Steel Importers to Appeal CIT Decision Finding Section 232 Tariffs Constitutional
The American Institute for International Steel will appeal a March 25 Court of International Trade decision that found Section 232 tariffs on iron and steel products to be constitutional and left them in place, a lawyer representing the trade group said in an email. In that decision, CIT had found itself bound by precedent and unable to overturn the tariffs, despite some concerns over whether they violate the separation of powers principle of the Constitution.
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The AIIS will appeal the case to the U.S. Court of Appeals for the Federal Circuit, said Alan Morrison, a George Washington University law professor who leads AIIS’s legal team. The trade group had earlier said it might be able to appeal to the Supreme Court because of CIT’s unusual decision to decide the case as a three-judge panel (see 1806270036). AIIS said in a news release it was "heartened" by parts of the opinion and that it planned to appeal.
As expected, CIT’s decision hinged on a 1976 Supreme Court ruling that found import licensing fees imposed under Section 232 on oil imports were a valid delegation of authority from Congress to the president. In that case, the high court found Section 232 met the “intelligible principle” standard because Congress put in place clear conditions -- a finding that imports impair national security and a remedy that adjusts imports accordingly -- for the president to act on the delegated authority and put import restrictions in place.
“This court is bound by Algonquin,” CIT said early in its decision, referring to that Supreme Court case. The trade court brushed aside arguments from AIIS that the 1976 decision didn’t directly address the iron and steel tariffs, and that subsequent rulings have created a new “legal landscape.”
Nonetheless, CIT did express some misgivings about Section 232. “Admittedly, the broad guideposts of subsections (c) and (d) of section 232 bestow flexibility on the President and seem to invite the President to regulate commerce by way of means reserved for Congress, leaving very few tools beyond his reach,” it said. The law’s broad delegation of authority also makes it difficult to review whether any decision to impose import restrictions exceeds Congress’ delegation of authority, “because judicial review would allow neither an inquiry into the President’s motives nor a review of his fact-finding,” CIT said. But “such concerns are beyond this court’s power to address, given the Supreme Court’s decision in Algonquin,” the trade court said.
CIT Judge Gary Katzmann elaborated on some of those concerns in a “dubitante” issued alongside the main opinion, which he also joined alongside CIT Judges Claire Kelly and Jennifer Choe-Groves. “My colleagues, relying largely on a 1976 Supreme Court decision, conclude that the statute passes constitutional muster. While acknowledging the binding force of that decision, with the benefit of the fullness of time and the clarifying understanding borne of recent actions, I have grave doubts,” he said.
According to Katzmann, while there are some conditions on the president’s authority under Section 232, “the President is not bound in any way by any recommendations made by the Secretary, and he is not required to base his remedy on the report or the information provided to the Secretary through any public hearing or submission of public comments. There is no rationale provided for how a tariff of 25% was derived in some situations, and 10% in others,” and the definition of national security in the law is so broad that it not only includes national defense but also encompasses the entire national economy,” he said.
Section 232 “provides virtually unbridled discretion to the President with respect to the power over trade that is reserved by the Constitution to Congress,” Katzmann said. “In short, it is difficult to escape the conclusion that the statute has permitted the transfer of power to the President in violation of the separation of powers.”
While CIT is required by precedent to find the tariffs constitutional, the "fullness of time" give a fuller picture of “understanding that may not have been available more than forty years ago,” Katzmann said. “We deal now with real recent actions, not hypothetical ones. Certainly, those actions might provide an empirical basis to revisit assumptions. If the delegation permitted by section 232, as now revealed, does not constitute excessive delegation in violation of the Constitution, what would?”
(American Institute for Int’l Steel, Inc. v. U.S., Slip Op. 19-37, CIT # 18-00152, dated 03/25/19, Judges Kelly, Choe-Groves and Katzmann)