard to see how the public
interest is advanced by forcing litigation during the pendency of
settlement negotiations (when the primary parties have agreed that
staying the action is appropriate). See, e.g., Parker v.
Anderson, 667 F.2d 1204, 1209 (5th Cir. 1982) (noting the strong
federal policy in favor of settlement); accord McCulloch v.
Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 17 (1963)
(“the presence of public questions particularly high in the scale
of our national interest because of their international complexion
Ct. No. 06-00156 Page 22
is a uniquely compelling justification for prompt judicial
resolution of the controversy over the Board's power.”). The court
also does not find that the problems of delay suffice to warrant
expedition. Although the court can appreciate that the requirement
of posting cash deposits may have deleterious effects on the
competitive position of a firm (especially over time), this is a
problem many (if not all) litigants face before the Court.
Therefore, there is nothing “extraordinary” here that warrants this
case taking priority over other cases pending before the court.
Therefore, Plaintiffs’ motion to expedite is denied, and this
matter will be decided in the ordinary course of consideration by
the court.
II. Motion to Intervene
The Coalition seeks to intervene as a matter of right, or, in
the alternative, by leave of the court. Intervention is governed
by 28 U.S.C. § 2631(j) and USCIT R. 24(a). Section 2631(j)
provides that:
(1) Any person who would be adversely affected or
aggrieved by a decision in a civil action pending in the
Court of International Trade may, by leave of court,
intervene in such action, except that--
(A) no person may intervene in a civil action under
section 515 or 516 of the Tariff Act of 1930 [19
U.S.C. §§ 1515 or 1516];
(B) in a civil action under section 516A of the
Tariff Act of 1930 [19 U.S.C. § 1516a], only an
interested party who was a party to the proceeding
in connection with which the matter arose may
intervene, and such person may intervene as a
matter of right; and
Ct. No. 06-00156 Page 23
(C) in a civil action under section 777(c)(2) of
the Tariff Act of 1930 [19 U.S.C. § 1677f(c)(2)],
only a person who was a party to the investigation
may intervene, and such person may intervene as a
matter of right.
(2) In those civil actions in which intervention is by
leave of court, the Court of International Trade shall
consider whether the intervention will unduly delay or
prejudice the adjudication of the rights of the original
parties.
As implemented into the Court rules, USCIT R. 24(a) & (b) provide,
in relevant part,
(a) Upon timely application anyone shall be permitted
to intervene in an action: (1) when a statute of the
United States confers an unconditional right to
intervene; or (2) when the applicant claims an interest
relating to the property or transaction which is the
subject of the action and the applicant is so situated
that the disposition of the action may as a practical
matter impair or impede the applicant’s ability to
protect that interest, unless the applicant’s interest
is adequately represented by existing parties. . . .
(b) Permissive Intervention. Upon timely application
anyone may be permitted to intervene in an action: (1)
when a statute of the United States confers a
conditional right to intervene; or (2) when an
applicant's claim or defense and the main action have
a question of law or fact in common. . . . In
exercising its discretion, the court shall consider
whether the intervention will unduly delay or prejudice
the adjudication of the rights of the original parties.
Although USCIT R. 24(a) provides two scenarios where a motion for
intervention as of right can be granted, i.e., (i) when provided
for in statute or (ii) when the party has an interest in the
dispute, section 2631(j) does not appear to contemplate
intervention as of right except when intervention as of right was
Ct. No. 06-00156 Page 24
explicitly provided for in 2631(j)(1)(A)-(C).
The court need not wrestle with this question here, however,
because the Coalition has also moved for permissive intervention.
As provided in section 2631(j) -- the statutory basis creating a
“conditional right to intervene” – permissive intervention is
appropriate (1) when the proposed intervenor would be “adversely
affected or aggrieved by a decision in a civil action pending in
the Court of International Trade”; and (2) the court is satisfied
that (a) intervention will not unduly delay or prejudice the
adjudication of the rights of the original parties and (b) the
motion is “timely.”12
The phrase “adversely affected or aggrieved,” which mirrors
the language in numerous statutes, including the Administrative
Procedure Act, 5 U.S.C. § 702, represents a “congressional intent
to cast the [intervention] net broadly -- beyond the common-law
interests and substantive statutory rights" traditionally known to
law. Fed. Election Comm'n v. Akins, 524 U.S. 11, 19 (1998).
Here, the Coalition has sufficient interest in the outcome of this
case. Although countervailing duty investigations and reviews are
described as “investigatory in nature,” they also resemble, in
some respects, adjudications between domestic and foreign parties
12
The court notes that here jurisdiction is founded under 28
U.S.C. § 1581(i). Section 2631(j) of Title 28 allows permissive
intervention in such suits. In contrast, under 28 U.S.C. §
1581(c), intervention may only be sought as a matter of right.
See 28 U.S.C. § 2631(j)(B).
Ct. No. 06-00156 Page 25
where the agency adjudicates the matter. Cf. NEC Corp. v. United
States, 151 F.3d 1361, 1371 (Fed. Cir. 1998). The issue before
the appropriate agencies, generally speaking, is establishing the
appropriate level of competition (as defined by the trade laws)
between importers and domestic industries. Cf. id. at 1376;
Canadian Lumber Trade Alliance v. United States, 30 CIT ___, 425
F. Supp. 2d 1321, 1353 (2006) (noting the purpose of antidumping
and countervailing duty laws is to regulate the level of
competition between importers and domestic industry). Because
binational panels may sustain or remand the results of these
investigations, they too affect the level of competition as
between importers and the domestic industries. As these
principles specifically relate to this case, the timing and
effects of an ECC (or a settlement) will directly impact the
competitive position of the domestic industry vis-a-vis their
Canadian competitors. Consequently, the Coalition’s members will
be directly affected by the outcome of this adjudication.
Nor would the Coalition’s intervention “unduly delay or
prejudice” the adjudication of this matter. The Coalition’s
motion to intervene predated the Defendants’ motion to dismiss and
the Coalition filed all of its papers along the same time-line as
the Defendants. Nevertheless, Plaintiffs argue that “intervention
always delays the resolution of judicial proceedings[,]” and,
therefore, the Coalition’s motion should be denied. Petitioner’s
Ct. No. 06-00156 Page 26
Resp. Mot. Intervene Coalition Fair Lumber Imports Executive
Committee 10 (emphasis added). While assuredly true, if the court
were to accept this proposition, it would essentially be holding
that permissive intervention can never be permitted. This, in
turn, would essentially strip section 2631(j)(1)&(2) of all force
or effect.
Recognizing this problem, the statute and rule do not state
that any delay warrants denial of a motion to intervene, but only
that undue delay warrants such denial. Opponents of a motion to
intervene, therefore, must allege that the delay would be “more
than is due or proper: excessive[]” XVIII Oxford English
Dictionary 1011-12 (8th ed. 2002) (forth definition); cf. id. at
1010 (defining “undue” as to “go[] beyond what is appropriate,
warranted, or natural; [be] excessive.”). Consequently, by
arguing that delay is typical whenever a party intervenes,
Plaintiffs’ argument in the abstract fails to prove why permitting
intervention would be improper here. Nor does the court find
that concerns of undue delay are warranted on the facts of this
case. The Coalition largely raises the same arguments raised by
Defendants (albeit sometimes in a more developed form), thereby
only modestly increasing the burden on Plaintiffs.13 Furthermore,
13
As mentioned above, USCIT R. 24(a) requires that
intervenors must file a pleading along with their motions. This
pleading allows the court to assess whether the proposed
intervenors will positively, and in good-faith, contribute to the
proceedings.
Ct. No. 06-00156 Page 27
given that the court has an independent duty to ascertain whether
it has jurisdiction in this matter, because many of the arguments
the Coalition raises are jurisdictional in nature, the additional
research and argument may even save the court research (and,
therefore, time).
Accordingly, exercising its discretion under section 2631(j)
and USCIT R. 24(b), the court grants the Coalition’s motion to
intervene. Cf. Stringfellow v. Concerned Neighbors in Action, 480
U.S. 370, 380 (1987) (“a district judge's decision on how best to
balance the rights of the parties against the need to keep the
litigation from becoming unmanageable is entitled to great
deference.”).
III. Motions to Dismiss under Rule 12(b)(1)
Defendants and the Coalition argue that this court lacks
jurisdiction here, inter alia, because Plaintiffs lack standing
and this matter is precluded from the court’s jurisdiction under
28 U.S.C. § 1581(i). The court will address each in turn.
(A) Standing
In order to commence an action before the Court, Plaintiffs
must establish that their actions present a “case or controversy”
within the meaning of Article III of the United States
Constitution. See, e.g., DaimlerChrysler Corp. v. Cuno, 548 U.S.
Ct. No. 06-00156 Page 28
__, No. 04-1704, Slip Op. at 4-6 (2006). “If a dispute is not a
proper case or controversy, the courts have no business deciding
it, or expounding the law in the course of doing so.” Id. at 5.
One of the core components of this “case or controversy”
requirement is whether the complaining parties have standing to
raise their claims. Id.; see also Canadian Lumber Trade Alliance
v. United States, 30 CIT ___, 425 F. Supp. 2d 1321, 1373 (2006).
To establish standing, plaintiffs bear the burden of proving that:
(1) that [they] have suffered an "injury in fact"--an
invasion of a judicially cognizable interest which is
(a) concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical; (2) that
there be a causal connection between the injury and the
conduct complained of--the injury must be fairly
traceable to the challenged action of the defendant,
and not the result of the independent action of some
third party not before the court; and (3) that it be
likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.
Bennett v. Spear, 520 U.S. 154, 167 (1997) (citing Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992)).
Plaintiffs here allege that they are injured by the
unauthorized delay in the binational panel/ECC proceedings. This
delay, they assert, requires them to continue to post cash-
deposits, and delays (perhaps indefinitely) the return of cash-
deposits previously tendered. This, in turn, deprives Plaintiffs
of the time-value of money, imposes transaction costs in securing
credit to cover cash-deposits, and may (if the ECC proceedings
never resume) deprive Plaintiffs of money. No reasonable mind
Ct. No. 06-00156 Page 29
could doubt that this is a judicially cognizable injury sufficient
to satisfy the injury in fact test for Article III standing. See,
e.g., Gen. Motors Corp. v. Tracy, 519 U.S. 278, 287 (1997)
(finding that an imposition of a tax was “plainly” a cognizable
injury); Bacchus Imps., Ltd. v. Dias, 468 U.S. 263, 267 (1984)
(same).14
What is more problematic for Plaintiffs, however, is the
question of redressibility. As noted above, an ECC has three
members, one selected by Canada, one by the United States, and one
by the party chosen by lot. Therefore, even if the United States
14
Nevertheless, the Defendants argue that because Plaintiffs
have no constitutionally protected right to import, they fail to
have a cognizable injury. This argument (a) impermissibly
conflates the standing inquiry with a merits analysis, see, e.g.,
ASARCO Inc. v. Kadish, 490 U.S. 605, 624 (1989) (standing is a
threshold inquiry that "in no way depends upon the merits of the
[claim]" (quoting Warth v. Sheldin, 490 U.S. 422 U.S. 490, 500
(1975)); Ass'n of Data Processing Service Org., Inc. v. Camp, 397
U.S. 150, 153 (1970); Canadian Lumber Trade Alliance, 30 CIT at
___, 425 F. Supp. 2d at 1343-44; accord Gilda Indus. Inc. v.
United States, 446 F.3d 1271, 1279 & 1284 (Fed. Cir. 2006)
rehearing den’d 2006 U.S. App. LEXIS 16812 (July 6, 2006)
(finding standing but dismissing, in part, the case on the merits
because plaintiff did not have a constitutional right to the
maintenance of an existing tariff rate or duty); (b) relies on a
logic long ago abandoned by the Supreme Court, Canadian Lumber
Trade Alliance, 30 CIT at ___, 425 F. Supp. 2d at 1343-44; and
(c) is contradicted by twenty-six years of history, i.e., because
standing is an “indispensable constitutional minimum [which] [n]o
act of Congress may displace,” such an argument, if adopted,
would essentially abolish much of the jurisdiction assigned to
this court and negate many decisions decided by it, id. at 1338
n.17 (2006). Although the court appreciates that standing is a
difficult concept, it has extensively reviewed applicable case
law to assist the parties in appropriately considering the issue.
See id. at 1335-49.
Ct. No. 06-00156 Page 30
were to appoint its member, the ECC could still be incomplete.
Because commissioning an ECC will require Canada’s independent
action, none of the injuries for which Plaintiffs complain would
likely be redressed simply by compelling the USTR to appoint the
United States’ member. Cf. Defenders of Wildlife, 504 U.S. at
569-71 (finding redressibility not met where agencies not before
the court made the ultimate decision); DaimlerChrysler Corp., 548
U.S. at __, Slip. Op. at 8 (holding that it is pure speculation
how elected state officials will pass along a tax surplus); but
cf. id. at 13-14 (noting that municipal taxpayers have standing to
challenge the illegal use of municipal monies (and, perhaps, that
redressibility in that context is not too speculative)); Sacilor,
Acieries et Laminoirs de Lorraine v. United States, 815 F.2d 1488,
1491 (Fed. Cir. 1987).
Addressing this concern, Plaintiffs point to the notice they
received from the Governments of Canada and the United States
which
advise[d] participants that the briefing schedule set by
the Rules is suspended, such that participants need not
file briefs or other submissions unless and until they
receive notice that either Canada or the United States
has decided that this proceeding should move forward.
Suspension Notice, Attach. C to Def's Resp. Ct.'s Order May 26,
2006 (emphasis added). Plaintiffs aver that if either Canada or
the United States decides that this proceeding should move forward
then, under the terms of the Suspension Notice, the ECC process
Ct. No. 06-00156 Page 31
will resume. Plaintiffs’ argument necessarily assumes that the
appointment of one member to the ECC means that the “United States
has decided that this proceeding should move forward.” However,
it is less than clear that, because one member of the ECC has been
appointed, the United States will (or has) necessarily decide(d)
that the ECC should move forward. To the contrary, because only
the governments themselves are parties to the ECC proceedings, any
movement by the ECC would appear to depend on the efforts of at
least one of the governments to brief the matter even if an ECC is
established.
(B) Statutory Jurisdiction
Even assuming standing, however, Plaintiffs have another
insurmountable obstacle in raising its case: the court’s equitable
discretion in exercising jurisdiction.
Plaintiffs raise their claim under 28 U.S.C. § 1581(i).
Section 1581(i) provides:
In addition to the jurisdiction conferred upon the
Court of International Trade by subsections (a)-(h) of
this section and subject to the exception set forth in
subsection (j) of this section, the Court of
International Trade shall have exclusive jurisdiction
of any civil action commenced against the United
States, its agencies, or its officers, that arises out
of any law of the United States providing for–
(1) revenue from imports or tonnage;
(2) tariffs, duties, fees, or other taxes on the
importation of merchandise for reasons other than
the raising of revenue;
(3) embargoes or other quantitative restrictions
Ct. No. 06-00156 Page 32
on the importation of merchandise for reasons
other than the protection of the public health or
safety; or
(4) administration and enforcement with respect
to the matters referred to in paragraphs (1)-(3)
of this subsection and subsections (a)-(h) of
this section.
This subsection shall not confer jurisdiction over an
antidumping or countervailing duty determination which
is reviewable either by the Court of International
Trade under section 516A(a) of the Tariff Act of 1930
[19 U.S.C. § 1516a(a)] or by a binational panel under
article 1904 of the North American Free Trade
Agreement or the United States-Canada Free-Trade
Agreement and section 516A(g) of the Tariff Act of
1930 [19 U.S.C. § 1516a(g)].
Defendants and the Coalition claim that this is a “matter”
arising from a final determination being reviewed by a binational
panel. Therefore, the argument goes, the court’s jurisdiction is
precluded over this matter.
In assessing whether jurisdiction is proper, the court must
determine (1) what agency action is being contested, (2) whether
the jurisdictional provision embraces that challenged agency
action, and (3) whether jurisdiction contesting that action exists
elsewhere or is otherwise exempted from the court’s jurisdiction.
See Gilda Indus. Inc. v. United States, 446 F.3d 1271, 1275-76
(Fed. Cir. 2006), rehearing den’d 2006 U.S. App. LEXIS 16812 (July
6, 2006); Shinyei Corp. of Am. v. United States, 355 F.3d 1297,
1304-05(Fed. Cir. 2003); Consol. Bearings Co. v. United States, 348
F.3d 997, 1001-02 (Fed. Cir. 2003); Tembec, Inc. v. United States,
30 CIT ___,___, Slip Op. 06-109 at 23 (July 21, 2006). In
Ct. No. 06-00156 Page 33
considering these questions, the court must be mindful of the
entity against whom the action is brought and the remedy that
Plaintiffs are seeking. See, e.g., Megapulse, Inc. v. Lewis, 672
F.2d 959, 968 (D.C. Cir. 1982) (a jurisdiction inquiry “depend[ed]
both on the source of the rights upon which the plaintiff bases its
claims, and upon the type of relief sought”); cf. Wilkinson v.
Dotson, 544 U.S. 74, 82 (2005) (holding that the relief sought was
relevant to whether jurisdiction was proper under 42 U.S.C. § 1983
or 28 U.S.C. § 2254).
Here, the complaint claims that the USTR has failed to timely
appoint a member to the ECC. The relevant agency action,
therefore, is the USTR’s failure (or delay) in acting. Cf. Action
on Smoking & Health v. Dept. of Labor, 28 F.3d 162, 163-64 (D.C.
Cir. 1994) (holding that inaction and delay can be “final agency
actions”). Contrary to the contention of Defendants and the
Coalition, the challenged agency action is not a challenge to the
legality of a countervailing duty final determination -- it is not
directed against the agencies charged with issuing such
determinations nor do the Plaintiffs ask this court to invalidate
or address the legality any such determination. Similarly, the
complaint is not “in essence” a challenge to such a determination.
Section 1581(i)(4) of Title 28 provides jurisdiction over the
administration and enforcement of the subject matters specified in
section 1581(i)(1)-(3). The challenged agency action relates to
Ct. No. 06-00156 Page 34
the administration and enforcement of the laws regulating “tariffs,
duties, fees” and is not a final determination reviewable before a
binational panel. It is therefore within the subject matters
specified in section 1581(i)(1)-(3). As such, the court has
jurisdiction over this action. See Tembec, Inc., 30 CIT ___, Slip
Op. 06-109 at 20 n.19.
But just because this court does have jurisdiction over a
subject matter does not mean that a court must exercise that
jurisdiction in all cases. Although courts have a “virtually
unflagging obligation” to exercise jurisdiction which is conferred
by Congress, Colo. River Water Conservation Dist. v. United
States, 424 U.S. 800, 821 (1976) (Stevens J, dissenting), federal
courts do have the power to dismiss or remand a case based on
abstention principles where the relief being sought is equitable or
discretionary, see Quackenbush v. Allstate Ins. Co., 517 U.S. 706,
730 (1996). Plaintiffs here seek a writ of mandamus. Mandamus
relief is both equitable and discretionary in nature. See Decca
Hospitality Furnishings, LLC v. United States, 30 CIT ___, ___, 427
F. Supp. 2d 1249, 1256 (2006); see also Mertens v. Hewitt Assocs.,
508 U.S. 248, 256 (1993). Therefore, the question becomes: is
abstention warranted?
Typically, “courts . . . .grapple with the issue of abstention
in the context of parallel state court proceedings . . . .
Nevertheless, in the interest of international comity, [courts]
Ct. No. 06-00156 Page 35
apply the same general principles with respect to parallel
proceedings in a foreign court.” Finova Capital Corp. v. Ryan
Helicopters U.S.A., Inc., 180 F.3d 896, 898 (7th Cir. 1999)
(emphasis added). If international comity warrants abstention, the
court may dismiss the case.
To be sure, “comity” is an amorphous concept -- it “is neither
a matter of absolute obligation, on the one hand, nor of mere
courtesy and good will, upon the other.” Hilton v. Guyot, 159 U.S.
113, 163-164 (1895). The Supreme Court has characterized it as the
“spirit of cooperation in which a domestic tribunal approaches the
resolution of cases touching the laws and interests of other
sovereign states.” Société Nationale Industrielle Aérospatiale v.
United States Dist. Ct., 482 U.S. 522, 543 n.27 (1987). It is a
proposition which recognizes that U.S. courts should restrain their
own action so as not to needlessly undermine the rules and
procedures of a foreign court, and that it is not the role of U.S.
courts to interfere with foreign courts’ abilities to create and
enforce their own rules in the manner they see fit. Cf. In re
Maxwell Commc’n Corp., 93 F.3d 1036, 1047 (2d Cir. 1996).
Before considering whether comity counsels in favor of
abstention, the court must first determine whether the binational
panels constitute foreign parallel proceedings for which this court
should grant regard or comity. As discussed above, the binational
panel review system creates a parallel procedure for the
Ct. No. 06-00156 Page 36
adjudication of trade disputes. Those proceedings are both
adequate and complete – they have their own rules, procedures and
enforcement mechanisms. When a binational panel needs assistance
from foreign courts, both their rules, and U.S. law, permit courts
of this country to grant such assistance. The legislative history
also reveals that Congress intended for binational panels to be a
“substitute” for the Court of International Trade. S. Rep. No.
100-509, at 31 (1988), as reprinted in 1988 U.S.C.C.A.N. 2395,
2426; see also id. at 34, 1988 U.S.C.C.A.N. at 2426 (noting the
U.S. courts may consider panel decisions commensurate with their
power to persuade). Therefore, the court finds that, for the
purpose of considering the action discussed here, review by
binational panels, for in all intents and purposes, constitutes
“proceedings in a foreign court.” See In re: Rolled Steel Plate
Imports Originating in or Imported from Canada, Secretariat File
No. MEX-96-1904-02, at 23-25 (Dec. 17, 1997) (review of the final
determination of the antidumping investigation), available at
http://www.nafta-sec-alena.org/app/DocRepository/1/Dispute/englis
h/NAFTA_Chapter_19/Mexico/ma96020e.pdf (arguing that binational
panels are jurisdictional, rather than arbitral, tribunals).
Accord Medellin v. Dretke, 544 U.S. 660, 670 (2005) (Ginsburg, J.
concurring) (arguing that the same comity principles U.S. courts
apply to foreign courts should apply to the International Court of
Justice); Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S.
Ct. No. 06-00156 Page 37
241, 258 (2004) (construing the phrase “foreign or international
tribunal,” as used in 28 U.S.C. § 1782(a), to include the
Commission of the European Communities).
The next question is, do principles of comity counsel in favor
of abstention? In this case, Plaintiffs are alleging that the USTR
is violating the rules of the binational panel review system and
thereby preventing the timely and efficient adjudication of their
claims. As for relief, the Plaintiffs are essentially asking the
court to step in and enforce the rules of the ECC (and binational
panel review) or have the matter transferred to the Court of
International Trade. The court finds this request highly
intrusive.
First, NAFTA rules explicitly provide a remedy when a member
state fails to timely appoint its panelists to the binational
panel; however, NAFTA does not provide any remedy in the event a
member state fails to timely appoint it members to the ECC.
Compare NAFTA art. 1901.2(2), 32 I.L.M. at 687 (creating a
procedure for the establishment of a panel in the event an involved
government does not timely select a panelist) with NAFTA annex
1904.13, 32 I.L.M. at 688. Simiarly, NAFTA has procedures for when
the laws of member states frustrate the ability of the binational
panel system to function. See NAFTA art. 1905, 32 I.L.M. at 684
(creating remedies when a member state’s law impairs the ability of
the binational panel review system). These provisions strongly
Ct. No. 06-00156 Page 38
suggest that when the NAFTA parties wanted to prevent each other
from escaping or limiting the binational proceedings, the parties
created remedies; therefore, when the NAFTA parties left a
violation or limitation without a remedy, they did so
intentionally.
Second, as noted above, NAFTA and the NAFTA Implementation Act
explicitly require U.S. courts to render assistance, upon request
of a binational panel or ECC, when such assistance is necessary.
See 19 U.S.C. § 3433. As such, U.S. courts should be reluctant to
step in when no request is made. In addition, the NAFTA
Implementation Act precludes judicial review of constitutional
challenges, either to the binational panel review system or of the
underlying trade law, until the binational panel review is
complete. See 19 U.S.C. § 1516a(g)(4)(C); Am. Coal. for
Competitive Trade v. Clinton, 128 F.3d 761, 765-66 (D.C. Cir.
1997). This evidences a strong Congressional intent to leave the
binational panel system free from judicial interference.
Third, NAFTA requires the member states to adopt “rules of
procedure.” NAFTA, art. 1904(14), 32 I.L.M. at 684. Giving
guidance on the substance of those rules, NAFTA further states that
those rules should be based on “judicial rules of appellate
procedure.” Id. Given that the allowance for settlement
discussions is an important part of appellate procedure, see, e.g.,
Fed. R. App. P. 33; Rules for Regulating the Practice and Procedure
Ct. No. 06-00156 Page 39
in the Federal Court of Appeal and the Federal Court, Part 9,
available at http://www.canlii.org/ca/regu/sor98-106/sec389.html
(Canadian Rules of Appellate Procedure), such allowances may
certainly be contemplated by NAFTA.15
Fourth, as for Plaintiffs’ request to have this matter
transferred,16 U.S. law permits U.S. courts to review cases only
when panel review has been suspended pursuant to NAFTA art. 1904 &
1905, 32 I.L.M. at 683-85. See 19 U.S.C. § 1516a(g)(12)
(addressing the transfer of cases to the Court of International
Trade upon the suspension of binational panel reviews); see also
NAFTA art. 1905, 32 I.L.M. at 684-85 (creating special committees
to review when a members state’s law is frustrating the binational
panel review system). To usurp jurisdiction of a matter committed
to a “substitute” judicial system would unquestionably be
intrusive.17
15
Plaintiffs do make a strong argument that the rules do not
permit proceedings being held indefinitely in abeyance pending
settlement talks. However, when “the parties to a treaty both
agree as to the meaning of a treaty provision, and that
interpretation follows from the clear treaty language, [the
court] must, absent extraordinarily strong contrary evidence,
defer to that interpretation.” Sumitomo Shoji Am., Inc. v.
Avagliano, 457 U.S. 176, 185 (1982).
16
It is not entirely clear what the Plaintiffs are exactly
seeking. If their claim is that, in the event the proceedings
are suspended, the matter should be transferred, this question
surely is not ripe for review.
17
It appears from the NAFTA rules that the binational panel
is still in existence and parties may be able to petition it for
relief, i.e., claim that the ECC process has been abandoned and,
Ct. No. 06-00156 Page 40
Finding that this court’s intervention would be highly
intrusive, the court must balance the interests of Plaintiffs with
the interests of the binational review system and the other
participants involved in that review. See Ungaro-Benages v.
Dresdner Bank AG, 379 F.3d 1227, 1238 (11th Cir. 2004). As
mentioned above, Plaintiffs do have an interest in the timely and
efficient adjudication of their claims. Nonetheless, if this
matter is resolved by settlement, it may actually expedite
Plaintiffs relief.18 Moreover, if a settlement is reached, this
may moot the ongoing ECC challenge rendering all efforts taken in
connection therewith nugatory.
Perhaps more importantly, the judiciary has a strong interest
in favoring the amicable resolution of disputes through settlement.
See, e.g., Parker v. Anderson, 667 F.2d 1204, 1209 (5th Cir. 1982);
Fed. R. App. P. 33. Given the importance of the issue to both the
governments of Canada and the United States, and the important
interests of other parties involved in this dispute in an amicable
therefore, a "Notice of Completion of Panel Review" has
constructively been issued.
18
There are several pending cases challenging various
aspects of the binational review process, including the
constitutionality thereof. See, e.g., Tembec, Inc. v. United
States, 30 CIT ___, Slip Op. 06-109 (July 21, 2006); Coalition
for Fair Lumber Imps. Executive Comm. v. United States, No.
05-1366 (D.C. Cir.) (challenging the constitutionality of the
binational panel proceedings). Absent settlement, any one of
these proceedings could delay resolution of this matter, even if
the ECC affirms the panel in its review.
Ct. No. 06-00156 Page 41
and final resolution of the controversy, there is a strong reason
to allow the settlement discussions to proceed unhindered by the
interference of U.S. courts.
The court is also mindful of the fact that the delay thus far
(especially if measured from the time Plaintiffs filed the
complaint) has not been substantial and that both governments
appear to be attempting to negotiate in good-faith a resolution to
this matter. Cf. Sumitomo Shoji Am., 457 U.S. at 185 (noting that
courts must give respectful consideration to the opinions of the
treaty partners). If this were a matter where the United States
lost before a panel, appealed to an ECC, and then unduly obstructed
or interfered with the proceedings before the ECC, cf. Medellin v.
Dretke, 544 U.S. 660, 666 (2005) (noting that alternative state
courts may provide relief), the result might be different, cf.
Woodford v. Ngo, 548 U.S. ___, No. 05–416, Slip Op. at 20-21 (Mar.
22, 2006) (holding that an administrative procedure at issue was
not so burdensome as to cast doubt on the Court’s interpretation of
an exhaustion requirement).19
Therefore, exercising the court’s equitable discretion, the
court declines to entertain Plaintiffs’ request that the court
19
Plaintiffs also raise a Fifth Amendment claim that they
are being deprived of property without due process of law.
Because the proceedings before the ECC have just been stayed, the
court does not find this question ripe for review. See Dames &
Moore v. Regan, 453 U.S. 654, 688-89 (1981) (Part V of the
opinion).
Ct. No. 06-00156 Page 42
order the USTR to appoint a member to the ECC, but rather abstains
from proceeding with this matter because to do so would be to
interfere with the NAFTA proceedings.
CONCLUSION
For the foregoing reasons, the court denies Plaintiffs motion
for expedited consideration, grants the Coalition’s motion to
intervene, and grants the Defendants’ Coalition’s motion to dismiss
for lack of jurisdiction.
New York, New York
August 2, 2006
/s/ Donald C. Pogue
Donald C. Pogue, Judge