Yesterday the U.S. Court of Appeals for the Federal Circuit (CAFC) issued an administrative stay of the injunction ordered the day before by the U.S. Court of International Trade (CIT) enjoining the International Emergency Economic Powers Act (IEEPA) tariffs put in place by President Trump.
The CAFC’s administrative stay will remain pending while it considers more substantive motions — meaning the Trump Administration’s Worldwide “Reciprocal” Tariffs and Canada/Mexico/China “Fentanyl” Tariffs will remain in place for now, pending the appellate court’s review of the motion for stay.
While the ultimate dispositions of these and related motions remain uncertain, they will certainly affect the status of the CIT’s injunction pending appeal.
Basis for Stay Requests
Within hours of the CIT’s Wednesday decision, the Government separately filed emergency motions to stay implementation of the injunction before both the CIT and the CAFC. The Government’s arguments in favor of a stay are substantively similar in its filings with the CIT and the CAFC.
The Government’s motions contend, for example, that permitting the CIT’s injunction to proceed would undermine “the President’s conduct of ongoing, delicate diplomatic efforts” and “preclude[] the President from using his powers under IEEPA to meaningfully respond to other threats.” The Government also invokes “protect[ion of] the public fisc” and argues that the Government is less likely to be made whole if the injunction moves forward yet the Government ultimately prevails. Ancillary lines of argument criticize the imposition of a nationwide injunction without addressing class certification requirements (before the CIT), as well as an alleged failure by the CIT to address the four factors for injunctive relief (before the CAFC). In the alternative, the Government also proposes that the courts stay “injunctive relief as it applies to nonparties.”
Next Steps for the Litigation
At present, motions to stay the CIT’s injunction remain pending before two courts: the CIT and the CAFC. The CIT provided plaintiffs until Monday, June 2, to respond to the Government’s motion and will likely issue its decision shortly thereafter, possibly before completion of briefing before the CAFC, which concludes on June 9. If the CIT declines to issue a stay, the CAFC would proceed to adjudicate the motions. While a precise deadline has not been defined, the nature of the relief requested suggests a short decision timeline, perhaps as soon as a week after the conclusion of briefing.
In the Government’s motion for stay before the CAFC, it also stated its intent to “seek emergency relief from the Supreme Court…to avoid the irreparable national-security and economic harms at stake” absent interim relief from the lower courts.
However the question of a stay is resolved, merits briefing in the Government’s substantive appeal will also begin before the CAFC. The speed with which the merits appeal proceeds may depend in part on whether a stay of enforcement of the CIT’s injunction is granted.
Another Federal Court Enjoins the IEEPA Tariffs, but Stays Enforcement
In a separate judicial proceeding, the U.S. District Court for the District of Columbia (DDC) held yesterday that IEEPA does not authorize the President to impose tariffs. The DDC’s legal rationale differed from that of the CIT in two important respects. First, the DDC held that the “statutory phrase ‘regulate . . . importation,’ as used in IEEPA, does not encompass the power to tariff.” The CIT’s opinion, by contrast, appeared to recognize that IEEPA may confer some tariff-making authority upon the President. Second, the DDC found that because IEEPA itself does not authorize tariffs, the challenge to IEEPA-based tariffs falls outside the jurisdiction of the CIT. This conflict in the DDC’s and CIT’s approaches increases the prospect of these challenges ultimately ending up before the Supreme Court, especially if the split holds at the appellate level.
The Order accompanying the DDC’s decision declared IEEPA reciprocal tariffs and the IEEPA fentanyl tariffs on the People’s Republic of China to be unlawful and preliminarily enjoined the Government from collecting the foregoing tariffs from the plaintiffs in that case. Unlike the CIT’s order, which applies to all retaliatory and fentanyl imports, consistent with the CIT’s nationwide jurisdiction, the DDC’s order is expressly circumscribed to plaintiffs’ imports. Furthermore, the DDC granted a 14-day stay for the Government to pursue an appeal, which the Government noticed on the same day.
Managing Supply Chains
Pending final court decisions on whether the CIT’s injunction will be implemented pending the Government’s appeal, importers may monitor recent entries to ascertain which were assessed IEEPA tariffs. The attorneys, licensed customs brokers, compliance specialists, and economists of Cassidy Levy Kent have extensive experience counseling companies in a wide range of industries on tariff matters as well as how to optimize their supply chains for tariff considerations and maintain U.S. market access.
This post edited May 30 in light of the CIT’s updated order’s granting plaintiffs until June 2 to file their response.