U.S. Court of International Trade Directs Refunds; Appeal Expected

Today, March 4, the U.S. Court of International Trade (CIT) issued an order directing Customs and Border Protection (CBP) to liquidate any unliquidated import entries without applying IEEPA duties and to reliquidate entries that have already been liquidated but are not yet final.

It is anticipated that the order will be appealed, citing procedural deficiencies and concerns about its broad, universal application, among other issues.

CIT Judge Richard K. Eaton issued the order. A non-public conference is scheduled for 10:00 a.m. on Friday, March 6, to address next steps, including the potential framework for a refund process.

The CIT’s action follows the March 2 motion filed with the U.S. Court of Appeals for the Federal Circuit (CAFC) by the plaintiffs, including V.O.S. Selections, Inc., seeking immediate issuance of the mandates. That motion effectively returned the matter to the CIT to initiate proceedings aimed at determining final relief, which is expected to include refunds of IEEPA tariffs owed to affected importers.

In explaining his decision, Judge Eaton stated that the refund process should proceed in an orderly manner and that CBP should be able to issue refunds through its standard procedures. He will oversee all related pending cases and resolve all refund-related issues, including those involving V.O.S. Selections. Judge Eaton also indicated that the court seeks to avoid requiring importers to file separate lawsuits to obtain refunds and to prevent an influx of additional cases. Nevertheless, the ultimate impact of the recent filings remains uncertain.

At the same time, the Department of Justice (DOJ) argued that importers should be required to file suit to recover refunds for entries that have already been liquidated. It remains unclear whether the government’s position refers to entries that are simply liquidated or those that have reached final liquidation beyond the protest period.

This ruling does not represent the final word on the tariff dispute. The DOJ filed a motion to stay (i.e., suspend) the order, but Judge Eaton denied that request. It is also noteworthy that the judge addressed the refund issue within a ruling on a separate motion concerning a different matter that had already been withdrawn. As a result, the order’s broad application could face additional legal challenges.

We will continue to monitor the CIT’s actions in connection with the Administration’s February 27 response to the February 20 Supreme Court ruling invalidating the use of IEEPA tariffs.

For further questions or discussion, please contact your South East World Wide (Chicago), Ltd. Sales Representative.