CIT Denies Domestics Intervention in 232 Case
The ongoing litigation over whether the Section 232 duties were properly extended to cover certain downstream products of steel and aluminum took an interesting detour in Slip Opinion 21-6, which covers multiple related cases with the lead case being Primesource Building Products v. United States. This opinion addresses the effort by the American Steel Nail Coalition to intervene in the case as a defendant in support of the United States and the continued application of the duties to imported steel nails. The Coalition is an ad hoc group that is not a formal entity as would be, for example, a trade association organized as an entity under state and federal law. Essentially, the Coalition wants a seat at the table in this litigation to protect its own economic interest in the continuation of the tariffs.
Intervention is permitted in federal courts like the Court of International Trade either by right or by leave of the Court. Take a look at CIT Rule 24 for the details. To have a right to intervene, the Coalition would need to show that it has an interest in the property or transaction involved and is "so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." On this point, the Court noted that the ultimate goal of both the United States and the Coalition is the same: to preserve the application of the tariffs on imported steel nails. The Coalition did not show any reason why the United States was not adequately representing that interest. Thus, the Coalition did not have the right to intervene.
The Court may exercise its discretion to permit intervention where the proposed intervenor has a claim or defense (in this case, a defense) that shares a common question of law or fact and there is a legal but conditional right to intervene. However, the Court may deny intervention where it may be expected to cause delay or prejudice to the rights of the original parties. Given that six of the plaintiffs in these cases opposed the motion to intervene, the Court found that allowing intervention would not promote the goal of a just, speedy, and inexpensive resolution of the matter. With that, the Court could have denied the motion and been done with this. [Disclosure: my firm represents one of those objecting plaintiffs.]
But, there is more. In a lengthy, detailed concurring opinion, relatively new-to-the-CIT Judge Baker raised interesting and important questions about what exactly the Coalition is and whether it can be a party in this (or presumably any) matter. Keep in mind that "parachuting" into an ongoing case is likely to be disruptive to the people who have been litigating up to that point. The new party gets to engage in discovery, can oppose motions, file briefs, and make oral arguments. Judge Baker took a hard look at both the law and the Coalition and found it lacked the capacity to be a party in the litigation.
First, this all needs to be differentiated from standing, which is the legal requirement that the party seeking relief in court be injured by the action or decision that caused the claimed injury. Here, the members of the Coalition have an economic interest that they want to defend to prevent an injury in fact. Regardless, the Supreme Court has held that an intervening party need not independently show standing where a proposed defendant-intervenor seeks the same relief as the government. That follows from Little Sisters of the Poor, which may be the first time a reproductive rights case has been cited by the CIT (but I have not checked that).
Judge Baker then moved on to the question of whether the Coalition is legally even a "thing." Remember that there are many forms of legal entities including various forms of corporations, partnerships, and joint ventures. There is also a thing called an "unincorporated association," which is a term of art that describes a group of people joined together in some common enterprise. But, an unincorporated association does not arise automatically whenever a group of people get together for a common goal. If it did, every pickup game of Ultimate would produce a legal entity. Here, the Coalition failed to show any common enterprise or goal beyond this litigation. It has held no meetings, made no public statements, and has no office or other indicia of an independent existence. As a result, Judge Baker is of the view that it does not exist sufficiently in the law to even appear as a party.
The next question on Judge Baker's plate is whether the Coalition, assuming it exists, would have capacity to sue in the CIT. This goes to the application of Rule 17(b). Under that Rule, an unincorporated association may sue in the CIT "in its common name to enforce a substantive right existing under the United States Constitution or laws." That would seem to cover the Coalition, but it might not. The Coalition is trying to intervene as a defendant to support the application of the tariffs. It is, effectively asking to be treated as if it had been sued, not to sue. The plaintiffs in this case could not have brought the cause of action against the Coalition because the Coalition is not responsible for the 232 duties at the heart of the case. The Coalition did nothing to the plaintiffs. In Judge Baker's view, the Coalition lacks capacity to participate as a party in this litigation.
Judge Baker then went on to review whether, in his view, the Coalition satisfied the requirements for intervention. It did not.
The capacity and existence discussion in the concurring opinion is not binding but raises the possibility of future questions. It is not that unusual for ad hoc committees to pop up in trade litigation. While not controlling, this concurring opinion is likely to put these questions on the front burner in future litigation. There might even end up being a growth market for the creation of trade associations.
Finally, on purely style points, I give Judge Baker props. Here are a couple examples of nice phrasing. "The Coalition does not put its money where its brief is . . . ." And, "I read the Coalition’s complaints about the consent injunctions as make-weight grumbling to put some distance between it and the government for purposes of satisfying Rule 24(a)." That prompted me to take a look back at his prior decisions, in which I found this laudable ode to the humble catfish:
In some quarters, the humble catfish has a bad reputation. It’s ugly, often maligned as a “bottom-feeder,” and with fins that sting, it’s not so easy to remove from a fishing line intended for statelier fish. But as reported in the newspaper of record, the ugly, ungainly, and prickly catfish is, in fact, a delicacy. Craig Claiborne, “Catfish, Long a Southern Delicacy, Branches Out,” N.Y. Times, Nov. 11, 1981, at C6. As a result, commercial catfish farming is a big business in this country. [Footnote with the Judge's tip to use pliers to remove the hook omitted.]
Personally, I dislike catfish and dismiss their meat as tasting like a swamp. Same goes for tilapia. But, maybe I have not found the right preparation.