CIT Rejects Importer's Stay Motion Pending SCOTUS Appeal

The Court of International Trade in an Oct. 23 opinion denied importer PrimeSource Building Products' motion for a partial stay of enforcement of a judgment in its suit against President Donald Trump's expansion of Section 232 steel and aluminum duties onto "derivative" products while the decision is on appeal at the U.S. Supreme Court. Judges Jennifer Choe-Groves, M. Miller Baker and Timothy Stanceu said that PrimeSource "has not met its burden of demonstrating its entitlement to a different outcome than that reached by" the U.S. Court of Appeals for the Federal Circuit when that court denied a similar stay bid by the importer.

In a concurring opinion, Baker said that he sought to "provide some more reasons" why PrimeSource's motion should be denied, given that, practically, the stay bid is an "injunction" seeking to stop CBP from liquidating the subject imports. The judge said the trade court has "zero authority to grant any such relief."

In the case, CIT said Trump illegally expanded the Section 232 duties beyond procedural time limits. The Federal Circuit reversed this finding, ruling that the president may take out-of-time action under the statute so long as the additional tariff measures pertain to the duties' original "plan of action" as contemplated by the commerce secretary in its report to the president undergirding the tariffs. PrimeSource petitioned the Supreme Court for review and unsuccessfully moved at the Federal Circuit for a stay of judgment pending its high court appeal (see 2306270037).

Baker said that issues decided on appeal are "foreclosed from further consideration," meaning the Federal Circuit's "mandate rule precludes us from granting PrimeSource the injunctive relief" that the Federal Circuit already denied. Separately, Rule 62, which governs stay motions, bars the court from issuing an injunction pending certiorari following a Federal Circuit decision, Baker said. The rule, which allows an injunction while an appeal is pending from an interlocutory appeal, only applies to appeals of CIT judgments.

CIT cited the federal statute regarding Supreme Court review, which says that only a Federal Circuit judge or Supreme Court justice may grant the injunctive relief. Additionally, Baker said that even if the court had the authority to consider the request, he would deny it because "the company has not demonstrated irreparable injury." The judge said should PrimeSource succeed, the court has the power to order reliquidation since the Administrative Procedure Act's waiver of sovereign immunity applies.

"In short, although injunctive relief ordering reliquidation is not available of right in cases properly brought under our residual jurisdiction, as a practical matter it would (or at least should) always be awarded," Baker said. "Thus, should PrimeSource prevail in the Supreme Court, it has no reason to fear that reliquidation of its entries would be unavailable."

Meanwhile, Stanceu, representing the majority, said that if the appellate court denied the previous stay motion on the ground that PrimeSource didn't adequately show irreparable harm, the trade court will "defer to that decision." The importer had argued that liquidation of its products may moot its Supreme Court appeal given the uncertainty of the trade court's authority to order reliquidation, and that the company will suffer from large "business disruptions" linked with paying the Section 232 cash deposits.

Stanceu found neither argument persuasive, holding that the company "has not made a convincing showing that the Supreme Court ... would consider itself precluded from ordering any relief it deemed necessary, regardless of asserted unsettled issues arising from lower court decisions." On the "business disruptions" point, the judge said the court's order demanding liquidation effectuated the Federal Circuit's judgment, which upheld PrimeSource's, and all importers', liability to pay the Section 232 duties "arising from its past business activities."

(PrimeSoruce Building Products v. United States, Slip Op. 23-155, CIT # 20-00032, dated 10/23/23; Judges: Jennifer Choe-Groves, M. Miller Baker and Timothy Stanceu; Attorneys: Jeffrey Grimson of Mowry & Grimson for plaintiff PrimeSource; Stephen Tosini for defendant U.S. government)