Lawyer Commentary Mondaq United States Why Trade Cases May Put Maple Leaf Deference On Review

Why Trade Cases May Put Maple Leaf Deference On Review

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Tariffs have taken center stage in the president's trade agenda during the first few months of the second Trump administration. And recently, several lawsuits have been filed in the U.S. Court of International Trade and federal district courts around the country, to challenge as unlawful tariffs the president has imposed.1

All these challenges could end up in the CIT before they are ultimately resolved.2 There, the administration might soon find a more challenging legal landscape in which to defend its actions than it once enjoyed.

The U.S. Supreme Court's 2024 decision in Loper Bright Enterprises v. Raimondo overruled the 40-year-old Chevron doctrine that generally required courts to defer to the executive branch's reasonable interpretations of ambiguous statutes.3 Instead, Loper Bright held that courts typically must "exercise their independent judgment" to adopt an ambiguous statute's "best reading," even if that reading differs from the executive's.

And though both Chevron and Loper Bright specifically involved the interpretations adopted by administrative agencies, Loper Bright emphasized that its holding was not strictly limited to that context, observing that in "an agency case as in any other," there is always a best reading for a court to adopt.

For almost the same 40-year period, the U.S. Court of Appeals for the Federal Circuit, the court of appeals over the CIT, has applied a similar doctrine ' the Maple Leaf standard. This standard, from the Federal Circuit's 1985 decision in Maple Leaf Fish Co. v. U.S., requires deference to the president's actions in the international trade context, absent ' as relevant here ' his clear misconstruction of the law on which the challenged action is based.4

Maple Leaf Fish Co. involved a challenge to the president's decision to impose duties on Canadian imports of frozen mushrooms under Sections 201-03 of the Trade Act of 1974. The question arose as to the extent that "the courts can review the challenged actions" of the executive branch in this context.

The Federal Circuit answered broadly that for a court to invalidate a trade action for violating the underlying law on which it was based, the president would have had to adopt a "clear misconstruction of the governing statute." Finding that the challenger failed to show such a misreading of the relevant provisions of the Trade Act, the court upheld the duties the president had imposed.

The Maple Leaf court did not explicitly invoke Chevron as a basis for adopting this deferential standard. The court, in fact, cited no authority for this proposition specifically, instead referencing as a foundation the generally "limited role of reviewing courts" in cases "involving the President and foreign affairs."

But both the CIT and the Federal Circuit have since treated Maple Leaf as if it were essentially a trade-specific version of Chevron deference.5 And both the CIT and the Federal Circuit have repeatedly relied on Maple Leaf in international trade disputes over the years.6

For instance, in 2004, during the George W. Bush administration, the CIT invoked Maple Leaf in Gilda Industries Inc. v. U.S., a dispute about the inclusion of Spanish-imported toasted breads on a retaliatory list under Sections 301-07 of the Trade Act,7 and in Motions Systems Corp. v. Bush, about imposing quotas on Chinese-imported assisted-mobility hardware under Section 421 of the Trade Act.8

And during the last Trump administration, the standard came up in several disputes involving Canadian imports of solar electricity hardware under Sections 201-04 of the Trade Act,9 tariffs imposed on global steel imports under Section 232 of the Trade Expansion Act of 1962,10 and tariffs imposed on various Chinese imports under Sections 301-07 of the Trade Act.11

Before Loper Bright was decided but while it loomed on the horizon, litigants in several cases argued that the Maple Leaf standard contravenes the judiciary's obligation vis-à-vis the executive branch to decide questions of law, though those arguments were left unresolved.12

Now, after Loper Bright ' which overruled Chevron for essentially this reason ' the question is whether Maple Leaf remains good law.

Thus far, in the only decision after Loper Bright in which this issue has squarely been addressed, the 2024 supplemental opinion in Solar Energy Industries Association v. U.S., the Federal Circuit sidestepped "whether the Maple Leaf standard should be retained" by concluding that, "whatever merit there may be" to the question, the trade action in dispute was sustainable under "de novo review."13

That said, with international trade actions abounding in just the first few months of this new administration, several...

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