Our third and final argument preview for January’s cases covers American Institute for International Steel, Inc. v. United States, a case that attracted two amicus briefs on each side. In March, 2018, President Trump relied upon Section 232 of the Trade Expansion Act of 1962, codified as amended at 19 U.S.C. § 1862, to impose a 25% tariff on imported steel products. In this case, a panel of the Federal Circuit will address a challenge by importers and users of imported steel products that Section 232 is facially unconstitutional. The appellants, in particular, argue that Section 232 constitutes an improper delegation of legislative authority and violates the principles of separation of powers established by the Constitution. This case will be argued at the Federal Circuit tomorrow morning.
In their opening brief, the appellants (American Institute for International Steel, Inc.; Sim-Tex, LP; and Kurt Orban Partners, LLC) present two issues to the court:
- “Did the Court of International Trade erroneously conclude that [Federal Energy Administration v.] Algonquin [SNG, Inc., 426 U.S. 548 (1976)] controls the outcome of this action?”
- “Is Section 232 facially unconstitutional on the ground that it does not impose any boundaries or limits on the President’s powers under it and therefore constitutes an improper delegation of legislative authority and violates the principles of separation of powers established by the Constitution?”
On the first issue, the appellants argue that “Algonquin is not a barrier to reaching the merits of this delegation challenge” because in that case “the Court was not called upon to consider the sort of boundless exercise of power by the President over imports that is presented in this case.” In particular, the “plaintiffs in Algonquin objected only to the type of section 232 remedy that was imposed,” while here “appellants have mounted a facial challenge to the operation of section 232.”
On the second issue, the appellants contend that “Section 232 violates the prohibition on delegation of legislative authority because it contains no boundaries that cabin the discretion of the President in adjusting imports into this country.” They maintain that the discretion to “impose remedies whenever imports ‘may threaten to affect the national security'” (quoting Section 232) is an “open-ended trigger,” compounded by the lack of “boundaries on what remedies the President may choose if he decides that imports of steel products may create such a threat.” “In short,” they argue, “Congress gave the President a ‘blank check’ . . . .” (citation omitted). They also criticize the government’s reliance on the “intelligible principle” rationale. They argue that when conducting the required analysis “it is essential to keep in mind the narrow statute that formed the basis of that principle” when it was developed by the Supreme Court, contrasting that narrow statute with the one at issue here, which they say permits the President to “impose tariffs in any amount, with no caps or formulas to follow.”
The government, by contrast, argues that “Algonquin resolves the merits of this appeal.” It maintains that “Algonquin cannot be disregarded merely because the Court’s constitutional holding arose within consideration of a different application of the statute, because the dispute involved different facts, or because the parties spent proportionally more pages of briefing on a different legal question.” But, the government continues, “[e]ven if this Court were not bound by Algonquin, it remains exceedingly persuasive authority” and, anyway, “Appellants’ repeated assertions that the President’s authority to act is ‘unbounded’ or ‘unbridled’ fails to directly confront the statute itself, which cabins the President’s authority in concrete, meaningful ways.” “[T]he President’s coexistent constitutional foreign affairs and national security responsibilities,” the government adds, “further compel the conclusion that Congress did not enact an unconstitutional statute.”
In their reply brief, the appellants maintain that “[t]he fundamental flaw in [the government’s] brief is its failure to come to grips with the complete lack of any limits on what the President can do under section 232.” They highlight that the government “fail[s] to identify a single action regarding imports that the President might take that would not be permitted under section 232.”
With respect to the “front end, or trigger,” they argue that, “in the facts giving rise to this case, the Defense Department concluded that its requirements for steel needed for national defense were not threatened by the current level of imports.” They criticize the government’s response “that ‘national security,’ as defined in section 232, is much broader than national defense,” as “magnif[ying] the problem.”
With respect to the remedies available to the President after the Section 232 “trigger,” they argue that there are no statutory “boundaries on the measures the President may impose to ‘adjust’ imports of a specific product that he has determined may threaten national security.” They also complain that “section 232 allows the President to treat very broad categories of
products in the same fashion, or differently, as he chooses and without explanation.”
They conclude that, “[w]hatever Congress has done, it has surely not imposed any boundaries in section 232, and there is nothing to stop the President from imposing what he, in his absolute discretion, thinks is the best policy,” explaining that the government’s “utter failure to identify a single measure that the President might impose on imports that would violate section 232 establishes beyond a doubt that there are no boundaries in section 232 and that section 232 cannot survive this delegation challenge.”
As we have already highlighted, each side in this case drew support from two amicus briefs. The Cato Institute and Gasari Farms support the appellants:
- The Cato Institute argues in its brief that the Federal Circuit “should reverse the decision below and hold that Section 232 is a permissible legislative delegation only if complemented by calibrated judicial review.”
- Gasari Farms contends that “[t]he gravity of the harm caused to the agricultural industry, and the fact that said harm is likely to continue, strengthens appellants’ argument that this Court should address the merits of appellants’ claim that Section 232 is an unconstitutional delegation of legislative authority.”
United States Steel, the American Iron and Steel Institute, and the Steel Manufacturers Association support the government:
- United States Steel maintains that “[j]udicial review of the President’s exercise of discretionary authority is not necessary to save the constitutionality of a delegation like the one in Section 232.”
- American Iron and Steel Institute and Steel Manufacturers Association likewise argue that because a “direct challenge to the implementation of these tariffs was rejected in 2018 by the Court of International Trade . . . the Appellants here structure their claim as a facial challenge to Section 232 itself.” But “that claim too has already been litigated—more than forty years ago, the Supreme Court expressly held that Section 232 was a permissible delegation of authority, and that holding controls this case.”
While three of the amicus briefs filed in this case clearly represent the views of parties directly impacted by the particular tariff in question, the case has much broader significance. Indeed, the Federal Circuit’s resolution of this case may significantly impact not only the current President’s ability to impose various tariffs in ongoing trade disputes with various countries, but also the ability of future Presidents to utilize Section 232. We will report on developments in this case.