Importers Urge SCOTUS to Grant Cert to Align the 2 Major IEEPA Tariff Suits

The lead IEEPA tariff case, which was brought by 12 U.S. states and five importers, is before the U.S. Court of Appeals for the Federal Circuit. CAFC held oral argument in the case on July 31 (see 2507310058), while oral argument in Learning Resources' and Hand2Mind's case won't be heard by the D.C. Circuit until Sept. 30. The importers said it's "very possible" the Federal Circuit will issue an opinion before the D.C. Circuit even holds oral argument, and the losing party in the CAFC case, titled V.O.S. Selections v. Trump, will quickly seek Supreme Court review.

If the high court grants certiorari in V.O.S. Selections, it should do so in Learning Resources' and Hand2Mind's suit before judgment, the brief said, adding that that isn't an "unusual course for this Court to take." The importers noted that the government has "endorsed such an approach in this very case," citing the Solicitor General's brief opposing the importers' motion to expedite the certiorari briefing in which the Solicitor General said the high court could grant review in this case if it grants review in the CAFC case. The Solicitor General made an identical argument in response to the importers' efforts to align briefing in the D.C. Circuit with the Federal Circuit's consideration of V.O.S. Selections.

Now that the government has defeated those motions, it now seems to "pivot" by claiming the Supreme Court should just address the jurisdictional question in the CAFC case or grant review in the present case after the D.C. Circuit has issued judgment (see 2507170052). In response, the importers noted that the question of the Federal Circuit's jurisdiction is undisputed in V.O.S. Selections, stripping the high court of the ability to address one of Learning Resources' and Hand2Mind's central points.

In V.O.S. Selections, the Court of International Trade said President Donald Trump exceeded his authority under IEEPA in implementing the reciprocal tariffs and tariffs on China, Canada and Mexico (see 2505280068). Conversely, the D.C. district court said IEEPA categorically doesn't provide for tariffs (see 2505290037). In so ruling, the D.C. court said CIT doesn't have exclusive jurisdiction under Section 1581(i), which says only the trade court will hear cases arising out of U.S. laws providing for tariffs. The D.C. court said the case arises out of IEEPA, which doesn't provide for tariffs.

The trade court, meanwhile, said the case arises out of Trump's executive orders modifying the Harmonized Tariff Schedule. Since the statute implementing the HTS says presidential modifications to the schedule are laws of the U.S., the case arises out of the EOs, CIT said. In contesting Learning Resources' and Hand2Mind's bid for Supreme Court review, the government said the case is especially improper for high court review given that the threshold issue is whether the district court had subject-matter jurisdiction.

In response, the importers said jurisdiction isn't an "obstacle to certiorari," but rather a "critical threshold issue this Court must decide before adjudicating the lawfulness of the IEEPA tariffs." While the government initially agreed that the case turns on whether IEEPA provides for tariffs, "they have since changed tack" and claimed the case arises out of the president's modifications to the HTS.

The importers said the case doesn't arise out of the modifications to the HTS, since the phrase "arises out of" refers to the "substantive law" that "gives rise to Petitioner's claims, not the technical vehicle for implementing an unlawful action." The proper analysis is to look at which law requires interpretation, and in this case, the answer is clearly IEEPA. No interpretation of the HTS is needed, and, tellingly, the trade court didn't interpret the HTS at all in making its ruling, the brief said.

In addition, Learning Resources and Hand2Mind said that the EOs aren't laws of the U.S. for Section 1581(i) purposes, since they were "made without statutory authority." While CIT articulated the HTS theory of jurisdiction, "it never explained why a challenge that requires no analysis of the HTSUS should be considered an action that 'arises out of' the HTSUS or modifications thereto," the brief said.

And while the government said it would be "nonsensical" for the case to arise out of IEEPA, since this would mean the jurisdictional and merits questions overlap, the importers argued that this overlap is quite "common."

The importers then went on to further flesh out their merits arguments, claiming that IEEPA, which lets the president "regulate ... importation," doesn't provide for tariffs. The companies drew a sharp distinction between the power to regulate and the power to tax, noting that the government can't identify a "single statute where 'regulate' has been understood as authority to tax or tariff." Nothing suggests IEEPA is the first time when Congress chose to expand the meaning of "regulate" to include the power to tax, though there's plenty of "indication to the contrary, including that none of the surrounding seven verbs in IEEPA’s detailed scheme deals with the power to raise revenue," the brief said.

In its reply, the government argued that the major questions and non-delegation doctrines, which were championed by Learning Resources and Hand2Mind, don't apply to foreign policy issues and that the major questions doctrine doesn't apply to the president. However, the importers said the issue here is "distinctly" an issue of Congress' tariff power and not an issue of the president's power over foreign policy. The brief added that presidential action isn't exempt from the major questions doctrine, and every "appellate decision on the books has said otherwise."