Attorneys: 'Flood' of Section 122 Complaints Unlikely as Federal Circuit Hears Appeal
The "flood" of lawsuits against Section 122 tariffs that the government suggested might result from the Court of International Trade's denial of a stay in its Burlap and Barrel and State of Oregon cases on the tariffs is seen as unlikely, with importers more likely to wait about filing suits against the tariffs until the U.S. Court of Appeals for the Federal Circuit rules on the government's appeal of CIT's ruling, lawyers told us (see 2605110054).
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Jessica Rifkin, a principal at Olsson Frank Weeda, said that “the potential avenues for importers seeking Section 122 refunds are the same as those that existed for importers seeking IEEPA refunds prior to the establishment" of CBP's Consolidated Administration and Processing of Entries tool for refunds of International Emergency Economic Powers Act tariffs. Importers can file protests of entries that liquidate with Section 122 tariffs or “file ‘me too’ suits seeking refunds at the CIT.”
She said most trade lawyers will likely suggest a “belt and suspenders approach” of filing both a protest and a complaint with CIT, but importers will likely wait until the Federal Circuit's appeal is decided to file their CIT lawsuits.
“However, if one or more importers file now, the filings could snowball, similar to the flood of IEEPA ‘me too’ complaints following the widely reported FedEx filing,” she said.
Importer Cleaner’s Supply Inc. filed its own complaint against the Section 122 tariffs to assert its rights as a result of CIT limiting the injunction against CBP collecting Section 122 duties to the three plaintiffs with standing in the court's Burlap and Barrel and State of Oregon rulings, Mariana del Rio Kostenwein, a partner at Simon Gluck & Kane who is representing the importer, told us (see 2605270052).
She said the Supreme Court's Trump v. CASA decision, which limited the ability of federal courts to issue national injunctions, likely influenced the trade court's decision to limit the injunction in its Section 122 ruling.
"The CIT in limiting the application of its Burlap and Barrel decision to the named plaintiffs has apparently taken the SCOTUS decision in Trump v. CASA Inc. seriously," del Rio Kostenwein said.
She said importers might have to file their own complaints to assert their right to potential refunds of Section 122 tariffs.
“If the final decision in Burlap and Barrel is limited to the particular litigants, potential refunds to our clients would not necessarily be protected unless they have their own cases covering the same issues as Burlap and Barrel,” del Rio Kostenwein said. “Accordingly, our client proactively has become a plaintiff in its own China 301, section 122 and IEEPA based tariffs cases to vindicate its own rights regardless of what happens in the test cases.”
While John Peterson of Neville Peterson told us some of his clients want to file complaints, and he expects to file some in the coming days, he doesn’t “see a great urgency to file right away,” because companies have “plenty of time before any Section 122 tariffs become liquidated.”
Christopher Duncan of Squire Patton Boggs said he doesn’t think importers will file complaints at the “widespread” rate they did for tariffs imposed under IEEPA.
“The Section 122 tariffs are time-limited, so there should (unless a new Section 122 is restarted) be no continuing threat of Section 122 tariffs after July 2026,” he told us. “Importers can adequately protect their rights to potential refunds through less costly traditional administrative means.”
Luke Mathers, litigation lead at Sandler, Travis & Rosenberg, agreed that it’s unlikely that other importers will follow the lead of Cleaner’s Supply.
“For one, most importers didn’t file IEEPA complaints until after the Supreme Court oral argument that went poorly for the government,” Mathers told us. “And for another, the payment of IEEPA refunds through CAPE may reduce concerns that CBP will refuse to pay refunds to importers absent a lawsuit.”
“That said, if for some reason the Federal Circuit and Supreme Court both decline to stay the CIT’s judgment, we may see a flurry of cases filed seeking injunctions against further collection of Section 122 tariffs,” Mathers added.
Duncan said CIT will likely stay complaints against the Section 122 tariffs until a final decision in the Section 122 cases, so, he argued, “the best way for importers to protect their rights to potential refunds is to track their entries’ liquidation dates.”
“If the appellate courts uphold the CIT’s decision invalidating the Section 122 tariffs, importers should be prepared to file post summary corrections (or CAPE declarations) for unliquidated entries and protests for liquidated entries, and to file a 28 USC 1581(a) complaint before the CIT if CBP denies the protests,” Duncan added.