On September 30, 2021, the Department of Commerce (“Commerce”) filed a voluntary referral motion to review the Section 232 502 exclusion request denials it issued to Voestalpine High Performance Metals Corporation and Ergo Specialty Steels, Incorporated (collectively “Voestalpine, et al.”) As of 2018. Specifically, the Commerce Department in its petition acknowledges that it lacks documentation as to why it rejected all 502 requests. This voluntary referral request comes just months after Commerce requested the same type of voluntary referral in six separate Section 232 appeals.
In its order of September 15, 2021, the court dismissed Commerce’s requests for voluntary dismissal and instead consolidated the six separate cases concerning similar denials of exclusion requests under Section 232 and collectively referred the cases to mediation annexed to the tribunal. Specifically, the court ordered that (1) all cases be stayed for a period of up to 90 days from September 15, during which time mediation must be conducted and completed, and (2) all cases must be referred on the active schedule unless a settlement is reached during the mediation process.
The court appears ready to follow the same path in the appeal of Voestalpine et al. On October 1, 2021, the CIT issued an order (1) suspending the deadline for complainants to respond to Commerce’s September 30 motion until further notice and (2) requiring both parties to file statements indicating whether this matter should be referred to mediation annexed to the tribunal.
Le Commerce, in its declaration filed on October 6, 2021, opposes the annexed judicial mediation. In its statement, the Department of Commerce argues that the differences between the products subject to exclusion requests do not allow for expeditious resolution through mediation. Commerce also notes that in Voestalpine et al.’s original complaint, the relief sought was a referral to Commerce.
Voestalpine et al., In its statement filed on October 8, 2021, refutes both Commerce’s arguments and supports the annexed mediation to the tribunal. In its statement, Voestalpine et al. stresses that the problem is not that the Department rejected the exclusion requests, but rather that it did not include the reasoning behind the denials in question. Voestalpine et al. also argues that it did not seek remedy by reference to Commerce simply for the review of exclusion requests. Instead, he requested a referral to the Commerce Department with a requirement “to reimburse Section 232 tariffs previously paid by applicants”.
It seems that a trend is developing. The court appears reluctant to allow the full return of these actions to Commerce while at the same time it is reluctant to grant the plaintiffs the relief sought: a statement that Commerce’s denials were illegal.
The court may also wait to see if global politics will impact the status of Section 232 tariffs in the near future. Either way, it seems likely that this case will be referred to the same mediation process as the cases earlier this year and that a trend towards court-annexed mediation will develop with respect to claim denials. exclusion under section 232.
As a reminder, the Trump administration instituted Section 232 of the National Security Tariffs on Steel and Aluminum in 2018 and also implemented an exclusion process for importers if they met certain conditions and were able to demonstrate that the product was not available from any other source and does not harm national security interests. Exclusions were granted by product and by importer.
Nithya nagarajan is a Washington-based partner of the law firm Husch Blackwell LLP. She practices within the International Trade and Supply Chain group of the firm’s Technology, Manufacturing and Transportation industry team.