Federal Circuit Upholds Constitutionality of Byrd Amendment
February 23, 2009
The Court of Appeals for the Federal Circuit (CAFC) recently upheld the constitutionality of the provisions in the Byrd Amendment that limit the distribution of collected antidumping and countervailing duties to petitioners and supporters of petitions in trade remedy cases. In the decision, SKF v. U.S. Customs and Border Protection, the Court reversed a 2006 decision of the Court of International Trade (CIT) which held that the "in support" language of the Byrd Amendment violated the equal protection clause of the Fifth Amendment because the antidumping laws are designed to benefit entire industries rather than individual companies and because dumping similarly injures all members of a domestic industry. Therefore, the CIT held that the support element of the Byrd Amendment was severable from the statute and that the language should be amended to remove the support requirement. On appeal, SKF (an importer who also produced in the US) argued that the support element not only violated the equal protection guarantees of the Fifth Amendment, it also argued that it violated the First Amendment because it discriminated based on the viewpoint expressed by the party seeking to share in the distribution of antidumping duties. In its recent decision, the CAFC found that "the First Amendment, at least in some circumstances, does not bar rewarding parties who assist the government in litigation, even if such rewards disadvantage a losing party that asserted an unsuccessful defense that is not objectively baseless."
While Congress in December 2005 repealed the Byrd Amendment in response to a World Trade Organization (WTO) ruling that the law violated the WTO Subsidies Agreement, the distribution of funds was still permitted on goods entered into the United States before October 1, 2007. Because of the delayed effective date of the repeal and the continuing collection of duties under administrative reviews for earlier entries, millions of dollars in collected Byrd money is at stake in this litigation.
This decision likely has implications for several other pending cases. There are reportedly 10 other cases pending at the CIT where plaintiffs that did not support the antidumping or countervailing duty petitions are seeking a court ruling that they are eligible to receive Byrd funds. The CAFC's ruling in SKF is likely to be applied to a separate pending constitutional appeal at the CAFC involving PS Chez Sidney v. U.S. International Trade Commission.
Sources indicate because of the millions of dollars involved in pending cases, a petition for writ of certiorari to the Supreme Court may be filed.