# NLMK PENNSYLVANIA, LLC v. UNITED STATES STEEL CORPORATION

> District Court, W.D. Pennsylvania · March 22, 2022

URL: https://www.frixlaw.com/law-library/cases/10417566

## Case

- **Court:** District Court, W.D. Pennsylvania
- **Decided:** March 22, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## How later opinions describe it (automated extraction)

- rejecting the presumption for state law fraud claims premised on allegedly fraudulent statements made to the FDA because “the relationship between a federal agency and the entity it regulates . . . originates from, is governed by, and terminates according to federal law.”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

NLMK PENNSYLVANIA, LLC and NLMK
INDIANA, LLC
Plaintiffs, Civil Action No. 2:21-cv-273
v. Hon. William S. Stickman IV
UNITED STATES STEEL CORPORATION,
Defendant.

OPINION
WILLIAM S. STICKMAN IV, United States District Judge
I. INTRODUCTION
Congress empowers the Secretary of Commerce, in conjunction with the President of the
United States and the Secretary of Defense, to investigate the impact of foreign imports on the
national security of the United States. If that impact is found to be harmful, the President is
authorized to impose a tariff on designated imported goods. After such an investigation, in 2017,
President Donald J. Trump imposed a 25% tariff on certain imported steel products. Under the
rules implementing the tariff, an impacted company could request an exemption from the tariff,
and domestic producers could then object to the exemption request. That is what happened here.
Plaintiffs NLMK Pennsylvania, LLC, and NLMK Indiana, LLC (collectively “NLMK”), requested
exemptions from the tariff and, in response, Defendant United States Steel Corporation (“U.S.
objected to every request. After the Department of Commerce (“Commerce”) ruled in
favor of U.S. Steel’s objections, NLMK lodged an appeal pursuant to the designated procedure.

NLMK received a $97 million dollar refund under a settlement approved by the United States
Court of International Trade. NLMK Indiana LLC vy. United States, Ct. Int’] Trade, No. 1:20-cv-
00050. □

Claiming that it was not made completely whole through Commerce’s appeal process,
NLMK filed a one-count Complaint in the Court of ‘Common Pleas of Allegheny County,
Pennsylvania, on January 22, 2021, asserting a state-law unfair competition claim. (ECF No. 1-
2). The Complaint alleges that NLMK submitted exclusion requests to Commerce and that U.S.
Steel engaged in unfair competition by making various misrepresentations to Commerce during
its evaluation. NLMK contends that these misrepresentations resulted in the wrongful imposition
of tariffs on its products, which caused direct and indirect economic damages. In other words—
NLMK claims that U.S. Steel lied in its objections to the exemption requests to harm NLMK, its
competitor, and that U.S. Steel’s lies are actionable under Pennsylvania common law.
U.S. Steel removed the case to the United States District Court for the Western District of
Pennsylvania on February 25, 2021 (ECF No. 1), and the Court found removal to be proper on
August 18, 2021, when it denied NUMK’s motion to remand. (ECF Nos. 34, 35). U.S. Steel has
now moved to dismiss NLMK’s unfair competition claim under Federal Rule of Civil Procedure
(“Rule”) 12(b)(6). (ECF No. 39). U.S. Steel argues that NLMK’s Complaint does not assert a
cognizable substantive claim because no Pennsylvania case has applied the unfair competition
claim cause of action to a situation remotely similar to the one here—to make actionable alleged
misrepresentations to government regulators or other public officials. But even if the claim is
actionable, U.S. Steel argues that there are multiple legal impediments to recovery, including
federal preemption, immunity under the federal Noerr-Pennington doctrine and judicial immunity
under Pennsylvania law.

For the reasons explained below, the Court will dismiss NLMK’s Complaint. It is skeptical
that NLMK has asserted a cognizable claim under Pennsylvania’s common law of unfair
competition. Even if it had, NLMK’s state law claim is preempted by the broad Constitutional
and statutory grant of power over national security, foreign trade and foreign relations to the federal
government. In this case, the statutory and administrative framework governing the imposition of
the tariff and the process for adjudicating an exemption request is so pervaded by critical federal
interests that it leaves no room for state involvement. Preemption bars NLMK’s state law unfair
competition claim.
i. BACKGROUND
A. Statutory and Administrative Background
Under Section 232 of the Trade Expansion Act of 1962, Pub. L. No. 87-794, 76 Stat. 872,
877 (1962) (codified as amended at 19 U.S.C. § 1862) (hereinafter Section 232), Congress
authorized and empowered the President, upon receipt and agreement with specific findings of an
executive officer, to take actions necessary to address national security threats posed by imported
goods. Under the statute, upon receiving a “request of the head of any department or agency, upon
application of an interested party, or upon his own motion,” the Secretary of Commerce must
“initiate an appropriate investigation to determine the effects on the national security of imports of
the article which is the subject of such request, application, or motion.” 19 U.S.C. § 1862(b)(1)(A).
At the same time, “the Secretary [of Commerce] shall immediately provide notice to the Secretary
of Defense of any investigation initiated... .” 19 U.S.C. § 1862(b)(1)(B). The Secretary of
Commerce’s investigation is informed and advised by various officers of the United States—most
notably the Secretary of Defense on “methodological and policy questions”’—and “if it is
appropriate and after reasonable notice, [the Secretary shall] hold public hearings or otherwise

afford interested parties an opportunity to present information and advice relevant to [the]
investigation.” 19 U.S.C. § 1862(b)(2)(A)@)-Gii).
Upon completion of the investigation, the Secretary of Commerce must submit a report
detailing the findings “with respect to the effect of the importation of such article in such quantities
or under such circumstances upon national security” and provide recommendations for action or
inaction of the President. 19 U.S.C. § 1862(b)(3)(A). Further, if the Secretary of Commerce
determines that an “article is being imported into the United States in such quantities or under such
circumstances as to threaten to impair the national security, the Secretary shall so advise the
President in such report.” Jd. Thereafter, the President shall “determine whether [he] concurs with
the finding of the Secretary, and if the President concurs, determine the nature and duration of the
action that, in the judgment of the President, must be taken to adjust the imports of the article and
its derivatives so that such imports will not threaten to impair the national security.” 19 U.S.C.
§ 1862(c)(1)(A)@Hi).
Congress also provided various considerations that both the President and the Secretary of
Commerce must consider in making their determinations:
the Secretary and the President shall, in the light of the requirements of national
security and without excluding other relevant factors, give consideration to
domestic production needed for projected national defense requirements, the
capacity of domestic industries to meet such requirements, existing and anticipated
availabilities of the human resources, products, raw materials, and other supplies
and services essential to the national defense, the requirements of growth of such
industries and such supplies and services including the investment, exploration, and
development necessary to assure such growth, and the importation of goods in
terms of their quantities, availabilities, character, and use as those affect such
industries and the capacity of the United States to meet national security
requirements. In the administration of this section, the Secretary and the President
shall further recognize the close relation of the economic welfare of the Nation to
our national security, and shall take into consideration the impact of foreign
competition on the economic welfare of individual domestic industries; and any
substantial unemployment, decrease in revenues of government, loss of skills or
investment, or other serious effects resulting from the displacement of any domestic

products by excessive imports shall be considered, without excluding other factors,
in determining whether such weakening of our internal economy may impair the
national security.
19 U.S.C. § 1862(d).
The specific tariffs underlying the dispute in this case arose after the Secretary of
Commerce initiated an investigation to determine the effects of steel imports on national security
on or about April 26, 2017.1 The Secretary of Commerce notified the United States Secretary of
Defense, James N. Mattis, of his “investigation to determine the effects of imported steel on
national security.”? President Trump then requested an expeditious investigation, with
considerations and recommendations concerning the nation’s security.>
Upon finishing his investigation, the Secretary of Commerce sent his report to the
President.t The Secretary of Commerce found that domestic steel production was essential to
national security, and more specifically, that the importation of foreign flat, long, semi-finished,
pipe and tube, and stainless steel were adversely impacting both national security and the steel
industry.* He found that “the present quantities and circumstance of steel imports are ‘weakening

' Notice Request for Public Comments and Public Hearing on Section 232 National Security
Investigation of Imports of Steel, 82 Fed. Reg. 19,205, 19,205 (Apr. 26, 2017).
2 Letter from the Secretary of Commerce to the Secretary of Defense (Apr. 19, 2017) (on file with
the Department of Commerce).
3 Administrative Memorandum from Administration of Donald J. Trump to the Secretary of
Commerce on Steel Imports and Threats to National Security DCPD201700259 (Apr. 20, 2017)
(on file with the Government Publishing Office).
4 Publication of a Report on the Effect of Imports of Steel on the National Security: An
Investigation Conducted Under Section 232 of the Trade Expansion Act of 1962, as Amended, 85
Fed. Reg. 40,202, 40,202 (Jul. 6, 2020) (hereinafter Steel Report); see also Adjusting Imports of
Steel Into the United States, Proclamation 9705 of March 8, 2018, 83 Fed. Reg. 11,625, 11,625
(Mar. 8, 2018) (hereinafter Proclamation 9705).
> Steel Report at 40,204.

our internal economy’ and threaten to impair the national security as defined in Section 232.”° The
Secretary of Commerce highlighted that “[nJumerous U.S. steel mill closures, a substantial decline
in employment, lost domestic sales and market share, and marginal annual net income for U.S.-
based steel companies illustrate the decline of the U.S. steel industry.””’ Excessive imports were
further reducing U.S. steel production capacities to an economically unsustainable position.’ The
Secretary of Commerce determined that U.S. steel producers would “face increasing competition
from imported steel as other countries export more steel to the United States to bolster their own
economic objectives and offset loss of markets to Chinese steel exports.”? He concluded “that the
only effective means of removing the threat of impairment is to reduce imports to a level that
should, in combination with good management, enable U.S. steel mills to operate at 80 percent or
more of their rated production capacity.”!°
To accomplish that goal, the Secretary of Commerce presented two options. The first was
for the President to impose either a global quota limiting steel imports to 63% of 2017 imports or
a global tariff of 24% on all steel imports.!' The second was for the President to impose a 53%
tariff on Brazil, South Korea, Russia, Turkey, India, Vietnam, China, Thailand, South Africa,
Egypt, Malaysia and Costa Rica, as well as limit imports from other countries to their 2017 levels.!”

6 Id.

8 Id.
Id.
0 Td.
1 Id. at 40,205.
2 Td.

The Secretary of Commerce recommended that the President consider an exemption process from
the options above premised “on an overriding economic or security interest of the United States.”
13 He additionally recommended “an appeal process by which affected parties could seek an
exclusion from the tariff or quota imposed.”'* Under that process, the Secretary of Commerce
“would grant exclusions based on a demonstrated: (1) lack of sufficient U.S. production capacity
of comparable products; or (2) specific national security[-]based considerations.”!> If an exclusion
was granted, the Secretary of Commerce “would consider at the time whether the quota or tariff
for the remaining products needs to be adjusted to increase U.S. steel capacity utilization to a
financially viable target of 80 percent.”!®
The President agreed with the findings of the Secretary of Commerce, and after considering
the recommendations, initially elected “to adjust the imports of steel articles by imposing a 25
percent ad valorem tariff on steel articles . . . imported from all countries except Canada and
Mexico.”!7 The President authorized Commerce to exclude certain steel articles from the
imposition of tariffs where those articles are “determined not to be produced in the United States
in a sufficient and reasonably available amount or of a satisfactory quality and [Commerce] is also
authorized to provide such relief based upon specific national security considerations.”!® The
President also ordered the Secretary of Commerce to continually monitor steel imports, consult

3 Td.
4 Td. at 40,206.
5 Td.
16 Td.
7 Proclamation 9705 at 11,626.
8 Td. at 11,627.

various officials, review imports for national security and inform the President of any
circumstances requiring further actions or circumstances indicating the duty rate is no longer
necessary.!°
Commerce subsequently published an interim final rule interpreting Proclamation 9705
and establishing the procedures and methods for obtaining exclusions from the imposition of tariffs
on certain steel articles.2° Under that rule, “directly affected individuals or organizations located
in the United States may submit an exclusion request.””! “An individual or organization is ‘directly
affected’ if they are using steel in business activities (e.g., construction, manufacturing, or
supplying steel product to users) in the United States.””? Individuals or organizations are required
to submit exclusion requests, objections to exclusion requests, rebuttals, and surrebuttals to an
online web portal.”
Commerce requires separate exclusion requests to be submitted for steel products
(including products falling into more than one ten-digit Harmonized Tariff Schedule of the United
States (“HTSUS”) statistical reporting number) “with chemistry by percentage breakdown by
weight, metallurgical properties, surface quality (e.g., galvanized, coated), and critical dimensions

‘9 Td. at 11,628. The President subsequently issued a number of Proclamations adjusting tariffs,
quotas and exemptions for various countries. The substance of those Proclamations, however, is
not material here.
20 See generally 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, 12,110 (Mar. 19, 2018)
(currently codified at 15 C.F.R. pt. 705, Supp. 1 (2020)).
2115 C.E.R. pt. 705, Supp. 1, § (c)(1).
22 Td.
3 Id. at § (b).

covered by a common HTSUS statistical reporting number.”** Commerce “will approve
exclusions on a product basis, and the approvals will be limited to the individual or organization
that submitted the specific exclusion request, unless Commerce approves a broader application . .
Each exclusion request must “specify the business activities in the United States within which
the requester is engaged that qualify the individual or organization to be directly affected and thus
eligible to submit an exclusion request.””° Each request “should clearly identify, and provide
support for, the basis upon which the exclusion is sought.””’ “An exclusion will only be granted
if an article is not produced in the United States in a sufficient and reasonably available amount,
is not produced in the United States in a satisfactory quality, or for specific national security
considerations.”*
The interim final rule made provisions for third parties to object to exclusion requests. Any
objections submitted in opposition to exclusion requests must:
clearly identify, and provide support for, its opposition to the proposed exclusion,
with reference to the specific basis identified in, and the support provided for, the
submitted exclusion request. If the objector is asserting that it is not currently
producing the steel or aluminum identified in an exclusion request but can produce
the steel or aluminum and make that steel or aluminum available “immediately” in
accordance with the time required for the user of steel or aluminum in the United
States to obtain the product from its foreign suppliers, the objector must identify
how it will be able to produce and deliver the quantity of steel or aluminum needed
either within eight weeks, or if after eight weeks, by a date which is earlier than the
named foreign supplier would deliver the entire quantity of the requested
product. It is incumbent on both the exclusion requester, and objecting producers,
to provide supplemental evidence supporting their claimed delivery times. This

4 Td. at § (c)(2).
23 Id
6 Id. at § (c)(5).
2 Id
28 Td.

requirement includes specifying in writing to the Department of Commerce as part
of the objection, the timeline the objector anticipates in order to start or restart
production of the steel included in the exclusion request to which it is objecting.”
After the submission process is complete (including the submission of any remaining
rebuttals or surrebuttals), Commerce “reviews the complete exclusion requests to determine
whether the article described in the request meet[s] any of three criteria, namely ‘the article is not
produced in the United States in a sufficient and reasonably available amount, is not produced in
the United States in a satisfactory quality, or for specific national security concerns.’” JSW Steel,
466 F. Supp. 3d at 1324 (quoting 15 C.F.R. pt. 705, Supp. 1, {§ (c)(6), (h)(2)).°° Commerce defines
both quantity and quality as follows:
The exclusion review criterion “Not produced in the United States in a sufficient
and reasonably available amount” means that the amount that is needed by the end
user requesting the exclusion is not available immediately in the United States to
meet its specified business activities. Available “immediately” means that a
product (whether it is currently being produced in the United States, or could be
produced in the United States) can be delivered by a U.S. producer “within eight
weeks,” or, if that is not possible, by a date earlier than the time required for the
requester to obtain the entire quantity of the product from the requester's foreign
supplier. Furthermore, to the extent that an objector can produce and deliver a
portion, which is less than 100 percent, but ten percent or more, of the amount of
steel or aluminum needed in the business activities of the user in the United States
described in the exclusion request, the Department of Commerce may deny a
requested exclusion for that percentage of imported steel or aluminum. It is

> Td. at § (d)(4).
30 Although Commerce has since amended its original interim final rule, the substantive process
remains the same. Commerce may grant exclusions “to ‘directly affected individuals or
organizations located in the United States ... . [who use steel or aluminum] in business activities’
and [it] retain[s] ‘the discretion to make exclusion requests available to all importers if [it] find[s]
the circumstances so warrant.’” Thyssenkrupp Materials NA Inc. y. United States, 498 F. Supp.
3d 1372, 1376 n.1 (C.LT. 2021) (citing various amendments to the interim final rule); see also
Submissions of Exclusion Requests and Objections to Submitted Requests for Steel and
Aluminum, 83 Fed. Reg. 46,026, 46,048-46,053 (Sept. 11, 2018); Implementation of New
Commerce Section 232 Exclusions Portal, 84 Fed. Reg. 26,751, 26,753, 26,757—26,760 (Jun. 10,
2019); Section 232 Steel and Aluminum Tariff Exclusions Process, 85 Fed. Reg. 81,060, 81,069—
81,071 (Dec. 14, 2020).
10

incumbent upon both the exclusion requester, and objecting producers, to provide
supplemental evidence supporting their claimed delivery times.
OK
The exclusion review criterion “not produced in the United States in a satisfactory
quality” does not mean the steel or aluminum needs to be identical, but it does need
to be equivalent as a substitute product. “Substitute product” for purposes of this
review criterion means that the steel or aluminum being produced by an objector
can meet “immediately” (see paragraph (c)(6)(i) of this supplement) the quality
(e.g., industry specs or internal company quality controls or standards), regulatory,
or testing standards, in order for the U.S.-produced steel to be used in that business
activity in the United States by that end user.?!
In addition to the determination of whether a product is produced in the United States in a sufficient
and reasonable quantity and to an acceptable level of quality, the Secretary of Commerce is
required to make a separate determination on the national security implications of each exclusion
request:
The exclusion review criterion “or for specific national security considerations” is
intended to allow the U.S. Department of Commerce, in consultation with other
parts of the U.S. Government as warranted, to make determinations whether a
particular exclusion request should be approved based on specific national security
considerations.*”
Commerce will typically issue its decision within 106 days of the exclusion request being
posted to the online portal, and Commerce “will grant properly filed exclusion requests which
meet the requisite criteria, receive no objections, and present no national security concerns.”*? If
no objections are submitted, the Bureau of Industry and Security “will immediately assess the
request for any national security concerns.’”** If the Bureau of Industry and Security “identifies no

3115 CFR. pt. 705, Supp. 1, (c)(6)@-(ii).
32 Td. at FF (c)(6)(aii).
Id, at $§ (h)(2)Gi), (AY).
34 Td, at J (h)(2)(ii).
11

national security concerns, it will post a decision granting the exclusion request in the...
[p]ortal.”?>
B. Factual Background
NLMK supplies steel sheet and coil to the construction, automotive, pipe and tube, and
heavy equipment industries. (ECF No. 1-2, 4 21). NLMK and U.S. Steel directly compete with
one another for customers in various markets, including pipe and tube, service center, yellow
goods, agricultural, construction and coated conversion products. (ECF No. 1-2, 4 12). To fulfill
the orders of customers, NLMK typically imports ten-inch and eight-inch steel slab feedstock to
construct finished products. (ECF No. 1-2, 13, 22-23, 29-30). NLMK has limited capacity to
produce eight-inch slab, and only one domestic producer is capable of producing ten-inch slab—
ArcelorMittal—which retains all of its ten-inch slab in furtherance of its own operations. (ECF
No. 1-2, 23, 29-30).
NLMK alleges that, seeking to exploit its need for imported steel slab, “U.S. Steel hatched
a scheme to prevent its competitors from obtaining . . . tariff exemptions . . . . forc[ing] NLMK to
pay unwarranted tariffs, thereby driving up NLMK’s costs, unfairly limiting its ability to...
participate in the market, .. . meet contractual obligations to .. . its customers, . . . maintain sales
volume,]... compete with U.S. Steel on price[,] . . . and make substantial investments to increase
its capacity ....” (ECF No. 1-2, 9 46). NLMK alleges that U.S. Steel “objected to every one of
NLMK’s requests covering steel slab from both Russia and Brazil.” (ECF No. 1-2, 36).
NLMK claims that U.S. Steel’s objections to its exclusion requests for ten-inch steel slab
included various fraudulent misrepresentations to Commerce, including: (1) falsely answering that
it manufactured, or could manufacture within eight weeks, ten-inch steel slab; (2) falsely

35 Td.
12

answering that it could supply one hundred percent of NLMK’s tonnage requirements in a timely
manner; (3) falsely representing that it could sufficiently satisfy NLMK’s orders for ten-inch steel
slab; (4) falsely indicating that it is capable of producing ten-inch steel slab; (5) falsely providing
that it could make an identical product in place of ten-inch steel slab; and (6) falsely representing
that it engaged in multiple exchanges and proposals with NLMK for the sourcing of ten-inch steel
slab. (ECF No. 1-2, {| 50-67). U.S. Steel’s objections to NLMK’s exclusion requests for eight-
inch steel slab allegedly included false representations to Commerce that it was able to
manufacture and supply all of the volume cited in the exclusion requests and that it had capacity
to supply those amounts. (ECF No. 1-2, { 68).
NLMK avers that the above representations were false because, among other things, U.S.
Steel is neither capable of producing ten-inch steel slab, nor has it sold ten-inch steel slab to
anyone. (ECF No. 1-2, 9 57). Moreover, NLMK avers that U.S. Steel never had the capacity to
produce the eight-inch steel slab quantities specified in NLMK’s exclusion requests because U.S.
Steel was not operating at full capacity because of planned outages at its facilities—potentially
stemming from unplanned outages and product delays—and even if it could operate at full capacity
(normally steel mills max out at eighty to eighty-five percent capacity), its production capacity
would represent roughly one percent of the domestic market—far less than required by NLMK’s
exclusion requests. (ECF No. 1-2, {9 74-76). U.S. Steel’s capability of producing and supplying
sufficient quantities of eight-inch steel slab is allegedly substantiated because U.S. Steel
announced, during the relevant time, that it was going to be importing steel articles from its
facilities in Europe to finish its own products. (ECF No. 1-2, {| 77-79).
NLMK avers that U.S. Steel’s false representations to Commerce resulted in the unfair
denial of tariff exclusion requests for ten-inch and eight-inch steel slab. (ECF No. 1-2, ¢ 81). It

13

claims that due to those increased trade costs, “NLMK’s costs have been artificially inflated,
impeding its ability to compete for new business... .” (ECF No. 1-2, { 82). That includes a
planned capital investment of more than $680 million to expand facilities and increase capacities,
cancellation of contracts with customers, and the idling of approximately 550 steelworkers in
Western Pennsylvania. (ECF No. 1-2, J 82-84).
Based on its allegations relating to U.S. Steel’s misrepresentations, NLMK brought a single
cause of action for “unfair competition” under Pennsylvania law, requesting compensatory and
punitive damages alleging that U.S. Steel knowingly and willfully made misrepresentations to
Commerce to secure denials of numerous tariff exclusion requests, and those denials resulted in
the unfair interference and obstruction with NLMK’s business relationships, as well as its ability
to competitively compete in the steel market. (ECF No. 1-2, 86-90).
TI. STANDARD OF REVIEW
A motion to dismiss filed under Rule 12(b)(6) tests the legal sufficiency of the complaint.
Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A plaintiff must allege sufficient facts that,
if accepted as true, state a claim for relief plausible on its face. See Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A court must
accept all well-pleaded factual allegations as true and view them in the light most favorable to a
plaintiff. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009); see also DiCarlo v.
St. Mary Hosp., 530 F.3d 255, 262-63 (3d Cir. 2008). Although a court must accept the allegations
as true, it is “not compelled to accept unsupported conclusions and unwarranted inferences, or a
legal conclusion couched as a factual allegation.” Baraka v. McGreevey, 481 F.3d 187, 195 (3d
Cir. 2007) (citations omitted).
The “plausibility” standard required for a complaint to survive a motion to dismiss is not
akin to a “probability” requirement but asks for more than sheer “possibility.” Iqbal, 556 U.S. at
14

678 (citing Twombly, 550 U.S. at 556). In other words, the complaint’s factual allegations must
be enough to raise a right to relief above the speculative level on the assumption that all the
allegations are true even if doubtful in fact. Twombly, 550 U.S. at 555. Facial plausibility is
present when a plaintiff pleads factual content that allows a court to draw the reasonable inference
that a defendant is liable for the misconduct alleged. Jgbal, 556 U.S. at 678. Even if the
complaint’s well-pleaded facts lead to a plausible inference, that inference alone will not entitle a
plaintiff to relief. Jd. at 682. The complaint must support the inference with facts to plausibly
justify that inferential leap. Jd.
IV. ANALYSIS
A. Whether NLMK has pled a viable unfair competition claim is unclear
in light of the current state of Pennsylvania law.
NLMK’s Complaint asserts a single cause of action—unfair competition under
Pennsylvania common law. U.S. Steel moves to dismiss NLMK’s claim, arguing that, as a
threshold matter, it fails to plead a recognized cause of action or, more correctly, the cause of
action it asserts does not apply to the facts pled.
NLMK argues that Pennsylvania’s common law tort of unfair competition applies to the
situation underlying its claim. It contends that Pennsylvania courts will permit an unfair
competition claim to compensate for harm caused by “the misappropriation for the commercial
advantage of one person of a benefit ... belonging to another.” See e.g., Miracle Indus., Inc. v.
Getty Petroleum Corp., 1992 WL 121723, at *4 (E.D. Pa. May 20, 1992); see also Testing Sys.,
Inc. v. Magnaflux Corp., 251 F. Supp. 286, 289 (E.D. Pa. 1966). (ECF No. 47, p. 12). NLMK
also argues that even if U.S. Steel’s conduct raised a novel factual basis for an unfair competition
claim under Pennsylvania law, dismissal would be inappropriate because this court can develop
the common law tort by applying it to novel situations—such as U.S. Steel’s alleged misconduct.

15

In other words, NLUMK asks the Court to essentially predict that Pennsylvania courts would apply
the unfair competition cause of action to U.S. Steel’s conduct. It contends that in Pennsylvania,
when there is an unsettled question of law, courts decline to dismiss the case if there is “case law
supporting the prediction that the Pennsylvania Supreme Court would recognize [the] claim|[.]”
Id.
U.S. Steel argues that NLMK’s complaint would require the Court to create a new type of
unfair competition claim under Pennsylvania law. (ECF No. 40, p. 10). U.S. Steel posits that the
United States Court of Appeals for the Third Circuit cautions that district courts should not be too
bold in making the Erie guess in areas of unsettled state law and that federal courts must look at
the current contours of state law, and “should be reluctant to expand the common law.” Lexington
Nat. Ins. Corp. v. Ranger Ins. Co., 326 F.3d 416, 420 (3d Cir. 2003). (ECF No. 55, p. 6). U.S.
Steel also argues that the Court ought not “act as a judicial pioneer” when applying state law and
instead must “permit state courts to decide whether and to what extent they will expand state
common law.” Leo v. Kerr-McGee Chem. Corp, 37 F.3d 96, 101 (Gd Cir. 1994). CECF No. 55,
p. 6).
Unfair competition has not been firmly defined by Pennsylvania courts and they have
struggled to determine to which sorts of situations it will apply. In Checker Cab Philadelphia,
Inc. v. Uber Techs., Inc., 689 F. App'x 707 Gd Cir. 2017), the Third Circuit recently observed the
confused state of Pennsylvania unfair competition law:
We have noted that the contours of Pennsylvania unfair competition law are not
entirely clear. See Granite State Ins. Co. v. Aamco Transmissions, Inc., 57 F.3d
316, 319 (3d Cir. 1995); see also Giordano vy. Claudio, 714 F.Supp.2d 508, 521
(E.D. Pa. 2010). But all unfair competition claims recognized by Pennsylvania
courts involve some accusation of “passing off’ of one’s own product as another,
or a false or dishonest statement, or tortious interference with contract, or
intellectual property theft. See Peek v. Whittaker, 2014 WL 2154965, at *10 (W.D.
Pa. May 22, 2014) (‘[Unfair competition] contextually is limited to claims designed

16

to protect a business from another’s misappropriation of its business organization
or its expenditure of labor, skill, or money....” (quotation and citation omitted)); see
also Granite State, 57 F.3d at 319. Here, Checker has only alleged violation of state
licensing regulations for taxi cabs as unfair competition. This in no way resembles
the unfair competition claims recognized by Pennsylvania courts.
In Peek v. Whittaker, 2014 WL 2154965 (W.D.Pa. May 22, 2014), United States District Judge
Mark R. Hornak summarized different types of conduct to which Pennsylvania courts applied the
cause of action:
At Pennsylvania common law, unfair competition is customarily defined as “the
‘passing off of a rival's goods as one's own.” Giordano y. Claudio, 714 F.Supp.2d
508, 521 (E.D.Pa.2010) (citing Scanvec Amiable Ltd. v. Chang, 80 Fed. Appx. 171,
180 (3d Cir.2003)). However, unfair competition is not limited to that definition.
Carl A. Colteryahn Dairy, Inc. v. Schneider Dairy, 415 Pa. 276, 203 A.2d 469, 473
(Pa.1964), Instead, “Pennsylvania courts have recognized a cause of action for the
common law tort of unfair competition where there is evidence of, among other
things, trademark, trade name, and patent rights infringement, misrepresentation,
tortious interference with contract, improper inducement of another's employees,
and unlawful use of confidential information.” Synthes (U.S.A.) v. Globus Med.
Inc., 2005 WL 2233441, at *8 (E.D.Pa. Sept.14, 2005) (citations omitted). “The
phrase contextually is limited to claims designed to protect a business from another's
misappropriation of its business organization or its expenditure of labor, skill, or
money, Le., injury to reputation, product, manner of doing business, identification
and so forth.” USX Corp. v. Adriatic Ins. Co., 99 F.Supp.2d 593, 620 (W.D.Pa.2000)
(citing Granite State Ins. Co. v. Aamco Transmissions, Inc., 57 F.3d 316, 320 Gd
Cir.1995)). Unfair competition may not be used as “a virtual catch-all for any
form of wrongful business conduct.” /d. at 619.
Peek at *10 (emphasis added).
Under Pennsylvania unfair competition law, the cause of action evades a single definition
susceptible to distillation into universally applied elements. However, none of the cases cited by
NLMK and none located by the Court are remotely similar to NLMK’s claim here. None arise
from one competitor making alleged misstatements about its own products or business to a non-
consumer, much less to a government regulator, resulting in the imposition of some detriment to
its competitor and/or its competitor’s products. At oral argument, the Court asked NLMK if it
could identify a single Pennsylvania-law case arising from these circumstances. It identified only

17

American Home Products Corp. v. Johnson & Johnson Corp., 1994 WL 46522 (Feb. 15, 1994).
(ECF No. 54, pp. 2-3). This case—an unpublished memorandum opinion denying a motion for a
new trial—is far from convincing. It suggests that the trial court permitted an unfair competition
claim based upon the alleged filing of a patent infringement action in bad faith to go to the jury.
But the opinion does not specify that the claim was asserted under Pennsylvania law. An
examination of the unpublished decision of the United States Court of Appeals for the Federal
Circuit reviewing the case on appeal offers no deeper insight. Neither opinion supports a
contention that the Pennsylvania tort may encompass the type of conduct at issue here. The fact
that American Home Products is the only case from a court sitting in Pennsylvania that NUMK
was able to identify only highlights the lack of authority supporting the extension of the
Pennsylvania unfair competition claim to U.S. Steel’s alleged conduct here.
NLMK argues that even if Pennsylvania law has not yet expressly extended the unfair
competition cause of action to the conduct at issue here, the Court may do so through the common
law process. In Checker Cab Philadelphia, the Third Circuit observed the confused state of
Pennsylvania unfair competition law and expressed reluctance to extend it by predicting that the
Pennsylvania Supreme Court would not adopt the formulations of the claim outlined in the
Restatement (Third) of Unfair Competition:
Unsurprisingly, Checker urges that we expand the definition of unfair
competition. More specifically, it argues that we should “forecast” that the
Pennsylvania Supreme Court would embrace a Restatement (Third) of Unfair
Competition (1995) definition. It claims that the Restatement (Third) definition
would bring the alleged regulatory violations under the umbrella of unfair
competition.
We disagree that the Supreme Court would embrace the Restatement
(Third) of Unfair Competition as setting forth the Pennsylvania law. The
Pennsylvania Supreme Court has in fact said it is “difficult to imagine a modern
court simply adopting something so broad-based and legislative in character as an
outside organization’s Restatement of Law.” Tincher v. Omega Flex, Inc., 628 Pa.
296, 104 A.3d 328, 353 (2014). Furthermore, no Pennsylvania appellate court has

18

embraced a Restatement (Third) definition of unfair competition. See Bldg.
Materials Corp. of Am. v. Rotter, 535 F.Supp.2d 518, 526 n.4 (E.D. Pa. 2008).
In this case, the Court is similarly hesitant to blaze new trails for Pennsylvania’s unfair
competition law. NLMK’s claim is of a categorically different nature vis-a-vis the conduct alleged
than the existing body of caselaw where Pennsylvania courts have applied the tort. The Court is
skeptical, therefore, that Pennsylvania courts would extend the unfair competition cause of action
to the conduct of U.S. Steel alleged in the Complaint. Ultimately, however, the Court is not
required to decide the merits of this unsettled issue of state law. As explained below, even if
NLMK had asserted a viable state-law claim, it would be barred by federal law. Thus, out of
respect for the authority of Pennsylvania courts over the development of the common law of the
Commonwealth, the Court will refrain from unnecessarily making a substantive call on this issue.
B. NLMK’s state law cause of action is preempted by federal law.
Under the Supremacy Clause of the United States Constitution, “the Laws of the United
States...shall be the supreme Law of the Land.” U.S. Const. art. VI, cl. 2. Therefore, when state
and federal laws conflict, federal law preempts state law. Altria Grp. Inc. v. Good, 555 U.S. 70,
76 (2008). There are three ways by which federal law may preempt state law: (1) express
preemption, (2) field preemption, and (3) conflict preemption. Farina v. Nokia, 625 F.2d 97, 115
(3d Cir. 2010). The Third Circuit defined the three types of preemption as follows:
Express preemption applies where Congress, through a statute’s express language,
declares its intent to displace state law. Field preemption applies where the federal
interest is so dominant that the federal system will be assumed to preclude
enforcement of state laws on the same subject. Conflict preemption nullifies state
law inasmuch as it conflicts with federal law, either where compliance with both
laws is impossible or where state law erects an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.
Farina, 625 F.3d at 115. (internal citations omitted). While these are convenient categories for
the purpose of analysis, the Supreme Court has cautioned against treating the distinction between

19

them too rigidly. Virginia Aluminum, Inc. v. Warren, 139 8.Ct 1894, 1901 (2019) (This Court
has sometimes used different labels to describe the different ways in which federal statutes may
displace state laws—speaking, for example, of express, field, and conflict preemption. But these
categories ‘are not rigidly distinct’”). Regardless of the classification, the preemption analysis
requires a probing examination of the relationship between the federal and state interests
implicated in the controversy.
‘Federal regulations preempt state laws in the same fashion as congressional statutes.” Jd.
(quoting Fellner v. Tri-Union Seafoods, LLC, 539 F.3d 237, 243 (3d Cir. 2008) (“Where Congress
has delegated the authority to regulate a particular field to an administrative agency, the agency’s
regulations issued pursuant to that authority have no less preemptive effect than federal statutes,
assuming those regulations are a valid exercise of the agency’s delegated authority.”)). Critical to
the analysis of this case “[p]reemption can apply to all forms of state law, including a civil action
based on state law. Farina, at 115 (citing Holk v. Snapple Beverage Corp. 575 F.3d 329, 331 Gd
Cir. 2009)). The critical question in this case is whether the process relating to the imposition of
tariffs (including objections to a competitor’s exclusion request, the ultimate determination of the
Secretary of Commerce and any post-determination appeal) precludes the inquiry associated with
NLMK’s state law cause of action.
1. The presumption against preemption does not apply.
Out of respect for the sovereignty of the states, there is a presumption against preemption.
Farina, at 116 (citing Wyeth v. Levine, 555 U.S. 555, 565, n.3 (2009) (“We rely on the presumption
[against preemption] because respect for the States as independent sovereigns in our federal system
leads us to assume that Congress does not cavalierly pre-empt state-law causes of action.”’)
(internal citations omitted)). The presumption against preemption will not apply, however, in areas
where state regulation has been historically absent. Farina, at 116 (citing Buckman v. Plaintiff's
20

Legal Comm., 531 U.S. 341, 347 (2001) (rejecting the presumption for state law fraud claims
premised on allegedly fraudulent statements made to the FDA because “the relationship between
a federal agency and the entity it regulates . . . originates from, is governed by, and terminates
according to federal law.”)). To be clear, “the presence of federal regulations, however
longstanding, does not by itself defeat the application of the presumption. Rather, its application
accounts for the historic presence of state law, but does not rely on the absence of federal
regulation.” Jd. at 116. In other words, the presumption against preemption will not be vitiated
by a history of federal regulation, alone, but rather, by the absence of a history of state regulation.
Nevertheless, in areas where there has been “a history of significant federal presence,” it may
evidence a corresponding and comparative absence of state regulation. See United States v. Locke,
529 U.S. 89, 108 (2000).
While, as NLMK correctly argues, the states have historically regulated unfair and
anticompetitive business practices, that is too broad of a characterization of what this case is about.
Specifically, this case calls into question a very specific type of conduct—alleged
misrepresentations made to Commerce in the determination of whether a tariff should be imposed
upon imported goods. It is difficult for NLMK to prevail on any claim that its cause of action falls
within a type of conduct traditionally regulated by the states when it is far from clear that it has
even asserted a tenable cause of action under state law. Moreover, as addressed at length below,
the statutory and regulatory framework governing the tariff exclusion process includes an
independent national security component that is part of each and every determination. The states
have no history of regulation in the fields of tariffs on foreign goods or national security. Rather,
these areas have, from the time the Constitution was ratified, been viewed as inherently federal in
nature.

21

The Supreme Court’s decision in Buckman is instructive as to the presumption against
preemption. There, the plaintiffs brought state law fraud claims against the manufacturer of
medical screws alleging that it made fraudulent representations to the Food and Drug
Administration (FDA) to obtain regulatory approval for the screws. The plaintiffs argued that
“such representations were at least a ‘but for’ cause of injuries that plaintiffs sustained from the
implantation of these devices. Had the representations not been made, the FDA would not have
approved the devices, and the plaintiffs would not have been injured.” Buckman, 531 U.S. at 344.
The Supreme Court explored the statutory and regulatory framework for approval of medical
devices. It then characterized the essence of plaintiffs’ claims as essentially seeking redress for
misrepresentations made to federal agencies in the approval process. It concluded:
Policing fraud against federal agencies is hardly “a field in which the States have
traditionally occupied,” Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67
S.Ct. 1146, 91 L.Ed. 147 (1947), such as to warrant a presumption against finding
federal pre-emption of a state-law cause of action. To the contrary, the relationship
between a federal agency and the entity it regulates is inherently federal in character
because the relationship originates from, is governed by, and terminates according
to federal law. Cf. Boyle v. United Technologies Corp., 487 U.S. 500, 504-505, 108
S.Ct. 2510, 101 L.Ed.2d 422 (1988) (allowing pre-emption of state law by federal
common law where the interests at stake are “uniquely federal” in nature). Here,
petitioner’s dealings with the FDA were prompted by the MDA, and the very
subject matter of petitioner’s statements were dictated by that statute’s provisions.
Accordingly—and in contrast to situations implicating “federalism concerns and
the historic primacy of state regulation of matters of health and safety, Medtronic,
518 US., at 485, 116 S.Ct. 2240—no presumption against pre-emption [applies] in
this case.
Id. at 347-48.
The conduct complained of by NLMK is substantially similar to that in Buckman—alleged
misrepresentations made to a federal regulatory agency which were alleged to be a but for cause
of the plaintiffs’ alleged injuries. Just as the Buckman Court rejected any contention that
misrepresentations concerning medical devices fall within the scope of the states’ traditional

22

authority over matters of health and safety, so too does the Court reject the contention that the
gravamen of this action implicates the authority of the states’ (in particular, Pennsylvania) to police
unfair business practices. Rather, the core of NLMK’s action is the series of alleged
misrepresentations made by U.S. Steel to Commerce. As in Buckman, this Court holds that
“Tplolicing fraud against federal agencies is hardly a field in which the States have traditionally
occupied.” Jd. at 347. This point is highlighted here, where Pennsylvania state law is not clear
that the unfair competition cause of action will even apply to misrepresentations made to a
government actor about a competitor. Conversely, there is no question that issues relating to
international trade, tariffs and national security have long been the exclusive domain of the federal
government, rather than the several states. Therefore, the Court holds that the presumption against
preemption does not apply in this case.
2. NLMK’s claim is preempted by the preeminent federal interests
that pervade the tariff exclusion process.
Having determined that there is no presumption against preemption applicable in this case,
the Court must determine whether any of the three classes of preemption apply. There is no
language in either the relevant statute or the regulations that expressly preempt state causes of
action relating to conduct in the tariff exemption process. Express preemption is not, therefore,
implicated in this case. Whether field preemption or conflict preemption applies requires a deeper
examination. Because it is broader in scope, the Court examined field preemption first. Because
it has determined that field preemption applies, it is unnecessary to address conflict preemption.
The Third Circuit has summarized the definition of field preemption as follows:
The doctrine of field preemption applies where “the scheme of federal regulation is
sufficiently comprehensive to make reasonable the inference that Congress ‘left no
room’ for supplementary state regulation” or where “the field is one in which ‘the
federal interest is so dominant that the federal system will be assumed to preclude
enforcement of state laws on the same subject.” Hillsborough Cnty., 471 U.S. at
713, 105 S.Ct. 2371 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230,
23

67 S.Ct. 1146, 91 L.Ed. 1447 (1947)). “The question whether the regulation of an
entire field has been reserved by the Federal Government is, essentially, a question
of ascertaining the intent underlying the federal scheme.” Jd. at 714, 105 S.Ct. 2371.
With respect to agency regulations, “we must consider whether the regulations
evidence a desire to occupy a field completely.” RJ. Reynolds Tobacco Co. v.
Durham Cnty.479 U.S. 130, 149, 107 S.Ct. 499, 93 L.Ed 2d 449 (1986). “Pre-
emption should not be inferred, however, simply because the agency’s regulations
are comprehensive.” Jd.
Farina, 625 F.3d at 121. Field preemption will apply where “the federal regulation is so sweeping
that no state law can occupy that field.” Donn v. A.W. Chesterton Co., Inc., 842 F. Supp. 2d 803,
807 (E.D. Pa. 2012).
The first task of the Court in determining whether field preemption applies is “ascertaining
the intent underlying the federal scheme.” /d. (citing Hillsborough Cnty., 471 U.S. at 714). “When
Congress intends federal law to ‘occupy the field’ state law in that area is preempted.” Crosby □□
National Foreign Trade Council, 530 U.S. 363, 372 (2000). The Supreme Court explained:
For when the question is whether a Federal act overrides a state law, the entire
scheme of the statute must, of course, be considered, and that which needs must
be implied is of no less force than that which is expressed. If the purpose of the act
cannot otherwise be accomplished—fits operation within its chosen field else must
be frustrated and its provisions be refused their natural effect—the state law must
yield to the regulation of Congress within the sphere of its delegated power.
Savage v. Jones, 225 U.S. 501, 533 (1912) (emphasis added). The surest indicator of the intent
underlying the federal scheme at issue here is the language of the enabling statute itself—19 U.S.C.
§1862. Gov't of Virgin Islands v. Knight, 989 F.2d 619, 633 (3d Cir. 1993); see also Pennsylvania
Dep’t of Pub. Welfare v. Davenport, 495 U.S. 552, 557-58 (1990); Consumer Product Safety
Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980)). First, the statute is entitled
“Safeguarding national security.” And this is not an empty title, but rather, it aptly captures a
pervasive national security focus underlying each section of the statute. By way of example, the
statute provides:

24

(b) Investigations by Secretary of Commerce to determine effects on national
security of imports of articles; consultation with Secretary of Defense and
other officials; hearings; assessment of defense requirements; report to
President; publication in Federal Register; promulgation of regulations
(1)(A) Upon request of the head of any department or agency, upon application of
an interested party, or upon his own motion, the Secretary of Commerce (hereafter
in this section referred to as the “Secretary”) shall immediately initiate an
appropriate investigation to determine the effects on the national security of imports
of the article which is the subject of such request, application, or motion.
(B) The Secretary shall immediately provide notice to the Secretary of Defense of
any investigation initiated under this section.
(2)(A) In the course of any investigation conducted under this subsection, the
Secretary shall—
(i) consult with the Secretary of Defense regarding the methodological and policy
‘questions raised in any investigation initiated under paragraph (1),
(ii) seek information and advice from, and consult with, appropriate officers of the
United States, and
(iii) if it is appropriate and after reasonable notice, hold public hearings or otherwise
afford interested parties an opportunity to present information and advice relevant
to such investigation.
19 U.S.C.A. § 1862. Specifically relevant to the claim in this case, the statute further states:
(d) Domestic production for national defense; impact of foreign competition
on economic welfare of domestic industries
For the purposes of this section, the Secretary and the President shall, in the light
of the requirements of national security and without excluding other relevant
factors, give consideration to domestic production needed for projected national
defense requirements, the capacity of domestic industries to meet such
requirements, existing and anticipated availabilities of the human resources,
products, raw materials, and other supplies and services essential to the national
defense, the requirements of growth of such industries and such supplies and
services including the investment, exploration, and development necessary to
assure such growth, and the importation of goods in terms of their quantities,
availabilities, character, and use as those affect such industries and the capacity of
the United States to meet national security requirements. In the administration of
this section, the Secretary and the President shall further recognize the close relation
of the economic welfare of the Nation to our national security, and shall take into
consideration the impact of foreign competition on the economic welfare of
individual domestic industries; and any substantial unemployment, decrease in
revenues of government, loss of skills or investment, or other serious effects
resulting from the displacement of any domestic products by excessive imports

25

shall be considered, without excluding other factors, in determining whether such
weakening of our internal economy may impair the national security.
19 U.S.C.A. § 1862. Finally, under the interim final rule enacted by the Secretary of Commerce
pursuant to the authority conferred by §1862, the Secretary’s determination of each and every
tariff exclusion request includes an independent national security inquiry:
The exclusion review criterion “or for specific national security considerations” is
intended to allow the U.S. Department of Commerce, in consultation with other
parts of the U.S. Government as warranted, to make determinations whether a
particular exclusion request should be approved based on specific national security
considerations.
15 C.F.R. pt. 705, Supp. 1, (c)(6)Gii). It is important to highlight that, even if no objection to
an exclusion request is lodged, the Secretary will still conduct a national security assessment of
the request. Jd. at § (h)(2)(i1) (“[If] no objections have been submitted, BIS will immediately assess
the request for any national security concerns.”).
The statutory and regulatory scheme at issue combines two areas which have traditionally
been viewed as presenting uniquely federal interests—the imposition of tariffs on foreign
commerce and national security. The federal preeminence in each of these fields originates in the
Constitution itself and has been long recognized by Congress and the courts.
Federal authority over the imposition of tariffs and the regulation of commerce with foreign
nations is established by two separate provisions of Article I, § 8:
The Congress shall have the Power To lay and collect Taxes, Duties, Imposts and
Excises...
U.S. Const. Art. I, § 8, cl. 1; and
To regulate Commerce with foreign Nations, and among the several States, and
with the Indian Tribes.
U.S. Const. Art. I, § 8, cl. 3. These clauses have long been interpreted as conferring broad federal
authority inherent in the preeminent role played by the national government with respect to foreign

26

trade and relations and that this authority was a necessary component of the federal system
established in the Constitution. In Brown v. Maryland, 25 U.S. 419, 438-39 (1827), Chief Justice
John Marshall explained that the bestowal upon Congress of the power to tax foreign commerce
corrected a weakness of the Articles of Confederation:
From the vast inequality between the different States of the confederacy, as to
commercial advantages, few subjects were viewed with deeper interest, or excited
more irritation, than the manner in which the several States exercised, or seemed
disposed to exercise, the power of laying duties on imports. From motives which
were deemed sufficient by the statesmen of that day, the general power of taxation,
indispensably necessary as it was, and jealous as the States were of any
encroachment on it, was so far abridged as to forbid them to touch imports or
exports, with the single exception which has ben noticed. Why are they restrained
from imposing these duties? Plainly, because, in the general opinion, the interest
of all would be best promoted by placing that whole subject under the control of
Congress.
(emphasis added). Likewise, the decision to place all authority over foreign commerce in the
hands of Congress—to the exclusion of the states—also arose from the weakness of the
decentralized approach preceding ratification of the Constitution:
The oppressed and degraded state of commerce previous to the adoption of the
constitution can scarcely be forgotten. It was regulated by foreign nations with a
single view to their own interests; and our disunited efforts to counteract their
restrictions were rendered impotent by want of combination. Congress, indeed,
possessed the power of making treaties; but the inability of the federal government
to enforce them had become so apparent as to render that power to a great degree
useless. Those who felt the injury arising from this state of things, and those who
felt the injury arising from this state of things, and those who were capable of
estimating the influence of commerce on the prosperity of nations, perceived the
necessity of giving the control over this important subject to a single government.
It may be doubted whether any of the evils proceeding from the feebleness of the
federal government, contributed more to that great revolution which introduced the
present system, than the deep and general conviction, that commerce ought to be
regulated by Congress. It is not, therefore, matter of surprise, that the grant should
be as extensive as the mischief, and should comprehend all foreign commerce, and
all commerce among the States. To construe the power so as to impair its efficacy,
would tend to defeat an object, in the attainment of which the American public took,
and justly took, that strong interest which arose from a full conviction of its
necessity.

27

Brown, 25 U.S. at 445-46. More recently, the Supreme Court stated:
Foreign commerce is pre-eminently a matter of national concern. In international
relations and with respect to foreign intercourse and trade the people of the United
States act through a single government with unified and adequate national power.
Although the Constitution, Art. I, §8, cl. 3, grants Congress power to regulate
commerce “with foreign Nations” and “among the several States” in parallel
phrases, there is evidence that the Founders intended the scope of the foreign
commerce power to be greater. Cases of this Court, stressing the need for
uniformity in treating with other nations, echo this distinction.
Japan Line, Ltd. v. County of Los Angeles, 441 U.S. 434, 448 (1979) (internal citations omitted).
In general, there is little doubt that the power to regulate international commerce and to
impose tariffs on imported goods are powers which have been constitutionally entrusted to the
federal government and admit little room for state interference—and even there in only the most
collateral of situations. The Court will examine whether this case presents one of those situations
or whether it falls within the broad field of federal interests which will preempt state interference.
The Court’s analysis does not stop with foreign trade because the tariffs at issue in this case
were not merely revenue-raising measures. Rather, the plain and pervasive language of the statute
expresses Congress’s intent in enacting 19 U.S.C. § 1862 was, as it said, to “safeguard [ ] national
security.” It did so by vesting the President and the Secretary of Commerce with the authority to,
respectively, commission a study of the national security implications of foreign imports, issue a
proclamation imposing a tariff, and issue rules providing for an exemption process—including an
individualized examination of the national security implications of each exemption request and
challenges thereto. With the congressional purpose of the Statute so clearly expressed, the Court
may move on to the next question—whether the federal interest in that purpose is so pervasive as
to exclude any state regulation even through an examination of actions occurring in the course of
the tariff exclusion process through state law causes of action.

28

Questions of foreign relations and national security are textually committed by the
Constitution to the federal government in a number of places. To Congress is entrusted the
authority “to declare war,” “to raise and support Armies,” “to provide and maintain a navy,” “to
make Rules for the Government and Regulation of the land and naval Forces,” “to provide for
calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel
Invasions,” and “to provide for organizing, arming, and disciplining, the Militia, and for governing
such Part of them as may be employed in the Service of the United States, reserving to the States
respectively, the Appointment of the Officers, and the Authority of training the Militia according
to the discipline prescribed by Congress.” U.S. Const. Art. I, § 8, cl. 11-16. The Constitution vests
the President with broad authority relating to national security and foreign relations. The President
is the commander in chief of the armed force, has the authority to appoint and receive ambassadors
and can make treaties (with approval by two-thirds of the Senate). U.S. Const. Art. IL.
There is no question that the framers of the Constitution viewed the textual conferral of
national security and foreign affairs powers upon the federal government as broad and exclusive.
The Federalist No. 4 extolled the Constitution’s unified front approach to foreign relations and
national security as a deterrent against foreign aggression and internal division. It observed:
Leave America divided into thirteen or, if you please, into three of four independent
governments—what armies could they raise and pay—what fleets cold they ever
hope to have? If one was attacked, would the others fly to its succor, and spend
their blood and money in its defense?
HK ok
If they [foreign governments] see that our national government is well
administered, our trade prudently regulated, our militia properly organized and
disciplined, our resources and finances discreetly managed, our credit re-
established, our people free, contented, and united, they will be much more
disposed to cultivate our friendship than provoke our resentment.

29

The Federalist No. 4 (John Jay). Likewise, The Federalist No. 42 reasoned, with respect to foreign
relations:
The second class of powers, lodged in the general government, consists of those
which regulate the intercourse with foreign nations, to wit: to make treaties; to send
and receive ambassadors, other public ministers, and consuls; to define and punish
piracies and felonies committed on the high seas, and offenses against the law of
nations; to regulate foreign commerce, including a power to prohibit, after the year
1808, the importation of slaves, and to lay an intermediate duty of ten dollars per
head, as a discouragement to such importations. This class of powers forms an
obvious and essential branch of the federal administration. If we are to be one
nation in any respect, it clearly ought to be in respect to other nations. The powers
to make treaties and to send and receive ambassadors, speak their own propriety.
Both of them are comprised in the articles of Confederation, with this difference
only, that the former is disembarrassed, by the plan of the convention, of an
exception, under which treaties might be substantially frustrated by regulations of
the States; and that a power of appointing and receiving "other public ministers and
consuls," is expressly and very properly added to the former provision concerning
ambassadors.
The Federalist No. 42 (James Madison) (emphasis added).
The Supreme Court has long recognized that foreign relations and national security are
preeminently federal concerns that are exclusive of state regulation. In Hines v. Davidowitz, 312
U.S. 52, 62 (1941), the Supreme Court held that “the supremacy of the national power in the
general field of foreign affairs...is made clear by the Constitution, was pointed out by authors of
The Federalist in 1787, and has since been given continuous recognition by this Court.” In finding
a Pennsylvania alien registration statute preempted by the exclusive federal authority to control
alienage and immigration, the Supreme Court related it to the foreign affairs powers of the United
States and explained:
The Federal Government, representing as it does the collective interests of the forty-
eight states, is entrusted with full and exclusive responsibility for the conduct of
affairs with foreign sovereignties. For local interests the several states of the Union
exist, but for national purposes, embracing our relations with foreign nations, we
are but one people, one nation, one power. Our system of government is such that
the interest of the cities, counties and states, no less than the interest of the people

30

of the whole nation, imperatively requires that federal power in the field affecting
foreign relations be left entirely free from local interference.
Hines, 312 U.S. at 63.
More recently, the Supreme Court has preempted a number of state laws that cross into the
authority over foreign relations textually committed by the Constitution to the federal government.
In Crosby v. National Foreign Trade Council, 530 U.S. 363 (2000), the Supreme Court held that
a Massachusetts statute restricting state agencies from purchasing goods and services from
companies doing business with Burma (Myanmar) was preempted by the federal law—
specifically, a federal act imposing sanctions on Burma and empowering the President to monitor
the situation in that nation and impose further sanctions subject to certain conditions. In finding
preemption, the Supreme Court focused on the preeminence of federal law over foreign relations
and national security, explaining:
This express investiture of the President with statutory authority to act for the
United States in imposing sanctions with respect to the Government of Burma,
augmented by the flexibility to respond to a change by suspending sanctions in the
interest of national security, recalls Justice Jackson’s observations in Youngstown
Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 635, 72 S.Ct. 863, 96 L.Ed. 1153
(1953): “When the President acts pursuant to an express or implied authorization
of Congress, his authority is at its maximum, for it includes all that he possesses
in his own right, plus all that Congress can delegate.” See also, id. at 635-36 n.2,
72 S.Ct. 863 (noting that the President’s power in the area of foreign relations is
least restricted by Congress and citing United States v. Curtiss-Wright Export
Corp., 299 U.S. 304, 57 S.Ct. 216, 81 L.Ed. 255 (1936)). Within the sphere defined
by Congress, then, the statute has placed the President in a position with as much
discretion to exercise economic leverage against Burma, with an eye toward
national security, as our law will admit. And it is just this plenitude of Executive
authority that we think controls the issue of preemption here. The President has
been given this authority not merely to make a political statement but to achieve a
political result, and the fullness of his authority shows the importance in the
congressional mind of reaching that result. It is simply implausible that Congress
would have gone to such lengths to empower the President if it had been willing
to compromise his effectiveness by deference to every provision of state statute or
local ordinance that might, if enforced, blunt the consequences of discretionary
Presidential action.

31

Crosby, 530 U.S. at 375-76.
The federal government’s authority over foreign trade, foreign relations and national
security is firmly rooted in the plain language of the Constitution and is confirmed by our
constitutional history. This authority is among the broadest possessed by the federal government.
It is against this backdrop that Congress passed 19 U.S.C. § 1862, which purports, in its very title,
to serve the interest of “protecting national security.” It specifically empowers the President, the
Secretary of Commerce and the Secretary of Defense to explore the impact of foreign imports on
the national security of the United States and, if necessary to promulgate a remedy to protect
domestic manufacturing when required to protect that interest. After the statutory prescribed
study, and using the broad authority conferred by 19 U.S.C. § 1862, President Trump issued
Proclamation 9705, which imposed a 25% tariff on imported steel articles (with certain designated
exceptions). The Secretary of Commerce used his authority to promulgate rules interpreting and
implementing Proclamation 9705 and designating a process for submitting exclusion requests,
objections to those requests, and for the adjudication of any such request. Critically, with or
without an objection lodged, the Secretary of Commerce was required to make an independent
national security inquiry in determining each and every exclusion request. Every step of the
process underlying the specific exclusion requests at issue in this case—from the initial exploration
of the need for a tariff, to its imposition, to the creation and maintenance of an exemption and
objection process, to the Secretary of Commerce’s ultimate determination—is an exercise in
authority which is overwhelmingly exclusively federal in nature. Each step of the process falls
squarely within areas of authority which have long been recognized as belonging to the federal
government, and the federal government alone.

32

NLMK argues that the Court can avoid interfering with areas of exclusive federal authority
by limiting its inquiry to the narrow state law cause of action asserted—looking only to U.S. Steel’s
alleged misrepresentations in the exemption process. The Court disagrees. This position does not
account for the fact that each and every exclusion determination included an examination of the
national security implications of the request (even without an objection). There is no way for
NLMK’s state law cause of action to avoid treading on ground that is held exclusively by the
federal government. Federal considerations which are framed and regulated by the statute,
Proclamation and rules relating to the tariff leave no room for state intrusion into the process.
In amore general sense, the Court holds that the process created by Congress and entrusted
to the administrative authority of the President and the Secretary of Commerce to determine
whether tariffs are warranted and to examine any exemption requests is so pervaded by issues
which are in the exclusive authority of the federal government as to preempt any inquiry by the
states—either by affirmative legislation and regulation or by the operation of state law causes of
action.*© Indeed, this case presents a classic instance of field preemption. Congress—through the
enactment of 19 U.S.C. § 1862——has created a process dealing with uniquely federal concerns and
places all determinations relating to the implementation of and exemption from tariffs firmly
within the discretion of federal executive officials. The nature and structure of 19 U.S.C. § 1862

36 The determination that field preemption bars scrutiny into the tariff exemption process does not
leave a party, like NLMK, wholly without a means of seeking redress. Rather, as explained above,
there is a process where one can challenge Commerce’s determinations. This is consistent with
the recognition that in many cases where field preemption is found, there will be a substituted
federal remedy. See, e.g., Saleh v Titan Corp., 580 F.3d 1, 31 (D.C. Cir. 2009) (Garland, J.,
dissenting) (“As Boyle [v. United Technologies, 487 U.S. 500 (1988)] explained “where the federal
interest requires a uniform rule, the entire body of state law applicable to the area conflicts [with]
and is replaced by federal rules.” Accordingly, where the Supreme Court finds field preemption
appropriate, it does not simply leave the field vacant. Instead, it substitutes a federal common law
regime.”). Here, the federal remedy was clearly established and, indeed, NLMK availed itself of
it.
33

and its attendant regulations at issue convey an unmistakable intention, in light of our
constitutional history and the plain language of the statute itself, to so thoroughly occupy the field
(i.e., the determinations relating to the imposition of and exemption from tariffs imposed
thereunder) “as to make reasonable the inference that Congress left no room for the States to
supplement it.?’ Farina, at 121 (quoting Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516
(1992)). This Court will not open the doors of the courthouse to NLMK’s Pennsylvania law cause
of action which would require the Court to apply state law standards to the exclusively federal
considerations encapsulated in the tariff exemption process. NLMK’s state law cause of action is
preempted.

37 Not only do the tariff imposition and exemption process established by 19 U.S.C. § 1862,
Proclamation 9705 and the Secretary of Commerce’s rules present issues which are traditionally
left to the authority of the federal government alone, but there is a corresponding absence of any
history of state regulation on these topics. Broadly, as explained above, areas of foreign
commerce, foreign relations and national security have not been topics historically regulated by
the states. More narrowly, NLMK cannot identify, and the Court cannot find, a single case where
its novel unfair competition claim was applied to communications made to a governmental agency
or in the course of some adjudicatory process. There is no longstanding tradition of state unfair
competition law regulating representations made by business competitors to governmental
actors—much less in situations relating to foreign trade and national security.
34

V. CONCLUSION
For these reasons, United States Steel Corporation’s Motion to Dismiss under Federal Rule
of Civil Procedure 12(b)(6) will be granted. (ECF No. 39). An Order of Court will follow.

BY THE COURT:

AAA & Bet
WILLIAM S. STICKMAN IV
UNITED STATES DISTRICT JUDGE
alzafzesz
Dated

35

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10417566. Public record. Not legal advice.