Almond Bros. Lumber Co. v. United States

Slip Op. 10-37
UNITED STATES COURT OF INTERNATIONAL TRADE
_______________________________
:
ALMOND BROS. LUMBER CO. et al.,:
:
Plaintiffs, : Before: Richard K. Eaton, Judge
:
v. : Court No. 08-00036
:
UNITED STATES, and :
RON KIRK, UNITED STATES :
TRADE REPRESENTATIVE, :
:
Defendants. :
_______________________________:
OPINION
[Plaintiffs’ motion for reconsideration denied.]
Dated: April 8, 2010
Saltman & Stevens, P.C. (Alan I. Saltman, Ruth G. Tiger,
Alan F. Holmer, and Aron C. Beezley) for plaintiffs.
Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Franklin E. White, Jr., Assistant Director, United
States Department of Justice Commercial Litigation Branch, Civil
Division (David S. Silverbrand); Office of the General Counsel,
United States Trade Representative (J. Daniel Stirk), for
defendants.
Eaton, Judge: Before the court is plaintiffs’ motion for
reconsideration of the May 20, 2009,1 opinion dismissing their
1
Since plaintiffs filed their motion for reconsideration, the
parties have made, and the court has ruled upon, various other
motions. The last motion in this series (plaintiffs’ October 23,
2009 motion to supplement the record, which was fully briefed on
December 8, 2009), was decided on December 21, 2009. Pursuant to
that order, the parties subsequently submitted supplementary
testimony and objections thereto, upon which the court ruled on
January 22, 2010.
Court No. 08-00036 Page 2
cause of action for lack of subject-matter jurisdiction. See
USCIT R. 59; Almond Bros. Lumber Co. v. United States, 33 CIT __,
Slip Op. 09-48 (May 20, 2009) (“Almond Bros. I”). See Pls.’ Mem.
Supp. Mot. Reconsideration (“Pls.’ Mem.”); Defs.’ Resp. Mot.
Reconsideration (“Defs.’ Resp.”); and Pls.’ Reply (“Pls.’
Reply”).
The disputed jurisdictional issue concerns the legal
authority by which the United States Trade Representative
(“USTR”) negotiated and entered into the 2006 Softwood Lumber
Agreement with Canada. See Softwood Lumber Agreement Between the
Government of Canada and the Government of the United States of
America, U.S.-Can., Sept. 12, 2006 (hereinafter “2006 Softwood
Lumber Agreement” or “2006 SLA”).2 Plaintiffs are domestic
producers of softwood lumber products and, as described in Almond
Bros. I, they seek to challenge a provision of the SLA that
provides for the Government of Canada to distribute $500 million
solely to domestic lumber producers who are members of the
Coalition for Fair Lumber Imports (the “Coalition”).
On October 21, 2009, the court heard oral argument and held
an evidentiary hearing on plaintiffs’ motion. See Evid. Hr’g
Tr., Oct. 21, 2009 (“Evid. Hr’g Tr.”). As they did in their
papers leading to Almond Bros. I, plaintiffs insist that this
2
A copy of the 2006 Softwood Lumber Agreement is available in
the library of the United States Court of International Trade.
Court No. 08-00036 Page 3
Court has jurisdiction over their claims because, they argue, the
2006 SLA was negotiated and entered into pursuant to section 301
of the Trade Act of 1974 [19 U.S.C. § 2411(c)(1)(D) (2006)].3
3
Section 301 of the Trade Act of 1974 is codified at 19
U.S.C. § 2411(c). Under § 2411(c)(1)(D), if the USTR determines
that the rights of the United States under any trade agreement
are being denied, or that an act, policy, or practice of a
foreign country violates a United States trade agreement or
burdens or restricts United States commerce, the USTR is
authorized to
enter into binding agreements with such foreign country
that commit such foreign country to—
(i) eliminate, or phase out, the act, policy,
or practice that is the subject of the action
to be taken under subsection (a) or (b) of
this section,
(ii) eliminate any burden or restriction on
United States commerce resulting from such
act, policy, or practice, or
(iii) provide the United States with
compensatory trade benefits that—
(I) are satisfactory to the Trade
Representative, and
(II) meet the requirements of
paragraph (4).
19 U.S.C. § 2411(c)(1)(D).
Paragraph 4 of § 2411(c) provides:
(4) Any trade agreement described in
paragraph (1)(D)(iii) shall provide
compensatory trade benefits that benefit the
economic sector which includes the domestic
industry that would benefit from the
elimination of the act, policy, or practice
that is the subject of the action to be taken
(continued...)
Court No. 08-00036 Page 4
Section 301, together with the provisions that immediately follow
it, are commonly referred to as “section 301.” See Canadian
Exports of Softwood Lumber, 56 Fed. Reg. 50,738, 50,739
(initiation of section 302 investigation and request for public
comment on determinations involving expeditious action) (“Oct. 8,
1991 Initiation & Determination”). In Almond Bros. I, the court
found that plaintiffs failed to provide any evidence for this
asserted source of jurisdiction: “Beyond the bare claim that the
SLA was the product of [section 301], . . . plaintiffs provide no
support for their contention that it was negotiated or executed
pursuant to that statute, despite having ample opportunity to do
so.” 33 CIT at __, Slip Op. 09-48 at 17. Here, the court again
finds that plaintiffs have failed to present any evidence that
would support their argument for jurisdiction. Accordingly,
plaintiffs’ motion for reconsideration is denied.
3
(...continued)
under subsection (a) or (b) of this section
. . . .
19 U.S.C. § 2411(c)(4).
Court No. 08-00036 Page 5
BACKGROUND
I. History of the Softwood Lumber Disputes Between the United
States and Canada
A. 1986 Memorandum of Understanding and 1996 Softwood
Lumber Agreement
While the history of the 2006 SLA has been thoroughly set
out in Almond Bros. I, plaintiffs’ sole new argument requires an
examination of the history of other softwood lumber disputes
prior to the negotiation of the 2006 agreement. Since the early
1980s, the United States has continually quarreled with Canada
over its alleged dumping and subsidization of softwood lumber
exports to the U.S. See generally David Quayat, The Forest for
the Trees: A Roadmap to Canada’s Litigation Experience in Lumber
IV, 12 J. Int’l Econ. L. 115, 122 (2009) (“Quayat”).
In 1986, United States lumber producers filed unfair trade
petitions with the Department of Commerce (“Commerce”) and the
United States International Trade Commission (“ITC”). See
Certain Softwood Lumber Products from Canada, 51 Fed. Reg.
37,453, 37,454 (Dep’t of Commerce Oct. 22, 1986) (preliminary
affirmative countervailing duty determination). In October 1986,
Commerce issued an affirmative preliminary determination of
subsidization. See id. at 37,453. Subsequently, the two
countries began negotiations. Quayat, 12 J. Int’l Econ. L. at
123. In December 1986, they entered into a Memorandum of
Understanding (the “1986 MOU”) pursuant to which Canada agreed to
Court No. 08-00036 Page 6
impose a tax or charge on softwood lumber exports to the U.S. and
the United States agreed to discontinue its investigations. Id.at 123 n.55; see also Oct. 8, 1991 Initiation & Determination, 56
Fed. Reg. at 50,739.
In September 1991, Canada announced that it would terminate
the 1986 MOU, meaning that it would no longer collect the export
taxes provided for in that document. Oct. 8, 1991 Initiation &
Determination, 56 Fed. Reg. at 50,739. In response, in October
1991, the USTR initiated an investigation to determine whether
Canada’s unilateral termination of the 1986 MOU was actionable
under section 301, i.e., whether Canada’s failure “to ensure the
continued collection of export charges on softwood lumber
envisioned by the MOU” was unreasonable and burdened or
restricted United States commerce (the “1991 Investigation”).
Id. Following the 1991 Investigation, the USTR determined that
acts, policies, and practices of the
Government of Canada regarding the
exportation of softwood lumber to the United
States, specifically the failure of the
Government of Canada to ensure the continued
collection of export charges on softwood
lumber envisioned by the MOU, are
unreasonable and burden or restrict U.S.
commerce . . . .
Id. (emphasis added).
The failure of Canada to collect the export charges was
resolved when Canada and the United States signed the 1996
Softwood Lumber Agreement (hereinafter “1996 SLA”). See Canadian
Court No. 08-00036 Page 7
Exports of Softwood Lumber, 61 Fed. Reg. 28,626, 28,626 (Office
of USTR June 5, 1996) (notice of agreement; monitoring and
enforcement pursuant to sections 301 and 306) (“Notice of 1996
SLA”). The agreement was
intended to provide a satisfactory resolution
to certain acts, policies and practices of
the Government of Canada affecting exports to
the United States of softwood lumber that
were the subject of an investigation
initiated by the United States Trade
Representative (“USTR”) under section
302(b)(1)(A) of the Trade Act of 1974 . . .
and that were found to be unreasonable and to
burden or restrict U.S. commerce pursuant to
section 304(a) on October 4, 1991.
Id. As noted, the “acts” that were “found to be unreasonable”
were Canada’s failure to collect the export charges provided for
in the 1986 MOU. October 8, 1991 Initiation & Determination, 56
Fed. Reg. at 50,739. The 1996 SLA expired by its terms in 2001.
See Notice of 1996 SLA, 61 Fed. Reg. at 28,626.
In May 2002, the Coalition filed new petitions with the ITC
and Commerce, and, after investigations, Commerce imposed both
antidumping duties and countervailing duties on Canadian softwood
lumber. Certain Softwood Lumber Products From Canada, 67 Fed.
Reg. 36,068 (Dep’t of Commerce May 22, 2002) (notice of amended
final determination of sales at less than fair value and
antidumping duty order); Certain Softwood Lumber Products From
Canada, 67 Fed. Reg. 36,070 (Dep’t of Commerce May 22, 2002)
(notice of amended final affirmative countervailing duty
Court No. 08-00036 Page 8
determination and countervailing duty order). As a result of
Commerce’s imposition of these unfair trade duties, legal
challenges arose in various fora including: this Court; tribunals
under the North American Free Trade Agreement; and the World
Trade Organization. Almond Bros. I, 33 CIT __, Slip Op. 09-48
at 8.4 The Coalition was one of the parties to many of these
challenges. Id.B. The 2006 Softwood Lumber Agreement
In 2006, the United States and Canada began new negotiations
to resolve the proceedings arising from the 2002 imposition of
unfair trade duties. The negotiations proved successful, and in
September of that year the USTR and the Canadian representative
executed the 2006 SLA. See generally 2006 Softwood Lumber
Agreement.
Among other things, the 2006 SLA required Canada to
distribute $500 million to United States lumber producers
identified as members of the Coalition. Plaintiffs, domestic
lumber producers, were not members of the Coalition, and thus
were not designated as beneficiaries of the distributed funds.
See Almond Bros. I, 33 CIT at __, Slip Op. 09-48 at 6-9
(detailing plaintiffs’ claims).
4
A list of these proceedings may be found in the 2006
Softwood Lumber Agreement, Annex 2A.
Court No. 08-00036 Page 9
II. Procedural History
In Almond Bros. I, the court granted defendants’ motion to
dismiss plaintiffs’ lawsuit based on a lack of subject-matter
jurisdiction. In their papers, plaintiffs had insisted that this
Court had jurisdiction over their claims pursuant to the “arising
under” provisions of 28 U.S.C. § 1581(i).5 Almond Bros. I, 33 CIT
at ___, Slip Op. 09-48 at 17.6 The sole statutory authority cited
5
28 U.S.C. § 1581(i) states:
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– . . .
(2) tariffs, duties, fees, or other taxes on
the importation of merchandise for reasons
other than the raising of revenue; . . .
(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.
6
As discussed in Almond Bros. I, the Court of International
Trade, like all federal courts, is a court of limited
jurisdiction, meaning that it may only review matters within
certain boundaries. 33 CIT at ___, Slip Op. 09-48 at 15-17
(citing Agro Dutch Indus. Ltd. v. United States, 29 CIT __, __,
358 F. Supp. 2d 1293, 1294 (2005) (citation omitted)). A primary
source of federal jurisdiction rests in “arising under”
jurisdiction, provided for under 28 U.S.C. § 1331, which grants
jurisdiction to the federal district courts for claims “arising
under” federal law. 28 U.S.C. § 1331 (“The district courts shall
have original jurisdiction over all civil actions arising under
(continued...)
Court No. 08-00036 Page 10
by plaintiffs as the basis for § 1581(i) arising under
jurisdiction over their case was section 301.
[P]laintiffs maintain that the court has
§ 1581(i) jurisdiction because the SLA was
negotiated pursuant to [section 301], which
provides for the entry into agreements that
provide for compensatory trade benefits. For
plaintiffs, these compensatory trade benefits
are the equivalent of duties. See 28 U.S.C.
§ 1581(i)(2) (“the [CIT] shall have exclusive
jurisdiction of any civil action commenced
against the United States . . . that arises
out of any law of the United States providing
for . . . duties . . . on the importation of
merchandise for reasons other than the
raising of revenue . . . .”).
Almond Bros. I, 33 CIT at __, Slip Op. 09-48 at 14 (footnote
omitted). The court in Almond Bros. I, however, found that
plaintiffs did not provide factual support for their theory that
the 2006 SLA was negotiated or entered into pursuant to section
301: “Because [plaintiffs] have failed to meet their burden of
6
(...continued)
the Constitution, laws, or treaties of the United States.”); see
Wright, Miller, & Cooper, 13D Fed. Prac. & Proc. 3d § 3562.
Accordingly, the law under which the 2006 SLA was entered into is
crucial to plaintiffs’ claims.
The statute under which plaintiffs claim jurisdiction, 28
U.S.C. § 1581(i)(4), is also an “arising under” statute. See 28
U.S.C. § 1581(i)(2) (actions arising out of a law providing for
duties on the importation of merchandise other than for raising
revenue) and § 1581(i)(4) (actions arising out of the
administration and enforcement of paragraph (2) of this
subsection); Schick v. United States, 554 F.3d 992, 994 (Fed.
Cir. 2009) (finding that the trial court lacked jurisdiction to
consider claim under § 1581(i)(4) where claim did not arise out
of a law providing for the administration and enforcement of
matters referred to in 19 U.S.C. § 1641(g)(2)).
Court No. 08-00036 Page 11
pleading facts from which the court could conclude that the SLA
was indeed the product of [section 301], the court cannot accept
plaintiffs’ argument that it has jurisdiction under the arising
under provisions of § 1581(i).” 33 CIT at __, Slip Op. 09-48 at
24-25 (citation omitted).
DISCUSSION
I. Standard of Review
“The major grounds justifying a grant of a motion to
reconsider a judgment are an intervening change in the
controlling law, the availability of new evidence, the need to
correct a clear factual or legal error, or the need to prevent
manifest injustice.” NSK Corp. v. United States, 32 CIT __, 593
F. Supp. 2d 1355, 1361 (2008) (quotation and citation omitted);
USCIT R. 59(a)(2).
II. Parties’ Arguments
As noted, the central jurisdictional issue in this case is
whether the 2006 SLA was negotiated and entered into pursuant to
section 301. In Almond Bros. I, the court observed,
The party seeking to invoke this Court’s
jurisdiction has the burden of establishing
such jurisdiction.” Autoalliance Int’l, Inc.
v. United States, 29 CIT 1082, 1088, 398 F.
Supp. 2d 1326, 1332 (2005) (citations
omitted) (“Autoalliance Int’l”). A “mere
recitation of a basis for jurisdiction, by
Court No. 08-00036 Page 12
either a party or a court, cannot be
controlling . . . .” Norsk Hydro Can., Inc.
v. United States, 472 F.3d 1347, 1355 (Fed.
Cir. 2006) (quotation omitted). “To avoid
dismissal in whole or in part for lack of
subject matter jurisdiction, [plaintiffs]
must plead facts from which the court may
conclude that it has subject matter
jurisdiction with respect to each of their
claims.” Schick v. United States, 31 CIT
2017, 2020, 533 F. Supp. 2d 1276, 1281 (2007)
(“Schick”) (citing McNutt v. Gen. Motors
Acceptance Corp., 298 U.S. 178, 189 (1936)
(explaining that a plaintiff “must allege in
his pleading the facts essential to show
jurisdiction.”)).
33 CIT at __, Slip Op. 09-48 at 10. Moreover, “while
jurisdictional facts are normally found in the complaint, it is
well settled that in considering a Rule 12(b)(1) motion
contesting jurisdiction, the court may consider matters outside
the pleadings.” Id. at __, Slip Op. 09-48 at 19 (citing Land v.
Dollar, 330 U.S. 731, 735 n.4 (1947); Cedars-Sinai Med. Center v.
Watkins, 11 F.3d 1573, 1584 (Fed. Cir. 1993)). Plaintiffs’
motion includes several arguments as to why they have satisfied
their burden of pleading facts sufficient to demonstrate
jurisdiction, but presents only one theory that has not
previously been put before the court. That is, that the October
8, 1991 section 301 investigation and its determinations
underlie the 2006 SLA as well as the 1996 SLA.
As an initial matter, it is worth noting that plaintiff’s
arguments with respect to the effect of the October 8, 1991
Court No. 08-00036 Page 13
section 301 investigation could and should have been raised in
their previous arguments before the court and not in their motion
for reconsideration. That is, all of the material facts were
known to them long prior to making of their motion. For this
reason alone, plaintiff’s motion should be denied. See Cochran
v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir. 2003) (It is
generally accepted that a party may not, on a motion for
reconsideration, advance a new argument that could (and should)
have been presented prior to the . . . court's original
ruling.”). Nonetheless, the court will address the new argument.
As the court noted in Almond Bros. I, prior to initiating
negotiations for an agreement under section 301, the USTR must
fulfill certain statutory obligations relating to the initiation
of investigations and the making of determinations, including
certain publication requirements. Almond Bros. I, 33 CIT at __,
Slip Op. 09-48 at 22-23. Specifically, the sections succeeding
19 U.S.C. § 2411 set out the steps that the USTR must undertake
before action can be taken thereunder:
If the Trade Representative determines that
an investigation should be initiated under
this subchapter with respect to any matter in
order to determine whether the matter is
actionable under section [301] of this title,
the Trade Representative shall publish such
determination in the Federal Register and
shall initiate such investigation.
19 U.S.C. § 2412(b)(1)(A) (this subsection is commonly referred
Court No. 08-00036 Page 14
to as “section 302").7
Moreover, if the USTR makes any factual determination
pursuant to § 2414(a) (i.e., that an act, policy or practice of a
foreign country is unjustifiable and burdens or restricts United
States commerce), that determination, too, must be published in
the Federal Register pursuant to 19 U.S.C. § 2414(c) (“The Trade
Representative shall publish in the Federal Register any
determination made under subsection (a)(1) of this section,
together with a description of the facts on which such
determination is based.”).8 In practice, the USTR has published
the notice of initiation and the factual determination
simultaneously. See, e.g., Canada—Compliance With Softwood
Lumber Agreement, 74 Fed. Reg. 16,436, 16,436 (Office of the USTR
7
19 U.S.C. § 2412 sets out the procedures for the required
investigation. See, e.g., Wheat Trading Practices of the
Canadian Wheat Board, 65 Fed. Reg. 69,362, 69,363 (Office of the
USTR November 16, 2000) (notice announcing the initiation of an
“investigation to determine whether certain acts, policies or
practices of the Government of Canada and the Canadian Wheat
Board with respect to wheat trading are unreasonable and burden
or restrict U.S. commerce and are, therefore, actionable under
section 301.”).
8
It is worth noting that the USTR has sought to comply with
the section 301 provisions relating to investigations and
determinations when seeking to enforce the 2006 SLA. See
Canada—Compliance With Softwood Lumber Agreement, 74 Fed. Reg.
16,436, 16,436 (Office of the USTR Apr. 10, 2009) (notice of
initiation of investigation of and determination that Canada “is
denying U.S. rights under the SLA”). Thus, it is clear that the
USTR knows how to comply with section 301 when he or she wishes
to take action pursuant to its provisions.
Court No. 08-00036 Page 15
Apr. 10, 2009) (notice of initiation of investigation of and
determination that Canada “is denying U.S. rights under the
SLA”). In Almond Bros. I, the court found that none of the
required acts necessary for action to be taken pursuant to
section 301 had been performed and, therefore, that the 2006 SLA
was not a product of that section. Almond Bros. I, 33 CIT at __,
Slip Op. 09-48 at 22-24.
Plaintiffs now claim that the mandatory prerequisite actions
were taken and that the section 301 publication requirements were
met with respect to the 2006 SLA. According to plaintiffs, the
October 8, 1991 publication, giving notice of the 1991 section
301 investigation and October 8, 1991 determination that
underpinned the 1996 SLA, also provided the basis for the 2006
SLA. See Evid. Hr’g Tr. 14-15.
[I]n 1996, the USTR entered a softwood lumber
agreement (the “1996 SLA”) which, just like
the 2006 SLA, was intended to ameliorate the
effect of the export of subsidized softwood
lumber products from Canada to the United
States without the imposition of any export
charges. The USTR entered into the 1996 SLA
pursuant to [section 301] on the basis of an
earlier [1991] investigation initiated under
§ 2412 and a determination made under § 2414
that Canada’s conduct was unreasonable and
burdened or restricted United States
commerce. Because the situation in 2006 in
all relevant respects was the same as it had
been in 1996, these findings and
determination remained valid.
Pls.’ Mem. 3. Accordingly, plaintiffs contend, “[b]ased on these
Court No. 08-00036 Page 16
[1991] findings and the [1991] determination, the USTR entered
into the 2006 SLA pursuant to [section 301], just as her
predecessor had entered the 1996 SLA.” Pls.’ Mem. 3. In other
words, plaintiffs argue that the 1991 investigation satisfied the
requirements for an affirmative determination under § 2414(a) and
publication of that determination under § 2414(c), both of the
necessary procedural steps for the 2006 SLA to have been
authorized under the authority of section 301. Plaintiffs make
this claim notwithstanding their concession that the 1991
determination and publication served as the section 301
predicates for the intervening 1996 SLA that expired by its terms
in 2001.
In response to plaintiffs’ allegations, defendants argue
that plaintiffs’ contention that “because the USTR used its
section 301 authority to impose retaliatory measures upon imports
of softwood lumber in 1991 and to enter into the Softwood Lumber
Agreement of 1996, the USTR must have entered into the [2006] SLA
pursuant to Section 301," is “without basis.” Defs.’ Resp. 6.
Rather, defendants argue, “no part of the negotiations or entry
into force of the [2006] SLA entailed any statutory authority
derived from section 301.” Defs.’ Resp. 6.
Court No. 08-00036 Page 17
III. Plaintiffs Fail to Present Facts Sufficient for the Court to
Find Jurisdiction over Their Claims
Plaintiffs’ primary argument is that the 1991 investigation
satisfied the mandatory section 301 requirements for entry into
the 2006 SLA because “the situation in 2006 in all relevant
respects was the same as it had been in 1996, [and thus the 1991]
findings and determination remained valid.” Pls.’ Mem. 3.
Contrary to plaintiffs’ contentions, however, the publication of
USTR’s Oct. 8, 1991 Initiation & Determination does not serve to
satisfy the section 301 statutory prerequisites necessary for the
entry into the 2006 SLA. As the United States points out, the
1991 Investigation was initiated as a result of Canada’s
withdrawal from the 1986 MOU and subsequent failure to collect
export charges. Following this September 1991 withdrawal, the
USTR initiated an investigation, pursuant to section 301, to
determine whether Canada’s failure “to ensure the continued
collection of export charges on softwood lumber envisioned by the
MOU” was unreasonable and burdened or restricted United States
commerce. Oct. 8, 1991 Initiation & Determination, 56 Fed. Reg.
at 50,739. In other words, the stated purpose of the 1991
Investigation was to determine if the failure of Canada to
collect the export taxes, provided for in the 1986 MOU, was
“unreasonable” and “burden[ed] or restrict[ed]” United States
commerce. Thus, the 1991 Investigation and Determination dealt
Court No. 08-00036 Page 18
with a particular set of facts extant during a particular period
of time.
This point is brought home by the USTR’s 1991 factual
determination:
On September 3, 1991, the Government of
Canada announced that it would terminate the
MOU in 30 days. . . .
Since the Government of Canada has refused to
collect export charges to offset possible
subsidies during this period, the United
States is compelled to exercise its rights
and to take enforcement measures arising out
of the MOU by imposing temporary measures to
safeguard against an influx of possible
injurious subsidized Canadian softwood
lumber. . . .
On October 4, 1991, the USTR, having
consulted pursuant to section 302(b)(1)(B)
[19 U.S.C. § 242(b)(1)(B)] of the Trade Act,
determined that an investigation should be
initiated with respect to certain acts,
policies, and practices by the Government of
Canada affecting exports to the United States
of certain softwood lumber products. . . .
Accordingly, the USTR, at the specific
direction of the President, has made the
following determinations pursuant to section
304 of the Trade Act [including] [t]hat acts,
policies, and practices of the Government of
Canada regarding the exportation of softwood
lumber to the United States, specifically the
failure of the Government of Canada to ensure
the continued collection of export charges on
softwood lumber envisioned by the MOU, are
unreasonable and burden or restrict U.S.
commerce . . . .
Oct. 8, 1991 Initiation & Determination, 56 Fed. Reg. at 50,738-
39 (emphasis added). Thus, the 1991 factual determination made a
Court No. 08-00036 Page 19
specific finding with respect to the collection of export taxes
that were required by the 1986 MOU.
The question of the harm found by the USTR in 1991 was
subsequently resolved by the entry into the 1996 SLA. Notice of
1996 SLA, 61 Fed. Reg. at 28,626. The important point, however,
is that the 1996 SLA resulted from Canada’s failure, in 1991, to
collect the taxes required by the 1986 MOU which failure was
found to be unreasonable and to burden or restrict United States
commerce. Thus, the specifics found in the 1991 Investigation
and set out in the determination related directly to Canada’s
withdrawal from the 1986 MOU, and not to more general concerns
about softwood lumber dumping or subsidization.
In addition, although plaintiffs insist otherwise, the
factual situation in 2006 was markedly different from that in
1991. In 1991, when Canada terminated the 1986 MOU, no dumping
or countervailing duty orders were in place. Thus, neither the
1991 Investigation nor the October 8, 1991 determination took
antidumping duty orders into account.9 However, by 2006,
9
Following the October 8, 1991 Initiation & Determination
relating to the 1991 Investigation, Commerce self-initiated a
countervailing duty investigation (Certain Softwood Lumber
Products From Canada, 56 Fed. Reg. 56,055, 56,055 (Dep’t of
Commerce October 31, 1991) (self-initiation of countervailing
duty investigation)), resulting in an affirmative final
determination that imposed a countervailing duty of 6.51%.
Certain Softwood Lumber Products from Canada, 57 Fed. Reg.
22,570, 22,570 (Dep’t of Commerce May 28, 1992) (final
(continued...)
Court No. 08-00036 Page 20
determinations regarding both dumping and countervailing duties
existed and were being contested. See supra p.7. The settlement
of these cases was the primary subject of the negotiations in
2006. See Tembec, Inc. v. United States, 31 CIT 241, 244, 475 F.
Supp. 2d 1393, 1397 (2007) (“On September 12, 2006, the
Governments of Canada and the United States signed an agreement
designed to settle the softwood lumber dispute . . . .”).
Pursuant to the 2006 SLA, both governments, as well as all
represented parties and participants, agreed to terminate the
legal actions related to softwood lumber to which they were
parties. See Softwood Lumber Agreement, art. II and Annex 2A.
Therefore, the facts demonstrate that the 2006 SLA was intended
to resolve the controversies arising from the imposition of
specific unfair trade duties on Canadian softwood lumber.
As has been seen, plaintiffs still fail, on their motion for
reconsideration, to present facts that would put this case within
this Court’s jurisdiction. “To avoid dismissal in whole or in
part for lack of subject matter jurisdiction, [plaintiffs] must
plead facts from which the court may conclude that it has subject
matter jurisdiction with respect to each of their claims.”
Schick v. United States, 31 CIT 2017, 2020, 533 F. Supp. 2d 1276,
9
(...continued)
affirmative countervailing duty determination). The issue of the
imposition of these duties was also resolved by the 1996 SLA.
See Notice of 1996 SLA, 61 Fed. Reg. at 28,626.
Court No. 08-00036 Page 21
1281 (2007)(citation omitted). After plaintiffs filed their
motion for reconsideration, the court undertook to determine if
there were any jurisdictional facts that had been overlooked in
Almond Bros. I. To make this determination, the court ordered
further oral argument and an evidentiary hearing. At the October
21, 2009 evidentiary hearing, plaintiffs called no witnesses to
support their position, despite having previously deposed the
chairman of the section 301 committee10 from the time of the
10
“The Chairman of the Section 301 Committee shall be
designated by the Deputy Special Representative from the Office
of the Special Representative for Trade Negotiations.” 15 C.F.R.
§ 2002.3 (2009). The Section 301 Committee performs the following
functions:
(1) Reviews complaints received pursuant to section 301
of the Trade Act of 1974.
(2) Provides an opportunity by the holding of public
hearings upon request by a complainant or an interested
party, as appropriate, and by such other means as the
Special Representative, a Deputy Special Representative
or the Chairman of the Section 301 Committee deems
appropriate, for any interested party to present his
views to the Section 301 Committee concerning foreign
restrictions, acts, policies, and practices affecting
U.S. commerce, and United States actions in response
thereto, as provided for in Section 301 of the Trade
Act (Pub.L. 93-618, 88 Stat. 1978).
(3) Reports to the Trade Policy Staff Committee the
results of reviews and hearings conducted with respect
to complaints received pursuant to Section 301 of the
Trade Act.
(4) On the basis of its review of petitions filed under
Section 301 and of the views received through hearings
or otherwise on such petitions, makes recommendations
(continued...)
Court No. 08-00036 Page 22
negotiations for the 2006 SLA until now. Specifically,
defendants made available for deposition William Busis, who
has held the position of section 301 chairman
continuously since the negotiations leading
to the [2006] SLA began and, therefore, would
possess knowledge of any actions the USTR has
taken pursuant to section 301 during that
time, including whether the United States
entered the SLA pursuant to the provisions of
19 U.S.C. [§] 2411(c)(1)(D).
Defs.’ Resp. Pls.’ Mot. for Leave to Take Depositions 5.
In fact, the only evidence that was presented to the court,
tending to establish the source of the USTR’s authority to enter
into the 2006 SLA, indicates that it was negotiated not pursuant
to section 301, but pursuant to the USTR’s general authority,
including that found in 19 U.S.C. § 2171.11 Defendants’ Hearing
Exhibit B includes a letter regarding the 2006 SLA that was
submitted to the United States Department of State on October 1,
2007, seeking guidance on the necessary compliance with the Case-
Zablocki Act, codified at 1 U.S.C. § 112b. The Act requires that
10
(...continued)
to the TPSC for review by that committee.
15 C.F.R. § 2002.3(b).
11
By 19 U.S.C. § 2171, the USTR was established within the
Executive Office of the President and has “primary responsibility
for developing, and for coordinating the implementation of,
United States international trade policy, . . . and shall be
the chief representative of the United States for . . .
international trade negotiations . . . .” 19 U.S.C.
§ 2171(c)(1)(A), (C).
Court No. 08-00036 Page 23
international agreements, other than treaties, be transmitted to
Congress within sixty days after the agreements have entered into
force.12 Attached to the letter is a background statement
identifying the legal authority under which the SLA was
negotiated and entered into:
The agreement was concluded under the general
authority of the Office of the United States
Trade Representative to negotiate, including
pursuant to USTR’s authority under the Trade
Act of 1974, as amended.
Letter from Carmen Suro-Bredie to John Kim, Esq. (Oct. 1, 2007).
For the court, this statement supports defendants’
contention that the 2006 SLA was the product of the USTR’s
12
1 U.S.C. § 112b(a) states:
The Secretary of State shall transmit to the Congress
the text of any international agreement (including the
text of any oral international agreement, which
agreement shall be reduced to writing), other than a
treaty, to which the United States is a party as soon
as practicable after such agreement has entered into
force with respect to the United States but in no event
later than sixty days thereafter. However, any such
agreement the immediate public disclosure of which
would, in the opinion of the President, be prejudicial
to the national security of the United States shall not
be so transmitted to the Congress but shall be
transmitted to the Committee on Foreign Relations of
the Senate and the Committee on International Relations
of the House of Representatives under an appropriate
injunction of secrecy to be removed only upon due
notice from the President. Any department or agency of
the United States Government which enters into any
international agreement on behalf of the United States
shall transmit to the Department of State the text of
such agreement not later than twenty days after such
agreement has been signed.
Court No. 08-00036 Page 24
general authority, including § 2171, and not the specific
authority found in section 301. This is because § 2171 is part
of the Trade Act of 1974 and provides for the USTR’s general
authority as “the chief representative of the United States for
international trade negotations.” 19 U.S.C. § 2171(c)(1)(C).
Plaintiffs, however, dispute this conclusion and argue that
the phrase “under the Trade Act of 1974" introduces ambiguity
into the sentence. Evid. Hr’g Tr. 9-10, 19. Specifically,
plaintiffs contend that there was no need to include the latter
phrase if § 2171 were indeed the authority under which the 2006
SLA was negotiated and entered into, because § 2171 itself
outlines the general authority of the USTR. Evid. Hr’g Tr. 9-10,
19. Put another way, plaintiffs contend that if the 2006 SLA
were the product of the USTR’s general authority, it would be
redundant to say “including pursuant to the USTR’s general
authority under the Trade Act of 1974 . . . .” Plaintiffs then
note that section 301 is also part of the Trade Act of 1974 and
that the Exhibit B letter may, in fact, make reference to that
section. For plaintiffs, their reading would move the sentence
from the less specific “general authority” to the more specific
provisions of section 301. Thus, plaintiffs claim, if § 2171
were truly the source of authority for the 2006 SLA, the
recitation that the agreement was “concluded under the general
authority of the Office of the United States Trade
Court No. 08-00036 Page 25
Representative” would have sufficed. Therefore, according to
plaintiffs, the inclusion of more specific language citing the
Trade Act of 1974 leaves open the possibility that the USTR was
acting under both the general authority of section 2171, and the
more specific authority of section 301, when negotiating the 2006
SLA.
Despite plaintiffs’ contentions, the court sees no
ambiguity. This is because the general authority of the USTR
does not derive solely from the Trade Act of 1974. The USTR is
part of the Executive Office of the President. 19 U.S.C.
§ 2171(a); Office of the United States Trade Representative,
Mission of the USTR, http://www.ustr.gov/about-us/mission (last
visited Mar. 16, 2010). “[T]he USTR, a member of the Executive
Office of the President, acts at the direction of the President
as his negotiating arm in international trade matters.” Gilda
Indus., Inc. v. United States, 28 CIT 2001, __, 353 F. Supp. 2d
1364, 1369 (2004) (citing 19 U.S.C. § 2171), aff’d in part,
vacated in part, and remanded on other grounds, 446 F. 3d 1271(Fed. Cir. 2006).
Both the President and the USTR are officers of the United
States. Motion Systems Corp. v. Bush, 28 CIT 806, 813, 342 F.
Supp. 2d 1247, 1254 (2004).
Court No. 08-00036 Page 26
With respect to the President, status as an
officer of the United States stems from the
Constitution itself, for the President is the
essential constitutional officer under
Article II of the Constitution. “The
executive Power shall be vested in a
President of the United States of America.
He shall hold his Office during the Term of
four Years . . . . ” U.S. CONST., Art. II,
§ 1. “This grant of authority establishes
the President as the chief constitutional
officer of the Executive Branch, entrusted
with supervisory and policy responsibilities
of utmost discretion.” Nixon v. Fitzgerald,
457 U.S. 731, 750 (1982).
Id. The President’s authority to conduct foreign policy derives
mainly from the United States Constitution. See U.S. CONST. art.
II, § 2, cl. 1. The USTR, in acting on behalf of the President,
derives his or her authority from both the Constitution and from
statutes such as § 2171. Thus, a reference to both the USTR’s
general authority and to more specific statutory authority
creates no ambiguity. That is, the reference in the October 1,
2007 letter to “the general authority” of the USTR followed by a
specific reference “including [the] USTR’s authority under the
Trade Act of 1974" proceeds from the general to the specific:
i.e., the reference to the USTR’s general authority that derives
mainly from the Constitution; and the reference to the Trade Act
of 1974, meaning the statutory grant of general power found in
§ 2171.
Court No. 08-00036 Page 27
CONCLUSION
Having reviewed all of the parties’ submissions and having
heard their oral arguments and reviewed the evidence presented at
the evidentiary hearing, the court finds that, even taking into
account plaintiffs’ arguments raised for the first time here,
they have failed to provide any evidence that would require
reconsideration of the decision that this Court lacks subject-
matter jurisdiction over plaintiffs’ claims. Therefore,
plaintiffs’ motion for reconsideration is denied.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: April 8, 2010
New York, New York
Errata
Almond Bros. Lumber Co. et al v. United States, Court No. 08-
00036, Slip Op. 10-37 (Apr. 8, 2010)
Page 11, line 21: Insert ““” at beginning of block quote.
Page 13, line 6: Insert ““” before “It” inside parenthetical.