Summary of a Recent
Judicial
Development in
International Trade
Trade Adjustment Assistance Requirements
Emilie H. LeibovitchNational AgLaw Center Graduate Assistant
In Than Viet Do v. United States Secretary of Agriculture, 427 F. Supp. 2d 1224 (Ct. Int'l Trade 2006), the United States Court of International Trade upheld the Secretary of Agriculture's decision that operators of a shrimping business who had sold one of their ships could not claim trade adjustment assistance (TAA) for their sold vessel and could not deduct the sale of the ship to calculate their net fishing income.
Plaintiffs own and operate a shrimping business in Texas. At the end of 2001, plaintiffs sold one of their ships for lack of profitability. Than Viet Do, 427 F. Supp 2d at 1225. In 2003, they applied for TAA with the Farm Service Agency (FSA) and as part of the application they submitted the profits and losses from their two ships. See id. at 1226. Because plaintiffs sold one of their ships at the end of 2001, the 2002 tax return listed the profits and losses of one ship only. See id. Their application was denied because their net fishing income did not decline from 2001 to 2002. See id. at 1227. After an unsuccessful appeal to the National Appeals Division (NAD), plaintiffs appealed to the United States Court of International Trade. See id. at 1226-27.
Plaintiffs' application was denied because the requirements of 19 U.S.C. § 2401e(a)(1)(C) and 7 C.F.R. § 1580.301(e)(4) were not met. See id. at 1227. First, since the regulations state that TAA is to be made to producers and the term "producer" is defined as persons, the court rejected plaintiff's argument that a vessel could qualify for TAA and that they could have a separate TAA claim for each of their vessels. Id. (citation omitted). The court stated that ships are only considered persons in admiralty law, where the purpose is to allow injured parties to recover for their injuries directly from the vessel. See id. at 1230. However, deciding that TAA can be claimed for vessels would allow people to file as many TAA claims as they have vessels, and this would defeat the legislative intent "to limit cash benefits to $10,000 per farmer or fisherman." Id. at 1229.
A second reason for the denial was that the net fishing income did not decline over the pre-adjustment to the adjustment years. See id. at 1227. The Secretary of Agriculture calculated net profit or loss by excluding the gains or losses from the sale of business assets and thus did not deduct the sale of the ship to calculate the net fishing income in the pre-adjustment year. See id. at 1230. Plaintiffs argued that the net fishing income should take into account the sale of the ship given the fact that all of their income derives from fishing and the sale of a ship has a substantial impact on the net fishing income. See id. However, because the Secretary of Agriculture's interpretation of net fishing income was reasonable pursuant to the Chevron deference principles, the court upheld the Secretary of Agriculture's determination. See id. at 1231.
The case was decided on Feb. 28, 2006; this summary was posted Feb. 21, 2006.