SCOTUS May Take Up Transpacific Case to Address Key Delegation of Tariff Power Issue, Lawyer Says

The Supreme Court of the U.S. may hear an appeal of the key Transpacific Steel LLC v. United States decision, seeing it as an opportunity to discuss the question of the extent to which Congress delegated tariff powers to the president, Julie Mendoza of Morris Manning, counsel to plaintiff-appellee Borusan Mannesmann, told Trade Law Daily. Having recently petitioned the Supreme Court to take up the case, Mendoza said that having the case sit in front of the nation's highest court will also give her and her team a chance to argue that the most recent decision in the case runs afoul of the intelligible principle standard for delegation of powers to the president as it relates to Section 232.

Transpacific is on appeal from the U.S. Court of Appeals for the Federal Circuit (see 2111150061). The landmark decision was over President Donald Trump's August 2018 tariff hike on Turkish steel, from 25% to 50%. The Court of International Trade ruled against the increase, finding that it came after the relevant deadline. Under 19 USC 1862, the president must decide whether to impose tariffs 90 days from a Commerce Department report on the need for such restrictions, then must implement the tariffs within 15 days (see 2007140046).

A three-judge panel at the Federal Circuit, however, overturned the decision, finding that as long as the tariffs continue their original purpose as laid out in the Commerce report, the president has the authority to hike tariffs as he or she pleases (see 2107130059). Seeing as the original purpose of the Section 232 steel and aluminum tariffs was to bolster domestic capacity utilization of steel and aluminum, any further tariffs beyond the deadline meant for this purpose are not in violation of the law, the majority said.

"Our petition to the Supreme Court basically says, 'Look, the one intelligible principle in the Section 232 law is that the president has to act and advise Congress within a specified period of time,'" Mendoza said. "The CAFC has just decided that that restriction really doesn't restrain the president's authority at all. If that's the case, then this is an improper delegation because there is no intelligible principle being imposed by Congress on how the 232 statute has to be administered. So, the court can either say, 'yes, you have to abide by the Section 232 statutory time limits,' or if he doesn't have to abide by them, there's no intelligible principle, and the 232 statute has to be struck down."

Further, the Federal Circuit's decision grants the president a seemingly unchecked level of power when imposing Section 232 duties, Mendoza said. "It effectively suggests that the president can take whatever action he wants whenever he wants. ... Is the president just given unlimited authority to decide that he's going to take some action in any point in time? There's a reason why the president has to make a decision and lay out what relief he's going to impose. It can't just be that he can forever change it, increase it, impose it in another way. It's not an unending authority to make whatever adjustments he wants." Mendoza made clear that she's not contesting the president's basis for imposing the tariffs, but merely that he did not follow the proper steps before doing so.

The Federal Circuit in its opinion, however, did say that its opinion does not mean that the president can continue imposing Section 232 tariffs years and years after the Commerce report, implying the existence of a limit. "They suggest there might be [a limit], but I don't see how," Mendoza responded. "How long is too long?"

It is rare for the Supreme Court to take up trade cases. If the court does in this instance, however, Mendoza suspects that it may have good reason to. "We have reason to think that they want to look at this area regarding the basis under the constitution for delegating authority to impose tariffs to the president," she said.