PrimeSource Bldg. Prods. v. United States
| Decision Date | 07 February 2023 |
| Docket Number | 2021-2066,2021-2252 |
| Parties | PRIMESOURCE BUILDING PRODUCTS, INC., Plaintiff-Appellee v. UNITED STATES, JOSEPH R. BIDEN, JR., PRESIDENT OF THE UNITED STATES, GINA M. RAIMONDO, SECRETARY OF COMMERCE, CHRISTOPHER MAGNUS, COMMISSIONER OF U.S. CUSTOMS AND BORDER PROTECTION, UNITED STATES CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF COMMERCE, Defendants-Appellants OMAN FASTENERS, LLC, HUTTIG BUILDING PRODUCTS, INC., HUTTIG, INC., Plaintiffs-Appellees v. UNITED STATES, JOSEPH R. BIDEN, JR., PRESIDENT OF THE UNITED STATES, UNITED STATES CUSTOMS AND BORDER PROTECTION, CHRISTOPHER MAGNUS, COMMISSIONER OF U.S. CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF COMMERCE, GINA M. RAIMONDO, SECRETARY OF COMMERCE, Defendants-Appellants |
| Court | U.S. Court of Appeals — Federal Circuit |
Appeal from the United States Court of International Trade in Nos 1:20-cv-00032-TCS-JCG-MMB, 1:20-cv-00037-TCS-JCG-MMB 1:20-cv-00045-TCS-JCG-MMB Senior Judge Timothy C. Stanceu Judge Jennifer Choe-Groves, Judge M. Miller Baker
JEFFREY S. GRIMSON, Mowry &Grimson, PLLC, Washington, DC, argued for plaintiff-appellee PrimeSource Building Products, Inc. Also represented by BRYAN PATRICK CENKO, JILL CRAMER, KRISTIN HEIM MOWRY, SARAH WYSS.
ANDREW CARIDAS, Perkins Coie, LLP, Washington, DC, argued for plaintiffs-appellees Oman Fasteners, LLC, Huttig Building Products, Inc., Huttig, Inc. Also represented by MICHAEL PAUL HOUSE; KARL J. WORSHAM, Phoenix, AZ.
MEEN GEU OH, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendants-appellants. Also represented by KYLE SHANE BECKRICH, BRIAN M. BOYNTON, TARA K. HOGAN, PATRICIA M. MCCARTHY.
ADAM H. GORDON, The Bristol Group PLLC, Washington, DC, for amicus curiae The American Steel Nail Coalition. Also represented by LAUREN FRAID, JENNIFER MICHELE SMITH.
Before TARANTO, CHEN, and STOLL, Circuit Judges.
In 2018, pursuant to § 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, the Secretary of Commerce reported to the President that steel imports threatened national security by contributing to unsustainably low levels of use of domestic steel-producing capacity, and the President, agreeing with the Secretary's finding, issued Proclamation 9705 to adopt a plan of action to address that threat, starting with imposition of higher tariffs on steel imports from certain countries but providing for monitoring and future adjustments if needed. In 2020, the President issued Proclamation 9980, which, based on the required monitoring, raised tariffs on imports of steel derivatives such as nails and fasteners. That proclamation was challenged in two cases (before us here) filed in the Court of International Trade (Trade Court)-one by PrimeSource Building Products, Inc.; the other by Oman Fasteners, LLC, Huttig Building Products, Inc., and Huttig, Inc. (collectively, Oman Fasteners)-against the United States, the President, and two federal agencies and their heads (collectively, the government). The Trade Court held Proclamation 9980 to be unauthorized by § 232 because the new derivatives tariffs were imposed after the passing of certain deadlines for presidential action set forth in § 232. See PrimeSource Building Products, Inc. v. United States, 497 F.Supp.3d 1333 (Ct. Int'l Trade 2021); PrimeSource Building Products, Inc. v. United States, 505 F.Supp.3d 1352 (Ct. Int'l Trade 2021); Oman Fasteners, LLC v. United States, 520 F.Supp.3d 1332 (Ct. Int'l Trade 2021).
The government appeals. After the Trade Court issued its decisions on the merits, we decided Transpacific Steel LLC v. United States, 4 F.4th 1306 (Fed. Cir. 2021), cert. denied, 142 S.Ct. 1414 (2022), which led the Trade Court to issue stays of its judgments in the two cases. In Transpacific, we upheld a presidential proclamation that increased tariffs on steel beyond Proclamation 9705's rate, concluding that when the President, within the § 232 time limits at issue, adopts a plan of action that contemplates future contingency-dependent modifications, those time limits do not preclude the President from later adding to the initial import impositions in order to carry out the plan to help achieve the originally stated national-security objective where the underlying findings and objective have not grown stale. We now uphold Proclamation 9980. That proclamation's new imposition reaches imports of steel derivatives, which are within § 232's authorization of presidential action based on the Secretary's finding about imports of steel, and there is no staleness or other persuasive reason for overriding the President's judgment that including derivatives helps achieve the specific, original national-security objective. We therefore reverse the judgments of the Trade Court.
Section 232 "empowers and directs the President to act to alleviate threats to national security from imports." Id. at 1311. For the President to act, the Secretary of Commerce must, under § 232(b), first investigate the effects on national security of imports of an article and submit to the President within 270 days a report detailing the Secretary's findings about such effects. 19 U.S.C § 1862(b)(1)(A)-(3)(A). The report must contain the Secretary's recommendations for action or inaction with respect to imports of that article. Id. § 1862(b)(3)(A). If the Secretary finds that imports of the article "threaten to impair the national security, the Secretary shall so advise the President in [the] report." Id. Under § 232(c), within 90 days of receiving the Secretary's report, the President must determine whether to concur in that finding. Id. § 1862(c)(1)(A)(i). If the President concurs in that finding, then within the same 90 days "the President shall" 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) (emphasis added). If the President determines to take action with respect to the import of the article and its derivatives, "the President shall implement that action" within 15 days of the foregoing determinations, id. § 1862(c)(1)(B), that is, within 105 days of the Secretary's report.
In 2017, the Secretary began investigating steel imports and concluded that they posed a threat to national security. J.A 232-35. On January 11, 2018, the Secretary reported to the President that the imports were "weakening our internal economy" and harming "the [domestic] steel industry," the continued vitality of which "is essential for national security applications." Id. The Secretary recommended that the President "take immediate action by adjusting the level of these imports through quotas or tariffs" with the goal of "reducing import penetration rates to approximately 21 percent," so that "U.S. industry would be able to operate at 80 percent of their capacity utilization." J.A. 236, 288. The 80 percent rate, the Secretary found, was the minimum "necessary to sustain adequate profitability and continued capital investment, research and development, and workforce enhancement in the steel sector" and to thereby "enable U.S. steel mills to increase operations significantly in the short-term and improve the financial viability of the industry over the long-term." J.A. 234, 289.
On March 8, 2018, the President announced his concurrence and remedial plan. Proclamation 9705: Adjusting Imports of Steel into the United States, 83 Fed.Reg. 11,625 (Mar. 8, 2018). He concurred that "steel articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security." Id. ¶ 5, 83 Fed.Reg. at 11,626. He imposed a 25 percent tariff on imports of various steel articles (e.g., flat-rolled products, bars and rods, tubes, pipes, and ingots) from many countries. Id. ¶ 8, clause 2, Annex, 83 Fed.Reg. at 11,626-29; see PrimeSource, 497 F.Supp.3d at 1337-38 n.2. The President deemed this an "important first step in ensuring the economic viability of our domestic steel industry." Proclamation 9705 ¶ 11, 83 Fed.Reg. at 11,626; id. clause 2, 83 Fed.Reg. at 11,627. He retained the option to "remove or modify" the impositions if the United States and other countries were to come up with suitable alternatives for remedying the security threat. Id. ¶ 9, 83 Fed.Reg. at 11,626. More generally, the President directed the Secretary to "continue to monitor imports of steel articles," "review the status of such imports with respect to the national security," and "inform the President of any circumstances that in the Secretary's opinion might indicate the need for further action by the President under section 232." Id. clause 5(b), 83 Fed.Reg. at 11,628.
In light of, e.g., negotiations between the United States government and some foreign governments, the President issued a variety of follow-up proclamations to make changes in the impositions of Proclamation 9705, including the August 2018 Proclamation 9772 that was challenged (and upheld by this court) in Transpacific. 4 F.4th at 131416. The Secretary monitored relevant imports, as required, and in January 2020, the President issued a new proclamation-now covering derivatives of the earlier-covered steel articles-based on information supplied by the Secretary. Proclamation 9980: Adjusting Imports of Derivative Aluminum Articles and Derivative Steel Articles into the United States, 85 Fed.Reg. 5281 (Jan. 24, 2020).[1]
The President recited that the Secretary had informed him that "domestic steel producers' capacity utilization ha[d] not stabilized for an...
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