CIT Says Statute Allowing for No Duties on Emergency Relief Goods Doesn't Cover Solar Cells

In an order accompanying the decision, which was issued Aug. 22 but not publicly released until Sept. 2, Reif told the government to "promptly liquidate and collect" AD/CVD on "unliquidated entries found to be circumventing" the AD/CVD orders on solar cells from China. In addition, the judge said that should any of these entries be liquidated prior to the "issuance of judgment in this action," the U.S. shall "promptly identify, collect any uncollected" AD/CVD on the entries and reliquidate them.

The lawsuit was filed by U.S. solar cell producer Auxin Solar and solar module designer Concept Clean Energy following the Biden administration's declaration under Section 1318(a) of an emergency due to a lack of "electricity generation capacity" (see 2401030071).

Invoking authority granted by the declaration, Commerce said it wouldn't collect AD/CVD on solar cells from the four Southeast Asian countries covered by the agency's recent anti-circumvention proceeding, which found solar cells from the four countries skirted the AD/CVD orders on Chinese solar cells. The agency said it wouldn't collect cash deposits from affected importers and would liquidate the entries without AD/CVD assessed and refund any cash deposits that were collected. The duty suspension rule took effect in November 2022 and expired in June 2024.

Section 1318(a) says that after the declaration of an emergency, the president can let the commerce secretary prescribe "the importation free of duty of food, clothing, and medical, surgical, and other supplies for use in emergency relief work." Reif first reviewed this statute, at Auxin's and Concept Clean Energy's request, for whether its ordinary meaning allows the duty-free treatment of solar cells and modules.

Taking instruction from the Supreme Court, the judge said he would review the statute's plain text, according to the dictionary definitions of its terms as understood at the time of the bill's passage in 1930, and that these plain meanings would be read in context of the broader statute. First acknowledging that solar cells aren't classified as "food," "clothing," "medical" supplies or "surgical" supplies, Reif established that the question is whether solar cells and modules qualify as "other supplies" under the statute.

Combining the Webster's dictionary definitions of "other" and "supply," Reif held that the ordinary meaning of the term "other supplies" is as follows: "provisions or materials dispensed to fill a need, which are distinct from, or additional to, the 'medical' or 'surgical' supplies already mentioned." While this definition could facially cover solar cells and modules, the judge said the term must also be considered in the context of the statute, where it's ultimately construed to not include solar cells.

The context of Section 1318(a) "tugs strongly in favor of a narrower reading" of "other supplies," Reif held, finding that the words preceding "'other supplies' ... 'cabin the contextual meaning of that term.'" The judge relied on two rules of statutory interpretation, one of which says that a "word is known by the company it keeps" and another that dictates that "where general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words."

Applying these principles, Reif said "other supplies" should be read more narrowly than its dictionary definition would suggest. Reading the term broadly "would be inconsistent with the enumeration of the preceding specific words and would render Congress’ choice of those specific words 'misleading surplusage,'" the court said. Thus, the "other supplies" should be "similar in nature to, or share common attributes with, 'medical' or 'surgical' supplies." Reif held that the term "is most naturally read to encompass items for use in healthcare-related applications that are not for medical or surgical purposes."

Reif also relied on the more recently developed major questions doctrine, which guards against finding "elephants in mouseholes," or, rather, new and unheralded executive power in broad statutes. The judge said the government's "virtually unbounded reading of 'other supplies'" in the statute "which would permit potentially the entirety of Congress’ lengthy and intricate tariff scheme to be nullified by the declaration of a presidential emergency, would appear inconsistent as well with the provision’s context in the Tariff Act."

The court also discussed the statute's legislative history and prior use to see if the government's use of the law may be salvaged. Regarding the legislative history, Reif said there simply isn't much to speak of, finding this factor to weigh against the U.S. The statute has been used six times in the past, and in one of those instances, the law was used to let lumber enter duty-free. Reif found that the use of the statute in this way doesn't overcome the court's textual analysis, since President Harry Truman invoked this law, along with another statute, the Veterans' Emergency Housing Act of 1946, to let the lumber enter duty-free.

Reif lastly considered the scope of relief available to Auxin and Concept Clean Energy. Before the court, the U.S. said it wasn't aware of any entries that were properly liquidated without the AD/CVD, adding that the over 20,000 entries subject to Commerce's rule are unliquidated and thus "live." However, the government said some entries may "flip" to liquidated status due to the "ongoing administrative processes." Thus, the judge considered the "appropriateness of a mixed remedy" that includes an order to liquidate all applicable entries with the applicable AD/CVD and an order to reliquidate any affected entries.

The judge then considered the four factors underlying injunctive relief, finding they weigh in favor of Auxin and Concept Clean Energy. Regarding whether the plaintiffs would suffer irreparable injury without injunctive relief, Reif said CIT has recently held that domestic parties receive a "direct competitive benefit from the proper administration and enforcement of the antidumping laws." Here, Auxin and Concept Clean Energy have shown they have "suffered irreparable competitive harms resulting from the non-collection" of AD/CVD on solar cells from the four countries, the judge said.

The plaintiffs have provided evidence showing the "massive influx of duty-free" solar cells and modules "depressed prices below plaintiffs’ raw material costs" and led to "lost business opportunities" for the companies, the court said.

Seeking to balance these harms with the government's claimed harm of massive administrative complexities from assigning the correct rates and solar cell importers' claimed harm of paying the additional duties on imports they entered in reliance on the duty suspension rule, Reif said the balance goes to Auxin and Concept Clean Energy. CIT has previously said that the harm from domestic producers' loss of competitive benefit "certainly outweighs the administrative inconvenience to Customs caused by reliquidation," Reif noted.

Also, the importers' interests in the finality of liquidation "are far weaker than if reliquidation were the primary remedy," given that the U.S. "has confirmed to the court that no applicable entries have been liquidated thus far," the court said. However, the judge said the plaintiffs' and importers' harms are on equal footing with regard to a potential reliquidation order.

And while the government and importers claimed that the balance of harms shouldn't favor the plaintiffs, since Auxin and Concept Clean Energy waited over 15 months after Biden's declaration to file suit, Reif dismissed this challenge. The judge said it doesn't appear the plaintiffs "engaged in such delay as to shift the balance of harms in favor of defendants and defendant-intervenors."

Ultimately, Reif said, all four factors, which also include the public interest and inadequacy of remedies available at law, favor a liquidation order, and that, regarding a reliquidation order, three of the factors favor Auxin and Concept Clean Energy and that the fourth factor, the balance of harms, weighs equally between the parties.

Thomas Beline, counsel for Auxin and Concept Clean Energy, said in an email that the "decision protects U.S. manufacturers’ use of the trade remedy laws to level the playing field against unfairly traded imports without fear that special interests can undo the orderly implementation of our laws by claiming that such imports are necessary for the public interest." Beline said that in addition to being illegal, the regulation was "just bad policy" that "created a lawless import environment, which first undermined the domestic solar supply chain with a wave of import volumes that far exceeded deployment and cratered pricing, and now impacts users with unexpected bills for past duties owed."

(Auxin Solar v. United States, Slip Op. 25-111, CIT # 23-00274, dated 08/22/25; Judge: Timothy Reif; Attorneys: Thomas Beline of Cassidy Levy for plaintiffs Auxin Solar and Concept Clean Energy; Douglas Edelschick for defendant U.S. government; Jeffrey Grimson of Mowry & Grimson for defendant-intervenors led by American Clean Power Association; Jonathan Stoel of Hogan Lovells for defendant-intervenors led by Canadian Solar (USA); Matthew Nicely of Akin Gump for defendant-intervenors Solar Energy Industries Association and NextEra Energy; Weronika Bukowski of Crowell & Moring for defendant-intervenors Invenergy Renewables and Invenergy Solar Equipment Management; Gregory Menegaz of The Inter-Global Trade Law Group for defendant-intervenor Risen Solar Technology; David Morrell of Jones Day for defendant-intervenors Boviet Solar Technology and Boviet Solar USA; Jonathan Freed of Trade Pacific for defendant-intervenors led by Trina Solar (U.S.); and Ned Marshak of Grunfeld Desiderio for defendant-intervenors led by Jinko Solar (U.S.) Industries)