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Court Declines to Issue Preliminary Injunction in Solar Cell Safeguard Case

Thursday, March 08, 2018
Sandler, Travis & Rosenberg Trade Report

The U.S. Court of International Trade has denied a request by three Canadian solar panel producers and a U.S. importer of solar cells and modules for a temporary restraining order and a preliminary injunction from the safeguard measure that the U.S. recently imposed on imports of crystalline silicon photovoltaic cells and modules. The court determined that the plaintiffs failed to demonstrate a likelihood that they will succeed on the merits for any of their claims or that the imposition of the equitable relief they seek would be in the public interest.

The plaintiffs argued that in issuing the safeguard measure the president acted without congressional authority because (1) the remedy recommendation by the International Trade Commission did not provide, on behalf of the ITC as a whole, a recommended action to address the serious injury to the domestic industry, as required under section 202(e) of the Trade Act; (2) the tariff-rate quota on CSPV cells not assembled into modules or other products violates section 312(d) of the NAFTA; and (3) the president lacked authority to impose a restriction on CSPV products from Canada because the ITC found that such imports did not account for a substantial share of total imports and did not contribute importantly to the serious injury or threat thereof caused by imports.

While the court presumes the plaintiffs were correct in asserting that the ITC did not recommend an action within the meaning of section 202(e) of the Trade Act before the president issued the proclamation imposing the safeguard, it nonetheless ruled that the ITC’s failure to provide a “remedy finding of the Commission” did not confine the president’s discretion in any way. The court acknowledged that the absence of an ITC remedy confined the discretion authority of Congress to invoke its override authority but still found that Congress did not intend to preclude the president from acting to remedy injury or threat of injury when an ITC report lacks a qualifying remedy recommendation.

With regard to the second claim, the court said that the plaintiffs “are faced with an issue of standing on which they may not be able to prevail” and have not demonstrated that their interpretation of 19 U.S.C. § 3372(d) to encompass the TRQ in the proclamation is correct. According to the court, to be inconsistent with section 3372(d) a safeguard measure must be a “quantitative restriction” and must fail to “permit the importation” of the specified quantity or value of the affected article. Finally, the CIT determined that while the NAFTA Implementation Act enables the president to exclude imports of a NAFTA country from a global safeguard action under the Trade Act, it does not require him or her to do so.

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