NLMK Pa., LLC v. United States

Decision Date03 December 2021
Docket NumberSlip Op. 21-162,Court No. 21-00507
Parties NLMK PENNSYLVANIA, LLC, Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

Luke A. Meisner, Roger B. Schagrin, Jeffrey D. Gerrish, and Kelsey M. Rule, Schagrin Associates, of Washington, D.C., for proposed defendant-intervenor.

Sanford Litvack, Andrew L. Poplinger, and R. Matthew Burke, Chaffetz Lindsey LLP, of New York, NY, for plaintiff.

Tara K. Hogan, Assistant Director, and Meen Geu Oh, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendant. Also on the brief were Brian Boynton, Acting Assistant Attorney General, and Patricia M. McCarthy, Director. Of counsel on the brief was Kenneth Kessler, Office of Chief Counsel for Industry & Security, U.S. Department of Commerce, of Washington, D.C.

MEMORANDUM AND ORDER

Kelly, Judge:

Before the court are proposed defendant-intervenor United States Steel Corporation's ("U.S. Steel") motions to intervene as a defendant-intervenor and to stay further proceedings in this action pending U.S. Steel's appeal to the U.S. Court of Appeals for the Federal Circuit ("Court of Appeals") of this Court's denial of U.S. Steel's motion to intervene in a different action. See Mot. to Intervene by [U.S. Steel] as Def.-Intrvnr., Oct. 27, 2021, ECF No. 14 ("Mot. to Intervene");1 Mot. to Stay Proceedings Pending Appeal, Oct. 27, 2021, ECF No. 15 ("Mot. to Stay"); see also N. Am. Interpipe, Inc. v. United States, 519 F. Supp. 3d 1313 (Ct. Int'l Trade 2021) (" NAI").

Plaintiff NLMK Pennsylvania, LLC ("NLMK") commenced this action challenging the U.S. Department of Commerce's ("Commerce") denial of NLMK's requests for certain imports of steel products to be excluded from tariffs imposed on steel imports pursuant to Section 232 of the Trade Expansion Act of 1962, as amended ("Section 232"), Pub. L. 87-794, § 232, 76 Stat. 872, 877 (1962), codified in various sections of Titles 19 and 26 of the U.S. Code. See Compl., ¶ 1, Sept. 8, 2021, ECF No. 2. U.S. Steel, a domestic producer of steel mill products which opposed NLMK's exclusion requests during the proceedings before Commerce, contends that it has a right to intervene under CIT Rule 24(a) and, alternatively, that it should be permitted to intervene under CIT Rule 24(b). Mot. to Intervene at 4–8, 9–11. U.S. Steel also moves for a stay of all proceedings in this action pending U.S. Steel's appeal of NAI. See Mot. to Stay. NLMK opposes the Motion to Intervene and the Motion to Stay. [NLMK's] Opp'n to [Mot. to Intervene], Nov. 17, 2021, ECF No. 23 ("NLMK Intrvntn. Opp."); [NLMK's] Opp'n to [Mot. to Stay], Nov. 17, 2021, ECF No. 24 ("NLMK Stay Opp."). Defendant United States (the "Government") opposes U.S. Steel's Motion to Intervene to the extent that U.S. Steel contends that it has a right to intervene, but the Government takes no position on U.S. Steel's request to be permitted to intervene under CIT Rule 24(b). Def.’s Omnibus Resp. to [Mot. to Intervene and Mot. to Stay], 2–3, Nov. 17, 2021, ECF No. 25 ("Def. Br."). The Government further opposes U.S. Steel's Motion to Stay. Id. at 2. For the reasons that follow, the Motion to Intervene and the Motion to Stay are denied.

BACKGROUND

NLMK is a producer of finished steel products including coil and sheet used in a variety of industrial applications. Compl. ¶ 2. NLMK alleges that it requires a steady and substantial supply of both 200mm (8 inch) and 250 mm (10 inch) semi-finished steel slab ("steel slab") to manufacture its products. Id. ¶¶ 2, 5–6. NLMK contends that it purchases as much steel slab as it can from domestic producers, but it has never been able to procure more than 20% of its monthly requirement of 8-inch slab from the U.S. market and 10-inch slab is not available in the U.S. market. Id. ¶¶ 3, 5–6. NLMK imports the remaining steel slab that it requires. Id. ¶¶ 3, 6.

On March 8, 2018, President Donald J. Trump issued Proclamation 9705, imposing additional tariffs on steel imports and instructing the Secretary of Commerce to grant requests for exclusions for, inter alia, any steel product that is not "produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality" (a "Section 232 Exclusion"). Proclamation 9705 of March 8, 2018, 83 Fed. Reg. 11625, 11627 (March 15, 2018) ( Adjusting Imports of Steel Into the United States) ("Proclamation 9705"). Commerce subsequently published rules for requesting Section 232 Exclusions and for the domestic industry to object to such requests. See Requirements for Submissions Requesting Exclusions From the Remedies Instituted in Presidential Proclamations Adjusting Imports of Steel Into the United States and Adjusting Imports of Aluminum Into the United States, 83 Fed. Reg. 12106 (March 19, 2018) (Filing of Objections to Submitted Exclusion Requests for Steel and Aluminum); Supplement No. 1 to Part 705—Requirements for Submissions Requesting Exclusions From the Remedies Instituted in [ Proclamation 9705 ], 83 Fed. Reg. 46056 (Sept. 11, 2018) ; Supplement No. 1 to Part 705—Requirements for Submissions Requesting Exclusions From the Remedies Instituted in [ Proclamation 9705 ], 84 Fed. Reg. 26757 (June 10, 2019) ; Supplement No. 1 to Part 705—Requirements for Submissions Requesting Exclusions From the Remedies Instituted in Presidential Proclamations Adjusting Imports of Steel Articles Into the United States, 85 Fed. Reg. 64382 (Oct. 13, 2020) ; Supplement No. 1 to Part 705—Requirements for Submissions Requesting Exclusions From the Adjustment of Imports of Aluminum and Steel Imposed Pursuant to [Section 232], 85 Fed. Reg. 81073 (Dec. 14, 2020). The interim final rule adopted by Commerce sets forth the procedures for Section 232 Exclusion requests, and permits domestic producers to object to a Section 232 Exclusion request if the domestic producer can "immediately"2 supply a "sufficient and reasonably available and amount" of the imported product. 15 C.F.R. § Pt. 705, Supp. 1(c)(d).

NLMK submitted Section 232 Exclusion requests in 2018, 2020, and 2021 alleging that it was unable to source the steel slab it needed from the U.S. market. Compl. ¶¶ 7, 10–12. This case involves only the 54 Section 232 Exclusion requests that NLMK submitted to Commerce in July 2020, March 2021, and April 2021 (the "Exclusion Requests").3 Id. ¶¶ 10–12. U.S. Steel objected to, and Commerce subsequently denied, all of the Exclusion Requests.4 Id. ¶¶ 11–12. NLMK brought this action to challenge Commerce's denials of the Exclusion Requests, asserting that the Section 232 Exclusion request review process Commerce undertook to deny NLMK's Section 232 Exclusion Requests was arbitrary, capricious and contrary to law. Id. ¶¶ 27, 32. In support of its conclusion, NLMK alleges that Commerce did not verify U.S. Steel's objections and ignored NLMK's evidence that it could not obtain enough steel slab from domestic sources. Id. ¶ 14. NLMK further alleges that Commerce based its denials in part on ex parte communications with U.S. Steel that flouted the procedures for objecting to Section 232 Exclusion requests, and Commerce did not provide adequate reasons for the denials. Id. ¶¶ 14, 18.

U.S. Steel now seeks to intervene as a defendant in order to defend its purported interest in upholding Commerce's denials of the Exclusion Requests and to stay this action pending U.S. Steel's appeal of NAI. See Mot. to Intervene and Mot. to Stay. For the reasons set forth below, U.S. Steel's motions are denied.

STANDARD OF REVIEW

CIT Rule 24(a)(2) provides, in relevant part,

On a timely motion, the court must permit anyone to intervene who: ... claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

CIT Rule 24(a)(2). The court will grant a motion to intervene under CIT Rule 24(a)(2) when the movant establishes the following four elements: (1) the motion is timely; (2) the movant asserts a legally protectable interest in the property at issue; (3) the movant's interest "must be of such a direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment"; and (4) the movant's interest will not be adequately represented by the government. Wolfsen Land & Cattle Co. v. Pac. Coast Fed'n of Fishermen's Associations, 695 F.3d 1310, 1315 (Fed. Cir. 2012) (emphasis in original) (internal quotation marks omitted). The court will permit a party to intervene under CIT Rule 24(b)(1)(A) if the proposed intervenor has a "conditional right to intervene [under] a federal statute." U.S. Steel contends that 28 U.S.C. § 2631(j)(1) provides such a conditional right. Mot. to Intervene at 9–10. That statute provides that any person that will be adversely affected or aggrieved by a decision in an action before the CIT may intervene with leave of the court. 28 U.S.C. § 2631(j)(1). Once a proposed intervenor demonstrates that it will be adversely affected or aggrieved, the court must "consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties." Id. § 2631(j)(2).

Granting a motion to stay, on the other hand, is within the discretion of the court. Cherokee Nation of Oklahoma v. United States, 124 F.3d 1413, 1416 (Fed. Cir. 1997). The court must weigh the competing interests when deciding a motion to stay. See Landis v. North Am. Co., 299 U.S. 248, 254–55, 57 S.Ct. 163, 81 L.Ed. 153 (1936). If there is "even a fair possibility" that the stay will damage a nonmovant, the movant "must make out a clear case of hardship or inequity in being required to go forward." Id. at 255, 57 S.Ct. 163. "Only in rare circumstances will a litigant in one cause be compelled to...

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