USP Holdings, Inc. v. United States
| Decision Date | 09 June 2022 |
| Docket Number | 2021-1726 |
| Citation | 36 F.4th 1359 |
| Parties | USP HOLDINGS, INC., Substituted for Universal Steel Products, Inc., PSK Steel Corporation, Dayton Parts, LLC, Borusan Mannesmann Pipe U.S. Inc., Jordan International Company, Plaintiffs-Appellants v. UNITED STATES, Joseph R. Biden, Jr., President of the United States, Gina M. Raimondo, Secretary of Commerce, Troy Miller, Senior Official Performing the Duties of the Commissioner for U.S. Customs and Border Protection, Defendants-Appellees |
| Court | U.S. Court of Appeals — Federal Circuit |
Lewis Leibowitz, The Law Office of Lewis E. Leibowitz, Washington, DC, argued for plaintiffs-appellants.
Meen Geu Oh, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendants-appellees. Also represented by Brian M. Boynton, Tara K. Hogan, Patricia M. McCarthy, Ann Motto.
Before Dyk, Mayer, and Chen, Circuit Judges.
Additional views filed by Circuit Judge Chen.
The Trade Expansion Act of 1962 authorizes the President to adjust imports—if he concurs with a determination by the U.S. Secretary of Commerce ("Secretary") "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"—and to "determine the nature and duration" of the corrective action. 19 U.S.C. § 1862(c)(1)(A).
Based on an investigation under § 1862, the Secretary here determined that excessive steel imports threatened to impair the national security. The President concurred and issued a series of proclamations beginning with Proclamation 9705 on March 8, 2018. With those proclamations, the President imposed a twenty-five percent tariff on steel imports from a number of countries.
Appellants challenged the actions of both the President and the Secretary in the Court of International Trade ("Trade Court"), contending that the President's and Secretary's finding of a threat to national security and the President's imposition of a tariff for an indefinite duration conflicted with the statute. The Trade Court granted the government's motion for judgment on the pleadings. We affirm.
Section 232 of the Trade Expansion Act of 1962, 19 U.S.C. § 1862, authorizes the President to adjust imports that threaten national security. Section 1862 includes, as relevant here, three subsections.
Section 1862(b) directs the Secretary, on the request of an adversely affected party or an agency or department head, or on his own, to "immediately initiate an appropriate investigation to determine the effects on the national security of imports of the article which is the subject of such request, application, or motion." § 1862(b)(1)(A). After the investigation is concluded, the Secretary must submit "a report on the findings of such investigation" to the President. § 1862(b)(3)(A). The report must include the Secretary's finding, if one is made, 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" and "the recommendations of the Secretary for action or inaction" regarding such a finding. Id.
Section 1862(c) provides that, thereafter, the President must determine if he agrees with the Secretary's threat finding and, if so, what action is necessary:
§ 1862(c)(1)(A).
Section 1862(d)1 provides nonexclusive factors for the President and the Secretary to consider regarding the threat to national security determination:
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.
§ 1862(d) (emphasis added).
On April 19, 2017, the Secretary initiated an investigation under § 1862 to determine the effects of steel imports on national security. See Publication of a Report on the Effect of Imports of Steel on the National Security, 85 Fed. Reg. 40,208 (July 6, 2020). The Secretary provided his report and recommendation to the President on January 11, 2018. See id. at 40,202. The report included the Secretary's findings:
The Secretary has determined that the displacement of domestic steel by excessive imports and the consequent adverse impact of those quantities of steel imports on the economic welfare of the domestic steel industry, along with the circumstance of global excess capacity in steel, are "weakening our internal economy" and therefore "threaten to impair" the national security as defined in Section 232.
Id. at 40,224 (emphasis added). In view of these findings, the Secretary made the following recommendation:
Due to the threat of steel imports to the national security, as defined in Section 232, the Secretary recommends that the President take immediate action by adjusting the level of imports through quotas or tariffs on steel imported into the United States, as well as direct additional actions to keep the U.S. steel industry financially viable and able to meet U.S. national security needs. The quota or tariff imposed should be sufficient, after accounting for any exclusions, to enable the U.S. steel producers to be able to operate at about an 80 percent or better of the industry's capacity utilization rate based on available capacity in 2017.
The President concurred with the Secretary's threat finding and decided to take action in response. He announced those actions in multiple presidential proclamations between March 8, 2018, and May 19, 2019. The President issued Proclamation 9705 on March 8, 2018, and established a twenty-five percent tariff on imports of steel articles from all countries, except Canada and Mexico, to take effect March 23, 2018. Proclamation No. 9705, 83 Fed. Reg. 11,626 –27 (Mar. 15, 2018). Proclamation 9705 also invited "[a]ny country with which [the United States] ha[s] a security relationship ... to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports from that country." Id. at 11,626.
From March 22, 2018, to May 19, 2019, the President issued a series of additional proclamations excluding various countries from the twenty-five percent tariff, again including Canada and Mexico. See Proclamation No. 9711 of March 22, 2018, 83 Fed. Reg. 13,361 –62 (Mar. 28, 2018); Proclamation No. 9740 of April 30, 2018, 83 Fed. Reg. 20,683 –84 (May 7, 2018); Proclamation No. 9759 of May 31, 2018, 83 Fed. Reg. 25,857 –58 (June 5, 2018); Proclamation No. 9777 of August 29, 2018, 83 Fed. Reg. 45,025 –26 (Sept. 4, 2018); Proclamation No. 9894 of May 19, 2019, 84 Fed. Reg. 23,987 (May 23, 2019). Many other countries remained subject to the tariff.2
Appellants USP Holdings, Inc., PSK Steel Corporation, Dayton Parts, LLC, Jordan International Company, and Borusan Mannesmann Pipe U.S. Inc. (collectively, "USP" or "Appellants") are all U.S. corporations primarily engaged in the import of steel products. USP filed suit with the Trade Court seeking a determination that the President's and the Secretary's threat determinations violated § 1862, that the imposition of the tariff was therefore unlawful, and that the indefinite duration of the tariff also violated § 1862. As to the threat determination, USP argued that the statute required a finding of an "impending threat," a finding neither the Secretary nor the President made. J.A. 17. As to the President's determination to impose a tariff indefinitely, USP challenged only the President's action because the Secretary did not make any finding or recommendation as to the duration. USP argued that the statutory requirement that the President "determine the nature and duration of the action," § 1862(c)(1)(A)(ii) (emphasis added), required the President to set a termination or end date, which he failed to do. Appellants alleged they had paid the steel tariffs the President imposed in various amounts ranging from $500,000 to nearly $35 million.
The government moved for judgment on the pleadings, which the Trade Court granted. See Universal Steel Prods., Inc. v. United States , 495 F. Supp....
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