Courts vs. Panels and Justice O'Connor

This is the Customs Law Blog, so I don't often dip my toes into trade law. But, my firm practices trade law, I am interested in and teach NAFTA, and I teach trade law as an adjunct at the John Marshall Law School's Center for International Business and Trade Law. So, an article comparing NAFTA dispute resolution panels to U.S. judicial decisions is kind of a perfect storm of thing that interest me.

Generally, a party wishing to challenge a U.S. antidumping or countervailing duty agency determination files its claim in the U.S. Court of International Trade. The CIT is the fine institution where I spent the first two years of my legal career. Under NAFTA Chapter 19, however, an antidumping or countervailing duty dispute involving Canada or Mexico ends up being the subject of consideration by a bi-national panel of arbitrators. You can see some of the Chapter 19 results here courtesy World Trade Law.net.

NAFTA panels were designed to encourage results that are consistent with the law of the country that made the challenged determination. The two main structural elements that support that goal are that the panel is required to apply the standard of review applicable in the country of the determination and that the panelists should be--to the greatest extent possible--judges or retired judges. The standard of review for most ADD/CVD determination is that the decision will be upheld unless it is not supported by substantial evidence on the record or not in accordance with law. [Note: When I teach this, I now go into a discussion of the meaning of the term "scintilla," but I will forgo that for now.] The reason judges are supposed to be on the panels is to make sure that the panelists have a strong grounding in the local value of precedent and stare decisis. In the U.S., that means accepting the binding nature of decisions by higher courts and avoiding, when possible, conflicts with prior decisions of the same court. This leads to predictability and uniformity.

Well, along comes Juscelino F. Colares of Syracuse University College of Law with an article called "An Empirical Examination of Product and Litigant-Specific Theories for the Divergence between NAFTA Chapter 19 and U.S. Judicial Review. Thanks to the Legal Theory Blog for the tip. Here is a link to the abstract. The upshot (based on the abstract) is that panels reverse U.S. agency decisions twice as often as does the CIT while panels are far more likely to affirm Canadian determination. According to the author, this indicates the operation of two independent systems in which the panel process has a "sub rosa code to liberalize U.S. trade law."

Although several judges are on the list, the roster is overwhelming populated by trade lawyers and academics. The Extraordinary Challenge Committee, which hears challenges to panel decisions in very limited circumstances, on the other hand, if chock full of judges including the rock-star status Justice Sandra Day O'Connor who was recently announced as a member of the ECC roster. While I think it is great that Justice O'Connor has decided to participate, I wonder if she knows what she is getting herself into. The cap on offsetting indirect selling expenses in constructed export price transactions, while interesting to a certain group of lawyers, hardly has the weightiness of, for example, any of the 26 amendments to the U.S. Constitution.