The D.C. Circuit Considers Constitutionality of NAFTA: A Report From Oral Argument

by Julian Ku

Professor Peter Rutledge of the law school at Catholic University files this account of yesterday’s oral argument in the U.S. Court of Appeals for D.C. considering the constitutionality of certain parts of NAFTA (the North American Free Trade Agreement). I’ve blogged about this on a number of occasions (see related posts below) The following is his very useful analysis:

For those of you who follow trade arbitrations, you know that today the US Court of Appeals for the District of Columbia heard oral argument on the constitutionaltiy of NAFTA’s dispute resolution mechanism, otherwise known as the “Canadian Softwood Lumber case.” Panelists (for those who follow the DC Circuit) were Randolph, Tatel and Edwards – a pretty balanced panel. While it’s always dangerous to read the tea leaves from oral argument, I ultimately predict that the Court will uphold NAFTA, but there will be 1-2 tricky junctures. Here’s how I see the issues breaking out:

+ Due Process – The Court will reject this argument unanimously – holding that the US lumber companies did not have a “property” interest in the Department of Commerce’s tariff determination (the Supreme Court’s decision in College Savings Bank will foreclose this)

+ Article III – The Court will unanimously reject this argument – holding that a tariff determination is the “quintessential public right” (Bakelite) and therefore need not be subject to Article III review

+ Appointments – No signal from panel. Didn’t seem to interest them.

+ Non-delegation – This is curious b/c the nondelegation issue is not squarely presented in the principal briefs. Rather, it seems to be some amalgam of the Article III and Appointments Clause arguments. Here, some members of the panel, particularly Judge Randolph, seemed pretty troubled that NAFTA allowed the binational panels to order officials of the executive branch to do something (I recognize this is a bit of “characterization” here, b/c the gov’t would argue that DOC is in fact following federal law, which instructs them to heed the binational panels). Maybe look for a Randolph concurrence.

+ Foreclosure of as-applied constitutional challenges – this seemed to be the issue that gave the court the greatest heartburn. Consider the following hypothetical – binational panel orders the department of commerce to impose a tariff but only on Muslims. Both USG and Canada seemed to take the position that NAFTA forecloses Article III review of that issue – but that the court didn’t need to resolve that question in this case. Interesting question will be whether court resolves it or, instead, leaves the door open for a future case.

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