Importers and a coalition of states challenged President Trump’s tariffs in U.S. courts, arguing that the International Emergency Economic Powers Act (IEEPA) does not authorize them. The U.S. Supreme Court agreed on February 20, 2026, and on October 8, 2026, the U.S. Court of International Trade certified a nationwide class of importers seeking refunds. The government’s appeal of the trade court’s refund orders is pending at the Federal Circuit.
Latest development Oct 29, 2026
On October 29, 2026, Judge Richard K. Eaton clarified the scope of CAPE Phase 3 processing of IEEPA tariff refunds. Finally liquidated entries subject to pending protests or litigation at the Court of International Trade are eligible without the protests first being withdrawn. Importers separately asked the court to order U.S. Customs and Border Protection to launch a fourth phase for IEEPA duties embedded in antidumping and countervailing duty entries.
Why it matters
The Supreme Court’s ruling limits presidential power to impose tariffs under the International Emergency Economic Powers Act. The pending appeal will decide whether the Court of International Trade can order refunds for importers that never sued, in a refund process that has certified about $126B.
Background
The dispute arose after President Trump invoked the International Emergency Economic Powers Act of 1977 (IEEPA) to impose tariffs. He first targeted Canada, Mexico, and China in February 2025, then extended tariffs to nearly all U.S. trading partners through the “Liberation Day” orders. Small businesses Learning Resources, Inc. and hand2mind sued almost immediately in the U.S. District Court for the District of Columbia. V.O.S. Selections, Inc. and other importers sued in the U.S. Court of International Trade (CIT), and a coalition of states led by Oregon later joined them. Both sets of plaintiffs argued that IEEPA, a sanctions and asset-freezing statute, grants no tariff power and that reading one in would raise nondelegation and major questions problems.
On May 28, 2025, a three-judge CIT panel ruled unanimously that the tariffs exceeded the president’s statutory authority under IEEPA and permanently enjoined their enforcement. The next day, the District of Columbia court declared the tariffs unlawful as to its two plaintiffs and preliminarily enjoined their enforcement against them. It stayed that ruling on June 3, 2025, pending the government’s appeal. On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, affirmed the CIT in relevant part. It held that IEEPA’s grant of authority to “regulate” imports does not authorize tariffs of unlimited scope and duration, though the judges split on rationale.
The U.S. Supreme Court granted certiorari, consolidated the Learning Resources and V.O.S. Selections cases, and heard expedited argument on November 5, 2025. On February 20, 2026, the Supreme Court ruled 6-3, in an opinion by Chief Justice Roberts, that IEEPA does not authorize the tariffs, affirming the Federal Circuit. The justices divided over whether the case turned on ordinary statutory interpretation or the major questions doctrine. The Supreme Court also vacated the District of Columbia court’s judgment in Learning Resources on jurisdictional grounds. On March 2, 2026, the Federal Circuit denied the government’s stay request and returned the case to the CIT for refund proceedings.
That month, the CIT ordered U.S. Customs and Border Protection (CBP) to build a refund system that also covers importers that did not sue. On June 2, 2026, the Department of Justice appealed the CIT’s refund orders to the Federal Circuit, arguing that the CIT cannot order refunds for importers that never sued. On August 6, 2026, the CIT heard argument on the Liberty Justice Center’s motion for a nationwide class that would let importers with finally liquidated entries recover without suing. CBP had by then refunded more than $86B. On August 25, 2026, CBP reported more than $106B in refunds certified for disbursement but paused the phase covering finally liquidated entries to refine validation checks. CBP later told the CIT that certified refunds sent to the Treasury had reached about $122B as of September 11, 2026, and about $126B by October 2, 2026. CBP began paying refunds on finally liquidated entries on October 6, 2026. On October 8, 2026, the CIT certified a nationwide class in Freestyle World, Inc. v. United States. The class covers importers that paid IEEPA duties between February 1, 2025, and February 19, 2026, and lets them pursue refunds without filing individual suits. The CIT held a closed status conference on next steps on October 13, 2026. On October 29, 2026, it clarified that finally liquidated entries subject to pending protests or CIT litigation are eligible for CAPE Phase 3 refund processing. The government’s appeal of the refund orders remains pending.
Timeline 25 events
-
OrderCIT holds closed status conference on refund class next steps
The Court of International Trade held a closed status conference in the Freestyle World class action to discuss next steps for administering refunds following the October 8 class certification order.
Briefings Volume 38, No. 10The Court of International Trade Certifies an IEEPA Refund Class: What the Freestyle World Ruling Means for Importers With Outstanding Refunds
-
JudgmentCIT certifies class of importers seeking IEEPA tariff refunds
Judge Richard K. Eaton certified a class of importers of record that paid IEEPA tariffs between February 1, 2025, and February 19, 2026, and have not filed individual refund suits. The order aimed to extend refunds beyond the roughly 4,000 importers who already sued.
Trade Court Certifies Broad IEEPA Tariff Refund ClassUS trade court certifies class action case for tariff refundsTrade Court Sides With Importers Seeking Class-Action Status for Tariff Refund PushIEEPA Refund Class Action Suit To Move Forward
-
EnforcementCBP begins disbursing refunds for finally liquidated entries
CBP started paying out IEEPA tariff refunds under CAPE Phase 3 to importers with finally liquidated entries, following the planned October 6 launch.
CBP starts paying out IEEPA tariff refunds for finally liquidated entriesCBP starts paying out IEEPA tariff refunds for finally liquidated entriesThe IEEPA Tariff Refund Guide: How to File Your CAPE Declaration and Get Your Money Back
-
OrderCBP reports $126B in IEEPA refunds certified
CBP told the court that CAPE had accepted about $136.6B in potential and certified refunds for processing. About $126B in duties plus interest had been certified and sent to the Treasury for disbursement.
IEEPA refunds: Latest CBP guidance for importersThe IEEPA Tariff Refund Guide: How to File Your CAPE Declaration and Get Your Money BackEffective Tariff Rates and Revenues (Updated October 14, 2026)
-
OrderJudge Eaton clarifies CAPE Phase 3 eligibility for protested entries
Judge Eaton ruled that finally liquidated entries subject to pending protests or CIT litigation remain eligible for Phase 3 refunds. Importers need not first withdraw the protests, whether they challenge only IEEPA duties or raise other customs issues.
CIT Judge Says Finally Liquidated Entries Subject to Protest Are Eligible for CAPE Phase 3Recent Tariff Developments: Changes to the Canadian Tariff List Under Section 338 and Updates on IEEPA Tariff Refunds - WithumUS trade court says all importers with protests eligible for IEEPA refunds
-
OtherCBP reports $122B in refunds certified and sent to the Treasury
CBP told the Court of International Trade that about $134.7B in potential and certified refunds had been accepted into CAPE. About $122B, including interest, had been certified and sent to the Treasury for disbursement as of September 11, 2026.
CBP Reports Major Progress on IEEPA Refunds; CAPE Phase 3 Launches October 6CBP to expand IEEPA tariff processing in October | Supply Chain DiveCBP Accelerates IEEPA Tariff Refund Processing
-
OrderCBP tells court CAPE Phase 3 refunds will launch October 6
CBP said CAPE Phase 3, covering refunds on finally liquidated entries for importers that sued, would deploy on October 6, 2026. Importers with a valid importer-of-record number submitted by July 30, 2026, could file Phase 3 declarations from October 3, 2026.
Claiming IEEPA Tariff Refunds? Prepare Now for CAPE Phase III Filing RequirementsCBP Confirms October 6, 2026 Launch of Phase 3 of the IEEPA Tariff Refund ProcessCBP States CAPE Phase 3 Will Deploy on October 6, 2026
-
OtherMembers of Congress urge CBP to address refund administrative delays
Members of Congress sent CBP a letter urging the agency to address administrative delays affecting disbursement of IEEPA duty refunds, following the pause of CAPE Phase 3 processing.
September 9, 2026 United States Customs & Border Protection (letter)CBP Launches CAPE for IEEPA Duty Refunds
-
OrderCBP pauses CAPE Phase 3 refunds to refine validation checks
CBP reported more than $106B in IEEPA refunds certified for Treasury disbursement. It temporarily paused Phase 3, which covers finally liquidated entries, and had so far paid Phase 3 refunds only to importers that sued at the CIT.
IEEPA Tariff Refunds: Critical Developments, Phase III Delays, and Action Steps for ImportersCBP Launches CAPE for IEEPA Duty RefundsCBP IEEPA Refund Update: $132.5 Billion Accepted for CAPE Processing as Phase 3 Is Delayed
-
HearingCIT hears argument on nationwide class certification for refunds
The Liberty Justice Center moved to certify a Rule 23(b)(2) nationwide class in V.O.S. Selections, Inc. v. United States, aimed at securing refund access for importers with finally liquidated entries. CBP had by then refunded more than $86B in IEEPA tariffs.
Court of International Trade to Address IEEPA Tariff Refunds in V.O.S. Selections Case
-
FilingCBP files updated status declaration on refund progress
CBP’s Brandon Lord declared that, as of July 31, 2026, over 75,000 CAPE declarations had been submitted and over 17.69 million validated entries liquidated without IEEPA tariffs. About $128.68B in potential and certified refunds had been accepted for processing.
IEEPA Tariff Refunds: Frequently Asked QuestionsCBP Provides Update on CAPE Program Progress and RefundsCBP has paid $100B in IEEPA tariff refunds
-
JudgmentCIT issues further reliquidation order for finally liquidated entries
Judge Eaton issued an additional order directing CBP to reliquidate, without regard to IEEPA duties, further finally liquidated entries belonging to suing importers, building on the July 15 order.
CIT Orders CBP to Process IEEPA Tariff Refunds for Phase 3 "Finally Liquidated" Entries | SmarTradeCIT Requires Importers to File Suit for Phase 3 IEEPA Tariff Refunds - LexologyCan Importers Recover IEEPA Tariffs on Finally Liquidated Entries?: Amundsen Davis
-
JudgmentCIT orders refunds on suing plaintiff’s finally liquidated entries
Judge Richard K. Eaton directed CBP to refund IEEPA duties on all of the plaintiff’s finally liquidated entries. The order gave importers that sued at the CIT a confirmed path to those refunds, but non-suing importers then lacked a comparable mechanism.
File Now: CIT's Order Confirms Only Importers That Have Sued Will Get Full IEEPA Tariff Refunds
-
EnforcementCBP reports $104.29B in refunds authorized, $71.06B paid
In a status update to the CIT, CBP reported authorizing about $104.29B in IEEPA tariff refunds and paying about $71.06B, including interest.
IEEPA Tariff Refunds Update: Good Progress, but Still a Ways to Go
-
AppealGovernment appeals CIT refund order to Federal Circuit
The Department of Justice filed notices of appeal in V.O.S. Selections and related cases (Euro-Notions, AGS Company, and Grant & Bowman) and moved to consolidate them. The appeals challenge the CIT’s authority to order universal refunds for non-litigant importers.
The U.S. Government Appeals IEEPA Tariff Refund Order — What Importers Need to Know NowWhat Every Multinational Should Know About the Government's Appeal of Judge Eaton's Universal IEEPA Tariff Refunds Order
-
EnforcementCBP launches first phase of IEEPA refund processing
CBP activated the first phase of IEEPA tariff refunds, limited initially to certain unliquidated entries, roughly two months after the Supreme Court’s decision.
-
OrderFederal Circuit denies government’s stay request, returns case to CIT
The Federal Circuit rejected the government’s request to pause the litigation and denied a motion for a stay. The ruling returned the case to the Court of International Trade so refund proceedings could begin.
-
JudgmentCIT orders nationwide IEEPA tariff refunds
The Court of International Trade, with Judge Eaton presiding over IEEPA refund cases, ordered CBP to implement a refund system that also covers importers that did not sue. It denied the government’s request for a stay pending appeal.
Court of International Trade Orders Nationwide Tariff Refunds, But Expect Government to AppealTariff Refund Mechanism Takes Shape After Supreme Court's IEEPA Ruling
-
JudgmentSupreme Court rules IEEPA does not authorize the tariffs
In a 6-3 opinion by Chief Justice Roberts, the Supreme Court affirmed that IEEPA did not authorize the president’s tariffs. The ruling invalidated the fentanyl-related and Liberation Day tariffs.
-
HearingSupreme Court hears oral argument
The Supreme Court heard consolidated, expedited argument in Learning Resources v. Trump and Trump v. V.O.S. Selections. Solicitor General D. John Sauer argued for the government, Neal Katyal for the private plaintiffs, and Benjamin Gutman for the state coalition.
Oral Argument Summary: Learning Resources, Inc. v. Trump (Tariffs)
-
JudgmentFederal Circuit, en banc, affirms that IEEPA does not authorize the tariffs
The en banc court affirmed in relevant part, holding that IEEPA’s grant of authority to regulate imports does not authorize the tariffs. Judges Cunningham and Taranto wrote separate opinions on the reasoning.
-
OrderD.C. district court stays its own ruling pending appeal
The district court stayed its decision finding IEEPA does not authorize the tariffs, pending the government’s appeal.
DC District Court Stays Decision Finding IEEPA Doesn't Provide for Tariffs Pending Appeal
-
JudgmentD.C. district court preliminarily enjoins tariffs for Learning Resources, hand2mind
Judge Rudolph Contreras of the U.S. District Court for the District of Columbia declared the IEEPA tariffs unlawful as to the two toy-company plaintiffs. He preliminarily enjoined enforcement of the tariffs against them.
Federal District Court Issues Another Ruling Against Trump's IEEPA Tariffs
-
JudgmentCIT rules IEEPA does not authorize the tariffs, permanently enjoins them
The Court of International Trade ruled unanimously that the challenged tariffs exceeded the president’s statutory authority under IEEPA and permanently enjoined their enforcement.
Court of International Trade's Flawed Ruling on Trump's Tariffs
-
HearingCIT panel hears argument in V.O.S. Selections
A three-judge Court of International Trade panel of Judges Gary S. Katzmann, Timothy M. Reif, and Jane A. Restani heard argument on the importers’ challenge to the IEEPA tariffs.
Experimental AI forecast
How it is madeHow will the Federal Circuit resolve the government’s appeal of the CIT’s orders requiring IEEPA tariff refunds for importers that did not sue, by March 31, 2028?
- Federal Circuit affirms refund orders32%
- Still pending on March 31, 202826%
- Federal Circuit narrows refund relief17%
- Federal Circuit reverses refund orders13%
- Refund appeal dropped or ruled moot12%
- Resolves by
- Mar 31, 2028in 17 months
- Record confidence
- Medium
The Federal Circuit is most likely to affirm the CIT’s refund orders for non-suing importers (32%), with a decision expected before March 31, 2028. The strongest reason is the October 8, 2026, class certification, which gives refunds to non-suing importers a procedural basis that does not rest on universal relief.
How it resolves. Resolves on the Federal Circuit’s first merits decision in the government’s consolidated appeals filed June 2, 2026 (V.O.S. Selections, Euro-Notions, AGS Company, and Grant & Bowman). “Affirms” means the refund orders for non-suing importers stand in substance. “Narrows” means partial affirmance, vacatur, or remand that limits who may receive refunds or how. “Reverses” means the court holds the CIT lacked authority to order refunds for non-suing importers. “Dropped or moot” means voluntary dismissal or a dismissal as moot before a merits ruling. “Still pending” applies if none of these has occurred by March 31, 2028. Later rehearing or Supreme Court review does not change the resolution.
Reasoning
Starting point. Federal Circuit appeals from Court of International Trade judgments, especially government appeals of remedial orders: The Federal Circuit affirms roughly 70% to 75% of CIT appeals in whole or in part. Full reversals of trade court remedies run near 15% to 25%. Median time from docketing to decision is about 12 to 18 months.
The base rate favors the trade court, since the Federal Circuit affirms most CIT appeals in whole or in part. The government’s core argument, that courts cannot grant relief to non-parties, has force under recent limits on universal remedies. But the October 8, 2026, nationwide class in Freestyle World now covers the same importers through Rule 23, which weakens the practical stakes of reversal. That class route also raises the chance that the court narrows the orders rather than reversing them outright, or that the appeal becomes moot. CBP has already certified about $126 billion and began paying finally liquidated entries on October 6, 2026, so the government may see little gain in pressing the appeal. A reversal would still matter for importers that opt out or fall outside the class, which keeps it a live alternative. The appeal was filed 5.1 months ago, and a typical timetable puts a decision well inside the window, though briefing on the class order could slow things. Since the October 26, 2026, forecast, the record adds only the October 29 Phase 3 clarification and a request for a fourth refund phase, neither of which moves any outcome by five points.
Class certification gives an independent basis for non-party refunds · Government’s universal-relief objection after limits on nationwide remedies · About $126 billion already certified reduces stakes of appeal · Federal Circuit’s high affirmance rate for CIT judgments · Possible mootness or delay from new class proceedings
Generated automatically by Claude Opus 5.5 on Nov 4, 2026 from this case’s record on this site, and published without editorial review. The probabilities are the model’s judgment, not measured frequencies, and they are scored publicly as cases resolve. Not legal or investment advice. How the forecasts are made
What it would mean
If the Federal Circuit affirms, importers that never sued would get a court-ordered path to refunds on finally liquidated entries. CBP puts that category at about $11B of duties. Most of the roughly $166B collected is already moving. About $126B had been certified to the Treasury by October 2, 2026. An affirmance would also support the October 8 class, which mainly targets small importers among the nearly 330,000 that paid. Cash would flow through CAPE once the mandate issues and a refund order is in place, and interest would keep accruing until then.
A reversal, or a ruling that narrows relief, would hit importers that skipped litigation. CBP says it cannot reliquidate finally liquidated entries on its own. Unless those importers sued in time, their share of the roughly $11B category would stay with the Treasury. Importers with their own trade court orders would keep their refunds, because the government has said it will not appeal those orders. The October 8 class would become the main route for everyone else. The government is expected to challenge it as a back door to universal relief.
Money, who pays, markets and what to watch
Two steps ahead. The class order may matter more than the appeal. If the Federal Circuit strikes only the universal injunction, a Rule 23(b)(2) class could deliver the same refunds, so the government would need to defeat certification as well. Delay itself helps the Treasury if passive class membership does not toll the two-year filing window. Buyers holding claims on finally liquidated entries would carry the most appeal risk.
The money
- United States Treasury: $11.4B to $40B. The low end is the finally liquidated category. CBP estimates it at about $11.4B, or 6.9% of IEEPA duties, before interest. The government’s brief says the universal orders now matter only for non-suing importers’ finally liquidated entries. Part of the $11.4B belongs to importers that sued, and the non-suers’ share is not disclosed. The high end is the roughly $40B of the $166B collected that had not been certified as of October 2, 2026, when $126B had been certified with interest. Cato puts about $25B of that in entries outside CAPE Phases 1 to 3, such as antidumping and countervailing duty entries. An affirmance and class relief could reach those entries. If the refund orders are affirmed, payment would run through CAPE and Treasury disbursement after the mandate. For class members, it would also require a class-wide refund order. Further review could push this into 2027 or 2028. If the orders are reversed, only importers that sue within the two-year window would be paid.[1][2][3][4][5] That is 6.6% to 23% of its annual revenue ($172B, Sep 2026).
- Figures used: United States Treasury, annual revenue $172B (Sep 2026)[6]
Who pays
- Federal taxpayers pay through the Treasury. No insurer, indemnity, or co-defendant shares the cost. CBO estimates IEEPA refunds of about $130B in fiscal 2026, and it projects a 2026 deficit of $2.1T.[7][8]
- Importers that filed their own trade court suits are not at risk in this appeal. The government’s brief says it will not appeal the hundreds of reliquidation orders already entered for them.[9]
- The money at stake belongs mostly to non-suing importers, and the class targets overwhelmingly small importers among the nearly 330,000 that paid IEEPA duties.[4][10]
- Where importers sold their claims, buyers collect the refund. One example is Alnus, which bought $38.2M of refund claims for about $25.7M.[11]
- Consumers who absorbed tariff costs receive nothing directly. Goldman Sachs analysts expected companies to cut prices more slowly than they raised them.[12]
Markets
- No reported share-price or bond move has been tied to rulings in the refund appeal.
- Refund claims trade on a secondary market that Sidley estimates at up to $100B. Claims reportedly traded at up to 60 cents on the dollar after the Supreme Court ruling, up from about 20 cents before it.[13]
- Later quotes reached upwards of 80 cents on the dollar as refunds began flowing, according to a market participant cited by Hedgeweek.[14]
- Oaktree Capital Management sued BJ’s Wholesale Club, alleging that BJ’s backed out of selling a $29M refund claim for about $20M.[11]
- American Eagle Outfitters said it had applied for about $190M in tariff refunds and expected a $140M net cash benefit.[11]
Collecting
- The payer is the United States, so solvency is not the risk. Access is. CBP says it lacks statutory authority to reliquidate finally liquidated entries without a court order.[3]
- Class certification alone is not a refund order. The class must still obtain a class-wide injunction directing CBP to reliquidate entries without IEEPA duties.[15]
- Once refunds are ordered, CAPE handles payment. As of October 2, 2026, about $1.1B was pending because importers had not provided or validated ACH banking details.[16]
- Refunds carry interest, so delay raises the Treasury’s eventual cost on any amounts it is ultimately ordered to repay.[17][12]
Beyond the parties
- The Federal Circuit hears all appeals from the trade court. Its ruling would therefore set the national rule on whether the trade court can order refunds for non-parties, or must do so through a class.[15]
- A reversal would push non-suing importers into individual suits before the two-year deadline runs. That would add to the hundreds of individual orders the trade court has already entered.[18][9]
- About $25B in entries sits outside CAPE Phases 1 to 3, including antidumping and countervailing duty entries. Importers have asked the court for a fourth phase to cover IEEPA duties embedded in those entries.[2]
- Lenders and claim buyers would need to reprice claims on finally liquidated entries. Credit agreements that treat refunds as collateral or require prepayment from them would also be affected.[13]
- The fiscal effect falls on taxpayers. CBO says customs collections in 2026 will come in about $250B below its February projection.[8]
What to watch
- Late 2026Government seeks review of Freestyle World class certification[15]
- Late 2026Trade court rules on request for CAPE phase covering antidumping entries
- Not yet scheduledFederal Circuit sets argument in consolidated refund appeal[3]
- Early 2027Two-year filing window may start closing for the earliest IEEPA entries[18][15]
- Late 2026CBP files next CAPE status declaration with the trade court[16]
Sources
- CBP starts paying out IEEPA tariff refunds for finally liquidated entries finance.yahoo.com · 2026-10
- IEEPA Refunds Update: Good Progress, Still Ways to Go cato.org · 2026-07
- DOJ Seeks to Vacate IEEPA Refund Injunctions diaztradelaw.com · 2026-08
- Trade Court Certifies Non-Litigant Importer Class in IEEPA Duty Refund Litigation dwt.com · 2026-10
- Effective Tariff Rates and Revenues (Updated October 14, 2026) budgetmodel.wharton.upenn.edu · 2026-10-14
- In and Out: A Decade of Federal Money, and the Tariff Surge That Was Refunded parityai.pro · 2026-10
- Deficit Tracker bipartisanpolicy.org · 2026-10
- Trump’s $200 billion tariff hit swells budget deficit to $2.1 trillion for 2026, CBO confirms fortune.com · 2026-08-10
- The Government’s Own Appeal Brief Just Made the Case for Suing Over Your IEEPA Refund frostlawaz.com · 2026-10
- CIT Certifies IEEPA Tariff Refund Class thompsonhinesmartrade.com · 2026-10
- Retailers, eager for cash, sell off rights to potential tariff refunds finance.yahoo.com · 2026-08
- CBO highlights the good news in Trump’s lost tariff revenue hiking the deficit by $2 trillion fortune.com · 2026-03-06
- IEEPA Tariff Refund Claims: Key Considerations for Lenders, Borrowers, and Claims Purchasers sidley.com · 2026-04
- Tariff refunds: How hedge funds are structuring a new short-duration credit trade hedgeweek.com · 2026-04
- IEEPA Refunds: CAPE Phase 3 and the Freestyle World Class Action leyton.com · 2026-10
- IEEPA Tariff Refund Update: CAPE Phase III Open cbh.com · 2026-10
- Hedge Funds Capitalize on Tariff Refund Opportunities cbiz.com · 2026-05
- The U.S. Government Appeals IEEPA Tariff Refund Order: What Importers Need to Know Now jw.com · 2026-06
Experimental AI analysis by Claude Opus 5.5 on Nov 4, 2026, built on the forecast above from this case’s record and public sources found by the model’s own web search. Figures are estimates as of the dates shown, and shares of value are computed by the site from the figures cited. Published without editorial review. Nothing here predicts the price of any security or is investment advice. How it is made