Government Challenges Court Order in Tariff Refund Litigation

Last week, the U.S. Department of Justice filed a motion seeking to challenge key aspects of a recent decision by the U.S. Court of International Trade in the ongoing IEEPA tariff refund litigation. The filing focused on both procedural and substantive issues arising from the court’s injunction ordering refunds of certain tariffs collected under the International Emergency Economic Powers Act (IEEPA).

At a high level, the government asked the court to modify its order requiring live testimony from the Commissioner of U.S. Customs and Border Protection (CBP) and signaled its intent to file a broad appeal of the court’s underlying injunction.

By way of background, the Court has been holding regular “settlement conferences” with the government to oversee CBP’s implementation of the Consolidated Administration and Processing of Entries (“CAPE”) portal, the system established to administer IEEPA refunds.  Growing dissatisfied with the progress of the government in implementing the refund process for all claims, including those claims that have been “finally liquidated,” the court entered a show cause order requiring the government to produce the CBP Commissioner to testify regarding why it should not enter an order requiring the government to immediately comply with its earlier injunction regarding refunds of all IEEPA tariffs, including the re-liquidation of claims by CBP of claims that have been “finally liquidated.” 

Key Points from the Government’s Motion

• Challenge to compelled testimony of senior officials:
  The government argued that requiring the CBP Commissioner—a Senate-confirmed, high-ranking official—to testify in court is improper. Courts generally prohibit compelling testimony from senior officials absent “extraordinary circumstances,” particularly where the testimony would probe agency decision-making.
• Reliance on the “apex doctrine”:
  The filing invokes longstanding precedent limiting depositions or testimony of high-level government officials unless they have unique, first-hand knowledge that cannot be obtained elsewhere. The government contends this standard is not met here.
• Availability of alternative witnesses:
  According to the government, other CBP officials with direct operational knowledge—who have already submitted detailed sworn declarations—are available to testify. As a result, compelling testimony from the Commissioner is unnecessary and legally inappropriate.
• Mandamus relief as a potential next step
  The government indicates that, if the court declines to amend its order, it intends to seek mandamus relief from the U.S. Court of Appeals for the Federal Circuit. Appellate courts have, in prior cases, vacated orders compelling testimony from senior officials in similar circumstances.
• Challenge to the scope of the injunction:
  Beyond the testimony issue, the government reiterates its position that the court’s injunction—particularly insofar as it directs relief for non-party importers—exceeds the court’s jurisdiction and equitable authority. The government has indicated it will appeal this aspect of the ruling.
• Operational constraints on tariff refunds
  The filing also emphasizes that CBP cannot immediately comply with the injunction due to legal and technical constraints. For example, refunds for finally liquidated entries generally require court-specific relief, and system changes must be implemented in stages.

Court’s Ruling

The Court quickly denied the government’s motion.  While acknowledging the separation of powers concerns raised by the government, the Court indicated that the Commissioner's testimony is necessary and that the government has a clear obligation to refund all unlawfully collected tariffs, including re-liquidating and refunding tariffs paid in connection with “finally liquidated” claims. It is anticipated that the government will appeal the Court’s ruling.

Potential Implications

The government’s appeal and accompanying request for a stay could significantly affect both the timing and scope of tariff refunds.

• Pending refund claims (submitted but not yet approved or paid):
  These claims are most likely to be directly impacted by a stay. If the Federal Circuit grants a stay of the injunction, CBP may slow or pause processing of certain categories of refunds—particularly those requiring additional system changes or court authorization (such as finally liquidated entries). Even absent a full pause, the government’s position on phased implementation suggests continued delays and prioritization decisions while the appeal is pending.
• Approved and paid refunds:
  While the filing does not explicitly address clawbacks, recipients of refunds already issued may face some degree of uncertainty pending appellate review. As a practical matter, however, refunds that have already been processed and paid are generally more difficult to revisit, particularly where they were issued pursuant to existing administrative authority or court direction. The likelihood of recovery efforts may depend on how the Federal Circuit ultimately resolves the scope and validity of the underlying injunction.
• File protests:
  Importers should consider filing Customs protests for entries at the 160-170 day mark post-liquidation (comfortably within the 180-day deadline for doing so) to preserve their rights to refunds as these issues continue to play out in the courts.
• Broader litigation and policy impact:
  More broadly, the appeal raises important questions about the limits of nationwide (or “universal”) injunctions in trade cases and the degree to which courts can direct operational actions by CBP. A decision from the Federal Circuit could therefore shape not only this litigation, but also future challenges to tariff measures and agency enforcement actions.

For those importers with claims that have been “finally liquidated” or will soon be “finally liquidated,” they may wish to consider filing a lawsuit in the CIT depending on the value of the IEEPA duties, plus interest, associated with the “finally liquidated” entries