The Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order (Order or checkoff) was implemented in August 2011, with assessment collection starting in January 2012. In October 2011, Resolute Forest Products Inc. (Resolute) filed an administrative petition under section 519(a) of the Commodity Promotion Research and Information Act of 1996 (1996 Act) challenging the program. Resolute argued that USDA violated the Administrative Procedure Act (APA) when it promulgated the program. Resolute also argued that the 1996 Act was unconstitutional.
A USDA administrative law judge ruled in favor of USDA in April 2014. Resolute appealed the decision to USDA’s Judicial Officer, who ruled in favor of USDA in November 2014. Resolute appealed to federal district court in December 2014. The court issued a decision in September 2015, finding in favor of USDA on five of six APA challenges, and requesting additional information on one APA issue concerning the rationale for the 15 million board foot (mmbf) assessment exemption threshold under the program. Additional information was provided to the court on two occasions. In May 2016, the district court issued a decision finding that, on the basis of the estimates and information reviewed, the selection of 15 mmbf as the de minimis quantity (to be exempted) was arbitrary and capricious and that the checkoff was therefore promulgated unlawfully.
A hearing was held in June 2016 to discuss remedies. Briefs were subsequently filed by the government and Resolute. On November 30, 2016, the district court issued a decision to remand the case back to USDA and direct the Secretary of Agriculture to issue Resolute a full refund of its assessments paid under the softwood lumber program. The Board issued the refund to Resolute in April 2017.
To address the court’s decision, USDA conducted a new analysis to determine a reasonable and appropriate de minimis exemption threshold for the softwood lumber research and promotion program. USDA analyzed various thresholds of exemption: 10, 15, 20, 25, and 30 mmbf. USDA also considered the impact of no de minimis exemption. Based on its analysis, USDA found that a de minimis level of 15 mmbf is reasonable and appropriate.
A proposed rule detailing USDA analysis and proposing to establish the exemption threshold at 15 mmbf was published in the Federal Register on May 30, 2017. The proposed rule had a 60-day comment period which ended on July 31, 2017. USDA received 33 comments in response to the proposal. Of those 33 comments, one was outside the scope of the rulemaking. The remaining 32 supported the 15 mmbf exemption threshold.
A final rule establishing the exemption threshold at 15 mmbf was published in the Federal Register on Oct. 26, 2017. All program obligations, including the collection of assessments and filing of reports, continue in effect.