[Senate Hearing 115-717]
[From the U.S. Government Publishing Office]
S. Hrg. 115-717
NOMINATIONS OF JEFFREY I. KESSLER,
ELIZABETH ANN COPELAND, PATRICK J. URDA, AMY KARPEL, AND RANDOLPH J.
STAYIN
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
ON THE
NOMINATIONS OF
JEFFREY I. KESSLER, TO BE ASSISTANT SECRETARY FOR ENFORCEMENT AND
COMPLIANCE, DEPARTMENT OF COMMERCE; ELIZABETH ANN COPELAND, TO BE A
JUDGE OF THE UNITED STATES TAX COURT; PATRICK J. URDA, TO BE A JUDGE OF
THE UNITED STATES TAX COURT; AMY KARPEL, TO BE A MEMBER OF THE UNITED
STATES INTERNATIONAL TRADE COMMISSION; AND RANDOLPH J. STAYIN, TO BE A
MEMBER OF THE UNITED STATES INTERNATIONAL TRADE COMMISSION
__________
JUNE 12, 2018
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Finance
__________
U.S. GOVERNMENT PUBLISHING OFFICE
38-445 PDF WASHINGTON : 2019
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COMMITTEE ON FINANCE
ORRIN G. HATCH, Utah, Chairman
CHUCK GRASSLEY, Iowa RON WYDEN, Oregon
MIKE CRAPO, Idaho DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming BILL NELSON, Florida
JOHN CORNYN, Texas ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia SHERROD BROWN, Ohio
ROB PORTMAN, Ohio MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada MARK R. WARNER, Virginia
TIM SCOTT, South Carolina CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana SHELDON WHITEHOUSE, Rhode Island
A. Jay Khosla, Staff Director
Joshua Sheinkman, Democratic Staff Director
(ii)
C O N T E N T S
----------
OPENING STATEMENTS
Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman,
Committee on Finance........................................... 1
Wyden, Hon. Ron, a U.S. Senator from Oregon...................... 3
Cornyn, Hon. John, a U.S. Senator from Texas..................... 4
CONGRESSIONAL WITNESSES
Donnelly, Hon. Joe, a U.S. Senator from Indiana.................. 5
Young, Hon. Todd, a U.S. Senator from Indiana.................... 6
ADMINISTRATION NOMINEES
Kessler, Jeffrey I., nominated to be Assistant Secretary for
Enforcement and Compliance, Department of Commerce, Washington,
DC............................................................. 8
Copeland, Elizabeth Ann, nominated to be a judge of the United
States Tax Court, Washington, DC............................... 9
Urda, Patrick J., nominated to be a judge of the United States
Tax Court, Washington, DC...................................... 10
Karpel, Amy, nominated to be a member of the United States
International Trade Commission, Washington, DC................. 12
Stayin, Randolph J., nominated to be a member of the United
States International Trade Commission, Washington, DC.......... 13
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Copeland, Elizabeth Ann:
Testimony.................................................... 9
Prepared statement........................................... 23
Biographical information..................................... 24
Responses to questions from committee members................ 43
Cornyn, Hon. John:
Opening statement............................................ 4
Donnelly, Hon. Joe:
Testimony.................................................... 5
Hatch, Hon. Orrin G.:
Opening statement............................................ 1
Prepared statement........................................... 43
Karpel, Amy:
Testimony.................................................... 12
Prepared statement........................................... 44
Biographical information..................................... 45
Responses to questions from committee members................ 49
Kessler, Jeffrey I.:
Testimony.................................................... 8
Prepared statement........................................... 54
Biographical information..................................... 55
Responses to questions from committee members................ 60
Stayin, Randolph J.:
Testimony.................................................... 13
Prepared statement........................................... 65
Biographical information..................................... 66
Responses to questions from committee members................ 73
Urda, Patrick J.:
Testimony.................................................... 10
Prepared statement........................................... 78
Biographical information..................................... 79
Responses to questions from committee members................ 82
Wyden, Hon. Ron:
Opening statement............................................ 3
Prepared statement........................................... 83
Young, Hon. Todd:
Testimony.................................................... 6
NOMINATIONS OF JEFFREY I. KESSLER,
TO BE ASSISTANT SECRETARY FOR
ENFORCEMENT AND COMPLIANCE,
DEPARTMENT OF COMMERCE; ELIZABETH
ANN COPELAND, TO BE A JUDGE OF THE
UNITED STATES TAX COURT; PATRICK J. URDA,
TO BE A JUDGE OF THE
UNITED STATES TAX COURT; AMY KARPEL,
TO BE A MEMBER OF THE UNITED STATES
INTERNATIONAL TRADE COMMISSION;
AND RANDOLPH J. STAYIN, TO BE A
MEMBER OF THE UNITED STATES
INTERNATIONAL TRADE COMMISSION
----------
TUESDAY, JUNE 12, 2018
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 10:07
a.m., in room SD-215, Dirksen Senate Office Building, Hon.
Orrin G. Hatch (chairman of the committee) presiding.
Present: Senators Crapo, Cornyn, Thune, Toomey, Heller, Wy-
den, Cantwell, Nelson, Carper, Cardin, Casey, and McCaskill.
Also present: Republican staff: Chris Allen, Senior Advisor
for Benefits and Exempt Organizations; Becky Cole, Policy
Director; Jeffrey Wrase, Staff Director; and Nicholas Wyatt,
Tax and Nominations Professional Staff Member. Democratic
staff: Michael Evans, General Counsel; Ian Nicholson,
Investigator; Joshua Sheinkman, Staff Director; and Tiffany
Smith, Chief Tax Counsel.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
UTAH, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. The committee will come to order.
With the permission of Senator Wyden, we are going to move
ahead here. He will be here in a few minutes.
I would like to welcome everyone here today to today's
hearing on five of this committee's pending nominations. Today
we will have an opportunity to hear from nominees for three
trade policy positions and two nominees to be tax judges.
Each of these positions is key in enforcing the work and
legislation that we produce from this particular committee.
Our first nominee is Mr. Jeffrey Kessler, who has been
nominated to serve as Assistant Secretary for Enforcement and
Compliance at the Department of Commerce. This is a position
that is responsible for administering antidumping and
countervailing duty trade laws and ensuring compliance with
trade agreements negotiated on behalf of U.S. industries.
If confirmed, Mr. Kessler will need to fully and faithfully
administer U.S. trade remedy laws.
As I have said before, it is important that the Department
of Commerce consult closely with Congress and members of this
committee. And frankly, there is room for improvement in that
department. I expect Mr. Kessler to be an asset in improving
that relationship.
Today we also have two tax judges, Ms. Elizabeth Ann
Copeland and Mr. Patrick J. Urda. The Tax Court is important
for many reasons, not the least of which is that it allows
taxpayers to challenge a liability before paying it. It is a
venue for everyone, from large corporations to individual
taxpayers, to get a fair and impartial hearing when a
disagreement arises with the Internal Revenue Service.
We are honored today to be joined by Chief Judge Maurice
Foley, Judge Tamara Ashford, Judge John Colvin, Judge Albert
Lauber, Judge Cary Pugh, and Special Trial Judge Diana Leyden.
Thank you all for attending here today.
Just last year, we signed into law the Tax Cuts and Jobs
Act as the largest reform of the tax code in more than 3
decades. We recognize there will potentially be some large
questions for the Tax Court.
More than ever, we need brilliant minds to do this
important work. Given their credentials, I trust that Ms.
Copeland and Mr. Urda will be just what our country needs for
the Tax Court to continue to give taxpayers a fair hearing as
the TCJA is implemented.
Finally, we also have before us two nominees to the
International Trade Commission, Ms. Amy Karpel and Mr. Randy
Stayin.
Ms. Karpel and Mr. Stayin, as nominees to be Commissioners
of the International Trade Commission, you will play important
roles in administering our trade remedy laws and providing
Congress and the administration with unbiased, independent
analysis.
Now, this work is becoming more important than ever, as far
as I am concerned, as trade has become an increasingly larger
part of our economy and businesses of all sizes rely on imports
and exports.
I expect that each of you will continue the good work of
the ITC in administering our trade remedy laws in a fair and
unbiased manner.
I want to thank all five of you for your dedication to our
country and your willingness to serve. As I have looked through
each of your respective resumes, it is clear that the President
has selected individuals who are well-qualified to serve in
these important posts.
And I hope to see each of you working to improve our
country as soon as practicable.
With that, I am going to turn to Senator Wyden, our ranking
member, for his opening statement.
[The prepared statement of Chairman Hatch appears in the
appendix.]
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator Wyden. Thank you very much, Mr. Chairman.
We are, as you noted, meeting today to discuss five
nominations that are important positions for the executive
branch.
Mr. Jeffrey Kessler has been nominated to serve as
Assistant Commerce Secretary for Enforcement and Compliance.
Ms. Amy Karpel and Mr. Randy Stayin are nominated to serve on
the U.S. International Trade Commission. And Ms. Elizabeth Ann
Copeland and Mr. Patrick Urda are nominated to serve as judges
on the Tax Court.
I am going to speak briefly on each, beginning with the
three trade-related nominations.
I think it is an understatement to say that this
administration swept into office with a wave of tough talk when
it came to trade and creating manufacturing jobs here at home.
I do believe NAFTA needs renegotiating. I agree that the
United States needs to step up with tough actions against
China's abusive trade practices. There is no question in my
mind that China has ripped off our technological innovation and
that this has had serious consequences for American employers.
After a year and a half of work, however, the Trump
administration has managed to unite our traditional allies with
China against us. Now, that really takes some doing, because if
you want a full-court press to deal with China, you want as
many of your traditional allies and partners with you. And so,
in a sort of head-scratching kind of way, the President decided
to alienate a big group of allies whom we very much need to
have with us as we take on these trade abuses with China.
This gives China a better chance to get away with cheating
on trade scot-free. Instead of creating American jobs, this
trade policy, in a nutshell, creates yet more chaos.
With respect to today's hearing, the good news is that the
three trade-related nominees before us are all set to fill
enforcement-
related positions. This is particularly important because, if
you are pro-trade--and I make no bones about it: I think what
we ought to be doing is growing things in America, making
things in America, adding value to them in America, and then
shipping them all over the world.
The prerequisite to generating more trade is to sharpen
trade enforcement and the tools that are on the books to
protect American workers.
Mr. Kessler would fill one of the top jobs at the
International Trade Administration within the Commerce
Department. Ms. Karpel and Mr. Stayin would play key roles as
Commissioners at the ITC helping to make sure American trade
policies benefit our workers and our businesses.
I consider all three of these individuals to be qualified.
I look forward to discussing enforcement issues further with
them.
Next, Ms. Copeland and Mr. Urda are nominated to serve as
Tax Court judges.
I noted the chairman's comments with respect to the
partisan-only tax bill that was passed in this Congress.
I see Senator Nelson and Senator McCaskill here. On this
side, we so wanted to have a bipartisan tax reform bill. And in
fact, I wrote two actual bills, one with our former colleague
Senator Coats, who sat right down there at the end of the dais.
My sense is, given the confusion that this recent tax bill
has generated--and Senator McCaskill has pointed out, just on
the pass-through provision alone--you folks are going to have
your hands full at the Tax Court in the days ahead.
And of course, the Tax Court is the judicial backbone of
the Federal tax code. It is the best opportunity Americans have
to dispute tax bills before they have to pay, and it keeps them
from getting stuck in slow-moving courts when they have a tax
issue.
It is a tough job, and they, as far as I can tell, spend a
lot of time on the road.
So to Ms. Copeland and Mr. Urda, we are pleased that you
are willing to serve.
Mr. Chairman, I appreciate your scheduling this hearing.
And as is usually the case, while we can differ on some issues
from time to time, most specifically this morning on the
effects of the tax bill, we come together in many, many
instances when we have an opportunity to pursue good
government. And we have a chance to do that this morning. And I
look forward to working with you.
The Chairman. Well, thank you, Senator. I appreciate you.
And you have worked well with me. And I hope we can continue to
do so.
[The prepared statement of Senator Wyden appears in the
appendix.]
The Chairman. I would like to extend a warm welcome to each
of our five nominees today.
I want to thank you all for coming.
Before we get to that, though, I will briefly introduce
each of you in the order you are set to give your opening
statements.
First, we will hear from Mr. Jeffrey Kessler, who is
currently working as counsel at Wilmer Hale over the past 10
years. Mr. Kessler has counseled global companies on high-
profile trade and policy issues.
Mr. Kessler holds a bachelor's degree in philosophy and
classics from Yale University, a master's degree in philosophy
from the University of Chicago, a master's degree in economics
from Stanford University, and a juris doctorate from Stanford
University.
Mr. Kessler is a member of the American Bar Association and
a term member of the Council on Foreign Relations.
Our second nominee is Ms. Elizabeth Ann Copeland, who will
be introduced by Senator Cornyn.
Senator Cornyn, would you please proceed on that?
OPENING STATEMENT ON HON. JOHN CORNYN,
A U.S. SENATOR FROM TEXAS
Senator Cornyn. Well, thank you, Mr. Chairman, Ranking
Member Wyden, and members of the committee.
It is my privilege to introduce Elizabeth Copeland, a
Texan, a fellow San Antonian, who has been nominated this time
by President Trump to serve as a judge on the U.S. Tax Court.
She is a certified public accountant and a graduate of the
University of Texas School of Law.
She is currently a partner at Clark Hill Strasburger in San
Antonio and has more than 20 years' experience resolving
complex tax issues, including the handling of employment tax
disputes, innocent spouse representations, IRS appeals, and Tax
Court litigation.
She is the former attorney adviser to the Tax Court and has
served as the chair of the State Bar of Texas Tax Section.
She is responsible for establishing the United States Tax
Court's pro bono program, the first State-wide program of its
kind in the Nation. This program is now used as a model for
other State bars to provide pro bono assistance to low-income
taxpayers.
Last year, Ms. Copeland received the San Antonio Tax Lawyer
of the Year by Best Lawyers, which is a peer-reviewed guide to
the legal profession. And finally, Tax Analysts named her a
2012 Tax Person of the Year in its national edition of Tax
Notes, a publication that many tax experts consider as a
leading publisher of tax information.
She has the distinction of being nominated by both
President Obama and President Trump, so it goes without saying
that she is highly regarded by everyone in the legal community.
She will be a valuable addition to the Tax Court, and I
look forward to supporting her nomination and encouraging all
my colleagues to do so.
So thank you, Mr. Chairman and Ranking Member Wyden, for
the opportunity to introduce Ms. Elizabeth Copeland.
The Chairman. Thank you, Senator Cornyn.
Our next nominee to speak is Mr. Patrick J. Urda, who will
be introduced by Senators Donnelly and Young.
Senator Donnelly, will you please get us started and then
hand it off to Senator Young?
STATEMENT OF HON. JOE DONNELLY,
A U.S. SENATOR FROM INDIANA
Senator Donnelly. Thank you, Mr. Chairman.
Thank you, Mr. Chairman and Ranking Member Wyden, for the
opportunity to be here today. Thank you to all of the members
of the committee.
I am proud to introduce my fellow Hoosier, Patrick Urda,
who has been nominated to be a judge of the United States Tax
Court.
Before I speak about Patrick, I would like to take a moment
to recognize the people supporting him here today. His parents,
Katie and Rich, who are friends of mine, have traveled from
South Bend to be here. He is also joined by----
Senator Carper. Could we ask them to raise their hands?
Senator Donnelly. Yes.
Senator Carper. All right. Thank you.
Senator Donnelly. Is that because you question their wisdom
in being my friend, Senator? [Laughter.]
Senator Wyden. Senator Carper is for family values.
Senator Cornyn. You have to be careful when you raise your
hand around here, though. [Laughter.]
Senator Donnelly. He is also joined by his fiancee
Cristina, his sisters Kathleen, Anne, and Libby, and his
brother-in-law Braden. I am sure they are all very----
Senator Carper. Could I ask his brother-in-law to raise his
hand, too?
Senator Donnelly. They are here. I am not making it up,
Senator. [Laughter.]
Patrick has been an attorney in the Tax Division of the
Department of Justice since 2006. In that time, he has
litigated dozens of appeals from the U.S. Tax Court and U.S.
district courts. He has also presented oral argument on behalf
of the government more than 40 times and in every U.S. court of
appeals.
He currently serves as counsel to the Deputy Assistant
Attorney General in the Tax Division at DOJ, where he advises
on everything from appellate to settlement matters.
Such a breadth of experience on tax issues is imperative
for any judge of the U.S. Tax Court.
Patrick is a proud graduate of the University of Notre Dame
and then went to a startup law school in Cambridge, MA--
Harvard--to conclude his education.
Patrick's talents have regularly been recognized at DOJ. He
received the Tax Division's Outstanding Attorney Award five
separate times and received DOJ's Distinguished Service Award
just last year.
His time at DOJ and his excellent work there are indicators
of his passion for public service and work ethic. And, if he is
confirmed, they are sure to be assets as he focuses on adapting
to the role of judge.
I believe Patrick is strongly qualified and is committed to
administering justice in our Nation's Tax Court. He has been
and continues to remain dedicated to serving our country, and I
strongly support his confirmation. I look forward to hearing
his testimony and your questions.
Mr. Chairman, thank you, and, Mr. Ranking Member, thank
you.
The Chairman. Well, thank you, Senator Donnelly.
Senator Young?
STATEMENT OF HON. TODD YOUNG,
A U.S. SENATOR FROM INDIANA
Senator Young. Well, thank you, Mr. Chairman, Ranking
Member Wyden, and esteemed members of this committee.
It is my honor to introduce fellow Hoosier Patrick J. Urda
to serve as a judge on the United States Tax Court.
Mr. Urda is an extremely qualified nominee. He currently
represents the United States in Federal tax matters in the U.S.
Court of Appeals. As a Tax Division attorney, he focuses on
appellate issues and litigation strategy.
Since 2006, he has successfully litigated more than 80
appeals from the United States District Courts and the United
States Tax Court.
Prior to his time at the United States Department of
Justice, he served as counsel to the Deputy Assistant Attorney
General, advising on legal and administrative issues facing the
Tax Division.
And from 2012 to 2015, Patrick was an adjunct professor at
American University's Washington College of Law.
Patrick also previously served as a clerk to the honorable
Daniel Manion in the United States Court of Appeals for the 7th
Circuit.
Not to mention, he was an Eagle Scout.
Mr. Urda has received multiple distinguished professional
honors throughout his career, including the Tax Division
Outstanding Attorney Award.
Patrick graduated from St. Joseph High School in South
Bend, IN. He went on to earn his B.A. from the University of
Notre Dame and then his J.D. from Harvard Law School.
Mr. Chairman, Mr. Urda has earned an excellent reputation
in the legal community. He is highly regarded and an
experienced attorney with the right qualifications to serve as
a judge on the United States Tax Court. I fully support his
nomination, and I hope my colleagues will do the same.
Thank you, Mr. Chairman.
The Chairman. Well, thank you. That is high praise for
these nominees.
I want to thank you Senators for being here.
Now, our fourth witness to speak will be Ms. Amy Karpel.
We will be happy to excuse Senators Donnelly and Young, who
I know have important business to do today. And we want to
thank you for being here.
Now, our fourth witness to speak will be Ms. Amy Karpel,
Chief Counsel for Negotiations, Legislation, and Administrative
Law at the Office of the United States Trade Representative.
Prior to beginning her role at the USTR in 2004, Ms. Karpel
was an attorney representing U.S. workers and producers.
Ms. Karpel received her undergraduate degree from the
University of Washington and a juris doctorate from American
University.
Our final witness will be Mr. Randolph Stayin, who was most
recently a partner at the firm Barnes and Thornburg.
Prior to that, Mr. Stayin was the founder and CEO of U.S.
Trade Adviser, and much earlier in his career, Mr. Stayin also
served as the chief of staff and trade adviser to Senator
Robert Taft, Jr.
In total, Mr. Stayin has spent more than the past 40 years
practicing law, with a focus on trade policy and trade
regulation.
Mr. Stayin received an undergraduate degree in economics
and English from Dartmouth College and a juris doctorate from
the University of Cincinnati.
I would also like to thank all the witnesses for being here
today. We are appreciative to listen to them.
And when you give your opening statements, we will look
forward to hearing from you.
So, without further ado, Mr. Kessler, will you please
begin?
STATEMENT OF JEFFREY I. KESSLER, NOMINATED TO BE ASSISTANT
SECRETARY FOR ENFORCEMENT AND COMPLIANCE, DEPARTMENT OF
COMMERCE, WASHINGTON, DC
Mr. Kessler. Mr. Chairman, Ranking Member Wyden, members of
the committee, I am honored to appear before you today as the
President's nominee to serve as Assistant Secretary of Commerce
for Enforcement and Compliance.
I would like to express my gratitude to President Trump for
nominating me for this important position. I am grateful to
Secretary Ross for having confidence in my ability to serve as
his Assistant Secretary. I am also grateful to Under Secretary
Kaplan.
And I thank the many other professionals at the Department
of Commerce who have helped with my nomination.
I would like to take a moment to acknowledge some family
members in the audience: my wife Bethany and my two young
daughters Lucy and Diana; my parents; my parents-in-law; my
brother.
Thank you all for being here.
Mr. Chairman, as you said in your opening remarks, the
Assistant Secretary of Commerce for Enforcement and Compliance
is charged with administering the antidumping and
countervailing duty laws. Congress enacted these laws to give
U.S. companies and workers an effective remedy against foreign
countries' unfair trade practices.
As an international trade lawyer, I work to combat such
practices on a daily basis. I have represented U.S.
manufacturers in the chemical products and aerospace industries
facing foreign subsidies and injurious dumping.
I have worked to stop government policies that prop up
favored enterprises and skew the competitive landscape to the
detriment of U.S. companies and workers. I have helped U.S.
companies decipher and navigate market access barriers imposed
by China and other countries.
The scope and scale of unfair trade practices used by
foreign governments and companies is truly breathtaking. Unfair
trade has serious, real-world consequences: lost jobs, lower
wages, plant closures. It puts U.S. workers' livelihoods at
risk and undermines the U.S. manufacturing and agricultural
base.
This administration has identified aggressive enforcement
of U.S. trade laws as a top policy priority. With respect to
the antidumping and countervailing duty laws, this means that
investigations and other proceedings should be conducted
rigorously.
U.S. companies and workers should receive the relief to
which they are legally entitled. The duties imposed should
truly correct for the distortive impact of unfair trade.
Circumvention should not be tolerated.
If confirmed, I will uphold these principles.
If confirmed, I will also seriously consider self-
initiating antidumping and countervailing duty investigations.
Last November, the Department of Commerce self-initiated
for the first time in more than a quarter century. Continuing
this practice has the potential to further strengthen
enforcement of trade remedy laws.
The Enforcement and Compliance Unit of the Department of
Commerce also has an important role to play in ensuring that
foreign governments uphold their commitments under existing
trade agreements.
Opening up foreign markets to U.S. exports of goods and
services is a critical element of the administration's trade
strategy, and, if confirmed, I plan to pursue this objective
aggressively as well.
Mr. Chairman, I believe that when the playing field is
level, U.S. companies, workers, and products can out-compete
anyone in the world.
As the administration has stated, true market-based
competition should be welcomed. But American workers, farmers,
ranchers, service providers, and businesses large and small
should not have to endure injurious dumping, subsidies, and
other unfair trade practices. That is why we need strict and
effective enforcement of the trade remedy laws.
With that, Chairman Hatch, Ranking Member Wyden, and
members of the committee, thank you again for your
consideration, and I would be happy to answer any questions.
The Chairman. Well, thank you. And thanks for your
willingness to serve.
[The prepared statement of Mr. Kessler appears in the
appendix.]
The Chairman. Ms. Copeland, we will go to you now.
STATEMENT OF ELIZABETH ANN COPELAND, NOMINATED TO BE A JUDGE OF
THE UNITED STATES TAX COURT, WASHINGTON, DC
Ms. Copeland. Chairman Hatch, Ranking Member Wyden, Senator
Cornyn, who did my lovely introduction, and other distinguished
members of this committee, I want to thank you for the
privilege of appearing before you today as the President's
nominee for a judge of the United States Tax Court. I am
grateful to the President for his confidence in me.
And I wish to thank the staff of this committee for their
generous time working with me on my nomination.
I would also like--I can say I would not be here without
the support throughout my life of many. I want to introduce my
supportive husband Brad Wilder, and my children Lexie Wilder
and Preston Wilder, who are here today. Also here are my father
William Copeland, my stepmother Barbara Copeland, my sister-in-
law Pamela Hurst, and my brother-in-law David Hurst.
The Chairman. Well, we are grateful to have all of you
here. And this is a great honor for Ms. Copeland. And so we
will now go to----
Ms. Copeland. Oh, I am sorry.
The Chairman. Oh, you are not through yet. [Laughter.]
Ms. Copeland. I hesitated so they could be recognized.
My stepson Davis and my amazing mother are also watching
livestream video.
I apologize, Chairman Hatch.
I am honored to have the attendance of a number of judges
from the United States Tax Court, whom you so nicely recognized
earlier. They have been both friends and mentors throughout the
years.
Early in my career, I had the opportunity to work as
attorney adviser at the United States Tax Court for the
honorable Mary Ann Cohen. I learned much under her direction.
I also then, upon leaving the Tax Court, returned to my
hometown of San Antonio, TX to practice and pursue a career in
tax law. I spent over 2 decades specializing in the area of tax
controversy and litigation with the law firm Oppenheimer,
Blend, Harrison, and Tate, which later became Strasburger and
Price and is now known as Clark Hill Strasburger.
While practicing in Texas, I received board certification
in tax law by the Texas Board of Legal Specialization. I also
was very active in the Section of Taxation for the American Bar
Association and with the State Bar of Texas Tax Section, for
which I served as chair from 2013 through 2014.
As a member of the Texas State Bar, I recognized the need
to assist unrepresented taxpayers, most of whom could not
afford legal counsel for their Tax Court cases. Working with
the help of Special Trial Judge Peter Panuthos and
representatives from IRS Area Counsel, we established an all-
volunteer pro bono assistance program which services all five
cities in Texas in which the Tax Court holds calendars. It is
one of my most treasured accomplishments, and the program is
still thriving today.
Working with that program and also in my own practice, I
have seen the vital role that the Tax Court plays in shaping
tax law. It is imperative for taxpayers to have their cases
heard in front of an impartial party for both taxpayers and the
government to be treated with respect.
I believe my strong background in tax controversy work will
provide me with the foundation to fairly and impartially
resolve tax cases in accordance with congressional intent.
If confirmed, I would hope to maintain and enhance the
public's confidence in the Tax Court as a neutral prepayment
forum for the resolution of tax disputes.
Thank you again, Chairman Hatch, Ranking Member Wyden,
Senator Cornyn, and other members of this committee. I am happy
to answer any questions you might have.
The Chairman. Thank you, Ms. Copeland.
[The prepared statement of Ms. Copeland appears in the
appendix.]
The Chairman. We will now turn to Mr. Urda for his
testimony.
Mr. Urda?
STATEMENT OF PATRICK J. URDA, NOMINATED TO BE A JUDGE OF THE
UNITED STATES TAX COURT, WASHINGTON, DC
Mr. Urda. Chairman Hatch, Ranking Member Wyden, and members
of the Finance Committee, it is an honor to be here today.
Thank you for holding this hearing to consider my nomination to
serve as a judge on the United States Tax Court.
I am grateful to the President for nominating me and thank
Senator Donnelly and Senator Young for their kind
introductions.
I would also like to express my heartfelt thanks to the
committee staff for their support throughout the process.
I sit before you as a nominee because of the support of so
many people, some of whom have joined me today, most
importantly my parents, Richard and Kathleen Urda. Dad is a
solo practitioner in South Bend, IN. He has been a role model
my entire life, consistently demonstrating how to be a good
lawyer and a better person. He has a vast knowledge of tax law,
and I am hoping I have picked up a few things through genetics
or osmosis. [Laughter.]
Some of the earliest memories of my mom are playing in the
halls of St. Mary's College, where she taught statistics. As my
siblings and I grew older, she spent more time teaching us, not
just working with us on math and English, but showing us
through her own example compassion, diligence, service, and
selflessness.
Any talk of my parents cannot help but make me think of my
siblings, Kathleen, Anne, Libby, and Mike, best friends,
confidants, and occasional sparring partners. That last
category is pretty much Mike. [Laughter.]
And I would not be here without the love and support of
Cristina Cardenas, who has traveled all the way from Argentina
to be here. Cristina works tirelessly to improve education for
children throughout the world. And I am so blessed to have her
in my life.
I have been truly lucky in terms of colleagues and friends.
I have learned with and learned from attorneys, office
managers, paralegals, and legal assistants in Chicago, South
Bend, and here in Washington. I have been incredibly fortunate
to learn about the tax field from the women and men of the Tax
Division as well as my opposing counsel for the last 12 years.
As to my friends, in a very real and sincere way, I do not
have friends, I have family. I thank you all, my family.
I have been blessed through the years with great mentors.
It would be impossible to name them all, but in particular I
thank Judge Dan Manion for hiring his first clerk from South
Bend and for teaching me so much about the law and life.
I thank Gil Rothenberg for bringing me to the Tax Division
and developing my knowledge and passion for the field.
And I thank Diana Erbsen for selecting me to be her
counsel, broadening my view of our tax system.
At the main DOJ building, there is a motto inscribed in
Latin that translates as ``Our duty is a privilege.'' That has
truly been the case for me. I feel honored to have had the
opportunity to litigate tax issues in the circuit courts for
the last 12 years. My service has taught me the breadth and
complexity of our tax system and has equipped me with the
ability to analyze the strengths and weaknesses of different
legal positions, whether those of the taxpayer or those of the
government.
My job has given me a deep appreciation for the important
work of the Tax Court and the need for fair and expeditious
resolution of tax controversies.
A long time ago, two wise former AUSAs told me that the
government wins its point when justice is done. I try to keep
that in mind when I litigate in my current position, and
justice, consistent with the law, will be the North Star for me
if I am so lucky as to be confirmed.
I pledge to be impartial in approach, diligent in
preparation, and absolutely committed to following the law
where it leads.
I look forward to answering the committee's questions.
The Chairman. We are happy to have you here.
[The prepared statement of Mr. Urda appears in the
appendix.]
The Chairman. Ms. Karpel?
STATEMENT OF AMY KARPEL, NOMINATED TO BE A MEMBER OF THE UNITED
STATES INTERNATIONAL TRADE COMMISSION, WASHINGTON, DC
Ms. Karpel. Chairman Hatch, Ranking Member Wyden, members
of the Finance Committee, I am honored to appear before you
today as the President's nominee for the position of
Commissioner on the U.S. International Trade Commission.
I would like to introduce the members of my family who are
here today: my husband Sloane Strickler, my mother Ann Larson,
my brother-in-law Andrew Strickler, and my mother-in-law Jo
Harriet Haley.
I also want to acknowledge those members of my family who
could not be here today: my father John Karpel, my sister
Jennifer Seoane, and lastly, my daughter Haley, who is
currently enjoying her last week of preschool.
I want to thank all of them for their love and support
during the confirmation process and over the years.
I am also grateful to Senate Minority Leader Schumer and
Senator Wyden for proposing my appointment as Commissioner.
I also want to thank the President for nominating me.
I greatly enjoyed meeting individually with members of this
committee leading up to today's hearing and thank them for
their time and insights.
I am honored to be nominated for Commissioner because of
the important work the Commission does. The Commission is
entrusted with the fair, timely, and objective administration
of our trade remedy laws, including in respect to violations of
intellectual property rights.
Vigorous enforcement of our trade remedy laws is important
because of the relief it provides to help keep U.S. workers
employed and U.S. businesses functioning in the face of unfair
trade. It is also important because of the role it plays in
helping make the case for international trade more broadly.
International trade touches nearly all sectors of our economy
and is vital to the strength of our economy and the livelihood
of the workers and businesses it supports.
If there is not strong enforcement of our trade remedy laws
when trade is not fair and when workers or businesses are hurt
by trade, it is hard to make that case.
If confirmed as Commissioner, I will administer these laws
fairly, objectively, and as Congress intended.
The Commission is also responsible for providing the
administration and Congress with objective, expert, fact-
finding studies and analysis on tariffs, trade, and U.S.
competitiveness. These studies serve as an independent source
of information and analysis for policymakers as they develop
and implement trade policy.
If confirmed, I commit to carry out this responsibility as
Congress intended and to safeguard the independence of the
Commission.
I will also, if confirmed, work with my fellow
Commissioners to be responsive to congressional requests for
information.
I believe my upbringing, background, and experience have
prepared me well for the position of Commissioner. I grew up in
Washington State along the shores of the Puget Sound. I could
see the port of Olympia in the distance from our house.
Container ships and tugboats pulling barges full of logs were a
regular feature passing by our house.
I was raised by my mother and father and spent a lot of
time with my maternal grandmother. My grandmother split her
time between St. Louis and her husband's farm in rural
Illinois, and when we were kids, my sister and I used to visit
in the summers.
My grandmother would prod us awake at 7 a.m., chiding that
we were sleeping the day away. Lazy was not something you were
allowed to be in our family.
My parents worked hard, both in their occupations and in
life, and modeled the importance of doing your part to improve
the world around you. They raised my sister and I to do the
same.
Since leaving Washington State, I have spent more than 20
years studying and working on international trade issues. I
have worked in private practice representing U.S. workers and
businesses in trade remedy proceedings, and I have worked in
public service for almost 13 years, serving most recently as
Chief Counsel at the Office of the U.S. Trade Representative.
Each of these capacities involved working with the laws the
Commission is entrusted to administer, first as an advocate for
clients petitioning for relief under those laws and then as a
policymaker relying on the sound and objective information and
analyses those laws call on the Commission to provide.
And I now look forward, if confirmed, to continuing in
public service as a Commissioner on the International Trade
Commission. In this role I would not be an advocate or a
policymaker as in my previous positions. Instead, I would be a
fair, objective, and impartial adjudicator, an independent
source of expert information and analysis.
It would be an honor to serve in this capacity.
Thank you for your consideration.
The Chairman. Well, thank you.
[The prepared statement of Ms. Karpel appears in the
appendix.]
The Chairman. Mr. Stayin, we will finish with you.
STATEMENT OF RANDOLPH J. STAYIN, NOMINATED TO BE A MEMBER OF
THE UNITED STATES INTERNATIONAL TRADE COMMISSION, WASHINGTON,
DC
Mr. Stayin. Thank you, Mr. Chairman, Ranking Member Wyden,
and members of the committee.
I am honored to appear before you today. And I am humbled
and grateful to the President for having nominated me to be a
Commissioner on the International Trade Commission.
I also want to thank Senators Portman, Roberts, Isakson,
and Brown for their support.
But most importantly, I am honored and blessed to have the
love and support that I have had from my family throughout my
many years in practicing trade law.
With me today is my wife Sharon; my sister Donna; my
children Gregg, Todd, and Beth, along with their spouses
Stephanie, Laura, and Scott; and my grandson Christopher. I am
always grateful that they are in my life and for the strength
they give me.
I began the practice of law as a litigator in Cincinnati,
OH. I came to Washington to serve as Chief of Staff for Senator
Robert Taft, Jr. In that role, I oversaw political, legal, and
policy issues, along with managing the staff.
Among my duties, the Senator asked me to give him advice on
the Trade Act of 1974, and thus was the beginning of my
involvement in U.S. trade law. It was the first building block
in my now 40 years of practicing international trade law.
My career has included litigation of many antidumping and
countervailing duty investigations and reviews, section 201
safeguard investigations, and section 232 national security and
Generalized System of Preferences investigations.
I also was involved in advising clients during and after
the Uruguay Round and the NAFTA negotiations, as well as during
Customs investigations to stop circumvention of antidumping
duty orders.
My practice also included serving as general counsel and
special counsel to 23 trade associations and many companies, a
significant number of which contributed to the depth of my
understanding of the realities and the difficulties of running
a manufacturing company in competition with unfairly traded
imports.
Among my many cases I have litigated, I would like to
briefly mention one that demonstrates the complexity and
commitment involved in defending U.S. companies from unfair
trade practices. That case was an antidumping duty
investigation of imported petroleum wax candles from China.
In 1984 when I began working on that case, Chinese
manufacturers were exporting their candles to the United States
at prices significantly below the cost of production for making
candles in the United States.
The initial result of that case was a 54-percent
antidumping duty order. The Commission determined that the
imports materially injured the U.S. industry, and the
Department of Commerce found that the imports were unfair trade
practices.
There have been many unsuccessful challenges to that
antidumping order, including six administrative reviews, nearly
100 scope reviews, two anticircumvention reviews, six Customs
investigations, two sunset reviews, and four 5-year reviews, in
addition to appeals to the Court of International Trade and the
U.S. Court of Appeals for the Federal Circuit, all of which I
managed and conducted for the continuing production of this
industry.
Not only was the initial 54-percent antidumping duty
imposed, it was raised each time we were challenged. With every
administrative review where the importers sought to terminate
or lower the duty from 54 percent, the duty in fact was
increased. It increased to where it is today, at 108 percent,
which is very significant, I think most experts would agree.
The antidumping duty order regarding candles from China is
the longest continuous antidumping duty order in the history of
our country.
Another result of this effort was that from 2000 to 2007,
U.S. candle companies received trade injury distributions of
over $183 million from the application of the Continued Dumping
and Subsidy Offset Act, also known as the Byrd Amendment.
This is only one example of the many products I
represented. As you are all aware, it is only one of thousands
of U.S. products that are injured by unfair trade practices.
For me, this is an honor. It is a pinnacle opportunity
built on my long and successful effort to support and defend
fair and equitable trade laws and their application. In
presenting arguments before the ITC, I have always respected
the very important role that it plays as an independent,
nonpartisan, quasi-judicial, fact-finding agency.
Our country's workers, farmers, ranchers, and businesses
know that they have an objective and fair place to go when they
have been injured by unfairly traded imports. All parties
receive a fact-based decision in accordance with due process of
law.
I look forward to participating in the ITC process as a
leader and key decision-maker and in maintaining the
credibility of U.S. trade remedy laws.
If confirmed, I assure you that I will serve with integrity
and that all of my decisions will be based on the facts and the
law, in accordance with the intent of Congress.
I further assure you that Congress and the executive branch
will continue to receive objective, independent, fact-based 332
studies and expert analysis to assist in the development of
trade policy.
I will be proud to join the nearly 400 men and women who
comprise the ITC. They are to be commended for the excellent
work that they do every day for Congress, the executive branch,
and, above all, the American people.
Thank you for the privilege of being considered for this
honor. I am now happy to answer your questions.
The Chairman. Well, thank you.
[The prepared statement of Mr. Stayin appears in the
appendix.]
The Chairman. We are happy to have all of you here today.
And I have some obligatory questions that I am going to ask all
the nominees. And you can each answer across the board here.
First, is there anything that you are aware of in your
background that might present a conflict of interest with the
duties of the office to which you have been nominated?
Mr. Kessler. No, Senator.
Ms. Copeland. No.
Mr. Urda. No.
Ms. Karpel. No.
Mr. Stayin. No.
The Chairman. Do you know of any reason, personal or
otherwise, that would in any way prevent you from fully and
honorably discharging the responsibilities of the office to
which you have been nominated?
Mr. Kessler. No.
Ms. Copeland. No.
Mr. Urda. No.
Ms. Karpel. No.
Mr. Stayin. No.
The Chairman. Do you agree without reservation to respond
to any reasonable summons to appear and testify before any duly
constituted committee of the Congress, if you are confirmed?
Mr. Kessler. Yes.
Ms. Copeland. Yes.
Mr. Urda. Yes.
Ms. Karpel. Yes.
Mr. Stayin. Yes.
The Chairman. Okay. Finally, do you commit to providing a
prompt response in writing to any questions addressed to you by
any Senator of this committee?
Mr. Kessler. Yes.
Ms. Copeland. Yes.
Mr. Urda. Yes.
Ms. Karpel. Yes.
Mr. Stayin. Yes.
The Chairman. Well, I think I just want to say how proud I
am of all of you and how pleased I am that you are willing to
accept these very, very important positions in our government.
And I have every confidence that each of you is going to be an
excellent person in the positions for which you have been
chosen.
So with that, I just want you to know how much I appreciate
that you are willing to serve.
And I will turn to Senator Wyden.
Senator Wyden. Thank you very much, Mr. Chairman.
My first question is going to be for our trade enforcers,
Mr. Kessler, Ms. Karpel, and Mr. Stayin.
And let me ask it this way. For those of us who are pro-
trade, it is particularly important that we get trade
enforcement right, because so often in the past it has been
either too slow or too weak; we have had cheats ripping us off.
I think I mentioned to you, Ms. Karpel, we had a sting
operation when I was chairman of the Trade Subcommittee, and we
invited people to cheat, and all over the world we were being
flooded with trade cheats.
So in 2015, the Congress made clear the importance of tough
enforcement, and particularly Senator Brown's bill, the
Leveling the Playing Field Act, really speaks to something you
all have jurisdiction over. You are in charge of that area with
respect to remedies.
And my first question just for you three--and I hope we can
do this in a ``yes'' or ``no'' answer--is, will the three of
you support vigorously applying this law so that our workers
and companies can get relief from unfairly traded imports?
And just go, Mr. Kessler, Ms. Karpel, and Mr. Stayin.
Mr. Kessler. Yes, Senator.
Ms. Karpel. Yes.
Mr. Stayin. Yes.
Senator Wyden. Good. Let the record note that that was a
question about vigorous application of Senator Brown's law.
All right. Let us now go to some additional enforcement
questions.
For you, Mr. Kessler: in my view, it is important on trade
remedy matters that participants in trade remedy proceedings
have the ability to respond to factual information submitted by
another party that could be relied on by the Department in
making its decision before that decision is made.
Are you, in general, supportive of that proposition?
Mr. Kessler. Yes, Senator.
Senator Wyden. Okay.
Now, let us now move to the section 232 tariffs. And
companies have indicated to me that it seems that officials in
the Bureau of Industry and Security may be making decisions
without giving one side the opportunity to respond to facts
submitted by the other. And if the Department wants this to
work, if Commerce wants it to work--we all would like to see it
work--it seems to me it has got to be a fair and objective
process.
Given that the Enforcement Division is going to be involved
in this process, if confirmed, will you commit not to provide
recommendations to this agency, the Bureau of Industry and
Security, on an exclusion request unless and until each side
has been able to respond to factual information submitted by
the other party?
Mr. Kessler. Senator, as you mentioned, the Enforcement and
Compliance unit plays only a supporting role in the 232
investigations. It is the Bureau of Industry and Security that
is primarily responsible for them.
I fully understand the importance of due process in that
context as well as the antidumping and countervailing duty
context. I can commit to being an advocate for due process and
to working with you and your staff to ensure that the
requesters get due process.
Senator Wyden. I think I did not get an answer specifically
to the question of you not providing recommendations to the
agency on an exclusion request unless there is due process.
I am going to hold the record open on this point, because I
know the staff may have talked to you about this fairly
recently, so you can flesh out what you think is due process,
because I am troubled by this.
And I have discussed it with the Department, and there have
been some differences between what some officials in the
Department think it is and what the others think it is. To me,
this cannot be rocket science. Everybody has got to be in a
position to have the facts to respond to what the other side is
saying.
So, Mr. Chairman, I support Mr. Kessler, as he knows. I
will hold the record open.
And if you could give us a response as to what more
specifically you believe constitutes due process there, that
would be great.
And then, finally, to our fine nominees for the Tax Court:
good luck.
Thank you, Mr. Chairman.
The Chairman. Thank you--I think.
Let me just ask Ms. Karpel and Mr. Stayin, under section
337 of the Tariff Act of 1930, the ITC has the essential task
of excluding foreign products that infringe U.S. intellectual
property protection.
As you know, the protection of intellectual property is
very important to me. And I strongly support the ITC's role in
administering section 337 proceedings.
Do you see section 337 as a crucial part of the ITC's
mission? And will you explain how you intend to administer the
law? That's for Ms. Karpel first and then Mr. Stayin second.
Ms. Karpel. Thank you for that question. And I very much
agree on the importance of protecting intellectual property and
the role that section 337 plays in doing so. And if confirmed,
I very much look forward to working in that area and ensuring
the section 337 law is vigorously enforced.
Mr. Stayin. I do agree with you with respect to the
importance of section 337.
Years ago, there were not very many cases brought before
the International Trade Commission. And then all of a sudden,
in the last maybe 10, 15 years, there has been a huge volume of
unfair trade practices which are committed with respect to
patents and trademarks and copyrights.
Vigorous enforcement there is very important. And I think
that the agency has done very well in that respect. And I
assure you that I will do everything in my power to continue
that aggressive and vigorous enforcement.
The Chairman. Now, let me ask you both this question. Do
you see section 337 as a crucial part of the ITC's mission? And
will you explain how you intend to administer the law?
Ms. Karpel. Absolutely, it is a critical part of the ITC's
responsibilities and mission. In terms of how I would intend to
administer the law, if confirmed, as I mentioned, I would view
my role as a Commissioner as an adjudicator who needs to be
impartial, fair, and objective. In each case, I would work hard
to understand the facts before me and apply the law to those
facts as Congress intended that law to be applied.
Thank you.
The Chairman. Okay.
Mr. Kessler, you mentioned in your testimony that you would
seriously consider having the Commerce Department self-initiate
antidumping and countervailing duty cases. Typically, AD/CVD
cases are initiated by U.S. industry when it believes it has
been harmed by dumped or subsidized products entering the
United States.
If confirmed, what criteria would you recommend that the
Commerce Department apply to determine whether to devote its
resources toward self-initiating the AD/CVD cases?
Mr. Kessler. Senator, I do not have a hard-and-fast rule,
but there are some categories of cases that would certainly be
candidates for self-initiation. One category of cases is if the
domestic industry faces the threat of retaliation from a
foreign country as a result of a potential future AD/CVD case
and self-initiating would mitigate that threat.
Another example would be if an industry has small companies
or is fractured and is unable to petition for relief for that
reason. That would be another instance where I would consider
self-initiation.
The Chairman. You know, I have been pretty impressed with
each one of you. And I think the President has been very wise
to pick you folks for these respective positions. And I am just
very grateful to you for being willing to take these positions.
They are not easy, but they are extremely, extremely
important. And I do not think we could have better people than
you folks. So I am very grateful.
And I do not think there are any politics involved or
anything else. It is just a good thing.
Now, this question is for Ms. Copeland and Mr. Urda.
As a Tax Court judge, you will preside over many cases that
involve unsophisticated taxpayers with few resources to deploy
in making their cases. What lessons do you take from your prior
professional experiences to ensure that you treat these
taxpayers with respect and understanding while stopping short
of awarding them an advantage?
So we will start with you, Ms. Copeland, first and then Mr.
Urda.
Ms. Copeland. Senator Hatch, that is an excellent question.
In my practice, as I mentioned in my opening statement, I was
responsible for initiating for the State Bar of Texas Tax
Section a pro bono assistance program. In connection with that
program, I had the opportunity to assist low-income taxpayers,
unrepresented taxpayers.
In fact, Chairman Hatch, the Tax Court has something like
70 percent of all cases before it with unrepresented taxpayers,
and something like 90 percent in their small cases.
So through the program with the State Bar of Texas and
through initiatives by the United States Tax Court, there are
volunteer low-income taxpayer clinics as well as volunteer bar
organizations that provide pro bono assistance to taxpayers.
As a judge of the United States Tax Court, I would ensure
that the parties appearing before me realized that that pro
bono assistance is available and that they can consult with the
attorneys who will accommodate the volunteer attorneys in my
courtroom to provide that assistance. And I would encourage
taxpayers to take advantage of the free assistance available.
I would also treat taxpayers as I always have, with dignity
and respect. And I am also very patient, so that would help.
The Chairman. Well, thank you. That would be good.
Mr. Urda?
Mr. Urda. During my career, I have had the opportunity to
litigate against a number of pro se people. And I think what
Ms. Copeland ended with is the right point: it is to treat them
with dignity and respect.
Of course, you have to maintain a neutral position as
judge, but you have to allow the issues that that person is
bringing to be developed. And you have to work as a judge to
really hear what that person is saying and what issues they
seek to challenge.
As an appellate litigator, part of our obligation to the
Court is to really give respect to the issues that a pro se,
maybe inartfully, is trying to raise.
I would take that same experience to the bench, treating
them with respect and, consistent with my role as a neutral
arbiter, to really allow them to develop in the best way
possible those issues, whether themselves or through the
resources that Ms. Copeland mentioned.
The Chairman. Well, thank you so much.
We will turn to the Senator from Washington.
Senator Cantwell. Thank you, Mr. Chairman.
And I want to say I wish I would have been here earlier to
help introduce Amy Karpel to the committee. We were stuck in a
hearing with all our FERC Commissioners. But we are glad that
she is being nominated to the International Trade Commission,
glad that she grew up in Olympia, WA, went to the University of
Washington, and then later to American University. So she has a
lot of experience at USTR, so that is what we hope that we
continue to see there.
I know that you are going to play an important role in
analyzing information. And you get how important trade is to
the Pacific Northwest. So I think that that just comes as a
very day-to-day experience for all of us in the Northwest.
What steps are you going to take to make sure that there is
an objective, thorough review of this information while you are
at the ITC as a Commissioner?
Ms. Karpel. Thank you. Thank you for the introduction. I
understand you had important matters to cover, so I am glad you
are here now.
In terms of what steps, the ITC is an independent agency,
and I think that is one of the most important things, that the
Commission is safeguarding that independence. And what comes
with that is the need to be objective and to be impartial and
to look at the facts and do careful and rigorous analysis.
And the ITC does that in a variety of ways. It does it in
the context of the trade remedy proceedings that are litigated,
and it does it in the context of the analytical work that it
does, whether it is per a request under section 332 from one of
the committees or from the administration. And that work is
critical.
There is a great staff at the Commission that has a
wonderful track record of delivering high-quality, independent
analysis. And certainly, as a Commissioner, I would want to
ensure that is maintained.
Senator Cantwell. Well, I like to say at home, our home,
that we get around the table and agree to a lot because of
science. We have a lot of thorny problems, but when we can get
around the table and have science to guide us, we usually can
get to a lot of conclusions.
I would say the same in your role, that this information
and data are very critical to helping us make important policy
decisions.
Mr. Kessler, I wanted to ask you about use of trade tools.
There are a number of tools to address unfair trade practices.
Some disputes result in trade enforcement, while others are
resolved through negotiation. When will you prioritize trade
enforcement actions over other types of actions?
Mr. Kessler. Senator, I would enforce the law in the
situations where industry is requesting antidumping or
countervailing duty investigations. If the industry is
interested in some kind of negotiated settlement of an
investigation, that is certainly something that I would
consider.
Senator Cantwell. So will you take into consideration
possible retaliation to trade enforcement action when deciding
how to best proceed?
Mr. Kessler. Senator, the law is not structured to take
that into account, nor should other countries be retaliating
against the United States for the legitimate enforcement of our
trade laws.
The antidumping and countervailing duty laws represent an
internationally accepted mechanism for enforcing the law, for
protecting U.S. companies and workers from unfair trade. And I
will enforce them rigorously the way that they are written.
Senator Cantwell. Well, and we have law in the United
States of America. And lots of businesses get into disputes and
they decide to settle them legally. So we are not taking that
away. I am just simply asking, when it comes to trade
enforcement, our processes today are seemingly to basically get
into that phase of the negotiations first and ask questions
later. So we will see where all of this takes us.
I appreciate your comments and your viewpoint. But the key
thing that I think is missing in today's debate is--we clearly
in our State have been involved with everything from WTO, where
we thought Boeing was unfairly protested against, to now saying
the Canadians, as it relates to a law that was passed in
British Columbia, are not allowing direct access.
But we have reached a point where we had a finding and we
wanted to pursue that, which is different than now causing a
lot of shelf space to disappear and maybe disappear for
decades. So I want to make sure that our strong trading
economy, particularly with agriculture, in this whole
discussion does not lose shelf space to the Australians or to
the Canadians or to somebody else and then, when all this is
said and done, we wake up 10 years later and we are 15 or 20 or
30 points behind in a marketplace. So that is why we are asking
these questions.
And I so appreciate the time, Mr. Chairman.
The Chairman. Well, thank you.
We are very grateful for your willingness to serve this
government. Each of you is an expert in your fields, and we
feel very complimented by the fact that you are willing to
serve. And I want to give you every credit for doing so.
And we will try to get this done as quickly as possible and
get you confirmed as quickly as possible.
But just so you all feel the same way, I just want you to
know that you are very much appreciated by this Senator and I
think the other Senators on this committee as well. So I want
to thank you all for your attendance and participation today.
I do ask that any member who wishes to submit questions for
the record do so by noon on Friday, June 15th.
And with that, this hearing is adjourned. I bet you are
glad about that. [Laughter.]
Thanks so much for being here. I am going to come down and
shake hands with all of you.
Thanks for being here. And with that, we will adjourn.
[Whereupon, at 11:13 a.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Prepared Statement of Elizabeth Ann Copeland,
Nominated to be a Judge of the United States Tax Court
Chairman Hatch, Ranking Member Wyden, Senator Cornyn, and other
distinguished members of the committee, thank you for the privilege of
appearing before you today as the President's nominee to serve as a
judge on the United States Tax Court. I am grateful to the President
for his confidence in me and wish to thank the staff of this committee,
who have been generous with their time while working with me on my
nomination.
I would not be here without the support of many throughout my life
and my career. I want to introduce my supportive husband Brad Wilder
and my children Lexie and Preston Wilder, who are here today. Also here
are my father William Copeland, my stepmother Barbara Copeland, my
sister-in-law Pamela Hurst, and her husband David Hurst. My stepson
Davis and my amazing mother, Josephine Copeland, are watching by
livestream video. I also am honored to have in attendance a number of
judges from the United States Tax Court, who have been both friends and
mentors throughout the years.
Early in my legal career, I had the opportunity to work as an
Attorney Advisor at the United States Tax Court for the Honorable Mary
Ann Cohen. I learned much under her direction. Upon leaving the employ
of the Tax Court, I returned to my hometown of San Antonio, TX to
pursue a career in tax law. I spent over 2 decades specializing in the
area of tax controversy and litigation with the law firm Oppenheimer,
Blend, Harrison, and Tate, Inc., which later became Strasburger and
Price, L.L.P and is now known as Clark Hill Strasburger. While
practicing in Texas, I received a board certification in tax law by the
Texas Board of Legal Specialization. I also was very active with the
Section of Taxation of the American Bar Association and with the State
Bar of Texas Tax Section, for which I served as chair in 2013-2014.
As a member of the Texas State Bar, I recognized a need to assist
unrepresented taxpayers--most of whom could not afford legal counsel--
with the presentation of their cases in Tax Court. Working with the
help of Special Trial Judge Peter Panuthos and representatives from IRS
Area Counsel, we established an all-
volunteer pro bono assistance program to service all five cities in
Texas in which the Tax Court holds calendars. It was one of my most
treasured accomplishments, and the program is still thriving today.
Working with that program and in my own practice, I have seen the vital
role that the Tax Court plays in shaping tax law. It is imperative for
taxpayers to have their cases heard before an impartial party and for
both taxpayers and government attorneys to be treated with respect. I
believe my strong background in tax controversy work will provide me
with the foundation to fairly and impartially resolve tax cases in
accordance with congressional intent. If confirmed, I would hope to
maintain and enhance the public's confidence in the Tax Court as a
neutral pre-payment forum for the resolution of tax disputes.
Thank you again, Chairman Hatch, Ranking Member Wyden, Senator
Cornyn, and other members of this committee, for your consideration. I
would be happy to answer any questions you might have.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Elizabeth Ann Copeland,
formerly: Elizabeth Ann Dawson; nicknames: Liz Copeland, Lizzy Copeland
and, formerly, Liz Dawson.
2. Position to which nominated: United States Tax Court.
3. Date of nomination: August 3, 2017.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: June 1, 1964; Colorado Springs, Colorado.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list secondary and higher education institutions, dates
attended, degree received, and date degree granted):
Lemont High School, 1978--1979, no degree received (passed 9th
grade, then moved from Illinois to Texas).
Alamo Heights High School, 1979-1980, no degree received
(passed 10th grade, then moved school districts).
Churchill High School, August, 1980-1982, High School Diploma
with Honors, May 1982.
University of Texas at Austin, 1982-1986, BSA Accounting with
Honors, May 1986; University of Texas at Austin School of Law,
1989-1992, JD, May 1992.
Queen Mary and Westfield College (now Queen Mary University of
London), September 1991-December 1991, no degree received
(Semester in London Program through the University of Texas at
Austin School of Law).
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment):
Ernst and Whinney (now Ernst and Young), Senior Accountant, San
Antonio, Texas, 1986-1987.
Ernst and Whinney (now Ernst and Young), Senior Accountant,
Dallas, Texas, 1987-1989.
Vernor, Liipfert, Bernhard, McPherson, and Hand, Chartered (now
DLA Piper US, LLC), Summer Associate, Washington DC, summer
1990.
Law, Snakard, and Gambil, P.C., Summer Associate, Fort Worth,
Texas, summer 1990.
Groce, Locke, and Hebdon, Summer Associate, San Antonio, Texas,
Summer 1991.
Oppenheimer, Rosenberg, Kelleher, and Wheatley, Inc., Summer
Associate, San Antonio, Texas, summer 1991.
United States Tax Court, Attorney Advisor to Judge Mary Ann
Cohen, Washington, DC, 1992-1993.
Oppenheimer, Blend, Harrison, and Tate, Inc., Shareholder, San
Antonio, Texas, 1993-2012.
Our Lady of the Lake University, Adjunct Professor, San
Antonio, Texas, 1996-1998.
Strasburger and Price, LLP, Partner, San Antonio, Texas, 2012-
present.
10. Government experience (list any advisory, consultative, honorary,
or other part-time service or positions with Federal, State, or local
governments, other than those listed above):
South Texas Internal Revenue Service Practitioners Council, San
Antonio, Texas, 2002-2005.
Texas State Board of Legal Specialization Tax Law Advisory
Commission and Tax Law Exam Commission, Austin, Texas, 2010-
2012.
11. Business relationships (list all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, other
business enterprise, or educational or other institution):
Oppenheimer, Blend, Harrison, and Tate, Inc., Shareholder, San
Antonio, Texas, 2001-2014.
Strasburger and Price, LLP, Partner, San Antonio, Texas, 2012-
present.
12. Memberships (list all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable, and
other organizations):
American Bar Association Section of Taxation
Member, 1992-present.
Tax Court Committee Chair, 2009-2011; Vice-Chair, 2007-
2009; Member, 2002-2013.
Pro Bono Committee, Vice Chair, 2009-2011.
Pro Bono Award Committee, 2014-2016.
American College of Tax Counsel
Member, 2014-present.
American Society of Women Accountants
Member, 2007-2011.
Bexar County Women's Bar Association and Foundation
Vice-President, approx. 2002.
Treasurer, approx. 1997-1998.
Board Member, approx. 1999-2001.
Member, 1994-present.
Girl Scouta of America
Troop Leader, 2006-2013.
Administrative Assistant, 2011-2014.
Assistant Troop Leader, approx. 1988-1989.
San Antonio Bar Association
Member, 2004-present.
San Antonio Bar Foundation
Member, 2015-present.
San Antonio Chapter of the Texas Society of Certified Public
Accountants
Member, 1986-1987 and 1995-2013.
State Bar of Texas Tax Section
Chair, 2013-2014.
Chair-Elect, 2012-2013.
Secretary, 2011-2012.
Treasurer, 2010-2011.
Council Member, 2004-2012.
Pro Bono Committee Chair, 2007-2010 and 2017-present.
Tax Controversy Committee Chair, 2002-2004, and Vice-
Chair, 2001-2002.
Texas Society of Certified Public Accountants
Member, 1986-1987 and 1995-2013.
Travis Park United Methodist Church
Scholarship Committee Chair, 2004-2005.
Finance Committee, 2006-2006.
Foundation Board Member, 2004-2005.
Staff-Parish Relations Committee, 2007.
13. Political affiliations and activities:
a. List all public offices for which you have been a
candidate.
None.
b. List all memberships and offices held in and services
rendered to all political parties or election committees during
the last 10 years.
Phone Bank for the 2008 Election Campaign of Barak Obama.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years.
Elizabeth Copeland Political Contributions
------------------------------------------------------------------------
Recipient Date Amount
------------------------------------------------------------------------
2008
Hillary Clinton for President May 23, 2008 $50.00
DNC August 13, 2008 $25.00
DNC October 6, 2008 $100.00
Obama for America October 13, 2008 $100.00
2009
Hillary Clinton January 24, 2009 $50.00
DNC April 9, 2009 $50.00
Campaign to Elect Renee June 24, 2009 $100.00
McElhaney (R)
DNC (Reforming Health Care) October 1, 2009 $100.00
Polly Jackson Spencer October 1, 2009 $100.00
Campaign
Texans for Kay Bailey November 2, 2009 $200.00
Hutchison (R)
Peter Sakai November 11, 2009 $25.00
2010
Campaign to Elect Renee February 28, 2010 $50.00
McElhaney (R)
Cathy Stryker (R) May 2, 2010 $100.00
DNC (Barack Obama B-Day) July 19, 2010 $100.00
Marialyn Barnard (R) August 16, 2010 $25.00
DNC (November Elections) August 24, 2010 $50.00
2012
Obama for America January 22, 2012 $50.00
DNC April 6, 2012 $50.00
Texas Democratic Party April 6, 2012 $50.00
Obama for America April 6, 2012 $50.00
Obama Victory Fund October 16, 2012 $147.00
Obama Victory Fund 2012 October 30, 2012 $112.00
2013
DNC February 15, 2013 $100.00
Mayor Julian Castro Campaign February 21, 2013 $100.00
DNC April 15, 2013 $50.00
DNC June 5, 2013 $100.00
State Party Victory Fund May 20, 2013 $50.00
Texas Democratic Party May 20, 2013 $50.00
DNC Onlinedemocrats.org October 16, 2013 $10.00
DNC Onlinedemocrats.org November 11 ,2013 $35.00
Democratic Party (online) November 26, 2013 $10.00
2014
Patricia Rouse Vargas February 6, 2014 $100.00
DNC February 17, 2014 $25.00
DNC March 9, 2014 $10.00
DNC March 31, 2014 $15.00
DNC April 9, 2014 $10.00
DNC May 4, 2014 $55.00
Renee McElhaney for Judge (R) June 19, 2014 $100.00
DSCC (Act Blue) June 30, 2014 $17.00
Act Blue DSCC July 30, 2014 $25.00
DNC September 30, 2014 $50.00
DNC October 8, 2014 $50.00
Democratic Senatorial September 30, 2014 $25.00
Campaign Committee
Pete Gallego October 10, 2014 $35.00
2015
DNC Membership April 7, 2015 $75.00
------------------------------------------------------------------------
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement):
Best Tax Lawyers in America, Best Tax Lawyer in San Antonio,
2011, 2017, and 2018, listed in Best Lawyers, 2006-present.
S.A. Scene Magazine, San Antonio's Best Tax Law Attorneys,
2004-present.
Thompson Reuters, San Antonio Super Lawyer, 2003-present.
Taxanalysts Tax Notes, 2012 Top 10 Tax Persons of the Year,
January 2013.
Bexar County Women's Bar Association, Belva Lockwood
Outstanding Lawyer, 2010.
American Bar Association, Section of Taxation, Janet Spragens
Pro Bono Award, 2009.
American Society of Women Accountants, Balance Award, 2007.
Bexar County Women's Bar Association, Belva Lockwood
Outstanding Young Lawyer, 1998.
Fulbright and Jaworski, Outstanding Second Year Law Student,
1991.
University of Texas at Austin McCombs School of Business,
Outstanding Student, 1986.
15. Published writings (list the titles, publishers, and dates of all
books, articles, reports, or other published materials you have
written):
``An Update on Innocent Spouse Claims,'' Texas Tax Lawyer,
spring 2013. Copy attached.
16. Speeches (list all formal speeches you have delivered during the
past 5 years which are on topics relevant to the position for which you
have been nominated):
Elizabeth Copeland
Five Year Speech Chart
------------------------------------------------------------------------
Date Speech Event/Location
------------------------------------------------------------------------
2012 Speeches
------------------------------------------------------------------------
June 12, 2012 Preparing Form 8857, Tax Alliance
Preparing a Protest, Conference Boot
Defending an Innocent Spouse Camp
at the IRS Office of
Appeals, then Mock Trial--
Innocent Spouse Case
------------------------------------------------------------------------
August 7, 2012 FATCA: The U.S. Attempt to San Antonio CPA
Take on the World: Chapter--Speaker
Understanding Form 8938, Series
FATCA, and Other Foreign
Account Disclosure Issues
------------------------------------------------------------------------
August 23, 2012 FATCA: The U.S. Attempt to Rio Grande Valley
Take on the World: Chapter of CPAs
Understanding Form 8938,
FATCA, and Other Foreign
Account Disclosure Issues
------------------------------------------------------------------------
September 17, How to Handle the Most Common Strasburger and
2012 IRS Disputes (Independent Price, LLP 2012
Contractor vs. Employee, Tax Symposium
Trust Fund Recovery Penalty, (Dallas)
Innocent Spouse,
Substantiation, and
Reporting Foreign Assets)
------------------------------------------------------------------------
September 19, How to Handle the Most Common Strasburger and
2012 IRS Disputes (Independent Price, LLP 2012
Contractor vs. Employee, Tax Symposium (San
Trust Fund Recovery Penalty, Antonio)
Innocent Spouse,
Substantiation, and
Reporting Foreign Assets)
------------------------------------------------------------------------
November 9, 2012 Tax Issues in Divorce Austin Chapter of
the Texas Society
of Certified
Public Accountants
------------------------------------------------------------------------
2013 Speeches
------------------------------------------------------------------------
May 30, 2013 How to Handle the Most Common San Antonio Chapter
IRS Disputes (Independent of the TSCPA
Contractor vs. Employee,
Trust Fund Recovery Penalty,
Innocent Spouse,
Substantiation, and
Reporting Foreign Assets)
------------------------------------------------------------------------
June 13, 2013 Texas Community Property: Tax Alliance
When Is What Is Mine Ours? Conference
------------------------------------------------------------------------
August 1, 2013 Planning for the Modern San Antonio Chapter
Family: How to Advise of the TSCPA
Clients Now That the U.S.
Supreme Court Has Struck
Down DOMA
------------------------------------------------------------------------
August 6, 2013 Planning for the Modern BCWB Luncheon (San
Family: How to Advise Antonio)
Clients Now That the U.S.
Supreme Court has Struck
Down DOMA
------------------------------------------------------------------------
August 13, 2013 Honey! You Shrunk Our Assets! Amarillo Chapter of
A Discussion of Tax Issues TSCPA
in Divorce
------------------------------------------------------------------------
August 14, 2013 Community Property and Tax Tax Law 101 Texas
Issues Bar CLE (Houston)
------------------------------------------------------------------------
August 16, 2013 Hot Issues Under Circular Advance Tax Law
230: A Dialogue With the Course (Houston)
Director
------------------------------------------------------------------------
August 26-27, Handling IRS Appeals and Strasburger and
2013 Other Tax Controversies Price 2013 Annual
Tax Symposium
------------------------------------------------------------------------
September 27, A War of the Roses--A San Antonio Chapter
2013 Discussion of Tax Issues in of the TSCPA 15th
Divorce Annual CE
Symposium
------------------------------------------------------------------------
October 17, 2013 Administrative Collection ALI/CLE Handling a
Procedures: Collection Due Tax Controversy:
Process, Offers in Audits, Appeals,
Compromise, and Installment Litigation, and
Agreements and Section 6672 Collections
Penalty Matters
------------------------------------------------------------------------
November 18, It's a Small World After All-- 2013 Austin CPA
2013 Understanding FACTA and the Chapter Annual Tax
IRS's Offshore Voluntary Conference
Disclosure Program
------------------------------------------------------------------------
2014 Speeches
------------------------------------------------------------------------
January 25, 2014 Foreign Bank Accounts: The ABA Section of
Latest Developments in OVDP, Taxation, Midyear
Opt Outs, Examinations, and Meeting, Phoenix,
Other IRS Offshore AZ
Enforcement Activities
------------------------------------------------------------------------
February 21, Current Issues in Estate Docket Call in
2014 Planning: Portability and Probate Court
DOMA Seminar Sponsored
by the San Antonio
Estate Planners
Council
------------------------------------------------------------------------
March 5, 2014 Interest Charge Domestic Strasburger and
International Sales Price, LLP Tax
Corporations (IC-DISC) Section
------------------------------------------------------------------------
May 13, 2014 Attention U.S. Manufacturers San Antonio Chapter
and Exporters--You Are of the TSCPA
Paying Too Much U.S. Tax
------------------------------------------------------------------------
June 11, 2014 Planning for the Modern Tax Alliance
Family--Advising Clients Conference, Plano,
After the Supreme Court TX
Overturned Portions of DOMA
------------------------------------------------------------------------
July 22, 2014 Don't Get an ``F'': Learn the ADKF, San Antonio,
Latest on FATCA and FBAR TX
Compliance
------------------------------------------------------------------------
August 15, 2014 Don't Get an ``F'': Learn the SACPA Continuing
Latest on FATCA and FBAR Education
Compliance Foundation, Inc.
------------------------------------------------------------------------
August 25, 2014 Current Developments in Civil 2014 Strasburger
and Criminal Controversies and Price
Symposium / Dallas
------------------------------------------------------------------------
October 23, 2014 Don't Get an ``F'': The Rio Grande Valley
Latest on FATCA and FBAR Chapter of CPAs
Compliance
------------------------------------------------------------------------
November 17, Don't Get an ``F'': The Austin CPA Chapter
2014 Latest on FATCA and FBAR 2014 Annual Tax
Compliance Conference
------------------------------------------------------------------------
November 20-21, Planning for the Modern Texas Society of
2014 Family--Advising Clients CPAs 2014 Texas
After the Supreme Court Tax Institute
Overturned Portions of DOMA
------------------------------------------------------------------------
2015 Speeches
------------------------------------------------------------------------
May 7, 2015 No Pain--Big Gain: Assisting ABA Section of
Self- Represented Taxation, Annual
Petitioners at Calendar Call Meeting,
Washington, DC
------------------------------------------------------------------------
July 27, 2015 Foreign Bank and Financial 2015 U.S. Mexico
Accounts Report (``FBARs'') Conference
------------------------------------------------------------------------
November 19, Recent Development in Annual Texas CPA
2015 Individual Federal Income Tax Institute--
Taxation Richardson, TX
------------------------------------------------------------------------
November 20, Recent Development in Annual Texas CPA
2015 Individual Federal Income Tax Institute--San
Taxation Antonio, TX
------------------------------------------------------------------------
2016 Speeches
------------------------------------------------------------------------
January 25, 2016 Individual Tax Update PATH Akin, Doherty,
Act Changes to TEFRA Klein, and Feuge,
Partnership Audit Rules and P.C. Internal CPE
Recent Developments in for CPA Firm
Individual Federal Income
Taxation
------------------------------------------------------------------------
March 25, 2016 Qualities of Effective 2016 Leadership
Leaders Academy
------------------------------------------------------------------------
October 26, 2016 Federal Tax Controversy Hot State Bar of Texas
Topics Annual Advanced
Tax Law Course
------------------------------------------------------------------------
2017 Speeches
------------------------------------------------------------------------
May 12, 2017 Breaking Bad--Dealing With ABA Section of
the Partnership Audit Rules Taxation May
and Partnership Agreement Meeting
Drafting Considerations
------------------------------------------------------------------------
June 14, 2017 Effective Representation in Texas Federal Tax
Today's IRS Appeals Institute
------------------------------------------------------------------------
July 26, 2017 Breaking Bad--Dealing With ABA Section of
the Partnership Audit Rules Taxation Webinar
and Partnership Agreement
Drafting Considerations
------------------------------------------------------------------------
August 18, 2017 Federal Tax Controversy--Hot State Bar of Texas
Topics 2017 Annual Advanced
Tax Law
------------------------------------------------------------------------
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
I have been practicing tax law in the tax controversy area for
over 20 years. I have tried many cases in the United States Tax
Court and settled many more over the years. I regularly speak
to CPA and attorney groups on tax law topics. Most importantly,
I was instrumental in developing the Tax Court Pro Bono Program
for the State Bar of Texas Tax Section that assists low-income
taxpayers throughout the State of Texas with their cases in
front of the United States Tax Court. Because an extremely
large percentage of cases that come before the United States
Tax Court involve pro se litigants, my work and experience with
that program will be a valuable resource for understanding how
to deal with such persons in the courtroom.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, associations, or organizations if you are confirmed by
the Senate? If not, provide details.
Yes.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
In connection with the nomination process, I have consulted
with the Administrative Office of the U.S. Courts (AOUSC) to
prepare and file a financial disclosure report in compliance
with the Ethics in Government Act of 1978. The AOUSC Committee
on Financial Disclosure has confirmed that my report, which has
been provided to the committee, is in compliance with
applicable laws and regulations.
I am not aware of any potential conflicts of interest. Should
any matter arise that involved an actual or potential conflict
of interest, I would handle it by careful and diligent
application of the Code of Conduct for United States Judges as
well as other relevant canons and statutory provisions, and I
would consult with the appropriate ethics officials in the
AOUSC, as applicable.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
Please note that the Tax Court hears cases all over the
country. I would unlikely be assigned to administer the Tax
Court calendar for my home city of San Antonio, which would
eliminate almost all appearances of conflict of interest.
As a partner in Strasburger and Price, LLP, I could perceive a
potential conflict if one of the attorneys from that firm were
to appear in my courtroom. I would offer to recuse myself from
that litigation, should that occur.
If Valero Energy Corporation (``Valero'') were a litigant in my
courtroom, I would also likely need to recuse myself, because
they were a large client in the past; however, I am not aware
of any Tax Court case pending for Valero.
I am listed as one of the attorneys for the following Tax Court
case that would require me to withdraw as counsel and
subsequently recuse myself from the litigation or any Tax Court
deliberations: James Ivy.
3. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy. Activities
performed as an employee of the Federal government need not be listed.
As Chair of the State Bar of Texas Tax Section, I submitted the
following comment projects on behalf of the Tax Section (copies
attached):
Comments Concerning the Proposed Amendments to Rules 1, 182(e),
183, 200, and 202 of the United States Tax Court Rules of
Practice and Procedure (9/6/05);
Comments Regarding Privacy Protection for Filings Made With the
Court (2/2/06):
Comments Regarding Proposed Amendments to the Rules of the
United States Tax Court (2/27/12);
Comments on the Material Advisor Penalty Regulations (9/19/13);
Comments on the Innocent Spouse Relief Regulations (1/7/14);
Comments on Proposed Section 1411 Department of Treasury
Regulations (2/20/14);
Comments on the Proposed Treasury Regulations regarding
``Excepted Benefits'' for Purposes of the Affordable Care Act
(2/24/14);
Comments on the Proposed Regulations Covering Section 706 QDOT
Elections (3/19/14);
Comments on Proposed New Texas Comptroller of Public Accounts
Rule 3.11 Regarding Settlements on Redetermination (4/4/14);
Comments on Proposed Treasury Regulations Covering Section
1.704-3 (5/5/14);
Comments on Proposed Regulations Regarding Disguised Sales and
the Allocation of Liabilities (6/20/14);
Comments on Internal Revenue Notice 2014-5, Discrimination
Testing Standards Applicable to Softly Frozen Defined Benefit
Pension Plans (6/25/14); and
Comments on Circular 230's Prohibition Against Contingent Legal
Fees (6/26/14).
4. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
If confirmed, I will carefully review any potential conflicts
by reference to 28 U.S.C. Sec. 455, Canon 3 of the Code of
Conduct for United States Judges, and any and all other laws,
rules, and practices governing such circumstances. I will also
consult, as applicable, with the appropriate ethics officials
in the AOUSC.
5. Copies of opinions--Two copies of written opinions should be
provided directly to the committee by the designated agency ethics
officer of the agency to which you have been nominated and by the
Office of Government Ethics concerning potential conflicts of interest
or any legal impediments to your serving in this position.
Provided to the committee.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court or administrative agency,
professional association, disciplinary committee, or other professional
group? If so, provide details.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
______
An Update on Innocent Spouse Claims
by Bryan T. Camp, Esq. and
Elizabeth A. Copeland, Esq.\1\
---------------------------------------------------------------------------
\1\ Both authors are honored to have been listed as two of nine
runners-up for the 2012 Tax Persons of the Year by Tax Analysts
2013 in the January 7, 2013 issue of tax
notes'.
---------------------------------------------------------------------------
I. ISSUES RELATED TO THE FILING OF RETURNS.
A. Joint Returns and Joint and Several Liability. The decision to
file a joint return is one that must be carefully thought out during
periods of separation and divorce or within a troubled marriage because
of the joint and several liability issues in connection with the filing
of a joint return.
B. Consider Filing Separately. Historically, the tax on married
couples filing jointly generally has been lower than the combined tax
on married couples filing separate returns. Now, however, in many
cases, a married couple's tax will be the same whether they file
jointly or separately. That's because (1) the end point of the 15%
bracket for married couples filing jointly is now twice the end of the
15% bracket for a single filer or a married person filing separately,
I.R.C. Sec. 1(f)(8)) and (2) the standard deduction for a married
couple filing jointly is twice the standard deduction of a single
person or a married person filing separately. I.R.C. Sec. 63(c)(2)).
Thus, if there is a pending divorce or a spouse has questionable tax
items, there may now be greater occasion to file separately than in the
past because, in many cases, filing separately may no longer involve an
increased tax cost or may only involve a slightly or moderately
increased tax cost. However, joint filing may still produce a lower tax
cost in many situations because there is still a marriage penalty for
the income brackets above the 15% bracket and numerous tax breaks are
unavailable \2\ or less favorable on separate returns.
---------------------------------------------------------------------------
\2\ Filing a separate return can result in the loss of important
tax credits. For example, a married couple cannot file separate returns
and claim the earned income tax credit.
C. Using I.R.C. Sec. 66 to Escape Community Property Rules in Year
---------------------------------------------------------------------------
of Divorce.
In Texas, a community property state, tax returns filed during
periods of separation and in the year of divorce can be a trap for the
unwary. It is important to note that, with the exception that will be
discussed below related to I.R.C. Sec. 66, spouses are required to file
either joint returns or married filing separate returns during periods
of separation. In addition, in the year of divorce, one-half of all
community income must be reported on the federal income tax return of
the non-earning spouse, if earned prior to the date the decree becomes
final Community income includes wages, partnership income and other
business income generated by a former spouse. This means where there is
a gross disparity in earning power as between husband and wife, in the
year of divorce the lower earning spouse will have a substantial tax
liability for the one-half of all community income earned by the higher
earning spouse up until the dissolution of the marriage. That lower
income spouse may not have the assets to cover that liability.
1. Requirements for I.R.C. Sec. 66.
The United States Congress recognized this potential disparity and
passed I.R.C. Sec. 66 as a solution or some spouses. However, the rules
under I.R.C. Sec. 66 are very stringent and do not apply in all
situations. In order for I.R.C. Sec. 66 to apply:
a. The spouses must live apart at all times during the calendar
year;
b. They must not file a joint tax return for that year;
c. They must have earned income which is community income; and
d. They must not transfer any portion of that earned income
between spouses except for the payment of child support.
If these conditions are met, then the earned community income,
meaning wages and self-employment income from trades or businesses or
partnerships, will be reportable by the party who earned the income
rather than one-half being allocated to the non earning spouse under
community property laws. Very importantly, all other community income
such as interest, dividends or capital gains are split equally and must
be reported one-half by each spouse, even under the application of
I.R.C. Sec. 66.
It should be made clear that alimony payments, during the period of
separation, destroy the applicability of I.R.C. Sec. 66 because they
allow for the transfer of income. Any support and separate maintenance
payments are also problematic to the applicability of I.R.C. Sec. 66.
On the other hand, payment of child support during periods of
separation is acceptable and does not impair the parties ability to use
I.R.C. Sec. 66.
This means that where income is shared between spouses (except for
child support) I.R.C. Sec. 66 will not apply. To avoid this egregious
result, the earned income between spouses should be separately
accounted for during the periods of separation. If there are other
assets available to maintain and support the spouse, those assets
should be used during the periods of separation. For example, if there
is an existing bank account or investment account with sufficient
assets to pay the house payment and other direct expenses, those assets
should be used rather than the continuing earned income during the year
of separation. All checks should be written by the spouse living in and
using the house (electricity, etc.). If the earned income of the higher
earning spouse is used to make house payments and pay other bills, the
provisions of I.R.C. Sec. 66 will not apply.
2. Client Doesn't Want I.R.C. Sec. 66 to Apply.
If it is beneficial to your client to split earned income, he/she
may be precluded from doing so under I.R.C. Sec. 66(b), unless such
client notifies the other spouse prior to the due date of the return
(April 15th) the amount of the community income to be split and the
nature of such income (wages, interest earnings, partnership income,
etc.).
3. Case Law.
Will the Internal Revenue Service look into these items? What has
the Internal Revenue Service done in the past? Although not a targeted
area, the Internal Revenue Service has shown a willingness to
investigate I.R.C. Sec. 66 abuses. For example, in a case involving a
Texas couple, Cline v. Commissioner, T.C. Memo 1982-44 (1982), the
Clines, a separated but not yet divorced couple who were residents of
Texas during 1977, filed married, filing separate returns. Mrs. Cline
reported 100% of the community income as it was earned by her. She also
paid 100% of the tax liability attributable to that income. In later
years, the Internal Revenue Service audited Mr. Cline's return and
allocated to him one-half of the community income, even though that tax
had already been paid by Mrs. Cline on her return. The court upheld the
determination by the Internal Revenue Service.
In another Texas case, Adams v. Commissioner, 82 T.C. 563 (1984), a
Texas couple was divorced in 1977. The husband was a partner in a CPA
firm On each of their returns in the year of divorce, the couple
reported their share of the partnership income up until the time of
divorce. Mrs. Adams used a per share per day pro rata method of
allocating income and Mr. Adams awaited the closing of the books and
made an allocation based on the full year's earnings. Mr. Adams' return
was subsequently adjusted, even though his manner of reporting the
income was an acceptable method. Mr. Adams' method was inconsistent
with the methods as between both spouses and resulted in a loss of
revenue to the taxing authority based on the different methods used
between the parties. The lesson learned in this case was that the
parties must agree in the decree of divorce how business income of
partnerships, S-corporations, or limited liability companies will be
allocated in the year of divorce.
II. OTHER CONSIDERATIONS
A. Using I.R.C. Sec. 7703 to File as Head of Household Prior to
Divorce
I.R.C. Sec. 66 helps spouses deal with inequities resulting from
the application of community property laws during periods of separation
and divorce. In addition, the Internal Revenue Code provides an
additional benefit for separated spouses who maintain a household for a
dependent child or children. That benefit is found at I.R.C. Sec. 7703.
1. I.R.C. Sec. 7703. Under I.R.C. Sec. 7703, a taxpayer may file an
individual return claiming head of household status, even though
married, if the following requirements are met:
a. The taxpayer has a child;
b. The taxpayer has paid greater than one-half of the
expenses maintaining the household for that child;
c. The parties were separated for greater than 6 months;
and
d. The spouse has not lived in the home for the last six
months of the tax year.
This is an excellent opportunity for the taxpayer supporting a
child to take advantage of the head of household rate schedules, rather
than deciding between a Married Filing Separate tax return or the
liability associated with a Joint Return. Remember though that I.R.C.
Sec. 7703 deals with filing status only; to avoid reporting \1/2\ of
community income on the head of household return refer to I.R.C.
Sec. 66(b) discussion above.
2. The Noncustodial Spouse. The logical extension of the rule under
I.R.C. Sec. 7703 is that the separated spouse, who is not maintaining a
household for the child(ren) will have to file under a married filing
separate status.
III. OVERVIEW OF INNOCENT SPOUSE RULES.
Thankfully, legislation provides relief to certain spouses who have
filed joint returns. The relief is found in I.R.C. Sec. 6015. For an
account of the very interesting legislative history of this statute,
enacted as part of the 1998 IRS Restructuring and Reform Act, see Bryan
T. Camp, Between a Rock and a Hard Place, 108 Tax Notes, 359 (July 18,
2005), available at http://papers.ssm.com/sol3/papers.cfm?abstract_
id=911275; and Bryan T. Camp, The Unhappy Marriage of Law and Equity in
Joint Return Liability, 108 Tax Notes, 1307 (September 12, 2005):
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1505653.
After 1998, the following three types of relief are available:
A. Sec. 6015(b) Traditional Innocent Spouse Election
Taxpayers can elect this relief when:
1. A joint return has been filed for the taxable year;
2. There is an understatement of tax on the return
attributable to the erroneous items of the non-requesting
spouse;
3. In signing the return, the requesting spouse did not know
or had no reason to know, that there was such an
understatement;
4. Taking into account all of the fact and circumstances, it
is inequitable to hold the requesting spouse liable for the
deficiency in tax; and
5. The request is made within two years of when IRS collection
action first initiated.
B. Sec. 6015(c) Separate Liability Election
Taxpayer can elect this relief when:
1. In signing the return, the requesting spouse had no actual
knowledge that there were erroneous items of the non-requesting
spouse;
2. At the time the election is filed, the requesting spouse is
no longer married to, or is legally separated from, the non-
requesting spouse; or the requesting spouse was not a member of
the same household as the non-requesting spouse at any time
during the 12-month period ending on the date the election is
filed; and
3. The request is made within two years of when IRS collection
action first initiated.
C. Sec. 6015(f) Equitable Relief:
The Service will grant this relief when:
1. Relief is not available under I.R.C. Sec. Sec. 6015(b) or
(c); and
2. Taking into account all the facts and circumstances, it is
inequitable to hold the requesting spouse liable.
To help taxpayers and Courts with this ``facts and circumstances''
test, the IRS has published guidance laying out a variety of factors
that its employees will use in deciding whether to grant relief
requested under subsection (f). While these are very helpful for
practitioners to know, the Tax Court has repeatedly emphasized that:
``In section 6015(f) cases, however, we do not simply count [the IRS
factors]. Likewise, we are not bound by them. The factors are
guidelines we use in evaluating all of the relevant facts and
circumstances to reach a conclusion.'' Henson v. Commissioner, T.C.
Memo 2012-288.
The last published guidance from the Service on what factors it would
consider in determining relief under subsection (f) was Rev. Proc.
2003-61. On January 5, 2012, the Service issued Notice 2012-8 which
proposed a revenue procedure that, if finalized, would revise the
factors and supersede Rev. Proc. 2003-61.
Notice 2012-8 states that, ``until the revenue procedure is finalized,
the Service will apply the provisions in the proposed revenue procedure
instead of Rev. Proc. 2003-61 in evaluating claims for equitable relief
under section 6015(f).'' However, the Notice also states that a
taxpayer requesting relief can choose either set of factors to be
evaluated under.
As of the date this Article was submitted, the IRS has not issued a
final Rev. Proc. That supersedes Rev. Proc. 2003-61. In Sriram v.
Commissioner, T.C. Memo. 2012-91 the Tax Court said it would ``continue
to apply the factors in Rev. Proc. 2003-61, 2003-2 C.B. 296, in view of
the fact that the proposed revenue procedure is not final and because
the comment period under the notice only recently closed.''
The main difference between the Rev. Proc. factors and the Notice 2012-
8 factors is the Service's treatment of the abuse and financial control
factors. The Service has eliminated ``abuse'' as a separate factor.
Instead, the Service will now consider both spousal abuse and control
of household finances as part of its determination on whether the
requesting spouse knew or had reason to know of either the
understatement of tax or the underpayment, as the case may be. If the
requesting spouse was abused (and the Notice describes a broad concept
of abuse in 4.03(2)(c)(iv)) or if the other spouse kept control of the
household finances by restricting the requesting spouse's access to
financial information, then such situations could make this factor
neutral or weigh in favor of the granting the requested relief.
IV. PROCEDURES FOR SEEKING SPOUSAL RELIEF.
Taxpayers can use a combination of administrative procedures and
judicial procedures to get spousal relief.
A. Administrative Procedures to Seek Relief.
The IRS basically has two jobs: to determine the proper tax, which it
then assesses, and to collect a properly assessed but unpaid tax.
Taxpayers can seek spousal relief from the IRS in both the tax
determination stage and tax collection stage.
First, taxpayers can seek spousal relief as part of the deficiency
proceedings. Before 1998, this was the only procedure available.
Taxpayers would ask for relief as part of the audit process, including
any meetings with the Office of Appeals. If the IRS denied relief, that
would be part of the Notice of Deficiency (NOD), which is the ``ticket
to the Tax Court.'' So taxpayers could then obtain Tax Court review of
that denial as part of a petition contesting the deficiency.
Second, taxpayers can seek relief as part of the Collection Due Process
(CDP) hearing. This second procedure is one Congress added in the 1998
IRS Restructuring and Reform Act (RRA 98). It is a post-assessment
procedure. Before the IRS may use its full lien and levy powers, it
must give taxpayers a chance to show why liens and levies were not
appropriate collection actions. See Sec. 6220, 6230. The IRS does this
through a special notice, called the CDP Notice, which gives taxpayers
30 days to ask for a CDP hearing with the Office of Appeals. As part of
the hearing about the appropriateness of collection, taxpayers could
ask for spousal relief After all, it's not appropriate to collect a tax
that should not have been assessed! The Office of Appeals makes its
decision by issuing a document called a ``Notice of Determination''
(note the ``NOD'' abbreviation here--that's on purpose). Just like a
``Notice of Deficiency,'' the ``Notice of Determination'' is a ticket
to Tax Court review. If you want Tax Court review, you must have an NOD
of some sort!
Notice that both the NOD procedures allow taxpayers to ask for spousal
relief as part of another procedure (either review of a proposed
deficiency or review of a proposed collection action).
Third, a taxpayer can seek spousal relief at any time after the IRS has
begun collection action against him or her. This third procedure
results in what is called a ``stand-alone'' petition for relief. It is
not part of any other type of proceeding. The taxpayer can then appeal
any denial of relief to the Office of Appeals who will issue a Notice
of Determination that is, once again, a ticket to Tax Court review. See
Sec. 6015(e).
Fourth, taxpayers can seek spousal relief through a claim for refund.
This is a very different procedural posture from the other three. The
first three procedures are all pre-payment procedures. However, a claim
for refund is a post-payment procedure. That is, whenever a taxpayer
has fully paid all the taxes assessed by the IRS, that taxpayer can
file an administrative claim for refund, giving any good reason why the
taxpayer may have overpaid. Section 6511 requires that administrative
claims for refunds be filed either within 3 years after a return was
filed or within 2 years after the payment was made. Remember, however,
that refunds are not allowed as part of the relief under Sec. 6015(c),
but only for (b) and (f) relief.
1. Preparing the Administrative Claim: Form 8857
In all of the above procedures, the taxpayer starts the administrative
claim process with a Form 8857. Although claims for refund are made on
Form 1040x, taxpayers would attach a Form 8857 to it. Further, although
the Internal Revenue Manual (IRM) says that the IRS will accept any
submission so long as it contains all the information, it is best to
use Form 8857. That is the form the IRS designed and that is the form
IRS employees are trained to interpret.
The basic rule here is: be as thorough as possible as time permits.
Putting in the time and effort on the front end will not only save time
and effort on the back end, but will also increase the chances of
success. Thoroughness will not only help the IRS employee see the truth
but will also demonstrate the taxpayer's determination to obtain
relief. That determination itself may persuade an IRS employee to grant
relief in a close case. This is especially true at the Office of
Appeals level where the Appeals Officers are supposed to take ``hazards
of litigation'' into consideration. For the particular rules that the
Office of Appeals uses to review Spousal Relief denials, see IRM Part
25, Chapter 15, Section 12 (e.g., IRM 25.15.12).
The most important part of being thorough is finding documents that
support the information given on Form 8857. For example, if the
taxpayer claims abuse, try to find documentary evidence of that. If
there are no police reports, or women's shelter reports, or medical
reports, try at least getting witness statements. Abuse is not simply a
one-time event. It is often a pattern of over-controlling that can be
demonstrated by eyewitnesses over a period of time. On Part V of the
form, try to provide as much documentation as possible about current
financial position. Current economic hardship can play a huge role in
getting spousal relief
Experienced practitioners strongly suggest attaching documentation. The
best practice here is to attach a narrative. Tell the story and
methodically explain the basis for relief If the taxpayer seeks
equitable relief under subsection (f) the best practice is to include a
chart summarizing each of the ``equitable factors'' contained in Rev.
Proc. 2003-61, with an explanation of how those factors play out.
Here's one suggestion:
------------------------------------------------------------------------
Favors
Factor Favors IRS? Taxpayer? Neutral?
------------------------------------------------------------------------
Marital status
------------------------------------------------------------------------
Economic hardship
------------------------------------------------------------------------
Knowledge or reason to
know
------------------------------------------------------------------------
- mitigated by
abuse?
------------------------------------------------------------------------
- mitigated by lack
of control over
finances?
------------------------------------------------------------------------
Legal obligation to pay
------------------------------------------------------------------------
Significant benefit
------------------------------------------------------------------------
Compliance with tax
laws
------------------------------------------------------------------------
Mental or physical
health
------------------------------------------------------------------------
Total
------------------------------------------------------------------------
2. Timing
Administrative requests must be made timely. As with much else in law,
the first action to take to seek spousal relief is to figure out how
much time to you have to file Form 8857. To do this, the best practice
is to get a transcript of your client's accounts. The easiest way to
get transcripts is through the IRS e-Services route. If you are not a
current e-Services user and/or lack access to the e-Service products,
you must complete an on-line IRS e-file application and pass a
suitability check which is the same check required by Electronic Return
Originators. Publication 3112, (IRS e-file Application) contains
additional details on the application and suitability processes. You
can also get a transcript by calling the practitioner hotline (866-860-
4259).
A request for spousal relief must not be made too soon or too late. Too
soon is before the IRS has selected the return for audit or, for
underpayment situations, before the IRS has taken a collection action
against the requesting spouse. The following IRS actions open the door
to requesting spousal relief: (1) sending the requesting spouse a
Sec. 6330 Collection Due Process (CDP) Notice; (2) making a Sec. 6402
offset of an overpayment made by the requesting spouse; (3) filing suit
against the requesting spouse in court; or (4) filing a claim for
payment of the tax in any proceeding where the requesting spouse is a
party or which involves property of the requesting spouse. Other
actions that might be thought of as collection don't count, such as
notice and demand, the filing of a Notice of Federal Tax Lien (NFTL)
(although the IRS must send the CDP notice shortly after filing the
NFTL.
Waiting more than 2 years after the first IRS collection jeopardizes
spousal relief. The statute says that a taxpayer must seek subsection
(b) or (c) relief within 2 years after the first collection action
(listed above). Although the Treasury regulations also create a similar
2-year period for requests for equitable relief under subsection (f),
the IRS has stated, in Notice 2011-70, that it will no longer enforce
the regulation.
3. How the IRS Processes the Administrative Claim
Be sure to fill out the current version of the Form 8857, available on
the IRS website. Send the Form to the Cincinnati Centralized Innocent
Spouse Operation (CCISO) in the Covington, Kentucky IRS Campus. For
clients under audit, or who have reached the point in the collection
process where they get personal ``service'' from an IRS Revenue
Officer, give a copy to the IRS employee. But the determination gets
made in at the Cincinnati Centralized Innocent Spouse Operation (CCISO)
in Covington, Kentucky. See IRM 25.15.8.2.2 (Collection Policy
Decision) (08-17-2010). So always be sure to send it there.
The first action the IRS takes with each Form 8857 is to see whether it
is filled out with enough information to make a determination. To be
processable, the form must at least (1) identify the tax periods for
which relief is requested; (2) identify the requesting spouse's
taxpayer identification number; and (3) have a valid signature (one
that says it is signed under the penalties of perjury). The IRS
generally accepts faxed documents and considers faxed signatures valid.
See IRM 25.15.7.5.2 (Screening Procedures) (02-25-2011). Competent
practitioners, however, should give much more information than the bare
minimum.
Once an IRS employee accepts a Form 8857 for processing, that employee
will enter certain freeze codes in the requesting spouse's account to
prevent further collection actions. See e.g., IRM 25.15.8.5.2.2
(Processable Form 8857) (08-17-2010). That's the good news. The bad
news is that the CSED is suspended for the period during which the IRS
is prohibited from levying against the requesting spouse. See
Sec. 6015(e)(2).
After the IRS employee decides the submitted Form 8857 is processable,
a CCISO employee will make a substantive decision about relief. That
outcome will depend in part on how thorough a Form 8857 is presented.
If the IRS denies relief, the requesting spouse has a right to go to
theOffice of Appeals. Good information about representing a client in
Appeals is here: http://www.irs.gov/individuals/content/
0,,id=98196,00.html.
4. Judicial Review of the Administrative Procedure
If the IRS (including the Office of Appeals) denies a taxpayer's
request for spousal relief, it is generally possible to petition the
Tax Court for review of the IRS decision, unless the request for
spousal relief was part of a claim for refund. In that latter
situation, the proper court is a federal district court or the U.S.
Court of Federal Claims.
Whether spousal relief arises as part of a deficiency proceeding, a CDP
proceeding or a stand alone proceeding, the Tax Court now applies the
same rules of procedure: it allows taxpayers to introduce new evidence
and reviews the IRS decision de novo. In the past the Tax Court had
different rules for different procedures but Porter v. Commissioner,
132 T.C. 203 (2009) changed that and illustrates how judicial review
works.
In Porter, Suzanne Porter asked for equitable relief from the tax and
penalties relating to mis-reporting of an early IRA distribution taken
by her ex-husband. The IRS denied relief. When Porter asked the Tax
Court to review the case, the IRS argued that the Tax Court should use
an ``abuse of discretion'' review. That is, the Court should (1) just
consider the information that the IRS considered, and (2) defer to the
IRS decision unless the Tax Court thought it was so wrong headed as to
be an abuse of the IRS discretion. In contrast, Mrs. Porter asked the
Tax Court to use a ``de novo'' standard of review. That is, the Court
should (1) consider new information that she wanted to give, and (2)
not defer to the IRS decision but instead make a completely independent
decision.
Historically, the Tax Court had used de novo review for Sec. 6015(b)
and (c) cases, but it had reviewed denials of Sec. 60 l 5(f) relief
using abuse of discretion standard. That was because the language in
the Code gave the Tax Court jurisdiction over (b) and (c) cases but not
(f) cases. However, when Congress passed the Tax Relief and Health Care
Act of 2006 (TRHCA), 120 Stat. 2922, 3061 (TRHCA), it explicitly gave
the Court jurisdiction over stand-alone (f) petitions. The Court
decided that it could apply the same standard of review for
Sec. 6015(f) relief cases as for (b) and (c) cases. Accordingly, in
cases brought under I.R.C. Sec. 6015(f), the Court now applies a de
novo standard of review as well as a de novo scope of review.
Applying that standard in Porter the Court concluded that Ms. Porter
was entitled to Sec. 6015(f) equitable relief. The Court found that the
factors favoring relief were: she and her husband were divorced; she
would suffer hardship if relief were not granted; she didn't receive a
significant benefit beyond normal support from the IRA distribution;
and she diligently complied with income tax laws in later years.
Factors against relief were that Porter had reason to know of the IRA
distribution because it appeared on the face of their return. Despite
that, the Court allowed relief; noting that while it had upheld similar
denials of relief under the abuse of discretion standard, the Court was
no longer required to defer so much to the IRS. The Court decided that
Porter's knowledge of the item was outweighed by the other factors and
was further tempered by the fact that she regularly inquired into her
husband's :finances during the preceding year and he refused to answer
or answered evasively.
The Ninth Circuit has recently upheld the Tax Court's decision that
``de novo'' review was the appropriate scope and standard for it to use
in reviewing the Service's denial of spousal relief Wilson v.
Commissioner, 705 F.3d 980 (9th Cir. 2013).
5. Reconsideration
The IRS has started a spousal reconsideration program, similar to audit
reconsideration. See IRM 25.15.17. Generally, the IRS will reconsider a
previously denied claim if the taxpayer shows that the taxpayer's
previous request was denied because of some communication glitch. This
is useful if a client tried to get relief on his or her own or if a
client's spouse had previously sought administrative relief for the
spouse and had failed, such as was the case in Lantz v. Commissioner,
132 T.C. 131 (2009), rev 'd 607 F.3d 479 (7th Cir. 2010) (jailed
dentist tried to obtain spousal relief for his wife from deficiencies
attributed to his income from Medicare fraud).
B. Seeking Relief Directly from a Bankruptcy Court.
One additional procedure to obtain spousal relief may be bankruptcy.
Section 505 of the Bankruptcy Code allows a bankruptcy court to
``determine the amount or legality of any tax.'' Bankruptcy courts have
used this authority to hear and decide requests for spousal relief.
Sometimes bankruptcy courts require the debtor to first file an
administrative claim. See In re Shafman, 267 B.R. 709, 714-717 (Banla.
N.D. W. VA. 2001) (after filing bankruptcy debtor filed adversary
proceeding seeking spousal relief from the IRS and court had debtor
first seek relief from IRS. IRS denial was reviewed (and in part
reversed) by bankruptcy court). Sometimes they do not. See In re
Hinckley, 256 B.R. 814 (Banla. M.D. Fla. 2000) (debtor requested relief
in an objection to IRS tax claim and court ruled on issue without
requiring administrative determination, granting relief). See also In
re Waggoner, 100 A.F.T.R.2d (RIA) 6426 (Bankr. N.D. Tex. 2007) (debtor
sought spousal relief in an adversary proceeding and court rejected the
IRS defense that the debtor had not first sought administrative
relief).
As a statutory matter, there is no reason a bankruptcy court cannot,
independently of the IRS, decide a request for spousal relief under
either 6015(b) or (c). However, because the statutory language in
6015(f) says that ``the Secretary may relieve such individual of such
liability,'' bankruptcy courts have declined to make any independent
judgment, but instead require the taxpayer to seek relief first from
the IRS and then review the IRS decision under a more deferential
standard than the Tax Court uses. See In re Cummings, 2005 Bankr. LEXIS
2040 (Bankr. S.D. Fla. 2005).
C. Procedural Problems to Watch For.
The reasonable practitioner should be aware of several procedural
problems (or traps).
1. The 2-year rule for Sec. 6015(b) and (c) relief
In order to obtain relief under Sec. 6015(b) or (c), the requesting
spouse must ask at the right time, which is the 2-year period after the
Service initiates collection action against the requesting spouse. This
2-year rule creates some problems. Recall that Treas. Reg. 1.6015-5
says that the 2 year period begins to run from the earliest of the
following IRS actions: (1) sending the requesting spouse a Sec. 6330
Collection Due Process (CDP) Notice; (2) making a Sec. 6402 offset of
an overpayment made by the requesting spouse; (3) filing suit against
the requesting spouse in court; or (4) filing a claim for payment of
the tax in any proceeding where the requesting spouse is a party or
which involves property of the requesting spouse. This generally means
a federal bankruptcy proceeding, although it might also include a state
receivership proceeding or a probate proceeding.
The problem is that your client will not always know when the 2-year
period has started. It is particular difficult to tell when the IRS may
have performed a setoff of an overpayment that starts the 2-year
period. That is why it is critical to obtain the account transcript for
the years the requesting spouse seeks relief Only a transcript will
reveal whether and when the IRS has taken one of the collection actions
that trigger the 2-year period.
2. The One Bite Rule in Sec. 6015(g)
The best way to think of the Sec. 6015(g) rule is to recall the
difference between claim preclusion and issue preclusion. Claim
preclusion operates to deny a litigant the ability to re-litigate a
``claim'' regardless of whether the litigant has new legal arguments or
new evidence regarding that claim. Claim preclusion bars re-litigating
any matter that was actually raised or that could have been raised in
the prior proceeding. In contrast, issue preclusion operates to bar re
litigation of a particular legal issue when that issue was actually
raised and litigated in a prior proceeding.
Section 6015(g) establishes a rule of issue preclusion. Section 6015(g)
basically says that taxpayers get only one chance to ask for spousal
relief from a court, whether under subsections (b), (c), or (f).
Specifically, 6015(g) says that if a taxpayer ``participated
meaningfully'' in any judicial proceeding where a court actually
considered the issue of spousal relief: then that taxpayer is barred
from asking any other court for relief.
The problem is knowing when taxpayers have taken that first bite. This
problem comes up in many ways. It most commonly arises when the IRS has
audited a return and the couple contests the proposed deficiency in Tax
Court. If both spouses are parties to the petition, then it may be
difficult for either spouse to later ask for spousal relief because
they were supposed to do it as part of the deficiency proceeding. The
problem is what does ``participated meaningfully'' mean? The Tax Court
has a good discussion of this in Deihl v. Commissioner, 134 T.C. 156
(2010). In that case, the taxpayer and her husband were petitioners for
petitions covering 3 years: 1996, 1997, and 1998. The 1996 pleadings
had raised the issue of Sec. 6015 relief, but the taxpayer withdrew her
claim for innocent spouse relief in the stipulation of facts. Neither
of the petitions for 1997 and 1998 raised the issue. The Tax Court
decided that (1) the issue was not actually raised because it was not
in the pleadings for two of the years and it got dropped as uncontested
in the other year, and (2) the taxpayer did not participate
meaningfully in the deficiency.
This case has a pretty good discussion of what counts for meaningful
participation. You can see that by why the Court thought Mrs. Deihl had
not participated meaningfully in the deficiency proceeding:
Petitioner, who is not an attorney and did not complete her
high school education, did not sign any court documents in the
consolidated cases. She did not review the petitions or the
stipulations of facts, nor did she agree to any of the
stipulations. Mr. MacPherson and Mr. Hartmann did not discuss
these documents with petitioner. In fact, she saw them for the
first time at trial in the present matter. Petitioner did not
meet with any IRS personnel, participate in any settlement
negotiations with the IRS, or sit in on any such meetings
between her attorneys and the IRS during the litigation in the
consolidated cases. However, petitioner was called as a witness
in the 2004 trial and testified briefly about certain expenses
for entertainment and computers deducted by her and Mr. Deihl's
S corporation.
Another time this problem comes up is when the IRS denies a claim, the
taxpayer does not appeal, and then the taxpayer later submits a new
claim for spousal relief Can the taxpayer avoid the one-bite rule by
failing to appeal the first denial? The regulations say no. A
requesting spouse is entitled to only one final administrative
determination of relief for a given assessment, unless the spouse was
still married at the time of the first request and so did not qualify
for (c) relief In that case the taxpayer can later ask for (c) relief
and take an appeal See the discussion in Barnes v. Commissioner, 130
T.C. 248 (2008), where the court dismissed a Sec. 6015(f) claim because
the IRS had previously denied what was essentially the same claim and
the taxpayer had not appealed that denial
3. The Intervening Spouse
In Nunez v. Commissioner, T.C. Memo 2012-121, the tax liability arose
from the operation of a California business. The issue was whether the
requesting spouse met the 7th ``threshold'' conditions for relief in
Rev. Proc. 2003-61, Sec. 4.01, that the tax liability be solely
attributable to the non-requesting spouse unless the reason the
requesting spouse had joint liability was solely because of community
property law. Ms. Nunez claimed that income and expense items were
attributable to her solely due to the operation of California's
community property law. Her ex-husband had asked to intervene during
the administrative process but had not responded to either of two
letters asking for information and so Appeals closed the case by
offering the taxpayer full relief. Eventually, the ex-husband contacted
Appeals and convinced them that the requesting spouse was co-owner of
the business and so Appeals changed its decision to a grant of 50%
relief rejecting her testimony that she was listed on the business
documents only because of California law.
The taxpayer rejected the offer of partial relief and sought review in
the Tax Court. Again, the ex-husband intervened and his testimony
helped convinced the Tax Court that the requesting spouse was not only
the co-owner but that she had actively participated in the business.
The Court concluded: ``After weighing the testimony and evidence in
this fact-intensive and nuanced case, we hold petitioner is not
entitled to relief from joint and several liabilities for the joint
income tax for each of the years at issue.''
4. Representing Non-Requesting Spouses
Non-requesting spouses face problems as well. Rev. Proc. 2003 19; 2003
1 C.B. 371 sets out the rights of non-requesting spouses. Basically,
the non-requesting spouse can participate in the administrative process
but has only limited rights to judicial review.
Specifically, if the requesting spouse gets an administrative denial
and takes it to Tax Court, the non-requesting spouse can intervene and
participate (if the non-
requesting spouse learns of the Tax Court petition). See King v.
Commissioner, 115 T.C. 118 (2000) in which a non-requesting spouse was
allowed to intervene. See also T.C. Rule 325.
However, if the IRS grants relief administratively, there is precious
little the non-requesting spouse can do about it. In Maier v.
Commissioner, 119 T.C. 267 (2002), The IRS granted relief under
Sec. 6015(f) to Judith Maier during the administrative proceedings.
Husband John Maier filed a petition in Tax Court seeking a
redetermination of the innocent spouse relief to Judith. Noting that it
is a court of limited jurisdiction, the Tax Court held that if the
Judith did not file a petition for review of the Internal Revenue
Service determination, John could not file a petition and oppose the
administrative determination granting relief as Congress had not given
the Tax Court with jurisdiction to hear his case.
V. RECENT DEVELOPMENTS
A. Changes in Equitable Factors.
On January 5, 2012, the Internal Revenue Service (IRS) released Notice
2012-8, 2012-4 I.R.B. 309, which proposed a revenue procedure that, if
finalized, would revise the factors the IRS will use to evaluate a
requesting spouse's claim for equitable relief under section 6015(f)
and would supersede Rev. Proc. 2003-61.
Notice 2012-8 states that, ``until the revenue procedure is finalized,
the Service will apply the provisions in the proposed revenue procedure
instead of Rev. Proc. 2003-61 in evaluating claims for equitable relief
under section 6015(f).'' As of the date this Article was submitted, the
IRS has not issued a final Rev. Proc. that supersedes Rev. Proc. 2003-
61. However, Notice 2012-8 also states that a taxpayer requesting
relief can choose either set of factors to be evaluated under. The
major conceptual change in the Notice was to take what had been a
separate factor--abuse--and use it instead to ameliorate the knowledge
factor.
In Sriram v. Commissioner, T.C. Memo. 2012-91 the Tax Court said it
would ``continue to apply the factors in Rev. Proc. 2003-61, 2003 2
C.B. 296, in view of the fact that the proposed revenue procedure is
not final and because the comment period under the notice only recently
closed.''
B. Elimination of the 2-Year Period for Requesting (f) Relief.
Treas. Reg. Sec. 1.6015-5(b)(1), implemented by Revenue Procedure 2003-
61, Sec. 4.01(3) both provide that a requesting spouse must file a
claim for equitable relief (whether under Sec. 6015(f) or Sec. 66(c))
no later than 2 years after the date of the Service's first collection
activity.
The Tax Court had consistently held that the Treasury Regulation was
invalid. Just as consistently, it was overruled by Circuit Courts of
Appeal See Bryan T. Camp, Interpreting Statutory Silence, 128 Tax Notes
501 (August 2, 2010). On April 18, 2011 three U.S. Senators and forty-
nine Congressmen sent letters to IRS Commissioner Douglas Shulman
urging the IRS to reconsider its position of applying a two year
limitations period to Sec. 6015(f) relief requests. The Congressmen
reasoned that the IRS was violating ``the spirit of the law,'' which
was intended to make it easier for taxpayers to apply for innocent
spouse relief. The Senators wrote that ``the 2-year limitation served
to deny equitable relief to the very taxpayers the law was designed to
reach.''
The Service responded with Notice 2011-70, saying it would not enforce
the regulatory 2-year rule. Sure enough, in Sec. 4.01(3) of Notice
2012-8, the Service has proposed removing the 2-year rule from its
evaluation of Sec. 60 l 5(f) claims. Instead, the Notice provides that
requests for equitable relief under Sec. 6015(f) or Sec. 66(c) must be
filed before the expiration of the period of limitation for collection
under Sec. 6502, or, if applicable, the period of limitation for credit
or refund under section 6511.
C. Ninth Circuit Upholds Tax Court De Novo Standard and Scope of
Review.
Wilson v. Commissioner, 705 F.3d 980 (9th Cir. 2013) is a Ninth Circuit
case where the panel spit 2-1 over whether the Tax Court properly
reviewed the IRS decision to deny spousal relief to Ms. Wilson. In its
review the Tax Court had considered new evidence presented by Ms.
Wilson that she had not presented during the consideration of her case
by the IRS Office of Appeals. The Tax Court also applied a de novo
standard of review, essentially substituting its judgment for the IRS's
judgment. In light of the new evidence, the Tax Court decided that Ms.
Wilson was eligible for relief.
The government appealed two issues: (1) whether the Administrative
Procedure Act limited the Tax Court's review to only such information
as was in the administrative record; and (2) whether, since the grant
of Sec. 6015(f) relief was discretionary on the part of the IRS, the
Tax Court could just substitute its judgment for that of IRS, or must
instead simply review the decision to ensure the IRS did not abuse its
discretion.
As to the first issue, the Ninth Circuit found it of great significance
that when Congress gave the Tax Court jurisdiction to ``determine''
Sec. 6015(f) ``petitions'' for relief it used the words ``petition''
and ``determine'' rather than ``appeal'' in Sec. 6015(e). The Circuit
then explained that giving the Tax Court the ability to hear new
evidence made sense in light of the statutory placement of the Tax
Court in tax administration and said that not to allow the Tax Court
the ability to hear new evidence and conduct a de novo hearing in
Sec. 6015(f) stand-alone petitions would create an anomaly with the
Court ability to do so when Sec. 6105(f) relief was raised during a
deficiency proceeding.
As to the second issue, the Ninth Circuit again decided to read the
``plain'' language of Sec. 6015(e) as allowing the Tax Court to apply a
de novo standard of review. Here the word was ``determine'' which the
Ninth Circuit thought was good enough. The court agreed with the
government that it was illogical for the Tax Court to ``review'' the
IRS decision for abuse of discretion on the basis of evidence that the
taxpayer may not have presented to the IRS during the administrative
process. However, since the Tax Court acted properly to allow new
evidence, this logic cut against the government's contention that the
Tax Court was limited to abuse-of-discretion review.
______
Questions Submitted for the Record to Elizabeth Ann Copeland
Question Submitted by Hon. John Thune
Question. Some have criticized the Tax Court for restricting access
to court documents, when similar documents are publicly available in
cases being heard by Federal District and Circuit Courts. I understand
that steps would have to be taken to protect taxpayers who are
representing themselves so that personal information is not
accidentally disclosed. What are your views on whether the Tax Court
should move to public electronic access via the Internet to court
documents in order to increase the transparency of the Tax Court's
proceedings?
Answer. Transparency of United States Tax Court (the ``Tax Court'')
proceedings is an important goal. As you note, the Tax Court takes a
restrictive approach to access, only allowing online public access to
its own orders and decisions. In analyzing the issue of electronic
access, I would bring to the Tax Court my perspective as a practitioner
working outside of the DC area, who, on occasion, needs access to Tax
Court documents. I understand the important task of protecting personal
information present in most Tax Court proceedings. Unrepresented
taxpayers make up a very large percentage of the Tax Court's docket and
have often failed to properly redact personal information such as
social security numbers from pleadings, motions and other court
filings. Attorneys representing taxpayers have likewise inadvertently
failed to redact social security numbers and other personal
information. If confirmed, I would work with Tax Court staff to achieve
the benefit of electronic access without creating the risk of
accidentally disseminating personal taxpayer information.
______
Question Submitted by Hon. Bill Nelson
Question. Given all of the glitches and general confusion created
by the new tax law (Pub. L. 115-97), how do you plan to help ordinary
Americans navigate these waters and resolve any complications brought
on by the new tax law?
Answer. The new tax law (Pub. L. 115-97) is indeed complex and will
present challenges to taxpayers. Before passage of the law, it was
already procedurally difficult for taxpayers to navigate the Internal
Revenue Code. If confirmed, I would respectfully allow taxpayers to
present their facts and understanding of the law and provide government
attorneys the same courtesy. I would encourage those who are
unrepresented to seek the help of free legal counsel provided by low
income taxpayer clinics and state bar association attorneys who
volunteer their time at Tax Court calendar calls in order to understand
how Pub. L. 115-97 affects their tax matter. I would strive to issue
timely and clearly written opinions interpreting the text and
Congressional intent of the law to assist both taxpayers and the
government in its understanding and application.
______
Prepared Statement of Hon. Orrin G. Hatch,
a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah)
today delivered the following opening statement at a hearing to
consider pending trade and tax nominations.
Today, we will have an opportunity to hear from nominees for three
trade policy positions, and two nominees to be tax judges.
Each of these positions is key in enforcing the work and
legislation we produce from this committee.
Our first nominee is Mr. Jeffery Kessler, who has been nominated to
serve as Assistant Secretary for Enforcement and Compliance at the
Department of Commerce.
This is a position that is responsible for administering anti-
dumping and countervailing duty trade laws and ensuring compliance with
trade agreements negotiated on behalf of U.S. industries. If confirmed,
Mr. Kessler will need to fully and faithfully administer U.S. trade
remedy laws.
As I have said before, it is important that the Department of
Commerce consult closely with Congress and members of this committee.
And, frankly, there is room for improvement in that department.
I expect Mr. Kessler to be an asset in improving that relationship.
Today we also have two tax judges, Ms. Elizabeth Ann Copeland, and
Mr. Patrick J. Urda.
The Tax Court is important for many reasons, not the least of which
is that it allows taxpayers to challenge a liability before paying it.
It is a venue for everyone, from large corporations to individual
taxpayers, to get a fair and impartial hearing when a disagreement
arises with the Internal Revenue Service.
We are honored today to be joined by Chief Judge Maurice Foley,
Judge Tamara Ashford, Judge John Colvin, Judge Albert Lauber, Judge
Cary Pugh, and Special Trial Judge Diana Leyden.
Thank you all for attending today.
Just last year, we signed into law the Tax Cuts and Jobs Act. As
the largest reform of the tax code in more than three decades, we
recognize there will potentially be some large questions for the Tax
Court.
More than ever, we need brilliant minds to do this important work.
Given their credentials, I trust that Ms. Copeland and Mr. Urda
will be just what our country needs for the Tax Court to continue to
give taxpayers a fair hearing as the TCJA is implemented.
Finally, we also have before us two nominees to the International
Trade Commission, Ms. Amy Karpel, and Mr. Randy Stayin.
Ms. Karpel and Mr. Stayin, as nominees to be commissioners of the
International Trade Commission, you will play an important role in
administering our trade remedy laws, and providing Congress and the
administration with unbiased, independent analysis.
This work is becoming more important than ever, as trade has become
an increasingly larger part of our economy, and businesses of all sizes
rely on imports and exports.
I expect that each of you will continue the good work of the ITC in
administering our trade remedy laws in a fair and unbiased manner.
I want to thank all five of you for your dedication to our country
and your willingness to serve.
As I've looked through each of your respective resumes, it's clear
that the President has selected individuals who are well-qualified to
serve in these important posts.
And I hope to see each of you working to improve our country as
soon as practicable.
______
Prepared Statement of Amy Karpel, Nominated to be a Member of the
United States International Trade Commission
Chairman Hatch, Ranking Member Wyden, members of the Finance
Committee, I am honored to appear before you today as the President's
nominee for the position of Commissioner on the U.S. International
Trade Commission.
I would like to introduce the members of my family who are here
today: my husband Sloane Strickler, my mother Ann Larson, my brother-
in-law Andrew Strickler, and my mother-in-law Jo Harriet Haley. I also
want to acknowledge those members of my family who couldn't be here
today: my father John Karpel, my sister Jennifer Seoane, and lastly my
daughter Haley, who is currently enjoying her last week of preschool. I
want to thank all of them for their love and support during the
confirmation process and over the years.
I am also grateful to Senate Minority Leader Schumer and Senator
Wyden for proposing my appointment as Commissioner. I also want to
thank Senator Cantwell for her kind introduction and the President for
nominating me. I greatly enjoyed meeting individually with members of
this committee leading up to today's hearing and thank them for their
time and insights.
I am honored to be nominated for Commissioner because of the
important work the Commission does. The Commission is entrusted with
the fair, timely and objective administration of our trade remedy laws,
including in respect of violations of intellectual property rights.
Vigorous enforcement of our trade remedy laws is important because of
the relief it provides to help keep U.S. workers employed and U.S.
businesses functioning in the face of unfair trade. It is also
important because of the role it plays in helping make the case for
international trade more broadly. International trade touches nearly
all sectors of our economy and is vital to the strength of our economy
and the livelihoods of the workers and businesses it supports. If there
is not strong enforcement of our trade remedy laws when trade is not
fair and when workers or businesses are hurt by trade, it is hard to
make that case. If confirmed as Commissioner, I will administer these
laws fairly, objectively, and as Congress intended.
The Commission is also responsible for providing the administration
and Congress with objective, expert fact-finding studies and analysis
on tariffs, trade and U.S. competitiveness. These studies serve as an
independent source of information and analysis for policy makers as
they develop and implement trade policy. If confirmed, I commit to
carry out this responsibility as Congress intended and to safeguard the
independence of the Commission. I will also, if confirmed, work with my
fellow Commissioners to be responsive to congressional requests for
information.
I believe my upbringing, background, and experience have prepared
me well for the position of Commissioner. I grew up in Washington State
along the shores of the Puget Sound. I could see the port of Olympia in
the distance from our house. Container ships and tug boats pulling
barges full of logs were a regular feature passing by our house. I was
raised by my mother and father, and spent a lot of time with my
maternal grandmother. My grandmother split her time between St. Louis
and her husband's farm in rural Illinois, and when we were kids, my
sister and I used to visit in the summers. My grandmother would prod us
awake at 7 a.m., chiding that we were ``sleeping the day away.'' Lazy
was not something you were allowed to be in our family. My parents
worked hard, both in their occupations and in life, and modeled the
importance of doing your part to improve the world around you. They
raised my sister and I to do the same.
Since leaving Washington State, I have spent more than 20 years
studying and working on international trade issues. I have worked in
private practice representing U.S. workers and businesses in trade
remedy proceedings. And I have worked in public service for almost 13
years, serving most recently as Chief Counsel at the Office of the U.S.
Trade Representative. Each of these capacities involved working with
the laws the Commission is entrusted to administer, first as an
advocate for clients petitioning for relief under those laws and then
as a policy maker relying on the sound and objective information and
analyses those laws call on the Commission to provide.
And I now look forward, if confirmed, to continuing in public
service as a Commissioner on the International Trade Commission. In
this role I would not be an advocate or a policy maker as in my
previous positions. Instead, I would be a fair, objective, and
impartial adjudicator and an independent source of expert information
and analysis. It would be an honor to serve in this capacity.
Thank you for your consideration.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Amy Karpel.
2. Position to which nominated: Commissioner, U.S. International
Trade Commission.
3. Date of nomination: February 27, 2018.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: Springfield, MO; June 7, 1974.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list secondary and higher education institutions, dates
attended, degree received, and date degree granted):
Capital High School, 1988-1992, high school diploma received/
granted June 1992.
University of Washington, Jackson School of International
Studies, 1992-1996, B.A. with honors received/granted June
1996.
American University, Washington College of Law, 1996-1999, J.D.
received/granted May 1999.
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment):
The Limited, Sales Clerk, Washington, DC, July 1997-April 1998.
American University, Residence Hall Desk Clerk, Washington, DC,
January 1997-May 1997.
Law Offices of Stewart and Stewart, Law Clerk, Washington, DC,
June 1998-April 1999.
Law Offices of Stewart and Stewart, Associate, Washington, DC,
September 1999-April 2004.
Office of the United States Trade Representative, Assistant/
Associate General Counsel, Washington, DC, April 2004-January
2011.
Office of the United States Trade Representative, Director for
Environment and Natural Resources, Washington, DC, January
2011-October 2012.
Office of the United States Trade Representative, Chief Counsel
for Negotiation, Legislation, and Administrative Law,
Washington, DC, October 2012-February 2017.
10. Government experience (list any advisory, consultative, honorary,
or other part-time service or positions with Federal, State, or local
governments, other than those listed above):
Federal Communications Commission, Legal Intern, Washington,
DC, July 1997-August 1997.
U.S. Department of State, Legal Extern, Washington, DC, January
1998-May 1998.
11. Business relationships (list all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, other
business enterprise, or educational or other institution):
None.
12. Memberships (list all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable, and
other organizations):
Member of the New York Bar (admitted January 2000); Member of
the District of Columbia Bar (admitted April 2001).
Ambassador (volunteer) for the Greater DC Diaper Bank (I will
resign upon my confirmation).
Member of the American Bar Association (approx. 2000-2006).
13. Political affiliations and activities:
a. List all public offices for which you have been a candidate.
None.
b. List all memberships and offices held in and services
rendered to all political parties or election committees during
the last 10 years.
None.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years.
I believe I contributed to President Obama's presidential
campaigns but cannot recall the amounts; it was likely in the $50-$100
range.
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement):
I received two small academic-based scholarships while at the
University of Washington, one for Phi Beta Kappa, and one I
believe was called a Certificate of High Scholarship.
15. Published writings (list the titles, publishers, and dates of all
books, articles, reports, or other published materials you have
written):
Co-author, Rules in a Rules-Based WTO: Key to Growth; The
Challenges Ahead (Transnational Pub. 2002).
Co-author, ``Handbook of WTO/GATT Dispute Settlement''
(Transnational Pub. 2003) (Pierre Pescatore and Stewart and
Stewart eds.).
Terence P. Stewart and Amy Ann Karpel, ``Review of the Dispute
Settlement Understanding: Operation of Panels,'' 31 Law and
Pol'y Int'l Bus. 593-655 (2000).
Amy Ann Karpel, ``The European Commission's Decision on the
Boeing McDonnell Douglas Merger and the Need for Greater U.S-EU
Cooperation in the Merger Field,'' 47 Am. U.L. Rev. 1029
(1998).
16. Speeches (list all formal speeches you have delivered during the
past 5 years which are on topics relevant to the position for which you
have been nominated):
None.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
I have nearly 2 decades of experience in trade law and policy,
initially as a law clerk and attorney for nearly 6 years with
the Law Offices of Stewart and Stewart representing U.S.
companies and workers in trade remedy proceedings and later as
an attorney and policy adviser for nearly 13 years at the
Office of the United States Trade Representative (USTR). From
my years of public service at USTR and in the private sector
working on behalf of U.S. companies and workers, I have a deep
knowledge of U.S. trade law and policy across a wide range of
trade and trade-related issues, as well as the process by which
trade laws and policies are developed and implemented within
the United States. While at Stewart and Stewart I represented
U.S. companies and workers in antidumping and countervailing
duty proceedings, including investigations before the U.S.
International Trade Commission. While at USTR, I served as
Chief Counsel where I managed a staff of over 30 attorneys on a
range of trade law and policy issues, including with respect to
USTR's policy review of U.S. International Trade Commission
section 337 determinations. In addition, at USTR, I advised
senior USTR officials on the application of U.S. trade law and
the negotiation and implementation of U.S. trade agreements,
drafted and negotiated U.S. trade agreements, and regularly
engaged with other regulatory agencies, congressional staff,
and members of the public on a range of regulatory and
legislative matters affecting U.S. trade law and policy.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, associations, or organizations if you are confirmed by
the Senate? If not, provide details.
Yes.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
None.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
None.
3. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy. Activities
performed as an employee of the Federal government need not be listed.
None.
4. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. (Provide the committee with two copies of any trust or other
agreements.)
No conflicts of interests. I will resign as an Ambassador for
the Greater DC Diaper Bank upon my confirmation.
5. Two copies of written opinions should be provided directly to the
committee by the designated agency ethics officer of the agency to
which you have been nominated and by the Office of Government Ethics
concerning potential conflicts of interest or any legal impediments to
your serving in this position.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency,
professional association, disciplinary committee, or other professional
group? If so, provide details.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
______
Questions Submitted for the Record to Amy Karpel
Questions Submitted by Hon. Ron Wyden
trade enforcement--general
Question. I am committed to standing up for all American workers
through tough trade enforcement. It is absolutely vital--to my home
state of Oregon and to the American people--that our country fully
enforces its trade laws and addresses unfair trade. Our trade
enforcement has sometimes been too slow or too weak to keep up with the
cheats who seek to undermine our domestic industries. In 2015, Congress
made clear the importance of tough enforcement when it passed Senator
Brown's bill, the Leveling the Playing Field Act, a package of
substantial improvements to U.S. enforcement laws.
Will you commit to fully applying that law so U.S. workers and
companies can get relief from unfairly traded imports?
Answer. Yes, if confirmed, in making determinations in trade remedy
proceedings, I commit to fully enforcing the U.S. antidumping and
countervailing duty laws, which were designed to provide relief to U.S.
workers and businesses hurt by dumped or subsidized imports.
trade enforcement at the itc
Question. Too often, trade relief is too little, too late for hard-
working Americans facing unfair trade. In 2015, Congress amended the
definition of material injury and the factors the International Trade
Commission (``ITC'') examines in evaluating injury to prohibit the ITC
from finding that there has been no injury merely because an industry
happens to be profitable or if its financial situation has recently
improved. For a range of Oregon industries--including softwood lumber,
solar, and steel producers--this clarification is critical to ensuring
that companies can get relief while they are still in the black and
before they are on life support.
Do you agree that a domestic industry may suffer material injury
from dumped and subsidized imports even though it manages to remain
profitable or its performance has improved? Do you agree there are
circumstances in which the Commission could find material injury where
an industry would have done better, but for dumped and subsidized
imports?
Answer. Yes. The 2015 amendments to title VII of the Tariff Act of
1930 (codified at 19 U.S.C. 1677(7)(J)) make clear that an industry may
be materially injured by dumped or subsidized imports even though it
remains profitable or its performance has recently improved. If
confirmed, in making determinations in antidumping and countervailing
duty investigations, I commit to applying the law as Congress intended.
digital trade
Question. Digital Trade is increasingly important to all aspects of
the U.S. economy. The Internet sector alone reportedly accounts for
more than five million jobs, and this does not count all of the
manufacturers and small businesses that rely on digital trade. In
recent years, the ITC, at my request, has done important analysis of
barriers to digital trade, an issue of importance to my constituents in
Oregon. The first of three reports on this subject was released to the
public in September 2017; the second is expected this fall; and the
third is due to be delivered in spring 2019.
Do you view as important the ITC's studies of barriers to digital
trade? Will you commit to continued analysis of these issues?
Answer. Yes, the ITC's studies on barriers to digital trade are
very important. Digital trade and technologies are transforming
business and international trade and are helping fuel economic growth
in the United States and globally. Yet, many countries have imposed
regulatory and policy barriers that slow or halt the adoption of
digital technologies and digital trade flows. If confirmed, I commit to
continuing these studies and undertaking additional analysis of these
issues if requested by the Senate Finance Committee, House Ways and
Means Committee or the U.S. Trade Representative.
itc independence and objectivity
Question. The ITC is charged with providing technical advice on
trade policy issues to USTR and to both this committee and the House
Ways and Means Committee. The Commission has rightly prided itself in
the past on the objective, thorough, non-partisan nature of its advice
to these entities.
Can you commit to this committee that you will do your utmost to
ensure the ITC's analysis will be independent and thorough, not rushed,
and that the process will be driven by substance, rather than political
pressure?
Answer. Yes, if confirmed, I commit to do my utmost to safeguard
the independence of the Commission and ensure its analysis is thorough,
not rushed (but timely) and driven by the law and facts and not
political pressure.
consultation with agencies in section 337 investigations
Question. Section 337 of the Tariff Act of 1930 requires the
Commission to consult with other Federal departments and agencies--
including the Federal Trade Commission--during the course of its
section 337 investigations. The FTC and other Federal agencies will
often have critical insights about the potential impact of section 337
investigations on competition, including how to maintain vibrant and
competitive U.S. domestic industries.
Will you commit to me that, if you are confirmed, the International
Trade Commission will consult closely with the FTC and other agencies
on cases where the U.S. public interest is at issue?
Answer. Yes, if confirmed, I commit to ensure that, in analyzing
the public interest in section 337 investigations, the ITC will
``consult with, and seek advice and information from, the Department of
Health and Human Services, the Department of Justice, the Federal Trade
Commission, and such other departments and agencies as it considers
appropriate'' (19 U.S.C. 1377(b)(2)).
assessing the balance of trade
Question. In making assessments about the balance of trade between
the United States and its trading partners, the President only takes
into account the trade in goods, and does not include trade in
services, even though the United States is a global leader in providing
high-level services to the world.
In your view, shouldn't services exports be included in assessing
whether our trade relationship with other countries is balanced?
Answer. The United States is the world's largest services market
and the largest cross-border services exporter and importer. U.S.
exports of services in 2017 totaled nearly $798 billion, giving the
United States a $255 billion dollar trade surplus in services. Services
trade is clearly a fundamental and critical part of U.S. trade and the
U.S. trade balance, and any full assessment of the U.S. trade
relationship with other countries should include services. If
confirmed, I commit to conducting assessments of the U.S. trade
relationship with other countries, in accordance with U.S. law and as
may be requested by the Senate Finance Committee, House Ways and Means
Committee, or the U.S. Trade Representative.
______
Questions Submitted by Hon. Sherrod Brown
Question. My bill, the Leveling the Playing Field Act, became law
in 2015 and strengthened U.S. trade remedy statutes. One specific
provision of the law expanded the criteria the ITC must consider when
evaluating industry and clarified that an industry can be profitable
but still be injured by imports. These provisions were enacted to
ensure that U.S. businesses and workers could obtain relief from unfair
trade practices without having to close their doors or lose their jobs.
If confirmed, will you commit to fully implementing the Leveling
the Playing Field Act, including the changes to injury criteria, as
Congress intended?
Answer. Yes. The 2015 amendments to title VII of the Tariff Act of
1930 make clear that an industry may be materially injured by dumped or
subsidized imports even though it remains profitable or its performance
has recently improved. If confirmed, in making determinations in
antidumping and countervailing duty investigations, I commit to
applying the law as Congress intended.
In making its injury determinations, the ITC decides whether U.S.
industries and workers obtain relief from unfair trade practices.
Question. If confirmed, will you commit to applying trade remedy
law in a way that ensures there is a real remedy available to
industries and workers who are adversely affected by unfair trade
practices?
Answer. Yes, if confirmed, I commit to applying the trade remedy
laws as Congress intended to provide relief to domestic industries
materially injured by dumped or subsidized imports.
Sometimes when U.S. petitioners file trade remedy cases, foreign
competitors will flood the market with products to beat any antidumping
or countervailing duties that may be applied. A provision in U.S.
statute called critical circumstances is intended to provide relief to
the U.S. industry in this instance.
Question. Will you commit to interpreting the law as Congress
intended and providing retroactive relief when the statutory test for
critical circumstances is met?
Answer. ``Critical circumstances'' is a provision in the
antidumping and countervailing duty laws that allows for retroactive
imposition of duties if certain conditions are met. Affirmative
determinations of critical circumstances, by both the Department of
Commerce and the Commission, result in the retroactive imposition of
duties on unliquidated entries entered on or after the date which is 90
days prior to the date the duties would normally be levied. If
confirmed, I commit to applying this provision as Congress intended and
providing such relief when the statutory criteria are met.
Question Submitted by Hon. John Thune
Question. I support the administration's efforts to address unfair
trade practices that are harming U.S. industries. However, I am
concerned about the impact that anti-dumping and countervailing duties
can have on U.S. users of the product as a result of antidumping
investigations.
Do you think the International Trade Commission's determination on
an antidumping duty investigation should include an analysis of the
economic impact to the U.S. consumers of the product that will be
affected by the duties in instances where the ITC reaches affirmative
determinations?
Answer. The focus of the antidumping law as written by Congress is
to provide relief to domestic industries that are materially injured by
dumped or subsidized imports. The law does not make the impact that an
antidumping order may have on consumers or downstream industries a
relevant factor in the Commission's analysis of whether a domestic
industry is injured by dumped or subsidized imports, and if confirmed,
I would be bound to apply the law as Congress intended. I know that
consumers and downstream industries of products can be affected by the
imposition of antidumping duties on those products, and the antidumping
law directs the Commission in its investigations to provide an
opportunity for consumers and industrial users to submit relevant
information concerning material injury to the domestic industry by
reason of dumped or subsidized imports.
______
Questions Submitted by Hon. Robert Menendez
Question. Accurate and detailed trade data is necessary for private
businesses to track imports and exports of their products as well as
for government agencies to administer trade policy. Section 484f of the
Tariff Act of 1930 provides authority for the Secretary of Treasury,
the Secretary of Commerce, and the USITC to adopt statistical reporting
numbers for these purposes.
What is your understanding of the current process used by the USITC
to evaluate requests from industry to adopt more detailed statistical
reporting numbers than presently exist? What factors do Treasury,
Commerce, and the USTIC take into consideration when evaluating such a
request from domestic industry? When such a request is denied, what
opportunities exist for domestic industry to appeal the ruling?
Answer. Any interested entity, foreign or domestic, may request
under section 484(f) that tariff categories be adopted or modified to
gather data of particular interest. Requests to the 484(f) Committee,
comprising the USITC, the U.S. Customs and Border Protection (CBP) and
the U.S. Department of Commerce's Bureau of the Census (Census Bureau),
are accepted based on two deadlines: March 15th, for HTS and Schedule B
provisions to take effect on the following July 1, and July 15th, for
HTS and Schedule B provisions to take effect on the following January
1st.
After the USITC does an initial review of a request to ensure it is
complete and contains no confidential information, CBP reviews each
request to verify the correct tariff classification of the covered good
or goods and the description's administrability. The USITC and CBP work
with the requesting party to resolve any issues identified in either
agency's respective review, and then USITC sends the request to the
Census Bureau. The Census Bureau does a survey to determine the annual
level of trade in the product or products that are the subject of the
request, to ensure that publishing the statistical data requested would
not disclose confidential information, by having too few firms
reporting shipments. At the same time, USITC's Office of Industries
assesses the potential benefits to the domestic industry/trade of
granting the request and the feasibility of reporting data as
requested. A summary of the Census Bureau's and the USITC's Office of
Industries' assessments is made publicly available in the committee's
minutes. If the relevant tests are met, the request will generally be
granted.
The 484(f) Committee meets, usually in late May and in mid-October,
to discuss the requests received and determine which ones to grant and
which ones to deny. The following criteria are used in the 484(f)
Committee's decision-making process:
Each proposed 10-digit non-legal statistical category must
cover an individual good, or a grouping of goods, typically
having $1 million in annual trade.
The requested annotation must have a clear and administrable
description and commonly used units of quantity.
There must be at least 3 importers or exporters reporting
shipments in the requested statistical category on an average
monthly basis to avoid disclosure of confidential information.
After the committee meets, the committee provides feedback in
writing to each requestor on the committee's decision. If a request is
denied, follow-up discussions can be arranged with committee members to
see if a request can be modified or supplemented to meet the tests
above. In such cases, the requestor may resubmit the request as soon as
the next committee cycle, taking into account the reasons the committee
denied the original request. As noted above, requests meeting these
tests are generally granted. Governmental requests relating to program
needs can be processed off-cycle, for example to administer antidumping
or countervailing duty orders.
______
Question Submitted by Hon. John Cornyn
Question. There will soon be billions of computing and
communications devices that depend on 5G technology, including devices
that the U.S. Government, private companies, and consumers use for
critical applications and infrastructure. The United States cannot
afford to let other nations lead the race to develop and implement 5G
technology.
Can you commit that you will take into consideration the national
security imperative of the United States having a domestic supply base
that can lead the world in the development of 5G technology and
products when hearing cases before the ITC?
Answer. The section 337 statute states that ``if the Commission
determines, as a result of an investigation under this section, that
there is a violation of this section, it shall direct that the articles
concerned, imported by any person violating the provision of this
section, be excluded from entry into the United States, unless, after
considering the effect of such exclusion upon the public health and
welfare, competitive conditions in the United States economy, the
production of like or directly competitive articles in the United
States, and United States consumers, it finds that such articles should
not be excluded from entry.'' If confirmed, I commit that, in any
section 337 investigation before me, I will apply the section 337
statute as Congress intended along with any applicable case law to the
facts of the investigation, including with respect to any national
security issues that may be relevant to the Commission's examination of
the public interest.
Questions Submitted by Hon. Patrick J. Toomey
Question. I have serious concerns about the administration's
decision to use the pretext of a national security concern to raise
taxes on imported steel and aluminum products. This policy will
inevitably increase costs on Pennsylvania consumers, workers, and
employers. Moreover, the section 232 tariffs punish some of our
Nation's closest allies, including the European Union, Canada, and
Mexico, and will invite retaliation on U.S. goods and services.
As you know, the International Trade Commission (ITC) conducts
sunset reviews every five years on existing antidumping (AD) and
countervailing duty (CVD) orders to determine whether revocation of
those orders would likely cause material injury to the domestic
industry. During these investigations, Federal statute requires that
the ITC take into account relevant economic factors within the context
of the business cycle and competitive factors that are distinctive to
the affected industry. As a result, future sunset reviews will likely
be affected by the recently imposed section 232 tariffs on steel and
aluminum, which are applied in addition to AD/CVD duties already in
effect. For example, if a 25-percent steel tariff is imposed under
section 232 on a product that is also under an AD/CVD order, then the
tariff may reduce the likelihood that future imports of that product
will injure the domestic industry, and thus the AD/CVD duty is no
longer needed.
If confirmed, how will you account for the recently imposed section
232 tariffs on steel and aluminum during the ITC's 5-year sunset review
process? Do you anticipate that some AD/CVD orders will be rescinded
due to the section 232 tariffs?
Answer. The antidumping and countervailing duty statutes direct the
Commission to ``evaluate all relevant economic factors within the
context of the business cycle and the conditions of competition that
are distinctive to the affected industry'' (19 U.S.C. 1675a(a)(4)). If
confirmed, I commit to evaluating trade remedy measures such as any
relevant section 232 tariffs as a relevant economic factor within the
context of the conditions of competition for the industry at issue in
making antidumping and countervailing duty determinations. I cannot
speak to a particular antidumping or countervailing duty order at this
time because each determination would be based on evaluating the facts
and the relevant statutory factors in the review at issue.
The sunset review process provides the ITC with the opportunity to
remove AD/CVD duties that are no longer needed to protect the domestic
industry. However, in practice, ITC rarely revokes AD/CVD orders.
According to ITC data, between 2013 and 2017, only 23 orders were
revoked under sunset reviews, while 156 new orders were imposed.
Moreover, these orders cover a substantial value of trade. In 2017
alone, newly imposed AD/CVD orders resulted in duties on imported goods
worth approximately $12 billion.
Question. With that in mind, can you describe how you would
approach sunset reviews, if confirmed? Do you believe that there are
orders currently in effect that have outlived their purpose, and if so,
which?
Answer. Under the likelihood standard in a 5-year review, the
Commission engages in a counterfactual analysis; it must decide the
likely impact in the reasonably foreseeable future of an important
change in the status quo--the revocation or termination of a proceeding
and the elimination of its restraining effects on volumes and prices of
imports. Thus, the likelihood standard is prospective in nature. The
U.S. Court of International Trade has found that ``likely,'' as used in
the 5-year review provisions of the Act, means ``probable.'' If
confirmed, I commit to applying that standard in 5-year reviews when
considering the likely volume, price effect, and impact of imports of
the subject merchandise on the industry if the orders are revoked or
the suspended investigation is terminated. I cannot speak to a
particular antidumping or countervailing duty order at this time
because each determination would be based on evaluating the facts and
the relevant statutory factors in the review at issue. I note however
that all parties, including importers, foreign producers, and
purchasers who may believe that an ``order has outlived its
usefulness,'' have an opportunity to participate and submit evidence in
five-year reviews which the Commission will consider with the other
evidence in the record in making its determination.
After the Commerce Department receives an AD/CVD petition, the ITC
conducts a short preliminary investigation before the case can advance.
The preliminary phrase is designed to avoid unnecessary investigations
for cases where there is no reasonable indication that imports are
causing material injury to the domestic industry. However, the ITC
rarely disapproves preliminary investigations. Allowing weak cases to
progress to a full investigation has several negative consequences,
including high legal costs to participating firms and taxpayers, as
well as market disruptions and uncertainty during the course of the
investigation.
Question. Do you consider preliminary investigations to be a useful
process for weeding out weak cases, or do you think that all petitions
deserve the expensive investigative process involved in a full
investigation?
Answer. At the preliminary phase of antidumping and countervailing
duty investigations, the Commission determines based on the information
available to it at the time whether there is a reasonable indication
that a domestic industry is materially injured or threatened thereof by
reason of the subject imports. The reasonable indication standard as
set forth by the Federal Circuit in American Lamb requires more than a
finding that there is a possibility of material injury. If confirmed, I
commit to applying this standard when making preliminary determinations
in antidumping and countervailing duty investigations.
______
Prepared Statement of Jeffrey I. Kessler, Nominated to be Assistant
Secretary for Enforcement and Compliance, Department of Commerce
Mr. Chairman, Ranking Member Wyden, members of the committee, I am
honored to appear before you today as the President's nominee to serve
as Assistant Secretary of Commerce for Enforcement and Compliance. I
would like to express my gratitude to President Trump for nominating me
for this important position. I would like to thank Secretary Ross and
Under Secretary Kaplan for their support, as well as many other
outstanding professionals at the Department of Commerce who have helped
with my nomination.
I would like to take a moment to acknowledge some family members in
the audience: my wife Bethany, and my two young daughters Lucy and
Diana.
Mr. Chairman, the Assistant Secretary of Commerce for Enforcement
and Compliance is charged with administering the antidumping and
countervailing duty laws. Congress enacted these laws to give U.S.
companies and workers an effective remedy against foreign countries'
unfair trade practices.
As an international trade lawyer, I work to combat such practices
on a daily basis. I have represented U.S. manufacturers in the chemical
products and aerospace industries facing foreign subsidies and
injurious dumping. I have worked to stop government policies that prop
up favored enterprises and skew the competitive landscape to the
detriment of U.S. companies and workers. I have helped U.S. companies
decipher and navigate market access barriers imposed by China and other
countries. The scope and scale of unfair trade practices used by
foreign governments and companies is truly breathtaking.
Unfair trade has serious, real-world consequences--including lost
jobs, lower wages, and plant closures. It puts U.S. workers'
livelihoods at risk, and undermines the U.S. manufacturing and
agricultural base.
This administration has identified aggressive enforcement of U.S.
trade laws as a top policy priority. With respect to the antidumping
and countervailing duty laws, this means that investigations and other
proceedings should be conducted rigorously. U.S. companies and workers
should receive the relief to which they are legally entitled. The
duties imposed should truly correct for the distortive impact of unfair
trade. Circumvention should not be tolerated. If confirmed, I will
uphold these principles.
If confirmed, I will also seriously consider self-initiating
antidumping and countervailing duty investigations. Last November, the
Department of Commerce self-
initiated for the first time in more than a quarter century. Continuing
this practice has the potential to further strengthen enforcement of
the trade remedy laws.
The Enforcement and Compliance unit of the Department of Commerce
also has an important role to play in ensuring that foreign governments
uphold their commitments under existing trade agreements. Opening up
foreign markets to U.S. exports of goods and services is a critical
element of the administration's trade strategy, and if confirmed I plan
to pursue this objective aggressively as well.
Mr. Chairman, I believe that when the playing field is level, U.S.
companies, workers, and products can out-compete anyone in the world.
As the administration has stated, true market-based competition should
be welcomed. But American workers, farmers, ranchers, service
providers, and businesses large and small should not have to endure
injurious dumping, subsidies, and other unfair trade practices. That is
why we need strict and effective enforcement of the trade remedy laws.
With that, Chairman Hatch, Ranking Member Wyden, and members of the
committee, thank you again for your consideration and I would be happy
to answer any questions.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Jeffrey Ian Kessler.
2. Position to which nominated: Assistant Secretary of Commerce for
Enforcement and Compliance.
3. Date of nomination: November 2, 2017.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: December 12, 1982, Washington, DC.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list secondary and higher education institutions, dates
attended, degree received, and date degree granted):
Institution: Stanford University.
Dates attended: August 2007 to July 2010.
Degree(s) received: JD, MA (economics).
Institution: University of Chicago.
Dates attended: June 2005 to June 2007.
Degree(s) received: MA (philosophy).
Institution: Yale University.
Dates attended: September 2001 to May 2005.
Degree(s) received: BA (classics and philosophy), magna cum
laude.
Institution: Walt Whitman High School.
Dates attended: Fall 1997 to Spring 2001.
Degree(s) received: Diploma.
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment):
Name of employer: Wilmer Cutler Pickering Hale and Dorr LLP
(WilmerHale).
Title/description: Counsel.
Location of work: Washington, DC.
Dates of employment: January 2011 to the present.
Name of employer: Stanford University.
Title/description: Research Assistant for Professor A.M.
Polinsky.
Location of work: Stanford, CA.
Dates of employment: March 2009 to December 2010.
Name of employer: King and Wood (now King and Wood Mallesons).
Title/description: Foreign Student Intern.
Location of work: Beijing, China.
Dates of employment: September 2010 to October 2010.
Name of employer: Department of the Treasury.
Title/description: Intern, Office of Investment Security.
Location of work: Washington, DC.
Dates of employment: August 2009 to September 2009.
Name of employer: Wilmer, Cutler, Pickering, Hale, and Dorr LLP
(WilmerHale).
Title/description: Summer Associate.
Location of work: Washington, DC.
Dates of employment: June 2009 to August 2009.
Name of employer: Office of the U.S. Trade Representative.
Title/description: Intern, Office of General Counsel.
Location of work: Washington, DC.
Dates of employment: May 2008 to July 2008.
Name of employer: BetterEssays.
Title/description: Edited essays part-time.
Location of work: New Haven, CT and Chicago, IL.
Dates of employment: November 2002 to June 2007 (estimated).
Name of employer: Pamnani and Pamnani Advocates and Solicitors.
Title/description: Legal Assistant.
Location of work: Mumbai, India.
Dates of employment: June 2006 to July 2006.
10. Government experience (list any advisory, consultative, honorary,
or other part-time service or positions with Federal, State, or local
governments, other than those listed above):
None.
11. Business relationships (list all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, other
business enterprise, or educational or other institution):
I am a limited partner in The Pyramid Company, L.L.L.P., which
is a Virginia-based company with real estate holdings in
Virginia.
12. Memberships (list all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable, and
other organizations):
I am a member of the American Bar Association, and a Term
Member of the Council on Foreign Relations.
13. Political affiliations and activities:
a. List all public offices for which you have been a
candidate.
None.
b. List all memberships and offices held in and services
rendered to all political parties or election committees during
the last 10 years.
None.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years.
Portman for Senate Committee ($500), February 12, 2016.
Jeb 2016, Inc. ($500), February 11, 2016.
Jeb 2016, Inc. ($500), January 12, 2016.
Romney for President, Inc. ($100), October 25, 2012.
Harabedian for City Council 2012 ($50); January 26, 2012.
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement):
John M. Olin Law and Economics Academic Year Fellowships
(Stanford University, 2008-2009 and 2009-2010).
Century Fellowship for graduate studies in philosophy
(University of Chicago, 2005).
Master-Adams Cup for leadership and character (Jonathan
Edwards College, Yale University, 2005).
Berkeley, Biddle, and Woolsey fellowship for travel and
research (Yale University, 2005).
Paskus Summer Fellowship for travel and writing (Jonathan
Edwards College, Yale University, 2004).
Winthrop Prize for ancient Greek translation (Yale
University, 2004).
Paul Mellon Undergraduate Research Grant for travel and
research (Yale University, 2003).
Berkeley, Biddle, and Woolsey Travel Fellowship (Yale
University, 2003).
Bristed Scholarship for ancient Greek translation (Yale
University, 2003).
15. Published writings (list the titles, publishers, and dates of all
books, articles, reports, or other published materials you have
written):
``What to Expect From a Trump Administration Trade Policy:
Revisiting NAFTA.'' WilmerHale (Dec. 16, 2016) and republished
in Law360 (Jan. 3, 2017, with different title and different
authors).
``What to Expect From a Trump Administration Trade Policy.''
WilmerHale (Nov. 21, 2016) and republished in Law360 (Dec. 23,
2016, with different title).
``China's Cybersecurity Law Imposes New Requirements on
Doing Business in China.'' WilmerHale (Nov. 10, 2016) and
republished in Mondaq (Nov. 14, 2016).
``U.S.-China Trade and Investment: 2014 JCCT Yields
Significant Market Access Commitments by China.'' WilmerHale
(Jan. 6, 2016) and republished in Mondaq (Jan. 7, 2015, with
different authors).
``U.S. and China Agree to Reduce Tariffs and Expand High-
Tech Trade Through the Information Technology Agreement.''
WilmerHale (Nov. 24, 2014) and republished in Mondaq (Nov. 25,
2014).
``Competing Interests in China's Competition Law
Enforcement: China's Anti-Monopoly Law Application and the Role
of Industrial Policy.'' U.S. Chamber of Commerce (Sept. 9,
2014). (I was the lead author, but the report does not identify
me.)
``Laying the Political Groundwork for Continued Economic
Reform: The Chinese Communist Party Central Committee's Third
Plenum.'' WilmerHale (Nov. 15, 2013) and republished in Mondaq
(Nov. 16, 2013).
``U.S., EU and International Sanctions Against Libya.''
WilmerHale (Mar. 10, 2011).
Book review: ``Contingent Protectionism in International
Trade.'' Stanford Journal of International Law (2010).
In addition, from 2009 to 2010 I contributed to an informal blog titled
globalpolicymemo.com, which has been defunct for several years.
16. Speeches (list all formal speeches you have delivered during the
past 5 years which are on topics relevant to the position for which you
have been nominated):
None.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
As an international trade attorney in private practice, I have
advised leading global companies and U.S. industry associations
on a wide range of high-profile, cutting-edge international
trade, investment, and market access issues. Through this work,
I have developed expertise in international trade law and
policy, including the challenges that unfair trade poses to
U.S. companies and workers.
With respect to domestic trade remedies, I have represented
U.S. manufacturers in the chemicals and aerospace industries
before the U.S. Department of Commerce, the U.S. International
Trade Commission, and the U.S. Court of International Trade.
In the area of World Trade Organization dispute resolution, I
have been involved in litigating several precedent-setting
cases, with successful challenges to foreign country trade
practices that restrict billions of dollars of international
trade per year, as well as successful defenses of U.S. trade
practices.
I have also assisted U.S. companies and industry associations--
especially those in innovative, IP-intensive industries--to
decipher and navigate Chinese trade and investment barriers,
such as sector-wide subsidy programs, IP policy and
enforcement, cybersovereignty and related policies, technology
transfer requirements, national security-related technical
standards, and restrictions on the supply of foreign services.
I have also advised U.S. companies on free trade agreement
rules and negotiations, export controls, and other trade-
related matters.
I earned a BA magna cum laude from Yale University, an MA from
the University of Chicago, and a JD and MA from Stanford
University, where I was an Articles Editor of the Stanford Law
Review and a John M. Olin Law and Economics fellow. I am a
member of the American Bar Association and a Term Member of the
Council on Foreign Relations. I have working knowledge of
French, Spanish, and Mandarin.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, associations, or organizations if you are confirmed by
the Senate? If not, provide details.
Yes. I will maintain my account in a 401(k) plan sponsored by
my current employer, WilmerHale, which is independently managed
by John Hancock Retirement Plan Services. No further
contributions will be made to my account following termination
of my employment.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
Any potential conflict of interest will be resolved in
accordance with the terms of my ethics agreement, which was
developed in consultation with ethics officials at the
Department of Commerce and the Office of Government Ethics. I
understand that my ethics agreement has been provided to the
committee. I am not aware of any potential conflict other than
those addressed by my ethics agreement.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
Any potential conflict of interest will be resolved in
accordance with the terms of my ethics agreement, which was
developed in consultation with ethics officials at the
Department of Commerce and the Office of Government Ethics. I
understand that my ethics agreement has been provided to the
committee. I am not aware of any potential conflict other than
those addressed by my ethics agreement.
3. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy. Activities
performed as an employee of the Federal Government need not be listed.
As an international trade attorney in private practice, I have
advised clients on international law and policy, so that they
can assess, among other things, whether and how to raise
concerns about possible violations of international agreements
and other trade policy matters with government agencies. For
example, I have:
Represented The Boeing Company in connection with World
Trade Organization disputes, including by supporting the
litigation efforts of attorneys at the Office of the U.S. Trade
Representative.
Advised the Semiconductor Industry Association on efforts to
inform U.S. policymakers about China's semiconductor-related
industrial policies.
Advised and served as the lead author for a U.S. Chamber of
Commerce report regarding China's discriminatory application of
competition law. (See response to Question A.15 above.)
Advised The Business Roundtable regarding its trade policy
agenda and associated outreach.
I have also represented clients in discrete matters involving
administrative and judicial proceedings; applications for
export licenses and import certificates; voluntary disclosures
of violations of trade controls or Customs laws; and
communications with government officials regarding Customs,
export controls, and sanctions compliance.
In addition, I advised a Task Force on U.S.-China Policy
organized by the Asia Society's Center on U.S.-China Relations
and the University of California San Diego's 21st Century China
Center.
4. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
Any potential conflict of interest will be resolved in
accordance with the terms of my ethics agreement, which I
understand has been provided to the committee.
5. Two copies of written opinions should be provided directly to the
committee by the designated agency ethics officer of the agency to
which you have been nominated and by the Office of Government Ethics
concerning potential conflicts of interest or any legal impediments to
your serving in this position.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency,
professional association, disciplinary committee, or other professional
group? If so, provide details.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
______
Questions Submitted for the Record to Jeffrey I. Kessler
Question Submitted by Hon. Orrin G. Hatch
Question. IP is a driver of the U.S. economy and of digital trade
in particular. The Department of Commerce found that the largest share
of our ICT trade surplus is from IP licensing. Yet, rampant IP theft
online continues to curb the United States' ability to fully compete in
the global digital marketplace.
Do you agree that strong IP protections are critical to the health
and sustainability of the digital marketplace and that we must avoid
exporting broad legal loopholes from liability?
Answer. The Trump administration's trade policy focuses on
promoting innovation and protecting intellectual property (IP), and
ensures that U.S. rights holders can use and profit from their IP
globally. I support this policy and agree that strong IP protections
are critical to the health and sustainability of the digital
marketplace. TPA laid out important negotiating objectives with respect
to intellectual property and digital trade, and I support the pursuit
of these objectives in trade agreement negotiations--which is primarily
the responsibility of the Office of the U.S. Trade Representative.
______
Questions Submitted by Hon. Ron Wyden
fairness in section 232 investigation process
Question. In its antidumping and countervailing duty proceedings,
Commerce's Enforcement and Compliance division (``E&C'') follows a
clear and transparent process for collecting and responding to the
views of all interested parties. This ensures everyone has a fair
opportunity to provide their views on information that might be the
basis for a decision before that decision is made. In contrast, it
seems that officials in the Bureau of Industry and Security (``BIS'')
may be making decisions in the section 232 tariff exclusion process
without even giving one side the opportunity to respond to facts
submitted by the other. If Commerce wants this process to work--and I
think we would all like to see it work--it has to be fair and
objective. Specifically, Commerce officials have given conflicting
guidance on whether a company requesting an exclusion can respond to
objections filed by U.S. steel manufacturers if they believe that the
objections do not fairly portray the availability of the steel product
for which an exclusion is requested.
Given that E&C has been tasked with assisting BIS with the
exclusion process, and may be called upon to assist in future
investigations, if confirmed, will you commit not to provide
recommendations to BIS on an exclusion request unless and until each
side has been able to respond to factual information submitted by the
other party?
Answer. I agree that the section 232 product exclusion process
should be fair and objective. I also understand the rationale for
giving each side an opportunity to respond to factual information
submitted by other parties. At the same time, Commerce must establish
limits on opportunities to comment, so that rulings are expeditious.
Furthermore, if certain information pertains to national security, it
might be inappropriate to disclose it to the parties.
If confirmed, I will have greater visibility into the product
exclusion process, and I will be in a better position to determine
whether companies requesting an exclusion can respond to objections
filed by other parties. If they cannot, I will assess why. On that
basis, I will consider whether any modifications to E&C's portion of
the exclusion process are appropriate.
balancing resources of commerce's enforcement division
Question. E&C seems to have experienced a substantial increase in
its caseload last year--an approximately 60-percent increase in new
trade remedy cases filed by industry. The President's budget for next
year calls for a modest increase in funding for the enforcement
division, but it also proposes that the division establish a team
dedicated to running section 232 national security investigations, as
well as continuing to enhance its ability to self-initiate more AD and
CVD investigations. Expansion of trade enforcement initiatives is
welcomed, but it is critical that they be pursued in a robust manner
and geared towards achieving effective and meaningful results.
As Chairman Hatch and I have pointed out in a recent letter to
Secretary Ross, the section 232 product exclusion process has been a
disaster. How do you think Commerce's enforcement division can best be
deployed to improve the section 232 process? How would you ensure that
Commerce's enforcement unit continues to issue timely decisions in
trade remedy cases and remains a strong administrator of trade remedy
laws while taking on this expanded role in the section 232 process?
Answer. My understanding is that E&C plays only a supporting role
in the section 232 process. Specifically, E&C determines whether
articles that are the subject of exclusion requests are produced in the
United States in a sufficient and reasonably available amount or of a
satisfactory quality, based on the evidence presented. However, the
final decision as to whether to grant an exclusion--as well as the
overall structure of the exclusion process--is up to BIS.
Commerce has already begun to improve the section 232 process by
dedicating additional resources outside of BIS to assist with the
caseload. In particular, I understand that E&C personnel, detailees
from elsewhere in the Department of Commerce's International Trade
Administration, and contractors working under the supervision of E&C
have recently been tasked with assisting in this effort. These
additional resources are part of an unprecedented effort to process
exclusion requests expeditiously, while also ensuring that
determinations are fair and transparent.
E&C's core function is and should remain the conduct of AD/CVD
cases, in a timely and high-quality manner. Domestic business and
workers that are injured by dumped and subsidized goods must receive
the relief to which they are entitled under U.S. trade remedy laws. If
confirmed, I will manage E&C resources to ensure that E&C continues to
perform this core function, while also supporting BIS with the
additional resources described above.
semiconductor trade enforcement
Question. Semiconductors are an export of particular importance to
my home State of Oregon, as well as an industry of strategic importance
to maintaining U.S. technological leadership. China has been targeting
this industry as part of its ``Made in China 2025'' policies,
reportedly by using massive subsidies which could create excess chip
supply in the global market and put pressure on American manufacturers
like those in my State.
In our meeting in advance of the hearing to consider your
nomination, you told me about your experience representing American
semiconductor producers dealing with trade-related challenges. Based on
that experience, what could you do in your role leading Commerce's
enforcement division to help ensure that American semiconductor
producers and their employees are not harmed by China's unfair tactics?
Answer. Semiconductors--the microchips that power the digital
economy--are an important driver of American innovation and
productivity, and central to many emerging technologies. Semiconductors
are core elements of cutting-edge technologies including artificial
intelligence, aerospace systems, autonomous vehicles, and the Internet
of things.
However, China is actively seeking to displace the United States as
the world leader in semiconductor technology. For example, one of
China's policy documents calls for China to reach an advanced world
level in all major segments of the semiconductor industry by 2030. To
that end, China resorts to unfair, non-market-based policies such as
massive, sector-wide subsidies. The economic and national security
ramifications for the United States are quite serious.
In my view, the United States should consider all trade policy
``tools in the toolbox'' to counter China's disruptive, market-
distorting policies. One tool is the imposition of antidumping and
countervailing duties, if the relevant legal requirements are met.
Other potentially available tools include tariffs imposed pursuant to
section 301 of the Trade Act of 1974; CFIUS; export controls; WTO
cases; and working with U.S. partners and allies to strengthen
international rules disciplining the types of unfair practices that
China engages in. If confirmed, I will work with counterparts in other
trade-related agencies in support of a strong, rules-based, whole-of-
government response to China's semiconductor-related industrial
policies.
transparency and consultation
Question. Meaningful consultations with Congress and communications
with the public are necessary for every aspect of our trade agenda. I
note that consultations will only be meaningful if conducted in a way
that allows Members of this committee and their staffs to actually
reflect on what is being considered and to offer comments. It is simply
unacceptable to only engage the committee just before a proposal is
offered or an agreement is reached. Especially now, when the
administration has so many irons in the fire regarding trade, it is
critical that Commerce and other agencies keep Congress informed of
trade initiatives and developments. This administration continues to
fall short in providing us with timely and detailed briefings on
critical developments in trade that are having big impacts on American
workers and businesses.
If confirmed will you commit to brief my Finance Committee staff on
the enforcement division's activities promptly and in detail upon
request?
Answer. Yes.
maintaining the effectiveness of trade remedy investigations
Question. I am committed to standing up for all American workers
through tough trade enforcement. It is absolutely vital--to my home
State of Oregon and to the American people--that our country fully
enforces its trade laws and addresses unfair trade. Our trade
enforcement has sometimes been too slow or too weak to keep up with the
cheats who seek to undermine our domestic industries. In 2015, Congress
made clear the importance of tough enforcement when it passed the
Leveling the Playing Field Act, a package of substantial improvements
to U.S. enforcement laws.
Will you commit to fully applying that law so U.S. workers and
companies can get relief from unfairly traded imports? What will you do
to prevent China and other countries from reducing the effectiveness of
U.S. trade remedies through litigation at the WTO and elsewhere?
Answer. Yes; if confirmed, I will fully apply the Leveling the
Playing Field Act. The Act is an important legal tool that expands and
clarifies the Department of Commerce's authority to apply adverse facts
available (AFA)--a critical tool for encouraging foreign companies and
governments to cooperate in antidumping and countervailing duty
proceedings. I appreciate that Congress passed the Act to strengthen
U.S. trade remedy laws and to ensure that U.S. manufacturers and
workers get the relief they deserve from unfair trading practices, and
if confirmed I intend to administer the law accordingly.
Other countries are using WTO litigation to try to weaken U.S.
trade remedies, and have unfortunately been doing so for many years. If
confirmed, I will support USTR in defending U.S. trade remedy laws
aggressively at the WTO. I will also seek out opportunities to defend
U.S. trade laws through collaboration with interagency colleagues as
well as outreach to other WTO members. In addition, if confirmed, I
will ensure that determinations under the antidumping and
countervailing duty statutes reflect a rigorous interpretation of U.S.
law, as enacted by Congress--not the findings of the WTO, which does
not have the authority to enact or modify U.S. law or administrative
determinations.
assessing the balance of trade
Question. In making assessments about the balance of trade between
the United States and its trading partners, the President only takes
into account the trade in goods, and does not include trade in
services, even though the United States is a global leader in providing
high-level services to the world.
In your view, shouldn't services exports be included in assessing
whether our trade relationship with other countries is balanced?
Answer. I recognize the United States' global leadership role in
providing high-level services to the world. The U.S. services sector is
highly innovative and a key driver of economic growth.
Maintaining a vibrant U.S. services sector and expanding U.S.
services exports are vital to a healthy economy and a core objective of
U.S. trade policy.
The Bureau of Economic Analysis includes both goods and services in
their official estimate of the U.S. trade balance. However, in the
context of particular policy discussions, it may be appropriate to
focus on either the goods or services portion of the trade balance.
retaliatory tariffs and ``trade wars''
Question. Shortly after announcing the United States would be
imposing tariffs on steel and aluminum, the President tweeted that
``trade wars are good, and easy to win.''
In light of the retaliatory tariffs and other repercussions that
U.S. businesses and workers are now facing from our trading partners,
do you agree with the President's statement that ``trade wars are good
and easy to win''?
Answer. The President's statement is an expression of confidence in
the U.S. ability to confront and eliminate other countries' unfair
trade practices. I agree with this sentiment.
Retaliatory tariffs imposed by U.S. trading partners are a serious
concern, particularly when they jeopardize U.S. businesses or the
livelihoods of U.S. workers, farmers, or ranchers. Potential
retaliation should be weighed carefully when making major trade policy
decisions. However, the threat of retaliation should not prevent the
United States from pursuing its national interests, including with
respect to the legitimate enforcement of trade laws.
______
Questions Submitted by Hon. Sherrod Brown
Question. As you know, in 2015 Congress enacted my bill the
Leveling the Playing Field Act to restore strength to our trade remedy
laws in response to foreign competitor's efforts to weaken them. That
bill has helped workers and manufacturers more successfully petition
for relief in the face of unfair trade practices, but I'm concerned
that the attacks on our antidumping and countervailing duty laws
continue.
Do you believe there are ongoing efforts by our trading partners
and foreign competitors to weaken our trade remedy laws? If so, how
should the U.S. respond to these attacks?
Answer. Yes, there are ongoing efforts to weaken U.S. trade remedy
laws. These efforts take many forms, such as WTO litigation, attempts
to circumvent antidumping and countervailing duties, and duty evasion.
I believe it is critical for the U.S. to counter such efforts
vigorously. At the WTO, the U.S. should aggressively defend U.S. trade
laws. Simultaneously, the U.S. should exercise its sovereign right to
enforce the antidumping and countervailing duty laws rigorously,
recognizing that the WTO does not have the legal authority to enact or
modify U.S. law or administrative determinations. The U.S. should be
vigilant about circumvention of antidumping and countervailing duties
and fully utilize the statutory authority for countering circumvention
(e.g., 19 U.S.C. Sec. 1677j). In addition, U.S. Customs and Border
Protection should work to mitigate the risk of duty evasion. If
confirmed, I will strongly support these objectives.
With respect to the Leveling the Playing Field Act: I appreciate
that Congress passed the Act to strengthen U.S. trade remedy laws and
to ensure that U.S. manufacturers and workers get the relief they
deserve from unfair trading practices, and if confirmed I intend to
administer the law accordingly.
Question. There has been bipartisan support in Congress for
investigating currency undervaluation as a countervailable subsidy.
If confirmed as Assistant Secretary of Commerce and if a petition
were filed that alleged currency undervaluation in addition to other
subsidies, would you investigate the currency undervaluation allegation
in addition to Commerce's other work on the case?
Answer. I fully appreciate the distortive and unfair effects that
currency manipulation can have on trade flows. If confirmed, I will
examine any allegation of currency undervaluation carefully, and assess
whether it meets the legal requirements for initiating a countervailing
duty investigation. This assessment will depend on the particular
allegations and supporting information contained in the relevant
petition.
Question. As I'm sure you're aware, respondents from China and
other countries work aggressively to circumvent antidumping and
countervailing duty orders after they're applied. These circumvention
efforts undercut the effectiveness of our trade remedy laws.
If confirmed, will you make it a priority to consider expeditiously
any circumvention cases brought by U.S. petitioners?
Answer. Yes. If confirmed, I will ensure that Enforcement and
Compliance considers any allegation of circumvention carefully and
expeditiously.
______
Question Submitted by Hon. John Thune
Question. The administration has indicated its strong preference
and intention to negotiate bilateral trade agreements with countries
that currently do not have trade measures in place with the United
States. That's an objective that I think will garner significant
bipartisan support as a constructive solution to many of the trade
imbalances that the President is seeking to address.
Given the role that the Commerce Department has played as part of
the trade team in this administration, how do you see your role in
facilitating the negotiation and implementation of future bilateral
trade agreements?
Answer. I support the administration's goal of negotiating trade
deals that work for all Americans, including through new bilateral
trade agreements where possible. As I stated at my confirmation
hearing, opening up foreign markets to U.S. exports of goods and
services is a critical element of the administration's trade strategy,
and if confirmed I plan to pursue this objective aggressively.
As an international trade lawyer, I have worked for years to open
up foreign markets and combat other countries' foreign trade practices.
In addition, if confirmed, I will be charged with monitoring the
operation of trade agreements and seeking foreign government compliance
with such agreements. If confirmed, I will bring all of this experience
to bear in the context of any new trade agreements that the
administration considers, so as to open up new markets for U.S.
businesses, workers, farmers, ranchers, and services providers, on the
basis of strong, enforceable disciplines.
______
Questions Submitted by Hon. Robert Menendez
Question. Mr. Kessler, in instances where a domestic company has
applied for a product exclusion from the section 232 tariffs on steel
or aluminum, and domestic industry has not filed comments in
opposition, how will the Department evaluate whether to grant such an
exclusion?
Answer. The Bureau of Industry and Security has primary
responsibility for administering the section 232 product exclusion
process. The Department of Commerce's Enforcement and Compliance unit
(which I will lead if confirmed) plays only a supporting role.
My understanding is that in situations where the Department posts
product exclusion requests for public comment, and no comments are
received, the Department will evaluate the requests on the basis of
information in the requests themselves, as well as information from
interagency consultations, in light of the Department's criteria for
accepting or rejecting exclusion requests.
Question. Would such a fact pattern enable the Department to make a
final determination more quickly? If there is no opposition from
domestic industry, under what circumstances would the Department deny
the application?
Answer. My understanding is that the Department seeks to process
all product exclusion requests expeditiously, including those in
response to which no comments are filed. The Department may deny
product exclusion requests if the relevant product is available
domestically in a satisfactory quality and in sufficient quantity, if
it is not in the U.S. national security interest to grant the request,
if the request is legally insufficient, or if the request would be
unadministrable if granted.
Question. New Jersey has many manufacturing companies that benefit
from enforcement of our AD/CVD laws but also has many others whose
businesses and workers are put at risk by the imposition high duties.
What are your views about the relevance under the law of downstream
industries and their workers, particularly those who provide added
manufacturing value? If confirmed, how will you consider these issues
when rendering your decisions?
Answer. If confirmed, I will be responsible for administering the
antidumping and countervailing duty statutes. Commerce's determinations
under these laws address the existence and magnitude of dumping and
subsidization for the relevant class of imported articles. Downstream
industries and workers are not a factor in such determinations.
However, the International Trade Commission may consider all relevant
economic factors in determining whether the domestic industry is
materially injured, or threatened with material injury, by reason of
imports or sales for importation.
______
Questions Submitted by Hon. Bill Nelson
Question. As you might know, Florida growers were not able to get
the Commerce Department to self-initiate a trade case against Mexican
growers for the dumping of subsidized tomatoes, cucumbers, blueberries,
strawberries, and bell peppers during the winter months.
Considering how costly and difficult it is for local growers to
successfully mount a trade case against Mexico for seasonal trade
abuses, do you agree that it's important for NAFTA to allow regional
growers to use seasonal data in antidumping and countervailing duty
cases--to make it easier for growers to obtain a level of fairness in
the marketplace?
Answer. One of USTR's NAFTA negotiating objectives (as of November
2017) is to seek a separate domestic industry provision for perishable
and seasonal products in AD/CVD proceedings. I support USTR's
prerogative to negotiate trade agreements on the basis of negotiating
objectives that it formulates, consistent with TPA.
Question. If confirmed, you'll be in charge of enforcing U.S. trade
law and holding companies accountable for any trade violations.
If state-sponsored companies, like ZTE or Huawei, willfully violate
our laws, how do you plan to deal with external pressure from other
areas of the executive branch or from other countries, like China?
Answer. There are no exceptions under the antidumping and
countervailing duty laws for state-sponsored companies. If confirmed, I
will enforce the law rigorously as it is written. External pressure
will not distract me from this task.
______
Prepared Statement of Randolph J. Stayin, Nominated to be a Member of
the United States International Trade Commission
Good morning.
Mr. Chairman, Ranking Member Wyden, and members of the committee, I
am honored to apprear before you today, and I am humbled and grateful
to the President for nominating me to serve as a Commissioner on the
United States International Trade Commission. I also want to thank
Senator Portman for his support and kind introduction today. Most
importantly, I am honored and blessed to have the love and support of
my family; not only throughout my years of trade law practice, but
every day. My wife Sharon, my sister Donna, and my children Greg, Todd,
and Beth, and her husband Scott, are here with me today.
I began the practice of law as a litigator in Cincinnati, OH. I
came to Washington to serve as Chief of Staff for Senator Robert Taft,
Jr. Among my duties, Senator Taft asked me to be his advisor regarding
The Trade Act of 1974, which was the beginning of my involvement with
U.S. trade law, and was the first building block in my, now, 32 years
of practicing international trade law. My career has included
litigation of many anti-dumping and countervailing duty investigations
and reviews, section 201 safeguard investigations, 232 national
security and Generalized System of Preferences investigations, advising
clients on NAFTA and Uruguay Round negotiations, and Customs
investigations to stop circumvention of antidumping and countervailing
duty orders.
My law practice has also included serving as general counsel and
special counsel to 23 trade associations and many companies, a
significant number of which contributed to the depth of my
understanding of the realities and difficulties of running
manufacturing companies that are in competition with unfairly traded
products.
Among the many trade cases I have litigated, I would like to
briefly mention one that clearly demonstrates the complexity and
commitment involved in defending U.S. companies from unfair trade
practices: an antidumping investigation of imported candles from China,
beginning in 1984, which came about due to Chinese manufacturers
exporting their candles at prices significantly below the production
costs of U.S. products. The initial result of that case was a 54-
percent duty being imposed on Chinese imports once Commerce found
unfair trade practices and the Commission determined that those imports
materially injured the U.S. industry. For over 30 years, that duty has
been unsuccessfully challenged many times, including six administrative
reviews, nearly 100 scope reviews, two anticircumvention reviews, six
Customs investigations, two sunset reviews, and four 5-year reviews, in
addition to appeals to the U.S. Court of International Trade and the
U.S. Court of Appeals for the Federal Circuit, all of which I managed
and conducted for the continuing protection of this U.S. industry. Not
only was the initial 54-percent duty imposed, it was raised each time
it was challenged, to the eventual level of 108 percent, where it has
remained for the last 10 years, making it the longest standing U.S.
antidumping order. Another result of this effort, from 2000-2007, was
that U.S. candle companies received trade injury distributions of over
$183 million dollars from the application of the Continued Dumping and
Subsidy Offset Act, also know as ``the Byrd Amendment.''
This example is only one of the many U.S. products I have
represented, and as you all are aware, it is only one of thousands of
U.S. products we must ensure will not be injured by unfair trade
practices.
For me, this honor is the pinnacle opportunity built from a long
and successful effort to support and defend fair and equitable trade
laws and their application. In presenting arguments before the ITC, I
have always respected the very important role it plays as an
independent, nonpartisan, quasi-judicial, fact-finding agency. Our
country's workers, farmers, ranchers, and businesses know that they
have an objective and fair place to go when they have been injured by
unfairly traded imports. All parties receive a fact-based decision in
accordance with due process of law.
I look forward to participating in the ITC process as a leader and
key decision-maker, and in maintaining the credibility of U.S. trade
remedy laws. If confirmed, I assure you that I will serve with
integrity and that all of my decisions will be based on the facts and
the law, in accordance with the intent of Congress. I further assure
you that the Congress and the executive branch will continue to receive
objective, independent, fact-based 332 studies and expert analysis to
assist in the development of trade policy. I will be proud to join the
nearly 400 men and women who comprise the ITC. They are to be commended
for the excellent work they do every day for Congress, the executive
branch, and, above all, the American people.
Thank you for the privilege of being considered for this honor. I
am now happy to answer your questions.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Randolph J. Stayin (Randy).
2. Position to which nominated: Commissioner, U.S. International
Trade Commission.
3. Date of nomination: September 28, 2017.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: October 30, 1942, Cincinnati, OH.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list secondary and higher education institutions, dates
attended, degree received, and date degree granted):
University of Cincinnati Law School (Cincinnati, OH)--1965-
1967--Juris Doctor--1967.
Northwestern Law School (Chicago, IL)--1964-1965.
Dartmouth College (Hanover, NH)--1960-1964--Bachelor of Arts.
Western Hills High School (Cincinnati, OH)--1956-1960--High
School Diploma.
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment):
Partner--Barnes and Thornburg Law Firm (Washington, DC)--1988-
2010.
Partner--Taft, Stettinius, and Hollister Law Firm (Washington,
DC)--1977-1988.
Chief of Staff--U.S. Senator Robert Taft, Jr. (Washington,
DC)--1973-1976.
Associate--Frost and Jacobs Law Firm (Cincinnati, OH)--1967-
1972.
10. Government experience (list any advisory, consultative, honorary,
or other part-time service or positions with Federal, State, or local
governments, other than those listed above):
Advisory Committee for the U.S. and Foreign Commercial
Service--(unpaid) in the 1980s (during Reagan administration).
11. Business relationships (list all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, other
business enterprise, or educational or other institution):
See Question A-9--Barnes and Thornburg Law Firm: Managing
Partner of DC Office, Chairman of International Trade Practice,
Member of Management Committee.
12. Memberships (list all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable, and
other organizations):
DC Bar, American Bar Association, Ohio Bar Association.
Washington National Cathedral: Chairman of Fund Committee and
Co-Chair of 1907 Society.
President, Cincinnati Recreation Commission.
President, Cincinnati Mental Health Commission.
13. Political affiliations and activities:
a. List all public offices for which you have been a
candidate.
N/A.
b. List all memberships and offices held in and services
rendered to all political parties or election committees during
the last 10 years.
N/A.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years.
N/A.
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement):
Rated ``AV Preeminent,'' Martindale-Hubbell; listed in ``Who's
Who in American Law'' and in ``The World's Leading
International Trade Lawyers.''
15. Published writings (list the titles, publishers, and dates of all
books, articles, reports, or other published materials you have
written):
N/A.
16. Speeches (list all formal speeches you have delivered during the
past 5 years which are on topics relevant to the position for which you
have been nominated):
No ``formal'' speeches in the last 5 years, but presented many
``current status'' trade issue updates on international trade
issues throughout my career; also participated in international
trade panel discussions, seminars, and meetings with national
and international groups and associations.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
See ``Attachment A: Qualifications.''
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, associations, or organizations if you are confirmed by
the Senate? If not, provide details.
Yes.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
N/A.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
None.
3. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy. Activities
performed as an employee of the Federal Government need not be listed.
Nothing on legislation. I was engaged by clients to represent
them in antidumping investigations and other unfair trade
remedies provided by U.S. laws.
4. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
I would recuse myself from any matter that would involve
conflict of interest.
5. Two copies of written opinions should be provided directly to the
committee by the designated agency ethics officer of the agency to
which you have been nominated and by the Office of Government Ethics
concerning potential conflicts of interest or any legal impediments to
your serving in this position.
It will be done; provided by the ITC.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency,
professional association, disciplinary committee, or other professional
group? If so, provide details.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
See ``Attachment B: Additional Information--List of
Supporters'' and additional character reference letter (in
addition to those character references provided during the FBI
interviews).
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
Attachment A--Qualifications--Question A-17
Question A-17: State what, in your opinion, qualifies you to serve
in the position for which you have been nominated.
international trade attorney
I have over 40 years of international trade litigation and trade
legislative and regulatory advisory experience in international trade
policy, international trade law, and international trade regulatory
compliance.
My career has focused on trade law, trade regulation, and trade
policy, representing clients seeking relief from unfair and unlawful
trade practices, clients seeking compliance with U.S. trade laws, and
clients impacted by other countries' trade practices.
My international trade services span the range from trade
litigation, to regulatory relief, to government policy, to legislation,
to corporate strategy, to general business consulting.
I have litigated antidumping and countervailing duty
investigations, sunset reviews, administrative reviews, scope and
anticircumvention investigations, 201 safeguards, 232 national
security, Generalized System of Preferences, export regulation, trade
sanctions, antiboycott issues, and U.S. Customs enforcement.
I have achieved an exceptional record of success in cases/
matters litigated and positions defended. Many cases were litigated
before the U.S. International Trade Commission, the U.S. Department of
Commerce, and the U.S. Trade Representative.
I have represented individual clients and entire industries, in
matters involving international standards, export regulation, trade
sanctions, foreign corrupt practices, and antiboycott issues. In
addition, I conducted U.S. Customs and compliance investigations
regarding duty preference regimes, valuation, tariff classification,
country-of-origin, and fraud matters.
In appeals of U.S. international trade decisions, I have
represented clients before the U.S. Court of International Trade, the
Court of Appeals for the Federal Circuit, and in dispute resolution
hearings before NAFTA panels.
During the NAFTA and Uruguay Round negotiations, I played lead
roles in representing client positions in government and industry
discussions and deliberations.
I have advised clients on trade and import-export policy
matters, including representation before White House officials, members
of the U.S. Senate and the U.S. House of Representatives, and U.S.
department heads and senior staff.
I have regularly consulted on trade matters with private-sector
principals and colleagues throughout the world.
I have advised, represented, and litigated on behalf of
individuals, corporations, trade associations, and coalitions of large
portions of entire industries.
outside general or special counsel
I have advised many national and international associations,
including but not limited to, the American Gear Manufacturers
Association, the Bicycle Parts Manufacturers Association, the Canadian
Lumber Remanufacturers Alliance, the Food Processing Suppliers
Association, the Hot-Dip Galvanizers Association, the Machinery Dealers
National Association, the Meat Industry Suppliers Association, the
National Candle Association, the Process Equipment Manufacturers
Association, the Quebec Lumber Manufacturers Association, the Water and
Wastewater Equipment Manufacturers Association, and the Wheat Gluten
Industry Council.
chief of staff--united states senate
I am the former Chief of Staff and Director of Legislation to
U.S. Senator Robert Taft, Jr., serving as Senator Taft's top strategic,
political, and legislative advisor.
I served as the Senator's lead trade advisor in negotiating the
passage of the Trade Act of 1974.
I managed Senator Taft's legislative, political, and support
staffs on Capitol Hill and in Ohio, totaling 60 political, legislative,
and administrative personnel.
I had a Top Secret security clearance.
manager and public speaker
I managed legal, political, and support staffs of up to 60
individuals.
At the Barnes and Thornburg Law Firm I served as Managing
Partner of the Washington office, Chair of the International Trade
Practice Group, and as a member of the Management Committee. At the
Taft, Stettinius, and Hollister Law Firm I served as Chair of the
International Trade Practice Group.
I have been a frequent speaker at trade association meetings,
legal seminars, and University programs and have been a member of the
American Society of Association Executives (active in its law and
international sections).
international trade representative matters
Following is a sampling of the many international trade litigations,
trade reviews, trade regulation, and trade practice matters I have
successfully conducted. These matters are a strong indication of the
breadth and depth of my international trade experience, and my
successes in international trade law, regulation, and policy.
Represented the National Candle Association as petitioner in an
antidumping investigation of candles from China, including nine
administrative reviews, over 400 scope reviews, two anticircumvention
reviews, four sunset reviews, a new shipper investigation, six Customs
investigations, and appeals to the U.S. Court of International Trade
and to the U.S. Court of Appeals for the Federal Circuit--resulting in
a continuous 108-percent duty and CDSOA distributions of $183 million
to U.S. candle companies. (The original dumping duty was 56 percent,
but with each administrative review challenge by Chinese exporters, the
duty rose to 108 percent, where it still remains.)
Represented U.S. manufacturers of baseball hats, as petitioners
in antidumping investigation, against headware from China.
Represented U.S. sparkler manufactures, as petitioners in an
antidumping investigation of sparklers from China, resulting in an
affirmative determination.
Represented a coalition of U.S. importers of emulsion styrene-
butadiene rubber from South Korea, resulting in a negative injury
determination.
Represented an importer of outboard engines from Japan,
resulting in a negative injury determination.
Represented a Canadian producer of thermostatically controlled
appliance plugs, resulting in a negative injury determination.
Represented Quebec lumber manufacturers of softwood lumber from
Canada in the Binational Panel review of the countervailing duty
investigation in the 1990s, resulting in a settlement between the U.S.
and Canadian governments.
Represented Canadian lumber remanufacturers of softwood lumber
in the Binational Panel review of the countervailing duty investigation
in the 2000s, resulting in a settlement by the U.S. and Canadian
governments.
Represented a Brazilian producer of tillage tools, resulting in
termination of the countervailing duty order.
Represented U.S. producers of wheat gluten in a Sec. 201 market
distribution/safeguards investigation, resulting in a 3-year quota and
a subsequent grant from the Department of Agriculture of $40 million.
Represented a Japanese manufacturer of ceramic packages in a
Sec. 232 investigation by the U.S. Commerce Department of the impact of
the imports on U.S. national security, resulting in no restrictions on
exports to the U.S.
Represented U.S. producers of glassware from Mexico in
Generalized System of Preferences investigations, resulting in
withdrawal of GSP duty-free treatment of imports from Mexico and in
Uruguay Round multilateral trade negotiations.
Represented U.S. producers in Generalized System of Preferences
investigations of saccharin from South Korea, resulting in withdrawal
of GSP duty-free treatment of the imports from South Korea.
Advised American Gear Manufacturers and European association on
international standards process in order to avoid trade barriers.
Challenged standards of the National Fire Protection Association
(NFPA) on two separate matters, successfully resulting in NFPA
withdrawing the standards, returning them to committee, and adding
representatives of the client association to its committee.
Challenged two proposed standards (Teflon coated re bar and mud-
flaps for trucks) at Federal Highway Administration and National
Highway Safety Administration that would exclude products of two
different associations, successfully resulting in withdrawal of both
proposed standards.
Advised clients regarding the beneficial requirements and
positive impacts of, and strategies for responding to, Federal and
State ``Buy America'' legislation.
Represented exporter in U.S. Customs investigation of Export
Control violation.
Represented U.S. exporter in acquiring the necessary export
license for high technology equipment.
Represented U.S. manufacturer in acquiring the necessary export
license for medical supplies and equipment to export to a country
subject to U.S. sanctions.
Represented foreign manufacturer in excluding its products from
application of U.S. sanctions, thereby allowing export to the U.S.
Represented three trade associations in dual use equipment
export control negotiations, leading to narrowing the scope of dual use
export controls over process equipment.
Represented U.S. importer of motorcycle pedals from China in
Customs seizure based on alleged trademark infringement/counterfeit
goods, resulting in a ruling in favor of the imports.
______
Attachment B--Additional Information
List of Supporters--Additional Character References
list of supporters
The Honorable Rob Portman, U.S. Senator (OH).
The Honorable Kevin Brady (TX), chairman, House Ways and Means
Committee.
The Honorable Lewis Eisenberg, U.S. Ambassador to Italy, former
finance chair, RNC.
The Honorable Bill Archer, former chairman of the House Ways and
Means Committee.
The Honorable Mitch Daniels, president of Purdue University,
former Governor of Indiana.
The Honorable Robert Taft II, former Governor of Ohio.
Gil Kaplan, nominee for Under Secretary of Commerce for
International Trade.
The Honorable Grant Aldonas, director, Georgetown University Law
Center--Institute of International Economic Law, former Under Secretary
of Commerce for International Trade.
The Honorable David Spooner, former Assistant Secretary of
Commerce for Import Administration.
Dan Carmichael, former general counsel, Eli Lilly.
______
C. Raymond Marvin
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510-6200
Dear Senators,
A friend of many years has been nominated by the President to be member
of the U.S. International Trade Commission: Randolph J. Stayin. I have
known Randy since the mid-90s as a fellow volunteer at the Washington
National Cathedral. We worked together to raise financial support for
the Cathedral's mission and vision and succeeded in breaking records
together. He was the chair of the Cathedral Fund Committee for many
years, while I served on the committee and then succeeded him as chair.
We became social and Cathedral friends and have stayed in contact over
the years. I know of his personal values and character and believe that
he is a man of impeccable honesty, inherent fairness, ethical conduct,
and strong intellectual capability. I have not had experience working
with him on any law or international trade matter, and cannot speak to
that, nor do I express any view about any policy matters that may be
presented to the USITC. I do voice support for Randy Stayin's character
and his personal temperament. I believe that if he is confirmed by the
Senate, he will serve as a Commissioner with energy, judiciousness,
fairness, and distinction. If you are able to meet with him personally,
you will likely understand how easily he engenders confidence on the
part of those with whom he works. It is a pleasure and honor for me to
speak up for Randy Stayin as being eminently qualified by knowledge,
experience, and temperament to be confirmed as a member of the USITC.
And for the record, I have never had and will never have any matter in
which I have any economic or political interest involving the USITC.
Thank you for giving Randy the best of your serious consideration, as
you consider his nomination.
With appreciation for your service to our Nation in the Senate,
C. Raymond Marvin.
______
Questions Submitted for the Record to Randolph J. Stayin
Questions Submitted by Hon. Ron Wyden
trade enforcement--general
Question. I am committed to standing up for all American workers
through tough trade enforcement. It is absolutely vital--to my home
State of Oregon and to the American people--that our country fully
enforces its trade laws and addresses unfair trade. Our trade
enforcement has sometimes been too slow or too weak to keep up with the
cheats who seek to undermine our domestic industries. In 2015, Congress
made clear the importance of tough enforcement when it passed Senator
Brown's bill, the Leveling the Playing Field Act, a package of
substantial improvements to U.S. enforcement laws.
Will you commit to fully applying that law so U.S. workers and
companies can get relief from unfairly traded imports?
Answer. Yes, if confirmed, I commit to strictly enforcing the
statute in making determinations in antidumping and countervailing duty
investigations.
trade enforcement at the itc
Question. Too often, trade relief is too little, too late for hard-
working Americans facing unfair trade. In 2015, Congress amended the
definition of material injury and the factors the International Trade
Commission (``ITC'') examines in evaluating injury to prohibit the ITC
from finding that there has been no injury merely because an industry
happens to be profitable or if its financial situation has recently
improved. For a range of Oregon industries--including softwood lumber,
solar and steel producers--this clarification is critical to ensuring
that companies can get relief while they are still in the black and
before they are on life support.
Do you agree that a domestic industry may suffer material injury
from dumped and subsidized imports even though it manages to remain
profitable or its performance has improved? Do you agree there are
circumstances in which the Commission could find material injury where
an industry would have done better, but for dumped and subsidized
imports?
Answer. I am aware that 19 U.S.C. 1677(7)(J), which was added to
the statute in 2015, states that the Commission may not make a negative
determination merely because the domestic industry is profitable or
because its performance has recently improved. If confirmed, I commit
to strictly enforcing the statute and to consider all the relevant
statutory factors when making determinations in antidumping and
countervailing duty investigations.
digital trade
Question. Digital Trade is increasingly important to all aspects of
the U.S. economy. The Internet sector alone reportedly accounts for
more than 5 million jobs, and this does not count all of the
manufacturers and small businesses that rely on digital trade. In
recent years, the ITC, at my request, has done important analysis of
barriers to digital trade, an issue of importance to my constituents in
Oregon. The first of three reports on this subject was released to the
public in September 2017; the second is expected this fall; and the
third is due to be delivered in spring 2019.
Do you view as important the ITC's studies of barriers to digital
trade? Will you commit to continued analysis of these issues?
Answer. Yes, for both questions. I view all three of the reports
the ITC is preparing in this series as important, and I fully support
completion of the second and third reports, which are due by October
29, 2018 and March 29, 2019, respectively. I also support continued ITC
analysis of these issues, particularly as may be requested by this
committee, the Committee on Ways and Means, and the USTR.
I understand that Ambassador Froman, in his letter requesting the
three Commission reports, indicated that USTR intends to classify
portions of the second and third reports on the basis that they concern
economic matters relating to national security and that USTR intends to
treat the two reports as interagency memoranda containing predecisional
advice subject to the deliberative process privilege.
itc independence and objectivity
Question. The ITC is charged with providing technical advice on
trade policy issues to USTR and to both this committee and the House
Ways and Means Committee. The Commission has rightly prided itself in
the past on the objective, thorough, non-partisan nature of its advice
to these entities.
Can you commit to this committee that you will do your utmost to
ensure the ITC's analysis will be independent and thorough, not rushed,
and that the process will be driven by substance, rather than political
pressure?
Answer. Yes. As a Commissioner, I will do my best to ensure that
the ITC's analysis remains independent and thorough, timely but not
rushed, and is driven by substance and not political pressure. It is
clear from the ITC's enabling legislation that Congress has gone to
great length to ensure that the ITC is an independent agency in both
name and reality. The ITC serves Congress and the President best when
it acts in that capacity.
consultation with agencies in section 337 investigations
Question. Section 337 of the Tariff Act of 1930 requires the
Commission to consult with other Federal departments and agencies--
including the Federal Trade Commission--during the course of its
section 337 investigations. The FTC and other Federal agencies will
often have critical insights about the potential impact of section 337
investigations on competition, including how to maintain vibrant and
competitive U.S. domestic industries.
Will you commit to me that, if you are confirmed, the International
Trade Commission will consult closely with the FTC and other agencies
on cases where the U.S. public interest is at issue?
Answer. I understand that section 337 states that ``during the
course of each investigation under this section, the Commission shall
consult with, and seek advice and information from, the Department of
Health and Human Services, the Department of Justice, the Federal Trade
Commission, and such other departments and agencies as it considers
appropriate'' (19 U.S.C. Sec. 1337(b)(2)). As a Commissioner, I commit
to applying the statute and applicable case law to the facts of any
section 337 investigation before me for deliberation.
assessing the balance of trade
Question. In making assessments about the balance of trade between
the United States and its trading partners, the President only takes
into account the trade in goods, and does not include trade in
services, even though the United States is a global leader in providing
high-level services to the world.
In your view, shouldn't services exports be included in assessing
whether our trade relationship with other countries is balanced?
Answer. Yes, services exports should be included. Including trade
in both goods and services provides the most comprehensive picture of
U.S. global competitiveness.
retaliatory tariffs and ``trade wars''
Question. Shortly after announcing that the United States would be
imposing tariffs on steel and aluminum, the President tweeted that
``trade wars are good, and easy to win.''
In light of the retaliatory tariffs and other repercussions that
U.S. businesses and workers are now facing from our trading partners,
do you agree with the President's statement that ``trade wars are good,
and easy to win?''
Answer. No.
______
Questions Submitted by Hon. Sherrod Brown
Question. My bill, the Leveling the Playing Field Act, became law
in 2015 and strengthened U.S. trade remedy statutes. One specific
provision of the law expanded the criteria the ITC must consider when
evaluating industry and clarified that an industry can be profitable
but still be injured by imports. These provisions were enacted to
ensure that U.S. businesses and workers could obtain relief from unfair
trade practices without having to close their doors or lose their jobs.
If confirmed, will you commit to fully implementing the Leveling
the Playing Field Act, including the changes to injury criteria, as
Congress intended?
Answer. I am aware that the Leveling the Playing Field Act, which
became law in 2015, expanded the criteria the Commission must consider
in antidumping and countervailing duty investigations including
clarifying that the domestic industry can be profitable but still
injured by imports. If confirmed, I commit to strictly enforcing the
statute and to consider all the relevant statutory factors when making
determinations in antidumping and countervailing duty investigations.
Question. In making its injury determinations, the ITC decides
whether U.S. industries and workers obtain relief from unfair trade
practices.
If confirmed, will you commit to applying trade remedy law in a way
that ensures there is a real remedy available to industries and workers
who are adversely affected by unfair trade practices?
Answer. If confirmed, I commit to strictly enforcing the statute,
and to evaluate the facts regarding the U.S. industry and workers and
consider all the relevant statutory factors when making determinations
in antidumping and countervailing duty investigations.
Question. Sometimes when U.S. petitioners file trade remedy cases,
foreign competitors will flood the market with products to beat any
antidumping or countervailing duties that may be applied. A provision
in U.S. statute called ``critical circumstances'' is intended to
provide relief to the U.S. industry in this instance.
Will you commit to interpreting the law as Congress intended and
providing retroactive relief when the statutory test for critical
circumstances is met?
Answer. I am aware that, in making changes to the statute regarding
critical circumstances in the URAA, Congress stated ``the legislation
clarifies that the Commission is to determine whether the surge in
imports prior to the suspension of liquidation, rather than the failure
to provide retroactive relief, is likely to seriously undermine the
remedial effect of the order'' (SAA at 877). The Commission considers
the list of statutory factors and makes its critical circumstances
determination independently of Commerce. If confirmed, I commit to
strictly enforcing the statute, and to evaluate the facts and relevant
statutory factors to determine whether the test for critical
circumstances is met.
Question Submitted by Hon. John Thune
Question. I support the administration's efforts to address unfair
trade practices that are harming U.S. industries. However, I am
concerned about the impact that anti-dumping and countervailing duties
can have on U.S. users of the product as a result of antidumping
investigations.
Do you think the International Trade Commission's determination on
an antidumping duty investigation should include an analysis of the
economic impact to the U.S. consumers of the product that will be
affected by the duties in instances where the ITC reaches affirmative
determinations?
Answer. I am aware that 19 U.S.C. 1677f(h) directs the Commission
to provide an opportunity for consumers and industrial users of subject
merchandise to submit relevant information concerning material injury
by reason of the dumped or subsidized imports. If confirmed, I would
consider all relevant submissions, including any submitted economic
analysis, when making determinations in antidumping duty
investigations.
______
Question Submitted by Hon. Robert Menendez
Question. Accurate and detailed trade data is necessary for private
businesses to track imports and exports of their products as well as
for government agencies to administer trade policy. Section 484f of the
Tariff Act of 1930 provides authority for the Secretary of Treasury,
the Secretary of Commerce, and the USITC to adopt statistical reporting
numbers for these purposes.
What is your understanding of the current process used by the USITC
to evaluate requests from industry to adopt more detailed statistical
reporting numbers than presently exist? What factors do Treasury,
Commerce, and the USTIC take into consideration when evaluating such a
request from domestic industry? When such a request is denied, what
opportunities exist for domestic industry to appeal the ruling?
Answer. Requests to the 484(f) Committee are accepted based on two
deadlines: March 15th, for HTS and Schedule B provisions to take effect
on the following July 1st, and July 15th, for HTS and Schedule B
provisions to take effect on the following January 1st.
After an initial review by the USITC to be sure a request is
complete and contains no confidential information, U.S. Customs and
Border Protection (CBP) reviews each request for classification and
administrability. Any issues after both agencies' reviews are worked
out with the requesting party before sending the request to the U.S.
Department of Commerce's Bureau of the Census. Census does a trade
report to determine the annual import level and to be sure there is no
disclosure involved in publishing the statistical data that would be
reported in the new annotation. At the same time, USITC's Office of
Industries also does a staff report focused on the potential benefits
to the domestic industry/trade of creating the requested statistical
breakout.
All committee members meet, usually in late May and in mid-October,
to discuss the requests received and determine which ones will be
accepted and which ones will be denied.
The following criteria are used in the 484(f) Committee's decision-
making process:
Each proposed 10-digit nonlegal statistical category must
cover a product or a grouping of goods typically having $1
million in annual trade.
The proposed annotation must have a clear and administrable
description.
There must be at least 3 importers or exporters reporting
shipments in the proposed category on an average monthly basis
to avoid disclosure of confidential information.
Feedback on the committee's processing of requests and on the
outcomes is provided to each requesting party after the committee
meeting. If a request is denied, follow-up discussions can be arranged
with committee members. Any denied request can be resubmitted as soon
as the next committee cycle with appropriate modifications and/or
additional information provided that take into account the basis of the
denial.
______
Question Submitted by Hon. John Cornyn
Question. There will soon be billions of computing and
communications devices that depend on 5G technology, including devices
that the U.S. Government, private companies, and consumers use for
critical applications and infrastructure. The United States cannot
afford to let other nations lead the race to develop and implement 5G
technology.
Can you commit that you will take into consideration the national
security imperative of the United States having a domestic supply base
that can lead the world in the development of 5G technology and
products when hearing cases before the ITC?
Answer. I understand that under section 337, ``if the Commission
determines, as a result of an investigation under this section, that
there is a violation of this section, it shall direct that the articles
concerned, imported by any person violating the provision of this
section, be excluded from entry into the United States, unless, after
considering the effect of such exclusion upon the public health and
welfare, competitive conditions in the United States economy, the
production of like or directly competitive articles in the United
States, and United States consumers, it finds that such articles should
not be excluded from entry.'' As a Commissioner, I commit to applying
the statute and applicable case law to the facts of any section 337
investigation before me for deliberation.
______
Questions Submitted by Hon. Patrick J. Toomey
Question. I have serious concerns about the administration's
decision to use the pretext of a national security concern to raise
taxes on imported steel and aluminum products. This policy will
inevitably increase costs on Pennsylvania consumers, workers, and
employers. Moreover, the section 232 tariffs punish some of our
Nation's closest allies, including the European Union, Canada, and
Mexico, and will invite retaliation on U.S. goods and services.
As you know, the International Trade Commission (ITC) conducts
sunset reviews every five years on existing antidumping (AD) and
countervailing duty (CVD) orders to determine whether revocation of
those orders would likely cause material injury to the domestic
industry. During these investigations, Federal statute requires that
the ITC take into account relevant economic factors within the context
of the business cycle and competitive factors that are distinctive to
the affected industry. As a result, future sunset reviews will likely
be affected by the recently imposed section 232 tariffs on steel and
aluminum, which are applied in addition to AD/CVD duties already in
effect. For example, if a 25-percent steel tariff is imposed under
section 232 on a product that is also under an AD/CVD order, then the
tariff may reduce the likelihood that future imports of that product
will injure the domestic industry, and thus the AD/CVD duty is no
longer needed.
If confirmed, how will you account for the recently imposed section
232 tariffs on steel and aluminum during the ITC's 5-year sunset review
process? Do you anticipate that some AD/CVD orders will be rescinded
due to the section 232 tariffs?
Answer. I am aware that section 232 tariffs were recently imposed
on steel and aluminum products. In 5-year reviews, the statute directs
the Commission to ``evaluate all relevant economic factors within the
context of the business cycle and the conditions of competition that
are distinctive to the affected industry'' (19 U.S.C. 1675a(a)(4)). If
confirmed, I commit to evaluating trade remedy measures such as the
section 232 tariffs as a relevant economic factor within the context of
the conditions of competition for the industry at issue in making
antidumping and countervailing duty determinations. I cannot speak to a
particular antidumping or countervailing duty order at this time
because each determination would be based on evaluating the facts and
the relevant statutory factors in the review at issue.
Question. The sunset review process provides the ITC with the
opportunity to remove AD/CVD duties that are no longer needed to
protect the domestic industry. However, in practice, ITC rarely revokes
AD/CVD orders. According to ITC data, between 2013 and 2017, only 23
orders were revoked under sunset reviews, while 156 new orders were
imposed. Moreover, these orders cover a substantial value of trade. In
2017 alone, newly imposed AD/CVD orders resulted in duties on imported
goods worth approximately $12 billion.
With that in mind, can you describe how you would approach sunset
reviews, if confirmed? Do you believe that there are orders currently
in effect that have outlived their purpose, and if so, which?
Answer. I am aware that, under the likelihood standard in a 5-year
review, the Commission will engage in a counterfactual analysis; it
must decide the likely impact in the reasonably foreseeable future of
an important change in the status quo--the revocation or termination of
a proceeding and the elimination of its restraining effects on volumes
and prices of imports. Thus, the likelihood standard is prospective in
nature. The U.S. Court of International Trade has found that
``likely,'' as used in the 5-year review provisions of the Act, means
``probable.'' If confirmed, I commit to applying that standard in 5-
year reviews when considering the likely volume, price effect, and
impact of imports of the subject merchandise on the industry if the
orders are revoked or the suspended investigation is terminated. I
cannot speak to a particular antidumping or countervailing duty order
at this time because each determination would be based on evaluating
the facts and the relevant statutory factors in the review at issue. I
note however that all parties, including importers, foreign producers,
and purchasers who may believe that an ``order has outlived its
usefulness,'' have an opportunity to participate and submit evidence in
five-year reviews which the Commission will consider with the other
evidence in the record in making its determination.
Question. After the Commerce Department receives an AD/CVD
petition, the ITC conducts a short preliminary investigation before the
case can advance. The preliminary phrase is designed to avoid
unnecessary investigations for cases where there is no reasonable
indication that imports are causing material injury to the domestic
industry. However, the ITC rarely disapproves preliminary
investigations. Allowing weak cases to progress to a full investigation
has several negative consequences, including high legal costs to
participating firms and taxpayers, as well as market disruptions and
uncertainty during the course of the investigation.
Do you consider preliminary investigations to be a useful process
for weeding out weak cases, or do you think that all petitions deserve
the expensive investigative process involved in a full investigation?
Answer. I am aware that at the preliminary phase of antidumping and
countervailing duty investigations, the Commission determines based on
the information available to it at the time whether there is a
reasonable indication that a U.S. industry is materially injured or
threatened thereof by reason of the subject imports. The reasonable
indication standard as set forth by the Federal Circuit in American
Lamb requires more than a finding that there is a possibility of
material injury.\1\ If confirmed, I commit to applying this standard
when making preliminary determinations in antidumping and
countervailing duty investigations.
---------------------------------------------------------------------------
\1\ Under the American Lamb standard, the Commission weighs the
evidence before it and determines whether ``(1) the record as a whole
contains clear and convincing evidence that there is no material injury
or threat of such injury; and (2) no likelihood exists that contrary
evidence will arise in a final investigation.'' American Lamb Co. v.
United States, 785 F.2d 994, 1001-1004 (Fed. Cir. 1986).
______
Prepared Statement of Patrick J. Urda, Nominated to be a
Judge of the United States Tax Court
Chairman Hatch, Ranking Member Wyden, and members of the Finance
Committee, it is a privilege and honor to be here today. Thank you for
holding this hearing to consider my nomination to serve as a judge on
the United States Tax Court.
I am grateful to the President for nominating me. I would also like
to express my thanks to the committee staff for their support
throughout this process.
I sit before you as a nominee because of the support of so many
people, some of whom have joined me today, most importantly, my parents
Richard and Kathleen Urda. Dad is a solo practitioner in South Bend,
IN. He has been a role model my entire life, consistently demonstrating
how to be a good lawyer and a better person. He has a vast knowledge of
tax, and I'm hoping I've picked up a few of his insights through
genetics or osmosis. Some of the earliest memories of my mom are
playing in the halls of St. Mary's College, where she taught
statistics. As my siblings and I grew older, she spent more time
teaching us, not just working with us on math or English, but showing
us--through her own example--about compassion, diligence, service, and
selflessness. Any talk of my parents cannot help but make me think of
my siblings--Kathleen, Anne, Libby, and Mike--my best friends,
confidants, and occasional sparring partners. And I would not be here
without the love and support of Cristina Cardenas, my fiancee, who
works tirelessly to improve education for children throughout the
world.
I have been truly lucky in terms of colleagues and friends. I've
learned with and learned from attorneys, office managers, paralegals,
and legal assistants in Chicago, South Bend, and Washington. I have
been incredibly fortunate to learn about the tax field from the women
and men of the Tax Division and my opposing counsel for the last twelve
years. As to my friends, in a very sincere way, I don't have friends, I
have family. I thank you all, my family.
I have been blessed through the years with great mentors. It would
be impossible to name them all, but, in particular, I thank Judge Dan
Manion for hiring his first clerk from South Bend and for teaching me
so much about the law and life. I thank Gil Rothenberg for bringing me
to the Tax Division and developing my knowledge and passion for the
subject. And I thank Diana Erbsen for picking me to be her counsel,
giving me a broader view of the workings of our tax system.
At the main DOJ building, there is a motto inscribed in Latin that
translates as ``Our duty is a privilege.'' That has truly been the case
for me. I feel honored to have had the opportunity to litigate tax
issues in appellate courts for the last 12 years. My service has taught
me the breadth and complexity of our tax system, and has equipped me
with the ability to analyze the strengths and weaknesses of different
legal positions--whether taxpayers' or the Government's. My job has
given me a deep appreciation for the important work of the Tax Court,
and the need for fair and expeditious resolution of tax controversies.
A long time ago, two wise former AUSAs told me that the Government wins
its point when justice is done. I try to keep that in mind when I
litigate in my current position, and justice--consistent with the law--
will be the North Star for me if I am so lucky as to be confirmed. I
pledge to be impartial in approach, diligent in preparation, and
absolutely committed to following the law where it leads.
I look forward to answering the committee's questions.
______
SENATE FINANCE COMMITTEE
STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Patrick Joseph Urda.
2. Position to which nominated: United States Tax Court.
3. Date of nomination: August 3, 2017.
4. Address (list current residence, office, and mailing addresses):
5. Date and place of birth: August 26, 1976; South Bend, Indiana.
6. Marital status (include maiden name of wife or husband's name):
7. Names and ages of children:
8. Education (list secondary and higher education institutions, dates
attended, degree received, and date degree granted):
1990-1994, St. Joseph High School, South Bend, Indiana; High
School Diploma, June 5, 1994.
1994-1998, University of Notre Dame; B.A. (summa cum laude),
May 17, 1998.
1998--2001, Harvard Law School; J.D., June 7, 2001.
9. Employment record (list all jobs held since college, including the
title or description of job, name of employer, location of work, and
dates of employment):
Gonderman Legal Corporation, P.C. (now dissolved), South Bend,
Indiana, Summer Associate (Summer 1998, Summer 1999).
McDermott, Will, and Emery, Chicago, Illinois, Associate (2001-
2003); Summer Associate (Summer 2000).
Maciorowski, Sackmann, and Ulrich, Chicago, Illinois, associate
(2003-2004).
United States Court of Appeals for the Seventh Circuit, South
Bend, Indiana, Law Clerk to the Honorable Daniel A. Manion
(2004-2006)
United States Department of Justice, Tax Division, Washington,
DC, Counsel to the Deputy Assistant Attorney General for
Appellate and Review (2015-present); Trial Attorney, Appellate
Section (2006-present).
American University, Washington College of Law, Washington, DC,
adjunct professor (2012-2015).
10. Government experience (list any advisory, consultative, honorary,
or other part-time service or positions with Federal, State, or local
governments, other than those listed above):
During my time at the Department of Justice, I also have served
on two temporary detail assignments outside the Tax Division:
United States Department of Justice Office of Legal Policy
Nominations Counsel (February-May 2017); and United States
Department of Justice, Criminal Division, Office of Overseas
Prosecutorial Development Assistance and Training, Trainer
(August 2017).
11. Business relationships (list all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, other
business enterprise, or educational or other institution):
Hannah's House, Mishawaka, Indiana, Board of Directors (2005-
2006).
St. Thomas the Apostle Church, Washington DC, Young Adults
Executive Board (2010-2013).
Washington English Center (formerly Language Etc.), Washington,
DC, Associate Board (2014-present).
12. Memberships (list all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable, and
other organizations):
American Society for International Law, Government Attorneys
Interest Group, Steering Committee Member (2012-2014).
Edward Coke Appellate Inn of Court, Member (2017).
Indiana Society of Washington, DC, Member (2017).
National Review Institute, Washington Fellow (2012).
Notre Dame Club of Washington, DC, Member (2006-present
(intermittent)).
Washington English Center, Washington, DC, Volunteer Teacher
(2008-present).
13. Political affiliations and activities:
a. List all public offices for which you have been a
candidate.
None.
b. List all memberships and offices held in and services
rendered to all political parties or election committees during
the last 10 years.
In 2008, I worked in a volunteer phone bank in support of
Senator John McCain's presidential campaign, and volunteered on
Election Day.
In 2012, I volunteered on Election Day in support of Mitt
Romney's presidential campaign.
c. Itemize all political contributions to any individual,
campaign organization, political party, political action
committee, or similar entity of $50 or more for the past 10
years.
On October 8, 2012, I contributed $200 to Romney Victory, Inc.
On August 10, 2011, I contributed $50 to Mullen for Congress.
14. Honors and awards (list all scholarships, fellowships, honorary
degrees, honorary society memberships, military medals, and any other
special recognitions for outstanding service or achievement):
United States Department of Justice Distinguished Service
Award, 2017.
Tax Division Outstanding Attorney Award (for work as Counsel),
2016.
Tax Division Outstanding Attorney Award (for work as attorney),
2010, 2012, 2014, 2015.
Internal Revenue Service, Mitchell Rogovin National Outstanding
Support to the Office of Chief Counsel Award, 2012.
Glenn D. Peters Scholarship, 1998-2001.
15. Published writings (list the titles, publishers, and dates of all
books, articles, reports, or other published materials you have
written):
None.
16. Speeches (list all formal speeches you have delivered during the
past 5 years which are on topics relevant to the position for which you
have been nominated):
None.
17. Qualifications (state what, in your opinion, qualifies you to
serve in the position to which you have been nominated):
My experiences as an appellate litigator in the Tax Division of
the Department of Justice, my time as a law clerk for the
United States Court of Appeals for the Seventh Circuit, and my
work in private practice have all prepared me for the position
of a judge on the United States Tax Court. During my more than
decade of service at the Tax Division, I have litigated a wide
variety of tax disputes, and, as a result, I have a strong
grounding in the substantive issues and procedural aspects of
tax law. Many of these appeals have stemmed from decisions of
the Tax Court, which has provided an important perspective into
the Court's practice, procedures, and docket. In my
professional career, both inside and outside the government, I
have learned from numerous colleagues, opposing counsel,
mediators, and judges, and I firmly believe that the knowledge
gained from them will provide invaluable help in carrying out
my responsibilities if I am confirmed as a judge. Good judges
are impartial in their approach, diligent in their preparation,
and absolutely committed to following where the law leads.
Thanks to the opportunities that I have had and my strong
desire to continue in public service, I will strive every day
to be such a judge.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, associations, or organizations if you are confirmed by
the Senate? If not, provide details.
Yes.
2. Do you have any plans, commitments, or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, provide details.
I have no plans, commitments, or agreements to pursue outside
employment during my service.
3. Has any person or entity made a commitment or agreement to employ
your services in any capacity after you leave government service? If
so, provide details.
No.
4. If you are confirmed by the Senate, do you expect to serve out
your full term or until the next presidential election, whichever is
applicable? If not, explain.
Yes.
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
I am not aware of any potential conflicts of interest due to
any investments, obligations, liabilities, or other
relationships. If confirmed, I will carefully review and
address any real or potential conflict of interest by adhering
to the Code of Conduct for United States Judges, 28 U.S.C.
Sec. 455 and any and all other laws, rules, and practices
governing such circumstances.
2. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
During my service in the Tax Division, I have represented the
United States in tax-related cases in the United States Courts
of Appeal, including appeals from Tax Court decisions. If
confirmed, I would recuse myself from any matters in which I
participated during my tenure at the Department of Justice.
3. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy. Activities
performed as an employee of the Federal government need not be listed.
None.
4. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
If confirmed, I will carefully review and address any real or
potential conflict of interest by adhering to the Code of
Conduct for United States Judges, 28 U.S.C. Sec. 455 and any
and all other laws, rules, and practices governing such
circumstances.
5. Two copies of written opinions should be provided directly to the
committee by the designated agency ethics officer of the agency to
which you have been nominated and by the Office of Government Ethics
concerning potential conflicts of interest or any legal impediments to
your serving in this position.
See Ethics Disclosure (Financial Disclosure Report) provided to
the committee.
D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been
investigated, disciplined, or otherwise cited for a breach of ethics
for unprofessional conduct before any court, administrative agency,
professional association, disciplinary committee, or other professional
group? If so, provide details.
No.
2. Have you ever been investigated, arrested, charged, or held by any
Federal, State, or other law enforcement authority for a violation of
any Federal, State, county, or municipal law, regulation, or ordinance,
other than a minor traffic offense? If so, provide details.
No.
3. Have you ever been involved as a party in interest in any
administrative agency proceeding or civil litigation? If so, provide
details.
No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, provide details.
No.
5. Please advise the committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
None.
E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and
testify before any duly constituted committee of the Congress on such
occasions as you may be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide
such information as is requested by such committees?
Yes.
______
Questions Submitted for the Record to Patrick J. Urda
Question Submitted by Hon. John Thune
Question. Some have criticized the Tax Court for restricting access
to court documents, when similar documents are publicly available in
cases being heard by Federal District and Circuit Courts. I understand
that steps would have to be taken to protect taxpayers who are
representing themselves so that personal information is not
accidentally disclosed. What are your views on whether the Tax Court
should move to public electronic access via the Internet to court
documents in order to increase the transparency of the Tax Court's
proceedings?
Answer. In my practice as an appellate litigator, I have found
availability of Federal District and Circuit Court documents on the
Internet to serve a valuable function, giving litigants efficient
access to court filings and providing the public a direct view of
judicial proceedings. Constructing a similar system for the Tax Court
would necessarily involve answering a wide range of questions, from the
protection of sensitive taxpayer information to practical issues of
budgeting and resources. As a nominee to the Tax Court, I am not in a
position to comment on the feasibility or practicality of building such
a platform, but, generally, transparency in the tax field serves an
important role in building taxpayer confidence in the tax system's
fairness and reliability.
Question Submitted by Hon. Bill Nelson
Question. Given all of the glitches and general confusion created
by the new tax law (Pub. L. 115-97), how do you plan to help ordinary
Americans navigate these waters and resolve any complications brought
on by the new tax law?
Answer. It has been my experience that clear decisions, firmly
grounded in statutory language, provide good road maps to help
taxpayers navigate changes in law and to properly order their affairs.
The Supreme Court has explained that interpretation of a particular
provision ``depends upon reading the whole statutory text, considering
the purpose and context of the statute, and consulting any precedents
or authorities that inform the analysis'' (Dolan v. Postal Service, 546
U.S. 481, 486 (2006)). If I am so fortunate as to be confirmed as a
judge on the Tax Court, I will utilize the tools identified by the
Supreme Court (as well as the relevant circuit court and the Tax Court
itself) to interpret the provisions of the new tax law and any related
administrative guidance.
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
This morning the Finance Committee meets to discuss five
nominations to important positions in the executive branch. Mr. Jeffrey
Kessler is nominated to serve as Assistant Commerce Secretary for
Enforcement and Compliance, Ms. Amy Karpel and Mr. Randy Stayin are
nominated to serve on the U.S. International Trade Commission, and Ms.
Elizabeth Ann Copeland and Mr. Patrick Urda are nominated to serve as
judges on the U.S. Tax Court.
I'll speak briefly on each, beginning with the three trade-related
nominations. This administration swept into office with a lot of tough
talk when it came to trade and manufacturing jobs at home.
I agree that NAFTA needs renegotiating. I agree that the U.S. needs
to step up with tough action against China's abusive trade practices.
But after a year and a half of work, the Trump administration has
managed to unite our traditional allies with China against us. In many
ways, China is getting away with its cheating scot-free. Instead of
creating American jobs, this trade policy is creating chaos.
With respect to today's hearing, the good news is that the three
trade-related nominees before us are all set to fill enforcement-
related positions. In my view, step one when you're looking to sharpen
our trade policies and fight for American workers is enforcing the laws
on the books. Mr. Kessler would fill one of the top jobs at the
International Trade Administration within the Commerce Department, and
Ms. Karpel and Mr. Stayin would play key roles as ITC Commissioners
helping to make sure our trade policies are benefitting American
workers and businesses. All three are qualified nominees, and I look
forward to discussing enforcement issues further with them.
Next are Ms. Copeland and Mr. Urda, who are nominated to serve as
Tax Court judges. The tax court is the judicial backbone of the Federal
tax code. It's the best opportunity Americans have to dispute tax bills
before they have to pay--and it keeps them from getting stuck in slow-
moving courts when they have a tax issue. It's a tough job that
requires a lot of time on the road. So I'm thankful that Ms. Copeland
and Mr. Urda are willing to serve.
Thank you, Chairman Hatch, for convening this hearing. I look
forward to questions.
[all]