[00:00:00] Speaker 01:
Case number 21-1726, USP Holdings Inc.

[00:00:04] Speaker 01:
versus United States, Mr. Rubich.

[00:00:08] Speaker 03:
Thank you, Your Honor, and may it please the Court.

[00:00:11] Speaker 03:
Section 232 of the Trade Expansion Act conditionally delegates executive branch authority to regulate international commerce, a power reserved by the Constitution to Congress.

[00:00:29] Speaker 03:
First, the delegation is to the Secretary of Commerce to make a finding, whether or not imports are threatened to impair national security.

[00:00:39] Speaker 03:
The second delegation, if that finding is affirmative, is to the President to take action to decide it is feasible and appropriate to do so.

[00:00:54] Speaker 03:
The first question is whether that commerce finding is final agency action subject to judicial review.

[00:01:02] Speaker 03:
Plaintiffs are firmly of the view that it must be because the commerce finding confers authority on the president that he didn't have in the first place.

[00:01:15] Speaker 03:
He has no authority to regulate imports under 232 without that finding.

[00:01:22] Speaker 03:
In addition, the president has many conditions in the statute, some of which he abided by, I would say most of them, but some that he didn't abide by.

[00:01:36] Speaker 03:
The key issue is, first of all, judicial review.

[00:01:40] Speaker 01:
Without the... What timing requirements are you contending weren't complied with?

[00:01:46] Speaker 01:
It wasn't clear to me.

[00:01:48] Speaker 03:
The timing requirements, Your Honor, were complied with with respect to the formation of the initial relief.

[00:01:59] Speaker 03:
And what we're talking about in this case is not modification after the relief is put in place.

[00:02:03] Speaker 01:
Now just tell me which timing requirements 1510 weren't complied with.

[00:02:07] Speaker 03:
The timing requirements were complied with.

[00:02:10] Speaker 03:
There are three important ones, 271.

[00:02:12] Speaker 01:
I don't need to know what they are if there's no issue about whether they were complied with.

[00:02:19] Speaker 03:
There's no issue as to whether they were complied with.

[00:02:21] Speaker 03:
The question is whether the determination of the president complied with the statute and whether the commerce determination is subject to judicial review or precluded from judicial review.

[00:02:34] Speaker 03:
because it's not final agency action.

[00:02:36] Speaker 03:
We contend strongly that it is final agency action.

[00:02:40] Speaker 03:
So the time limits in this particular case were complied with.

[00:02:45] Speaker 03:
And in fact, the president beat the clock by a wide margin in making his determination.

[00:02:51] Speaker 01:
So how can we, whether you consider it to be review of the agency action or of the presidential action, how can we make a determination

[00:03:03] Speaker 01:
as to whether this is a threat or not.

[00:03:09] Speaker 01:
I mean, that would seem to be the sort of standard that the courts really can't make a determination about, particularly where it's presidential action.

[00:03:18] Speaker 01:
And the Bush case in the Supreme Court sort of says that in these circumstances, you sort of mush together the agency's determination and the presidential determination since they've elected toward the same standard.

[00:03:31] Speaker 03:
There is.

[00:03:31] Speaker 03:
Excuse me, Your Honor.

[00:03:34] Speaker 03:
How can we do that?

[00:03:37] Speaker 03:
We can do it in a very meticulous way.

[00:03:40] Speaker 03:
The Commerce Department's job, delegated by Congress, is to determine whether imports threaten to impair the national security.

[00:03:50] Speaker 03:
The statute says threaten.

[00:03:51] Speaker 03:
It doesn't say maybe.

[00:03:53] Speaker 03:
It doesn't say perhaps.

[00:03:54] Speaker 03:
It doesn't say conjecturally.

[00:03:57] Speaker 03:
The word threat has meaning, and that would be part of the review of the Commerce determination.

[00:04:03] Speaker 03:
The statute does not require the president to make an independent determination of threat only to concur or not to concur with the Commerce Secretary's finding.

[00:04:13] Speaker 03:
Let's presume for a moment that the Commerce Secretary's finding is devoid of evidentiary support, is illogical, is arbitrary, and the executive branch is contending that nevertheless,

[00:04:28] Speaker 03:
the commerce determination, which provides new authority to the president that he didn't have before, is precluded from judicial review.

[00:04:36] Speaker 03:
We think that is an outrageous assertion.

[00:04:39] Speaker 01:
Okay, so maybe if the agency said, we're not going to make a threat determination, and the president nonetheless acted, that might be a problem.

[00:04:50] Speaker 01:
But what's the problem with the threat determination that was made here?

[00:04:57] Speaker 01:
What's the theory as to how it's unsupported?

[00:05:01] Speaker 03:
Again, let's suppose that it is completely unsupported.

[00:05:04] Speaker 03:
We haven't had review of it yet.

[00:05:06] Speaker 03:
We need to have review of that determination.

[00:05:10] Speaker 03:
But just tell me what the theory is.

[00:05:14] Speaker 01:
If, as, and when you got such review, what's the matter with this threat determination?

[00:05:19] Speaker 03:
The scenarios that were articulated by the Commerce Department do not amount to a threat based on the ordinary meaning of the word threat.

[00:05:30] Speaker 01:
Because?

[00:05:32] Speaker 03:
They are neither reasonably likely to occur nor likely to occur in the near future, and that is a fundamental feature of the definition of threat as opposed to perhaps or maybe.

[00:05:46] Speaker 01:
I don't see how we can review that kind of amorphous determination.

[00:05:53] Speaker 03:
It has to be reviewed because it provides authority.

[00:05:57] Speaker 03:
It changes the legal landscape and gives the president the power to act where he didn't have it before.

[00:06:06] Speaker 03:
So it is a final action of the agency and it is in any feature of the commerce report could

[00:06:15] Speaker 03:
be determined to be without evidentiary support.

[00:06:20] Speaker 03:
It is required to look at the report, to look at the finding, and see whether it is supported or whether it's arbitrary.

[00:06:29] Speaker 03:
I believe in this instance myself that it is arbitrary, but that's not the point here.

[00:06:34] Speaker 03:
The point here is that it needs to be reviewed because without a valid, logical, and non-arbitrary finding,

[00:06:44] Speaker 03:
the president doesn't have the authority to adjust influence.

[00:06:49] Speaker 03:
That's what Congress provided.

[00:06:57] Speaker 01:
Okay, what about the durational issue?

[00:07:01] Speaker 03:
I'm sorry, can you repeat that?

[00:07:02] Speaker 01:
What about the durational issue?

[00:07:06] Speaker 03:
The statute very clearly requires when the president makes the determination, he must state the nature and duration

[00:07:15] Speaker 03:
of the action that's required to solve the problem of imports.

[00:07:20] Speaker 01:
Your theory is he has to have a fixed duration, three years or something like that.

[00:07:27] Speaker 03:
We do not contend it has to be a fixed duration or a set date.

[00:07:31] Speaker 03:
But if it is circumstantial, if capacity utilization is at a certain level for a certain period of time, or I certainly think he has the discretion to say,

[00:07:43] Speaker 03:
after a certain period of time, much like Section 201, he can review the process, have another investigation by the Commerce Department.

[00:07:54] Speaker 03:
We're not saying there has to be an arbitrary deadline.

[00:07:57] Speaker 00:
What we're saying is that there has to be.

[00:08:00] Speaker 00:
Mr. Leibowitz, didn't we address this issue in Trans-Pacific, at least in some manner, where we observed that the President

[00:08:13] Speaker 00:
Proclamation 9705, expressing an interest in protecting national security, rested on this important goal of trying to reach an 80% production capacity for domestic steel production.

[00:08:34] Speaker 00:
And so in that sense, your initial response to Judge Dyke's question about ant duration

[00:08:42] Speaker 00:
also include something like circumstances as opposed to a hard time limit seems to be already reflected in the President's initial proclamation here.

[00:08:58] Speaker 03:
Your Honor, first of all, perhaps in rebuttal I'll get into this a little bit more.

[00:09:04] Speaker 03:
Trans-Pacific does not deal with the issue of creation of the remedies.

[00:09:09] Speaker 03:
It deals with modification of it.

[00:09:11] Speaker 03:
In Trans-Pacific, the tariffs were imposed on Turkey.

[00:09:16] Speaker 03:
They were doubled.

[00:09:17] Speaker 03:
And the issue was whether that doubling was appropriate.

[00:09:20] Speaker 03:
That's after the remedy goes into effect.

[00:09:23] Speaker 03:
These are issues related to the creation of the remedy in the first place.

[00:09:27] Speaker 03:
The determination, which starts the clock running on the 15 days, is the key here.

[00:09:35] Speaker 03:
And that determination must state the duration.

[00:09:39] Speaker 03:
It didn't.

[00:09:40] Speaker 03:
The president didn't do that.

[00:09:42] Speaker 03:
And that is the issue that we face today.

[00:09:55] Speaker 03:
I want to get back to the judicial review because the court below failed to appreciate the similarities between Section 201 in the chorus group case and the situation we have here.

[00:10:10] Speaker 03:
In fact, the president in a Section 201 case does not have to take action.

[00:10:18] Speaker 03:
And as we pointed out in our reply brief, a third of the 201 cases that went to the president, he took no action.

[00:10:26] Speaker 03:
He's obviously got the authority to do that.

[00:10:29] Speaker 03:
That's just like 232.

[00:10:30] Speaker 03:
The wording is slightly different, but not materially different such that one

[00:10:35] Speaker 03:
obtains judicial review and the other does not.

[00:10:38] Speaker 03:
They both obtain it, or neither one does, but Coors Group made it clear that Section 201 is subject to judicial review.

[00:10:45] Speaker 03:
Some form of it, the details of that review, the extent of it, need to be dealt with, I think, on remand in the first instance, but there is clearly an entitlement to judicial review.

[00:10:58] Speaker 03:
There's a strong presumption.

[00:11:00] Speaker 03:
When the President is given additional power by an agency,

[00:11:03] Speaker 03:
That agency report is subject to review.

[00:11:07] Speaker 03:
We cited the cases.

[00:11:08] Speaker 03:
I don't need to repeat them now.

[00:11:10] Speaker 03:
But that is our main point.

[00:11:13] Speaker 03:
Judicial review is essential to avoid arbitrary exercise of power that Congress did not delegate.

[00:11:21] Speaker 01:
Do you want to save the rest of your time for rebuttal?

[00:11:31] Speaker 03:
Your Honor, I would like to do that, yes.

[00:11:34] Speaker 01:
Thank you.

[00:11:35] Speaker 01:
We'll hear from Mr. O, next.

[00:11:38] Speaker 02:
Thank you, Your Honor.

[00:11:39] Speaker 02:
May it please the court?

[00:11:41] Speaker 02:
I'll address the APA review issue first.

[00:11:44] Speaker 02:
That is, whether the Secretary's advisory report to the President is a final agency action reviewable under the APA.

[00:11:52] Speaker 01:
Well, it may have to be reviewable in some circumstances, right?

[00:11:55] Speaker 01:
Suppose Commerce said, we don't think it's necessary for us to make a threat determination at all, so we're not going to do that.

[00:12:03] Speaker 02:
I think that would be correct.

[00:12:06] Speaker 02:
You're correct.

[00:12:07] Speaker 02:
So, under Maple Leaf, Fish Crone, Silpat Solar, that would be reviewable for the content of whether the statutory prescriptions were complied with because subpart B of the statute does require finding a threat by the secretary in order for the president to act under subpart C of the statute.

[00:12:27] Speaker 02:
But that would be review under cases like Sultab Solar or Maple Leaf Bishko.

[00:12:34] Speaker 02:
But it wouldn't be going into the merits of the president's SAC finding or even the secretary's SAC finding or the merits of those determinations themselves.

[00:12:42] Speaker 01:
As to the threat?

[00:12:44] Speaker 02:
As to things like the threat, whether the duration is satisfactory to someone else, things like that would all be out of bounds under that case law.

[00:12:52] Speaker 02:
Correct.

[00:12:53] Speaker 02:
But we think that line of authority is not a review in the sense of whether something is arbitrary or patricious or contrary to law.

[00:13:01] Speaker 02:
It's review under Maple Leaf-Fishcoast standards of whether there's a clear misconstruction of governing statute, misconstitutional violation, or other action outside delegated authority, which is a different sort of review.

[00:13:14] Speaker 02:
That's our position in this case.

[00:13:16] Speaker 02:
So, but leaving that aside, I mean, we can talk about the cases which we believe were in our favor.

[00:13:21] Speaker 02:
We think the trial court addressed the issue properly, declined APA review.

[00:13:25] Speaker 00:
I do want to go into the merits argument that the plaintiff raises, because those do deal with... Is it theoretically possible that a secretary report could be so skeletal in conclusory as to why there's

[00:13:45] Speaker 00:
something threatening national security, that that would be something that we would have to consider as possibly exceeding the president's statutory authority?

[00:13:57] Speaker 02:
That's a good question, Judge Chen.

[00:13:59] Speaker 02:
I'll put it this way.

[00:14:01] Speaker 02:
The way I read the statute is under subpart, when you get to subpart B and subpart C, the importance of the persuasiveness of the secretary's report is that you're trying to convince the president

[00:14:15] Speaker 02:
So if the report is skeletal and it doesn't have, you know, some kind of rational basis supporting the threat fighting, the risk is that the president just won't act because he won't agree with it.

[00:14:27] Speaker 02:
So in that sense, the statute builds in this sort of check that doesn't really make itself necessary for it.

[00:14:34] Speaker 00:
I guess my question is premised on the president concurring with this skeletal three-sentence report.

[00:14:42] Speaker 00:
Then what happened?

[00:14:45] Speaker 02:
Our position would be that would be unreviewable under the statute, because here you do have an affirmative correct finding.

[00:14:53] Speaker 02:
The president, for whatever reason, did concur with that correct finding.

[00:14:56] Speaker 02:
And one thing that I think is important here is nothing in subpart B restricts the president to just look at the secretaries' report.

[00:15:03] Speaker 02:
So let's say the steel report just has three sentences.

[00:15:06] Speaker 02:
It was conclusory.

[00:15:08] Speaker 02:
But that doesn't mean the president didn't talk to other advisors, didn't talk to people in the mess industry, get other consent that did compel them to act ultimately through a presidential population.

[00:15:18] Speaker 02:
So we think there is a distinction there.

[00:15:20] Speaker 02:
And I understand kind of the tension here about

[00:15:24] Speaker 02:
saying something is out of bounds in judicial review, but we still think that position squares with the case law, which has always been very differential to the president enacting this particular sphere.

[00:15:35] Speaker 02:
So, moving beyond procedural issues, going to... Help me a little bit.

[00:15:40] Speaker 01:
I mean, in a normal anti-dumping case, as I understand it, once you have a commerce determination, IPC, the Termination of Material Injury, you still have to have

[00:15:53] Speaker 01:
presidential approval right before the anti-dumping order takes effect.

[00:16:00] Speaker 01:
And yet, we routinely review commerce determinations about dumping margin.

[00:16:07] Speaker 01:
I mean, look, how is that different?

[00:16:10] Speaker 01:
I guess is the question.

[00:16:12] Speaker 02:
I think the big difference here is how the statute of structure

[00:16:16] Speaker 02:
I think the two cases this court would have to square are this court's en banc decision and motion systems and core scrutiny.

[00:16:25] Speaker 02:
And what the trial court did when analyzing and harmonizing those cases, it did it under this kind of level of discretion analysis.

[00:16:33] Speaker 02:
How much discretion does the president have to disagree with the finding, to reject the finding, to say, no, I'm not going to take that action?

[00:16:41] Speaker 02:
And temporally, who is the one who takes that last action?

[00:16:45] Speaker 02:
So there's an interplay between these factors, which is consistent with how cases like Dalton v. Specter and Franklin v. Massachusetts have analyzed the issue.

[00:16:55] Speaker 02:
They view the issue temporally, and they address the issue through how much discretion does the president have when he ultimately decides or decides not to take a certain action.

[00:17:07] Speaker 01:
So here, when we're looking at Section 232.

[00:17:11] Speaker 01:
Can't the president just say, I don't believe that the dumping duties are in the national interest, so I'm not going to do anything?

[00:17:20] Speaker 02:
I don't have the specific.

[00:17:24] Speaker 02:
To me, I would look at the statute.

[00:17:25] Speaker 02:
I don't have that specific statute in front of me, so I don't know how the presidential action or discretion is circumscribed.

[00:17:33] Speaker 02:
But here, with respect to Section 232, the president's action is essentially uncircumscribed.

[00:17:40] Speaker 02:
almost no limit other than certain factors he has to consider as to whether he should or could not take action that limit what kind of action he can take, what things he should find persuasive or compelling.

[00:17:53] Speaker 02:
And so the level of discretion that has supported the president in this particular case

[00:17:58] Speaker 02:
we think demonstrates that it is the president that takes the final action.

[00:18:02] Speaker 02:
It is he who ultimately makes the decision from which legal consequences flow under the APA, which makes the advisory action, the underlying action and recommendation unreviewable in the APA.

[00:18:15] Speaker 02:
Moving on to the merits portion.

[00:18:18] Speaker 02:
Regarding challenges to whether the President's finding of threats or whether the issue of the nature and duration of the President's actions are reviewable, we think that these are square merits challenges that the plaintiff is raising, which, you know, cases, Bill Babson and Maple Leaf-Fischow have said are not reviewable in this court.

[00:18:40] Speaker 02:
The court doesn't have jurisdiction to review those discretionary actions.

[00:18:44] Speaker 02:
So, we think in one sense, Judge Baker's concurrence below has a significant amount of sway.

[00:18:50] Speaker 02:
What Judge Baker recognizes, for example, you're not, you know, the plaintiff isn't challenging that a duration wasn't stated.

[00:18:59] Speaker 02:
The plaintiff recognized essentially that a duration was stated because there were circumstances here that specified what the duration was.

[00:19:07] Speaker 02:
Essentially, you're just disagreeing with

[00:19:09] Speaker 02:
what that duration should be.

[00:19:11] Speaker 02:
You're disagreeing with the persuasiveness of the threat finding.

[00:19:15] Speaker 02:
And what Judge Baker said is if that's the case, then we don't have jurisdictional ratio.

[00:19:20] Speaker 02:
Now, we didn't raise the jurisdictional argument, but I think this shows or demonstrates how closely plaintiff's argument is tied to the kind of merits second guessing, which courts have already said are not reviewable under this case law.

[00:19:34] Speaker 02:
So we think that established precedent decides the issues squarely in our favor, and that this court, precisely on that issue, should affirm the decision of the Charter Court.

[00:19:45] Speaker 02:
The last issue is the timing issue with respect to the negotiation provision of the Section 232 statute.

[00:19:53] Speaker 01:
I don't understand that we raise the timing issue.

[00:19:57] Speaker 02:
He did say that, or my friend on the other side did say that during his opening statement.

[00:20:04] Speaker 02:
His brief would suggest that he's challenging the negotiation provisions as to the timing provisions in that statute.

[00:20:13] Speaker 02:
So, if he waives it now, then I'm happy to not address this and avoid the issue altogether.

[00:20:22] Speaker 01:
Anything further?

[00:20:23] Speaker 02:
Nothing further.

[00:20:24] Speaker 01:
Thank you.

[00:20:25] Speaker 01:
Okay.

[00:20:26] Speaker 01:
Thank you, Mr. O. Okay, Mr. Leibowitz, we have a few minutes.

[00:20:32] Speaker 03:
Thank you, Your Honor.

[00:20:33] Speaker 03:
I feel like I'm reading a different statute than my friend on the executive branch side.

[00:20:40] Speaker 03:
There are numerous limitations on the presidential freedom of action.

[00:20:46] Speaker 03:
One is that he must solve the problem.

[00:20:50] Speaker 03:
In his judgment, he must solve the problem of imports.

[00:20:55] Speaker 03:
He has to eliminate it.

[00:20:56] Speaker 03:
And that is a key to why the duration must be part of it.

[00:21:01] Speaker 03:
Duration puts a finite limit.

[00:21:07] Speaker 03:
You can't tell whether you solved the problem unless you have some limit to the action.

[00:21:13] Speaker 03:
Trade remedy statutes in general provide for periodic review, provide for termination.

[00:21:20] Speaker 03:
Just to be clear, Your Honor, the Coors Group case did not deal with anti-dumping, which has numerous

[00:21:26] Speaker 03:
specific statutory provisions regarding judicial review.

[00:21:30] Speaker 03:
1516A, for example, of 28 USC.

[00:21:36] Speaker 03:
Section 201 is different.

[00:21:39] Speaker 03:
Section 201 parallels section 232 in many respects.

[00:21:44] Speaker 03:
The president is free.

[00:21:46] Speaker 03:
The court below was wrong to say the president wasn't free to take no action under section 201.

[00:21:52] Speaker 03:
He is free to take no action.

[00:21:54] Speaker 03:
And there's a provision in the statute

[00:21:56] Speaker 03:
Section 2253B2, that says that.

[00:22:00] Speaker 03:
If there's no action that the president determines is feasible or appropriate in the national economic interest, he can take no action.

[00:22:07] Speaker 03:
And in one third of the cases before him, he did exactly that.

[00:22:13] Speaker 03:
So that is very parallel to Section 232.

[00:22:17] Speaker 03:
Notwithstanding that, this court held that

[00:22:22] Speaker 03:
Section 201, the administrative determination is judicially reviewable because the president didn't have power in the first place.

[00:22:33] Speaker 03:
Before the ITT determination in that case, the president didn't have the power to limit imports.

[00:22:40] Speaker 03:
After the determination he did, that was the key.

[00:22:43] Speaker 03:
They didn't talk about the idea whether he was free to reject something or accept something.

[00:22:52] Speaker 03:
There is no material difference between rejecting a finding or saying, I hear your finding and I'm not going to do anything about it.

[00:23:03] Speaker 03:
Those differences are not significant.

[00:23:06] Speaker 03:
And that is our assertion.

[00:23:10] Speaker 03:
Regarding Section C3A, the 180-day provision, there is some relevance because the President's determination

[00:23:21] Speaker 03:
excluded, and I'm talking about Proclamation 9705 now, it excluded import relief for Canada and Mexico.

[00:23:32] Speaker 03:
He tried to bring it back in in the 15 days.

[00:23:34] Speaker 03:
Now, in that 15-day period, the statute is crystal clear.

[00:23:39] Speaker 03:
The President must implement his determination within 15 days.

[00:23:44] Speaker 03:
The determination is 9705, not the belated inclusion of Canada and Mexico.

[00:23:50] Speaker 03:
in Proclamation 9711, the day before the 15 days.

[00:23:56] Speaker 03:
Both sides agree that the 15 days started to run on March the 8th, 2018, with the issuance of 9705, and the 23rd was the... Now you're convincing me.

[00:24:08] Speaker 01:
I thought you said there wasn't any timing issue that you were raising.

[00:24:14] Speaker 03:
Not that the president violated the time limit.

[00:24:16] Speaker 03:
No, he didn't violate the time limit.

[00:24:17] Speaker 03:
He beat that time limit.

[00:24:19] Speaker 03:
He had 90 days and he used about 60 days before 9705 and he implemented within 15 days thereafter.

[00:24:29] Speaker 03:
The question is, what did he implement?

[00:24:30] Speaker 03:
He implemented 9705, not 9711.

[00:24:35] Speaker 03:
The statute is very clear on that.

[00:24:38] Speaker 03:
His discretion is

[00:24:41] Speaker 03:
sharply limited in many, many respects.

[00:24:44] Speaker 00:
Just so I understand, your argument is that the subsequent proclamations after 9705 violated the statutory timing requirements.

[00:24:52] Speaker 00:
That's your argument?

[00:24:54] Speaker 03:
My argument is that the 9711, between the time of the determination and the implementation, violated the statute.

[00:25:03] Speaker 00:
Because of the timing?

[00:25:04] Speaker 03:
Because the determination was the determination.

[00:25:10] Speaker 03:
The president chose to make the determination on March the 8th.

[00:25:14] Speaker 03:
That's what he did.

[00:25:15] Speaker 03:
We have to get to that.

[00:25:16] Speaker 00:
Oh, I see.

[00:25:16] Speaker 00:
You're saying the president had no ability or discretion to amend his choices made in Proclamation 9705?

[00:25:27] Speaker 03:
Not during the 15-day period.

[00:25:30] Speaker 03:
He had to implement that determination.

[00:25:32] Speaker 03:
Thereafter, that's another issue.

[00:25:34] Speaker 03:
That's a separate set of issues after that day.

[00:25:39] Speaker 03:
I'm just talking about 9711 now, Aaron.

[00:25:42] Speaker 01:
Okay.

[00:25:43] Speaker 01:
Thank you.

[00:25:44] Speaker 01:
We're out of time.

[00:25:45] Speaker 01:
Thank both counsel.

[00:25:46] Speaker 01:
The case is submitted.