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Keywords

lawsuitplaintiffmotiondiscriminationmotion to dismisstariff
motionregulationobjectionmotion to dismisstariff

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Thyssenkrupp Materials NA Inc. v. United States, 498 F.Supp.3d 1372

Facts

Thyssenkrupp, a group of importers of steel and aluminum, filed a lawsuit against the United States and various government officials, claiming that the exclusion process established by the Department of Commerce for tariffs imposed under the Trade Expansion Act resulted in a non-uniform tax. They argued that the requirement to apply for exclusions on an individual basis led to different duty rates for the same merchandise, violating the Uniformity Clause. The government moved to dismiss the case, asserting that the plaintiffs lacked a valid claim.

Thyssenkrupp describes its Complaint as a facial challenge of Commerce's regulations implementing the Proclamations. Thyssenkrupp has made no allegation in its Complaint that it requested an exclusion and that Commerce improperly denied it.

Issue

Whether the process created in the Interim Final Rule for importers to request exclusions from tariffs imposed on aluminum and steel violates the Uniformity Clause of the Constitution or is arbitrary, capricious, or otherwise not in accordance with law.

The question before us is whether the process created in Interim Final Rule: Requirements for Submissions Requesting Exclusions From the Remedies Instituted in Presidential Proclamations Adjusting Imports of Steel Into the United States and Adjusting Imports of Aluminum Into the United States; and the Filing of Objections to Submitted Exclusion Requests for Steel and Aluminum, 83 Fed. Reg. 12,106 (Dep't Commerce Mar. 19, 2018) violates the Uniformity Clause of the Constitution or is arbitrary, capricious or otherwise not in accordance with law.

Rule

The Uniformity Clause requires that all duties, imposts, and excises be uniform throughout the United States, and the court applies a test to determine if Congress defined the subject of a tax in non-geographic terms.

The Uniformity Clause requires that 'all Duties, Imposts and Excises shall be uniform throughout the United States.' U.S. Const. art I. § 8, cl. 1.

Analysis

The court found that the exclusion process established by Commerce did not violate the Uniformity Clause because the tariffs were defined in non-geographic terms, allowing any directly affected party in the U.S. to apply for an exclusion. The court noted that the process operated with the same force and effect nationwide, and Thyssenkrupp's claims of geographic discrimination were not substantiated.

The court concluded that the exclusion process 'operates with the same force and effect in every place where the subject of it is found,' Head Money Cases, 112 U.S. at 594, 5 S.Ct. 247. Accordingly, Counts I and III of the Complaint are dismissed.

Conclusion

The court granted the government's motion to dismiss, concluding that the interim final rule did not violate the Uniformity Clause and was consistent with the presidential proclamations and the Trade Expansion Act.

The court granted the government's motion to dismiss, concluding that the interim final rule did not violate the Uniformity Clause and was consistent with the presidential proclamations and the Trade Expansion Act.

Who won?

The United States prevailed in the case because the court found that the exclusion process did not violate the Uniformity Clause and was a permissible interpretation of the presidential proclamations.

The Government counters that because both the Section 232 tariffs imposed by the President and Commerce's regulations implementing these tariffs are defined in non-geographical terms and operate with the same force and effect nationwide, the exclusion process set out in the Interim Final Rule does not violate the Uniformity Clause.

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