PrimeSource Building Products, Inc. v. United StatesPrimeSource Building Products, Inc. v. United States
OPINION AND ORDER
[The American Steel Nail Coalition‘s motions to intervene in twelve pending actions are denied, both as to the Coalition itself and as to its member companies. Judge Baker concurs in a separate opinion.]
Dated: January 20, 2021
Adam H. Gordon, Jennifer M. Smith, Lauren N. Fraid, and Ping Gong, The Bristol Law Group PLLC of Washington, D.C., for Proposed Defendant-Intervenor.
Michael P. House, Jon B. Jacobs, Andrew Caridas, and Shuaiqi Yuan, Perkins Coie LLP of Washington, D.C., for Oman Fasteners, LLC; Huttig Building Products, Inc.; and Huttig, Inc.
Max F. Schutzman, Ned H. Marshak, and Jordan C. Kahn, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP of New York, NY, and Washington, D.C., for Astrotech Steels Private Ltd. and Trinity Steel Private Ltd.
Brenda A. Jacobs, Jacobs Global Trade & Compliance LLC of McLean, VA, for New Supplies Co., Inc. and GJ Burkhart Inc. dba Fry Fastening Systems.
Lizbeth R. Levinson, Ronald M. Wisla, and Brittney R. Powell, Fox Rothschild LLP of Washington, D.C. for Aslanbas Nail and Wire Co.; Geekay Wires, Ltd.; SouthernCarlson, Inc.; Building Material Distributors, Inc.; Continental Materials, Inc.; Wexcell, LLC; Fanaco Fasteners LLC; S.T.O Industries, Inc.; PT Global, Inc.; Building Products of America, LLC; Kratos Building Products, Inc.; and DC International, Inc.
Jeffrey S. Neely and Nithya Nagarajan, Husch Blackwell LLP of Washington, D.C. for J. Conrad LTD and Metropolitan Staple Corp.
Richard A. Mojica, Adam P. Feinberg, Marcus A.R. Childress, Miller & Chevalier Chartered of Washington, D.C., for Tempo Global Resources, LLC.
David G. Forgue, Barnes, Richardson & Colburn, LLP of Chicago, IL for Farrier Product Distribution, Inc.
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 and Stephen C. Tosini, Senior Trial Counsel.
Before the court are motions submitted by the American Steel Nail Coalition (the “Coalition“) to intervene as a party defendant in each of these twelve actions, in which plaintiffs challenge the legality of a presidential proclamation (“Proclamation 9980” or the “Proclamation“) that imposed 25% duties on imports of certain articles made of steel, including steel nails. Six plaintiffs oppose the Coalition‘s motions to intervene, while others consented, deferred to the discretion of the Court, or did not respond to the Coalition‘s motions. Ruling that the individual members of the Coalition fail to qualify for intervention as of right or for permissive intervention, the court denies these motions, both as to the Coalition and as to its member companies.
I. BACKGROUND
Proclamation 9980, issued by President Trump on January 24, 2020 with an effective date of February 8, 2020, imposed duties of 25% ad valorem on imports of what it identified as “derivatives” of aluminum articles and of steel articles, including steel nails. See 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
The plaintiffs in these twelve actions, which were brought during the period of February 4 to June 4, 2020, variously challenge the issuance of the Proclamation on multiple grounds, including that the President did not comply with statutory procedures and thereby exceeded his delegated authority, that the Secretary of Commerce, in taking actions under Section 232, failed to comply with requirements of the Administrative Procedure Act,
The Coalition describes itself as a group of domestic manufacturers of steel nails.1 With respect to the twelve pending actions, the Coalition claims an interest in defending Proclamation 9980 from judicial challenge. The Coalition has filed proposed answers to the complaints, proposed motions for judgment on the pleadings, and various briefs in the twelve cases.2 It also has filed answers to the court‘s inquiries relating to its status. Some plaintiffs have opposed the Coalition‘s intervention.3
II. DISCUSSION
As it applies here,
The Coalition moves to intervene as of right under
A. The Coalition Does Not Meet the Requirements for Intervention As of Right
As pertinent to the pending motions,
The Coalition claims an economic interest in maintaining the 25% tariffs on imports of the steel nails subject to Proclamation 9980 on the ground that its members produce steel nail products in the United States that compete with those imports. But neither the Coalition nor any of its individual members have demonstrated that defendant United States will not adequately represent any interest the Coalition or its member companies have, or could have, in the tariffs imposed upon the import transactions that are the subject of the twelve cases for which intervention is sought. The President imposed the 25% tariffs on the subject steel nails based on the President‘s finding that such action is required so that these imports do not threaten to impair the national security. See Proclamation 9980 ¶ 9, 85 Fed. Reg. at 5,283 (“Based on the Secretary‘s assessments, I have concluded that it is necessary and appropriate in light of our national security interests to adjust the tariffs imposed by previous proclamations to apply to the derivatives of aluminum articles and steel articles described in Annex I and Annex II to this proclamation.“). Because the government has but one interest in this litigation—maintaining Proclamation 9980—it reasonably can be expected to act vigorously to defend that interest, which Proclamation 9980 has stated to be grounded in removing a threatened impairment of the national security of the United States.
The Coalition argues that its interests, being private and commercial, are not coincident with the government‘s public and enforcement-oriented interests. Coalition‘s Mot. 5 (quoting Vivitar Corp. v. United States, 7 C.I.T. 165, 168–69, 585 F. Supp. 1415, 1418–19 (1984)). The respective motivations may be different, but the Coalition‘s overall interest in seeking to intervene is in defending Proclamation 9980 from judicial challenge, and in that critical respect its interest is aligned with that of defendants. The Coalition argues that “evidence exists that the interests of the Coalition may not be adequately represented in this action,” Coalition‘s Mot. 5, pointing out that in two of the cases, the government has consented to a preliminary injunction against the collection of duties, actions that, it argues, “directly
Nor have the members of the Coalition shown that they will be in a position to make arguments other than those the government has made, or will make, in the litigation of the twelve cases. The claims of the various plaintiffs raise various questions of constitutional law and statutory interpretation. Similarly, the Coalition‘s own proposed submissions indicate that its arguments would raise questions of law should it be permitted to intervene. See, e.g., Mot. for J. on the Pleadings (Ct. No. 20-00032) (Mar. 20, 2020), ECF No. 61; Mot. for Partial J. on the Pleadings (Consol. Ct. No. 20-00037) (Mar. 20, 2020), ECF No. 56. To the extent any questions of fact will be material to a resolution of these actions, they necessarily would pertain to matters of record pertaining to the issuance of Proclamation 9980 rather than to factual issues the Coalition would be in a position to address through its participation.
B. The Court Denies Permissive Intervention Because Intervention Will Unduly Delay or Prejudice the Adjudication of the Rights of the Parties
As directed by statute and the Court‘s rules, the court considers “whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.”
C. None of the Member Companies Has Qualified Individually for Intervention
In his concurring opinion, Judge Baker raises certain complex issues that pertain generally to the legal status and capacity of the Coalition and whether the Coalition permissibly may represent the interests of its member companies as a defendant-intervenor. We hold today that neither the Coalition nor any of its individual member companies have demonstrated that they should be permitted to intervene in any of these twelve actions. Because none of the member companies may intervene individually, it necessarily follows that the Coalition may not be a defendant-intervenor on behalf of those member companies, regardless of its capacity or status. Therefore, we do not reach, and leave for another day, the issues pertaining to the legal status and capacity of the Coalition, and its authority to represent its members, that Judge Baker addresses in his concurring opinion.
III. CONCLUSION AND ORDER
Upon consideration of the Coalition‘s motions to intervene in these twelve actions, and all papers and proceedings had herein, and upon due deliberation, it is hereby
ORDERED that any stays in effect in any of the twelve actions are hereby lifted solely for the purpose of the court‘s ruling on the Coalition‘s motions to intervene in those cases; and it is further
ORDERED that the motions to intervene in each of these twelve actions be, and hereby are, denied both as to the Coalition and as to each of its individual member companies; and it is further
ORDERED that all other motions filed by the Coalition be, and hereby are, denied as moot.
/s/ Timothy C. Stanceu
/s/ Jennifer Choe-Groves
Timothy C. Stanceu, Chief Judge
Jennifer Choe-Groves, Judge
Dated: January 20, 2021
New York, New York
Baker, J., concurring
Baker, Judge, concurring: “The American system of civil litigation draws important differences between the parties to a case and everyone else.” Caleb Nelson, Intervention, 106 Va. L. Rev. 271, 273 (2020). If outsiders parachute into a case in federal district court or our Court via intervention, they “can conduct discovery, participate fully at trial, and pursue an appeal in the event of a judgment.” Id. at 274. And they might “block[] settlement” agreed to by the original parties. Solid Waste Agency of N. Cook Cty. v. U.S. Army Corps of Eng‘rs, 101 F.3d 503, 507 (7th Cir. 1996) (Posner, J.).
Because intervention can “impose substantial costs on the parties and the judiciary,” id., it behooves the “federal courts to . . . th[ink] hard about who is eligible to become a party.” Nelson, 106 Va. L. Rev. at 273. This is especially true given that the law governing intervention “is a mess.” Id.
These twelve actions, which involve challenges by importers to tariffs on steel nails imposed by the President for national security reasons, are an opportunity for us to think hard not only about who is eligible to become a party in federal court, but also about what is eligible to become a party. Before us are the identical motions of the
I concur with my colleagues in denying the motions to intervene. I write separately to take this opportunity to think hard about the intervention questions that the parties originally briefed and the additional questions that we asked the parties to address, including the Coalition‘s nature (is it an entity or an ad hoc group?), associational standing, and capacity to be sued as a party defendant.
As explained below, although the Constitution does not require the Coalition to demonstrate standing here—a question that the Supreme Court only resolved while these intervention motions were pending—the Coalition‘s motions to intervene are legal nullities because it lacks any legal existence. Moreover, even if the Coalition has legal existence or the lack of such existence is not fatal to its motions, its lack of capacity to sue or be sued in any federal court is.
Either one of those reasons standing alone is enough to deny the Coalition‘s intervention motions. But even if the Coalition‘s motions are not legal nullities and it has the capacity to sue or be sued, the Coalition is flatly ineligible for either intervention as of right or permissive intervention.
Although my colleagues do not decide the question, in my view the Coalition is ineligible for intervention as of right because it has no protectable legal interest in the tariffs it seeks to defend. Moreover, even if the Coalition has a legally protected interest in the tariffs, I agree with my colleagues that the Coalition is still ineligible for intervention as of right because its notional interest in these suits is adequately represented by the government.
The Coalition is also disqualified from permissive intervention under either of the applicable pathways for such intervention—questions my colleagues do not reach. The Coalition is ineligible under the first such pathway, a statute granting outsiders with standing a conditional right to intervene, because the Coalition lacks associational standing to represent its members.
Likewise, the Coalition is ineligible under the second such pathway, a provision in our rules allowing for intervention when the intervenor shares a defense with the defendant, because Plaintiffs have no claim against the Coalition. A fortiori, the Coalition shares no defense with the government.
Finally, even if the Coalition is otherwise eligible for permissive intervention, which is a necessary but not sufficient condition for such intervention, I concur with my colleagues’ discretionary denial of leave to intervene because of the resulting prejudice to the parties and burdens on the Court.
That all said, I appreciate that the Coalition‘s members would at least like to have their views heard in this litigation. But there is another, far less costly—and, as here, too often overlooked—mechanism for having outsider views heard that creates no prejudice for the parties and imposes far fewer burdens on the Court than the comparatively drastic step of intervention. Interested outsiders that wish their views
Statutory and Factual Background
In 2017, the Secretary undertook a Section 232 investigation of the effects of imported steel on national security. After public hearings and receiving comments from various quarters, including both importers and domestic producers, the Secretary issued a report finding that steel imports threatened national security.1 Based on this report, in 2018 the President issued Proclamation 9705, which imposed duties on imported raw steel. See Proclamation No. 9705 of March 8, 2018, Adjusting Imports of Steel into the United States, 83 Fed. Reg. 11,625 (Mar. 15, 2018).
In 2020, the President issued the proclamation challenged in these suits, Proclamation 9980, which extended Proclamation 9705‘s duties to certain steel derivative products, including steel nails, not previously addressed by the Secretary‘s earlier investigation and report (or any report). See Proclamation No. 9980, Adjusting Imports of Derivative Aluminum Articles and Derivative Steel Articles into the United States, 85 Fed. Reg. 5281 (Jan. 29, 2020). The President explained that the purpose of extending the tariffs to steel derivative products was to prevent the “ero[sion of] the customer base for U.S. producers of . . . steel” and circumvention of Proclamation 9705‘s duties caused by imports of such products. Id. at 5282.
Unlike Proclamation 9705, Proclamation 9980 was not preceded by an investigation by the Secretary, administrative hearings, and the opportunity for public comments by anyone, including members of the Coalition.2 In short, Proclamation 9980‘s tariffs on steel nail importers came out of the blue insofar as the Coalition is concerned. From the Coalition‘s happy perspective, Proclamation 9980 represents found money.
Plaintiffs in these twelve actions,3 domestic importers of steel nails, challenge Proclamation 9980 on various Administrative Procedure Act and non-statutory review grounds. Defendants are the United States, the President, and various other officials and agencies charged with enforcement of Proclamation 9980.
The Coalition‘s Intervention Motions
The Coalition moved to intervene as a party defendant in each of these cases and
merits briefs in the four active cases even though its motions for intervention were still pending.5 We ordered the parties not to respond to the Coalition‘s merits filings pending further order of the Court. See ECF 62.
Plaintiffs in six of these suits affirmatively oppose the Coalition‘s motions to intervene.6 The government takes no position, and no existing party affirmatively supports intervention.
Other than the bare assertion that its members7 comprise “the largest producers of steel nails in the United States,” ECF 47, at 4, neither the Coalition‘s motions to intervene nor its proffered answers contain any allegations, much less evidentiary substantiation,8 concerning the Coalition‘s nature, purposes, activities, associational standing, authority to represent its members, and capacity to sue or be sued. We therefore ordered the Coalition to file supplemental briefing and any supporting evidence addressing these topics. ECF 63. The Coalition responded, see ECF 69, as did the plaintiffs opposing intervention in non-stayed cases. See ECF 74; Oman Fasteners, LLC v. United States, Consol. Ct. No. 20-37, ECF 71.
The only evidentiary materials the Coalition included in its response were the declarations of executives of the nine companies then comprising the Coalition,9 which the Coalition‘s supplemental brief asserts account “for a super-majority of
These executives, speaking on behalf of their respective companies—notably, not on behalf of the Coalition—state that their companies are domestic producers of steel nails that authorized the Coalition to represent their interests with respect to Proclamation 9980. See id. at 20-36. All state that their respective companies purchase steel wire rod, the raw material used to produce steel nails. See, e.g., id. at 22. Apparently only one member, however, purchases steel wire rod from exclusively domestic steel producers.10
Although not relevant to the grounds upon which my colleagues and I deny the Coalition‘s intervention motions, I note that protecting domestic nail manufacturers that use imported steel wire rod, as all but one of the Coalition‘s members appear to do in some unknown measure, is assuredly not the purpose of Proclamation 9980, which instead seeks to protect customers of domestic steel producers. See Proclamation 9980, 85 Fed. Reg. at 5282.
Several executives indicate that since the Proclamation took effect, prices and demand for their respective companies’ nails have increased. See id. at 20, 24, 26, 28, 34, 38. All indicate that they anticipate demand and prices for their respective companies’ nails will drop if Proclamation 9980 is declared unlawful, see id. at 20-36, presumably because their competitors’ prices will drop.
In its supplemental brief, the Coalition asserts that it “was formed by the mutual consent of its members to achieve a common purpose—defending the lawfulness and ensuring the immediate and ongoing enforcement of Proclamation 9980,” and that it is analogous to a “trade organization.” Id. at 11. I take this statement of counsel, coupled with the Coalition‘s failure to directly respond to one of our questions11 and to submit any affidavit or declaration by a person authorized to speak for the Coalition, as an admission that the Coalition is not a preexisting or even newly created entity of any kind but rather a one-off, ad hoc group of companies that jointly retained counsel to defend Proclamation 9980.
Discussion
The Coalition moves to intervene as of right under
I. Constitutional standing
“Article III of the Constitution limits the exercise of the judicial power to ‘Cases’ and ‘Controversies.’ ” Town of Chester, N.Y. v. Laroe Estates, 137 S. Ct. 1645, 1650 (2017). The leading modern case explains that a justiciable Article III case or controversy requires a “party invoking federal court jurisdiction” to demonstrate, as “the irreducible constitutional minimum of standing,” (1) that it has suffered “an injury in fact,” that is, “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical“; (2) a “causal connection between the injury and the conduct complained of“; and (3) “it must be likely that the injury will be redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561-62 (1992) (cleaned up).
Defendants, as well as plaintiffs, must possess constitutional standing. See McConnell v. FEC, 540 U.S. 93, 233 (2003) (stating “that because the [defendant agency] has standing, . . . we need not address the standing of the intervenor-defendants, whose position here is identical to the [agency‘s],” thereby implying that at least one defendant must have standing), overruled in part on other grounds, Citizens United v. FEC, 558 U.S. 310 (2010); Arizonans for Official English v. Arizona, 520 U.S. 43, 64 (1997) (stating that “[s]tanding to sue or defend is an aspect of the case-or-controversy requirement” of Article III) (emphasis added); Samsung Elecs. Co. v. Rambus, Inc., 523 F.3d 1374, 1378 (Fed. Cir. 2008) (same); see also Diamond v. Charles, 476 U.S. 54, 62 (1986) (observing that “a State has standing to defend the constitutionality of its statute“).
The Coalition, however, argues that it need not independently demonstrate constitutional standing to defend Proclamation 9980 because it can piggyback on the government‘s standing. See ECF 69, at 12 (citing Canadian Wheat Bd. v. United States, 637 F. Supp. 2d 1329 (CIT 2009)). In Canadian Wheat, a decision of this Court noted a circuit split over whether putative intervenors must independently demonstrate their constitutional standing. See 637 F. Supp. 2d at 1338-42.12
After acknowledging the Federal Circuit had reserved the question, see 637 F. Supp. 2d at 1338 (citing Landmark Land Co. v. FDIC, 256 F.3d 1365, 1382 (Fed. Cir. 2001)), Canadian Wheat agreed with those circuits holding that intervenors need not demonstrate independent standing, reasoning that once a “case or controversy” exists, “so long as the parties with standing remain in the case, the court‘s jurisdiction continues regardless of the
The Supreme Court seemingly resolved this circuit split in 2017 by applying McConnell‘s rationale, albeit without acknowledging that decision. In Town of Chester, the Court observed that under Article III, ” ‘standing is not dispensed in gross.’ ” Id. at 1650 (quoting Davis v. FEC, 554 U.S. 724, 734 (2008)). Rather, “a plaintiff must demonstrate standing for each claim he seeks to press and for each form of relief that is sought.” Id. (quoting Davis, 554 U.S. at 734). Under these principles, in cases with multiple plaintiffs “[a]t least one plaintiff must have standing to seek each form of relief requested in the complaint.” Id. at 1651.
Applying these principles in the context of intervention as of right, the Supreme Court held that “[f]or all relief sought, there must be a litigant with standing, whether that litigant joins as a plaintiff, a coplaintiff, or an intervenor as of right.” Id. Therefore, “at the least, an intervenor of right must demonstrate Article III standing when it seeks additional relief beyond that which the plaintiff requests.” Id.14 This holding tracks exactly with the reasoning of McConnell. See supra note 13.
Although courts agree that Town of Chester requires that an intervenor seeking different relief must demonstrate standing, some courts, judges, and commentators read it as not deciding whether (as here) an intervenor seeking the same relief sought by an existing party must also demonstrate standing. See, e.g., Kane Cty., Utah v. United States, 950 F.3d 1323, 1331-32 (10th Cir. 2020) (Tymkovich, C.J., dissenting from denial of rehearing en banc); Old Dominion Elec. Coop. v. Fed. Energy Regulatory Comm‘n, 892 F.3d 1223, 1232 n.2 (D.C. Cir. 2018), cert. denied, 139 S. Ct. 794 (2019); Zachary N. Ferguson, Rule 24 Notwithstanding: Why Article III Should Not Limit Intervention of Right, 67 Duke L.J. 189, 193 (2017).
After the pending intervention motions were briefed, the Supreme Court put to rest these lingering doubts. In Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania, 140 S. Ct. 2367 (2020), a group of nuns
Citing Town of Chester, the Supreme Court explained that the nuns did not have to demonstrate constitutional standing because they sought the same relief as the government. See id. at 2379 n.6 (as “both the Federal Government and the [nuns] asked the court to dissolve the injunction against the religious exemption[,] [t]he Third Circuit . . . erred by inquiring into the Little Sisters’ independent Article III standing“). In other words, Little Sisters of the Poor applied the McConnell principle that a defendant-intervenor seeking the same relief as the defendant need not demonstrate constitutional standing.
Town of Chester, as recently clarified by Little Sisters of the Poor, thus definitively resolved the persistent circuit split noted by the CIT in Canadian Wheat. Article III does not require a putative intervenor—whether as of right or permissive—to demonstrate independent constitutional standing, so long as it seeks the same relief as one of the parties to the case.
Here, like the government, the Coalition seeks to defend Proclamation 9980, and (so far) it has not opposed any step taken by the government.15 For that reason, Article III does not require the Coalition to demonstrate independent constitutional standing and, by extension, associational standing. See Int‘l Union, United Auto., Aerospace & Agric. Implement Workers of Am. v. Brock, 477 U.S. 274, 281-82 (1986)
(explaining associational standing of organization to represent its members). Instead, at least insofar as Article III is concerned, the Coalition can ride the government‘s standing coattails to defend Proclamation 9980.16
II. Legal existence
“One of the most fundamental precepts of Anglo-American jurisprudence is that a right, to be enforced in a court of law, must have a ‘holder’ or ‘bearer.’ ” Motta v. Samuel Weiser, 598 F. Supp. 941, 948 (D. Me. 1984) (citing IV R. Pound, Jurisprudence 192 (1959)). A right must attach to some “legal unit.” Id. (quoting Pound, supra, at 192). Such a legal unit is either a “natural person or some other entity which has been accorded legal personality by common law or statute.” Id. In other words, legal existence is the sine qua non for the attachment of any rights or liabilities.
Legal existence, a “substantive” question going to the status of a putative party, is a “separate and distinct legal concept[]
Examples from corporate and bankruptcy law readily illustrate the distinction between legal existence and capacity. A corporation in involuntary bankruptcy has legal existence, but it lacks the capacity to sue or be sued; it must sue or be sued in the name of the bankruptcy trustee. See, e.g., In re C.W. Mining Co., 636 F.3d 1257, 1263 (10th Cir. 2011) (“The only person with standing or legal capacity to represent [the corporate Debtor in involuntary bankruptcy] in any litigation, including these appeals, is its Trustee.“).
On the other hand, once a corporation has filed articles of dissolution and ceases to exist under applicable state law, it is incapable of even filing for bankruptcy and the question of capacity does not even arise. See, e.g., In re Midpoint Dev., L.L.C., 466 F.3d 1201, 1207 (10th Cir. 2006) (bankruptcy filing by purported corporation was a legal nullity because the corporation no longer had legal existence after filing articles of dissolution).
Although legal existence and capacity are distinct concepts, both “are prerequisites to the suability of an entity.” Roby, 796 F. Supp at 110. Indeed, legal existence is an antecedent question to capacity: An entity lacking legal existence cannot sue or be sued, not because it lacks capacity, but rather because the entity simply does not exist in the eyes of the law. See House v. Mitra QSR KNE, LLC, No. CV GLR-17-412, 2018 WL 3353068, at *3 (D. Md. May 31, 2018) (“[L]egal existence is a prerequisite to having the capacity to sue“).
In the absence of legal existence or specific statutory authorization,18 a federal court filing by a purported entity is a nullity. Id. (“[A] suit brought in the name of a . . . party [lacking legal existence] is a mere nullity“) (cleaned up); Youell v. Grimes, 203 F.R.D. 503, 507-09 (D. Kan. 2001) (group of Lloyd‘s of London underwriters was not an unincorporated association, lacked legal existence, and therefore could not be sued as a counterclaim defendant); Brown v. Fifth Jud. Dist. Drug Task Force, 255 F.3d 475, 477 (8th Cir. 2001) (“[A] group of persons working together for a common purpose must first be found to have legal existence” before it can sue); In re Asbestos Prods. Liab. Litig., 311 F.R.D. 152, 155-56 (E.D. Pa. 2015) (lawsuits filed in the names of plaintiffs who died prior to filing were legal nullities because the purported plaintiffs lacked any legal existence). As a result, “the question whether an entity is . . . legally cognizable is so fundamental to the effectiveness of the Court‘s ultimate order that the Court must consider the issue on its own motion.” Motta, 598 F. Supp. at 951.19
Here, I conclude that the Coalition has no legal existence. As plaintiff Oman Fasteners argues, see ECF 71 at 1-2, the Coalition is not an unincorporated association, which “is a term of art—every group that is not a corporation or partnership is not automatically an unincorporated association.” Roby, 796 F. Supp. at 110. The common law generally defines “unincorporated association” as “a body of persons united without a charter, but upon the methods and forms used by incorporated bodies for the prosecution of some common enterprise.” Hecht v. Malley, 265 U.S. 144, 157 (1924).
The Coalition‘s evidentiary submission demonstrates that it is an ad hoc group of domestic nail manufacturers that seeks to defend the Proclamation; on this record, the only joint action ever taken by its members appears to be the retention of counsel to represent the Coalition in this lawsuit. There is no indication that the Coalition has ever met, transacted any business, or issued any public statements. Nor is there any indication that the Coalition has a place of business, bank account, telephone number, officers, structure, or even so much as an email address or rental mailbox at the UPS Store.
The Coalition‘s evidentiary submission—limited to declarations of senior executives of its members speaking, not on the Coalition‘s behalf, but on each member‘s behalf—gives the game away. If the Coalition had some existence separate and apart from its members, presumably some person—a president, chairperson, or chief executive officer selected by the Coalition‘s members—could and would speak for it. No one speaks for the Coalition in this case or otherwise—other than its counsel—because it has no existence separate from its members in any sense whatsoever. In short, the Coalition is nothing more than a name appended to a court filing.
But an ” ‘association’ that exists in name only is not an association at all, as that term is defined in both common and legal vernacular.” Motta, 598 F. Supp. at 949; see also, e.g., Cal. Clippers, Inc. v. U.S. Soccer Football Ass‘n, 314 F. Supp. 1057, 1068 (N.D. Cal. 1970) (holding that “the most informal and transitory of organizations” with “no charter, by-laws or articles, no office or place of business, no mailing address, no bank account, no assets or obligations, and [that] never transacted any business” and “never met” was not an unincorporated association); Ermert v. Hartford Ins. Co., 559 So. 2d 467, 474 (La. 1990) (“[A]n unincorporated association, as a juridical person distinct from its members, does not come into existence or commence merely by . . . the fact that a number of individuals have simply acted together; there must also be an agreement whereby two or more persons combine certain attributes to create a separate entity for a legitimate purpose.“); cf. Brock, 477 U.S. at 289 (for associational standing purposes, distinguishing “suits by associations on behalf of their members from class actions” by observing that the latter represents “an ad hoc union of injured plaintiffs who may be linked
Because the Coalition is not an unincorporated association, it cannot have any legal existence, which as noted above is a prerequisite for invoking the authority of a federal court absent statutory authorization. As a result, the Coalition‘s motions to intervene have the same legal effect as court filings made in the name of a deceased person, a fictitious person, an animal, an inanimate object, or a dissolved corporation—they are complete nullities.
III. Capacity
This Court‘s Rule 17(b) governs the capacity of parties to sue or be sued. For an individual, capacity is determined by the law of domicile,
As it is neither an individual nor a corporation, the Coalition asserts that it has legal capacity under Rule 17(b)(3)(A) because it is an unincorporated association and Plaintiffs seek to enforce substantive rights under federal law. See ECF 69, at 10 (“Plaintiffs raise claims pursuant to several federal statutes“).20
Even assuming the Coalition is an unincorporated association for purposes of Rule 17(b)(3)(A) as it claims, the Coalition‘s capacity theory fails because Plaintiffs do not seek “to enforce a substantive right existing under the United States Constitution or laws” against the Coalition.
For an unincorporated association to have capacity to be sued as a defendant in connection with a plaintiff‘s “enforce[ment] of a substantive right existing under the United States Constitution or laws,” federal law must provide for a cause of action against the association. Examples abound.21
Here, Plaintiffs assert APA and nonstatutory
IV. Intervention as of right under Rule 24(a)
The Coalition first seeks to intervene as of right under our Rule 24(a). That rule, taken verbatim in relevant part from
of the action, and is so situated that disposing of the action may as a practical matter impair or impede the
There is no serious dispute that the Coalition‘s motions were timely,25 so I will examine whether the Coalition satisfies the other three parts of this test.
A. The Coalition‘s interest
The Coalition‘s motions assert that its members have an “economic interest” in continued enforcement of Proclamation 9980‘s import duties, as its members (domestic producers of steel nails) compete with the importers subject to the duties, see ECF 47, at 3–5. But “mere[] economic interests will not suffice” under
Here, the Coalition does not, nor could it, claim that Section 232 confers any legally protectable interest upon the Coalition or its members.26 Unlike the antidumping and countervailing duty statutes, which provide specific rights to domestic producers to participate in administrative proceedings culminating in final agency action imposing such duties,27 the Coalition and its members played no role in the issuance of Proclamation 9980, as there were no underlying administrative proceedings, and it had no statutory right to participate in any. Although the Coalition‘s members may indirectly benefit from actions taken by the President under Section 232, they have no “interest . . . which the substantive law [Section 232] recognizes as belonging to or being owned by [them].” Am. Mar., 870 F.2d at 1562.
B. Directness of any injury to the Coalition‘s interest
Even if the Coalition had a legally protected interest of some kind here, it would
In American Maritime, the putative intervenor sought to intervene as a defendant in the Court of Federal Claims in a contract dispute over a government shipping subsidy. The putative intervenor, a competitor of the plaintiff, argued that it would suffer competitive injury if the plaintiff prevailed and was awarded the disputed subsidy. American Maritime held that “[f]ear of future competition” that might result from a court judgment in favor of a competitor “does not reflect an interest in the property or transaction” within the meaning of
C. Adequacy of the government‘s participation
Even if the Coalition asserted a cognizable interest within the meaning of
First, it “must make a compelling showing that its interests may not be adequately protected by the government insofar as there are aspects of the case that the government might not—or might not be able to—pursue to their fullest.” Id. at 1316. Second, the Coalition “must overcome the presumption that the government as sovereign adequately represents the interest of citizens concerning matters that invoke ‘sovereign interests.’ ” Id. (quoting Standard Heating & Air Conditioning Co. v. City of Minneapolis, 137 F.3d 567, 572 (8th Cir. 1998)).
As to the first element, the Coalition complains that, prior to its motion to intervene, the government consented to preliminary injunctive relief in eight of these cases barring the collection of Proclamation 9980‘s duties and that in so doing the government undermined Proclamation 9980‘s effectiveness. ECF 47, at 5–6. The Coalition‘s argument is unpersuasive for several reasons.
To begin with, I read the Coalition‘s complaints about the consent injunctions as make-weight grumbling to put some distance between it and the government for purposes of satisfying
In any event, the Coalition‘s facts are wrong: without admitting to liability, the
Most importantly, the government‘s consent to entry of these preliminary injunctions for its own tactical litigation reasons does not detract from its vigorous defense of Proclamation 9980 on the merits. Reasonable differences in litigation strategy between the government and the Coalition do not demonstrate an inability or unwillingness on the government‘s part to defend any aspect of Proclamation 9980. See Del. Valley Citizens’ Council for Clean Air v. Pennsylvania, 674 F.2d 970, 974 (3d Cir. 1982).
Even if the Coalition could demonstrate that the government is not defending some aspect of Proclamation 9980, the Coalition would still have to establish the second element of the test for demonstrating the inadequacy of the government‘s representation—it must “overcome the presumption that the government as sovereign adequately represents the interest of citizens concerning matters that invoke ‘sovereign interests.’ ” Wolfsen, 695 F.3d at 1316 (quoting Standard Heating, 137 F.3d at 572).
To overcome this presumption, the Coalition cites Vivitar Corp. v. United States, 585 F. Supp. 1415 (CIT 1984), and argues that the government necessarily does not adequately represent its private interests. See id. at 1418 (“[T]his court is reluctant to view the Government‘s and [the putative intervenor‘s] interests as coincident, where [the putative intervenor‘s] interests are purely private . . . and where the Government‘s interests are public and enforcement oriented.“).
I think the Coalition places more weight on Vivitar than it can bear, as in that case the government also took a legal position adverse to that of the putative intervenor‘s. See id. More importantly, insofar as Vivitar is susceptible of the reading that the Coalition gives it, I think Vivitar is no longer persuasive authority. Wolfsen requires us to presume that the government‘s sovereign interests and the Coalition‘s private interests are coincident. The Coalition fails to carry its burden of demonstrating otherwise.
V. Permissive intervention under Rule 24(b)(1)
Alternatively, the Coalition contends that it qualifies for permissive intervention under both prongs of
In exercising our discretion under
A. Permissive intervention by statute
Although
1. “Adversely affected or aggrieved”
Here, the Coalition asserts that its members will be “adversely affected or aggrieved” for purposes of
As used in the APA, “adversely affected or aggrieved” means Article III “injury in fact.” Rohm & Haas Co. v. U.S. Int‘l Trade Comm‘n, 554 F.2d 462, 463 (CCPA 1977) (citing Sierra Club v. Morton, 405 U.S. 727, 733 (1972)); see also United States v. Students Challenging Regul. Agency Procs., 412 U.S. 669, 690 n.14 (1973) (” ‘Injury in fact’ reflects the statutory requirement [in Section 10 of the APA] that a person be ‘adversely affected’ or ‘aggrieved,’ and it serves to distinguish a person with a direct
2. Associational standing
Here, the Coalition makes no claim that it has constitutional standing to defend Proclamation 9980, but it contends in its supplemental brief that it has associational standing to represent its members that do. See ECF 69, at 13–17.
“To establish standing based upon harm to one or more of its members (associational standing),” Disabled Am. Veterans v. Gober, 234 F.3d 682, 689 (Fed. Cir. 2000), an association must demonstrate that (1) “its members would otherwise have standing to sue in their own right“; (2) “the interests it seeks to protect are germane to the organization‘s purpose“; and (3) “neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Id. (quoting Hunt v. Wash. State Apple Advertising Comm‘n, 432 U.S. 333, 343 (1977)).
The Coalition easily satisfies the third element of the Hunt test here, as neither its asserted defense nor the relief it seeks—a judgment upholding Proclamation 9980—requires the participation of its individual members. See Reid v. Dep‘t of Commerce, 793 F.2d 277, 279 (Fed. Cir. 1986) (distinguishing between “declaration, injunction[,] or some other form of prospective relief” requiring no participation of association members and “particularized relief dependent on the individual circumstances of each” association member). The Coalition, however, does not so easily navigate past the first and second Hunt shoals. I consider each in turn.
a. The members’ standing
To satisfy the first Hunt element, the Coalition must demonstrate that “its members would otherwise have standing to [defend Proclamation 9980] in their own right.” Gober, 234 F.3d at 689. That is, the Coalition must show that if Proclamation 9980 is invalidated, its members would suffer “injury in fact, that is, an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 561 (internal quotation marks and citations omitted).
The Coalition submitted declarations of senior executives of its members—all domestic nail manufacturers—stating that their respective companies fear competitive injury if Proclamation 9980‘s duties on their competitors—importers of steel nails—are invalidated. See ECF 69, at 20-36. Such competitive injury by operation of normal market forces ordinarily qualifies as injury in fact for Article III purposes. See AVX Corp. v. Presidio Components, Inc., 923 F.3d 1357, 1364 (Fed. Cir. 2019) (“[C]ompetitive injury to a challenger is highly likely where the government action has a natural price-lowering or sales-limiting effect on the challenger‘s sales (compared to what prices or sales would be in the absence of the government action),” including by “directly lowering competitors’ prices for competing goods“); see also Canadian Lumber Trade All. v. United States, 517 F.3d 1319, 1334 (Fed. Cir. 2008) (noting that under the doctrine of competitor standing, it “is presumed (i.e., without affirmative findings of fact) that a boon to some market participants is a detriment to their competitors“) (emphasis in original). Accordingly, the Coalition has demonstrated injury in fact and hence constitutional
“Beyond the constitutional requirements” of an Article III case or controversy, “the federal judiciary . . . also adhere[s] to a set of prudential principles that bear on the question of standing.” Valley Forge Christian Coll. v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 474 (1982). In assessing claims of associational standing based on injury to an association‘s members, courts also consider whether the association‘s members have prudential standing. See, e.g., Reid, 793 F.2d at 280.34
One prudential consideration bearing on standing is that “a party ‘generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.’ ” Kowalski v. Tesmer, 543 U.S. 125, 129 (2004) (quoting Warth v. Seldin, 422 U.S. 490, 499 (1975)). This principle of third-party standing, sometimes referred to as jus tertii standing, “limit[s] access to the federal courts to those litigants best suited to assert a particular claim.” Starr Int‘l Co., Inc. v. United States, 856 F.3d 953, 965 (Fed. Cir. 2017) (quoting Gladstone, Realtors v. Vill. of Bellwood, 441 U.S. 91, 100 (1979)).35
Here, the Coalition seeks to intervene to defend Proclamation 9980, which is a sovereign legal interest of the government, not the Coalition‘s members. Cf. Diamond v. Charles, 476 U.S. 54, 65 (1986) (physician that intervened to defend state abortion law had no cognizable interest for standing purposes “because the power to create and enforce a legal code, both civil and criminal[,] is one of the quintessential functions of a State“) (cleaned up).36 Thus, to have prudential standing to defend Proclamation 9980, the Coalition‘s members must demonstrate a ” ‘close’ relationship with the person who possesses the right,” i.e., the government, and a ” ‘hindrance’ to [the government‘s] ability to protect [its] own interests.” Id. at 966 (quoting Kowalski, 543 U.S. at 130).
The Coalition‘s members do not satisfy this test. First, they have no relationship with the government. Cf. Kowalski, 543 U.S. at 130–31 (noting that in some cases the attorney-client relationship can confer third-party standing on the part of an attorney to assert the interests of a client). Nor does any impediment prevent the government from fully defending Proclamation 9980.
In short, even though the Coalition‘s members possess constitutional standing because of their competitive injury that will likely result from Proclamation 9980‘s invalidation, they lack third-party standing because they have no “legally protected interest” in defending Proclamation 9980. As its members lack prudential standing, the Coalition founders on the rock of the first Hunt associational standing element.
b. Germaneness
To establish associational standing, the Coalition must also demonstrate the second Hunt element, i.e., that “the interests it seeks to protect are germane to the organization‘s purpose.” Disabled Am. Veterans, 234 F.3d at 689. Neither the Coalition‘s intervention motions nor its proposed answers accompanying them contained any allegations regarding the nature of the Coalition and its purposes, much less whether the interests it seeks to protect are germane to those purposes. We therefore ordered the Coalition to address, inter alia, its associational standing, and to submit any supporting evidence.
The Coalition therefore fails to carry its burden of demonstrating that it satisfies the germaneness requirement of associational standing. See McKinney v. U.S. Dep‘t of Treasury, 793 F.2d 1544, 1553 (Fed. Cir. 1986) (public interest law firm did not have associational standing because it “failed to demonstrate a nexus between its organizational purpose and the economic interests of the producers and workers it purportedly represents“); NHH Inv‘r Grp. v. DFH Watford, LLC, No. 4:15-CV-027, 2015 WL 12867309, at *3 (D.N.D. Oct. 8, 2015) (associational standing did not exist because “[a]n exhaustive review of the record leaves the Court with no understanding as to the interest or purpose of [purported association] as an organization“) (emphasis added); see also Humane Soc‘y of U.S. v. Hodel, 840 F.2d 45, 57 (D.C. Cir. 1988) (germaneness requirement of associational standing screens out lawsuits “filed by organizations on issues on which they as a practical matter lack expertise or resources“).
Because the Coalition here has provided no evidence of its interests, purposes, resources, or expertise as an organization, the Coalition‘s attempt to intervene is functionally equivalent to “a law firm seeking to sue in its own name on behalf of a client . . . alleging injury from governmental action wholly unrelated to the firm,” Hodel, 840 F.2d at 57-58 (emphasis added), except here the proposed defendant-intervenor‘s counsel has created a name (the “Coalition“) to sue under rather than using the law firm name. That is a distinction without a difference, and the Coalition fails to satisfy the germaneness requirement of associational standing under Hunt.
* * *
In sum, I conclude that the Coalition is ineligible for permissive intervention under the first prong of
B. Permissive intervention based on a shared defense
The second prong of
In Diamond, the district court allowed a physician to intervene to defend a challenged state abortion law. After the district court declared the law unconstitutional and the Seventh Circuit affirmed, the physician—but not the state—appealed. The Supreme Court dismissed the appeal, reasoning that the physician had no constitutional standing to defend the challenged statute because he had no direct stake in upholding the statute. See 476 U.S. at 68. Justice O‘Connor concurred in the judgment on the basis that the district court should never have allowed the physician‘s intervention in the first instance. See id. at 71.
With respect to permissive intervention, Justice O‘Connor explained that
A district court in Texas recently adopted Justice O‘Connor‘s reasoning in Diamond and held that the State of Nevada could not intervene in a suit against the federal government asserting a challenge to certain aspects of the Affordable Care Act. The court explained that Nevada did not qualify for permissive intervention under
In the absence of any controlling authority from the Federal Circuit, I agree with and would adopt the reasoning of Justice O‘Connor in Diamond and the Texas district court in DeOtte. Here, at least for purposes of
C. Prejudice to the original parties
Even if the Coalition were otherwise eligible for permissive intervention under either prong of
This discretion should not be exercised lightly, as a new party has “substantial power to direct the flow of litigation and affect settlement negotiation[s].” Deutsche Bank Nat‘l Tr. Co. v. FDIC, 717 F.3d 189, 195 (D.C. Cir. 2013) (Silberman, J., concurring); see also Solid Waste Agency of N. Cook Cty. v. U.S. Army Corps of Eng‘rs, 101 F.3d 503, 508 (7th Cir. 1996) (Posner, J.) (“Increasing the number of parties to a suit can make the suit unwieldy.“).
Here, in exercising our discretion under
As to delay, I note that allowing the Coalition to intervene would have disrupted the briefing schedules agreed to by the parties in two38 of the four cases before us in active litigation. This problem is of the Coalition‘s own making; in moving to intervene, it did not address its associational standing to represent its members, even though, as I explain above, the statute it invoked for permissive intervention—
Finally, I note that the Coalition claims, at most, an indirect economic interest in
VI. The amicus curiae alternative to intervention
Because of our national jurisdiction, our rules expressly provide for amicus curiae participation with leave of court. See
Outsiders with anything less than an indisputable right of intervention should think hard about whether they can accomplish their purposes more efficiently—for all involved—by seeking leave to participate as amici curiae rather than by taking the comparatively drastic step of seeking intervention. “[E]xperienced litigators note that many of those benefits [of intervention] could be achieved simply by . . . outsiders . . . present[ing] their views as amici.” Nelson, 106 Va. L. Rev. at 391. In my view, we should freely give leave to outsiders with indirect economic interests to present their views through amici curiae briefs.
/s/ M. Miller Baker
M. Miller Baker, Judge