International Trade > AG Trade Law > SCOTUS Says No to Papierfabrik
11 Mar '19

Few international trade disputes make their way to the Supreme Court of the United States (SCOTUS). In the vast majority of these appeals, SCOTUS simply denies the petition for certiorari without comment. Indeed, SCOTUS last addressed the merits of a trade appeal over a decade ago, when it upheld the U.S. Department of Commerce’s interpretation of an antidumping statute. See United States v. Eurodif S.A., 555 U.S. 305 (2009).

Over the past two years, Papierfabrik August Koehler SE has twice asked SCOTUS to review decisions by Commerce to apply “adverse facts available” in antidumping administrative proceedings, based on the company’s alleged failure to act to the best of its ability. In each proceeding, Commerce relied upon adverse facts available to assign a high duty rate to Papierfabrik’s imports of lightweight thermal paper from Germany. The statute in effect at the time of Commerce’s determinations required the agency to “corroborate” the information that it used in assigning the high duty rate to Papierfabrik’s imports. Commerce allegedly did so.

In its most recent request, Papierfabrik presented a technical question of statutory interpretation: does a statute’s purpose override explicit requirements in the provision’s text? In Papierfabrik’s view, the U.S. Court of Appeals for the Federal Circuit and the U.S. Court of International Trade erred in holding that the antidumping statute’s remedial purpose trumped the statute’s explicit corroboration requirement. Citing the United States’ international obligations under the World Trade Organization Anti-Dumping Agreement, a group of law professors filed an amicus brief supporting Papierfabrik.

The U.S. government opposed Papierfabrik’s petition on several grounds, advancing three main themes. First, it accused Papierfabrik of masquerading a fact-bound question (whether substantial evidence supports Commerce’s corroboration finding) as a legal one (whether Commerce offered a permissible interpretation of the statutory scheme), and it explained that substantial evidence nevertheless supports Commerce’s corroboration finding. Second, the government contended that Commerce faithfully applied the statute to the facts at hand and, therefore, corroborated the duty rate assigned to Papierfabrik’s imports “to the extent practicable.” Finally, the government argued that SCOTUS should not grant the petition because Congress amended the relevant statute in 2015 to give Commerce “even greater discretion in applying, selecting, and corroborating adverse rates in antidumping proceedings,” such that a ruling on the prior version of the statue would have little prospective significance.

SCOTUS denied Papierfabrik’s petition on Monday, March 4. As a result, Commerce’s broad discretion to apply adverse facts available under appropriate circumstances remains intact for now.