Argument Preview

Five cases being argued in April at the Federal Circuit attracted amicus briefs. One of those cases is Solar Energy Industries Association v. United States, a trade case. In this case, the Federal Circuit will review a determination by the Court of International Trade that the “President’s authority to modify a safeguard measure under 19 U.S.C. § 2254(b)(1)(B) is limited solely to ‘trade-liberalizing’ modifications, and that Proclamation 10101 thus went beyond the President’s statutory authority.” This is our argument preview.

The government in its opening brief first argues that the Federal Circuit “should reverse the trial court’s erroneous ruling that section 2254(b)(1)(B) limits the President’s authority to make a ‘modification’ to a safeguard measure solely to ‘trade-liberalizing’ actions.” According to the government, “[t]he statute’s text, structure, purpose, and history all indicate that Congress did not intend such a restrictive reading of the President’s authority to implement a ‘modification.'” Moreover, the government asserts, “despite the trial court’s focus on the statutory scheme, the court’s interpretation conflicts with multiple aspects of the safeguard statute indicating that Congress did not restrict the President’s ability to make limited adjustments to a safeguard measure under section 2254(b)(1)(B).” Further, it contends, “these numerous aspects of the safeguard statute indicate that Congress gave the President flexibility to modify safeguard measures consistent with the prevailing circumstances, and refute the contrary gloss the trial court placed on section 2254(b)(1)(B).” Finally, the government argues, “even if ‘modification’ in section 2254(b)(1)(B) were construed as prohibiting the President from implementing an ‘increase’ to the safeguard measure, Proclamation 10101 should still be sustained as lawful because the modifications at issue are neutral in relation to the original safeguard measure.”

In its response brief, SEIA first argues “all the tools of statutory construction—text, context, structure, purpose, and history—show that section 204(b)(1)(B) unambiguously precludes trade-restrictive changes to safeguard measures.” Moreover, it contends, “because section 204(b)(1)(B) permits modifications only after the domestic industry ‘has made’ a positive adjustment to competition, it logically follows that this provision cannot be grounds to further restrict trade.” SEIA then asserts “Proclamation 10101 is independently unlawful for two additional reasons.” First, SEIA argues “the President did not receive the petition required by section 204(b)(1)(B) to modify a safeguard measure.” Second, it continues, “the President did not find that ‘the domestic industry has made a positive adjustment to import competition,’ as required by section 204(b)(1)(B).”

The government, in its reply brief, reasserts the arguments it made in the opening brief. For example, it argues “the text, structure, purpose, and history of 19 U.S.C. § 2254(b)(1)(B) indicate that Congress afforded the President flexibility to modify safeguard measures to meet existing circumstances following the International Trade Commission’s (ITC’s) midterm report, without inserting a ‘trade-liberalizing’ requirement into that authority.” The government also contends “none of the procedural arguments that appellees raise as alternate grounds for affirmance has merit.”

The Chamber of Commerce of the United States of America and the American Clean Power Association filed an amicus brief in favor of SEIA. Their brief argues that “[u]pholding the CIT is important to ensure that the Executive and [United States Trade Representative] will not again unreasonably change the rules of the road and subject business to the yo-yoing effects of tariffs.” They argue the Federal Circuit “should . . . affirm the CIT’s decision and preserve the ability of businesses to rely on the rules of the road in their supply chain planning.”

This case will be argued on Monday, April 3. We will report on any developments.