What Every Multinational Should Know About … the Government’s Appeal of Judge Eaton’s Universal IEEPA Tariff Refunds Order (and Why It Is Claiming It Can Keep Billions of Dollars of Unlawfully Collected IEEPA Tariffs)

For several months, the U.S. government has been signaling an impending challenge of the Court of International Trade’s (CIT) authority to require refunds of IEEPA tariff payments (i.e., payment refunds for tariffs enacted pursuant to the International Emergency Economic Powers Act) for entries liquidated more than 80 days earlier. Now, the hanging sword has dropped. In recent filings in the CIT and in its appeal to the Court of Appeals for the Federal Circuit (CAFC), the government has stated its intent to argue that Judge Eaton’s refund orders cannot require the return of finally liquidated IEEPA tariff payments except, at most, for plaintiffs that filed protective actions under 28 U.S.C. § 1581(i).

That position creates material uncertainty for importers whose entries are not covered by Phase 1 of Custom and Border Protection’s (CBP) Consolidated Administration and Processing of Entries (CAPE) refund program. Most immediately, the dispute concerns “finally liquidated” entries — i.e., entries liquidated for more than 90 days (80 days under CAPE, which includes a ten-day buffer period). These entries may account for an estimated $30 billion or more in unlawfully collected IEEPA tariff payments. But the concern is broader. Other categories of entries that fall outside CAPE Phase 1, including reconciliation entries and entries involving antidumping or countervailing duty (AD/CVD) issues, also may face delayed, uncertain, or contested refund treatment, depending on how the planned Phase 2 plays out.

The practical consequence is straightforward: importers that have not filed Section 1581(i) protective actions may be at risk of losing, delaying, or complicating their ability to recover certain IEEPA tariff refunds. That risk is most obvious for finally liquidated entries, but it may also extend to other categories outside CAPE Phase 1 if the timing of refunds remains unclear or if those categories become caught up in the government’s broader appellate arguments over the scope of relief available to non-parties. More than 3,000 companies have already filed such actions, but many importers, customs brokers, and individual importers have not. For companies with a meaningful volume of entries that are more than 80 days past liquidation — or with substantial reconciliation or AD/CVD-affected entries — now is the time to seriously consider filing a protective action to preserve refund rights and potentially position themselves to seek earlier relief.

The government’s appeal will likely prolong uncertainty while the CAFC, and potentially the U.S. Supreme Court, consider the scope of the CIT’s refund authority. In the meantime, the liquidation clock continues to run, the number of finally liquidated entries grows by the day, and categories of entries outside CAPE Phase 1 remain in limbo. Accordingly, importers should promptly evaluate whether they need to take affirmative steps to protect their rights, including filing a Section 1581(i) protective action at the CIT if they have not already done so.

The Stage Is Set: What Happened at the CIT in March and April 2026?

On March 27, 2026, following the Supreme Court’s decision in Learning Resources v. United States, 607 U.S. __ (2026), the CIT ordered the government to refund all IEEPA tariff payments, including those for finally liquidated entries — i.e., entries liquidated for more than 90 days. The order was first entered in Atmus Filtration v. United States, Case No. 26-1259. After the plaintiff in Atmus withdrew its complaint, the CIT on April 7 entered a materially similar refund order in Euro-Notions Florida v. United States, Case No. 25-595. This transfer of the order to a new case pushed back the 60-day window for the Department of Justice (DOJ) to appeal and may have materially increased the number of “finally liquidated” entries (those beyond 90 days from entry) as a result.

The CIT partially stayed compliance with that order and instead required the government to provide weekly closed-door status updates on its refund efforts. During those conferences, the government described the development of its CAPE refund system, which appeared designed to process refunds for unliquidated entries and entries liquidated for 80 days or less (entries that had not hit the 90-day post-liquidation mark, taking into account a ten-day buffer period). The government did not explain how it would handle entries liquidated for more than 80 days.

On April 17, Judge Eaton entered similar refund orders, along with similar partial stays, in three additional cases: V.O.S. Selections v. United States, Case No. 25-66; AGS Company Automotive Solutions v. United States, Case No. 25-255; and Grant & Bowman v. United States, Case No. 25-689. Those four cases became the lead matters for ongoing refund-related proceedings.

The Play Reaches the Crisis Point: What Happened at the CIT in May and June 2026?

In late May 2026, Judge Eaton signaled increasing concern with the pace and scope of the government’s compliance. On May 27, in V.O.S. Selections, Judge Eaton ordered briefing on whether the stay should be lifted and whether the government should be required to comply immediately with the refund order. He also directed CBP Commissioner Rodney S. Scott to appear at a June 9 hearing to address the timing of CBP’s compliance. In Euro-Notions, Judge Eaton separately required another CAPE status report and scheduled a June 11 conference.

On May 29, the government asked the CIT to excuse Commissioner Scott’s appearance and allow lower-ranking officials to appear instead. The CIT denied that request. More importantly, in that briefing, the government made explicit what it had previously only implied: it intended to appeal the CIT’s refund orders on the ground that they amounted to an impermissible universal injunction because they ordered relief for both parties and non-parties that had not filed protective Section 1581(i) actions. The government further stated that, as to finally liquidated entries, it would seek a stay of the refund orders except for the named plaintiffs in the cases before the court.

On June 3, the government filed notices of appeal in the Federal Circuit in V.O.S. Selections, Euro-Notions, AGS Company, and Grant & Bowman, and moved to consolidate those appeals. The government also separately appealed the order requiring Commissioner Scott to appear, and the Federal Circuit promptly stayed that order, leading Judge Eaton to modify the order to permit other CBP representatives to appear instead.

Meanwhile, on June 4, the parties in V.O.S. Selections briefed whether the stay of compliance should remain in place. The government again argued that the refund orders were impermissibly universal, while plaintiffs disagreed but acknowledged that immediate full compliance was not necessary while the appeal is pending. Also on June 4, Terry Precision Cycling, a plaintiff in another Section 1581(i) case, moved in V.O.S. Selections to certify a class of importers with IEEPA tariff refund claims not currently eligible for processing through CAPE, taking advantage of an exception to the universal injunction rule that allows for class actions with universal application to a class of plaintiffs. The government’s response is due June 25, 2026.

At the June 9 hearing, a CBP representative testified that CAPE Phase 3 entries — a category of entries including finally liquidated entries — will start being processed for refunds. The CBP representative repeated the government’s earlier argument that such entries could only be processed for importers that have filed Section 1581(i) actions before the CIT. The representative also stated that CAPE Phase 2 entries — a category of entries including reconciliation entries and entries involving AD/CVD issues — will launch on June 29.

The Ending of the Play Is Unknown: Action Moves to the Federal Circuit

It is not clear how the Federal Circuit will resolve the government’s appeal of the CIT’s refund orders. Based on its recent submissions, the government likely will rely heavily on the Supreme Court’s decision in Trump v. CASA, 606 U.S. 831 (2025), arguing that Judge Eaton’s orders operate as impermissible universal injunctions by requiring relief for importers beyond the named plaintiffs before the court. The government will likely also argue that it is complying with the CIT’s orders to the extent administratively feasible through CAPE and that any importer seeking refunds for finally liquidated entries has an adequate path to relief by filing its own Section 1581(i) action.

Plaintiffs, by contrast, are likely to argue that CASA does not control. The CIT is not an ordinary district court, and its statutory jurisdiction over customs matters is uniquely tied to the administration of a uniform tariff regime. From that perspective, an order requiring CBP to refund unlawfully collected tariffs on a uniform basis is not an improper extension of relief to strangers to the case but a necessary consequence of the court’s role in supervising the lawful administration of customs duties. Plaintiffs are also likely to argue that limiting refunds for finally liquidated entries to importers that filed protective Section 1581(i) actions would undermine the constitutional and statutory requirement of uniformity in customs duties by allowing the government to retain unlawful tariff payments from some importers while refunding identical payments to others.

There also is room for Plaintiffs to argue that the statutory provisions blocking refunds of “finally liquidated” entries are not applicable at all. The entire Customs and tariff statutory structure is premised on the presumption that the tariffs collected were lawful, with the statute then setting 90 days after liquidation as the date that liquidation becomes final for these lawful tariffs. Here, however, the Supreme Court has stated that the IEEPA tariffs were unlawful from the start. There accordingly is room to argue that any rules regarding the finality of liquidation are moot in this particular context. Or, to put it another way, in case there is any tension between the Supreme Court’s ruling and the statute when it comes to refunds, the Supreme Court decision trumps the statute, not the other way around.

An additional distinction that may prove important is that this case does not present the usual concern animating objections to nationwide or universal injunctions. In the ordinary case, the objection is that a single trial court is effectively making policy for the entire country before the merits have been finally settled. Here, by contrast, the merits have already been resolved by the Supreme Court: the IEEPA tariffs were unlawful. The question is therefore not whether relief should be granted in the first instance, but whether the CIT may require the government to implement that merits determination on a uniform basis. That posture may make this case materially different from the paradigm case addressed in CASA.

Even if plaintiffs ultimately have the better legal argument, however, the government’s appeal introduces real uncertainty — and potentially significant delays — for importers that have not already filed Section 1581(i) protective actions. Although our view is that plaintiffs ultimately have the stronger legal argument, there is no question that the filing of the appeal divides the world of IEEPA tariff refunds that fall outside of Phase 1 into two categories: the IEEPA tariff refund “haves” (those that have filed protective Section 1581(i) actions at the CIT) and the “have-nots” (those that have not filed such actions). Ongoing litigation could lead to material delays and other administrative hurdles for importers that have not filed Section 1581(i) actions in the CIT and, perhaps, an inability to claim refunds of finally liquidated or other non-Phase 1 entries.

Why Is the Set of Finally Liquidated IEEPA Tariff Entries Important?

In some respects, the government has moved surprisingly quickly to implement refunds. It has represented that more than $95 billion of the approximately $166 billion in IEEPA tariff payments has already been queued for refund through the CAPE system. CBP has stated that, by the end of June, more than $40 billion should actually have been paid out. For many importers, significant money in the bank is significant and welcome progress.

The problem is that the category of entries the government is now contesting is still very large — potentially more than $30 billion. That category consists of entries that were liquidated more than 80 days ago and are therefore “finally liquidated” under the government’s current view of CAPE Phase 1.

At first glance, that category might appear relatively narrow. CBP often liquidates entries within approximately 314 days after importation. Because the earliest IEEPA tariffs took effect on February 4, 2025, one might assume that only a limited set of early 2025 entries could have become finally liquidated by the time the Supreme Court struck down the tariffs in late February 2026.

In practice, however, CBP frequently liquidates entries much sooner than 314 days after importation. In some cases — particularly lower-value or informal entries — liquidation may occur automatically and on a faster timetable. The filing of post-summary corrections also can result in earlier liquidation. As a result, for many importers, the universe of entries that may already be more than 80 days past liquidation is much broader than it first appears.

That is why the dispute matters so much. For importers with significant volumes of lower-value or quickly liquidated entries, the amount at stake may be considerable, and the risk is not limited to a small pool of early-2025 imports.

Bottom Line: What Should Importers Do Now to Best Preserve IEEPA Tariff Refund Opportunities?

The government’s position is now established: there may never be a CAPE Phase 2, or, if there is, it may not ever cover all remaining (non-Phase 1) entries. Although CBP has made meaningful progress in processing refunds for entries within CAPE Phase 1, CBP will align with the position of the DOJ that importers that have not filed protective actions under 28 U.S.C. § 1581(i) should wait, perhaps forever, for certain categories of IEEPA tariff refunds.

For that reason, the most prudent course for importers that want to maximize and preserve their refund rights is twofold: first, continue pursuing refunds through the government’s CAPE process; and second, seriously consider filing a protective Section 1581(i) action in the CIT. CAPE may well deliver refunds for many entries, but a Section 1581(i) action remains the best available tool for preserving an importer’s independent right to seek recovery if the government continues to resist broader relief for finally liquidated entries or other categories outside CAPE Phase 1.

This calculus also extends to other categories of entries that do not appear to be included in CAPE Phase 1, most notably reconciliation entries (which are subject to planned coverage in CAPE Phase 2) and entries involving AD/CVD issues. The timing for refunds of those entries remains uncertain, and there is at least some possibility that disputes over those categories could become wrapped into the government’s broader appellate arguments about the scope of relief available to non-parties. For importers with significant volumes of reconciliation entries or AD/CVD-affected entries, there may therefore be an additional advantage to filing a protective Section 1581(i) action: parties before the CIT may be better positioned to seek earlier or more targeted relief for those entries, while non-parties may be forced to wait and see how the litigation develops.

This is especially important for importers that have a meaningful number of entries liquidated more than 80 days ago, importers with large volumes of lower-value entries that may have liquidated quickly, and importers with entries subject to reconciliation or AD/CVD complications. For those companies, the downside of inaction may be significant: absent a protective filing, the importer could find itself dependent on the outcome of appellate litigation over the scope of the CIT’s authority, with no guarantee that refunds for all affected entries will be preserved.

A protective Section 1581(i) filing does not require an importer to abandon CAPE or to assume that litigation will ultimately be necessary on every entry. Rather, it serves as an insurance policy. It preserves the importer’s own claim to relief while the courts sort out whether the government can lawfully withhold refunds from non-parties for finally liquidated or otherwise excluded entries. In the current environment, where the government has appealed and is expressly challenging the availability of broader relief, that protection may prove critical.

If you would like more information about potentially filing a Section 1581(i) protective filing, please reach out to the authors or your Foley relationship attorney.