In Learning Resources, Inc. v. Trump, the U.S. Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. While Learning Resources concluded that the IEEPA tariffs are invalid, the Court did not address refunds, leaving the question to the lower court, the U.S. Court of International Trade (CIT).
Recent Developments Impacting Refund Considerations
In December, the CIT responded to a wave of new complaints brought by importers seeking refunds by issuing an administrative order under which such cases were automatically stayed. The order further indicated that the CIT “expects to determine the appropriate next steps for resolution of the New IEEPA Tariff Cases following a final, unappealable decision in [Learning Resources].” Although the CIT has not formally lifted the stay, plaintiffs in some cases have taken steps to urge the CIT to do so.
Meanwhile, the Court of Appeals for the Federal Circuit, which had decided V.O.S. Selections, Inc. v. Trump (the companion case to Learning Resources), ordered the immediate issuance of a mandate in that case on March 2. This order will allow the CIT to take prompt action in V.O.S. Selections consistent with the Supreme Court’s ruling.
On March 4, Judge Richard K. Eaton issued an order in one of the CIT cases seeking refunds of the IEEPA tariffs, directing the U.S. government to “liquidate [any unliquidated entries subject to the IEEPA tariffs] without regard to the IEEPA duties.” The order further emphasized the need for a uniform approach to redress for importers who paid IEEPA tariffs. On March 6, U.S. Customs and Border Protection (CBP) responded to Judge Eaton’s order by asserting that compliance with the order would not be feasible with existing CBP resources, but suggesting that modifications to CBP’s Automated Commercial Environment (ACE) system could be made within 45 days to streamline the process of calculating and issuing refunds to importers.
Takeaways
The CIT order — and the CBP response — sets out a path for importers to claim refunds, perhaps “automatically,” but uncertainties remain. Proceedings before the CIT are ongoing and may develop fast. In light of these fluid and overlapping considerations, importers should work closely with counsel to craft individualized strategies that take their specific situations into account.
