Wednesday, December 13, 2006

Softwood Lumber Ends

Not with a bang, but with a whimper. Read about it via the CBC here.

With a few more details, the story is this: The Coalition for Fair Lumber Imports had challenged the NAFTA Chapter 19 dispute resolution process as violating the U.S. Constitution. Unfortunately for this interesting claim, in October the U.S. and Canada entered into a settlement of the softwood lumber dispute. As a result, there was no controversy before the Court to decide and the Court dismissed the action as moot. You can read that here.

Want to know why Chapter 19 might be unconstitutional? I have no idea what the parties to the actual case were arguing. But, I can tell you the argument most commonly raised. It has to do with the appointments clause of the Constitution. Article II, Section 2 gives the President the power to appoint "Judges of the supreme Court, and all other officers of the United States . . . ." This extends to all so-called Article III judges. Prior to NAFTA, antidumping and countervailing duty disputes were always heard by the U.S. Court of International Trade and then the Court of Appeals for the Federal Circuit. In NAFTA, the parties agreed that disputes involving Canada, Mexico, and the U.S. would instead be sent to arbitration. The arbitrators are chosen by the parties from a roster. The U.S. hoped that the roster would contain a number of retired federal judges and it does. But it also contains professors and trade lawyers and, in theory, could include the guy who runs the animal shelter down the street. These are not people who have been appointed by the President with the advice and consent of the Senate and yet they are doing judge work. Thus, the argument goes, it is unconstitutional.

I'm not so sure. This is an agreement between the nations to enter into arbitration rather than go to court. That happens in commercial agreements all the time. Arbitration is, by definition, not court so you don't need a judge. The wrinkle is that this agreement means that private parties, who had not choice in the matter, to give up review by an officer of the United States (i.e., a judge). In other words, the private party is forced out of Court and into arbitration making the decision of a U.S. governmental agency effectively beyond judicial review.

Unfortunately, we won't know the answer to this question until someone else gets fed up with the Chapter 19 process and tries to topple the whole house of cards.

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