US, Plaintiffs File Responses to CIT’s Order on Immediate Tariff Refunds, Seek Class Certification

The latter two briefs came in response to Eaton's orders on May 27 to show cause as to why he shouldn't withdraw a partial pause on his original refund order that's currently in place while CBP develops CAPE (see 2605270062). Ending the pause would require CBP's immediate compliance with his original refund order, which applied to all entries, liquidated or unliquidated.

Terry Precision Cycling filed the motion for class certification in the V.O.S. Selections case. It requested the trade court to certify a class under Rule 23(b)(2) for “all importers who paid tariffs imposed under” IEEPA and “who hold claims that are not currently eligible for processing and refund through” the CAPE.

“Without certification, the government will undoubtedly continue to advance its view that CASA bars any injunctive remedy for importers who are not plaintiffs in this suit,” Terry Precision Cycling said, referring to Trump v. CASA, the 2025 Supreme Court case that barred universal injunctions. “As a result, potentially tens of thousands of identically situated importers may be required to initiate their own refund actions, all of which will present the same legal question that this Court will then have to resolve in each case on an individual basis. Certification of Plaintiff’s proposed Rule 23(b)(2) class avoids that absurd result.”

In their response to the order to show cause, the plaintiffs said they filed the motion to certify a class “in an abundance of caution.”

Plaintiffs' Response to the Trade Court’s Order to Show Cause

Rather than lifting the stay on the refund order, the trade court should issue “a permanent injunction requiring the government to process and pay all IEEPA refunds" through CAPE, plaintiffs led by V.O.S. Selections argued in their response to the order to show cause.

“The Supreme Court made clear in CASA that a court may issue the injunctive orders necessary to ensure that the plaintiffs receive ‘complete relief,’” the plaintiffs said. “While many of plaintiffs’ tariffs were eligible for Phase 1 treatment, at least one plaintiff -- Terry Precision Cycling, LLC -- has entries that liquidated more than 90 days ago. An injunction compelling the government to process and pay those entries through CAPE is necessary to afford ‘complete relief to the plaintiffs before the court.’”

The plaintiffs said the injunction can’t be limited to plaintiffs and must be extended to “all importers.”

“For starters, such an order would violate the Uniformity Clause, which requires that ‘all Duties, Imposts and Excises shall be uniform throughout the United States,’” the plaintiffs said. “If the Court limited its relief purely to plaintiffs, that would amount to an unconstitutional order allowing the five plaintiff companies to pay lower tariffs than all other importers.”

An order granting relief to only the plaintiffs in the V.O.S. Selections case “would functionally grant universal relief,” because the trade court has “nationwide, exclusive jurisdiction” and all the IEEPA refund cases were assigned to Eaton, the plaintiffs said.

“Accordingly, this Court’s legal determination that the government is obligated to process and pay all IEEPA refunds through CAPE necessarily governs for everyone,” the plaintiffs said. “In such circumstances, the practical effect of this Court’s order will be universal relief, even if it is cabined to only the V.O.S. plaintiffs.”

“And once this Court has determined that the government has a legal obligation to process all payments through CAPE, that precedent governs all cases, so the government lacks a non-frivolous basis for refusing to process any payments through the CAPE system,” the plaintiffs added.

The plaintiffs said the Supreme Court’s CASA decision doesn’t apply to the trade court, because the court’s “remedial authority is not governed by the Judiciary Act of 1789,” and it is “a specialized Article III court.”

Because Congress gave the court “exclusive nationwide jurisdiction over tariffs,” the plaintiffs said its intent was “to empower the Court to issue orders that conclusively resolve any issues it confronts.”

“To exercise that power, the CIT must have the ability to impose broader injunctive relief than traditional district courts,” the plaintiffs said.

The plaintiffs said the authority for broad injunctive relief beyond the powers of district courts was granted to the trade court by Congress through multiple provisions.

“The first, 28 U.S.C. § 1585, grants the CIT ‘all the powers in law and equity of … a district court of the United States,” the plaintiffs said. “But the second, 28 U.S.C. § 2643(c)(1), goes further -- separately granting the CIT the power to ‘order any other form of relief that is appropriate in a civil action, including, but not limited to … injunctions.’”

“That provision expressly authorizes the CIT to issue injunctive relief without tying its authority to the traditional equitable powers of district courts under the Judiciary Act of 1789 -- the sole focus of CASA,” the plaintiffs added.

While the government said it lacked authority to reliquidate and pay refunds for finally liquidated entries without a court order, the plaintiffs said, “that is wrong” and “the government does not cite any statute barring reliquidation.”

The plaintiffs said the Federal Circuit’s Shinyei decision cited by the government to support their claims doesn’t prohibit reliquidation when the trade court’s “jurisdiction rested on 28 U.S.C. § 1581(i), as opposed to Section 1581(a) or (c).”

The plaintiffs added that 19 U.S.C. 1520(a)(1) grants the government the authority to reliquidate finally liquidated entries that liquidated with IEEPA duties. The statute states that the government is authorized “to refund duties or other receipts … whenever it is ascertained on liquidation or reliquidation of an entry or reconciliation that more money has been deposited or paid as duties than was required by law to be so deposited or paid.”

“The statute nowhere suggests that individualized court orders are necessary to process and pay refunds,” the plaintiffs said. “There is no impediment to the government opening the CAPE system for all entries on which IEEPA tariffs were paid, regardless of when they liquidated.”

Government’s Response to the Trade Court’s Order to Show Cause

Lifting the stay on the trade court’s order for refunds would create a “logistical impossibility” for CBP as the agency can’t “process refunds for which it has not yet created the CAPE functionality,” and can’t “process refunds for entries where no declaration has been filed in CAPE,” the government said in its response to the order to show cause.

The government said it intends to expand CAPE to function for entries that the agency can’t currently process.

“CBP is currently developing functionality for entries flagged for reconciliation,” the government said. “Once the reconciliation functionality is deployed, CBP intends to expand CAPE functionality to cover additional categories of entries, including entries filed by plaintiffs to actions in this Court and for which reliquidation is needed.”

For finally liquidated entries, the government said that “an importer must file suit” with CIT, and the trade court “must enter an importer-specific order.”

“Congress has not given CBP the authority to pay refunds on entries that are liquidated and final,” the government said. “CBP shares the Court’s desire to facilitate the availability of refunds for importers with liquidated and final entries. But such importers must sue.”

The government said the trade court lacks the authority to issue universal injunctions due to the Supreme Court’s CASA decision, so “importer-specific relief must be ordered.”

“Commandeering the refund process, including through uniform supervision, is simply not within any trial court’s power because courts are empowered to grant ‘complete relief between the parties,’ not between the defendant and the world at large,” the government said.

The trade court “disregarded party-presentation principles” when it issued its order for refunds, because none of the parties sought an injunction with a “‘nationwide scope.’”

“If the party-presentation principle means anything, it means that a court cannot issue the drastic and extraordinary remedy of a universal injunction without a motion before the court and without any party asking for such radical relief,” the government said.

If the trade court intends to lift the stay on its order for refunds, the government said the court “should at least enter a stay pending appeal.” The government said it will seek a stay pending appeal from the U.S. Court of Appeals for the Federal Circuit if the trade court doesn’t grant one.