June 22, 2020 — The firm won another favorable ruling for the Solar Energy Industries Association (SEIA) as its member companies, including Invenergy Renewables LLC, Clearway Energy Group, EDF Renewables and AES Distributed Energy, seek to prevent the Trump administration from slapping duties on double-sided (bifacial) solar panel imports.

On May 27, the U.S. Court of International Trade (CIT) denied the administration's request to dissolve a preliminary injunction issued in December prohibiting the U.S. Trade Representative (USTR) from enforcing the withdrawal of an exemption from duties on the panel imports. SEIA's utility-scale developer members rely on the imports to boost their supply of double-sided solar panels amid a domestic shortage.

CIT Judge Gary Katzmann ruled that the administration had not met its burden of showing sufficiently changed factual or legal circumstances to justify removal of the injunctive relief. 

The dispute began in January 2018, when the Trump administration approved safeguard duties on imports of single- and double-sided solar panels. Under section 201 of the 1974 Trade Act, these tariffs aim to protect a domestic industry from the harm associated with increased imports from foreign competitors.

In June 2019, the USTR excluded double-sided panels from the duties, but reversed course four months later, giving the public just 19 days' notice of its withdrawal. In October, Invenergy filed suit against the U.S. government, challenging the withdrawal on multiple grounds, including the USTR's failure to abide by Administrative Procedure Act (APA) requirements. Later that month, SEIA and several of its other members joined with Invenergy in support of its request for a preliminary injunction, arguing that the USTR's illegal withdrawal violated the law and would cause the companies irreparable harm. 

In January, in an effort to fix the APA violations, the administration notified the court of the USTR's notice in the Federal Register inviting public comment on whether to withdraw the exclusion. USTR opened a public docket, receiving 15 comments regarding the tariff exclusions on double-sided solar panels and 49 subsequent comments responding to the initial comments.

In April, following notice and comment, the USTR announced again that it would withdraw the exclusion, and moved to dissolve the preliminary injunction. The next month, SEIA, Invenergy and other plaintiffs opposed the request, arguing that the USTR's April withdrawal still did not cure all of the likely APA violations previously identified by the court, focusing particularly on the arbitrary and capricious nature of the decision. Plaintiffs also observed that the administration had not shown that its action was consistent with the president's solar safeguard proclamation. 

In his ruling, Judge Katzmann agreed with plaintiffs that the administration had not shown that the April withdrawal cured the defects of the October withdrawal. He also observed that the USTR had still not rescinded the October withdrawal, thus leaving unclear whether it might go into effect if the injunction was lifted.

Judge Katzmann acknowledged the government's concern that domestic module producers may face a threat of material injury due to the USTR's decision to exclude double-sided solar panel products from safeguard duties, but also recognized the interests of plaintiffs, whose costs will increase if duties are imposed on double-sided panels that are otherwise unavailable from U.S. suppliers.

"At this stage of the proceedings, the court takes no position on the efficacy of the Exclusion or a decision to withdraw the Exclusion in providing protection to the domestic solar industry," the judge wrote in his decision. "Instead, the court merely continues to require the Government to follow its own laws when it acts."

Matt Nicely leads the HHR team, which includes Daniel Witkowski, Dean Pinkert and Julia Eppard.