The U.S. Court of International Trade (CIT), a Federal district court based in New York City with jurisdiction over most “trade” matters, issued a ruling that declares that implementation of the so-called “Byrd Amendment” is unconstitutional to the extent that eligibility for payments under that law are contingent upon a domestic company’s expression of support for the relevant antidumping or countervailing duty petition. In the decision in PS Chez Sidney, L.L.C. v. United States International Trade Commission and United States Customs Service, the CIT determined that this aspect of the Byrd Amendment implementation was in violation of the First Amendment of the U.S. Constitution. The court states as follows:

To the extent that the Government seeks, and is required to seek, accurate information about the level of support for an antidumping or subsidy petition it can, and indeed must, make the inquiry at issue. To the extent, however, that it conditions the payment of benefits to those who answer the inquiry upon the content of their opinion, it may no more do so than it may base the condition upon the color of their skin.

In its concluding paragraph, the court, citing the Declaration of Independence, goes on to state:

It is both axiomatic, and the core basis for our political system, that government derives its just powers from the consent of the governed… The validity of that consent depends, at least in part, upon its grant by the populace unforced by fear or favor. Imposition by law of a penalty for failure to support a particular governmental policy, must of necessity derogate from that consent and thus affect the very foundation of legitimacy of government.

The court determined that eligibility for Byrd Amendment disbursements must be based on whether a domestic producer has suffered material injury by reason of unfairly trade imports (the standard for imposition of a dumping or CVD order), not whether the company has expressed support for the underlying petition.

Members should note that this decision – which will in all likelihood be appealed to the Federal Court of Appeals – does not affect the repeal of the Byrd Amendment for which this Association fought so hard (and successfully). The decision may, however, open the door to Byrd Amendment payouts to a larger group of domestic producers. However, no direction is provided by the CIT as to how the mechanism for past or pending disbursements must be altered in order to eliminate the Constitutional violation. That much, at least, remains to be seen.

Members who are interested in reading the CIT decision (which is actually pretty interesting) can access the decision at the link below.