Federal Circuit Upholds Commerce's Limited Interpretation of Section 129 Authority

Introduction

The U.S. Court of Appeals for the Federal Circuit (the "Federal Circuit") recently upheld the U.S. Department of Commerce's ("Commerce") narrow interpretation of the scope of section 129 determinations in ThyssenKrupp Acciai Speciali Terni S.p.A et. al v. United States.1Domestic and foreign parties involved in Commerce investigations should take note that ThyssenKrupp upholds a longstanding Commerce practice to limit the scope of section 129 determinations to specific issues raised in the context of a WTO dispute. This article provides a brief background on section 129, and then discusses Commerce's application of section 129 and the ThyssenKrupp ruling.

Background on Section 129

Section 129 of the Uruguay Round Agreements Act (19 U.S.C. § 3538) outlines the statutory process for bringing agency determinations ruled inconsistent with the U.S. government's WTO obligations into compliance. (Section 123 is used when a WTO ruling requires a change in regulation or written practice.) Under section 129, the United States Trade Representative ("USTR") must first consult with Commerce and various congressional committees to determine the proper response. Next, the USTR may request that Commerce issue a section 129 determination to bring the challenged action into compliance with U.S. government obligations. Following this USTR directive, Commerce will issue a preliminary determination and invite interested parties to submit written comments, which sometimes contain allegations that are not part of the WTO determination. For example, a party's comments for a section 129 determination might request wholesale methodological changes or the correction of clerical errors that were not raised in the context of the WTO dispute. When Commerce receives such extraneous allegations, it must articulate its position on the scope of section 129.

In doing so, Commerce must interpret a vague section 129 statute. Section 129 provides only that "Commerce shall . . . issue a determination in connection with the particular proceeding that would render [Commerce's] action . . . not inconsistent with the findings of the panel or the Appellate Body." 19 U.S.C. § 3538(b)(2). Adverse WTO decisions similarly provide little guidance as they only direct Commerce to make determinations consistent with WTO agreements, but do not prescribe a specific manner. Thus, one can argue that Commerce is free to include anything in a section 129 determination that is not...