Opposition Brief — Sacilor, Acieries et Laminoirs de Lorraine v. United States

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OCT 13 wer

OCTOBER TERM, 1987

SACILOR, ACIERIES ET LAMINOIRS

DE LORRAINE, ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA, ET AI

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

CHARLES FRIED

Solicitor General

RICHARD K. WILLARD

Assistant Attorney General

DAVID M. COHEN

VELTA A. MELNBRENCIS

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

YUSEPH F sp

In the Supreme Court of the Anite’ States

ANIOL, JR,

RK

oe

QUESTIONS PRESENTED

1. Whether foreign steel producers who had con-

tracted to sell steel pipe to a United States customer have

Standing to challenge the Secretary of Commerce’s deci-

sion not to allow imports of steel pipe above the level

specified in an international agreement.

2. Whether these foreign steel producers’ challenge to

the Secretary’s decision is mooted by the fact that the

United Staies customer has subsequently satisfied its need

for such steel pipe and, by virtue of the force majeure pro-

vision of their contract, rendered the prior obligations be-

tween it and the foreign steel producers null and void.

(1)

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

Allenv. Wright, 468 U.S. 737 (1984) .................. 9

Association of Data Processing Service Org. v. Camp,

oe es ga we Gv u'6 bd btw Ss vse 9

Block v. Community Nutrition Institute, 467 U.S. 340

ris aL eae ak ¢acG aes pad ade cence Y

British Caledonian Airways Ltd. v. Bond, 665 F.2d 1153

ed oy ea lh dS ooops o0le tv wah * oe 6

Burke v. Barnes, No. 85-781 (Jan. 14, 1987) ............ 8

City of Los Angeles v. Lyons, 461 U.S. 95 (1983) ........ 6, 8

Clarke v. Securities Industry Ass’n, No. 85-971 (Jan. 14,

a ee easy bay ks nase xa 6 9

DeFunis v. Odegaard, 416 U.S. 312 (1974) ............. 7

Illinois Elections Bd. v. Socialist Workers Party, 440 U.S.

re es yaw sg oe a ac ene ec 6

peerony ¥. faut, 455 U.S. 476 (i9SZ) .. ww ees 6, 8

Nebraska Press Ass’n v. Stuart, 427 U.S. 539 (1976) ..... a

ee OE EM ee) i) 7

Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S.

8 BIT AS AU See 9

Weinstein v. Bradford, 423 U.S. 147 (1975) ........... 6, 8

Statute:

Steel Import Stabilization Act, Pub. L. No. 98-573,

Tit. VIII, 98 Stat. 3043 (19 U.S.C. (Supp. Ill) 2253

re wea paaeean ne |-

§ 805(b)(1), 98 Stat. 3045 .....

§ 805(b)(3), 98 Stat. 3046.....

Nm NM hM

(IIT)

Jn the Supreme Court of the United States

OCTOBER TERM, 1987

No. 87-69

SACILOR, ACIERIES ET LAMINOIRS

DE LORRAINE, ET AL., PETITIONERS

Vv,

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 2a-9a) is

reported at 815 F.2d 1488. The opinion of the Court of In-

ternational Trade (Pet. App. 10a-22a) is reported at 613 F.

Supp. 364.

JURISDICTION

The judgment of the court of appeals (Pet. App. la) was

entered on March 31, 1987. On June 19, 1987, the Chief

Justice extended the time within which to file a petition for

a writ of certiorari to and including July 13, 1987, and the

petition was filed on that date. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. In October 1984, as part of an overall effort to pro-

tect the domestic steel industry from foreign imports,

Congress enacted the Steel Import Stabilization Act

(SISA), Pub. L. No. 98-573, Tit. VIII, 98 Stat. 3043

(1)

Lo)

(19 U.S.C. (Supp. III) 2253 note). Section 805(b)(1) of

SISA (98 Stat. 3045) instructs the Secretary of Commerce

to limit the quantity of steel pipe and tube imported an-

nually into this country to the amounts set forth in a 1982

agreement between the United States and the European

Economic Community (EEC). Section 805(b)(3) (98 Stat.

3046) permits the Secretary to allow additional imports of

specific steel products when he finds that such products

are in “short supply” in the United States or that

“emergency economic situations” exist.

In light of the enactment of SISA, the United States and

the EEC in January 1985 exchanged an additional set of

letters in which they clarified their 1982 agreement (Pet.

App. 3a). Under the agreement as thus clarified, the EEC

pledged to restrain the export of steel pipe to the United

States to a level equal to 7.6% of this Nation’s apparent

consumption during 1985 and 1986, and to use export

licenses as the means of imposing this restraint (/bid.). The

United States, in turn, agreed that the Secretary of Com-

merce would allow the importation of additional steel pipe

and tube upon appropriate request by the EEC if a “short

supply” or “emergency market situation” existed in the

United States (/d. at 4a).

Pursuant to Section 805(b)(3) and the clarified agree-

ment, the EEC requested, in January 1985, that the

Secretary find that a “short supply” existed for the steel

pipe needed by the All-American Pipeline Company

(AAPL) to construct a crude oil pipeline from California

to the Gulf Coast (Pet. App. 4a). The Secretary invited

public comments on the EEC’s “short supply” request

(ibid.). After receiving and evaluating these comments, the

Secretary, on March 28, 1985, denied the EEC’s request,

explaining that three United States steel companies had

unused capacity exceeding the amount of pipe for which

the EEC had requested “short supply” approval (/bid.)

2. Petitioners are three foreign steel producers who

had previously contracted to supply pipe to AAPL. They

instituted this action in the Court of International Trade,

alleging that the Secretary’s denial of the EEC’s “short

supply” request was arbitrary and capricious and a viola-

tion of their due process rights (Pet. App. 4a, 14a). While

the case was pending before that court, the United States

and the EEC amended their 1985 agreement to admit an

additional 100,000 tons of imported pipe for the AAPL

project (/bid.). Following the negotiation of that amend-

ment, the Court of International Trade rejected peti-

tioners’ challenge to the Secretary’s earlier “short supply”

decision (/d. at 10a-22a). It ruled that neither the SISA nor

the January 1985 agreement between the United States and

the EEC “establish[es] direct, affirmative, and judicially

enforceable rights for private parties in the position of

[petitioners]” (/d. at 16a). The court emphasized that the

Secretary’s decision was “in the foreign affairs arena” (/d.

at 20a (footnote omitted)) and it held that his decision was

not subject to judicial review because “it is committed to

agency discretion” by law (/d. at 2la). The court also re-

jected petitioners’ due process claim (/d. at 21a-22a).

3. Petitioners filed a notice of appeal to the Federal

Circuit. While the appeal was pending, AAPL purchased

from other sources the pipe that it needed for the pipeline

project; the parties thereupon notified the court that, pur-

suant to the force majeure clause in petitioners’ contract

with AAPL, all prior obligations between petitioners and

AAPL had been rendered null and void (Pet. App. 4a). In

light of these events, the United States renewed its argu-

ment that petitioners were without standing to challenge

the Secretary’s denial of the EEC’s short-supply request

and, in addition, suggested that petitioners’ appeal had

become moot (/d. at 6a). The Federal Circuit agreed with

the United States on both counts; it therefore found it un-

necessary to address the trial court’s holding that the

Secretary’s decision was nonreviewable (/d. at Ya).

4

First, the Federal Circuit ruled that petitioners lacked

standing to challenge the Secretary’s denial of the EEC’s

short-supply request (Pet. App. 6a-8a). With respect to the

constitutional elements of standing doctrine, it found that,

even “[a]ssuming that [petitioners] ha[ve] sustained the re-

quired injury-in-fact,” “it is not clear that relief would be

likely to follow froma favorable decision in this case” (/d.

at 7a). The court pointed out that “AAPL is no longer

obligated to purchase [petitioners’] pipe” and that, “[e]ven

if such an obligation existed, export of the pipe would be

contingent on receipt from the EEC of the necessary ex-

port licenses” (/bid.). The court found “nothing in the

record * * * indicating that the EEC would issue the

licenses to [petitioners]” (/bid.). Moreover, with respect to

the prudential elements of standing doctrine, the court

found that, “{a]lthough ([petitioners’] interests are

arguably regulated by section 805(b)(3) of the SISA, it

does not appear that Congress intended to rely on foreign

manufacturers to challenge administrative application of

American import laws” (Pet. App. 7a). On the court’s

view, “it would be contrary to the entire purpose of the

Act to allow foreign producers to challenge a decision

made pursuant to a regulatory scheme designed to protect

American steel producers from foreign imports” (/d. al

8a).

In the alternative, the court ruled that petitioners’

challenge to the Secretary’s denial of the EEC’s short-

supply request had become moot (Pet. App. 8a-9a). “The

goal of th[is] suit,” the court explained, “was to allow [peti-

tioners] to export pipe to the United States to fulfill [their]

obligation to AAPL”; since AAPL had subsequeni!y pur-

chased the required pipe from other sources, thus voiding

petitioners’ contracts, the court concluded that “there is no

live case or controversy to be resolved by [this] suit” (/d. at

8a). The court refused to address petitioners’ claim that

“the possibility of recovery of money damages against the

Secretary in a suit in the Claims Court on a Fifth

Amendment taking theory or in a district court under the

Federal Tort Claims Act presents a sufficiently live con-

troversy for this court to decide the present case[,]” noting

that “{nJo such claims were presented to the trial court”

and stating that it would “not render an advisory opinion

on claims that were not or could not be raised below”

(ibid.).

ARGUMENT

The decision below is correct. It does not conflict with

any decision of this Court or of any other court of ap-

peals. Accordingly, this Court’s review is not warranted.

1. Petitioners initially suggest (Pet. 7-11) that the deci-

sion below must be reviewed in order to assure this coun-

try’s trading partners that they will not be subjected to ar-

bitrary short-supply decisions and to prevent those trading

partners from instituting retaliatory trade measures. But

petitioners greatly exaggerate the need for judicial review

of these matters. The United States and the EEC con-

templated that disputes concerning short-supply decisions

might arise, and they accordingly included in their pipe

and tube agreements certain consultative procedures for

resolving such disputes. Pursuant to those consultative

procedures, the United States and the EEC in fact agreed,

only two months after the Secretary had denied the EEC’s

original short-supply request, to admit 100,000 additional

tons Of EEC pipe for the AAPL project. See Pet. App. 4a.

Thus, far from exhibiting a pressing need for further

judicial review, the history of this case indicates that the

United States and its trading partners are fully capable of

resolving their disputes through the diplomatic process.

Indeed, it was tor this reason that the Court of Interna-

tional Trade held the Secretary’s short-supply decision to

be immune trom judicial review at the behest of private

parties like petitioners, a holding that the Federal Circuit

found unnecessary to reach.

2. Petitioners next suggest (Pet. 11-16) that the

Federal Circuit’s judgment with respect to the mootness

issue conflicts with a decision of the District of Columbia

Circuit and with this Court’s decisions involving ad-

ministrative action that is “capable of repetition, yet

evading review.” This suggestion is without merit.

There is no conflict between the decision in British

Caledonian Airways Ltd. v. Bond, 665 F.2d 1153 (D.C.

Cir. 1981), and the decision here. In British Caledonian,

various foreign airlines petitioned the District of Colum-

bia Circuit for direct review of an order of the Federal

Aviation Administration (FAA). The FAA rescinded the

challenged order five weeks after it had been issued, and

the government moved to dismiss the action as moot. The

court of appeals rejected that argument, finding that the

FAA’s order was “typical of those capable of repetition yet

evading review” (665 F.2d at 1157-1158).

Contrary to petitioners’ statement (Pet. 14-16), the in-

stant case does not fall within the exception to the

mootness doctrine applied by the District of Columbia

Circuit in British Caledonian. The principle that govern-

mental action may be “capable of repetition but evading

review” applies “only in exceptional situations” (City of

Los Angeles v. Lyons, 461 U.S. 95, 109 (1983)). Specifical-

ly, the challenged action must be such that it is “by nature

short-lived” (Nebraska Press Ass’n v. Stuart, 427 U.S.

539, 547 (1976)), and there must be a “reasonable expecta-

tion that the same complaining party [will] be subjected to

the same action again” (Weinstein v. Bradford, 423 U.S.

147, 149 (1975) (per curiam)). Accord, Murphy v. Hunt,

455 U.S. 478, 482 (1982) (per curiam); //linois Elections

Bd. v. Socialist Workers Party, 440 U.S. 173, 187 (1979).

The court in British Caledonian found that both of these

conditions were satisfied in the circumstances involved

there, which concerned an FAA order that was in existence

ror only five weeks (665 F.2d at 1157-1158). Neither condi-

tion, however, is satistied in the present case.

First, there is nothing particularly “short-lived” about a

decision by the Secretary to deny a short-supply request.

Compare DeFunis v. Odegaard, 416 U.S. 312, 319 (1974)

(per curiam) (law school admission practices will not by

their nature evade effective judicial review), with

Nebraska Press Ass’n v. Stuart, 427 U.S. at 546-547 (pre-

trial publicity restraints by their nature evade effective

judicial review); Roe v. Wade, 410 U.S. 113, 125 (1973)

(restrictions On means for aborting pregnancy by their

nature will evade effective review). In deciding whether to

grant an EEC short-supply request, the Secretary ex-

amines the market for steel pipe and determines whether a

particular project can satisfy its needs from domestic

sources. There is no reason to suppose that the market for

steel pipe is so violatile that the Secretary will frequently

have to change his short-supply decisions; to the contrary,

the premise of the SISA and of the 1985 agreement be-

tween the United States and the EEC is that the Secretary

can evaluate domestic suppliers’ capacity with sufficient

accuracy to ensure both the vitality of the domestic steel

pipe industry and a sufficient supply of steel pipe for all

domestic consumers. Thus, while further consultations

between the United States and the EEC, or unforeseen

changes in market conditions, may cause the Secretary oc-

casionally to revise a short-supply decision, the mere

possibility of revision does not provide sufficient basis for

holding that the Secretary’s action is by its nature so short-

lived that it is “capable of repetition, yet evading review.”

Indeed, it is difficult to see what relevance the doctrine

of “capable of repetition, yet evading review,” has to this

case to begin with. Unlike the FAA order at issue in British

Caledonian, the administrative decision at issue here —the

Secretary’s short-supply decision—has not expired; it re-

mains subject to challenge by any party with a sufficiently

adverse interest. Petitioners’ challenge to that decision was

not mooted by any action on the Secretary’s part; rather,

it was mooted by the combined effect of AAPL’s subse-

quent decision to satisfy its need for steel pipe from other

sources and the operation of the force majeure clause in

petitioners’ contract with AAPL. Because of the idiosyn-

cratic nature of the facts that have caused petitioners’

claim to become moot, there is no reason to believe that

the Secretary’s short-supply decision is likely to “evade

review” in the future.

In any event, petitioners have made no reasonable

showing that they are likely to be subjected to this par-

ticular administrative action again. See City of Los

Angeles v. Lyons, 461 U.S. at 109; Murphy v. Hunt, 455

U.S. at 482-483. The United States and the EEC have

agreed to allow an additional 100,000 tons of foreign pipe

to be imported into the United States for use on the AAPL

project, and AAPL has now purchased all of the pipe that

it needs to construct its pipeline. Furthermore, petitioners

have not demonstrated that the EEC will make another

short-supply request with respect to the AAPL project or,

even if it does, that petitioners will be the foreign suppliers

on whose behalf the EEC will choose to act. Hence, there

can be no “reasonable expectation that the same complain-

ing party [will] be subjected to the same action again”

(Weinstein v. Bradford, 423 U.S. at 149).

3. Finally, petitioners contend (Pet. 17-25) that the

court below erred in finding that they lack standing to

challenge the Secretary’s denial of the EEC’s short-supply

request. Since this controversy is moot, the Court would

be without jurisdiction to consider this contention. See

Burke v. Barnes, No. 85-781 (Jan. 14, 1987), slip op. 3-4.

In any event, the contention is wrong.

As this Court has noted on many occassions, a plaintiff

satisfies the constitutional elements of standing doctrine

only by showing that it has suffered some concrete injury

that is “fairly traceable” to the challenged action and “like-

ly” to be redressed by a favorable decision. See, e.z.,

9

Allen v. Wright, 468 U.S 737, 751 (1984); Simon v.

Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 38,

41 (1976). Here, “export of the pipe [was] * * * contingent

on receipt from the EEC of the necessary export licenses”

and “nothing in the record * * * indicat[ed] that the EEC

would issue the licenses to [petitioners]” (Pet. App. 7a).

Thus, as the court below held, petitioners did not show

that their alleged injury —their inability to supply pipe to

the AAPL project — was likely to be redressed by a deci-

sion in their favor. —

Moreover, petitioners’ claims would in any event be

barred by the prudential limits that this Court has placed

on challenges to agency action in the federal courts. To

have standing to challenge agency action, a plaintiff must

have an interest “ ‘arguably within the zone of interests to

be protected or regulated by the statute or constitutional

guarantee in question’” (Clarke v. Securities Industry

Ass’n, No. 85-971 (Jan. 14, 1987), slip op. °6-7, quoting

Association of Data Processing Service Org. v. Camp, 397

U.S. 150, 153 (1970)). “The essential inquiry,” the Court

has said, “is whether Congress ‘intended for [a particular]

class [of plaintiffs] to be relied upon to challenge agency

disregard of the law’ ” (Clarke, slip op. 10, quoting Block

v. Community Nutrition Institute, 467 U.S 340, 347

(1984)).

Here, as the court below held (Pet. App. 7a-8a), it is

clear that Congress did not intend to rely on foreign steel

producers to challenge the Secretary’s administration of

the import quota statute. While foreign steel producers are

indirectly regulated by the SISA, Congress enacted the

SISA exclusively for the benefit of domestic steel pur-

chasers and producers; as the court of appeals explained,

“it would be contrary to the entire purpose of the Act to

allow foreign producers to challenge a decision made pur-

suant to [the] regulatory scheme * * *.” (/d. at 8a). The

statute provides for consultations between the govern-

10

ments of the United States and the EEC with respect to

short-supply requests; it gives only the EEC (and not

foreign exporters) the right to make such requests; and it

does not refer to or attempt to protect foreign exporters in

any way. In these circumstances, foreign steel exporters

cannot reasonably be said to be within the “zone of in-

terests” sought to be protected or regulated by SISA’s

statutory scheme.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectully submitted.

CHARLES FRIED

Solicitor General

RICHARD K. WILLARD

Assistant Attorney General

DAVID M. COHEN

VELTA A. MELNBRENCIS

Atforneys

OCTOBER 1987