Silfab Solar, Inc. v. United States

Slip Op. 18-30
UNITED STATES COURT OF INTERNATIONAL TRADE
SILFAB SOLAR, INC., et al.,
Plaintiffs,
v.
UNITED STATES, et al.,
Before: Timothy C. Stanceu, Chief Judge
Defendants,
Court No. 18-00023
and
SOLARWORLD AMERICAS,
INC., et al.,
Defendant-Intervenors.
OPINION AND ORDER
[Granting plaintiffs’ motion for expedited consideration and denying plaintiffs’ motion for an
injunction, and for a stay, pending appeal]
Dated: March 26, 2018
Jonathan T. Stoel, Hogan Lovells US, LLP, of Washington, D.C., for plaintiffs. With
him on the motions were Craig A. Lewis, Mitchell P. Reich, Michael G. Jacobson, and Robert B.
Wolinksky.
Stanceu, Chief Judge: On March 5, 2018, the court denied the motion of plaintiffs Silfab
Solar, Inc., Heliene, Inc., Canadian Solar (USA), Inc., and Canadian Solar Solutions, Inc. for a
temporary restraining order and a preliminary injunction. Silfab Solar, Inc. v. United States, Slip
Op. 18-15, 2018 WL 1176619 (Mar. 5, 2018), ECF No. 47 (“Silfab I”). In their motion for this
equitable relief, plaintiffs sought to enjoin defendants from subjecting plaintiffs’ products to
“safeguard” measures, in the form of temporary import duties, that the United States imposed,
beginning February 7, 2018, on imports of certain crystalline silicon photovoltaic (“CSPV”) cells
Court No. 18-00023 Page 2
and certain products (including “modules”) that contain such cells. The United States imposed
the safeguard measures by means of a presidential proclamation (the “Proclamation”), issued
January 23, 2018 pursuant to section 203 of the Trade Act of 1974, 19 U.S.C. § 2253. 1
Proclamation No. 9693, 83 Fed. Reg. 3541 (Jan. 25, 2018) (the “Proclamation”).
Plaintiffs have appealed the court’s order denying their motion for equitable relief.
Notice of Appeal (Mar. 21, 2018), ECF No. 49. Before the court are two motions plaintiffs make
pursuant to their interlocutory appeal of that order.
Plaintiffs’ first motion seeks an injunction preventing defendants from taking any action
to impose or enforce the Proclamation with respect to their products, and a stay of proceedings in
this Court, pending the appeal. Pls.’ Mot. For Inj. Pending Appeal and Stay of Dist. Ct.
Proceedings During Appeal of Prelim. Inj. Ruling (Mar. 21, 2018), ECF No. 50 (“Inj. and Stay
Mot.”). All defendants oppose this motion, with respect to both an injunction and a stay. Id.
at 3, 5.
In the second motion, plaintiffs seek an expedited ruling on their first motion. Pls.’ Mot.
For Expedited Consideration of Mot. For Inj. Pending Appeal and Stay of Dist. Ct. Proceedings
(Mar. 21, 2018), ECF No. 51. Plaintiffs’ second motion seeks, in the alternative, an extension of
time to respond to a motion to dismiss, which was filed on February 20, 2018 by defendant U.S.
International Trade Commission (the “ITC”), until their first motion is resolved. Id. at 2; see
Mot. to Dismiss and Mem. in Supp. of Mot. to Dismiss of Def. U.S. Int’l Trade Commission
(Feb. 20, 2018), ECF No. 33.
The court grants the motion to expedite and, accordingly, now rules on plaintiffs’ first
motion. The court concludes that plaintiffs have not met the requirements for an injunction
1
All citations to the United States Code herein are to the 2012 edition.
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pending appeal. The court also decides against a stay of this litigation. Because the only action
now required of plaintiffs is a response to the ITC’s motion to dismiss, plaintiffs have not
convinced the court that a stay of proceedings is needed at this time.
I. BACKGROUND
Background on this litigation is presented in the court’s previous opinion and order,
Silfab I at 2-5, familiarity with which is presumed. The court issued that opinion and order on
March 5, 2018, denying plaintiffs’ motion for a temporary restraining order and a preliminary
injunction. That motion, like the instant motion, sought to prevent the United States from taking
any action to impose or enforce the Proclamation on plaintiffs’ products covered by the
Proclamation and from collecting any tariffs from plaintiffs pursuant to it. Compare Proposed
Prelim. Inj. Order (Feb. 7, 2018), ECF No. 10-16, with Proposed Inj. Pending Appeal Order
(Mar. 21, 2018), ECF No. 50-1 (“Proposed Inj. Order”).
II. DISCUSSION
A. Injunction Pending Appeal
Rule 62(c) of the Rules of this Court provides, in pertinent part, that “[w]hile an appeal is
pending from an interlocutory order . . . that . . . denies an injunction, the court may . . . grant an
injunction on terms for bond or other terms that secure the opposing party’s rights.” USCIT
R. 62(c). In considering motions for injunctions pending appeal, courts have examined
(1) whether the movant has made a strong showing that he is likely to succeed on the merits;
(2) whether the movant will be irreparably injured absent a stay; (3) whether issuance of the
injunction will substantially injure the other parties interested in the proceeding; and (4) where
the public interest lies. See generally 11A Charles Alan Wright, Arthur R. Miller & Mary Kay
Kane, Federal Practice and Procedure § 2904 (3d ed. 2013). These are essentially the same
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standards that apply to a grant or denial of a preliminary injunction in the first instance. The
burden on the proponent of an injunction to show a likelihood of success on the merits is
understood to be at least as high as, if not higher than, the original burden on the proponent of
the injunction. See Bayless v. Martine, 430 F.2d 873, 879 (5th Cir. 1970).
In ruling on plaintiffs’ motion for an injunction pending appeal, the court has
reconsidered the conclusions it reached in denying plaintiffs’ previous motion, which sought a
temporary restraining order and a preliminary injunction at the outset of this litigation. Upon
reviewing the relevant issues again, the court concludes that plaintiffs have not met their burden
for obtaining an injunction pending appeal.
1. Likelihood of Success on the Merits
In support of their motion for an injunction pending appeal, plaintiffs argue that “[a]t
minimum, Plaintiffs have raised ‘serious’ and ‘difficult’ questions of law in their motion for
temporary restraining order and preliminary injunction” and that “[s]pecifically, because the
United States International Trade Commission [“ITC”] did not issue a remedy
‘recommendation’ . . . the President lacked authority to impose the remedies imposed by the
Proclamation.” Inj. and Stay Mot. 3 (“Plaintiffs’ [sic] recognize that this Court did not agree
with their position, but that is immaterial to whether an injunction pending appeal should be
granted. It is enough that the questions of law are ‘serious’ and ‘difficult.’”).
In pointing to the ITC’s not having issued a remedy recommendation, plaintiffs refer to
their first claim in this litigation (“Count 1” in their complaint). They claim that the President
and the U.S. Trade Representative violated sections 201 and 203 of the Trade Act of 1974,
19 U.S.C. §§ 2251 and § 2253, by adopting a safeguard measure upon a report of the ITC that
did not comply with subsection (e) of section 202 of the Trade Act, 19 U.S.C. § 2252(e), in that
Court No. 18-00023 Page 5
it did not include a remedy recommendation that was on behalf of the Commission. Compl. ¶ 54
(Feb. 7, 2018), ECF Nos. 2 (public), 16 (conf.). The court concluded previously that plaintiffs
have not shown a likelihood of success on the merits of this claim. Silfab I at 9-30. The court
reaches the same conclusion again, for precisely the reasons the court stated in its previous
opinion and order. Noting the ITC’s affirmative finding that CSPV products were being
imported into the United States in such increased quantities as to be a substantial cause of serious
injury to the domestic industry, the court concluded that plaintiffs’ statutory interpretation did
not accord with the plain language, purpose, or legislative history of the statute. See id.
Regarding the statutory purpose, the court opined that “[t]he practical effect of plaintiffs’
interpretation is that the lack of an ITC remedy recommendation would negate the ITC’s
affirmative injury or threat determination,” preventing the President from acting in response to
the ITC’s finding of serious injury, “which is the very problem the statute was enacted to
address.” Id. at 19.
Upon reconsideration of the merits of plaintiffs’ other two claims, the court again
concludes that plaintiffs are unlikely to succeed on the merits of either of them. Here also, the
court reaches this conclusion for the reasons it stated in its previous opinion and order.
Plaintiffs claim, in Count 2 of their complaint, that the Proclamation violated section 312
of the North American Free Trade Agreement Implementation Act (the “NAFTA
Implementation Act”), 19 U.S.C. § 3372(d), by imposing a quantitative restriction that did not
permit the importation of a specified quantity or value of an article of Canada. Compl. ¶¶ 55-60.
They direct this claim to the inclusion in the Proclamation of a tariff-rate quota on CSPV cells.
The court questioned whether plaintiffs will be able to establish standing to assert this claim,
noting that plaintiffs did not allege that they produced or imported CSPV cells from Canada.
Court No. 18-00023 Page 6
Silfab I at 31. The court also mentioned that the Trade Act of 1974 regards tariff-rate quotas and
quantitative restrictions as distinct remedies. Id. at 31-32. Moreover, the court cast doubt on
plaintiffs’ argument that the tariff-rate quota at issue can be said not to “permit” the importation
of a specified quantity or value of CSPV cells from Canada. Id. at 32-33. In considering again
plaintiffs’ second claim, the court once more concludes that even were plaintiffs to establish
standing, they would be unlikely to show that the tariff-rate quota at issue is a “quantitative
restriction” within the meaning of 19 U.S.C. § 3372(d) or that it failed to permit the importation
of a specified quantity or value of CSPV cells from Canada.
Plaintiffs’ third claim, expressed in Count 3 of their complaint, is that the President
lacked authority to impose a restriction on CSPV products from Canada because the ITC found
that imports from Canada did not account for a substantial share of total imports and did not
contribute importantly to the serious injury, or threat thereof, caused by imports. Compl.
¶¶ 61-67. The court concluded that plaintiffs were unlikely to be successful on this claim
because the NAFTA Implementation Act permits, but does not require, the President to exempt
imports from a NAFTA country from a global safeguard imposed under section 203 of the Trade
Act of 1974. Silfab I at 34. Under the NAFTA Implementation Act, the two findings of the ITC,
i.e., that imports from Canada did not account for a substantial share of total imports and did not
contribute importantly to the serious injury, or threat thereof, caused by imports, were not
binding on the President, who is directed to make his own findings on these same two issues.
Id. at 35-36. The President’s findings of fact and exercise of judgment are not subject to judicial
review. Id. at 37-39. Considering again the third claim asserted in the complaint, the court
concludes, as it did previously, that plaintiffs are not likely to succeed on the merits of this claim.
Court No. 18-00023 Page 7
2. Irreparable Harm in the Absence of an Injunction Pending Appeal
Plaintiffs assert that the Proclamation “has struck a crushing blow to Plaintiffs’ respective
businesses, and each one has been forced to undergo significant operational changes, including
terminating dozens of employees, closing manufacturing facilities, and losing key customer
contracts.” Inj. and Stay Mot. 3. They add that “[a]bsent an injunction pending appeal, Plaintiffs
will continue to face debilitating harm, and there is a substantial likelihood that their claims
would be mooted by the time the appeal is resolved.” Id. (citation omitted).
The court, for purposes of ruling on their motion for injunctive relief, presumes, without
finding, that plaintiffs have met the requirement of showing irreparable harm in the absence of an
injunction pending appeal.
3. Whether the Injunction Will Substantially Injure the Other Parties Interested in the Proceeding
The injunction pending appeal that plaintiffs seek would enjoin U.S. officials, during the
pendency of the appeal, from “taking any action to impose or enforce against the Plaintiffs the
Presidential Proclamation No. 9693” and enjoin U.S. Customs and Border Protection “from the
collection of any tariff on Plaintiffs’ imports of crystalline silicon photovoltaic cells, whether or
not partially or fully assembled into other products, from Canada pursuant to the Presidential
Proclamation during the pendency of the Appeal.” Proposed Inj. Order 1-2. The court has not
conducted a hearing to make its own findings of fact as to whether this proposed injunction
would substantially injure the defendant or the defendant-intervenors, who oppose the injunction.
For the reasons discussed below, such a hearing is not necessary, at least at this time.
4. Whether an Injunction Pending Appeal Is in the Public Interest
Previously, the court concluded that plaintiffs did not meet their burden of showing that
the public interest weighed in favor of an injunction. Silfab I at 39-41. In their current motion,
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plaintiffs do not address this factor, making no argument as to why an injunction pending appeal
would be in the public interest. In any event, the injunction plaintiffs seek would halt the
implementation of the Proclamation with respect to the Canadian CSPV products that plaintiffs
export and import, interfering with the administration of the safeguard measure the President
imposed to facilitate efforts by the domestic industry to make a positive adjustment to import
competition. The public interest arguments plaintiffs made earlier were not persuasive, for the
reasons the court discussed previously. Id. The court cannot conclude that the injunction
pending appeal sought by plaintiffs would be in the public interest.
5. On Balance, the Court Concludes that an Injunction Pending Appeal Is Not Warranted
Upon reconsidering each of their claims, the court again concludes that plaintiffs have not
met their burden of showing a likelihood of success on the merits. They have made no argument
as to why such an injunction would be in the public interest, and the court has reason to conclude
to the contrary. Even upon presuming, arguendo, that the other two factors are in plaintiffs’
favor, the court concludes that the showing they have made is not sufficient for the court to order
the injunction pending appeal that they seek.
B. Stay of Proceedings Pending Appeal
Plaintiffs argue that a stay of the proceedings in this Court pending their appeal would
serve the interests of judicial economy and efficiency, submitting that the results of their appeal
“almost certainly will alter the scope or the course of the litigation.” Inj. and Stay Mot. 4. The
court is not persuaded by this argument. The only action now required of plaintiffs is to respond
to the motion to dismiss filed by the ITC. The court sees no convincing reason why litigation on
that motion should be stayed.
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As an alternative to a stay, plaintiffs request that the court set a consolidated response
date of May 31, 2018 for the motion to dismiss filed by the ITC and any other motions to dismiss
that are filed. Inj. and Stay Mot. 5 n.1. This request is not a proper motion for an enlargement of
time and, moreover, seeks an enlargement that appears excessive in length. A motion for an
enlargement of time would entail requesting the consent of the other parties to the case.
USCIT R. 7(f). Plaintiff is advised to consult with the other parties to this case and file any such
motion expeditiously.
III. CONCLUSION AND ORDER
Upon consideration of plaintiffs’ motion for an injunction and a stay pending appeal and
their motion for expedited consideration, upon all papers and proceedings had herein, and upon
due deliberation, it is hereby
ORDERED that Plaintiffs’ Motion For Expedited Consideration of Motion For
Injunction Pending Appeal and Stay of District Court Proceedings (Mar. 21, 2018), ECF No. 51
be, and hereby is, granted; it is further
ORDERED that Plaintiffs’ Motion For Injunction Pending Appeal and Stay of District
Court Proceedings During Appeal of Preliminary Injunction Ruling (Mar. 21, 2018), ECF No. 50
be, and hereby is, denied in the entirety; and it is further
ORDERED that plaintiffs’ request for an enlargement of time to May 31, 2018 to
respond to the motion to dismiss filed by the U.S. International Trade Commission be, and
hereby is, denied.
/s/Timothy C. Stanceu
Timothy C. Stanceu, Chief Judge
Dated: March 26, 2018
New York, New York