2020 CIT 98
Ct. Int'l Trade2020Background
- Section 232 (19 U.S.C. § 1862) authorizes the President to adjust imports that threaten U.S. national security after a Commerce Secretary investigation, a report (within 270 days), and a Presidential decision within 90 days, with implementation within 15 days of that decision.
- Commerce opened a steel §232 investigation April 2017 and issued the Steel Report Jan. 11, 2018; President Trump issued Proclamation 9705 (25% steel tariffs) March 8, 2018.
- On August 10, 2018 the President issued Proclamation 9772, doubling tariffs to 50% on steel imports from Turkey only; those additional duties remained until May 21, 2019 (Proclamation 9886).
- Transpacific Steel (an importer), later joined by Turkish producers and an importer-intervenor, paid the increased duties (Transpacific alleged >$2.8M) and sued for refund, arguing Proclamation 9772 violated §232 procedures and the Fifth Amendment (Equal Protection and Due Process).
- The Court held Proclamation 9772 unlawful and void: it violated §232's procedural time and report requirements and violated Fifth Amendment Equal Protection; the Court did not resolve a distinct constitutional property-interest ruling on due process.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural compliance with §232 timelines and report requirements | Proclamation 9772 was issued outside §232's 90/15 windows and without a formal new Secretary report; timelines are mandatory | President may modify earlier §232 proclamations and act flexibly; timelines are directory, not mandatory | Court: Timelines and report requirements are mandatory; issuing 9772 outside them exceeded §232 authority (ultra vires) |
| Nexus to national security (scope of §232 authority) | 9772 lacked a proper, procedurally sound Secretary finding specific to Turkey; it was motivated by diplomatic leverage, not national security | Courts should not second-guess Presidential fact-finding or motives; only type-of-action review is proper | Court: Because 9772 was procedurally unauthorized (no proper report), it was beyond §232 authority; the Court did not probe the President's subjective motive here |
| Fifth Amendment Equal Protection (country-based discrimination) | Singling out Turkish steel (doubling tariffs on Turkey alone) was arbitrary and not rationally related to the Steel Report’s aggregate national-security rationale | Targeting Turkey was a plausible, rational incremental step toward national-security objectives; no showing of discriminatory intent required | Court: Proclamation 9772 irrationally singled out Turkey and failed rational-basis review; it violated the Fifth Amendment’s equal protection guarantee |
| Procedural Due Process (property interest in tariff rates/refunds) | Plaintiffs suffered deprivation (duties paid) and were entitled to at least basic procedural protections beyond statutory noncompliance | Plaintiffs identify no independent source creating a constitutionally protected property interest; statutory process sufficed | Court: Declined to decide whether a constitutional property interest exists; remanded relief is supplied by enforcing the statute’s procedures (statutory remedy granted) |
Key Cases Cited
- Maple Leaf Fish Co. v. United States, 762 F.2d 86 (Fed. Cir. 1985) (standards for judicial review of a President's §232 action)
- Federal Energy Administration v. Algonquin SNG, Inc., 426 U.S. 548 (U.S. 1976) (upholding §232 as nondelegation because of required Secretary report)
- Trump v. Hawaii, 138 S. Ct. 2392 (U.S. 2018) (rational-basis review of Presidential proclamation in national-security context)
- Romer v. Evans, 517 U.S. 620 (U.S. 1996) (discriminatory purpose that cannot be a legitimate government interest)
- Allegheny Pittsburgh Coal Co. v. Cnty. Comm'n of Webster Cnty., 488 U.S. 336 (U.S. 1989) (unequal taxation/unequal treatment can violate equal protection)
- City of Cleburne v. Cleburne Living Center, 473 U.S. 432 (U.S. 1985) (rational-basis and assessment of under/overinclusiveness)
- Board of Regents v. Roth, 408 U.S. 564 (U.S. 1972) (property interest and procedural due process principles)
- Romer-related equal-protection precedent: Dep't of Agric. v. Moreno, 413 U.S. 528 (U.S. 1973) (animus defeats legitimacy of government interest)
- United States R.R. Retirement Bd. v. Fritz, 449 U.S. 166 (U.S. 1980) (rational-basis review standard for unequal treatment)
- AFL-CIO v. Kahn, 618 F.2d 784 (D.C. Cir. 1979) (scope of review for Presidential trade actions)