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Federal Circuit Upholds Steel Tariff, SCOTUS Bid Likely (1)

Feb. 28, 2020, 5:14 PMUpdated: Feb. 28, 2020, 8:23 PM

The Federal Circuit upheld the Trump administration steel import tariffs and the free-trade group that lost its legal challenge is almost certain to once again ask the Supreme Court to take up the case.

The Supreme Court is somewhat more likely to review the case now that it will reach the justices through the normal appeals process. Last year, the Surpeme Court declined to review the American Institute for International Steel Inc.'s expedited appeal of a U.S. Court of International Trade decision.

The U.S. Court of Appeals for the Federal Circuit on Friday upheld the president’s tariff authority under the Trade Expansion Act of 1962. The act doesn’t unconstitutionally delegate legislative authority to the president, the Federal Circuit said in an non-precedential opinion.

The act allows the president to adjust imports only to avert a threat to national security.

The court cited a decades-old U.S. Supreme Court ruling upholding the constitutionality of the act in a case involving increased fees on petroleum products. The administration complied with the requirements of the act in setting the tariffs, including a finding by the commerce secretary that the then-existing importation of steel threatened national security by jeopardizing domestic steel production, the court said.

The AIIS had argued that the 1976 case upholding quotas on oil imports didn’t foreclose its challenge, as that case focused on the legality of the president’s actions, not the constitutionality of what Congress did in passing the law. But the Federal Circuit said that the precedent controlled.

The Federal Circuit followed the reasoning of the lower court, which said it was bound by the decision in Fed. Energy Admin. v. Algonquin SNG, Inc. 426 U.S. 548, said R. Will Planert, Morris, Manning & Martin, LLP, counsel for AIIS.

The group plans to file for Supreme Court review in advance of the 90-day deadline so that the justices can act on the petition before adjourning in June. “We’re full speed ahead,” he said. The Supreme Court can reconsider Algonquin, he said. The Federal Circuit said it saw “no basis” on which Algonquin can be distinguished for purposes of deciding the issue before the court.

Justices Interested?

Five justices have signaled an interest in revisiting the non-delegation doctrine, which is at the heart of the case, said William Yeatman, Cato Institute of Constitutional Studies, research fellow.

The Cato Institute filed an amicus brief in support of AIIS in the case. “It’s always an uphill climb to get a cert petition granted,” he said. “But it’s a heavy hitting separation of powers case that implicates this non-delegation doctrine which a critical mass of justices are " interested in, he said.

The justices may decide this isn’t the best vehicle to address this issue since it implicates executive branch actions on national security, an area the Supreme Court is generally reluctant to wade into, said Devin Sikes, Akin Gump.

Trade lawyer Eric Emerson, Steptoe & Johnson said it would be “hard to believe” that the Supreme Court would grant review especially with precedent that is directly on point.

While frontal attacks to Section 232 of the Trade Expansion Act are unlikely to succeed, Emerson said, focusing on the manner in which the law is administered is more likely to prevail, he said.

There are a number of challenges to the administration’s 232 actions working their way through the Court of International Trade. The AIIS case is the only one to have reached the appellate level.

The Justice Department did not immediately respond to a request for comment.

Judge Richard G. Taranto wrote the opinion, joined by Judges Alvin A. Schall and Kara F. Stoll.

Morris, Manning & Martin LLP represented AIIS.

The case is American Inst. for Int’l Steel v. United States, Fed. Cir., No. 19-cv-01727, unpublished 2/28/20.

((Adds comments from attorneys))

(With assistance Rossella Brevetti)

To contact the reporter on this story: Peter Hayes in Washington at PHayes@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com