US Asks DC Circuit for Stay of DC Court IEEPA Tariff Ruling
The U.S. on June 2 asked the U.S. Court of Appeals for the D.C. Circuit for an emergency stay of the D.C. district court's decision last week finding that the International Emergency Economic Powers Act doesn't confer tariff-setting authority (see 2505290037). The government said that while the district court's preliminary injunction only extends to the plaintiffs, two small importers, the ruling undermines the president's ability to negotiate trade deals and wield broader diplomatic power (Learning Resources v. Donald J. Trump, D.C. Cir. # 25-5202).
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The government concurrently filed a motion to stay the D.C. district court's preliminary injunction pending its appeal of the decision.
On May 29, the D.C. district court declared President Donald Trump's tariffs issued under the IEEPA to be invalid, preliminary enjoining their collection from two small importers, Learning Resources and Hand2Mind. Judge Rudolph Contreras said IEEPA doesn't allow the president to impose tariffs at all. The decision came a day after the Court of International Trade vacated Trump's executive orders imposing the tariffs, though the trade court didn't categorically say that IEEPA doesn't allow for tariffs (see 2505280068).
The government already filed for an emergency stay of the trade court's ruling before the U.S. Court of Appeals for the Federal Circuit. The appellate court granted an administrative stay while it mulls the emergency stay request (see 2505290039). The government has now filed an emergency stay motion before the D.C. Circuit as well, arguing that the D.C. district court got the issue wrong and that a stay is needed to allow the president to address important issues affecting U.S. economic and national security.
The U.S. stay motion before the D.C. Circuit differs from its stay motion before the Federal Circuit in a few key ways, one of which is that the government is arguing that the D.C. court doesn't have jurisdiction to hear the case. The government argued that the case should exclusively be heard before CIT, since Section 1581(i), the statute giving CIT exclusive jurisdiction to hear cases arising from U.S. laws that provide for tariffs, applies. Contreras disagreed, finding that since IEEPA doesn't provide for tariffs, he properly had jurisdiction to hear the case.
In response, the U.S. invoked the trade court's discussion of its own jurisdiction, which highlighted the role of the Harmonized Tariff Schedule in enacting the president's tariffs. The government said the challenged executive orders "imposed tariffs by modifying" the HTS, adding that the HTS "is a law of the United States that provides for tariffs." The president's modifications of the HTS "are likewise 'considered to be statutory provisions of law for all purposes,'" the brief said. Thus, this case arises out of a U.S. law providing for tariffs, the brief said.
In addition, the government said Contreras' interpretation "would perversely deprive a CIT ruling holding tariffs valid of any nationally uniform effect, because a district court that disagreed with the CIT could simply declare that the CIT lacked jurisdiction and issue a contrary ruling."
The U.S. also said denying a stay "would irreparably harm the United States," citing four declarations from Trump Cabinet officials discussing how tariffs are crucial to their ongoing negotiation efforts with many countries. These negotiations are "premised on the credible threat of enforcement of the IEEPA tariffs," Commerce Secretary Howard Lutnick said.
While Contreras said these harms flow from the trade court's permanent injunction against the EOs imposing the tariffs, the U.S. said "any ruling that calls into question the President’s ability to impose the challenged tariffs has significant detrimental effects on recent trade agreements and pending negotiations by undermining both the President’s leverage and the premise of the negotiations."