Antitrust Lawyer Blog Commentary on Current Developments

CIT Decision on Constitutionality of Section 232

A lawsuit commenced by the American Institute for International Steel (“AIIS”) regarding the constitutionality of Section 232 before the Court of International Trade (“CIT”) has been decided.  A three-judge panel decided that Section 232 was not unconstitutional.

The plaintiffs argued that Section 232 of the Trade Expansion Act of 1962, as amended, did not properly delegate authority to the Executive Branch because there is no “intelligible principle” under which Section 232 authorizes presidential action.

CIT determined that Section 232 did, in fact, meet the “intelligible principle” standard to uphold Section 232’s constitutionality.  In reaching its decision, the CIT relied on a 1976 case, Fed. Energy Admin. v. Algonquin SNG Inc., 426 U.S. 548 (1976), where the Supreme Court upheld a similar challenge against Section 232, finding that Section 232 “establishes clear preconditions to Presidential action. . . .”

Plaintiffs attempted to distinguish the 1976 case from the one before it, but ultimately failed to convince the three-judge panel that the Algonquinwas not binding on the CIT.

Despite the outcome, there are avenues for appeal.  The case can be appealed to the Supreme Court, where the Highest Court can revisit its earlier rulings and revise the law.  Despite the difficulty in overruling an earlier Supreme Court decision, one judge on the CIT panel expressed “grave doubts” about the 1976 decision that was binding on the CIT.  Judge Katzmann did not dissent from the opinion, and maintained that he was bound by earlier precedent, but maintained skepticism that the earlier decision was right.  Judge Katzmann expressed concern that Section 232 violates the spirit of Separation of Powers embedded in the Constitution because it:

“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.”

AIIS already announced its decision to appeal the decision, so time will tell whether the Supreme Court will revisit its earlier precedent.