U.S. Court of International Trade Stays Department of Commerce’s Motion for Voluntary Remand Setting Course for Court-Annexed Mediation in Section 232 Exclusions Dispute

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[ co-author: Isabella Peek ]

On September 30, 2021, the Department of Commerce (“Commerce”) filed a motion requesting a voluntary remand to review 502 Section 232 exclusion request denials it issued to Voestalpine High Performance Metals Corporation and Ergo Specialty Steels, Incorporated (collectively “Voestalpine, et al.”) beginning in 2018. Specifically, Commerce in its motion acknowledges that it lacks documentation explaining why it rejected all 502 requests. This motion for voluntary remand comes only a couple months after Commerce requested the same type of voluntary remand in six separate Section 232 appeals.

In its September 15, 2021, order, the court rejected Commerce’s motions for voluntary remand and instead consolidated the six separate cases concerning similar denials of Section 232 exclusion requests and collectively referred the cases to court-annexed mediation. Specifically, the court ordered that (1) all cases are stayed for a maximum of 90 days beginning September 15th in which time mediation should be conducted and concluded, and (2) all cases be returned to the active calendar unless settlement is reached during the mediation process.

The court seems set to follow the same course in Voestalpine et al.’s appeal. On October 1, 2021, the CIT issued an order (1) staying Plaintiffs time to respond to Commerce’s September 30th motion until further notice and (2) requiring both parties to file statements on whether this case should be referred to court-annexed mediation.

Commerce in its statement filed on October 6, 2021, opposes the court-annexed mediation. In its statement, Commerce argues that the differences in the products that are the subject of the exclusion requests do not allow for a speedy resolution through mediation. Commerce also points out that in Voestalpine et al.’s initial complaint, the relief sought was a remand to Commerce.

Voestalpine et al., in its statement filed on October 8, 2021, rebuts both of Commerce’s arguments and supports court-annexed mediation. In its statement, Voestalpine et al. points out that the issue is not that Commerce denied the exclusion requests, but rather that it did not include the reasoning behind any denials at issue. Voestalpine et al. also argues that it did not seek relief through remand to Commerce merely for reconsideration of the exclusion requests. Rather, it sought a remand to Commerce with a requirement “to refund the Section 232 tariffs previously paid by Plaintiffs.”

It appears there may be a trend developing. The court seems reluctant to allow these actions to fully go back to Commerce while, at the same time, it is reluctant to provide plaintiffs the relief sought: a declaration that Commerce’s denials were unlawful.

It may also be that the court is waiting to see whether 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 of court-annexed mediation is developing where Section 232 exclusion request denials are concerned.

As a reminder, the Trump Administration instituted Section 232 national security tariffs on steel and aluminum in 2018 and also set up an exclusion process for importers if they met certain qualifications and were able to demonstrate that the product was not available from any other source and did not harm national security interests. The exclusions were granted on a product specific and importer specific basis.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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