Dynamic Interpretation of Economic Regulatory Legislation (Countervailing Duty Law)

By Eskridge, William N., Jr. | Law and Policy in International Business, Fall 1990 | Go to article overview
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Dynamic Interpretation of Economic Regulatory Legislation (Countervailing Duty Law)


Eskridge, William N., Jr., Law and Policy in International Business


Dynamic statitory interpretation recognizes that statutes evolve as various interpreters apply them to changing circumstances over time. hence, an interpretation rendered today may not be the same as the one that would have been rendered when the statute was originally enacted. The scholarsip exploring dynamic statutory interpretation has thus far focused on statutes implicating civil and personal rights. (1) Scholars have focused on such statutes because they raise interesting issues and because the evolution of such statutes is dramatically influenced by evolving constitutional principles. By focusing on statutes implicating civil and personal rights, however, we have neglected the ways in which other types of legislation evolve. For example, economic regulatory legislation evolves as much as, and in some ways more dramatically than, civil rights statutes. (2) Just as civil rights statutes evolve in response to changing social patterns and new constitutional theories, regulatory legislation evolves in response to changing economic patterns and new economic theories.

This commentary applies dynamic statutory interpretation theory to Professor Richard Diamond's proposed interpretation of the counter-vailing duty statue. (3) Federal law imposes a "countervailing duty" on imported merchandise for which a foreign country provides a "subsidy" with respect to its production. The countervailing duty statute does not clearly define a "subsiy" but the agency administering the statute has issued a proposed rulemaking to clarify the term. Diamond proposes that subsidy be defined as a foreign government's payment that reduces the marginal costs of foreign firm's exports to the United States. Thiis definition is based on economic theory that has only recently been applied to develop a more rational counterevailing duty law. As such, it is not the definition Congress had envisioned when it passed the original statute in 1930, or when it substantially revised the statute in 1979, or even when the statute was amended in 1984. Yet I argue that this economics-based definition of "subsidy" is one that the agency can use as the basis for its regulations, under established doctrine and sound theory.

This article will develop the doctrinal and theoretical reasons justifying dynamic interpretation of economic regulatory legislation generally and of the countervailing duty statute in particular. Three times facilitate the evolution of such statutes. One theme is delegation. Most economic regulatory statutes delegate rulemaking responsibilities to agencies, which can either be independent or part of the executive branch. Congress delegates many of the analytically difficult issues, such as the subsidy issue, to agencies, partly to avoid making the hard political choices itself, and partly so that the agency can fill in the statutory details rationally and dynamically. Because agencies have some accountability to the political process and are formally given broad lawmaking duties, the Supreme Court has long deferred to reasonable agency interpretations. This deference has been given even when the agency has changed its interpretation over time and even when those interpretations are probably inconsistent with original legislative expectations. The Court is not deferential when those expextations are clearly expressed in the statutory text.

A secind theme is the dynamic consequences of statutory purposes. the Court has long approved of interpreting statutes to fulfill their central purposes. While a statutory purpose may be invariable, new theories for best fulfilling that purpose can justify dynamic statutory interpretation. By definition, economic regulatory legislation is aimed at solving, or ameliorating, an economic problem. There is always the danger of overregulating or underregulatinfg, and the duty of the primary statutory interpreter--usually an agency-is to attempt to acheive optimal regulation, within the limits set by the statutory text.

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