Statute Requires ITC Grant Relief Against Defaulting Respondents, Subject to Public Interest

In Laerdal Medical Corp. v. International Trade Commission, No. 17-2445 (Fed. Cir. Dec. 7, 2018), the Federal Circuit reversed the ITC’s determination that Laerdal failed to plead its trade dress claims with adequate detail.  The Court also vacated the Commission’s decision that no relief was warranted against defaulting respondents and remanded for the Commission to determine the appropriate remedy after consideration of public interest concerns.

Referencing SAS Inst., Inc. v. Iancu and several other Supreme Court and Federal Circuit decisions, the Court determined the use of the word “shall” in 19 U.S.C. § 1337(g)(1) unambiguously requires the Commission to grant relief against defaulting respondents, subject only to public interest concerns if all elements of the statute are satisfied.  In arriving at this conclusion, the Court looked to the statute’s plain text, context, purpose, legislative history, and the Commission’s own prior decisions.  The Court held that the Commission must find a violation of the statute before issuing a remedy, but in the context of a defaulting respondent, that analysis occurs upon default.  After institution of an investigation, the question of adequacy of the pleadings is “no longer a live one absent a challenge by a responding party.” 

The Court found that it was undisputed that Laerdal met the prerequisites for finding a violation under § 1337(g)(1).  Therefore, the Commission was required to presume all facts alleged in the complaint were true and provide the proper remedy, subject only to public interest concerns.