In a recent landmark ruling, the U.S. Supreme Court upheld the decision of the former Trump administration regarding steel tariffs, thereby diverging with the stance of the current Biden administration. This stems from an appeal brought to the fore by USP Holdings, which alleged that the lower courts were mistaken in their rejection of their contention that the instigation of the tariffs was unwarranted.
The opposing perspective came from the Biden administration, which stood against USP Holdings and various other steel importers that argued that the tariffs were grossly hurting their operations. As a note of continuity, the current administration has persisted with the existing tariff level, despite these remonstrations.
Scott Paul, the president of the Alliance for American Manufacturing, clarified the Biden administration’s stance regarding tariff-lifting. He emphasized that lifting steel tariffs without a substantive alternative solution could generate adverse effects such as job losses and factory shutdowns. This would likely have a wider impact, both on the economy and on the political scene in states like Pennsylvania and Ohio, among others.
As a backdrop, the Trump administration’s rationale for tariffs arose from Section 232 of the Trade Act of 1962. This provision allows for the imposition of restrictions on the importation of such goods that could be critical to national security. At this juncture, the administration believed these tariffs were essential to reinforce domestic steel production, in order to reliably manufacture airplanes, ships, and other military materials.
Despite the affirmation of the tariff by the Supreme Court, the policy generated frictions with some allies, albeit with exceptions granted to certain nations. This dispute resolution in the court was addressed without an attached explanatory note, and it encountered no dissent from any justices.
The journey of this case into the highest court began in April 2017, when then-Commerce Secretary Wilbur Ross launched an investigation. The question on the table was whether the importation of steel was shaping up in a manner that could potentially threaten or compromise national security—an evaluation fetched from the petition that arrived at the Supreme Court.
In addition to this matter, the Supreme Court has been abuzz with activity, especially with potentially game-changing rulings on climate change lawsuits waiting in the wings. This complexity in the legal landscape, particularly concentrated on whether such lawsuits should fall under state or federal law, seems to extend itself to influence the future decisions of the Supreme Court.
An opinion piece by Boyden Gray, who served as a top counsel in both the Reagan and H.W. Bush administrations, highlights that federal courts are presently grappling with this legislative gray area around jurisdiction over climate change cases. By established legal precedent, lawsuits concerning cross-border air and water pollution have been decided under federal law.
The imposition of such environmental ideals and regulations by overstepping states and cities is thereby kept in check by the federal judicial system. Gray traces this practice back to the unanimous Supreme Court ruling in the case American Electric Power Co. v. Connecticut (AEP) in 2011, involving multi-state federal law claims to lessen greenhouse gas emissions by power companies.
Authored by Justice Ruth Bader Ginsburg, the verdict underscored the propriety of federal law application. It concurred with the Obama administration’s view that such claims were not suited for court proceedings since the job of controlling greenhouse gas emissions had been entrusted to the Environmental Protection Agency (EPA) under the Clean Air Act.
Gray also referenced two instances where left-leaning states and cities are seeking reparations in the order of billions for damages indexed to historical, current, and anticipated climate change. Yet, he pointed out, Ginsburg’s ruling is being dodged by attempting to leverage state law to circumnavigate established federal law.
An example of this maneuver can be seen in the case City of New York v. Chevron Corp in 2021, dismissed by the 2nd Circuit. In the dispute, New York City lodged a lawsuit against several energy firms under state law for damages allegedly induced by climate change. Citing extensive precedents by the Supreme Court, the 2nd Circuit reiterated that federal law was incumbent in lawsuits related to interstate air pollution, which includes greenhouse gases.
Now, three pivotal lawsuits have found their way to the Supreme Court, including Delaware v. BP America Inc, Chevron Corp. v. San Mateo County, and Suncor Energy (U.S.A.) Inc. v. Board of County Commissioners of Boulder County. The energy companies implicated have requested the court’s intervention to settle the split in each case.
Gray signals a warning about what he perceives as exploitative and opportunistic lawsuits against large corporations under the guise of climate change. The Supreme Court, by exercising judicial clarity this term, could provide a significant setback to those trying to exploit the legal system for these perceived gains.
