Argument Recap

Last week the Federal Circuit heard three cases that attracted amicus briefs. In the last of these three cases, American Institute for International Steel, Inc. v. United States, the American Institute for International Steel (and its co-appellants) presented two questions to the Federal Circuit related to the Section 232 of the Trade Expansion Act of 1962. As we noted in our argument preview, these questions ask whether Congress unconstitutionally delegated its legislative authority to the President. Last Friday, the parties presented their arguments to a panel of the court that included Judges Taranto, Stoll, and Schall. Here is our recap of those arguments.

Alan Morrison, arguing on behalf of the appellants, began by claiming that “Section 232 violates the constitutional prohibition on the delegation of legislative authority because the power given to the President to adjust imports contains no substantive boundaries whatsoever.” Morrison’s primary argument was that Section 232 has “no barrier on the front end, and there surely is no barrier with respect to the remedies” available to the President under Section 232. This would allow the President, she explained, to impose tariffs and the like with no statutory limitation. In fact, Morrison claimed, “[t]here is no indication that there is any limitation at all” on the President’s power under Section 232.

Morrison then reached his second argument, which is where he spent a majority of his oral argument time. Morrison claimed that in the Supreme Court’s decision in Federal Energy Administration v. Algonquin SNG, Inc.(“Algonquin”), “the Court said there were boundaries, but did not tell us what the boundaries were.” This prompted a two-part question from one of the judges: “(A) Why does that matter, but (B) why should that be surprising in an area where authority . . . is meant to be flexible?” Moreover, said the judge, “[f]lexible doesn’t mean unbounded and [the flexibility is] very much dependent under the statute on circumstances that cannot be predicted in some abstract in advance.” Morrison answered both questions in turn: “If that were the law, your honor, there would be no limits on the power of Congress to delegate to the President.” In particular, he continued, “[y]ou could allow the President to do anything he wants to do, . . . and if the President can do this, he has taken the place of Congress.” Morrison then made a separation of powers argument.

The court asked Morrison if he could distinguish the present case from Algonquin. Morrison did so by noting that “the holding in Algonquin was that the objection of the challenger there to the imposition of licensing fees was not authorized by the statute.” Anyway, Morrison argued that “the court is not bound [by Algonquin] because what was at issue in Algonquin was the authority of the President [while what is] [a]t issue here is the authority of Congress.” He went on to explain that his clients “are complaining about what Congress did, or more what it didn’t do, by not putting any boundaries on the statute.” Morrison concluded his argument by pointing to other cases he said support his position. He argued that “the Supreme Court has made clear that when Congress sets up a two-part process here, to the Secretary [of Defense] first and then to the President, whatever the President does is not judicially reviewable unless there is a statute that specifically provides for that.” Even assuming that the actions at issue were judicially reviewable, he continued, “how could we say something was beyond the statutory mandate when there is nothing limiting [in] the statute?”

Tara Hogan, on behalf of the federal government, opened her argument with a simple and direct summary of the government’s position. Hogan argued that “in order to affirm the trial court’s judgment, this court need not go any further than reading the Supreme Court’s opinion in Algonquin, which resolved the precise question that the plaintiffs raised here, whether Section 232 is a constitutional delegation of authority.” She continued: “The Supreme Court concluded that the statute easily fulfills the intelligible principle standard, the same standard that this court would be required to apply if this court were addressing the issue in the first instance.” Hogan further argued that the Federal Circuit “may review Presidential action and set it aside if the President acts beyond his statutory authority, clearly misconstrues the governing statute, or there is a significant procedural violation.”

The judges did not have nearly as many questions for Hogan as they had for Morrison. One of the more notable questions asked to Hogan related more to logic than the law: “Doesn’t it make some logical sense as an initial matter [that] judicial review . . . is available to effectively enforce whatever limiting principle or intelligible principle there is in a statute?” Hogan responded that “whether there is an intelligible principle will inform whether there is judicial review where judicial review is available.”

Hogan argued that there are certain situations and delegations related to national security where judicial review is not available. She noted that the government was “not arguing that there is no judicial review available.” Rather, she explained, the Supreme Court has “continu[ed] to affirm a long-standing tradition of deference to . . . Executive fact finding and exercise of discretion.”

As her time wrapped up, Hogan effectively summarized her position:

“The fact that there is a long judicial tradition, rooted in separation of powers as between the Executive and the Judiciary, doesn’t really answer the question which has been presented by this case. Which is, has Congress unconstitutionality delegated its lawmaking power to the Executive. And Congress did not. Congress set forth the policy that it wants the President to follow. It has identified the individuals that are charged with certain aspects of the investigation and the fact finding, and it has delineated what the President is authorized to do. And there are meaningful boundaries. The President may only adjust the imports of the article and its derivatives that have been the subject of the investigation by the Secretary of Commerce. And the Supreme Court has said that those boundaries are not unlimited.”

During Morrison’s rebuttal time, he focused once again on a separation of powers argument. For example, he argued that “if what the President did here had been subject to approval and approved by Congress,” then there would be no constitutional issues, as this would embody the checks and balances of American democracy.

Based on the briefing and oral argument, a significant starting point in the Federal Circuit’s decisionmaking in this case will revolve around whether its analysis is controlled by the Supreme Court’s decision in Algonquin or if, instead, there is a way to distinguish that case. If the Federal Circuit were to find that Algonquin is not controlling here and that Section 232 unconstitutionally delegates legislative authority to the President, this case would almost certainly be one on a fast track to the Supreme Court. We’ll monitor developments in the case and report on them.