Significant new developments in federal court last week may materially affect importers’ ability to obtain refunds of tariffs paid under the International Emergency Economic Powers Act (“IEEPA”).
On May 29, 2026, U.S. Customs and Border Protection (“CBP”) filed a motion with significant implications for all importers seeking IEEPA refunds. Most notably, for the first time since the Supreme Court struck down the IEEPA tariffs, CBP asserted that it lacks the legal authority to issue IEEPA refunds on finally liquidated entries (i.e., on entries 180 days or more past liquidation) without an importer-specific court judgment.
For importers who had been counting on the refund process to eventually cover their finally liquidated entries, CBP’s new position is a significant setback: if CBP’s reasoning prevails, those importers may need to file individual cases in federal court to obtain refunds. Here is what importers need to know.
1. Background
As we have discussed previously here, the Supreme Court issued a landmark 6-3 ruling on February 20, 2026 invalidating the IEEPA tariffs. Immediately thereafter, the U.S. Court of International Trade (“CIT”) issued its first order directing CBP to liquidate unliquidated entries subject to IEEPA tariffs “without regard to” those duties, and to reliquidate any liquidated entries not yet final.[1] That order was immediately suspended after CBP represented that it was developing a new electronic module, the Consolidated Administration and Processing of Entries (“CAPE”), within its Automated Commercial Environment (“ACE”) system to calculate and process IEEPA duty refunds.
After a few procedural twists and turns that saw the case of Euro-Notions Florida, Inc. v. United States become the lead CIT case for IEEPA refunds, the Court issued a similar order that was likewise immediately suspended.[2] Most recently, the Court issued—and again suspended—a comparable duty refund order in V.O.S. Selections, Inc. v. United States,[3] which was the original case that had gone to the Supreme Court.
Since April 20, CBP’s CAPE system has been processing duty refunds with only minor technical issues, and some importers have received actual duty refunds through CAPE. However, CAPE is largely only accepting declarations for unliquidated entries and entries that are less than 80 days past liquidation. CBP has previously stated that while CAPE will not be able to process finally liquidated entries, a functionality for those entries would be added at a later stage.[4] The most recent developments, outlined below, contradict that statement.
2. Key Developments This Week in V.O.S. Selections
A. May 27, 2026 — Show Cause Order[5]
On May 27, 2026, in V.O.S. Selections, CIT Judge Richard Eaton, whom the CIT has designated as the lead judge for IEEPA refunds, directed CBP to show cause why the Court should not remove the suspension of its order requiring CBP to liquidate or reliquidate, without regard to IEEPA duties, all entries entered subject to IEEPA duties. This means that finally liquidated entries would have to be reliquidated.
The Court ordered each party to submit a brief by June 4, 2026. A hearing on the Order to Show Cause is scheduled for June 9, 2026.
The Court directed CBP Commissioner Rodney S. Scott to appear in person to answer the Court’s questions regarding the anticipated timing of Customs’ compliance with its order.
This Order signals that Judge Eaton is growing impatient with the pace of CBP’s compliance in issuing IEEPA refunds and is actively considering lifting the stay that has held the universal refund order in suspension.
B. May 29, 2026 — CBP’s Motion to Amend Order[6]
CBP’s response, filed last Friday, has significant implications for all importers. The filing contains two elements.
1. CBP Asserts It Lacks Authority to Refund Finally Liquidated Entries Without an Importer-Specific Federal Court Judgment
This is the most consequential aspect of CBP’s filing.
CBP asserted, for the first time since the Supreme Court struck down the IEEPA tariffs, that it lacks the legal authority to issue IEEPA refunds on finally liquidated entries without an importer-specific court judgment, stating: “Once an entry is finally liquidated, CBP has no authority to reliquidate or refund money without a court order . . . Defendants have maintained that refunds for such imports must be handled through importer-specific orders requiring reliquidation once CBP has completed programmatic changes for other categories of refunds the Court has directed it to prioritize.”[7]
In effect, CBP is stating that for finally liquidated entries, each importer of record needs a specific judgment (i.e., their own suit under the CIT jurisdiction statute at Section 1581(i) of Title 28 of the United States Code) for CBP to grant refunds.
CBP has further stated that the CIT’s universal injunction ordering CBP to reliquidate final entries, including those made by importers who have not sued in this Court, exceeds the Court’s jurisdiction and equitable authority,[8] and that it intends to appeal the universal injunction and seek a stay of that injunction except as to the particular importer plaintiffs in each case.
This position appears to contradict guidance currently published on CBP’s IEEPA FAQs web page, which indicates that entries for which liquidation is final will be included in upcoming phases of CAPE.
The deadline for the government to appeal the CIT’s duty refund order in the Euro Notions case is June 6, 2026. Based on CBP’s newly-articulated position, we expect CBP to file an appeal to the Federal Circuit before the deadline.
2. CBP Seeks to Substitute Witnesses for Commissioner Scott
CBP requested that the Court amend its May 27 order, which currently requires CBP Commissioner Rodney S. Scott to appear in court for live testimony on June 9, 2026, on the grounds that Commissioner Scott is a Senate-confirmed Executive Branch official who cannot be ordered to testify except under extraordinary circumstances.
CBP requested that the Court permit either Susan Thomas, CBP’s Executive Assistant Commissioner for Trade, or Brandon Lord, the CBP Executive Director, Trade Programs Directorate who has submitted bi-weekly CAPE status updates to the Court, to testify in the Commissioner’s place. CBP has requested that the Court rule on this motion by Tuesday, June 2, 2026, and has indicated that if the motion is denied, it will promptly seek mandamus relief from the Federal Circuit.
The CIT promptly denied CBP’s Motion to Amend Order, setting the stage for a governmental appeal of the CIT’s duty refund order in the Euro Notions case later this week.[9]
3. Practical Guidance for Importers
In light of these developments, we offer the following observations:
- Importers with Entries More Than 80 Days Past Liquidation (Not Eligible for CAPE under CBP’s new theory): Continue Filing Section 1581(i) Suits. CBP has now taken the position that importer-specific court orders are required to obtain refunds on finally liquidated entries. Importers with finally liquidated entries that are not eligible for CAPE should continue to file individual suits under 28 U.S.C. § 1581(i) before the CIT. While it is possible that the CIT will reject CBP’s position on jurisdiction, we continue to view individual federal court actions against CBP as the most reliable path to securing duty refunds.
- Importers with Entries Eligible for CAPE: Consider Filing CAPE Declarations. CAPE has been processing duty refunds, and some importers have already received actual refunds through CAPE. However, based on the developments outlined above, it now appears highly likely that CBP will appeal the duty refund orders in Euro-Notions and V.O.S. Selections, with the deadline to appeal Euro-Notions falling on June 6. Should CBP appeal and obtain a stay, the availability of CAPE may be suspended during the process of litigation (or as a way to stall payouts). Accordingly, importers with entries eligible for CAPE (i.e., unliquidated entries or entries within 80 days of liquidation) should consider filing CAPE declarations before any appeal can disrupt the process.
- Continue to File Protests on Entries Reaching Final Liquidation. Under 19 U.S.C. § 1514, importers have 180 days from the date of liquidation to file a protest with CBP. Filing a timely protest prevents a liquidation from becoming final and preserves legal rights with respect to IEEPA duties assessed on those entries. Note that these entries are not eligible for CAPE, and a protest is a separate administrative step that is not a substitute for a § 1581(i) lawsuit.
- Monitor the Docket Closely. This situation remains highly dynamic. Key upcoming dates include the parties’ show cause briefs due on June 4, the June 6 appeal deadline in Euro-Notions, and the June 9 hearing in the V.O.S. Selections matter. We will continue to monitor developments and will provide updates as material events occur. We expect this coming week to be critical in shaping the landscape for IEEPA duty refunds.
We are actively monitoring these dockets and are available to discuss the implications for your specific entries at any time.
FOOTNOTES
[1] Atmus Filtration, Inc. v. United States, Court No. 26-01259, ECF No. 29 (Ct. Int’l Trade Mar. 5, 2026) (Amended Order).
[2] Euro-Notions Florida, Inc. v. United States, Court No. 25-00595, ECF No. 12 (Ct. Int’l Trade Apr. 7, 2026) (Order).
[3] V.O.S. Selections, Inc. v. United States, Court No. 25-00066, ECF No. 82 (Ct. Int’l Trade Apr. 17, 2026) (Order).
[4] Declaration of Brandon Lord, Atmus Filtration, Inc. v. United States, Court No. 26-01259, ECF No. 51, at 3 (Ct. Int’l Trade Mar. 31, 2026) (“CBP intends to expand CAPE to process finally liquidated entries in a subsequent phase of development.”).
[5] V.O.S. Selections, Inc. v. United States, Court No. 25-00066, ECF No. 86 (Ct. Int’l Trade May 27, 2026) (Order to Show Cause).
[6] V.O.S. Selections, Inc. v. United States, Court No. 25-00066, ECF No. 88 (Ct. Int’l Trade May 29, 2026) (Defendants' Motion to Amend Order).
[7] Id.
[8] Id., citing Trump v. CASA, Inc., 606 U.S. 831 (2025).
[9] V.O.S. Selections, Inc. v. United States, Court No. 25-00066, ECF No. 89 (Ct. Int’l Trade May 29, 2026) (Order).
*McKenna Lee is a law clerk in the firm's Washington, D.C. office.