Government Defense of Solar Panel Tariff Adjustment Would Eviscerate Judicial Review, Industry Argues

A Department of Justice defense of President Donald Trump's decision to eliminate a tariff exemption for bifacial solar panels would upend “well-settled principles of judicial review,” counsel for Solar Energy Industries Association argued in a May 7 response to DOJ's motion to dismiss. The DOJ argued that the Court of International Trade isn't permitted to review a president's factual determinations when determining if the tariff actions followed statute. Seeing as the president is only explicitly allowed to adjust previous safeguard measures to a product “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,” the questions of whether that petition was submitted and if domestic industry has indeed made the requisite adjustments have become central ones to the case.

SEIA said that the conditions were not met, while DOJ says that not only have they been met, but that the court may not even review these “factual determinations” because the president said he received the petition, and his word is good enough. Counsel for SEIA and the other plaintiffs in the case found this argument to conflate “presidential fact-findings with presidential compliance with statutory predicates.” Allowing the president to “find" that he complied with the law would effectively remove judicial review, it said.

The lawsuit initially arose after SEIA sought to invalidate an October presidential proclamation reimposing solar safeguard duties on bifacial panels and upping the safeguard tariffs on all imported solar cells (see 2103030028). Joined by Invenergy Renewables, NextEra Energy and EDF Renewables, SEIA said Trump failed to follow the requirements of the safeguard laws when he issued the proclamation (see 2012300045). Invenergy had successfully challenged the Office of the U.S. Trade Representative's earlier attempts to withdraw the exemption in a previous lawsuit (see 2011190020).

In a 52-page reply memo to DOJ's motion to dismiss, SEIA attempted to catch the solar panel exemption removal on various procedural requirement violations, including ones declaring that the president must receive a petition from a majority of representatives of the domestic industry before further corrective action is taken and that safeguard duties cannot be reapplied to a product for at least two years after termination of the initial safeguard measure -- both of which the plaintiffs argued were not met. In attempting to prove that a petition from domestic industry was received, the government defense submitted three letters to the court from domestic companies asking for the action -- but not only do these not constitute a majority of domestic industry, SEIA said, they also don't show that they have made a “positive adjustment to import competition,” as required.

Looking to source materials associated with passage of the Trade Act of 1974 -- the authority in which these actions were derived -- plaintiffs also made the case that the bill doesn't allow for an increase in reapplying safeguard measures at all, only trade liberalizing ones. Finding that DOJ's position “defies logic” in arguing for tariff increases in this case, the plaintiffs argued that because the law requires a positive adjustment to the original safeguard relief for further action to take place, it would make sense that trade liberalizing measures would come next as opposed to greater trade restrictions. Also, the original Senate version of the bill had it in explicit terms that no tariff increases were to take place in safeguard modifications, but this wording was dropped to not limit the trade liberalizing measures that the president could take in responding to industry concerns, they said.