US Steel Asks for Rehearing Over Rejected Intervention in Section 232 Exclusion Denial Challenges

The whole U.S. Court of Appeals for the Federal Circuit should rehear a case on whether a group of domestic steel manufacturers have the right to intervene in cases challenging denied exclusion requests from Section 232 national security tariffs, U.S. Steel argued in an Oct. 24 motion for rehearing. The outcome of the litigation will have an "obvious impact" on U.S. Steel, and the majority's ruling in the opinion cannot be squared with key Supreme Court precedent, the appellant said.

In May 2021, the Court of International Trade first denied the steel companies' bid to join the exclusion denial cases (see 2105260037). The trade court said that to qualify for intervention, the proposed intervenor must either have a legally protectable interest in the transaction at issue, have a direct relationship with the litigation where the intervenor will either gain or lose by the direct judgment or show that its interests are not adequately expressed by the government. The trade court said the steel companies failed on all three fronts.

The companies took their cases to the Federal Circuit, where the majority of a three-judge panel rejected the companies' right to intervene (see 2209080024). The court acknowledged, though, that the regional courts are split on the issue while still ruling that the appellants didn't have a legally protectable interest in the Commerce Department's denials of the Section 232 exclusion requests. The steel companies said such interest existed through their participation administratively, direct economic stake and position as intended beneficiaries of the tariff. The Federal Circuit wrote that status as an administrative participant is insufficient to establish a legally protectable interest. The statute permits any party to object to an exclusion request but doesn't require outsiders to voice these objections.

Judge Pauline Newman dissented from the opinion, finding that the companies have clear economic interests in the exclusion requests. In its rehearing motion, U.S. Steel argued that Newman was right. Both Newman and U.S. Steel looked to CIT's Rule 24 concerning intervention, which grants intervention of right to a party that "claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest."

U.S. Steel argued that the "language, history, and policy" of this rule show that the practical effects of the lawsuit establish "one or more 'interests' that warrant intervention in litigation" and that the result of the majority's ruling is "extraordinary" and "strikingly counter-intuitive." The steel company used the 1967 Supreme Court case Cascade Natural Gas Corp. v. El Paso Natural Gas Co. to bolster its claim. In this case, the Supreme Court said that economic interests do back intervention since Cascade was entitled to intervene in a divestiture case that would affect its supplier's operations.

The Supreme Court said that if "an absentee would be substantially affected in a practical sense by the determination made in an action, he should, as a general rule," be allowed to intervene. "The majority's ruling here cannot be reconciled with that holding," the brief said.

"Applying these principles would make short work of this case," U.S. Steel argued. "It is undeniable that U. S. Steel is an intended beneficiary of a tariff program that the President promulgated specifically to 'help our domestic steel industry.' There is no doubt that U. S. Steel obtains significant, direct, and non-speculative economic benefits from application of those tariffs to products it produces." Both U.S. Steel and Newman also focused on the government's own denial of the fact that it would adequately represent the steel companies' interests.

U.S. Steel further argued that the questions raised in this appeal "have tremendous practical importance." The question of intervention in Section 232 exclusion cases concerns thousands of importers and a large number of future court cases. "Or, as Judge Newman put it, '[f]air judicial process favors permitting affected voices to be heard,'" U.S. Steel said. "Because the majority’s decision frustrates that goal, en banc review is warranted."

(California Steel Industries v. U.S., Fed. Cir. #21-2172) (N. Am. Interpipe v. U.S. , Fed. Cir. #21-2180) (Evraz v. U.S., Fed Cir. #21-2181) (AM/NS Calvert v. U.S., Fed. Cir. #21-2182) (Valbruna Slater Stainless v. U.S., Fed. Cir. #21-2183) (voestalpine High Performance Metals v. U.S., Fed. Cir. #21-2185)