[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43429-43433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21522]
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INTERNATIONAL TRADE COMMISSION
19 CFR Part 210
Procedures for Investigations and Related Proceedings Concerning
Unfair Practices in Import Trade
AGENCY: U.S. International Trade Commission.
ACTION: Final rule.
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SUMMARY: The Commission hereby adopts certain interim rules as final
rules of practice and procedure for investigations and related
proceedings under section 337 of the Tariff Act of 1930 (19 U.S.C.
1337). The Commission also revises the interim rule concerning
investigation target dates, and adopts that rule as a final rule. This
change is made, in response to public comment, so that any decision
that results in a target date beyond fifteen months will be by initial
determination. The Commission further revises the final rule concerning
modification or rescission of exclusion orders, cease and desist
orders, and consent orders to eliminate the publication of Federal
Register notices that are not required by law, to eliminate unnecessary
publication costs.
DATES: The effective date of these final rules is September 23, 1996.
These final rules will apply to all section 337 investigations and
proceedings instituted after September 23, 1996, as well as to
complaints requesting the institution of a section 337 investigation
and petitions for modification or rescission of exclusion orders, cease
and desist orders, and consent orders filed after September 23, 1996.
FOR FURTHER INFORMATION CONTACT: Sidney Harris or Paul J. Luckern,
Office of Administrative Law Judges, U.S. International Trade
Commission, telephone (202) 205-2692 or (202) 205-2694. Hearing
impaired individuals can obtain information on the final rules by
contacting the Commission's TDD terminal at (202) 205-1810.
SUPPLEMENTARY INFORMATION:
Rulemaking Analysis
The final rules proposed in this notice do not meet the criteria
enumerated in
[[Page 43430]]
section 3(f) of Executive Order 12866,1 and therefore do not
constitute a significant regulatory action for purposes of that
Executive Order.
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\1\ 58 FR 51735, Oct. 4, 1993.
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In accordance with the Regulatory Flexibility Act,2 the
Commission hereby certifies 3 that the revised rules set forth in
this notice are not likely to have a significant economic impact on a
substantial number of small business entities. The Commission notes
that most section 337 complainants are not small businesses. Moreover,
proposed final rule 210.51(a) merely requires any extension of a target
date beyond 15 months to be by initial determination, and proposed
final rule 210.76(b) merely ceases publication of certain section 337
Federal Register notices that are not required by law.4 In any
event, the Regulatory Flexibility Act is inapplicable to this
rulemaking, because it is not one for which a notice of proposed
rulemaking was required under 5 U.S.C. 553(b) or another statute.5
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\2\ 5 U.S.C. 601 note.
\3\ Pursuant to 5 U.S.C. 605(b).
\4\ See 60 FR 53119 (Oct. 12, 1995).
\5\ See 5 U.S.C. 603(a).
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Background
Interim rules
On December 30, 1994, the Commission published interim rules
implementing the statutory amendments to section 337 effected by the
Uruguay Round Agreements Act (URAA) (59 FR 67622, Dec. 30, 1994).
Public comment was invited during a 90-day period ending March 30,
1995. The Commission received comments from The International Trade
Commission Trial Lawyers Assoc. (ITCTLA), Texas Instruments (TI),
Minnesota Mining and Manufacturing Co. (3M), Mr. Gilbert B. Kaplan of
the law firm of Hale and Dorr (Kaplan), the Government of Canada
(Canada) and the Japan Machinery Exporters' Association (JMEA). The
Commission took those comments into account before promulgating these
final rules. As these final rules are, with one exception, identical to
the interim rules on which public comment was invited and received, no
further notice and comment period is found necessary. See e.g. American
Transfer & Storage Co. v. I.C.C., 719 F.2d 1283 (5th Cir. 1983);
Methodist Hosp. of Sacramento v. Shalala, 38 F.3d 1225 (D.C. Cir.
1994); City of Stoughton, Wis. v. EPA, 858 F.2d 747 (D.C. Cir. 1988).
Each comment on the interim rules is summarized and the Commission's
responses are provided in the section-by-section analysis of the final
rules. Only section 210.51(a) is changed from the interim rules. In
response to public comment, final rule 210.51(a) now provides that any
extension of an investigation target date beyond 15 months shall be by
initial determination, subject to discretionary review by the
Commission. Final rule 210.76(b)
Final rule 210.76(b) is being revised to eliminate the provision
stating that the Commission will institute proceedings to modify or
rescind a remedial order or a consent order by publishing a notice in
the Federal Register. This change is being made to increase the
efficiency and economy of the section 337 process by eliminating
unnecessary publication costs, as recommended by the Commission's
Inspector General. See generally Audit Report No. IG-03-94, Review of
Ways to Increase the Economy and Efficiency of the Process for
Conducting Section 337 Investigations, at pages 2-4 and 8 (Aug. 19,
1994).
Last year, the Commission conducted a separate rulemaking to
eliminate provisions of 19 CFR Part 210 requiring the publication of
Federal Register notices that are not required by law. The proposed
revision of final rule 210.76(b) was inadvertently omitted from the
notice of proposed rulemaking published at 60 FR 16082 (Mar. 29, 1995).
The notice of final rulemaking published at 60 FR 53117 (Oct. 12, 1995)
acknowledged that omission. That notice also stated that the Federal
Register publication requirement of final rule 210.76(b) had been
suspended in Administrative Orders 95-12 (Mar. 21, 1995) and 95-18
(Oct. 4, 1995) and that a proposed revision of final rule 210.76(b) to
delete the Federal Register notice requirement would be published for
public comment at a later date. See 60 FR at 53119.
The Commission has since decided, however, that the costs and the
administrative burden of utilizing the notice and public comment
procedure to revise final rule 210.76(b) outweigh any potential
benefits. Significant amounts of staff time and resources are consumed
in the preparation of notices for publication. In addition, publication
fees are not nominal. Though discounts are available, the fee for
publishing a notice in the Federal Register can be as high as $125 per
column (with no proration for partial columns) and $375 per page. The
Commission also must bear the cost of reproducing the notice for
distribution to the public through the Office of the Secretary and
other sources, as well as the cost of mailing copies to various bar
groups, other Federal agencies, and other interested persons or
organizations.
The notice and comment procedure of 5 U.S.C. 553(b) is not only
costly, it also lengthens the time it takes for the Commission to
effect the desired rule change. After a notice of proposed rulemaking
is published in the Federal Register, interested persons must be given
adequate time to review the proposed rules and determine whether they
wish to submit comments, as well as adequate time to prepare and file
the comments. The Commission must then review those comments before
making a final decision on the content of the revised rule. (Moreover,
after the Commission makes a final decision on content, the revised
rule generally cannot go into effect for at least 30 days after a
notice of final rulemaking is published in the Federal Register. See 5
U.S.C. Sec. 553(d).)
Judging by the response to the notice of proposed rulemaking
published at 60 FR 16082, it seems unlikely that a notice of proposed
rulemaking concerning the revision of final rule 210.76(b) would
generate much public comment. In addition to publishing that notice in
the Federal Register, the Commission mailed that notice to bar groups,
Federal agencies, and other interested persons or organizations that
routinely receive such notices. Only one bar group and one agency
commented on the proposed revision of the part 210 rules to eliminate
the publication of Federal Register notices that are not required by
law.
Even though the aforementioned notice of proposed rulemaking did
not set forth a proposed revision of final rule 210.76(b), the ITCTLA
urged the Commission not to suspend or eliminate the Federal Register
notice requirement of that rule. The ITCTLA noted that the Federal
Register is a reliable and readily accessible data base. The ITCTLA
added that Federal Register notices of Commission proceedings to modify
or rescind a remedial order or a consent order fill a valuable due
process role by alerting interested persons to a potential disturbance
of the status quo--which enables them to take whatever action they deem
necessary to protect their interests.
The Commission considered the ITCTLA comments, but has decided that
final rule 210.76(b) must be revised for the same reasons that the
relevant provision of that rule was suspended and that other part 210
rules were revised last year to eliminate Federal Register notice
requirements. (See 60 FR at 53118.) Those reasons include (1) the need
to reduce unnecessary spending, (2) the fact that section 337 notices
are available from various sources, (3) the absence of any indication
that
[[Page 43431]]
suspension of the Federal Register notice requirement imposed by final
rule 210.76(b) has caused significant problems for parties, the
Commission's staff, interested members of the public, or other Federal
agencies, and (4) the absence of any indication that revising that rule
by deleting the publication requirement is likely to cause such
problems in the future.
Interested persons who wish to contest the revision of final rule
210.76(b) can petition the Commission to have the revised rule amended
or repealed, pursuant to 5 U.S.C. 553(e) and 19 CFR 201.4(b).
The Federal Register publication requirement of final rule
210.76(b) is an agency rule of practice and procedure. Hence, the
proposed revision of final rule 210.76(b) to eliminate that requirement
need not be published in a notice of proposed rulemaking that solicits
public comment. See 5 U.S.C. 553(b).
Section-By-Section Analysis of the Final Rules
Many of the final rules discussed in this notice are identical to
the correspondingly numbered interim rules published on December 30,
1994. No comment was received on many of the interim rules, and the
Commission found no reason to change those interim rules on its own
before adopting them as final rules. Thus, the preamble to those final
rules is as set forth in the ``Section-By-Section Analysis of the
Interim Rules'' found at 50 FR 67624-67626 (Dec. 30, 1994) (hereinafter
referred to as ``preamble'').6
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\6\ The Commission received no comments on the following interim
rules: 210.3-210.5; 210.16; 210.21-210.22; 210.24; 210.39; 210.41;
210.43; 210.49-210.50.
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The Commission did receive comments on certain interim rules, and
those comments and the views of the Commission are summarized below.
The commentary in the December 30, 1994, notice is considered part of
the preamble to those final rules, to the extent that such commentary
is not inconsistent with the discussion below.
Subpart C--Pleadings
Section 210.14
The interim rules added a new paragraph (e) to section 210.14 to
implement the amendment to Section 337(c) of the Tariff Act with regard
to counterclaims. Interim rule 210.14(e) requires that counterclaims be
filed not later than 10 business days before the commencement of the
evidentiary hearing.
The ITCTLA, TI, 3M and Kaplan commented that the preamble to
interim rule 210.14(e) suggests that the deadline for counterclaims is
being set at 10 business days before the evidentiary hearing to permit
respondents to use discovery mechanisms to ``identify potential
counterclaims'' and that because counterclaims which a respondent can
raise also include permissive counterclaims (i.e., claims unrelated to
the complaint), the preamble can be construed to support discovery on
unrelated matters to determine whether they constitute potential
counterclaims.
Canada and the JMEA objected to the changes made by the URAA
regarding counterclaims as insufficient to meet U.S. obligations under
the General Agreement on Tariffs and Trade (GATT). Canada and the JMEA
further commented on the inability of a respondent to raise a
counterclaim at the Commission, at least to the extent that the subject
matter of the counterclaim falls within the jurisdiction of the
Commission. The JMEA proposed that the Commission draft rules to
provide that if a respondent in a first section 337 investigation files
a complaint with the Commission alleging violation of section 337 in a
second investigation, the second investigation can be joined to the
first investigation.
The requirement that counterclaims be filed not later than ten
business days before the commencement of the evidentiary hearing was
included to provide a respondent adequate time to identify potential
counterclaims while avoiding the distraction that might occur if
counterclaims could be filed during (or after) the evidentiary hearing.
Discovery at the Commission is not for the purpose of generating a
counterclaim and the scope of discovery is not expanded by the new
counterclaim provision beyond what was previously allowed in Commission
investigations.
The comments of Canada and the JMEA regarding interim rule
210.14(e) are based on their perceptions of deficiencies in the URAA.
As such, the Commission does not find it appropriate to incorporate
changes based on these comments into its final rules. Moreover, the
joinder of two section 337 investigations, as proposed by the JMEA, may
be sought by motion under section 210.15. The Commission notes that
such a motion for joinder was, in fact, granted in Certain Precision
Resistor Chips, 337-TA-63/65, Order No. 2 (May, 1979).
In view of the foregoing, the Commission has determined that no
changes to interim rule 210.14 are warranted.
Subpart D--Motions
Section 210.23
Interim rule 210.23 eliminates the provision allowing the
Commission to suspend an investigation because of a proceeding in a
court or agency of the United States involving similar subject matter,
except for possible antidumping or countervailing duty matters referred
to the Department of Commerce by the Commission.
Canada maintains that interim rule 210.23 may exacerbate
discriminatory features of section 337 identified by the GATT Panel
Report in Aramid Fiber, BISD 36S/345, Adopted 11/7/89, pertaining to
dual proceedings.
It is important to bear in mind the reason underlying the changes
to section 210.23. Interim rule 210.23 reflects the amendments to
section 337(b)(1) that eliminated statutory deadlines. Administrative
law judges and the Commission retain the inherent authority to suspend
an investigation, based on a parallel proceeding, although it is
expected that this authority will be used sparingly. Moreover, the
addition of 28 U.S.C. 1659 now provides respondents with the ability to
obtain a stay of a parallel District Court proceeding.
In view of the foregoing, the Commission has determined that no
changes to interim rule 210.23 are warranted.
Subpart G--Determinations and Actions Taken
Sections 210.42 and 210.51
Interim rule 210.51 requires the administrative law judge, within
45 days of institution of an investigation, to set a target date for
completion of that investigation. Any decision to set a target date of
15 months or more is by initial determination, subject to discretionary
review by the Commission. Interim rule 210.42(c) provides, in relevant
part, that motions to set a target date exceeding 15 months from the
date of institution, pursuant to interim rule 210.51(a), are granted by
initial determination.
The ITCTLA, 3M, TI and Kaplan commented that the Commission should
be directly responsible for setting the target dates, and that this
decision should not be delegated to the administrative law judges.
The JMEA commented that the rules should not be administered in a
manner that effectively imposes a time limit on the administrative law
judge which the JMEA maintained would be the case if
[[Page 43432]]
the discretion of the judge were limited to establishing target dates
of 15 months or less. 3M and Kaplan commented that the choice of 15
months as the time that triggers Commission review seems to give a
degree of approval to target dates exceeding 12 months, and that
Commission review should be triggered by any target date that exceeds
12 months.
The Commission finds that it is appropriate for the administrative
law judge to set all target dates. Allowing the administrative law
judge to set target dates within a 12- to 15-month period of time,
without Commission review, greatly simplifies judicial management of
investigations. It is expected that the administrative law judges will
abide by the intent of Congress and the Commission, and conclude most
investigations within the traditional period of 12 months or less.
The ITCTLA commented that interim rule 210.51, when read in
conjunction with the Commission's review authority set forth in
Sec. 210.42(h)(3), violates the amended statute's requirement that the
Commission shall establish a target date within 45 days after an
investigation is instituted with respect to an initial determination
setting a target date of more than 15 months. The ITCTLA commented
that, for example, should an administrative law judge, 45 days after
institution, set a target date of 18 months, the target date will not
become the determination of the Commission until 30 day later, or a
total of 75 days, and should the Commission choose to review the
initial determination the period could be extended even further.
The ITCTLA further commented that interim rule 210.51 should be
amended such that any subsequent modification by the administrative law
judge to the target date, based on good cause, should be in the form of
an initial determination subject to review by the Commission in every
instance.
The Commission recognizes that section 337(b)(1) requires that the
Commission ``within 45 days after an investigation is initiated,
establish a target date for its final determination.'' Under interim
rule 210.51, any decision by the administrative law judge to set a
target date of 15 months or less is not subject to review, and thus
will be final within 45 days after institution of the investigation. It
is expected that target dates will rarely exceed 15 months. In the rare
case where a target date in the first instance is set in excess of 15
months, the initial determination and any subsequent review by the
Commission will be completed within 45 days of institution, as required
by section 337(b)(1). Thus, no modification of interim rule 210.51 is
found necessary. The Commission, however, has modified interim rule
210.51, such that, under final rule 210.51(a), any extension that would
result in a target date beyond 15 months from institution will be by
initial determination, and subject to discretionary review by the
Commission.
Subpart H--Temporary Relief
Sections 210.52 and 210.70
These rules provide for the posting and forfeiture of a
complainant's bond when a complainant seeks temporary relief.
Canada commented that the statute and rules make no provision for a
bond requirement on a complainant where no temporary relief has been
sought, and suggested that provision should be made for the
indemnification of the defendant in all situations.
To the extent that Canada's comment is based on its perception of a
deficiency in the URAA, the Commission does not consider it appropriate
to incorporate changes based on this comment in its rules. Furthermore,
the Commission finds no need for such a provision. In cases involving a
successful motion for temporary relief, articles may only enter or be
sold in the United States during the pendency of an investigation upon
the posting of a bond. In cases that do not involve a motion for
temporary relief, by contrast, respondents do not require any
indemnification, because respondents' articles are not subject to
exclusion until a final determination of violation by the Commission.
Subpart I--Enforcement Procedures and Advisory Opinions
Section 210.76
Paragraph (b) of final rule 210.76 requires that the Commission
publish a Federal Register notice in order to institute a proceeding to
modify or rescind the exclusion order, cease and desist order, or
consent order. The Commission proposes to revise paragraph (b) by
eliminating the publication requirement and allowing the Commission to
institute such proceedings simply by issuing a notice.
Miscellaneous
The JMEA maintained that in order to comply with the spirit of the
Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPs), the Commission should clarify that (1) the domestic industry
requirement under section 337 cannot be satisfied by an individual
inventor pursuing his or her personal monetary interest by enforcing
his or her paper patent, and (2) that section 337 is not a vehicle for
pursuing such personal interest. Those comments, however, relate to
questions of statutory interpretation, dealing with the substance of
section 337, and do not implicate any Commission procedural rule.
List of Subjects in 19 CFR Part 210
Administrative practice and procedure, Business and industry,
Customs duties and inspection, Imports, Investigations.
For the reasons set forth in the preamble, 19 CFR Part 210 is
amended as set forth below.
PART 210--ADJUDICATION AND ENFORCEMENT
1. The authority citation for Part 210 will continue to read as
follows:
Authority: 19 U.S.C. 1333, 1335, and 1337.
2. The interim rule amendments to Secs. 210.3, 210.4, 210.5,
210.14, 210.16, 210.21, 210.22, 210.23, 210.24, 210.39, 210.42, 210.43,
210.49, 210.50, 210.52 and 210.70, published on December 30, 1994 (59
FR 67622) are adopted as final rules without change.
Note: Sec. 210.21(d) has been further amended by a rule
published on Oct. 12, 1995 (60 FR 53120).
3. The interim rule amending Sec. 210.51 (b) and (c) published on
December 30, 1994 (59 FR 67622) is adopted as a final rule and
paragraph (a) is revised to read as follows:
Sec. 210.51 Period for concluding investigation.
(a) Permanent relief. Within 45 days after institution of the
investigation, the administrative law judge shall issue an order
setting a target date for completion of the investigation. If the
target date does not exceed 15 months from the date of institution of
the investigation, the order of the administrative law judge shall be
final and not subject to interlocutory review. If the target date
exceeds 15 months, the order of the administrative law judge shall
constitute an initial determination. After the target date has been
set, it can be modified by the administrative law judge for good cause
shown before the investigation is certified to the Commission or by the
Commission after the investigation is certified to the Commission. Any
extension of the target date beyond 15 months, before the investigation
is certified to the Commission, shall be by initial determination.
* * * * *
[[Page 43433]]
4. Paragraph (b) of Sec. 210.76 is revised to read as follows:
Sec. 210.76 Modification or rescission of exclusion orders, cease and
desist orders, and consent orders.
* * * * *
(b) Commission action upon receipt of petition. The Commission may
thereafter institute a proceeding to modify or rescind the exclusion
order, cease and desist order, or consent order by issuing a notice.
The Commission may hold a public hearing and afford interested persons
the opportunity to appear and be heard. After consideration of the
petition, any responses thereto, and any information placed on the
record at a public hearing or otherwise, the Commission shall take such
action as it deems appropriate. The Commission may delegate any hearing
under this section to the chief administrative law judge for
designation of a presiding administrative law judge, who shall certify
a recommended determination to the Commission.
By Order of the Commission.
Issued: August 19, 1996.
Donna R. Koehnke,
Secretary.
[FR Doc. 96-21522 Filed 8-22-96; 8:45 am]
BILLING CODE 7020-02-P
