Client Alert: December 8, 2025
Major U.S. Importers File CIT Lawsuits To Preserve IEEPA Tariff Refund Rights
A growing number of large U.S. importers including Costco are filing protective lawsuits in the U.S. Court of International Trade (CIT) to preserve their rights to duty refunds in case the Trump Administration’s IEEPA-based tariffs are struck down by the U.S. Supreme Court. With billions of dollars at stake, companies are moving quickly to ensure that they are not foreclosed from obtaining duty refunds if the Court’s decision does not automatically extend relief to all affected importers.
Possible Outcomes Of The U.S. Supreme Court IEEPA Tariffs Case
The U.S. Supreme Court in V.O.S. Selections v. Trump, for which oral arguments were heard on November 5, 2025, could rule that the IEEPA-based tariffs are unlawful. One potential outcome—speculative, but meaningful from a risk management perspective—is that the Court may not address the refund process or it may grant relief/refunds only to the named plaintiffs in the case before it, without automatically extending that relief to all similarly situated importers. In that latter scenario, companies that did not file protests with CBP for liquidated entries or initiated CIT actions could find themselves without a viable refund pathway, unless Customs & Border Protection (CBP) were to provide an administrative refund process.
A second possibility is that the Court could hold the tariffs unlawful but remand the case to lower courts to determine who is entitled to refunds. This occurred in the well-known Harbor Maintenance Fee (HMF) litigation, where the U.S. Supreme Court in 1998 struck down the fee as a constitutionally prohibited export tax, but left it to lower courts to determine the availability of refunds. That process took years, during which many exporters lost their ability to recover the invalidated fees that they had paid. The legacy of the HMF litigation is a cautionary lesson: even when the underlying fee or duty is held unconstitutional, refund eligibility can hinge on whether a trader has already preserved its individual claims.
Why Filing In The CIT Matters: Preserving Refund Rights Post-Liquidation
Under U.S. customs law, importers can amend their entries through a post-summary correction (“PSC”) before liquidation or challenge duties it was levied by CBP once CBP “liquidates” an entry (i.e., when CBP formally finalizes the duty assessment). CBP typically liquidates entries within 10 months of importation or within one year by operation of law. Following liquidation, an importer’s refund rights are sharply reduced. Importers have up to 180 days after liquidation to file a protest with CBP, and if that deadline is missed, the entry becomes final and unreviewable. It is possible for the courts to mandate that affected past entries be reliquidated, but that is not guaranteed. At that point (180 days after liquidation), even if the tariff is later ruled unlawful, the importer may not be able to obtain a refund unless it has a pending CIT case enjoining the liquidation of their entries as well as contesting the legality of the IEEPA tariffs.
A CIT lawsuit therefore can function as a protective tolling mechanism. It keeps the affected entries open for judicial review and ensures that the importer is not barred from seeking refunds if the U.S. Supreme Court’s ruling is favorable or remanded to lower courts to sort out the procedures.
Why These Cases Are Being Filed Now: The Liquidation/Protest Clock Is Ticking
The timing of the recent influx of CIT lawsuits is directly tied to the mechanics of liquidation:
CBP typically liquidates entries ~10 months after importation.
The earliest entries subject to the challenged IEEPA tariffs are now approaching liquidation, meaning importers face imminent deadlines to file a protest, a lawsuit (or both), or potentially risk losing refund rights.
Once liquidation occurs, importers have only 180 days to file a protest with CBP (a protest can cover multiple entries), after which the entry becomes finalized absent a pending protest or CIT litigation.
There are some legal questions of whether a protest can even be filed challenging the IEEPA tariffs because protests are for contesting actions by CBP but in this case, the IEEPA tariffs were actions by the President through Executive Orders and not CBP decisions on classification, valuation, country of origin or such.
For many importers, by the time the U.S. Supreme Court issues a decision and potentially the lower courts decide on the eligible persons for duty refunds or procedures, a substantial portion of their imports subject to IEEPA-tariffs may have already liquidated, and/or the protest window expired.
This is why a growing number of sophisticated importers are filing CIT lawsuits to challenge the IEEPA tariffs and to seek duty refunds. It is possible that the liquidation and protest timelines could close before the judicial process fully resolves the legality of the tariffs and scope of or manner of relief. Protective litigation may be a means of ensuring that refund rights do not expire while the courts deliberate.
Implications for Companies That Paid IEEPA Tariffs
The recent wave of CIT filings signals that many importers are making an affirmative choice to preserve their potential refund rights, rather than wait for the U.S. Supreme Court’s decision or for potential CBP administrative relief, if any. Given the looming liquidations of early importations from this year subject to IEEPA tariffs, companies with meaningful exposure may wish to evaluate the risks of inaction now.
Our firm is actively assisting clients in assessing litigation options, liquidation timelines, and strategies for filing protective CIT actions. It may be an opportune time to evaluate past 2025 importations (e.g. reviewing liquidation dates of customs entries and potential refund amounts) promptly to determine whether a protective lawsuit is warranted.
Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. LMD Trade Law PLLC (and its attorneys and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.
