The Federal Circuit Withdraws Its Prior Holding Concerning the Appealability of Issues that Are “Noticed” but Not Reviewed by the ITC

In response to a petition for rehearing filed by the International Trade Commission (ITC), the U.S. Court of Appeals for the Federal Circuit has withdrawn its prior holding that a losing party in a § 337 investigation may appeal any decided issue adversely decided by the administrative law judge (ALJ) in an Initial Determination (ID), regardless of whether the ITC actually addresses the issue upon its review in a Final Determination.  General Electric Co. v. International Trade Commission, Case No. 10-1223 (Fed. Cir., July 6, 2012) (Rader, C. J.) (Newman, J., dissenting).  In Part III of the original panel decision, the Federal Circuit had rejected the ITC’s argument that issues in an ID that are “noticed” for review, but as to which the ITC takes “no position,” are not subject to further appeal.  (see IP Update, Vol. 15, No. 3).  The panel held that denying a losing party the right to appeal any adversely decided issue conflicts with the statutory right of judicial review.

The ITC filed a combined petition for reconsideration by the panel and rehearing en banc, in which it argued that the original panel decision was contrary to both the prior decision in Beloit Corp. v. Valmet Oy (1984) and the Administrative Procedure Act (APA).  First, the ITC argued that the Federal Circuit’s decision in Beloit specifically contemplated that the ITC can reach its final determination on a “single dispositive issue,” while taking “no position” on the remaining issues in the case, and that the Federal Circuit “does not sit to review what the Commission has not decided.”  Second, the ITC argued that, in accordance with the two-step decision-making process pursuant to the APA, once the ITC decides to review an issue from the ID, the ITC is entitled to either address it or take no position on it, but the issue can never become “not reviewed,” and it is the agency itself which disposes of the issue.  According to the ITC, “Congress has not seen fit to provide that a Commission decision not to take a position on a reviewed decision, made by a majority of the Commission, should nevertheless be deemed to be an affirmance of the ALJ’s ruling on that issue.”

In its reconsideration order, the Federal Circuit stated that it was withdrawing the aspect of the opinion to which the ITC voiced objection, and that “[t]he panel offers no decision on the questions raised in Part III, which may arise in future case.”  Judge Newman dissented from the decision to withdraw this section, which she said improperly “ratifies the commission’s authority to negate the finality of these final decisions, thereby forestalling judicial review and impeding the expeditious resolution of ITC proceedings.”  Judge Newman urged that “[i]nstead of simply ratifying this aberrant procedure and accepting its consequences, at a minimum the court should take the caseen banc and obtain input from the communities that Section 337 is designed to serve.”

Practice Note:  The Federal Circuit’s withdrawal of this aspect of the GE v. ITC opinion could result in a spike in “piecemeal” litigation before the ITC.  While the ITC has typically required ALJs to address all issues raised by the parties in their IDs, the Federal Circuit has now sanctioned an approach whereby the ITC may effectively shield more “thorny” issues from further judicial review to the extent resolution of those issues is not needed for the ITC’s final decision.  If this approach becomes the norm, parties can expect an increase in the likelihood that the Federal Circuit might remand more § 337 investigations back to the ITC in order to address those issues as to which the ITC took “no position,” which could lead to an increase in the length and cost of the litigation.