US, Importer Spar on Bid to Stay Suit on End of de Minimis While IEEPA Decision Is Appealed
The U.S. and Detroit Axle, an importer challenging the elimination of the de minimis threshold for Chinese products, sparred at the Court of International Trade on whether to stay the company's case in light of the trade court's decision to vacate all tariff executive orders issued by President Donald Trump under the International Emergency Economic Powers Act (Axle of Dearborn, d/b/a Detroit Axle v. Dep't of Commerce, CIT # 25-00091).
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The government said the U.S. Court of Appeals for the Federal Circuit is expeditiously hearing its appeal of the CIT decision, which affects Detroit Axle's case, and the importer won't suffer irreparable harm, since it can get refunds at the end of the case. In response, Detroit Axle said it makes a different claim than those brought by the litigants in the lead IEEPA tariff cases now before the Federal Circuit, and it will clearly suffer irreparable harm from a stay.
Last week, the trade court vacated Trump's executive order imposing tariffs on and eliminating de minimis for Chinese products, though that decision was temporarily stayed while CAFC mulls an emergency stay motion (see 2505280068). The CIT judges rejected the executive order for failing to meet IEEPA's requirement that the action "deal with" the declared crisis, which concerned the flow of fentanyl.
Separately, Detroit Axle filed suit to challenge the order's elimination of de minimis for Chinese products as a violation of the de minimis statute (see 2505220063). The importer argued that if Trump wanted to ax the de minimis threshold, he had to do it through notice-and-comment rulemaking.
After CIT vacated the executive order, the government moved for a stay in Detroit Axle's case, arguing that the order in the importer's case is also at issue in the lead IEEPA tariff cases. As a result, the "existence or scope of an injunction pending those appeals affects this case." A decision from the Federal Circuit on the government's emergency stay motion "will, at the very least, clarify the breadth of this Court’s injunction," meaning a stay here will "promote judicial economy and conserve party and judicial resources," the U.S. said.
The government added that Detroit Axle won't suffer irreparable injury if a stay is imposed, since the importer didn't challenge the executive order, which was issued April 2, until May 16, nor did it seek to enjoin the government from implementing the order until May 21. "Axle is thus hard-pressed to argue that it is suffering actual and immediate hardship when it neglected to swiftly challenge the EOs in question," the brief said.
In response, Detroit Axle said its "delay" in filing suit doesn't mean it won't suffer irreparable harm if the case is stayed. The elimination of de minimis wasn't effective until May 2, and "it was eminently reasonable for the company to wait a couple of weeks before incurring the major expense of a lawsuit in case the Executive reversed course, as has repeatedly happened over the last few months," the brief said. "Nothing about this timeline undermines Detroit Axle’s severe irreparable harm."
Detroit Axle additionally argued that granting a stay "would mean the government wins this case," since the importer will be "forced to shutter most or all of its business and lay off hundreds of employees" if de minimis isn't restored by the end of June. "The government should not be allowed to renege on its agreement" to speedily litigate the case "and effectively win the case through delay," the brief said.
The importer is also making a different argument than the lead IEEPA tariff plaintiffs, Detroit Axle said. A stay is "unwarranted," it said, since the company is seeking a preliminary injunction of the order "on independent grounds that can and should be adjudicated regardless of the outcome of the appeals" in the IEEPA tariff cases.
While the government said the company could just get refunds if it wins, Detroit Axle needs urgent relief, it said. The end of de minimis for Chinese goods "is causing the company severe and irreparable harm by forcing it to pay 72.5% tariffs on shipments of Chinese goods from its Mexico facility to consumers in the United States -- shipments that should be completely protected from tariffs by the exemption," the brief said.