The Federal Circuit heard oral argument earlier this month in Solar Energy Industries Association v. United States, a trade case that attracted an amicus brief. In this case, the Federal Circuit is reviewing a determination by the 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.” Judges Lourie, Taranto, and Stark heard the oral argument. This is our argument recap.
Joshua Kurland argued for the government. He began by arguing that the court should reverse the judgment of the ITC because the text, structure, purpose, and history of 19 U.S.C. § 2254(b)(1)(B) showed that Congress took a neutral approach towards modifications. This, he argued, gave the President flexibility to meet the safeguard statutes and remedial objectives. One judge asked why modification does not mean lessening, because both reduction and termination, which are located near the word modification, indicate lessening. Kurland responded that there are two other uses of modification just in that same provision that have to allow other types of modifications.
Kurland asserted Congress did not craft 19 U.S.C. § 2254(b)(1)(B) on a blank slate, because the basic definition of modification under the statute is described in an open ended way. One judge then asked whether the CIT is concerned that the government’s reading would create a loophole the President could exploit. Kurland responded by explaining that the provisions do not prevent modest adjustments and, anyway, he argued, there are are ultimately other relevant constraints in the statute.
Matthew Nicely argued for SEIA. He began by asserting that Congress laid out specific statutory standards when the President seeks to make changes to a safeguard action. The relevant statutory standards, he argued, were not used by President Trump.
One judge asked whether it is clear what is trade-restrictive and what is trade-liberalizing. Nicely responded by arguing that, ultimately, the answer depends on the specific context. Nicely argued that the canons of statutory construction cited in SEIA’s briefs show that if a word is ambiguous, it may be interpreted by looking at the context in which the word is used.
A judge asked about the fair implications from the statute. Nicely responded by contending that, looking at the context, if Congress had meant to allow a more trade restrictive approach it would have used the same language in both sections of the statute.
Finally, one judge asked if there are any examples where a court has found a clear misconstruction of a statute by the President. Nicely admitted that he could not think of one, but, he argued, there is a clear misconstruction here.
In rebuttal, one judge asked why it is not the case that, in light of the existence of a circumvention provision, it actually makes sense to view all of Section 204(b)(1)(A) as addressing trade-liberalizing measures. Kurland responded by arguing that “modification” even in that provision is not unidirectional. He also argued that the circumvention provision does not apply here because the relevant products were initially within the measure.
We will report on the Federal Circuit’s disposition of this case.