[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Rules and Regulations]
[Pages 43429-43433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21522]


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INTERNATIONAL TRADE COMMISSION

19 CFR Part 210


Procedures for Investigations and Related Proceedings Concerning 
Unfair Practices in Import Trade

AGENCY: U.S. International Trade Commission.

ACTION: Final rule.

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SUMMARY: The Commission hereby adopts certain interim rules as final 
rules of practice and procedure for investigations and related 
proceedings under section 337 of the Tariff Act of 1930 (19 U.S.C. 
1337). The Commission also revises the interim rule concerning 
investigation target dates, and adopts that rule as a final rule. This 
change is made, in response to public comment, so that any decision 
that results in a target date beyond fifteen months will be by initial 
determination. The Commission further revises the final rule concerning 
modification or rescission of exclusion orders, cease and desist 
orders, and consent orders to eliminate the publication of Federal 
Register notices that are not required by law, to eliminate unnecessary 
publication costs.

DATES: The effective date of these final rules is September 23, 1996. 
These final rules will apply to all section 337 investigations and 
proceedings instituted after September 23, 1996, as well as to 
complaints requesting the institution of a section 337 investigation 
and petitions for modification or rescission of exclusion orders, cease 
and desist orders, and consent orders filed after September 23, 1996.

FOR FURTHER INFORMATION CONTACT: Sidney Harris or Paul J. Luckern, 
Office of Administrative Law Judges, U.S. International Trade 
Commission, telephone (202) 205-2692 or (202) 205-2694. Hearing 
impaired individuals can obtain information on the final rules by 
contacting the Commission's TDD terminal at (202) 205-1810.

SUPPLEMENTARY INFORMATION:

Rulemaking Analysis

    The final rules proposed in this notice do not meet the criteria 
enumerated in

[[Page 43430]]

section 3(f) of Executive Order 12866,1 and therefore do not 
constitute a significant regulatory action for purposes of that 
Executive Order.
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    \1\ 58 FR 51735, Oct. 4, 1993.
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    In accordance with the Regulatory Flexibility Act,2 the 
Commission hereby certifies 3 that the revised rules set forth in 
this notice are not likely to have a significant economic impact on a 
substantial number of small business entities. The Commission notes 
that most section 337 complainants are not small businesses. Moreover, 
proposed final rule 210.51(a) merely requires any extension of a target 
date beyond 15 months to be by initial determination, and proposed 
final rule 210.76(b) merely ceases publication of certain section 337 
Federal Register notices that are not required by law.4 In any 
event, the Regulatory Flexibility Act is inapplicable to this 
rulemaking, because it is not one for which a notice of proposed 
rulemaking was required under 5 U.S.C. 553(b) or another statute.5
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    \2\ 5 U.S.C. 601 note.
    \3\ Pursuant to 5 U.S.C. 605(b).
    \4\ See 60 FR 53119 (Oct. 12, 1995).
    \5\ See 5 U.S.C. 603(a).
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Background

Interim rules

    On December 30, 1994, the Commission published interim rules 
implementing the statutory amendments to section 337 effected by the 
Uruguay Round Agreements Act (URAA) (59 FR 67622, Dec. 30, 1994). 
Public comment was invited during a 90-day period ending March 30, 
1995. The Commission received comments from The International Trade 
Commission Trial Lawyers Assoc. (ITCTLA), Texas Instruments (TI), 
Minnesota Mining and Manufacturing Co. (3M), Mr. Gilbert B. Kaplan of 
the law firm of Hale and Dorr (Kaplan), the Government of Canada 
(Canada) and the Japan Machinery Exporters' Association (JMEA). The 
Commission took those comments into account before promulgating these 
final rules. As these final rules are, with one exception, identical to 
the interim rules on which public comment was invited and received, no 
further notice and comment period is found necessary. See e.g. American 
Transfer & Storage Co. v. I.C.C., 719 F.2d 1283 (5th Cir. 1983); 
Methodist Hosp. of Sacramento v. Shalala, 38 F.3d 1225 (D.C. Cir. 
1994); City of Stoughton, Wis. v. EPA, 858 F.2d 747 (D.C. Cir. 1988). 
Each comment on the interim rules is summarized and the Commission's 
responses are provided in the section-by-section analysis of the final 
rules. Only section 210.51(a) is changed from the interim rules. In 
response to public comment, final rule 210.51(a) now provides that any 
extension of an investigation target date beyond 15 months shall be by 
initial determination, subject to discretionary review by the 
Commission. Final rule 210.76(b)
    Final rule 210.76(b) is being revised to eliminate the provision 
stating that the Commission will institute proceedings to modify or 
rescind a remedial order or a consent order by publishing a notice in 
the Federal Register. This change is being made to increase the 
efficiency and economy of the section 337 process by eliminating 
unnecessary publication costs, as recommended by the Commission's 
Inspector General. See generally Audit Report No. IG-03-94, Review of 
Ways to Increase the Economy and Efficiency of the Process for 
Conducting Section 337 Investigations, at pages 2-4 and 8 (Aug. 19, 
1994).
    Last year, the Commission conducted a separate rulemaking to 
eliminate provisions of 19 CFR Part 210 requiring the publication of 
Federal Register notices that are not required by law. The proposed 
revision of final rule 210.76(b) was inadvertently omitted from the 
notice of proposed rulemaking published at 60 FR 16082 (Mar. 29, 1995). 
The notice of final rulemaking published at 60 FR 53117 (Oct. 12, 1995) 
acknowledged that omission. That notice also stated that the Federal 
Register publication requirement of final rule 210.76(b) had been 
suspended in Administrative Orders 95-12 (Mar. 21, 1995) and 95-18 
(Oct. 4, 1995) and that a proposed revision of final rule 210.76(b) to 
delete the Federal Register notice requirement would be published for 
public comment at a later date. See 60 FR at 53119.
    The Commission has since decided, however, that the costs and the 
administrative burden of utilizing the notice and public comment 
procedure to revise final rule 210.76(b) outweigh any potential 
benefits. Significant amounts of staff time and resources are consumed 
in the preparation of notices for publication. In addition, publication 
fees are not nominal. Though discounts are available, the fee for 
publishing a notice in the Federal Register can be as high as $125 per 
column (with no proration for partial columns) and $375 per page. The 
Commission also must bear the cost of reproducing the notice for 
distribution to the public through the Office of the Secretary and 
other sources, as well as the cost of mailing copies to various bar 
groups, other Federal agencies, and other interested persons or 
organizations.
    The notice and comment procedure of 5 U.S.C. 553(b) is not only 
costly, it also lengthens the time it takes for the Commission to 
effect the desired rule change. After a notice of proposed rulemaking 
is published in the Federal Register, interested persons must be given 
adequate time to review the proposed rules and determine whether they 
wish to submit comments, as well as adequate time to prepare and file 
the comments. The Commission must then review those comments before 
making a final decision on the content of the revised rule. (Moreover, 
after the Commission makes a final decision on content, the revised 
rule generally cannot go into effect for at least 30 days after a 
notice of final rulemaking is published in the Federal Register. See 5 
U.S.C. Sec. 553(d).)
    Judging by the response to the notice of proposed rulemaking 
published at 60 FR 16082, it seems unlikely that a notice of proposed 
rulemaking concerning the revision of final rule 210.76(b) would 
generate much public comment. In addition to publishing that notice in 
the Federal Register, the Commission mailed that notice to bar groups, 
Federal agencies, and other interested persons or organizations that 
routinely receive such notices. Only one bar group and one agency 
commented on the proposed revision of the part 210 rules to eliminate 
the publication of Federal Register notices that are not required by 
law.
    Even though the aforementioned notice of proposed rulemaking did 
not set forth a proposed revision of final rule 210.76(b), the ITCTLA 
urged the Commission not to suspend or eliminate the Federal Register 
notice requirement of that rule. The ITCTLA noted that the Federal 
Register is a reliable and readily accessible data base. The ITCTLA 
added that Federal Register notices of Commission proceedings to modify 
or rescind a remedial order or a consent order fill a valuable due 
process role by alerting interested persons to a potential disturbance 
of the status quo--which enables them to take whatever action they deem 
necessary to protect their interests.
    The Commission considered the ITCTLA comments, but has decided that 
final rule 210.76(b) must be revised for the same reasons that the 
relevant provision of that rule was suspended and that other part 210 
rules were revised last year to eliminate Federal Register notice 
requirements. (See 60 FR at 53118.) Those reasons include (1) the need 
to reduce unnecessary spending, (2) the fact that section 337 notices 
are available from various sources, (3) the absence of any indication 
that

[[Page 43431]]

suspension of the Federal Register notice requirement imposed by final 
rule 210.76(b) has caused significant problems for parties, the 
Commission's staff, interested members of the public, or other Federal 
agencies, and (4) the absence of any indication that revising that rule 
by deleting the publication requirement is likely to cause such 
problems in the future.
    Interested persons who wish to contest the revision of final rule 
210.76(b) can petition the Commission to have the revised rule amended 
or repealed, pursuant to 5 U.S.C. 553(e) and 19 CFR 201.4(b).
    The Federal Register publication requirement of final rule 
210.76(b) is an agency rule of practice and procedure. Hence, the 
proposed revision of final rule 210.76(b) to eliminate that requirement 
need not be published in a notice of proposed rulemaking that solicits 
public comment. See 5 U.S.C. 553(b).

Section-By-Section Analysis of the Final Rules

    Many of the final rules discussed in this notice are identical to 
the correspondingly numbered interim rules published on December 30, 
1994. No comment was received on many of the interim rules, and the 
Commission found no reason to change those interim rules on its own 
before adopting them as final rules. Thus, the preamble to those final 
rules is as set forth in the ``Section-By-Section Analysis of the 
Interim Rules'' found at 50 FR 67624-67626 (Dec. 30, 1994) (hereinafter 
referred to as ``preamble'').6
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    \6\ The Commission received no comments on the following interim 
rules: 210.3-210.5; 210.16; 210.21-210.22; 210.24; 210.39; 210.41; 
210.43; 210.49-210.50.
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    The Commission did receive comments on certain interim rules, and 
those comments and the views of the Commission are summarized below. 
The commentary in the December 30, 1994, notice is considered part of 
the preamble to those final rules, to the extent that such commentary 
is not inconsistent with the discussion below.

Subpart C--Pleadings

Section 210.14
    The interim rules added a new paragraph (e) to section 210.14 to 
implement the amendment to Section 337(c) of the Tariff Act with regard 
to counterclaims. Interim rule 210.14(e) requires that counterclaims be 
filed not later than 10 business days before the commencement of the 
evidentiary hearing.
    The ITCTLA, TI, 3M and Kaplan commented that the preamble to 
interim rule 210.14(e) suggests that the deadline for counterclaims is 
being set at 10 business days before the evidentiary hearing to permit 
respondents to use discovery mechanisms to ``identify potential 
counterclaims'' and that because counterclaims which a respondent can 
raise also include permissive counterclaims (i.e., claims unrelated to 
the complaint), the preamble can be construed to support discovery on 
unrelated matters to determine whether they constitute potential 
counterclaims.
    Canada and the JMEA objected to the changes made by the URAA 
regarding counterclaims as insufficient to meet U.S. obligations under 
the General Agreement on Tariffs and Trade (GATT). Canada and the JMEA 
further commented on the inability of a respondent to raise a 
counterclaim at the Commission, at least to the extent that the subject 
matter of the counterclaim falls within the jurisdiction of the 
Commission. The JMEA proposed that the Commission draft rules to 
provide that if a respondent in a first section 337 investigation files 
a complaint with the Commission alleging violation of section 337 in a 
second investigation, the second investigation can be joined to the 
first investigation.
    The requirement that counterclaims be filed not later than ten 
business days before the commencement of the evidentiary hearing was 
included to provide a respondent adequate time to identify potential 
counterclaims while avoiding the distraction that might occur if 
counterclaims could be filed during (or after) the evidentiary hearing. 
Discovery at the Commission is not for the purpose of generating a 
counterclaim and the scope of discovery is not expanded by the new 
counterclaim provision beyond what was previously allowed in Commission 
investigations.
    The comments of Canada and the JMEA regarding interim rule 
210.14(e) are based on their perceptions of deficiencies in the URAA. 
As such, the Commission does not find it appropriate to incorporate 
changes based on these comments into its final rules. Moreover, the 
joinder of two section 337 investigations, as proposed by the JMEA, may 
be sought by motion under section 210.15. The Commission notes that 
such a motion for joinder was, in fact, granted in Certain Precision 
Resistor Chips, 337-TA-63/65, Order No. 2 (May, 1979).
    In view of the foregoing, the Commission has determined that no 
changes to interim rule 210.14 are warranted.

Subpart D--Motions

Section 210.23

    Interim rule 210.23 eliminates the provision allowing the 
Commission to suspend an investigation because of a proceeding in a 
court or agency of the United States involving similar subject matter, 
except for possible antidumping or countervailing duty matters referred 
to the Department of Commerce by the Commission.
    Canada maintains that interim rule 210.23 may exacerbate 
discriminatory features of section 337 identified by the GATT Panel 
Report in Aramid Fiber, BISD 36S/345, Adopted 11/7/89, pertaining to 
dual proceedings.
    It is important to bear in mind the reason underlying the changes 
to section 210.23. Interim rule 210.23 reflects the amendments to 
section 337(b)(1) that eliminated statutory deadlines. Administrative 
law judges and the Commission retain the inherent authority to suspend 
an investigation, based on a parallel proceeding, although it is 
expected that this authority will be used sparingly. Moreover, the 
addition of 28 U.S.C. 1659 now provides respondents with the ability to 
obtain a stay of a parallel District Court proceeding.
    In view of the foregoing, the Commission has determined that no 
changes to interim rule 210.23 are warranted.

Subpart G--Determinations and Actions Taken

Sections 210.42 and 210.51

    Interim rule 210.51 requires the administrative law judge, within 
45 days of institution of an investigation, to set a target date for 
completion of that investigation. Any decision to set a target date of 
15 months or more is by initial determination, subject to discretionary 
review by the Commission. Interim rule 210.42(c) provides, in relevant 
part, that motions to set a target date exceeding 15 months from the 
date of institution, pursuant to interim rule 210.51(a), are granted by 
initial determination.
    The ITCTLA, 3M, TI and Kaplan commented that the Commission should 
be directly responsible for setting the target dates, and that this 
decision should not be delegated to the administrative law judges.
    The JMEA commented that the rules should not be administered in a 
manner that effectively imposes a time limit on the administrative law 
judge which the JMEA maintained would be the case if

[[Page 43432]]

the discretion of the judge were limited to establishing target dates 
of 15 months or less. 3M and Kaplan commented that the choice of 15 
months as the time that triggers Commission review seems to give a 
degree of approval to target dates exceeding 12 months, and that 
Commission review should be triggered by any target date that exceeds 
12 months.
    The Commission finds that it is appropriate for the administrative 
law judge to set all target dates. Allowing the administrative law 
judge to set target dates within a 12- to 15-month period of time, 
without Commission review, greatly simplifies judicial management of 
investigations. It is expected that the administrative law judges will 
abide by the intent of Congress and the Commission, and conclude most 
investigations within the traditional period of 12 months or less.
    The ITCTLA commented that interim rule 210.51, when read in 
conjunction with the Commission's review authority set forth in 
Sec. 210.42(h)(3), violates the amended statute's requirement that the 
Commission shall establish a target date within 45 days after an 
investigation is instituted with respect to an initial determination 
setting a target date of more than 15 months. The ITCTLA commented 
that, for example, should an administrative law judge, 45 days after 
institution, set a target date of 18 months, the target date will not 
become the determination of the Commission until 30 day later, or a 
total of 75 days, and should the Commission choose to review the 
initial determination the period could be extended even further.
    The ITCTLA further commented that interim rule 210.51 should be 
amended such that any subsequent modification by the administrative law 
judge to the target date, based on good cause, should be in the form of 
an initial determination subject to review by the Commission in every 
instance.
    The Commission recognizes that section 337(b)(1) requires that the 
Commission ``within 45 days after an investigation is initiated, 
establish a target date for its final determination.'' Under interim 
rule 210.51, any decision by the administrative law judge to set a 
target date of 15 months or less is not subject to review, and thus 
will be final within 45 days after institution of the investigation. It 
is expected that target dates will rarely exceed 15 months. In the rare 
case where a target date in the first instance is set in excess of 15 
months, the initial determination and any subsequent review by the 
Commission will be completed within 45 days of institution, as required 
by section 337(b)(1). Thus, no modification of interim rule 210.51 is 
found necessary. The Commission, however, has modified interim rule 
210.51, such that, under final rule 210.51(a), any extension that would 
result in a target date beyond 15 months from institution will be by 
initial determination, and subject to discretionary review by the 
Commission.

Subpart H--Temporary Relief

Sections 210.52 and 210.70

    These rules provide for the posting and forfeiture of a 
complainant's bond when a complainant seeks temporary relief.
    Canada commented that the statute and rules make no provision for a 
bond requirement on a complainant where no temporary relief has been 
sought, and suggested that provision should be made for the 
indemnification of the defendant in all situations.
    To the extent that Canada's comment is based on its perception of a 
deficiency in the URAA, the Commission does not consider it appropriate 
to incorporate changes based on this comment in its rules. Furthermore, 
the Commission finds no need for such a provision. In cases involving a 
successful motion for temporary relief, articles may only enter or be 
sold in the United States during the pendency of an investigation upon 
the posting of a bond. In cases that do not involve a motion for 
temporary relief, by contrast, respondents do not require any 
indemnification, because respondents' articles are not subject to 
exclusion until a final determination of violation by the Commission.

Subpart I--Enforcement Procedures and Advisory Opinions

Section 210.76

    Paragraph (b) of final rule 210.76 requires that the Commission 
publish a Federal Register notice in order to institute a proceeding to 
modify or rescind the exclusion order, cease and desist order, or 
consent order. The Commission proposes to revise paragraph (b) by 
eliminating the publication requirement and allowing the Commission to 
institute such proceedings simply by issuing a notice.

Miscellaneous

    The JMEA maintained that in order to comply with the spirit of the 
Agreement on Trade-Related Aspects of Intellectual Property Rights 
(TRIPs), the Commission should clarify that (1) the domestic industry 
requirement under section 337 cannot be satisfied by an individual 
inventor pursuing his or her personal monetary interest by enforcing 
his or her paper patent, and (2) that section 337 is not a vehicle for 
pursuing such personal interest. Those comments, however, relate to 
questions of statutory interpretation, dealing with the substance of 
section 337, and do not implicate any Commission procedural rule.

List of Subjects in 19 CFR Part 210

    Administrative practice and procedure, Business and industry, 
Customs duties and inspection, Imports, Investigations.

    For the reasons set forth in the preamble, 19 CFR Part 210 is 
amended as set forth below.

PART 210--ADJUDICATION AND ENFORCEMENT

    1. The authority citation for Part 210 will continue to read as 
follows:

    Authority: 19 U.S.C. 1333, 1335, and 1337.

    2. The interim rule amendments to Secs. 210.3, 210.4, 210.5, 
210.14, 210.16, 210.21, 210.22, 210.23, 210.24, 210.39, 210.42, 210.43, 
210.49, 210.50, 210.52 and 210.70, published on December 30, 1994 (59 
FR 67622) are adopted as final rules without change.

    Note: Sec. 210.21(d) has been further amended by a rule 
published on Oct. 12, 1995 (60 FR 53120).

    3. The interim rule amending Sec. 210.51 (b) and (c) published on 
December 30, 1994 (59 FR 67622) is adopted as a final rule and 
paragraph (a) is revised to read as follows:


Sec. 210.51  Period for concluding investigation.

    (a) Permanent relief. Within 45 days after institution of the 
investigation, the administrative law judge shall issue an order 
setting a target date for completion of the investigation. If the 
target date does not exceed 15 months from the date of institution of 
the investigation, the order of the administrative law judge shall be 
final and not subject to interlocutory review. If the target date 
exceeds 15 months, the order of the administrative law judge shall 
constitute an initial determination. After the target date has been 
set, it can be modified by the administrative law judge for good cause 
shown before the investigation is certified to the Commission or by the 
Commission after the investigation is certified to the Commission. Any 
extension of the target date beyond 15 months, before the investigation 
is certified to the Commission, shall be by initial determination.
* * * * *

[[Page 43433]]

    4. Paragraph (b) of Sec. 210.76 is revised to read as follows:


Sec. 210.76  Modification or rescission of exclusion orders, cease and 
desist orders, and consent orders.

* * * * *
    (b) Commission action upon receipt of petition. The Commission may 
thereafter institute a proceeding to modify or rescind the exclusion 
order, cease and desist order, or consent order by issuing a notice. 
The Commission may hold a public hearing and afford interested persons 
the opportunity to appear and be heard. After consideration of the 
petition, any responses thereto, and any information placed on the 
record at a public hearing or otherwise, the Commission shall take such 
action as it deems appropriate. The Commission may delegate any hearing 
under this section to the chief administrative law judge for 
designation of a presiding administrative law judge, who shall certify 
a recommended determination to the Commission.

    By Order of the Commission.
    Issued: August 19, 1996.

Donna R. Koehnke,
Secretary.
[FR Doc. 96-21522 Filed 8-22-96; 8:45 am]
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