Department of Justice lawyers filed an opening brief Monday seeking to overturn a Court of International Trade (CIT) order that mandated blanket refunds for illegal tariffs, arguing the judge overstepped his authority by applying his ruling to companies that never filed a lawsuit. The appeal to the U.S. Court of Appeals for the Federal Circuit hinges on a June 2025 Supreme Court decision regarding birthright citizenship, which substantially limited the use of universal injunctions.
Protecting the Treasury from Non-Litigants
At the center of the dispute is CIT Judge Richard Eaton’s directive for U.S. Customs and Border Protection to issue refunds to all importers, not just the specific plaintiffs who challenged the tariffs. While the government has already processed and certified an estimated $100 billion in refunds, the current battle concerns duties on entries that were fully finalized where the administrative refund window has lapsed. The administration asserts that Congress explicitly prohibits CBP from reprocessing these entries and that businesses seeking repayment must individually sue within the statute of limitations.
“The CIT’s universal injunctions, requiring the government to refund IEEPA duties for all importers (including non-party importers), cannot possibly be squared with CASA,” the government brief stated, referencing the birthright citizenship case that curtailed sweeping judicial orders. The Justice Department's position is clear: the lower court has already entered hundreds of orders for companies that took legal action, and others are free to do the same.
Impact on American Business
Legal experts note that while the government’s procedural argument appears strong, the fallout will land squarely on domestic small-to-medium enterprises. The distinction between litigants and non-litigants creates a system where the recovery of unlawfully collected funds depends on a company’s budget for federal litigation, effectively prioritizing corporate legal departments over American manufacturers and importers who lack the resources to sue. The millions withheld from these businesses represent capital that cannot be reinvested in domestic hiring or wage growth, placing smaller players at a disadvantage against larger competitors who can afford to navigate the federal courts.