United States: Section 232 Survives The U.S. Court Of International Trade. What's Next?

In late March, the U.S. Court of International Trade (CIT) issued a highly anticipated opinion addressing Section 232 of the Trade Expansion Act of 1962. Section 232 authorizes the President to take measures against imports found to threaten to impair the national security of the United States. Section 232 sets no limit on what measures the President may take against the imports, so long as the chosen remedy addresses imports.

After President Trump imposed duties on imports of steel in March 2017, the American Institute for International Steel, Inc. (AIIS) filed suit at the CIT a few months later, alleging that Section 232 violates the "non-delegation" doctrine. The Supreme Court has developed the doctrine over a series of opinions, the first of which it issued shortly after the nation's inception. In simple terms, to preserve the separation of powers that the Constitution establishes, the doctrine prohibits Congress from delating any of its constitutionally prescribed authorities to another branch of government without an "intelligible principle." If the law in question contains an "intelligible principle" to which the delegate must conform, it passes constitutional muster and does not offend the non-delegation doctrine. The Supreme Court has not invalidated a law based on the non-delegation doctrine since the 1930s.

After AIIS filed suit, Chief Judge Stanceu assigned the dispute to a three-judge panel, a move that Congress has authorized when an action before the CIT presents a constitutional question. See 28 U.S.C. § 255. The panel consisted of Judges Claire R. Kelly, Jennifer Choe-Groves and Gary S. Katzmann.

The panel held that Section 232 does not violate the non-delegation doctrine. Judge Kelly, in an opinion joined by Judge Choe-Groves, explained that the Supreme Court's opinion in Federal Energy Administration v. Algonquin SNG Inc. foreclosed AIIS's claim. Slip Op. at 1–15. In Algonquin, the Supreme Court rejected a non-delegation challenge to Section 232. See 426 U.S. 548 (1976). Although she acknowledged that Algonquin controlled the outcome, Judge Kelly expressed concern that the applicable standard of review could hamstring the CIT's ability to check unconstitutional action under Section 232:

identifying the line between regulation of trade in furtherance of national security and an impermissible encroachment into the role of Congress could be elusive in some cases because judicial review would allow neither an inquiry into the President's motives nor a review of his fact-finding. . . . One might argue that the statute allows for a gray area where the President could invoke the statute to act in a manner constitutionally reserved for Congress but not objectively outside the President's statutory authority, and the scope of review would preclude the uncovering of such a truth.

Slip Op. at 14. Judge Gary S. Katzmann agreed with the result, concluding that Algonquin dictated the result, but he expressed doubts over whether Algonquin remains sound in view of recent events. Id. at 15–28. In short, he doubted that the Supreme Court in Algonquin contemplated that a President would use Section 232 in the same manner that gave rise to AIIS's suit. Id.

What's next? Since its appeal ended at the CIT, AIIS has taken two steps. First, AIIS immediately appealed the CIT's opinion to the U.S. Court of Appeals for the Federal Circuit (Federal Circuit). AIIS did not file a request to expedite the proceedings shortly after initiating its appeal, as the Federal Circuit's Rules suggest, though AIIS may still file its briefs well before the deadlines set by the Rules to speed up its appeal. Recent statistics indicate that, absent an expedited schedule, the Federal Circuit will resolve the appeal in approximately 14 months. Second, on April 15, AIIS filed a direct appeal with the Supreme Court, seeking to bypass the Federal Circuit entirely. In its view, the Supreme Court should resolve the dispute now primarily because it would be "a waste of judicial resources" for the Federal Circuit to decide the appeal, given that only the Supreme Court may provide an authoritative ruling on the scope of Algonquin.

The Supreme Court rarely accepts a dispute without a decision from the underlying court of appeals, here the Federal Circuit. If the Supreme Court declines to entertain AIIS's appeal now, AIIS's appeal before the Federal Circuit runs its normal course, and the Federal Circuit rejects AIIS's claims in approximately 14 months, AIIS presumably would seek Supreme Court review in late Summer 2020. If the Supreme Court decides to accept the dispute for review, a decision likely would not arrive until after the 2020 Presidential Election.

Notably, if AIIS does not prevail on appeal before the Federal Circuit or the Supreme Court, such a result would not foreclose other challenges related to Section 232. Recall that AIIS's appeal raises a very narrow issue—Section 232 offends the non-delegation doctrine. An interested party could raise other issues not previously addressed by the CIT. For example, depending upon what action President Trump takes as a result of the Section 232 investigation into automobiles and automotive parts, an interested party could advance an argument that the President exceeded the statutory authority delegated to him. Additionally, if the U.S. Department of Commerce (Commerce) rejects an interested party's Section 232 product exclusion request for various aluminum and/or steel products, that party potentially could challenge various aspects of Commerce's decision.

To date, the CIT has faced three suits in recent months concerning Section 232. In April 2018, Judge Jane A. Restani denied a request for injunctive relief in Severstal Export GmbH v. United States based on the allegation that President Trump exceeded his authority under Section 232 by considering "the overall economic situation" of a particular industry. More recently, in Transpacific Steel LLC v. United States, a group of importers filed suit to challenge President Trump's decision in August 2018 to double the Section 232 tariffs on aluminum and steel imports from Turkey. The suit raises a host of claims that accuse the President of exceeding his statutory authority, as well as offending the Fifth Amendment's guarantees of due process and equal protection. The suit remains pending before a three-judge panel consisting of Judges Kelly, Katzmann and Restani.

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