USP HOLDINGS, INC., SUBSTITUTED FOR UNIVERSAL STEEL PRODUCTS, INC., PSK STEEL CORPORATION, DAYTON PARTS, LLC, BORUSAN MANNESMANN PIPE U.S. INC., JORDAN INTERNATIONAL COMPANY 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
2021-1726
United States Court of Appeals for the Federal Circuit
June 9, 2022
Appeal from the United States Court of International Trade in No. 1:19-cv-00209-GSK-MMB-LMG, Senior Judge Leo M. Gordon, Judge Gary S. Katzmann, Judge M. Miller Baker.
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.
Opinion for the court filed by Circuit Judge DYK, in which Circuit Judge MAYER joins, and in which Circuit Judge CHEN joins except as to footnote 4.
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.
Based on an investigation under
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.
BACKGROUND
I
Section 232 of the Trade Expansion Act of 1962,
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.”
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:
[If] the Secretary finds 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, the President shall—
(i) determine whether the President concurs with the finding of the Secretary, and
(ii) if the President concurs, 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.
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.
II
On April 19, 2017, the Secretary initiated an investigation under
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.
Id. at 40,225.
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
The government moved for judgment on the pleadings, which the Trade Court granted. See Universal Steel Prods., Inc. v. United States, 495 F. Supp. 3d 1336 (Ct. Int‘l Trade 2021). The Trade Court held that Proclamation 9705 and the subsequent proclamations imposing tariffs did not violate
USP appeals. We have jurisdiction under
DISCUSSION
On appeal, “[w]e review a judgment on the pleadings from the Court of International Trade de novo.” Forest Lab‘ys, Inc. v. United States, 476 F.3d 877, 881 (Fed. Cir. 2007).
I
We first address the determinations by the President and the Secretary that steel imports threaten to impair the national security. USP challenges both determinations. We consider the reviewability of this determination as to both the President and the Secretary.
Under the Constitution, Congress has exclusive authority to regulate international commerce.
The Supreme Court has held that the “President‘s actions may [] be reviewed for constitutionality.” Franklin v. Massachusetts, 505 U.S. 788, 801 (1992). But USP does not assert a constitutional challenge here because “claims simply alleging that the President has exceeded his statutory authority are not ‘constitutional’ claims, subject to judicial review under the exception recognized in Franklin.” Dalton v. Specter, 511 U.S. 462, 473-74 (1994).
Nonetheless, claims that the President‘s actions violated the statutory authority delegated to him in
Although we conclude the President‘s actions beyond his statutory authority are reviewable, we must also consider the appropriateness of bringing suit against the President directly. The Trade Court held that the President himself could be named as a defendant in the complaint because no relief was sought against him. As noted in Judge Baker‘s concurrence at the Trade Court, the President cannot be sued directly to challenge his threat determination under the statute. As we held in Corus, the jurisdictional statute here,
USP also alleges that the Secretary‘s action violated the statute. USP argues that the Secretary‘s threat finding constitutes a final agency action that is subject to review under the APA. See
The Trade Court‘s decision in this respect is incorrect. We have held that “an agency recommendation is subject to judicial review” if it constitutes a final agency action, i.e., “if ‘the action . . . mark[s] the consummation of the agency‘s decisionmaking process,’ and ‘the action [is] one by which rights or obligations have been determined, or from which legal consequences will flow.‘” Corus, 352 F.3d at 1358 (quoting Bennett v. Spear, 520 U.S. 154, 177-78 (1997)). In reference to the first prong, the government does not appear to dispute that the Secretary‘s threat determination is the consummation of the agency‘s decisionmaking process.
As to the second (legal consequences) prong, we addressed in Corus a statute where “the President does not have complete discretion under the statute” and his authority to act under the statute only arose “if the Commission [made] ‘an affirmative finding regarding serious injury.‘” Corus, 352 F.3d at 1359 (quoting
Here, the Supreme Court held that an earlier version of
The statute indisputably incorporates a congressional judgment that an affirmative finding of threat by the Secretary is the predicate for presidential action, while also incorporating a congressional judgment that how to address the problem identified in the finding is a matter for the President, whose choices about remedy are not constrained by the Secretary‘s recommendations.
Transpacific, 4 F.4th at 1323 (emphasis added). This precondition to presidential action brings this case within Corus.4
Other cases have acknowledged that a predicate affirmative agency finding of an injury or threat, as in Corus, is reviewable. In Silfab Solar, we distinguished the International Trade Commission‘s “affirmative finding regarding serious injury or the threat thereof,” which was a “condition necessary for the President to take action” that was reviewable under Corus, from a remedy recommendation that was not a predicate to the President‘s authority to act and was not reviewable. Silfab Solar, 892 F.3d at 1346.
The situation here, where the Secretary‘s affirmative finding of a national security threat is a predicate to presidential authority, is distinguishable from the cases where the relevant statute lacked this type of condition on presidential action. See, e.g., Dalton, 511 U.S. at 465-66; Franklin, 505 U.S. at 791-92. In the former, the agency action is reviewable; in the latter, it is not.
We conclude that the Secretary‘s threat determination under
II
USP argues that the threat determination by both the President and the Secretary was contrary to the clear language of
Section 1862 imposes no imminence requirement. The factors that the President and Secretary are directed to consider in making their determinations do not mention imminence but focus instead on long term health of and adverse effects on the relevant domestic industry.
USP relies on Goss Graphics Systems, Inc. v. United States, 216 F.3d 1357, 1362 (Fed. Cir. 2000), and Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 983 (Fed. Cir. 1994), both of which recognized an imminence requirement. Appellants’ Br. at 31. But those cases involved a different statute, which specifically required that “the threat of material injury is real and that actual injury is imminent.” Suramerica, 44 F.3d at 983 (quoting
Because
USP does not challenge the President‘s determination for any reason other than the alleged statutory violation.7
Nor could it because
USP separately criticizes the Secretary‘s threat determination as unsupported by substantial evidence. But the Secretary‘s threat determination is not reviewable under the APA arbitrary and capricious standard. This is so because the standard governing the Secretary‘s action is the same as for the President‘s action (i.e., the existence of a “threat“), and the President‘s action is only reviewable for compliance with the statute. Under such circumstances, the threat determinations of the President and the Secretary are reviewed together as a single step using an identical test under the Supreme Court‘s decision in Bush. As explained in Bush, where the Court addressed the requirements of a statute similar to
III
USP alleges that the President failed to satisfy the “nature and duration” requirement in
The statute here grants the President discretion to “determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports” to address imports that threaten national security.
This court recently addressed the President‘s authority to act under
[W]e conclude that the best reading of the statutory text of § 1862 . . . is that the authority of the President includes authority to adopt and carry out a plan of action that allows adjustments of specific measures, including by increasing import restrictions, in carrying out the plan over time.
Id. at 1319 (emphasis added). Thus, under Transpacific,
Given our holding that the President has the “authority to adopt and carry out a plan of action” and to adjust his ongoing approach under
USP does not argue that the President‘s action, if consistent with the statute, is impermissible. Again, this is a matter committed to the President‘s discretion, and the President‘s exercise of his judgment to “determine the nature and duration” of the action he believes necessary is beyond the scope of our review. See Dalton, 511 U.S. at 474; Bush, 310 U.S. at 379-80; Transpacific, 4 F.4th at 1319; Silfab Solar, 892 F.3d at 1349.
CONCLUSION
We have authority to review the determinations by both the President and the Secretary that steel imports threaten national security and the determination by the President to set a steel tariff for an indefinite duration. We find no violations of the statute.
AFFIRMED
COSTS
No costs.
USP HOLDINGS, INC., SUBSTITUTED FOR UNIVERSAL STEEL PRODUCTS, INC., PSK STEEL CORPORATION, DAYTON PARTS, LLC, BORUSAN MANNESMANN PIPE U.S. INC., JORDAN INTERNATIONAL COMPANY 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
2021-1726
United States Court of Appeals for the Federal Circuit
June 9, 2022
CHEN, Circuit Judge, additional views.
As to the question of whether the Commerce Secretary‘s threat determination under
The “core question” for determining finality is “whether the agency has completed its decisionmaking process, and whether the result of that process is one that will directly affect the parties.” Dalton v. Specter, 511 U.S. 462, 470 (1994) (quoting Franklin v. Massachusetts, 505 U.S. 788, 797 (1992)). In both Franklin and Dalton, the Supreme Court held that the Secretary‘s or Commission‘s report and recommendations to the President did not constitute final agency action, reviewable under the APA, because those recommendations were not themselves binding actions that directly affected the parties.
In Franklin, the Commerce Secretary‘s decennial census report had “no direct effect on reapportionment until the President [took] affirmative steps to calculate and transmit the apportionment to Congress.” 505 U.S. at 799. The President was not bound by the data in the Secretary‘s report; rather, the decennial census was a “moving target” subject to correction by the President. Id. at 797. The Court observed that the
In Dalton, the Supreme Court again found that recommendations to the President were not reviewable final agency action. With the Defense Base Closure and Realignment Act of 1990, Congress designed an elaborate selection process for the fair and timely closure and realignment of military bases. Dalton, 511 U.S. at 464. The process involved the Defense Base Closure and Realignment Commission submitting a report that recommended base closings and realignments. Id. at 465. The President was required to either approve or disapprove the Commission‘s recommendations “in their entirety.” Id. If the President disapproved, the Commission could prepare a new report to submit to the President. Id. If the President again disapproved, no bases could be closed that year. Id. In Dalton, the Commission had recommended closing the Philadelphia Naval Shipyard and the President approved. Id. at 466. The Supreme Court held that the Commission‘s report was unreviewable because, as in Franklin, the report carried “no direct consequences for base closings.” Id. at 469. The Court found “immaterial” the fact that the President was constrained to either entirely approving or disapproving the Commission‘s recommendation. Id. at 470-71. The Court emphasized: “Without the President‘s approval, no bases are closed under the Act” and, furthermore, “the Act, in turn, does not by its terms circumscribe the President‘s discretion to approve or disapprove the Commission‘s report.” Id. at 470. “[M]ore fundamentally,” with regard to the action that “will directly affect the parties,” it is “the President, not the Commission, [who] takes the final action that affects the military installations.” Id. (internal quotation marks omitted). Dalton, in short, reaffirmed that a report or recommendation to the President is not a final agency action if no direct consequences occur without the President‘s action and if the President has discretion in whether to take action.
Setting aside Corus Group, our case would be a straightforward application of Franklin and Dalton. Before any action “to adjust the imports of the article and its derivatives” is taken, the President must concur with the Secretary of Commerce‘s finding that the imported article threatens to impair the national security and determine the appropriate duration or action.
But in Corus Group, this court held that the Commission‘s report and recommendation under a very similar statute,
Nor does the Supreme Court‘s Bennett decision, which Corus Group relied on, suggest otherwise. Corus Grp., 352 F.3d at 1359 (“We conclude also that this case is controlled by Bennett, rather than by Dalton and Franklin . . . .“). Unlike Franklin and Dalton, Bennett did not involve an agency making a tentative recommendation to the President but a determination of one agency‘s entitlement by another. In Bennett, the Fish and Wildlife Services (FWS) issued a determination on another agency‘s actions and their impact on threatened and endangered species of animals. FWS‘s determination created a legal burden and specific liabilities that, thereby, determined the other agency‘s rights and obligations. Bennett v. Spear, 520 U.S. 154, 169-70 (1997) (explaining that once a biological opinion issues, the agency subject to the opinion “bears the burden of ‘articulating in its administrative record its reasons for disagreeing with the conclusions of a biological opinion‘” and though free to disregard the biological opinion, the agency “does so at its own peril” subject to substantial civil and criminal penalties including imprisonment); id. at 178 (finding the action is “one by which rights or obligations have been determined” because the “Biological Opinion and accompanying Incidental Take Statement
We have applied Franklin and Dalton, in other cases involving tentative reports and recommendations to the President, to find that the reports and recommendations are non-final and thus unreviewable. In our en banc decision in Motions Systems, we held that the acts of the Trade Representative under
Accordingly, although I agree that this panel is bound by Corus Group, I write to express concern that Corus Group was, and our decision in this case is, incorrectly decided under Supreme Court precedents Franklin and Dalton.
Notes
Judge Chen suggests that the decision in Corus is inconsistent with Franklin and Dalton. There is no inconsistency. The Supreme Court itself in Bennett (where the deciding authority could not act without a recommendation) explicitly distinguished Franklin and Dalton as resting on the advisory nature of the recommendations:
[T]he Biological Opinion and accompanying Incidental Take Statement alter the legal regime to which the action agency is subject, authorizing it to take the endangered species if (but only if) it complies with the prescribed conditions. In this crucial respect the present case is different from the cases upon which the Government relies, Franklin v. Massachusetts, 505 U.S. 788 (1992), and Dalton v. Specter, 511 U.S. 462 (1994). In the former case, the agency action in question was the Secretary of Commerce‘s presentation to the President of a report tabulating the results of the decennial census; our holding that this did not constitute “final agency action” was premised on the observation that the report carried “no direct consequences” and served “more like a tentative recommendation than a final and binding determination.” 505 U.S., at 798. And in the latter case, the agency action in question was submission to the President of base closure recommendations by the Secretary of Defense and the Defense Base Closure and Realignment Commission; our holding that this was not “final agency action” followed from the fact that the recommendations were in no way binding on the President, who had absolute discretion to accept or reject them. 511 U.S., at 469-471. Unlike the reports in Franklin and Dalton, which were purely advisory and in no way affected the legal rights of the relevant actors, the Biological Opinion at issue here has direct and appreciable legal consequences.
Bennett, 520 U.S. at 178. The Secretary‘s finding here is not merely advisory. As the Supreme Court held in Algonquin, the Secretary‘s threat finding is a “clear precondition[] to Presidential action.” 426 U.S. at 559.
Nor is this a situation where the challenge is based on procedural flaws in Commerce‘s approach. The absence of such procedural flaws was not a condition of presidential action in Dalton:
The President‘s authority to act is not contingent on the Secretary‘s and Commission‘s fulfillment of all the procedural requirements imposed upon them by the 1990 Act. Nothing in [the relevant statute] requires the President to determine whether the Secretary or Commission committed any procedural violations in making their recommendations, nor does [the relevant statute] prohibit the President from approving recommendations that are procedurally flawed.
511 U.S. at 476. See Silfab Solar, 892 F.3d at 1347 (confirming that presidential action is not invalidated by procedural problems in a recommendation); Michael Simon Design, Inc. v. United States, 609 F.3d 1335, 1341 (Fed. Cir. 2010) (same); see also Motions Sys., 437 F.3d at 1362 (“[B]ecause the acts of the Trade Representative were not final actions, the Court of International Trade also lacked jurisdiction to review those acts. Instead, the Trade Representative‘s actions were analogous to those of the Secretary in Franklin, a case in which the Secretary‘s report was ‘like a tentative recommendation’ or ‘the ruling of a subordinate official’ because it was the President who carried the responsibility of transmitting the final report to Congress.“).