NEW YORK – The United States government has escalated a significant legal battle, appealing a Court of International Trade (CIT) judge’s order that mandates the U.S. Customs and Border Patrol (CBP) issue tariff refunds to all importers affected by tariffs deemed illegal in February. Government lawyers contend that Judge Richard Eaton, who oversees the tariff lawsuits in the CIT, overstepped his authority by extending the refund order to companies that did not file a lawsuit in trade court.
The appeal was lodged with the U.S. Court of Appeals for the Federal Circuit in June 2026, with the government filing its opening brief on Monday, August 11, 2026. This legal challenge centers on the scope of judicial power, particularly concerning universal injunctions that apply a ruling broadly to all affected parties, rather than solely to specific litigants.
Legal Precedent and Universal Injunctions at Core of Dispute
At the heart of the government’s argument is a Supreme Court decision from June 2025, which arose from a case concerning birthright citizenship. This landmark ruling, referred to as CASA in the government’s brief, significantly limited the use of universal injunctions. Government lawyers assert that Judge Eaton’s order for widespread tariff refunds directly contravenes this Supreme Court precedent.
“The CIT’s universal injunctions, requiring the government to refund IEEPA duties for all importers (including non-party importers), cannot possibly be squared with CASA,” the government explicitly stated in its opening brief. This position directly challenges Judge Eaton’s interpretation, as he has maintained that the limitations on universal injunctions established by CASA do not apply to the specific circumstances of the tariff refund cases before his court.
The tariffs in question, which were deemed illegal in February, have already seen substantial refunds. The CBP has processed and certified approximately $100 billion in refunds to date. However, the current dispute focuses on a specific category of companies: those whose customs entries were finalized and for whom the administrative refund process is no longer available. A Congressional rule dictates that the CBP cannot reprocess tariffs for which this administrative avenue has closed.
Administrative Hurdles and the Path to Litigation
For companies whose entries are finalized, the government’s stance is clear: they retain the right to pursue their claims through the courts. Government lawyers highlighted this in their brief, noting, “The Court of International Trade (CIT) has already entered hundreds of such orders in suits brought by importers seeking that relief, and importers who have not yet brought such suits are free to do so within the statute of limitations.” This suggests that while administrative reprocessing might be blocked by Congressional mandate, the judicial path remains open for individual litigants.
However, this distinction between administrative and judicial recourse raises significant concerns for businesses, particularly smaller entities. Barry Appleton, a law professor and co-director of New York Law School’s Center for International Law, articulated the potential inequity of this situation. While acknowledging that the government appears to have a stronger legal argument based on the CASA precedent, Appleton emphasized the practical difficulties faced by businesses.
Economic Equity Versus Legal Technicality
Professor Appleton argued that the principle of justice should not be contingent on a company’s capacity to engage in litigation. “The government took this money under a law the Supreme Court said never authorized it. Getting it back should not turn on whether a business could afford to sue,” he stated. This perspective underscores a fundamental tension between strict legal interpretation and equitable economic outcomes, especially for businesses that may lack the resources or awareness to pursue legal action.
He further elaborated on the burden placed on smaller enterprises: “Refunding an unlawful tariff should not be a reward for litigating. … You cannot really ask a small company to sue for money it does not know it is owed, on a deadline it has never heard of.” This highlights the information asymmetry and resource disparity that can disadvantage smaller importers, potentially leaving them without recourse for tariffs collected under an unauthorized law.
The outcome of this appeal will have far-reaching implications, not only for the specific companies awaiting refunds but also for the broader interpretation of judicial authority in trade disputes. It will test the balance between adhering to Supreme Court precedents on universal injunctions and ensuring equitable access to redress for businesses impacted by government actions.
