CAFC Says US Steel Cos. Can't Intervene in Section 232 Exclusion Denial Challenges
A group of domestic steel manufacturers doesn't have the right to intervene in a spate of challenges to denied requests for exclusions from Section 232 steel and aluminum tariffs, the U.S. Court of Appeals for the Federal Circuit ruled in a Sept. 8 opinion. Ruling against the Court of International Trade's opinion that the would-be intervenors did not establish standing, Judges Kimberly Moore and Todd Hughes ultimately found that the interveners nevertheless failed to identify a legally protectable interest to qualify as intervenors under the trade court's rules.
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Judge Pauline Newman issued a dissenting opinion, finding the steel companies did have clear economic interests in the tariff exclusion requests. The judge also said the proposed intervenors cleared the court's rules for intervention over whether the U.S. adequately represents the companies' interests. The proposed intervenors are U.S. Steel, Electralloy/G.O. Carlson, Crucible Industries, Ellwood City Forge and Ellwood Specialty Steel.
In May 2021, CIT denied the steel companies' bid to join the exclusion denial cases (see 2105260037). The trade court said that to qualify for intervention, the proposed intervenor must either have a legally protectable interest in the transaction at issue, have a direct relationship with the litigation where the intervenor will either gain or lose by the direct judgment or show that its interests are not adequately expressed by the government. The trade court said the steel companies failed on all three fronts. The companies took their cases to the Federal Circuit, where the judges expressed doubt over the prospect of their intervention, asking why the companies should be given certain rights that were not even granted administratively (see 2204080050).
The judges' doubts during oral argument translated into the Sept. 8 opinion, rejecting the companies' right to intervene. Hughes, the opinion's author, first established that the judges reviewed the case de novo, though there is no clear standard when reviewing the denial of a motion to intervene. The regional courts are split on the issue, and since the Federal Circuit would affirm under either a de novo or abuse of discretion standard, Hughes said there was no need to settle the issue.
Moore and Hughes addressed the would-be intervenors' arguments that they didn't need to establish standing to intervene but even if they did need to do so, they had established standing. The appellate court found standing must first be established to intervene in a case. As opposed to a "traditional unwilling defendant," an intervenor actively looks to join the action in which the plaintiff didn't bring a claim against the proposed intervenor, so the proposed party must establish standing, Hughes said.
The Federal Circuit then reversed the trade court's ruling that the intervenors failed to establish standing. "Because in each of these cases the proposed intervenors’ requested relief is largely identical to the government’s prayer for relief, the proposed intervenors have established piggyback standing," the opinion said.
Hughes struck any hope that the intervenors would be allowed to join the six cases by ruling that the companies didn't have a legally protectable interest in the Commerce Department's denials of the Section 232 exclusion requests. The steel companies said such interest existed through their participation administratively, direct economic stake and position as intended beneficiaries of the tariff. Hughes wrote that status as an administrative participant is insufficient to establish a legally protectable interest. The statute permits any party to object to an exclusion request but doesn't require outsiders to voice these objections.
"That the proposed intervenors chose to seize on Commerce’s administrative grace and object to the pertinent requests does not transform their participation during the administrative proceedings into a legally protectable interest during subsequent judicial proceedings," the opinion said. "And the proposed intervenors’ alleged economic interests cannot suffice either." Hughes said the proposed intervenors also failed to show that their participation in the matter could add some material aspect beyond what is already present in the cases. The potential factual contributions to the actions touted by the intervenors are "irrelevant" since the record is closed once it hits the judiciary, the opinion said.
Newman disagreed with Hughes' holding, finding the intervenors do clear the standard over whether their interests are adequately represented. The U.S. took no position on whether it adequately represents the steel companies' interest, and the U.S. cannot be seen as knowing the economic interests of the intervenors sufficient to represent them adequately, the judge said. The companies also have a legally protectable interest in the exclusion denials, the dissent said.
"The multiplicity of imported products and the impact on the various domestic producers weigh in favor of permitting intervention," Newman said. "The U.S. Steel objectors have clear economic interests in these tariff exclusion requests, and meet the requirements of Rule 24(a)(2) that they have 'an interest relating to the property or transaction that is the subject of the action,' and no 'existing parties adequately represent that interest.'"
(California Steel Industries v. U.S., Fed. Cir. #21-2172, dated 09/08/22, Judges Kimberly Moore, Pauline Newman and Todd Hughes. Attorneys: Sanford Litvack of Chaffetz Lindsey for plaintiff-appellee California Steel Industries; Craig Lewis of Hogan Lovells for plaintiff-appellees North American Interpipe, Evraz, Valbruna Slater Stainless; Robert Alan Luberda of Kelley Drye for plaintiff-appellee AM/NS Calvert; Matthew Nolan of ArentFox for plaintiff-appellees voestalpine High Performance Metals; Edro Specialty Steels; Ann Motto for defendant-appellee U.S. government; James Ransdell of Cassidy Levy for defendants-appellants)
(N. Am. Interpipe v. U.S. , Fed. Cir. #21-2180) (Evraz v. U.S., Fed Cir. #21-2181) (AM/NS Calvert v. U.S., Fed. Cir. #21-2182) (Valbruna Slater Stainless v. U.S., Fed. Cir. #21-2183) (voestalpine High Performance Metals v. U.S., Fed. Cir. #21-2185)