Am. Inst. for Int'l Steel, Inc. v. United States

• Decision Date: 25 March 2019
• Docket Number: Court No. 18-00152,Slip Op. 19-37
• Citation: 376 F.Supp.3d 1335
• Parties: AMERICAN INSTITUTE FOR INTERNATIONAL STEEL, INC., Sim-Tex, LP, and Kurt Orban Partners, LLC, Plaintiffs, v. UNITED STATES and Kevin K. McAleenan, Commissioner, United States Customs and Border Protection, Defendants.
• Court: U.S. Court of International Trade

376 F.Supp.3d 1335

AMERICAN INSTITUTE FOR INTERNATIONAL STEEL, INC., Sim-Tex, LP, and Kurt Orban Partners, LLC, Plaintiffs,

v.UNITED STATES and Kevin K. McAleenan, Commissioner, United States Customs and Border Protection, Defendants.

Slip Op. 19-37

Court No. 18-00152

United States Court of International Trade.

March 25, 2019

OPINION

Kelly, Judge:

Before the court are American Institute for International Steel, Inc., Sim-Tex LP, and Kurt Orban Partners, LLC's ("Plaintiffs") motion for summary judgment and Defendants' motion for judgment on the pleadings, and their respective supporting memoranda. See [Plaintiffs'] Mot. Summary J. & Mem. Supp., July 19, 2018, ECF No. 20 ("Pls.' Br.") ; Defs.' Mot. J. Pleadings & Opp'n Pls.' Mot. Summary J., Sept. 14, 2018, ECF No. 26 ("Defs.' Opp'n Br."). Plaintiffs seek declaratory and injunctive relief against enforcement of section 232 of the Trade Expansion Act of 1962, as amended 19 U.S.C. § 1862 (2012)¹ ("section 232"), on the grounds that, on its face, it constitutes an improper delegation of legislative authority in violation of Article I, Section 1 of the U.S. Constitution and the doctrine of separation of powers.² See Pls.' Br. at 16–42; see also U.S. Const. art. I, § 1. Defendants argue that Plaintiffs' claim is foreclosed by Fed. Energy Admin. v. Algonquin SNG Inc., where the Supreme Court stated that section 232's standards are "clearly sufficient to meet any delegation doctrine attack." Defs.' Opp'n Br. at 13 (quoting Fed. Energy Admin. v. Algonquin SNG Inc., 426 U.S. 548, 559, 96 S.Ct. 2295, 49 L.Ed.2d 49 (1976) ).³ Alternatively, Defendants argue that the statutory scheme "amply satisfies the nondelegation doctrine." Id. at 14.

BACKGROUND

Section 232 authorizes the Secretary of Commerce to commence an investigation "to determine the effects on the national security of imports" of any article. 19 U.S.C. § 1862(b)(1)(A). The Secretary of Commerce must "provide notice to the Secretary of Defense" of the investigation's commencement and, in the course of the investigation, "consult with the Secretary of Defense regarding the methodological and policy questions raised[.]" 19 U.S.C. § 1862(b)(1)(B) ; 19 U.S.C. § 1862(b)(2)(A)(i). The Secretary of Commerce must also "(ii) seek information and advice from, and consult with, appropriate officers of the United States, and (iii) if it is appropriate and after reasonable notice, hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation." 19 U.S.C. § 1862(b)(2)(A)(ii)–(iii). The Secretary of Defense shall also, if requested by the Secretary of Commerce, provide to the Secretary of Commerce "an assessment of the defense requirements of any article that is the subject of an investigation conducted under this section." 19 U.S.C. § 1862(b)(2)(B).

Upon the investigation's completion or within the timeline provided, the Secretary of Commerce must provide the President with a report of the investigation's findings, advise on a course of action, and if the Secretary determines that the article under investigation "is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security," advise the President of the threat. 19 U.S.C. § 1862(b)(3)(A).

After receiving the Secretary of Commerce's report, if the President concurs with the finding that a threat exists, he shall "determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports of the article and its derivatives so that such imports will not threaten to impair the national security." 19 U.S.C. § 1862(c)(1)(A)(ii).

Additionally,

By no later than the date that is 30 days after the date on which the President makes any determinations under paragraph (1), the President shall submit to the Congress a written statement of the reasons why the President has decided to take action, or refused to take action, under paragraph (1).

19 U.S.C. § 1862(c)(2).

Finally, section (d) lists the following factors that the Secretary and the President should consider when acting pursuant to the statute:

(d) Domestic production for national defense; impact of foreign competition on economic welfare of domestic industries

For the purposes of this section, the Secretary and the President shall, in the light of the requirements of national security and without excluding other relevant factors, give consideration to domestic production needed for projected national defense requirements, the capacity of domestic industries to meet such requirements, existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense, the requirements of growth of such industries and such supplies and services including the investment, exploration, and development necessary to assure such growth, and the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements. In the administration of this section, the Secretary and the President shall further recognize the close relation of the economic welfare of the Nation to our national security, and shall take into consideration the impact of foreign competition on the economic welfare of individual domestic industries; and any substantial unemployment, decrease in revenues of government, loss of skills or investment, or other serious effects resulting from the displacement of any domestic products by excessive imports shall be considered, without excluding other factors, in determining whether such weakening of our internal economy may impair the national security.

19 U.S.C. § 1862(d).

JURISDICTION AND STANDARD OF REVIEW

This Court has jurisdiction under 28 U.S.C. § 1581(i)(2),(4) (2012). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." USCIT R. 56(a). "Judgment on the pleadings is appropriate where there are no material facts in dispute and the party is entitled to judgment as a matter of law." Forest Labs., Inc. v. United States, 476 F.3d 877, 881 (Fed. Cir. 2007) (citation omitted). Plaintiffs challenge the constitutionality of section 232. Compl. ¶ 11, June 27, 2018, ECF No. 10 ; Pls.' Br. at 3, 16–42. The issue of a statute's constitutionality is a question of law appropriate for summary disposition, which the court reviews "completely and independently." See, e.g., Demko v. United States, 216 F.3d 1049, 1052 (Fed. Cir. 2000).

DISCUSSION

Article I, Section I of the U.S. Constitution provides that "all legislative Powers herein granted shall be vested in a Congress of the United States." U.S. Const. art. I, § 1. The Supreme Court established the standard by which delegations are to be judged in J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409, 48 S.Ct. 348, 72 L.Ed. 624 (1928), explaining that "[i]f Congress shall lay down by legislative act an intelligible principle to which the person or body authorized to fix such rates is directed to conform, such legislative action is not a forbidden delegation of legislative power."

Since 1935 no act has been struck down as lacking an intelligible principle. See Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935) ; A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935). The Supreme Court has upheld delegations of authority as sufficient to guide the executive branch where they contained standards such as: regulating broadcast licensing as "public interest, convenience, or necessity" require, National Broadcasting Co. v. United States, 319 U.S. 190, 225–26, 63 S.Ct. 997, 87 L.Ed. 1344 (1943) ; ensuring that a company's existence in a holding company does not "unduly or unnecessarily complicate the structure" or "unfairly or inequitably distribute voting power among security holders[,]" American Power & Light Co. v. SEC, 329 U.S. 90, 104–05, 67 S.Ct. 133, 91 L.Ed. 103 (1946) ; and setting nationwide air-quality standards limiting pollution to the level required "to protect the public health." Whitman v. Am. Trucking Ass'ns, Inc., 531 U.S. 457, 472, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001). Most importantly for the challenge here, in Algonquin, the Supreme Court found that section 232 "easily" met the intelligible principle standard because

[i]t establishes clear preconditions to Presidential action[,] —[i]nter alia, a finding by the Secretary of the Treasury that an "article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security." Moreover, the leeway that the statute gives the President in deciding what action to take in the event the preconditions are fulfilled is far from unbounded. The President can act only to the extent "he deems necessary to adjust the imports of such article and its derivatives so that such imports will not threaten to impair the national security." And § 232(c),⁴ [a]rticulates a series of specific factors to be considered by the President in exercising his authority under § 232(b). In light of these factors and our recognition that "(n)ecessity ... fixes a point beyond which it is unreasonable and impracticable to compel Congress to prescribe detailed rules ...," we see no looming problem of improper delegation.

Algonquin, 426 U.S. at 559–60, 96 S.Ct. 2295 (citation and footnote omitted). This court is bound by Algonquin.

Plaintiffs argue unpersuasively that Algonquin does not control because the plaintiffs in Algonquin"did not bring a facial challenge to the constitutionality of section 232," but rather challenged the President's statutory authority to impose a specific kind of remedy and argued for a narrow statutory...