Everyone who watches government knows that once a program or policy is under way, it acquires a life of its own. It's tough to stop it.
In one area of import law, the U.S. Court of International Trade just made an abrupt cancellation a little tougher.
The Oct. 6 ruling has to do with antidumping duties, extra tariffs slapped on foreign goods that are being sold at prices deemed unfairly low and therefore injurious to competing U.S. producers of the same kind of merchandise. Such duties are supposed to stop foreign producers from protecting their home market by "dumping" excess production in foreign markets at fire sale prices.
Antidumping duties cannot be imposed unless there are official findings that the prices are too low and that those bargains from overseas are hurting U.S. production. But there's no doubt that the tariffs are often used as a most effective bargaining chip to get overseas producers to think a bit more about the impact they are having on the United States.
That's what happened when the Commerce Department's International Trade Administration issued an antidumping order in 1984 covering Korean steel plate.
The Korean government responded by entering into a "voluntary" agreement to limit exports to the United States not only of steel plate, but also of other steel products.
Most of the U.S. steel industry was delighted and told the Commerce Department that it could cancel the antidumping duties in return for the agreement. When a majority of the U.S. industry was heard from, Commerce stopped in midstream a formal review of the antidumping order and simply revoked it. Circumstances had changed enough so that the order was no longer warranted, the officials explained.
Tiny Gilmore Steel Corp., however, didn't like the tradeoff and continued to insist that the extra protective tariffs were needed. The court sided with Gilmore. In Gilmore Steel v. U.S., Judge Nicholas Tsoucalas ruled that an antidumping order can be put aside only if the Commerce Department has developed the complex economic evidence to show that the sales at unfairly low prices have stopped and that there is no likelihood that the predatory pricing will start again. The mere fact that most of the industry that first asked for the protection no longer wants it is not enough.
In other cases, courts ruled that:
A company asking for leniency may be giving up some privacy rights. The U.S. Court of Appeals in Boston told a newspaper that it could see the financial records of a coin dealer accused of deception by the Federal Trade Commission. The commission settled the case with what looked to many like a relatively mild penalty, based at least in part on the company's representations about its financial health.
Before approving the settlement, the trial court judge insisted on reviewing the financial records himself. That gave the public the right to see them, the appellate court ruled. The right to keep confidential data confidential is waived when the company itself uses it as an argument for leniency, the decision says. (FTC v. Standard Financial, Oct. 6) A utility has no constitutional right to pass on to customers the costs relating to building new plants when those facilities never went into operation.
A Pennsylvania utility challenged a state law that says it can add to its rate base only facilities actually put into operation. That means that once the utility decided not to go forward with plans to build four nuclear generating plants, it could not amortize the costs already incurred. That's an unlawful taking of its property without just compensation, the power company contended.
But the Pennsylvania Supreme Court said it only would be unconstitutional to deny the utility a fair return on its investment in providing services to customers. Since the canceled plants will never provide service, the company has no right to be able to collect its costs. (Barasch v. Pennsylvania PUC, Oct. 15) Hotel owners get an immediate tax deduction for sprucing up their property. The Internal Revenue Service insisted that a major renovation of a Hyatt Hotel at the Los Angeles airport -- involving new carpeting, drapery and furnishings -- was a rehabilitation effort that had to be capitalized, stretching out the deductions over 30 years.
The improvements were extensive enough to earn the facility back a high rating from the American Automobile Association. But the U.S. Court of Appeals said that any hotel that wants to stay competitive has to do that kind of remodeling, and that the costs are merely normal, deductible expenses of being in that business. (Moss v. Commissioner, Oct. 28) Lawyers don't have to be working for profit to be paid for their work representing a debtor in a bankruptcy proceeding.
Because money that goes for lawyer bills is not available to creditors, bankruptcy courts are especially careful about examining all claims against the debtors' assets. That made a bankruptcy judge in Greensboro, N.C., hesitate to pay a legal services lawyer.
But the U.S. District Court there said to go ahead and pay the bill. In other kinds of representation, a legal services lawyer can be paid just like those in business for themselves, and there's no reason to treat bankruptcies differently, the ruling says.
(Legal Aid v. Burns, Oct. 20) Moskowitz covers legal affairs for McGraw-Hill World News.