Steel Nail Importer, DOJ Debate Stay of Liquidation Pending Appeal of Steel 'Derivatives' Tariffs

The Department of Justice seeks a stay from the Court of International Trade of the liquidation of PrimeSource's entries pending DOJ's appeal of CIT's decision that struck down President Donald Trump's expansion of Section 232 tariffs onto steel and aluminum “derivatives,” it said in a June 9 motion for partial stay of judgment.

DOJ requests a reprieve from liquidation of PrimeSource's imports without the Section 232 duties declared illegal by the court. DOJ also asks for the court to have PrimeSource monitor its imports of relevant merchandise once again and to maintain continuous bond payments.

Fighting the stay request in a June 25 response, PrimeSource said DOJ failed to show its likelihood of success in its appeal -- a requirement for stay orders (PrimeSource Building Products, Inc. v. United States, CIT #20-00032).

The U.S. filed its appeal to the U.S. Court of Appeals for the Federal Circuit on June 17 (see 2106170058). In the underlying decision, a three-judge CIT panel in April found that Trump violated procedural time limits when he expanded the tariffs to cover the derivative products (see 2104050049).

Arguing that it is likely to succeed on the merits of its appeal, DOJ said that it is enough that “substantial legal questions exist” to support a stay. The question of the lawfulness of presidential action to address a national security threat meets this standard, DOJ said. Notably, the government also said that Judge Miller Baker's dissenting opinion should be enough to suggest that the likelihood to succeed criteria is met. “Further, the appellate court may well conclude that the statutory periods for concurrence and implementation are not intended as temporal constraints on Presidential power to avert the threat of impairment to national security,” DOJ said.

PrimeSource argues DOJ did not address whether they were likely to succeed on the merits until the very end of their motion. “There is no doubt that this was a deliberate choice given that defendants’ arguments that the Federal Circuit may reverse any judgment by this Court and that this case presents 'substantial legal questions' does not justify a stay,” the plaintiff said. Federal Circuit precedent has changed such that having a substantial legal question is no longer sufficient to meet the likelihood of success threshold, PrimeSource said.

If this is true, then it falls on DOJ to show an actual likelihood to succeed on the merits. Given that both CIT and the Federal Circuit have ruled against the government in two cases with the “same legal issues,” DOJ is unlikely to succeed on appeal, PrimeSource said. “Defendants cannot credibly demonstrate that their chances of success on the merits are better than negligible when two separate panels have both ruled against defendants’ position on the same ground,” the brief said.