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A Tale of Two Appellate Decisions

Writer's picture: Neil EllisNeil Ellis

Updated: Jul 24, 2021

The Court of Appeals for the Federal Circuit issues relatively few substantive decisions within its trade jurisdiction, and a month or more can pass without a single precedential decision in that field. So it was unusual that three precedential trade decisions were issued on consecutive days during the past week – TransPacific Steel LLC v. United States (No. 20-2157) on Tuesday, TR International Trading Co. v. United States (No. 20-1830) on Wednesday, and Stupp Corp. v. United States (No. 20-1857) on Thursday. This note addresses the first two; analysis of the third opinion, while interesting, will have to wait.


Considering the first two opinions, TransPacific immediately looks important, while TR International appears narrow and technical. But when considered through the prism of litigation planning for U.S. importers, the latter opinion is at least as important as the former.


The importance of TransPacific is evident because it confronts questions of the balance of power among the branches of government. In particular, the Court of Appeals was asked to interpret an expansive statutory delegation of authority to the Executive Branch in light of the U.S. Constitution’s vesting the Legislature with exclusive authority to regulate foreign trade and impose taxes and tariffs. U.S. Const., Art. I, § 8. As we have all learned over the past few years, Section 232 of the Trade Expansion Act of 1962, 19 U.S.C. § 1862, delegated authority to the President to take a range of trade-related actions in order to alleviate a threat to the national security posed by imports. Both the term “national security” and the range of actions that the President may take are broadly defined. But the statute spells out in detail the procedures to be followed and deadlines that “shall” be met, before such actions may be taken. In its simplest terms, the question in TransPacific is whether those deadlines are mandatory.


In reaching a negative answer to that question, the majority opinion attempted to avoid potential constitutional issues by carefully parsing the statutory language and legislative intent. The opinion rested, in part, on the meaning of the word “action” as found in the statute – as distinguished from the word “act” – and on the intent of Congress in amending the Act in 1988, where the legislative history made clear the Congressional frustration with Presidential inaction in previous cases. Judge Reyna, in dissent, addressed the constitutional issues directly, by arguing that, in light of the Constitution’s vesting of trade regulatory authority in the Legislative Branch, Congressional delegations of that authority to the Executive Branch should be interpreted narrowly. Relying on this underlying principle, the dissent dismissed the majority’s interpretation of the law as “statutory leapfrog, hopping here and there but ignoring what it has skipped.” Slip Op. at 56.


The importance of TransPacific is indisputable in terms of broad issues of the relations among the three branches of government in the regulation of trade. However, the practical significance of the Court’s decision in TR International should not be overlooked. Here, the Court of Appeals broke no new ground, but reaffirmed its consistent position that jurisdiction for judicial review of the trade agencies’ decisions cannot be invoked through the “residual” provision of 28 USC § 1581(i) when direct substantive review options exist.


TR International involved a determination by U.S. Customs and Border Protection that the processing of a food additive (citric acid) in India was not sufficient to establish Indian country of origin. Because the country of origin of the primary input was unknown, CBP presumed that it was of Chinese origin – and hence subject to the U.S. anti-dumping and countervailing duty orders (and tariffs) on Citric Acid from China. The importer challenged CBP’s determination both by protest and launching a lawsuit pursuant to the Court of International Trade’s residual jurisdiction under Section 1581(i), claiming, inter alia, that CBP’s actions were ultra vires and procedurally defective. The Court of International Trade dismissed the lawsuit, and the Court of Appeals affirmed.

The Court noted that other avenues for judicial review were available and that 1581(i) “‘may not be invoked when jurisdiction under another subsection of [section] 1581 is or could have been available, unless the remedy provided under that other subsection would be manifestly inadequate’.” Slip Op. at 6 (quoting Sunpreme Inc. v. United States, 892 F.3d 1186, 1191 (Fed. Cir. 2018)). Here, the Court noted that the denial of a protest may be subject to judicial review under subsection (a) of Section 1581. Likewise, to the extent that the importer was challenging a finding that the Indian merchandise fell within the “scope” of the Citric Acid orders, the Court of Appeals noted that the Department of Commerce has the authority to interpret the scope of anti-dumping and countervailing duty orders, and that scope rulings are also expressly subject to judicial review under subsection (c) of Section 1581.


In light of this well-established precedent, it is important, when preparing a litigation strategy, to identify the correct jurisdictional bases and to remain aware of the applicable deadlines for judicial review. Although the timing issue did not arise in TR International, jurisdictional deadlines cannot be extended, and residual jurisdiction cannot be invoked to elide the expiration of deadlines under the proper jurisdictional bases. In light of the increasingly expansive application of circumvention and scope determinations by Commerce and CBP’s increasingly rigorous application of duties on entries, this lesson is as important as the separation of powers issue handled by the Court in TransPacific.

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