Transpacific Steel LLC v. United States

4 F.4th 1306

TRANSPACIFIC STEEL LLC, Borusan Mannesmann Boru Sanayi ve Ticaret A.S., Borusan Mannesmann Pipe U.S. Inc., The Jordan International Company, Plaintiffs-Appellees

v.UNITED STATES, Joseph R. Biden, Jr., in His Official Capacity as President of the United States, United States Customs and Border Protection, Troy Miller, in His Official Capacity as Senior Official Performing the Duties of the Commissioner for United States Customs and Border Protection, Department of Commerce, Gina Raimondo, in Her Official Capacity as Secretary of Commerce, Defendants-Appellants

2020-2157

United States Court of Appeals, Federal Circuit.

Decided: July 13, 2021

Matthew Mosher Nolan, Arent Fox, LLP, Washington, DC, argued for all plaintiffs-appellees. Plaintiff-appellee Transpacific Steel LLC also represented by Diana Dimitriuc Quaia, Nancy Noonan, Leah N. Scarpelli, Russell Andrew Semmel.

Julie Mendoza, Morris, Manning & Martin, LLP, Washington, DC, for plaintiffs-appellees Borusan Mannesmann Boru Sanayi ve Ticaret A.S., Borusan Mannesmann Pipe U.S. Inc. Also represented by Donald Cameron, Jr., Eugene Degnan, Mary Hodgins, Brady Mills, R. Will Planert, Edward John Thomas, III.

Lewis Leibowitz, The Law Office of Lewis E. Leibowitz, Washington, DC, for plaintiff-appellee Jordan International Company.

Tara K. Hogan, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendants-appellants. Also represented by Bryan M. Boynton, Jeanne Davidson, Ann Motto, Meen Geu Oh, Stephen Carl Tosini.

Before Reyna, Taranto, and Chen, Circuit Judges.

Dissenting opinion filed by Circuit Judge REYNA.

Taranto, Circuit Judge.

In section 232 of the Trade Expansion Act of 1962, Pub. L. No. 87–794, 76 Stat. 872, 877, codified as amended at 19 U.S.C. § 1862, Congress provided that if the President receives, and agrees with, a finding by a specified executive officer (now the Secretary of Commerce) that imports of an article threaten to impair national security, the President shall take action that the President deems necessary to alleviate the threat from those imports. See Fed. Energy Admin. v. Algonquin SNG, Inc. , 426 U.S. 548, 96 S.Ct. 2295, 49 L.Ed.2d 49 (1976) (addressing then-current version of § 1862 and holding that permitted action includes requiring licenses for imports and that provision raised no substantial issue of improper delegation of legislative power); American Inst. for Int'l Steel, Inc. v. United States , 806 F. App'x 982 (Fed. Cir. 2020) (rejecting nondelegation challenge to the current version of the statute). In its present form, the statute includes provisions, added in 1988, that set forth process and timing standards applicable to the Secretary's making of the predicate finding of threat, § 1862(b), and set forth certain timing standards applicable to the President's follow-on decisions if the Secretary finds such a threat, § 1862(c). Of central importance here is § 1862(c)(1). It specifies one period within which the President is to concur or disagree with the Secretary's finding and to determine the necessary action if the President concurs in the finding and another period within which the President is thereafter to implement the chosen action. § 1862(c)(1). This case involves a challenge to certain presidential action as taken too late under § 1862(c)(1).

In January 2018, the Secretary, in compliance with the process and timing requirements of § 1862(b), found that imports of steel threatened to impair national security because the imports caused domestic steel-production capacity to be used less than the level of utilization needed for operation of the plants to be profitably sustained over time. In March 2018, within the periods prescribed for presidential action, the President agreed with the Secretary's finding, determined the needed plan of action, and announced the plan in a proclamation that imposed some tariffs immediately, announced negotiations with specified nations in lieu of immediate tariffs, invited negotiations more broadly, and stated that the immediate measures might be adjusted as necessary. Proclamation 9705, 83 Fed. Reg. 11,625 (Mar. 15, 2018). Within a few months, as certain negotiations produced agreements or adequately progressed, the President determined that imports were still too high to allow domestic plant utilization to meet the Secretary's identified target, and the President raised the tariff on steel from Turkey, one of the largest producers and exporters of steel imported into the United States. Proclamation 9772, 83 Fed. Reg. 40,429 (Aug. 15, 2018). Proclamation 9772 ’s raising of the tariff on Turkish steel imports is challenged here.

Transpacific Steel LLC, Borusan Mannesmann Boru Sanayi ve Ticaret A.S., Borusan Mannesmann Pipe U.S. Inc., and the Jordan International Company (together, Transpacific)—importers of Turkish steel (in some cases also producers or exporters)—sued in the Court of International Trade (Trade Court), alleging that the President's issuance of Proclamation 9772 was unlawful. The Trade Court held the action unlawful on two grounds. First, the court held that Proclamation 9772 was unauthorized because, unlike the initial Proclamation 9705, it was issued outside the time periods set out in § 1862(c)(1) for presidential action after the Secretary's finding (in which the President concurred) of a national-security threat from steel imports. To take this action in August 2018, the court ruled, the President had to secure a new report with a new threat finding from the Secretary. Second, the court held that singling out steel from Turkey for the increased tariff violated the equal-protection guarantee of the Fifth Amendment to the Constitution.

We reverse. The President did not violate § 1862 in issuing Proclamation 9772. The President did not depart from the Secretary's finding of a national-security threat; indeed, the President specifically adhered to the Secretary's underlying finding of the target capacity-utilization level that was the rationale for the predicate threat finding. Moreover, the President made the determination that further import restrictions were needed to achieve that level in a short period after the Secretary's finding and after the initial presidential action. And that initial presidential action (in March 2018) itself announced a continuing course of action that could include adjustments as time passed. In these circumstances, we conclude that the increase in the tariff on steel from Turkey by Proclamation 9772 did not violate § 1862. We do not address other circumstances that would present other issues about presidential authority to adjust initially taken actions without securing a new report with a new threat finding from the Secretary.

Nor did the President violate Transpacific's equal-protection rights in issuing Proclamation 9772. The most demanding standard that could apply here is the undemanding rational-basis standard. The President's decision to take one of a number of possible steps to achieve the goal of increasing utilization of domestic steel plants’ capacity to try to improve their sustainability for national-security reasons meets that standard.

I

A

Section 1862 empowers and directs the President to act to alleviate threats to national security from imports. It does so by modifying and adding to other presidential authority granted by Congress.

Subsection (a) . The first subsection of § 1862 refers to two of the preexisting, continuing statutory grants of presidential authority and forbids relaxation of import restrictions under those grants if national security would be threatened. Specifically, subsection (a) addresses 19 U.S.C. §§ 1821 and 1351, which grant the President certain discretionary authority regarding tariffs on goods from foreign nations with which the President might enter into executive agreements. Section 1821(a), which dates to at least 1962, see Trade Expansion Act of 1962, § 201, 76 Stat. at 872, states that the President "may," for any of the broad trade-related purposes identified in 19 U.S.C. § 1801, enter into trade agreements and, among other things, raise or lower duties (within limits) to carry out such agreements. § 1821. Section 1351, which traces back to 1934, see Tariff Act of 1934, ch. 474, 48 Stat. 943, confers similar authority. § 1351. Subsection (a) of § 1862 forbids the President, when acting under those provisions, "to decrease or eliminate the duty or other import restrictions on any article if the President determines that such reduction or elimination would threaten to impair the national security." § 1862(a).¹

Subsection (b) . The next subsection sets forth the agency-level processes required for exercise of § 1862 ’s own grant of presidential authority to take action against imports that threaten to impair national security. In particular, subsection (b) prescribes process and timing standards for the Secretary of Commerce to make the finding that is a precondition for the President to take such action under this statute.

If the Secretary receives a request from an agency or department head or an "application of an interested party," or on the Secretary's "own motion," the Secretary must "immediately initiate an appropriate investigation to determine the effects on the national security of imports of the [relevant] article." § 1862(b)(1)(A). During the investigation, the Secretary must consult with and seek information and advice from certain officers—most notably, the Secretary of Defense—and, if appropriate, "hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation." § 1862(b)(2)(A). Within "270 days" of the investigation's start, "the Secretary shall submit to the President a report on the findings of" the investigation. § 1862(b)(3)(A). Based on those findings, the Secretary must include his "recommendations ... for action or inaction." Id....