Solar Energy Indus. Ass'n v. United States

86 F.4th 885

SOLAR ENERGY INDUSTRIES ASSOCIATION, NextEra Energy, Inc.,Invenergy Renewables LLC, EDF Renewables, Inc., Plaintiffs-Appellees v. UNITED STATES, United States Customs and Border Protection,Troy Miller, Acting Commissioner for U.S. Customs and Border Protection, Defendants-Appellants

2022-1392

United States Court of Appeals, Federal Circuit

Decided: November 13, 2023

Appeal from the United States Court of International Trade in No. 1:20-cv-03941-GSK, Judge Gary S. Katzmann.

Matthew R. Nicely, Akin Gump Strauss Hauer & Feld LLP, Washington, DC, argued for plaintiffs-appellees Solar Energy Industries Association, NextEra Energy, Inc. Also represented by Julia K. Eppard, Devin S. Sikes, James Edward Tysse, Daniel Martin Witkowski.

Amanda Shafer Berman, Crowell & Moring, LLP, Washington, DC, argued for plaintiff-appellee Invenergy Renewables LLC. Also represented by John Bowers Brew, Larry Eisenstat, Robert L. Lafrankie; Frances Pierson Hadfield, New York, NY.

Christine Streatfeild, Baker & McKenzie LLP, Washington, DC, for plaintiff-appellee EDF Renewables, Inc.

Joshua E. Kurland, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for all defendants-appellants. Defendants-appellants United States, United States Customs and Border Protection, Troy Miller also represented by Brian M. Boynton, Tara K. Hogan, Patricia M. McCarthy. Defendant-appellant United States also represented by Michael Thomas Gagain, Office of the General Counsel, Office of the United States Trade Representative, Washington, DC.

Jonathan Stoel, Hogan Lovells US LLP, Washington, DC, for amici curiae Chamber of Commerce of the United States of America, American Clean Power Association. Also represented by Michael Jacobson, Molly Newell; Katherine Booth Wellington, Boston, MA. Amicus curiae Chamber of Commerce of the United States of America also represented by Tara S. Morrissey, United States Chamber Litigation Center, Washington, DC.

Before Lourie, Taranto, and Stark, Circuit Judges.

Stark, Circuit Judge.

In 2018, the President adopted certain safeguard measures to protect the domestic solar panel industry. In particular, the President issued Proclamation 9693, which imposed duties on imports of solar panels into the United States. See Proclamation 9693: To Facilitate Positive Adjustment to Competition from Imports of Certain Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled into Other Products) and for Other Purposes, 83 Fed. Reg. 3541 (Jan. 23, 2018). The duties of Proclamation 9693 began at 30% and were scheduled to decrease each year to 25%, 20%, and then, in their final, fourth year, 15%. See id. at 3548. Importers of a certain type of solar panel - called bifacial solar modules, which "consist of cells that convert sunlight into electricity on both the front and back of the cells," J.A. 4 - petitioned the United States Trade Representative ("USTR") for an exclusion, asking that bifacial solar panels not be subjected to the duties. The USTR granted the exclusion, but then quickly reversed course, with the consequence that the duties of Proclamation 9693 remained scheduled to be imposed on bifacial panels. Following litigation in the Court of International Trade ("trade court"), and additional actions by the USTR, bifacial solar panels were again excluded from the duties.

In October 2020, the President issued Proclamation 10101, "modifying" Proclamation 9693 to withdraw the exclusion of bifacial solar panels from the scheduled duties, and also to increase the fourth-year duty rate from 15% to 18%. See Proclamation 10101: To Further Facilitate Positive Adjustment to Competition from Imports of Certain Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled into Other Products), 85 Fed. Reg. 65639 (Oct. 16, 2020). In response to Proclamation 10101, importers of bifacial solar panels brought suit against the United States in the trade court on the grounds that the proclamation exceeded the power of the President. Their principal contention was that the statute authorizing the President to "modify" Proclamation 9693 only allowed him to make previously adopted safeguard measures more trade-liberalizing, but eliminating the exclusion of bifacial panels and raising the fourth-year duty were trade-restrictive. The suing parties further argued that even if the President had the authority to "modify" safeguards in a trade-restrictive direction, he failed to follow appropriate procedures in doing so.

The trade court agreed with the importers that the statutory authority to "modify" a safeguard is limited to trade-liberalizing changes. While the trade court rejected the importers' procedural challenges, it nonetheless set aside Proclamation 10101 for exceeding the President's authority. The government now appeals from the trade court's judgment in favor of the importers.

We conclude that the President's interpretation of the applicable statute, which allows him to "modify" an existing safeguard, is not a clear misconstruction. That is, the President's view that a "modification" may include a change in a trade-restricting direction, and is not limited to trade-liberalizing changes, is not unreasonable. We further determine that, in adopting Proclamation 10101, the President did not commit any significant procedural violation of the Trade Act. Accordingly, we reverse the judgment of the trade court.

I

A

Section 201 of the Trade Act of 1974, codified at 19 U.S.C. § 2251, provides the President of the United States with the power to impose "safeguards" (also referred to as "safeguard measures") that protect domestic industries from serious injury caused by imports. Statutory Section 2251 broadly directs the President to "take all appropriate and feasible action within his power which the President determines will facilitate efforts by the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs." 19 U.S.C. § 2251(a).

Imposition of a new safeguard is governed by 19 U.S.C. §§ 2252 and 2253, which set out a process that typically includes: (i) a petition from the domestic industry filed with the International Trade Commission ("Commission"), setting out the purposes for which the safeguard is sought, "which may include facilitating the orderly transfer of resources to more productive pursuits, enhancing competitiveness, or other means of adjustment to new conditions of competition"; (ii) an investigation and determination by the Commission as to "whether an article is being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported article"; (iii) the submission of a report by the Commission to the President, which may include a recommendation of presidential action to "address the serious injury, or threat thereof, to the domestic industry," such as the imposition of or increase in duty on the imported article or a modification or imposition of a quantitative restriction on the importation of the article into the United States; and (iv) a decision by the President "to take all appropriate and feasible action" that will provide "greater economic and social benefits than costs" and will assist domestic industry. Generally, safeguards adopted pursuant to these procedures may not be in effect for longer than four years without an additional petition from the domestic industry. See id. §§ 2253(e)(1)(A)-(B), 2254(c). Certain types of safeguards, including imposition of duties lasting more than one year, must be "phased down at regular intervals during the period in which the action is in effect." Id. § 2253(e)(5).

Once a particular safeguard is in place, Section 2254 governs efforts to change the existing measure. Section 2254(a)(1) requires, among other things, that the Commission "monitor developments with respect to the domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition." Id. § 2254(a)(1). If a safeguard is imposed for longer than three years, the Commission must, no later than the midpoint of the period for which it is adopted, "submit a report ["Commission Report"] on the results of the monitoring . . . to the President and to the Congress" Id. § 2254(a)(2). After receiving the Commission Report, the President is empowered to take certain actions with respect to the safeguard, with different statutory provisions applying depending on whether the domestic industry has or has not made a positive adjustment to import competition.

Specifically, 19 U.S.C. § 2254(b), entitled "Reduction, modification, and termination of action," provides that "[a]ction taken under section 2253 of this title," i.e., a safeguard, "may be reduced, modified, or terminated by the President," after receiving the Commission Report,

if the President . . .

(A) . . . determines, on the basis that either -

(i) the domestic industry has not made adequate efforts to make a positive adjustment to import competition, or

(ii) the effectiveness of the action taken under section 2253 of this title has been impaired by changed economic circumstances,

that changed circumstances warrant such reduction, or termination; or

(B) determines, after a majority of the representatives of the domestic industry submits to the President a petition requesting such reduction, modification, or termination on such basis, that the domestic industry has made a positive adjustment to import competition.

Id. § 2254(b)(1) (emphasis added). While subparagraph (b)(1)(B) permits the President to "reduc[e], modif[y], or terminat[e]" a safeguard when the domestic industry has made a positive adjustment to import competition, subparagraph A more narrowly describes...