Maple Leaf Mktg., Inc. v. United States
| Decision Date | 22 June 2021 |
| Docket Number | Court No. 20-00125,Slip Op. 21-77 |
| Citation | 528 F.Supp.3d 1365 |
| Parties | MAPLE LEAF MARKETING, INC., Plaintiff, v. UNITED STATES et al., Defendants. |
| Court | U.S. Court of International Trade |
Richard F. O'Neill and John M. Peterson, Neville Peterson LLP, of New York, NY, argued for plaintiff. Also on the brief was Patrick B. Klein.
Ann C. Motto, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendants. Also on the briefs were Jeffrey Bossert Clark, Acting Assistant Attorney General, Jennifer B. Dickey, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Tara K. Hogan, Assistant Director.
Defendants move for partial dismissal of Plaintiff Maple Leaf Marketing Inc.’s ("Maple Leaf" or "Plaintiff") challenge to the constitutionality and lawfulness of duties imposed on re-imported steel tubing from Canada pursuant to Section 232 of the Trade Expansion Act of 1962 ("Section 232"), as amended, 19 U.S.C. § 1862 (2018).1 See Defs.’ Partial Mot. to Dismiss Compl., Sept. 23, 2020, ECF No. 14 ( ); see also Compl., June 24, 2020, ECF No. 5. Defendants seek dismissal of any challenge raised by Plaintiff to any decision of U.S. Customs and Border Protection ("Customs" or "CBP") when implementing duties imposed pursuant to Section 232 ("Section 232 duties"), either for lack of jurisdiction or as abandoned or waived. See Defs.’ Partial Mot. to Dismiss at 20–26;2 see also Defs.’ Reply Supp. Partial Mot. to Dismiss at 20–24, Jan. 15, 2021, ECF No. 22 ( ). Defendants contend that all remaining counts, except for Count II, should be dismissed for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the U.S. Court of International Trade ("USCIT"). See Defs.’ Partial Mot. to Dismiss at 1; see also USCIT R. 12(b)(6). Plaintiff requests the court deny Defendants’ motion, arguing that the court has jurisdiction over its claims, and maintaining that the remaining counts plausibly assert that the Government's imposition and assessment of Section 232 duties in this instance violates the Due Process Clause of the Fifth Amendment to the U.S. Constitution, is untimely under 19 U.S.C. § 1862, and is otherwise an ultra vires and unlawful exercise of delegated statutory authority.3 See Pl.’s Resp. Opp. [Defs.’ Partial Mot. to Dismiss] at 1–6, Dec. 11, 2020, ECF No. 18 ("Pl.’s Br."). For the following reasons, Defendants’ partial motion to dismiss is granted.
Section 232 empowers the President to adjust imports of articles that may threaten to impair the national security of the United States. The Secretary of Commerce ("Secretary"), in consultation with the Secretary of Defense and other appropriate officers, conducts an investigation to determine the effects on the national security of imports of certain articles. See 19 U.S.C. § 1862(b). The Secretary submits to the President a report that details the investigation's findings, advises the President if the subject article is "being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security," and, based on such findings, recommends action or inaction. See id. § 1862(b)(3)(A). Within ninety days after receiving the Secretary's report, the President must decide whether he or she concurs; if so, the President must also 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." Id. § 1862(c)(1)(A)(ii). The President has fifteen days after the day on which he or she determines to take action to implement that action. Id. § 1862(c)(1)(B). Should the President decide that the action to be taken under § 1862(c)(1) is "the negotiation of an agreement which limits or restricts" imports of articles that threaten to "impair the national security," and either "no such agreement is entered into before the date that is 180 days after the date on which the President ma[de] the determination[,]" or such agreement has entered into force but "is not being carried out or is ineffective in eliminating the threat to the national security[,] ... the President shall take such other actions as the President deems necessary[.]" Id. § 1862(c)(3)(A). The President "shall publish in the Federal Register notice of any additional actions being taken under [ 19 U.S.C. § 1862 ] by reason of [ 19 U.S.C. § 1862 (c)(3)(A) ]." See id. § 1862(c)(3)(A).4
On April 19, 2017, the Secretary initiated a Section 232 investigation to determine the effects of steel imports on national security. See Notice Request for Public Comments and Public Hearing on Section 232 National Security Investigation of Imports of Steel, 82 Fed. Reg. 19,205, 19,205 (Dep't Commerce Apr. 26, 2017). The product scope of the investigation covered "steel mill products ... which are defined at the Harmonized System ("HS") 6-digit level as: 720610 through 721650, 721699 through 730110, 730210, 730240 through 730290, and 730410 through 730690, including any subsequent revisions to these HS codes." Publication of a Report on the Effect of Imports of Steel on the National Security, 85 Fed. Reg. 40,202, 40,209 (Dep't Commerce July 6, 2020) (an investigation conducted under [Section 232]) ("Steel Report").
On January 11, 2018, the Secretary delivered the report to the President. See Proclamation 9705 of March 8, 2018, 83 Fed. Reg. 11,625, 11,625 (Mar. 15, 2018) (" Proclamation 9705"); see also Steel Report, 85 Fed. Reg. 40,202. The Steel Report "conclude[d] that the present quantities and circumstance of steel imports are ‘weakening our internal economy’ and threaten to impair the national security as defined in Section 232[,]" 85 Fed. Reg. at 40,204, and recommended that the President "impose a [63 percent] quota or [24 percent] tariff on all steel products covered in this investigation imported into the United States[.]" Id. at 40,205. "In selecting an alternative," the Steel Report also advised that "the President could determine that specific countries should be exempted from the proposed 63 percent quota or 24 percent tariff ... based on an overriding economic or security interest of the United States." Id. at 40,226.
On March 8, 2018, within ninety days of receiving the report, the President issued Proclamation 9705. See 83 Fed. Reg. at 11,625, 11,628. Concurring with the Secretary's findings, the President announced a 25 percent ad valorem tariff on steel articles "imported from all countries except Canada and Mexico." Id. at 11,626 ¶ 8. Proclamation 9705 states that, except as otherwise provided, "all steel articles imports specified in the Annex shall be subject to an additional 25 percent ad valorem rate of duty[.]" Id. at 11,627 cl. 2. The President implemented the tariffs by modifying Subchapter III of Chapter 99 of the Harmonized Tariff Schedule of the United States ("HTSUS") to add a new note and a new tariff provision under the heading 9903.80.01. Id. at 11,627 cl. 2; see also id. at 11,629 –30 (). Namely, the Annex added Note 16 to Subchapter III of Chapter 99, which provides, in relevant part, the following:
Proclamation 9705, 83 Fed. Reg. at 11,629 (Annex). With respect to Canada and Mexico, the President determined that it would be "necessary and appropriate ... to continue ongoing discussions ... and to exempt steel articles imports from these countries from the tariff, at least at this time." Id. at 11,626 ¶ 10.
On March 22, 2018,5 the President amended Proclamation 9705 to temporarily exempt from Section 232 duties steel articles imported from several more countries,6 pending negotiations with those countries. See Proclamation 9711 of March 22, 2018, 83 Fed. Reg. 13,361, 13,363 –65 (Mar. 28, 2018) (" Proclamation 9711"). On April 30, 2018, having reached agreements in principle with the Argentine Republic ("Argentina"), the Commonwealth of Australia ("Australia"), and Federative Republic of Brazil ("Brazil"), the President extended the exemption from Section 232 duties on steel imports from those countries indefinitely, but declared that the exemption on steel imports from...
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