The Department of Justice (DOJ) said it intends to appeal a Court of International Trade (CIT) order involving refunds of duties collected under the International Emergency Economic Powers Act (IEEPA) and a separate order requiring U.S. Customs and Border Protection (CBP) Commissioner Rodney S. Scott to appear for live testimony.
The dispute centers on how CBP should return duties that the court has described as unlawfully collected, whether refunds can be made on entries that have already become finally liquidated, and whether the court can require the CBP Commissioner to testify in person about the government’s refund process.
According to the court order, the matter involves $166 billion in IEEPA duties. The court stated that the remedy for unlawful collection is for the United States Government to refund the unlawfully collected duties. DOJ, however, argued that the court’s refund order exceeds the CIT’s authority when applied broadly to importers that have not filed lawsuits.
May 29 DOJ Filing: https://storage.courtlistener.com/recap/gov.uscourts.cit.17080/gov.uscourts.cit.17080.88.0.pdf
May 29 Judge Richard Eaton Response: https://storage.courtlistener.com/recap/gov.uscourts.cit.17080/gov.uscourts.cit.17080.89.0.pdf
LATEST DISPUTE OVER IEEPA DUTY REFUNDS
The disagreement focuses on how IEEPA duty refunds should be handled across different categories of entries.
DOJ stated that CBP is already in the process of refunding approximately $85 billion of IEEPA tariffs paid on entries that are unliquidated or nonfinal and therefore still within CBP’s control. The filing also said that additional refund claims continue to be filed and that CBP is deploying system enhancements intended to allow the vast majority of entries flagged for reconciliation to be processed.
The more complex issue involves entries that are finally liquidated. Once an entry becomes finally liquidated, DOJ argued that CBP does not have authority to reliquidate or refund money without a court order. DOJ said refunds for importers that filed cases in the Court of International Trade should be handled through importer-specific orders requiring reliquidation.
For finally liquidated entries tied to importers that have not filed suit, DOJ argued that the court’s broader refund order exceeds the CIT’s jurisdiction and equitable authority. DOJ said it intends to appeal the universal injunction and seek a stay of the injunction, except as applied to the specific importer plaintiffs in cases where the court entered the injunction.
DOJ ARGUES NEED FOR IMPORTER-SPECIFIC RELIQUIDATION ORDERS
What Are Finally Liquidated Entries?
In customs practice, liquidation is the final computation of duties, taxes, fees, or drawback owed on an entry. When an entry becomes finally liquidated, the ability to change the duty treatment becomes more limited.
In this case, DOJ’s position is that entries more than 90 days past liquidation cannot be refunded by CBP unless a court orders reliquidation on an importer-by-importer basis. DOJ said the CIT has not issued those importer-specific reliquidation orders for all affected parties and does not have authority to order refunds on finally liquidated entries for importers that have not sued.
The court’s order reflects a different concern. Judge Richard K. Eaton wrote that all unlawfully collected IEEPA duties should be refunded to the importers that made deposits. He also noted that while CBP developed the Consolidated Administration and Processing of Entries (CAPE) program, there are still billions of dollars in duties that currently cannot be processed by the CAPE program but still must be refunded.
HOW IS CBP PROCESSING IEEPA REFUNDS?
CBP has developed the CAPE program within the Automated Commercial Environment (ACE) to support the processing of IEEPA duty refunds. DOJ described the refund work as a phased process that requires additional system enhancements, particularly for categories of entries that are not yet easily processed through current capabilities.
The court acknowledged that CBP moved quickly to develop CAPE and that billions of dollars of IEEPA duties have already been returned to importers, with billions more being processed. At the same time, the court stated that most refunds processed so far are understood to have gone to large importers rather than small importers.
Judge Eaton wrote that Customs has not yet proposed a method for complying with the court’s order to refund all unlawfully collected duties, including amounts owed to small importers.
DOJ ASKS TO SUBSTITUTE CBP COMMISSIONER’S TESTIMONY
The court ordered CBP Commissioner Rodney S. Scott to appear in person on June 9, 2026, to answer questions about the anticipated timing of Customs’ compliance with the court’s refund order.
DOJ asked the court to amend that order and allow either Susan Thomas, CBP Executive Assistant Commissioner for Trade, or Brandon Lord, Executive Director of the Trade Programs Directorate in CBP’s Office of Trade, to testify instead. DOJ argued that Thomas and Lord have more direct knowledge of the refund process, refund limitations, CAPE functionality, and the operational obstacles involved in processing refunds.
DOJ also argued that courts rarely compel high-ranking government officials to testify unless extraordinary circumstances exist, the official has first-hand knowledge, and the necessary information cannot be obtained from another source. DOJ said Commissioner Scott is a high-ranking executive official and that other CBP officials are better positioned to answer the court’s operational questions.
HOW DID THE COURT RESPOND?
Judge Eaton denied DOJ’s motion to substitute another CBP official for Commissioner Scott.
In the order, the court stated that Commissioner Scott is responsible for the assessment and collection of duties and, when required, their refund. The court also described the Commissioner as both a policymaker and an administrator.
Judge Eaton wrote that Commissioner Scott’s testimony is necessary to determine whether it is the government’s policy to return all unlawfully collected duties, either by complying with the court’s order or by another means. The court specifically pointed to the need to understand whether the government’s policy is to refund duties to both large and small importers.
The court also acknowledged the separation of powers concerns that can arise when an executive official is ordered to appear in court, but said it had taken those issues into account in denying the government’s motion.
WHAT HAPPENS NEXT IN THE IEEPA REFUND CASE?
DOJ said it will appeal both the broader refund order involving finally liquidated entries and the order requiring Commissioner Scott to appear before the court. DOJ also said it would seek mandamus relief from the Federal Circuit if the motion to substitute another official was denied.
The next stage of the dispute is expected to focus on the scope of the court’s refund authority, the treatment of finally liquidated entries, CBP’s ability to process refunds through CAPE, and whether the Commissioner must personally testify about the government’s refund position.
For importers, the case remains significant because it addresses the mechanics of recovering IEEPA duties, the limitations tied to liquidation status, and the practical gap between refund obligations and CBP’s current refund-processing capabilities.
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