International Trade Commission Takes Steps to Promote Early Adjudication of Dispositive Issues

by Mintz Levin - Copyright & Trademark Matters
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On June 24, 2013, the International Trade Commission (“ITC”) announced a pilot program for early adjudication of potentially-dispositive issues in investigations. The pilot program is part of ongoing efforts by the ITC to streamline its Section 337 investigation procedures to reduce the costs for parties participating in investigations and to expedite resolution of investigations.

About the pilot program

The ITC will evaluate investigations at their onset for participation in the pilot program, selecting those investigations that appear likely to present grounds for early disposition. Specifically, the ITC will assign to the pilot program those investigations that, in its view, can be resolved on threshold grounds, such as (A) domestic industry (19 U.S.C. § 1337(a)(3)); (B) importation (19 U.S.C. § 1337(a)(1)(A)); and (C) standing. This selection is made by the Office of Unfair Import Investigations, the ITC Commissioners, and the ITC Office of the General Counsel. Parties seeking one of these expedited hearings can submit written requests to the ITC during the pre-institution phase requesting that their investigation be added to the pilot program.

When an investigation is selected for the pilot program, the ITC will include in its notice of institution an abbreviated schedule for (A) fact finding on the potentially-dispositive issue identified by the ITC; and (B) an initial determination by the assigned Administrative Law Judge (generally within 100 days of institution). The assigned judge may request that the 100-day deadline be extended for good cause. However, given the stated purpose of this expedited procedure, we do not expect that such extensions will be granted liberally. The ITC’s notice states that a finding of no domestic industry will result in the investigation being stayed pending Commission review, and that no other finding will stay the investigation. However, it is likely that a finding of no importation or no standing would similarly stay the investigation.

A party aggrieved by an initial determination rendered in the pilot program may petition the ITC for review within five (5) calendar days of service of the initial determination. Replies to any such petitions must be submitted within three (3) business days of service of the petition. Within thirty (30) days of the issuance of the initial determination, the ITC will decide whether to review it. The ITC’s review, if undertaken, will typically take thirty (30) days.

The procedure defined by the pilot program differs from a motion for summary determination in significant ways: First, in addition to allowing for an expedited evidentiary proceeding, the assigned judge must render a decision within the set deadline; he or she may not postpone the issue for trial, as with summary determinations. Second, if the Commission takes review of the initial determination, the Commission’s review is expected to be completed within 30 days. In contrast, there is no set deadline for the Commission’s review of summary determinations.

An ongoing effort to streamline investigations

The ITC has, in recent months, sought to implement procedures for early resolution of dispositive issues. In so doing, the ITC seeks to save the parties the time and expense of full discovery and litigation of the investigation in its entirety, when the case turns on such a dispositive issue.

In keeping with these goals, in March 2013, the ITC, in the investigation Certain Products Having Laminated Packaging, Laminated Packaging, and Components Thereof, Inv. No. 337-TA-874, ordered an early evidentiary hearing and initial determination on the issue of whether the complainant had met the economic prong of the domestic industry requirement. See 78 Fed. Reg. 19,007 (Mar. 28, 2013). In the event that the initial determination held that requirement unmet, the ITC further directed that a stay would issue, stopping proceedings unless the Commission, upon review, entered a contradictory order. See id. The complainant argued in response that the shortened time to establish this requisite element was an illegal change in procedures without notice and comment.

Administrative Law Judge Theodore Essex, presiding over the investigation, expressed some sympathy for that position, stating his view that “the Commission’s decision to depart from its own rules and regulations without any justification is of questionable legality.” Order No. 3 at 1, fn. 1.

Other Administrative Law Judges presiding over ITC investigations seem more sympathetic to the view that some dispositive issues should be adjudicated early in investigations. Judge Thomas Pender, for example, has sought to expedite resolution of the domestic industry issue before. In Certain Cases for Portable Electronic Devices, Inv. No. 337-TA-861, Judge Pender ordered disclosure of domestic industry contentions ninety-one (91) days after initiation of the investigation, with an evidentiary hearing on the issue two hundred sixty-nine (269) days after initiation, and initial determination of the issue within one year—more than four months before the target date for completion of the investigation. See Certain Cases for Portable Electronic Devices, Inv. No. 337-TA-861, Order No. 3 (November 28, 2012).

Perhaps in response to concerns raised by Judge Essex and the complainant in Certain Products Having Laminated Packaging, Laminated Packaging, and Components Thereof, the ITC admits that its new pilot program is a cautious early step towards promulgation of rules that would alter the schedule of all investigations. This program, though, goes farther than prior efforts to reach dispositive issues early in investigations which, as summarized above, addressed the domestic industry requirement only. The new pilot program encompasses additional dispositive grounds, including standing and importation.

Impact

Foreshadowed by the ITC’s actions in Certain Products Having Laminated Packaging, Laminated Packaging, and Components Thereof, the new pilot program continues the trend of the ITC providing judges more flexibility to dispose of cases quickly. The program is not a stark departure from the schedule set by the ITC in that investigation, however. It remains to be seen whether expanding the scope of issues for initial determination beyond the domestic industry requirement will accomplish the ITC’s goal of winnowing out weak cases before the parties expend much resources in the investigations. It is unclear at this point precisely what proportion of investigations will be appropriate for early disposition. The ITC may have difficulty selecting appropriate cases for the pilot program. Selection of inappropriate cases for the program may simply mean additional hearings where the most likely outcome is not disposition of the investigation. Similarly, abundant extensions of the 100-day deadline, or extended time periods for Commission review would reduce the program’s impact. Until the program begins in earnest, one can only speculate as to whether it will accomplish its goals or simply add more tight deadlines to procedures already replete with them.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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