This is a guest post by Perry Bechky, a partner at Berliner Corcoran & Rowe LLP and a visiting scholar at Seattle University School of Law.
On Wednesday and Thursday, two courts ruled that President Trump lacked the statutory authority under IEEPA to impose tariffs. The cases are VOS Selections v USA (CIT) and Learning Resources v Trump (DDC). Here are a few initial thoughts:
--It isn’t possible for both courts to have jurisdiction. Either the CIT has exclusive jurisdiction or it doesn’t have jurisdiction at all. The jurisdictional question (whether the case “arises out of any law … providing for … tariffs”) is closely entwined with the merits question (whether IEEPA authorizes the challenged tariffs). The DDC took the straightforward position that the case arises out of IEEPA. By contrast, the CIT looked away from IEEPA in its jurisdictional analysis, apparently rooting its jurisdiction in the Harmonized Tariff Schedule (“the law … setting tariffs”) and/or the Executive Orders amending the HTS (on the ground that the CIT has previously considered “presidential action” to qualify as “any law of the United States” to establish jurisdiction). This seems a stretch. The CIT’s opinion hardly mentions the HTS outside its jurisdictional determination, while discussing IEEPA throughout and ultimately “hold[ing] … that IEEPA does not authorize any of the [tariffs].” And, CIT precedent aside, it seems questionable to treat “presidential action” as a “law” – and especially as the “law” a case arises out of – when the construction of a statute (indubitably a “law”) is squarely before the court.
--The appellate courts will benefit from considering both opinions, which make different points while reinforcing each other. Reading both calls into question the wisdom of giving one court exclusive jurisdiction. Thirty years ago, in my first law review article, I argued for a specialized court in the name of uniformity. My thinking has become more pluralistic over the years. It’s messier and takes longer but gives hope that the dialogue between courts may lead to better-reasoned decisions in the end. Here, for example, the CIT was bound by the 1974 precedent in Yoshida, while the DDC was free to question Yoshida and its compatibility with modern norms of statutory construction.
--The Government raised the political question doctrine as a defense. This defense has a core kernel of merit: whether to declare a national emergency and respond with statutorily-authorized sanctions are foreign policy decisions within the discretion of the President. But the Government overreached, trying to bar the courts from deciding whether the specific actions taken by the President (tariffs) are ultra vires. As Joel Trachtman noted, the Government’s position would have rendered meaningless Congress’ efforts to constrain the President’s IEEPA powers within limits set in the statute. The CIT had a fuller discussion of this point and rendered a strong rule-of-law decision. Marbury beats in the hearts of the CIT judges.
--On the merits, both courts made some strong points. I am particularly persuaded by two arguments. First, in our constitutional system, the powers to regulate and tax are distinct, so the word “regulate” in IEEPA should not be construed to include tariffs, i.e., taxes. Indeed, if the statutory authority to “regulate … importation and exportation” included the power to tax exports, it would be flatly unconstitutional as to exports. “No Tax or Duty shall be laid on Articles exported from any State.” Maybe it’s possible to construe the word “regulate” more broadly as to imports than exports, but surely the more natural understanding is that the word has the same meaning in both contexts. Second, Congress has enacted numerous statutes governing tariffs, including Section 122 on “temporary import surcharges” to respond to balance of payments concerns and Section 232 on “adjustment of imports” to protect national security. Both statutes establish limits and procedures. IEEPA tariffs would end-run around those limits and procedures. The CIT took a deeper look at Section 122, while the DDC looked more broadly at the overall statutory regime. They both reached sensible outcomes, but I’m more persuaded by the DDC’s broader approach. As it concluded, “It would be anomalous, to say the least, for Congress to have so painstakingly described the President’s limited authority on tariffs in other statutes, but to have given him, just by implication, nearly unlimited tariffing authority in IEEPA.” (punctuation omitted).
--The CIT also rejected the so-called “fentanyl tariffs” against Canada, China, and Mexico on the ground that the tariffs do not “deal with” the fentanyl problem, as required by IEEPA, because they merely pressure others to “deal with” it. This argument could have wide consequences for the way IEEPA is used to impose economic sanctions (other than tariffs). Going back to the Iranian Hostage Crisis in 1979, when IEEPA was new, Presidents have used non-tariff sanctions to “deal with” foreign policy problems by pressuring other countries (and private persons) to change their policies. Congress has blessed that practice, repeatedly. What’s new here are the tariffs, but the CIT’s ruling sweeps broadly enough to call established IEEPA practices into question. The professionals at OFAC must be recalling the adage that bad facts make bad law and hoping (as I expect will be the case) that this aspect of VOS will be overturned on appeal.
