CIT Again Tells US Steel It Can't Intervene in Section 232 Exclusion Denial Case

U.S. Steel was again denied the right to intervene in a Section 232 exclusion denial challenge at the Court of International Trade, with the court holding that the Pennsylvania steel company did not have a legally protectable interest in the case. According to the Dec. 3 opinion, U.S. Steel cannot intervene in the case since it won't be directly affected by the case's outcome. Judge Claire Kelly said that any harm that U.S. Steel would experience as a result of the court granting a Section 232 exclusion would be indirect since the company has no right to the sale of the covered products.

The case was brought by Russian steelmaker NLMK, which sought 54 Section 232 steel and aluminum tariff exclusions on its steel slab. The company challenged the Commerce Department's exclusion denials, arguing that the review process was "arbitrary, capricious and contrary to law." U.S. Steel, which objected to the exclusion request, then sought to intervene in NLMK's action to argue for the exclusion denial.

NLMK's case is not the first exclusion denial challenge in which U.S. Steel has looked to insert itself. In May, CIT denied it and other domestic steel producers the right to intervene in six challenges to Section 232 tariff exclusion denials (see 2105260037). This is when the court first found that the steel producers failed to claim a legally protectable interest in the transaction at issue in the case, have a direct relationship with the litigation or show that their interests are not adequately addressed by the U.S. government. This decision is currently being appealed to the U.S. Court of Appeals for the Federal Circuit (see 2111190051).

The same rationale that fueled the trade court's first rejection of U.S. Steel's intervention bid was applied to the second decision keeping the company out of the proceedings. U.S. Steel doesn't argue any non-economic harm that will follow from NLMK receiving refunds for the Section 232 duties it has already paid, nor does the company "stand to gain or lose any sales based on this court's ruling," Kelly said. "And, NLMK does not challenge the legality of the Section 232 tariffs generally. Therefore, U.S. Steel failed to show that it has any direct interest in the outcome of this case."

U.S. Steel argued that it has a legally protectable outcome in the case since it participated as an objector to NLMK's exclusion requests to Commerce. However, U.S. Steel does not have a statutory right to participate in the exclusion process, so it does not have a right to participate in any resulting judicial action, the court said.

U.S. Steel also "misstates the potential consequences of this case," in its intervention bid. The American company said that any increase in tariff-free imports of competing products would harm it by "suppressing prices and eliminating sales opportunities." However, the imports at issue in this case have already entered the country and the only resulting action of this case would be a refund, the court pointed out. All future disputes over steel and aluminum tariff exclusions, which U.S. Steel seems to be most worried about, will be decided on a case-by-case basis, the court said.

Kelly also ruled against U.S. Steel's move to stay the case pending its appeal of the intervention question to the Federal Circuit. The court held that a stay could prejudice NLMK. If successful, NLMK could be staring at $130 million in refunds sitting in its bank account. A delay in the case would precluded NLMK from accessing this large sum of money "to which it is legally entitled" if successful, the court said. Also, a stay wouldn't resolve any issue in NLMK's complaint, the court said. All the appellate court will find is whether U.S. Steel can intervene in the action and not whether NLMK's entries should have been excluded from the steel and aluminum tariffs.

(NLMK Pennsylvania, LLC v. United States, Slip Op. 21-162, CIT #21-00507, dated 12/03/21, Judge Claire Kelly. Attorneys: Luke Meiser of Schagrin Associates for proposed defendant-intervenor U.S. Steel; Sanford Litvack of Chaffetz Lindsey for NLMK; Tara Hogan for defendant U.S. government)