US Files Opening Brief at SCOTUS in IEEPA Tariff Cases

"To the President, these cases present a stark choice: With tariffs, we are a rich nation; without tariffs, we are a poor nation," Sauer said. Using language similar to that found in a few briefs before the U.S. Court of Appeals for the Federal Circuit (see 2508110029), the solicitor general said President Donald Trump has said the U.S. was a "dead country" one year ago and now, due to tariffs, "America is a strong, financially viable, and respected country again."

The Supreme Court has agreed to hear two cases on the IEEPA tariffs on an expedited basis, setting argument for the proceedings for Nov. 5 (see 2509180050). In one of the cases, Donald J. Trump v. V.O.S. Selections, the U.S. Court of Appeals for the Federal Circuit affirmed the Court of International Trade's ruling that the reciprocal and trafficking tariffs are a violation of the president's authority found in IEEPA (see 2508290073).

In the other, Learning Resources v. Donald J. Trump, the U.S. District Court for the District of Columbia, said IEEPA categorically doesn't provide for tariffs (see 2506200018). The case was pending before the U.S. Court of Appeals for the D.C. Circuit when the Supreme Court agreed to hear the case before the appellate court's judgment.

The U.S. said the court will now address the following questions in the consolidated cases: whether IEEPA allows for tariffs at all, whether the reciprocal and trafficking tariffs go beyond any tariff authority conferred in IEEPA, whether an unbounded tariff authority violates the Constitution's nondelegation doctrine and whether the D.C. federal district court had jurisdiction to hear the case.

In his brief, Sauer said "the lower courts could not agree on why, exactly, IEEPA does not authorize these tariffs." The solicitor general emphasized that the Learning Resources district court said IEEPA doesn't allow any tariffs, "largely because IEEPA does not expressly use the word 'tariffs,'" imposing an "unjustifiable 'magic words' requirement, contrary to this Court's case law." Sauer then said CIT "instead held that because another statute (Section 122 of the Trade Act of 1974) addresses balance-of-payment deficits, IEEPA cannot cover the same ground." However, these statutes are "overlapping and mutually reinforcing," the solicitor general argued.

The Federal Circuit struck down the tariffs for its own reasons, holding that IEEPA may authorize some tariffs "just not these tariffs, or any other tariffs that the court considers too enduring, too significant, or too widespread," the brief said. Sauer argued that neither IEEPA itself nor the major questions doctrine, which says the Executive can only regulate on issues of major economic or political significance upon explicit delegation by Congress, "allows courts to fashion such atextual, know-it-when-you-see-it limitations on the President’s emergency powers."

The solicitor general added that "such limitations are in direct violation of the separation of powers," stressing the fact that the president gets wide latitude in using broad delegations of authority by Congress in the realms of foreign affairs and national security.

The parties challenging the tariffs, among other things, argued that IEEPA categorically doesn't allow tariffs. Under this claim, the challengers said IEEPA, which lets the president "regulate ... importation" of property in which a foreign party has an interest, doesn't confer the power to impose tariffs. The U.S. argued that the term "regulate" is a "broad term that encompasses monetary exactions," adding that, when paired with "importation," the phrase "regulate ... importation" "unambiguously encompasses tariffs."

The government stressed the role of the power to "regulate" in the statutory context of IEEPA. Sauer said the term "regulate" is one of nine actions the statute lets the president take in the face of a national emergency. Of these actions, the president can "block," "nullify," "void," "prevent" and "prohibit" importations, meaning it would be "particularly anomalous" to read the term "regulate" as not allowing taxation while allowing the more extreme tool of banning all imports.

The solicitor general also argued that IEEPA's history "confirms it encompasses tariffs." Right before IEEPA was passed, President Richard Nixon used the Trading With the Enemy Act (TWEA), IEEPA's predecessor that used largely identical language, to impose a 10% duty surcharge on nearly all imports. In a key decision, Yoshida International v. U.S., the CAFC's predecessor court upheld this move as a valid exercise of the president's authority under TWEA.

The U.S. said the fact that Congress passed IEEPA after Yoshida was decided indicates IEEPA is an eyes-open delegation of broad tariff authority. Sauer cited the IEEPA House Report, which cited Yoshida's interpretation of TWEA as authorizing the "imposition of duties."

Sauer also sought to address various arguments raised by the D.C. district court in its Learning Resources decision, including the claim that "regulate importation" can't include duties, since IEEPA also lets the president regulate "exportation," and the imposition of duties on exports is explicitly unconstitutional. The solicitor general said that "reasoning lacks merit."

The brief said the premise of the claim is incorrect, since the Constitution only says no duties shall be laid on "Articles exported from any State," thus permitting duties on exports from territories and Washington, D.C. In addition, Sauer said the term regulate "carries its ordinary (fixed) meaning, whose broad contours are contextually shaped by the object of the regulation." Even if "regulate exportation" were read to include tariffs, that doesn't justify narrowly reading "regulate importation," the brief said.