CAFC Affirms Dismissal of Lawsuit Against Softwood Lumber Funds Distribution

The Court of Appeals for the Federal Circuit affirmed the dismissal of a challenge to the allocation of 2006 U.S.-Canada Softwood Lumber Agreement funds. The agreement ended a countervailing duty order on softwood lumber from Canada by, in part, requiring Canada to distribute $500 million to the Coalition for Fair Lumber Imports (CFLI). A group of non-CFLI domestic producers said compensating CFLI to the exclusion of other domestic producers is discriminatory, contrary to the underlying law, and improperly delegates distribution authority to the CFLI for funds that should have been distributed by the government. The Court of International Trade dismissed in April 2012 (see 12042048), and CAFC found the lower court was correct July 1. The distribution scheme had a rational basis for discriminating because it was meant to solve a trade dispute the CFLI was heavily involved in, CAFC said. And the underlying law was so broad as to give USTR the discretion to agree to distribution to CFLI. USTR didn’t delegate authority to CFLI to distribute the funds either, because it agreed to the distribution method, CAFC said.