Court skeptical of solar firms’ tariff lawsuit: ‘Game over’

Source: Ellen M. Gilmer, E&E News reporter • Posted: Tuesday, May 15, 2018

Canadian solar companies’ bid to block President Trump’s new solar tariffs felt like a long shot Friday as a federal appeals court heard their case.

Judges for the U.S. Court of Appeals for the Federal Circuit appeared skeptical of claims that trade restrictions on imported solar cells and modules are unlawful because Trump officials didn’t follow proper procedures.

Four Canadian companies — Silfab Solar Inc., Heliene Inc., Canadian Solar (USA) Inc. and Canadian Solar Solutions Inc. — brought the suit earlier this year after the president granted a request from two struggling domestic manufacturers to levy charges on crystalline silicon photovoltaic cells shipped to the U.S. from other countries. The tariffs were widely opposed most other American solar companies and foreign manufacturers.

According to the Canadian firms, the tariffs violate the 1974 Trade Act because they relied on U.S. International Trade Commission recommendations that lacked a majority vote. The commissioners agreed that imported solar cells caused “serious injury” to the domestic industry but then issued an assortment of remedy recommendations, none backed by a majority.

The U.S. Court of International Trade in March rejected a request to issue a preliminary injunction blocking the tariffs (Energywire, March 22).

Hogan Lovells attorney Jonathan Stoel, representing the companies, on Friday urged the Federal Circuit to overturn that decision. He framed the appeal as an issue of survival for the Canadian firms, which now must pay a 30 percent tariff on cells shipped south of the border, and argued that the president blatantly violated the law by approving the tariffs without a majority-backed remedy recommendation from the ITC.

Judge Kimberly Moore, a George W. Bush appointee, criticized the argument, saying it “handcuffs the president contrary to the clear mandate of the plain language of the statute.” The Trade Act, she noted, stipulates that the president “shall act” once the ITC determines that imports cause serious injury.

“Game over,” Moore added.

Judges Jimmie Reyna and Timothy Dyk, both Democratic appointees, also seemed doubtful of the claim. Reyna said it seemed to “pigeonhole” the president’s authority, while Dyk noted that the statute seemed to give the president broad discretion.

The Canadian firms got a little more traction on their second argument, that the president violated the U.S. law that implements the North American Free Trade Agreement because the statute limits the application of tariffs to countries whose products represent a “substantial share” of U.S. imports.

According to legal filings, Canada accounts for only 2 percent of U.S. solar imports.

The judges grilled government lawyers on how the president reached his decision to include Canada in the tariffs. Dyk noted that while he could not question the president’s factual analysis for the approval, he could review whether the president exceeded his legal authority.

Justice Department attorney Jeanne Davidson maintained that the president’s decision is not reviewable. She added that the court has never enjoined the president from providing emergency relief on a trade issue.

The three-judge panel is expected to issue a decision in the coming months. The Canadian companies’ original lawsuit is still moving forward in the trade court, where government lawyers have pushed to have the case dismissed (Energywire, April 18).