US to SCOTUS: Case on Section 232 'Derivative' Duties Not Proper Vehicle to Review Nondelegation Approach

The U.S. urged the Supreme Court of the United States to reject importer PrimeSource Building Products' petition for a writ of certiorari in a case on the expansion of Section 232 duties onto "derivative" products, telling the high court that PrimeSource's separation of powers claims fall flat. While the importer said the case can give the court a chance to reconsider its approach to nondelegation, the government argued that, under the principle of stare decisis, the petitioner must identify a "special justification" for revisiting established law, which it has failed to do here (PrimeSource Building Products v. U.S., Sup. Ct. # 23-69).

The U.S. counter filing to PrimeSource centered on the Supreme Court's last ruling on the Section 232 statute, which came in Federal Energy Administration v. Algonquin, decided in 1976. In that decision, the high court rejected the claim it must construe Section 232 narrowly to avoid a serious unconstitutional delegation of legislative power question, the government noted. PrimeSource argued that Algonquin is differentiated from the present dispute because amendments imposed on the statute in 1988 established certain procedural limits that President Donald Trump allegedly violated in expanding the duties, and that these amendments were not in place at the time Algonquin was decided (see 2307270028).

In Algonquin, SCOTUS noted all of the restrictions that were already imposed on the executive by the statute, including the requirement of a finding that the imports threaten national security. "If those constraints sufficed to defeat the nondelegation challenge in Algonquin, they suffice to defeat any nondelegation challenge here, regardless of how a court interprets the statute’s time limits," the U.S. said.

The government added that Algonquin was correctly decided and that the present spat is not the proper vehicle for revisiting this ruling or the court's approach to nondelegation. The U.S. claimed that the president's discretion under Section 232 is "far more constrained than in other cases in which this Court has rejected nondelegation challenges," and that Congress can leave the exercise of power to the president's unrestricted judgment in allowing the president to act "in respect of subjects affecting foreign relations." The line between an allowable grant of discretion to the executive and an impermissible delegation of legislative power "must be fixed according to common sense and the inherent necessities of the governmental co-ordination," the brief said.

In the present suit, the U.S. Court of Appeals for the Federal Circuit ruled that Trump legally expanded the duties onto derivative products beyond procedural time limits (see 2302070030). The appellate court relied on its finding in Transpacific Steel v. U.S., in which it said that further Section 232 action can be taken beyond the 105-day time limit to take action after the commerce secretary issues a report as long as the move follows the report's original plan of action.

In its reply, the U.S. took note of Transpacific, saying that the court already denied the petition in a case that raised "the same statutory question that is presented here," although in a different context. The statute allows the president to take "action," which suggests a process and not a singular act, the government argued. The U.S. said it "would have been especially odd in the present statutory context for Congress to foreclose the President from responding to changed circumstances or new information. Section 232 deals with foreign policy and national security, settings in which flexibility to address changed circumstances and new information is especially vital."

PrimeSource also championed the high court's recent ruling in West Virginia v. EPA in its brief, arguing that the "major questions" doctrine requires a rebuke of the president's actions. Under this doctrine, the president may not act on questions that affect large swaths of the economy without direct congressional authority.

In response, the government said PrimeSource "cannot dispute" that the tariff expansion in question "fits within the substantive scope of the President's power to 'adjust the imports' of an 'article and its derivatives' in order to protect 'national security.'" This power is clearly granted to the executive since the Tariff Act would have specifically and unambiguously allowed the president to set tariffs on steel derivatives in his initial tariff action. The only question is whether the president could expand the duties beyond this initial action. Allowing the president to impose such a tariff "cannot reasonably be described as 'delegating vast legislative power to the Executive,'" the brief said.