Primesource Bldg. Prods., Inc. v. United States

• Decision Date: 27 January 2021
• Docket Number: Slip Op. No. 21-8,Court No. 20-00032
• Citation: 497 F.Supp.3d 1333
• Parties: PRIMESOURCE BUILDING PRODUCTS, INC., Plaintiff, v. UNITED STATES, et al., Defendants.
• Court: U.S. Court of International Trade

497 F.Supp.3d 1333

PRIMESOURCE BUILDING PRODUCTS, INC., Plaintiff,

v.UNITED STATES, et al., Defendants.

Slip Op. No. 21-8

Court No. 20-00032

United States Court of International Trade.

January 27, 2021

Jeffrey S. Grimson, Mowry & Grimson, PLLC, of Washington, D.C., for plaintiff. With him on the brief were Kristin H. Mowry, Jill A. Cramer, Sarah M. Wyss, James C. Beaty, Bryan P. Cenko, and Wenhui Ji.

Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for defendants. With her on the brief were Tara K. Hogan, Assistant Director, Stephen C. Tosini, Senior Trial Counsel, and Meen Geu Oh and Kyle S. Beckrich, Trial Attorneys.

Before: TIMOTHY C. STANCEU, Chief Judge, JENNIFER CHOE-GROVES and M. MILLER BAKER, Judges.

OPINION AND ORDER

STANCEU, Chief Judge:

Plaintiff PrimeSource Building Products, Inc. ("PrimeSource"), a U.S. importer of steel nails, challenges on various grounds a proclamation issued by the President of the United States ("Proclamation 9980") that imposed 25% tariffs on, inter alia , various imported products made of steel (identified in the proclamation as "derivatives" of steel products), including steel nails. Arguing that plaintiff's complaint does not state a claim on which relief can be granted, defendants move to dismiss this action according to USCIT Rule 12(b)(6). Plaintiff opposes defendants' motion to dismiss and moves for summary judgment, urging us to declare Proclamation 9980 invalid and order the refund of any duties that previously may have been collected on its affected entries. In moving to dismiss and in their response to PrimeSource's summary judgment motion, defendants argue that the President's action was within the authority delegated by Congress and must be upheld.

We grant defendants' motion to dismiss as to four of plaintiff's claims, which are set forth as Counts 1, 3, 4, and 5 of the Amended Complaint, and deny it as to Count 2, in which plaintiff claims that Proclamation 9980 is invalid because it was issued after the authority delegated to the President by the governing statute had expired. Because plaintiff has not shown "that there is no genuine dispute as to any material fact," USCIT R. 56(a), we deny plaintiff's summary judgment motion as to the remaining claim.

I. BACKGROUND

A. The Challenged Presidential Proclamation

On January 24, 2020, President Trump issued Proclamation 9980, Adjusting Imports of Derivative Aluminum Articles and Derivative Steel Articles Into the United States , 85 Fed. Reg. 5,281 (Exec. Office of the President Jan. 29, 2020) (" Proclamation 9980 "). Proclamation 9980 imposed a duty of 25% ad valorem on various imported products made of aluminum and of steel, including steel nails and other steel fasteners as well as "bumper stampings of steel" for motor vehicles and "body stampings of steel" for agricultural tractors. Id. at 5,291, 5,293.

The 25% duties imposed by Proclamation 9980 went into effect on February 8, 2020. Id. at 5,290. As authority for the President's action, Proclamation 9980 cited Section 232 of the Trade Expansion Act of 1962, 19 U.S.C. § 1862 ("Section 232"),¹ and certain previous proclamations of the President that also invoked Section 232, including Proclamations 9704, Adjusting Imports of Aluminum Into the United States , 83 Fed. Reg. 11,619 (Exec. Office of the President Mar. 15, 2018) (" Proclamation 9704 "), and 9705, Adjusting Imports of Steel Into the United States , 83 Fed. Reg. 11,625 (Exec. Office of the President Mar. 15, 2018) (" Proclamation 9705 "). Proclamation 9980 ¶¶ 9–10, 85 Fed. Reg. at 5,283.

Proclamation 9705 imposed 25% duties on various steel products in basic and semi-finished form but did not impose duties on the products that were the subject of Proclamation 9980,² which Proclamation 9980 described as "Derivatives of Steel Products."³

B. Proceedings Before the Court of International Trade

Plaintiff commenced this action on February 4, 2020, naming as defendants the United States, the U.S. Department of Commerce, U.S. Customs and Border Protection, and various officers of the United States in their official capacities (the President of the United States, the Secretary of Commerce, and the Acting Commissioner of Customs and Border Protection). Summons, ECF No. 1; Compl., ECF Nos. 8 (conf.), 9 (public).

Plaintiff amended its complaint on February 11, 2020. First Am. Compl., ECF Nos. 21 (conf.), 22 (public) ("Am. Compl."). Defendants filed their Rule 12(b)(6) motion to dismiss the amended complaint on March 20, 2020. Defs.' Mot. to Dismiss for Failure to State a Claim, ECF No. 60 ("Defs.' Mot."). On April 14, 2020, plaintiff opposed defendants' motion to dismiss and moved for summary judgment. Rule 56 Mot. for Summ. J., Pl. PrimeSource Bldg. Prods. Inc.'s Mem. of Points and Authorities in Supp. of Mot. for Summ. J. and Resp. to Defs.' Mot. to Dismiss for Failure to State a Claim, ECF No. 73-1 ("Pl.'s Br."). Defendants replied in support of their motion to dismiss and responded to plaintiff's summary judgment motion on May 12, 2020. Defs.' Reply in Supp. of their Mot. to Dismiss and Resp. to Pl.'s Mot. for Summ. J., ECF No. 78 ("Defs.' Reply"). Plaintiff replied in support of its summary judgment motion on June 9, 2020. Pl. PrimeSource Bldg. Prods. Inc.'s Reply Br. in Supp. of its Mot. for Summ. J., ECF No. 91 ("Pl.'s Reply").

II. DISCUSSION

A. Subject Matter Jurisdiction

We exercise subject matter jurisdiction according to section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(i)(2), (i)(4). Paragraph (i)(2) of § 1581 grants this Court jurisdiction of a civil action "that arises out of any law of the United States providing for ... tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue." Id. § 1581(i)(2). Paragraph (i)(4) grants this Court jurisdiction of a civil action arising "out of any law of the United States providing for ... administration and enforcement with respect to the matters referred to in paragraphs (1)–(3) of this subsection." Id. § 1581(i)(4).

B. Standards of Review

A court reviewing a challenge to Presidential action taken pursuant to authority delegated by statute does so according to a standard of review that is highly deferential to the President. "For a court to interpose, there has to be a clear misconstruction of the governing statute, a significant procedural violation, or action outside delegated authority." Maple Leaf Fish Co. v. United States , 762 F.2d 86, 89 (Fed. Cir. 1985). Review of Proclamation 9980 according to the Administrative Procedure Act, 5 U.S.C. § 706 ("APA"), is not available because the President is not an agency for purposes of the APA. Franklin v. Massachusetts , 505 U.S. 788, 800–01, 112 S.Ct. 2767, 120 L.Ed.2d 636 (1992). In an action such as this one, where a statute commits a determination to the President's discretion, a reviewing court lacks authority to review the President's factual determinations. United States v. George S. Bush & Co. , 310 U.S. 371, 379–80, 60 S.Ct. 944, 84 L.Ed. 1259 (1940) ; Silfab Solar, Inc. v. United States , 892 F.3d 1340, 1349 (Fed. Cir. 2018) ("In particular, courts have repeatedly confirmed that, where the statute authorizes a Presidential ‘determination,’ the courts have no authority to look behind that determination to see if it is supported by the record." (citing George S. Bush & Co. , 310 U.S. at 379, 60 S.Ct. 944 )); Maple Leaf Fish Co. , 762 F.2d at 89 ("The President's findings of fact and the motivations for his action are not subject to review." (citing Florsheim Shoe Co. v. United States , 744 F.2d 787, 795 (Fed. Cir. 1984) )).

To avoid dismissal for failure to state a claim on which relief can be granted, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." USCIT R. 8(a)(2). A court will grant a motion to dismiss if the complaint fails to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

The court will grant a motion for summary judgment "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).

C. Defendants' Motion to Dismiss

Plaintiff raises five claims in its complaint. Am. Compl. In its first claim ("Count 1"), id. ¶¶ 62–69, PrimeSource alleges that the Secretary of Commerce violated the Commerce Department's regulations, 15 C.F.R. § 705, and the Administrative Procedure Act in various ways when providing the "assessments" on which the President based Proclamation 9980. PrimeSource alleges, inter alia , that the Secretary failed to initiate an investigation, failed to notify the Secretary of Defense of an initiation of an investigation, failed to publish an Executive Summary in the Federal Register, and failed to provide for public hearings, as required by its regulation, id. ¶¶ 66–67, and violated the APA when he "failed to provide interested parties with sufficient notice and an opportunity to comment" on the imposition of the duties on derivatives, id. ¶ 68, and when he failed to provide a reasoned explanation for its assessments, id. ¶ 69.

PrimeSource's second claim ("Count 2") is that Proclamation 9980 was issued in violation of the time limits specified in Section 232. Id. ¶¶ 70–73. Specifically, plaintiff alleges: (1) noncompliance with Section 232(c)(1)(A), 19 U.S.C. § 1862(c)(1)(A), which directs the President to make a determination on a report submitted by the Commerce Secretary under 19 U.S.C. § 1862(b)(3)(A) within 90 days of receiving such report, and (2) noncompliance with 19 U.S.C. § 1862(c)(1)...