Court Rules Against AIIS Challenge to Section 232

The CIT denied a motion by AIIS for a summary judgment, citing a precedent set by the 1976 Algonquin case regarding restrictions on imports of oil. In that case, the court found that Congress was within its constitutional authority to allow the president authorization and discretion in setting import adjustments to protect national security. 

In their decision in the AIIS suit, the judges wrote, “Admittedly, the broad guideposts of subsections (c) and (d) of Section 232 bestow flexibility on the President and seem to invite the President to regulate commerce by way of means reserved for Congress, leaving very few tools beyond his reach.”

They added, “One might argue that the statute allows for a gray area where the President could invoke the statute to act in a manner constitutionally reserved for Congress but not objectively outside the President’s statutory authority, and the scope of review would preclude the uncovering of such a truth. Nevertheless, such concerns are beyond this court’s power to address, given the Supreme Court’s decision in Algonquin, 426 U.S. at 558–60.”

Judge Gary Katzmann, although joining with his colleagues in the ruling, voiced his concerns regarding the Section 232 statute. Katzmann noted that the president is not bound by the recommendations made by the Secretary of Commerce nor is he required to base his remedy on the report or on public concerns.

Said Katzmann, “There is no rationale provided for how a tariff of 25 percent was derived in some situations, and 10 percent in others. There is no guidance provided on the remedies to be undertaken in relation to the expansive definition of ‘national security’ in the statute – a definition so broad that it not only includes national defense but also encompasses the entire national economy. “

He notes the Defense Department stated that only 3 percent of steel and aluminum production is required to meet U.S. military needs.

Although, Congress has the power to assign responsibilities to the president to carry out and implement its policies and to conduct foreign affairs, said Katzmann, “that power is also not unbounded, even in times of crisis.

“What we have come to learn is that Section 232, however, provides virtually unbridled discretion to the President with respect to the power over trade that is reserved by the Constitution to Congress. Nor does the statute require congressional approval of any presidential actions that fall within its scope. In short, it is difficult to escape the conclusion that the statute has permitted the transfer of power to the President in violation of the separation of powers.

“I respectfully suggest, however, that the fullness of time can inform understanding that may not have been available more than forty years ago,” continued Katzmann. “We deal now with real recent actions, not hypothetical ones. Certainly, those actions might provide an empirical basis to revisit assumptions. If the delegation permitted by Section 232, as now revealed, does not constitute excessive delegation in violation of the Constitution, what would?”