Key Takeaways
- The government has appealed the U.S. Court of International Trade’s “universal” refund order, arguing refunds must be limited to importers that have brought individual lawsuits.
- Importers have moved to certify a class covering all importers whose entries are currently ineligible for refunds through U.S. Customs and Border Protection’s Consolidated Administration and Processing of Entries system.
- Importers should continue taking proactive steps to preserve refund rights.
Overview
A significant development in the ongoing litigation over refunds of tariffs imposed under the International Emergency Economic Powers Act (IEEPA) has heightened uncertainty for importers. Following the U.S. government’s appeal of the U.S. Court of International Trade (CIT) order requiring broad tariff refunds, a coalition of importers has moved to certify a class action in the CIT seeking refunds for similarly situated importers.
Background
In February, the U.S. Supreme Court held that IEEPA does not authorize the imposition of tariffs, effectively invalidating the tariff regime. The CIT subsequently directed U.S. Customs and Border Protection (CBP) to refund unlawfully collected duties, including for certain categories of liquidated entries. CBP developed a Consolidated Administration and Processing of Entries (CAPE) system to begin processing refunds of IEEPA tariffs. On June 2, the United States appealed the CIT’s order requiring CBP to liquidate all unliquidated entries, without regard to IEEPA duties. The government’s position is that granting universal relief to all importers – even importers that have not filed a case – violates the Supreme Court’s prohibition of universal injunctions set forth in Trump v. CASA, the scope of the Federal Circuit’s remand order in V.O.S. Selections v. Trump and the party presentation principle.
New Development
In response to the government’s appeal, on June 4 Terry Precision Cycling LLC, one of the plaintiffs in V.O.S. Selections, moved to certify a class covering all importers that paid IEEPA duties and that hold claims not currently eligible for processing and refund through CBP’s CAPE system. The plaintiff contends that if there is a question as to the government’s ability to reliquidate any entry to refund IEEPA duties paid, the court can avoid any ambiguity regarding CASA’s application by certifying a class under Rule 23(b)(2), and that class certification would obviate the need for tens of thousands of similarly situated importers to bring individual lawsuits to obtain refunds.
Implications for Importers
As we have recommended consistently since the advent of IEEPA tariff refund availability, importers should review their entry records to identify all transactions in which they paid IEEPA duties. Importers should also continue to monitor the liquidation status of all such entries and should timely file protests for liquidated entries to preserve the right to obtain refunds in the future. For entries that are more than 180 days past the date of liquidation, importers may want to consider filing protective lawsuits in the CIT pursuant to 19 U.S.C. 1581(i). Finally, importers should closely monitor the developments in the CIT and the Federal Circuit as the pending litigation evolves. It remains to be seen whether the outcome of this litigation will be sufficient to protect the interests of all importers, or subsequent court filings may still be necessary.
BakerHostetler offers legal support on matters related to U.S. import compliance and tariff issues. Our Tariff Task Force is ready to guide you through the rapidly evolving tariff rules, enforcement actions and mitigation strategies. Our Tariff Task Force also includes litigators who actively defend class actions and multi-district litigation, including significant experience defending pricing and fee class actions. If you have any questions about tariffs, tariff refunds or tariff related class actions, please feel free to contact us today.
