US Moves to Transfer 2 IEEPA Suits to Trade Court, Montana Plaintiffs Push Back

One of the cases was filed in a U.S. district court in Florida by a single, small importer to challenge the use of IEEPA to impose tariffs on China related to the flow of fentanyl into the U.S. (see 2504040036). The other was filed in a federal court in Montana initially by two members of the Blackfeet Nation tribe, who were later joined by two additional members, to challenge President Donald Trump's tariffs on Canada (see 2504100039). The Montana case challenged the IEEPA tariffs imposed on Canada to address fentanyl flows, the adjustment to these tariffs by the reciprocal IEEPA duties and Section 232 steel and aluminum tariffs.

The U.S. moved to transfer both to CIT, first noting the court's jurisdictional statute, 19 U.S.C. Section 1581(i), which says the court has "exclusive jurisdiction" over "any civil action" arising out of "any law of the United States" that provides for "tariffs, duties, fees or other taxes on the importation of merchandise for reason other than the raising of revenue" or under any law providing for "revenue from imports." The government said the "Supreme Court has confirmed that" this law and the others enshrining CIT's exclusive jurisdiction over trade matters "mean exactly what they say."

When one exclusive grant of jurisdiction applies, "all other district courts are 'divested of jurisdiction' over the action," the brief said.

The government argued that this exclusive grant of jurisdiction to CIT "serves an important function: it consolidates this area of law 'in one place ... with an already developed expertise in international trade and tariff matters,' thus ensuring a 'degree of uniformity and consistency.'" If claims like the ones raised by importer Simplified and the Blackfeet Nation members could be brought in any court, "there would be a risk of inconsistent results and different tariffs imposed in different regions of the country, in direct conflict with Congress’s statutory design," the briefs said.

Citing a host of cases heard by CIT regarding presidential proclamations imposing duties and "various Presidential actions imposing tariffs," including the massive Section 301 challenge and host of cases challenging Section 232 action, the U.S. said the case law is clear in making the trade court the proper home for the cases.

The government added that "similar cases" have been treated similarly. In 1980, the U.S. Court of Appeals for the 9th Circuit transferred a claim on a 10% duty imposed under the Trading With the Enemy Act, IEEPA's predecessor, to the Court of Customs and Patent Appeals, the predecessor to the U.S. Court of Appeals for the Federal Circuit, which hears appeals from the trade court. In addition, the Court of Customs and Patent Appeals "adjudicated another TWEA matter brought in the correct forum," United States v. Yoshida International.

Specifically, in the Montana case, the Blackfeet Nation members argue that the IEEPA and Section 232 duties imposed on Canada violate the Jay Treaty, which was signed in 1794 and "excludes Indigenous people from paying duty on goods carried across the [Canadian] border." The complaint also said the duties violate the Fifth Amendment's guarantees of due process.

Luke Mathers, a trial attorney in DOJ's international trade field office, appeared in the case and said both of these claims similarly belong in the trade court. Characterizing the Jay Treaty as "long-extinct," the government said claims related to the treaty and the Fifth Amendment belong at CIT "because they arise out of laws providing for tariffs or the administration or enforcement of those laws." The U.S. said Jay Treaty and Fifth Amendment claims have been "routinely" heard at CIT, noting a 1974 case heard in Maine that found a Jay Treaty claim belonged in the Customs Court.

The Blackfeet Nation members filed their reply opposing the motion to transfer a day later, arguing that the Montana court has jurisdiction, the trade court doesn't have jurisdiction and that public interest requires keeping the case in the members' home.

The brief said the Montana court has jurisdiction, since the issues are fit "for judicial decision" now and would suffer "immense" hardship by "withholding court consideration" until "some later date." Harm suffered by the Blackfeet Nation members includes great damage to the "farming, construction, and tourist" industries, the brief said.

The members added that CIT doesn't have jurisdiction, since the national emergencies declared by the president to impose the tariffs don't relate to trade. The Canada IEEPA tariffs relate to the flow of fentanyl, a declared public health crisis, and not a trade issue. The brief said courts have read Section 1581(i) as a "residual jurisdictional provision, not a broad grant of preemption to any case that mentions the word trade or tariff." The members said the "clear authority is that this Court has jurisdiction," adding that the government has "not claimed otherwise" and merely said CIT has "better" jurisdiction.

The brief also said IEEPA doesn't mention tariffs, placing it beyond the reach of Section 1581(i), given that it's not a law providing for tariff-setting authority. Counsel for Simplified told us that the importer's jurisdictional claim in Florida rests on a similar defense (see 2504080072). The president has "numerous tariff avenues available to respond to a true national emergency," none of which were used here, the brief said. IEEPA now can't be used to "kick every other federal court to the curb on every constitutional claim raised."

Monica Tranel, counsel for the members and former two-time Democratic nominee for Congress in Montana, also said in the motion that she's not convinced by the government's invocation of challenges to TWEA. Tranel said the Yoshida court found that the "limited nature" of the TWEA duty surcharge "fell within the explicit grant from Congress," adding that IEEPA was passed to "narrow TWEA."

The members additionally argued that the public interest is served by keeping the suit in Montana. The members "live here," have their "historic homelands" in the state" and request relief that is "unique to Montana," the brief said.