415 F.Supp.3d 1267
Ct. Int'l Trade2019Background
- Transpacific Steel, an importer, seeks a refund of excess duties paid after the President imposed a 50% tariff on steel from Turkey (Proclamation 9772) above the 25% tariff applied generally (Proclamation 9705).
- Commerce opened a Section 232 investigation in April 2017 and issued its Steel Report on January 11, 2018; the President issued Proclamation 9705 (25% global steel tariff) on March 8, 2018, within the statutory timeframes.
- On August 10, 2018 the President issued Proclamation 9772 imposing a 50% tariff on Turkish steel effective August 13, 2018—well after the 90-day decision window and 15-day implementation period in 19 U.S.C. § 1862(c).
- Transpacific alleged Proclamation 9772 (a) lacked a national-security nexus required by Section 232, (b) violated Section 232’s procedural timing and investigatory requirements, and (c) violated the Fifth Amendment’s equal protection and due process principles.
- The government moved to dismiss under USCIT Rule 12(b)(6). The court denied dismissal, finding Transpacific pleaded plausible claims that the President violated Section 232’s procedural limits and irrationally singled out Turkey, so the refund claim may proceed. (The additional tariffs on Turkey were later lifted but the refund claim remains.)
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Proclamation 9772 complied with Section 232’s procedural timing (90-day decision + 15-day implementation) | 9772 was issued long after the statutory windows and thus lacked the required investigatory/consultative foundation | The President can modify or continue actions under Section 232 without a new report; Proclamation 9772 is a valid continuation/modification of 9705 | Court: Plaintiff plausibly alleged a procedural violation; issuance after statutory windows without new procedures defeats dismissal |
| Whether singling out Turkey for a 50% tariff violates equal protection (Fifth Amendment) | Targeting Turkey lacks any rational connection to legitimate governmental purpose and treats similarly situated countries differently | The action survives rational-basis review because the government need only articulate any conceivable rational justification; national-security/economic rationales suffice | Court: No government justification was offered that rationally distinguishes Turkey from other countries; plaintiff pleaded a plausible equal protection claim |
| Whether Proclamation 9772 can be justified as continuation/monitoring under Proclamation 9705 | The President’s delegation in 9705 to monitor cannot supplant Section 232’s timing and procedures for new or increased measures | Government contends monitoring language permits further action based on Secretary reports or changing facts | Court: The monitoring/continuation argument cannot override the statute’s clear time limits; plaintiff plausibly alleges the later action was procedurally improper |
| Adequacy of pleading for denial-of-dismissal standard | Complaint alleges undisputed facts that raise a plausible right to refund under Twombly/Iqbal standards | Government argues plaintiff’s claims are speculative and fail to meet rational-basis deference | Court: Under Twombly/Iqbal, allegations here are sufficient to survive 12(b)(6); dismissal denied |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for motions to dismiss)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading framework)
- Nordlinger v. Hahn, 505 U.S. 1 (1992) (rational-basis review requires any conceivable rational justification)
- Armour v. City of Indianapolis, 566 U.S. 673 (2012) (deference under rational-basis in economic regulation)
- Vill. of Willowbrook v. Olech, 528 U.S. 562 (2000) (equal protection claim for arbitrary differential treatment)
- FCC v. Beach Commc'ns, Inc., 508 U.S. 307 (1993) (court asks only whether any conceivable rational basis exists)
- Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456 (1981) (deference to legislative economic classifications)
- Fed. Energy Admin. v. Algonquin SNG, Inc., 426 U.S. 548 (1976) (Section 232 delegation and preconditions to presidential action)
- Bank of Guam v. United States, 578 F.3d 1318 (2009) (application of Twombly pleading standards)
- Am. Inst. for Int'l Steel v. United States, 376 F. Supp. 3d 1335 (Ct. Int'l Trade 2019) (CIT discussion of Section 232 scope and separation-of-powers concerns)