They contend that the injunction mandating refunds cannot be universal and would apply solely to the businesses that initiated lawsuits seeking restitution.
Yesterday, in a filed motion, the Trump Administration signaled its intention to challenge the U.S. Court of International Trade’s ruling that demanded refunds for every business that paid tariffs deemed illegal under President Trump’s use of the International Emergency Economic Powers Act of 1977 (IEEPA). The Supreme Court later voided the IEEPA tariffs in a case I helped initiate and argue alongside the Liberty Justice Center and others.
When Judge Eaton of the Court of International Trade (CIT) issued his order in March, I expected the administration might appeal on the grounds that it clashes with the Supreme Court’s controversial stance against universal injunctions in Trump v. CASA, Inc. (decided last year). Yet over the nearly three months that followed, there was no appeal, and in fact a tariff-refund system was established that has begun distributing payments to businesses harmed by the unlawful tariffs. Victor Schwartz, proprietor of V.O.S. Selections and the lead client in our suit, is among those who have already received a refund.
The administration now intends to contend that only those businesses that filed lawsuits should be eligible for recovery. In my view, this situation underscores why universal injunctions are necessary in certain kinds of cases. Thousands upon thousands of businesses and other importers were compelled to pay more than $166 billion in illegal tariffs. Requiring each of them to pursue their own lawsuits would waste enormous time and resources and would impose a heavy burden on smaller organizations with limited funds. It would also delay many payments significantly, leaving taxpayers responsible for interest as refunds are issued.
In a prior post about the refund issue, I noted additional grounds for supporting Judge Eaton’s decision to issue a universal injunction here, chiefly that Trump v. CASA applies only to injunctions issued under the Judiciary Act of 1789 and its successors, not to the separate 1980 jurisdictional statute from which the Court of International Trade derives its authority.
As I have also mentioned in earlier posts, even complete refunds for tariffs that were illegally collected cannot fully repair the harm they caused. Among other things, they cannot compensate consumers who faced higher prices, or businesses that lost sales or suffered from reduced investment and damaged relationships with suppliers. These factors argue against staying injunctions prohibiting the collection of illegal tariffs, a stance the courts mistakenly took in our case (though the CIT recently ruled the opposite in the ongoing Section 122 tariff dispute).
The government’s demonstrated reluctance to issue full refunds to all victims provides another reason not to stay injunctions against the Section 122 tariffs, or any other illegal tariffs the executive branch may attempt to impose.
Meanwhile, it remains unclear how long this appeal will take to resolve, and whether tariff refunds will continue in the interim. I hope the Federal Circuit and, if necessary, the Supreme Court (should the matter reach them) will rule against the administration and decline to halt Judge Eaton’s ruling during ongoing litigation.
UPDATE: Putting procedural technicalities aside, the administration bears a moral and legal duty to refund every penny, and the reasoning behind it should be evident. As I noted in a previous post:
[T]he Trump Administration can readily resolve the refund issue simply by abdicating this legal fight and issuing refunds to all those forced to pay the illegal tariffs. That would be straightforward. The government has records of all payments and recipients. Calculating interest is also not difficult. The government could simply issue electronic transfers or mail checks to all eligible individuals.
Ultimately, the government illegally seized billions of dollars and therefore must restore them. If I unjustly seize your property, I am obligated to return it and pay interest. The same principle applies when the federal government does so. You don’t need to be a legal theorist or a tariff expert to understand this simple point.
NOTE: As I have previously stated, I am no longer part of the V.O.S. Selections legal team, because my role concluded after the Supreme Court issued its decision. Accordingly, I am not involved in the refund phase of the tariff litigation.
