Importers Tell SCOTUS Section 232 Report Gives President New Power, Must Be Subject to Judicial Review

The report from the commerce secretary concluding a Section 232 investigation is not "purely advisory" and actually gives the president a new power to regulate trade, so it "must be subject to judicial review" under the Administrative Procedure Act, petitioners led by USP Holdings argued at the U.S. Supreme Court in a March 2 brief (USP Holdings v. United States, U.S.C. # 22-565).

Replying to claims made by the U.S. in a broad challenge to President Donald Trump's Section 232 steel and aluminum tariffs, USP said that if the Section 232 reports were unreviewable, "it could become an empty ritual."

The case centers on two questions: whether Commerce's Section 232 report is final agency action under the APA and whether it's judicially reviewable under the APA. The U.S. Court of Appeals for the Federal Circuit had ruled that the report is final agency action but that it was not reviewable under the APA's "arbitrary and capricious standard" (see 2206090047).

Now before the Supreme Court, the government claimed that the report is neither subject to the APA nor reviewable for arbitrariness (see 2302230036). It said the report isn't reviewable because of its link to national security.

USP countered that the delegation of the report to Commerce suggests that it has as much to do with the power to regulate trade. USP said Commerce acts as a "gatekeeper" to presidential action under the statute. The report isn't advisory since the president can't take action without it. It is an important prerequisite to executive action and a final agency action in itself, the brief said.

"This case does not deal with second-guessing the President’s actions; rather, it deals the rationality of the Secretary’s decision to confer authority on the President, a delegation that Congress clearly has the power to make," USP said. "Petitioners do not argue that the President’s decisions regarding what steps to take are subject to judicial review under the APA."

The petitioners said that the government ignored the key precedential opinion of FEA v. Algonquin, in which the Supreme Court ruled against a claim that a previous version of Section 232 was an unconstitutional delegation of legislative power. The court said that a single precondition limiting action under the statute, the secretary's report, makes the statute a legal delegation of power. "This holding is at the center of this case," the brief said. Algonquin bucks the notion that an "arbitrary and irrational administrative decision granting legislative power to the President is immune from judicial review," USP said.

Turning to the government's invocation of U.S. v. George S. Bush & Co. and Dalton v. Specter as precedential opinions, USP argued that George S. Bush & Co. involves a different statute that doesn't require an administrative decision giving the president new legal authority, and that a government agency report at issue in Dalton was advisory and didn't give the president new authority.

New lower court opinions in Transpacific and PrimeSource have given the president "enormous leeway to allow endless modifications to findings that essentially turn the Executive Branch into a legislature," the petitioners said. "... Failure to adhere to the requirements of the APA would allow the President to instruct the Secretary to issue a decision exempt from judicial review. Section 232 imposes responsibility on the Secretary, both directly and under the APA, to conduct a rational investigation and render a rational decision based on the evidence in the record," USP said.