IEEPA Tariff Refund Update: Government Appeals CIT Refund Order and the Road Ahead for Importers

The U.S. Supreme Court in late February 2026 held in Learning Resources v. United States that the tariffs brought under the International Emergency Economic Powers Act (IEEPA) were unlawful. Following that decision, the Court of International Trade (CIT) ordered the federal government to refund all IEEPA tariff payments to all importers of record. The CIT partially stayed compliance with those orders while U.S. Customs and Border Protection (CBP) developed its Consolidated Administration and Processing of Entries (CAPE) refund infrastructure and provided the court with weekly status updates.

The government has represented that more than $95 billion has been queued for refund through CAPE and, by the end of June 2026, more than $40 billion in refunds should actually have been disbursed. For many importers, that progress is meaningful and welcome. But a large category of entries – those liquidated more than 80 days before the refund clock started (the finally liquidated category) – remains contested, with the government estimating the dollar exposure at potentially more than $30 billion.

The June 9 Hearing: What We Learned from CBP

On June 9, 2026, the CIT held a lengthy hearing as part of its order to show cause issued on May 27, 2026, directing the government to explain why the CIT should not lift the stay of its prior refund orders. CBP's Executive Assistant Commissioner for Trade Susan Thomas (EAC Thomas), testified on behalf of CBP. The hearing ended without the CIT lifting the stay but produced important disclosures about CAPE's scope and limits.

EAC Thomas reported that Phase 1 of CAPE has accepted claims covering approximately $90 billion of the total $166 billion in IEEPA tariffs collected and that approximately $23 billion has been approved and transmitted to the U.S. Department of the Treasury for refund. To underscore the scale of this effort: In all of the last fiscal year, CBP processed only 338,000 entries with tariff refunds of any type. In just the first six weeks of CAPE Phase 1, CBP has processed IEEPA refunds on nearly 8.5 million entries.

The Government's Appeal to the Federal Circuit

On June 3, 2026, the U.S. Department of Justice (DOJ) filed notices of appeal in the U.S. Court of Appeals for the Federal Circuit. At the June 9 hearing, DOJ reiterated its position that the CIT erred and the court cannot order the government to refund money to non-plaintiffs. Whether the CIT or DOJ is correct will be resolved at the Federal Circuit.

Government's Anticipated Arguments: Although the government has not yet filed its opening brief, anticipate it will argue that the CIT's refund orders function as impermissible universal injunctions under the Supreme Court's decision in Trump v. CASA, 606 U.S. 831 (2025). In practical terms, the government is expected to argue that importers who did not file their own actions at the CIT are not entitled to benefit from the court's refund orders. Under that theory, only importers who filed lawsuits at the CIT would be entitled to refunds of finally liquidated entries.

Plaintiffs' Anticipated Response: Plaintiffs are expected to argue that CASA does not control here. They may argue that the CIT is not an ordinary district court: Its statutory jurisdiction is uniquely tied to the uniform administration of customs duties, and an order requiring CBP to refund unlawfully collected tariffs on a universal basis is not an overreach but a necessary feature of the court's supervisory role. They may also argue that this case does not present the typical concern animating objections to nationwide injunctions. In the ordinary case, such an injunction forces nationwide policy before the merits are settled. Here, the merits have already been resolved by the Supreme Court: The IEEPA tariffs were unlawful from inception. The question is not whether to grant relief but whether the CIT may require uniform implementation of the Supreme Court's ruling. That posture may make this case materially different from the paradigm addressed in CASA.

Plaintiffs may also argue that the statutory framework for "final liquidation" simply does not apply in this context. The entire customs liquidation structure presupposes that the tariffs collected were lawfully imposed. Where the Supreme Court has held the tariffs were unlawful from the start, there is a credible argument that rules regarding the finality of liquidation are inapplicable – and that, to the extent any tension exists between those statutory provisions and the Supreme Court's ruling, the constitutional decision controls.

CAPE Refund System: Current Status and Upcoming Phases

CBP's CAPE refund program remains the primary vehicle for importer refunds. At the June 9, 2026, hearing before Judge Richard Eaton, CBP's executive assistant commissioner for trade, Susan Thomas, confirmed the following timeline:

• Phase 1 (Active). Covers entries that were not yet finally liquidated when refund processing began, as well as entries liquidated within the preceding 80 days (incorporating a 10-day buffer). Refunds are actively being processed and paid.
• Phase 2 (Launching June 29, 2026). Will cover reconciliation entries where 1) the entry is unliquidated or liquidated within 80 days of the Phase 2 filing date and 2) the reconciliation (Type 09) entry has not yet been filed. Both conditions must be met. EAC Thomas estimates Phase 2 will cover approximately 2.8 million additional entries with potential refunds of approximately $28.7 billion, bringing combined Phase 1 and Phase 2 coverage to roughly $130 billion of the $166 billion total. Importantly, Phase 2 will not cover all reconciliation entries. Entries filed before roughly May 31, 2025, that liquidated on a standard 314-day cycle will have liquidated more than 80 days before June 29, 2026, and fall outside Phase 2's scope. Importers with reconciliation entries from the earliest months of the IEEPA tariff period should not assume Phase 2 will capture those entries and should plan accordingly.
• Phase 3 (Targeted for Late July 2026). Will cover finally liquidated entries – those liquidated more than 80 days before the refund period. Critically, the government has stated that Phase 3 refunds will be processed only for importers who have filed lawsuits at the CIT. Approximately 4,000 plaintiff importers who have filed refund lawsuits are expected, if CBP proceeds as planned, to have all of their IEEPA tariffs refunded through CAPE Phases 1, 2 and 3 combined, regardless of liquidation status. Under the government's current position, importers who have not filed suit will not receive Phase 3 refunds through CAPE.

What Importers Should Do

The government's appeal has divided the importer universe into two groups: 1) those who filed at the CIT and 2) those who have not. For importers in the latter category, the risk is no longer theoretical. The government's current position is that importers who did not file at the CIT may wait indefinitely – and perhaps permanently – for refunds of finally liquidated entries.

Thus, it is recommended that importers take the following steps promptly:

1. Evaluate Your Exposure in Each CAPE Phase. Identify which of your entries fall within Phase 1 (proceeding normally), Phase 2 (reconciliation/ antidumping/countervailing duty entries (AD/CVD), targeted for June 29) and Phase 3 (finally liquidated).
2. Seriously Consider Filing a Protective Action at the CIT If You Have Not Already Done So. Given the government's appellate position and CBP's current refund plans, a protective filing may be the most effective step currently available to preserve refund rights for finally liquidated entries. A protective filing does not require abandoning CAPE; it preserves your independent right to seek relief if the appellate process produces adverse outcomes.
3. Continue Pursuing CAPE Refunds in Parallel. CAPE is expected to deliver refunds for many importers, particularly those within Phase 1. Do not assume that a CIT filing makes CAPE participation unnecessary.
4. Monitor Phase 2 Closely. Reconciliation entries and AD/CVD-affected entries present distinct timing and legal questions. With Phase 2 launching June 29, importers with significant reconciliation entry volumes should confirm eligibility promptly. Separately, importers with entries subject to both AD/CVD orders and IEEPA duties should note that AD/CVD entries for which the U.S. Department of Commerce has issued liquidation instructions were excluded from Phase 1. CBP could not process IEEPA refunds on those entries without interfering with the Commerce Department's liquidation timeline. Whether Phase 2 will accept these entries has not been confirmed, but importers with meaningful overlapping AD/CVD and IEEPA exposure should review CBP's CAPE Phase 2 guidance upon release to determine whether their entries become eligible.
5. Track the Federal Circuit Proceedings. The Federal Circuit's resolution of the government's appeal will be the defining legal event of the coming months. Holland & Knight will continue to provide updates as the briefing schedule is set and the court issues rulings.

Looking Ahead

The Federal Circuit appeal is likely to take months to resolve, and a subsequent petition for Supreme Court review cannot be ruled out. During that time, the universe of potentially affected entries will continue to grow as additional entries become finally liquidated.

Though the ultimate outcome remains uncertain, one point is already clear: The government has drawn a distinction between importers who filed at the CIT and those who did not. Importers who remain on the sidelines risk finding themselves excluded from certain refund programs if the government's position prevails.

For that reason, importers should not view CAPE participation and CIT litigation as competing strategies. Accordingly, importers should consider pursuing available CAPE refunds while simultaneously preserving their rights through a protective action at the CIT.

For more information or questions on navigating the current IEEPA tariff refund landscape – including filing a CIT lawsuit on your behalf, evaluating your exposure or advising on CAPE participation strategy – please contact the authors, who presented on the topic in a June 12, 2026, Holland & Knight webinar.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.