12 US States Tell CAFC Recent SCOTUS Decision on Injunctions Doesn't Impact CIT Ruling in Tariff Suit

In addition, the scope of CIT's injunction "comports with the Constitution’s requirement that 'all Duties, Imposts, and Excises shall be uniform throughout the United States,'" the brief said. If the government is suggesting that a narrower injunction would let them collect "unlawful" IEEPA tariffs from nonparties but not collect them from the parties to the case, "or to continue to collect them in some parts of the country but not in the plaintiff States, they have not explained how that regime would comport with the uniformity requirement," the states said.

While many of the amicus briefs filed in the case supported all elements of the states' case, one in particular, filed by small company Burlap and Barrel, also focused on the issue of nationwide relief. The company argued that the Federal Circuit may affirm relief to "parties and non-parties alike through class certification."

Specifically, Burlap and Barrel said the high court's CASA decision leaves open at least two avenues for the CAFC to affirm the trade court's decision. First, the appellate court can find that the plaintiffs are unlikely to have "complete relief" without an injunction. "Our domestic economy is complex and the Plaintiffs are likely to suffer harm from the challenged orders even with respect to items they are not importing or purchasing directly," the brief said. Even if the CASA decision requires an injunction to be confined to the plaintiffs, "it should also apply to businesses and residents within the Plaintiff-States, harm to whom translates directly to harm to those states."

Second, the CASA decision said class action procedures can support extending injunctions to nonparties, the company said. There's "ample support in the record" of this case for the Federal Circuit to certify a class of all importers, the brief said. Joinder is "impracticable," since there are thousands of importers; there are "common questions of law" regarding the tariffs; the plaintiff importers and states are "plainly typical class representatives because they challenge the same Tariff Orders, on the same basis, and allege the same economic harm" as the other class members; and plaintiffs "have no conflicts of interest with class members," the brief said.

In May, the trade court enjoined the executive orders implementing the reciprocal tariffs and tariffs on China, Canada and Mexico meant to combat the flow of fentanyl (see 2505280068). CIT didn't say IEEPA categorically doesn't provide for tariffs, though the court said IEEPA doesn't allow for tariffs to address trade deficits issues in light of the specific authority to address these issues under Section 122, and that the fentanyl tariffs don't "deal with" the declared emergency, since IEEPA can't be used to create leverage over another country to address a problem.

The government appealed the decision, arguing that IEEPA allows the president to impose tariffs. It said Section 122 and IEEPA can be read harmoniously and that the president can use IEEPA to create leverage over another country (see 2506250037). In response, the five importers serving as co-plaintiffs with the states told the Federal Circuit that the government's defenses of the tariff actions fall short (see 2507080061).

The states now join the importers, arguing in their reply that IEEPA can't be used to usurp the limits for addressing trade deficits found in Section 122, and the statute can't be used merely to give the president "leverage in negotiations with trading partners." Alternatively, they said, IEEPA categorically doesn't provide for tariffs.

In making its arguments, the states invoked the Supreme Court's recent decision in FCC v. Consumers Research. Oregon argued that "Congress has delegated to the executive branch some authority to adjust the rate of tariffs in response to world events -- including, in Section 122 ..., authority to impose limited tariffs to deal with a large and serious trade deficit." It noted that those delegations are "specific and bounded." These limited delegations reflect that "authority to impose tariffs" affects the entire U.S. economy and "so demands greater 'guidance' from Congress than other delegations of authority."

The states argued that the major questions doctrine "counsels against" reading IEEPA to delegate the president's claimed and "sweeping" tariff authority. This doctrine says the executive must rely on specific authority from Congress when regulating issues of massive economic and political significance.

Under the government's reading of IEEPA, which lets the president "regulate ... importation," Congress gave the president "the unreviewable authority to impose tariffs of any amount for any length of time on all of that trade -- and even to override the express limits Congress set in other delegations of tariff authority like Section 122," the states argued. "Common sense suggests that Congress would not bury that vast power in the otherwise innocuous phrase 'regulate … importation.'"

The government argued that the major questions doctrine doesn't apply to the president and that it loses force when the statute relates to the "President's authority to conduct foreign policy. In response, the states said the doctrine "applies equally regardless of whether the President acts directly or through an agency," adding that delegations to the president's "subordinates are just as much delegations to the President himself." The states added that the Supreme Court also has applied this doctrine to statutes that only applied in the event of "a war or other military operation or national emergency."

Before the Federal Circuit, the U.S. also bemoaned the trade court's lack of consideration of the four equitable factors underlying injunctive relief. CIT's merits decision didn't discuss these factors, though it did discuss them in a later order.

In response, the 12 states said that "the basis for injunctive relief in this case rests largely on resolution of the substantive issue -- whether the President exceeded his statutory authority in imposing the challenged tariffs," since the public has no "interest in the perpetuation of unlawful agency action." The government's claim that the injunction harms U.S. negotiating efforts is belied by the notion that the government can't "be heard to complain about damage inflicted by its own hand," the brief said.

In any event, various administration officials have made public remarks saying that the trade court's ruling hasn't harmed ongoing negotiations, undermining the very same officials' "apocalyptic predictions" made in court about the effect of the ruling, the states argued.