The Supreme Court’s decision in Learning Resources, Inc. v. Trump and the consolidated case Trump v. V.O.S. Selections, Inc. invalidating the tariffs imposed by the administration under the International Emergency Economic Powers Act (IEEPA) created an opportunity for importers to recover duties paid. Although a clear path to obtaining refunds had not emerged in the two weeks following the Supreme Court’s decision, a consequential order from the U.S. Court of International Trade (CIT) on March 4 revealed the court’s sense of urgency on the issue of refunds, and its view that parties who have not filed suit at the CIT are also entitled to the benefits of the Learning Resources decision. In light of this significant development, importers should continue taking steps to position themselves for a potential recovery.
CIT ISSUES BROAD RULING BENEFITTING ALL IMPORTERS
On March 4, the CIT issued an order on a Motion for Preliminary Injunction filed by plaintiffs in a pending action, Atmus Filtration, Inc. v. United States. In his ruling, Judge Richard Eaton ordered U.S. Customs and Border Protection (CBP) to (1) liquidate any unliquidated entries that were entered subject to the IEEPA duties without regard to the IEEPA duties and (2) reliquidate (also without regard to IEEPA duties) any liquidated entries for which liquidation is not final. This means CBP must refund all IEEPA duties that have been collected.
The order signals the CIT’s intention to not limit relief to the plaintiffs in Atmus or to the parties who have already filed suit at the CIT. Finding that the Supreme Court ruled the IEEPA duties were unlawful at the time they were imposed, Judge Eaton held that “[a]ll importers of record whose entries were subject to IEEPA duties are entitled to the benefit of the Learning Resources decision.” Judge Eaton also issued an unequivocal response to the question of the CIT’s authority to issue nationwide injunctions – the Supreme Court’s holding in Trump v. Casa, Inc. that universal injunctions are not permissible do not apply to the CIT because the court has been granted national geographic jurisdiction by statute. He also noted that the Supreme Court confirmed the CIT’s exclusive jurisdiction to hear IEEPA claims and the constitutional requirement of uniformity in resolving import-related matters.
CIT LITIGATION IN THE WAKE OF LEARNING RESOURCES
The Supreme Court decision did not address refunds of IEEPA duties paid, creating uncertainty as to whether and how a refund process would materialize. The administration did not announce any intention or plan to implement a refund claims process, instead indicating that litigation on refunds could take years.
A few days after the Supreme Court’s decision, the plaintiffs in V.O.S. Selections filed a motion in the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) requesting that the court terminate its jurisdiction over the case and transfer jurisdiction back to the CIT. Concurrent with that filing, the V.O.S. Selections plaintiffs filed a Motion for Permanent Injunctive Relief, requesting that the CIT issue orders necessary to promptly refund tariffs paid by the plaintiffs, including interest.
The plaintiffs in V.O.S. Selections argued in their motion to the CIT that the U.S. government stipulated it would provide refunds to the plaintiffs in that case if the tariffs were ultimately held unlawful and is therefore now judicially estopped from taking a contrary position. Furthermore, the U.S. government later clarified in its filings with the CIT in a separate matter that the stipulation would apply to all “current and future similarly situated plaintiffs.” According to the V.O.S. Selections plaintiffs, action by the CIT would facilitate the prompt payment of refunds to other plaintiffs who have filed or will file lawsuits challenging the IEEPA tariffs. On March 2, over the objections of the government, the Federal Circuit issued the mandate.
Rather than issue a decision on the pending motion in V.O.S. Selections, the CIT issued the order in Atmus immediately following a hearing on the Atmus plaintiffs’ motion for preliminary injunction. During the hearing, Judge Eaton questioned why CBP continued to liquidate entries with IEEPA duties even after the Learning Resources decision. Following the government’s response that CBP needed more time to finalize its positions on refunds and had not instructed agency employees to liquidate entries without IEEPA duties, Judge Eaton expressed impatience, stating “[t]he law is clear. You have to start doing it now using your regular procedures.” He also informed the parties that the Atmus case, not V.O.S. Selections, is the forum that will “determine how CBP should proceed with respect to refunds.” The government made a motion to stay the judge’s order pending appeal, which was denied from the bench. Judge Eaton proceeded to schedule a non-public conference for Friday, March 6 for CBP to present the outlines of a potential process for refunds. Judge Eaton indicated a willingness to amend the order. It is likely that a final version of the CIT’s order will be appealed to the Federal Circuit.
Given the over 53 million entries subject to IEEPA duties, it is far from clear how CBP will manage an orderly and timely refund process. During the hearing, the government emphasized the need for CBP to conduct a manual process for each entry before refunding amounts to ensure no other duties, such as Section 301 or Section 232, are owed.
Despite its broad wording, questions remain regarding the scope of the CIT order.
Unliquidated Entries
The order instructs CBP to liquidate those entries that were unliquidated as of the date of the order without regard to the IEEPA duties. Unliquidated entries are effectively “open” entries in which CBP has not finalized the assessment of duties, taxes and fees. While entries remain unliquidated, importers also have an opportunity to correct errors on their entries. CBP’s final assessment occurs around 314 days after the entry of merchandise, unless extended. The vast majority of entries with IEEPA duties remain unliquidated.
Liquidated Entries for Which Liquidation is Not Final
The order does not clarify the meaning of liquidated entries “for which liquidation is not final,” but presumably this refers to those entries that were liquidated less than 90 days before the court’s order. Under the Customs regulations, CBP can voluntarily re-liquidate (or correct) entries up to 90 days following the initial liquidation date. Judge Eaton noted that with respect to a large number of IEEPA entries, the 90-day re-liquidation period has not passed.
Entries Where Liquidation is Final and Conclusive
The CIT order did not address the treatment of liquidated entries for which liquidation is final. Under the provisions of 19 U.S.C. §1514, importers have 180 days from the date of liquidation to file an administrative protest of an entry with CBP. Otherwise, the entry is considered final and conclusive upon all persons and cannot be challenged in court by the importer. IEEPA entries that have reached this milestone are unaffected by the CIT’s order. The treatment of finally liquidated entries is expected to be discussed during the March 6 conference.
Entries that have not been protested within 180 days from the date of liquidation are considered final and conclusive upon all persons. However, to the extent liquidation is not considered “protestable” because CBP’s role in the liquidation is considered purely ministerial, such as cases involving a challenge to the constitutionality of duties, the Federal Circuit has held that importers are not required to file a protest and may rely on the CIT’s residual jurisdiction under U.S.C. §1581(i) to challenge the exaction in court. In such cases, liquidation of the entry at issue should not be considered “final” for purposes of §1514 and therefore subject to a potential CIT order to CBP to re-liquidate. In order to take this position, and in the absence of contrary guidance from the CIT or an agreement with the government, an importer would need to file a lawsuit in the CIT to preserve its refund rights for these finally liquidated entries. Indeed, the government confirmed its position in the March 4 hearing that importers must file a CIT case to obtain a refund of liquidated duties. Recognizing the potential hurdle for importers who haven’t filed suit, Judge Eaton instructed the government to appear at the conference prepared to discuss how liquidated entries might be handled.
IMMEDIATE ACTION ITEMS
Given the potential for an appeal of the CIT’s order, importers should continue taking steps to best position themselves for potential refund recovery.
- Enroll in CBP’s online portal, the Automated Commercial Environment (ACE) and set up to receive electronic refunds from CBP. Effective February 6, CBP discontinued use of paper checks and began issuing any excessive duties, taxes and fees electronically through the Automated Clearing House. Any process adopted by CBP to issue refunds consistent with the CIT’s order will occur through ACE.
- Identify all entries subject to IEEPA tariffs for the period February 4, 2025, to February 24, 2026. The Supreme Court decision did not overturn duties assessed by CBP under Section 232 (e.g., steel and aluminum derivatives, auto parts) or Section 301 (goods from China). Importers should work with their customs broker or internal trade compliance team to compile a complete list of affected entries, including entry numbers, dates of entry, amounts paid, product classifications, and liquidation dates. This inventory will form the foundation of refund claims and help quantify the potential recovery.
- Review these entries for potential errors, as CBP will likely be reviewing the entries for errors before liquidating them for an IEEPA refund, which may result in a bill for additional duties, or reduce the anticipated IEEPA refund. Depending on the entry and the error, it may be possible to address the correction administratively with CBP. Accordingly, importers should closely monitor the liquidation status of the IEEPA entries.
- Regardless of any refund recovery path, importers will need to substantiate their rights to a refund. This means compiling entry records and proof of payment to CBP. This may require engaging with your customs broker or trade counsel to obtain the necessary documentation, including commercial invoices, entry summaries, proof of payment, customs broker records, and any correspondence with CBP regarding the IEEPA tariffs. Proper documentation will expedite processing and reduce the risk of claim denials based on technical grounds.
- Finally, due to the potential for appeal of the CIT’s order, we recommend filing suit at the CIT or filing a protest with CBP to preserve refund rights on liquidated entries.
Importers should not delay in reviewing their import history in preparation for a potential claims process. Companies that act quickly will be better positioned to secure full recovery and avoid procedural barriers that could limit or eliminate refund rights.
We are closely monitoring developments in this area.
