It’s on.

United States Court of International Trade Judge Richard Eaton has finally realized that the government is slow-walking refunds of IEEPA tariffs, possibly intent on retaining a large proportion of the $166 billion in unconstitutionally-imposed Customs duties. His Honor appears to be displeased. He has restated his order that the government refund ALL of the IEEPA tariffs unconstitutionally assessed. The government’s response is “no!”, and an announcement that they will appeal his refund order.

A battle is shaping up over IEEPA refunds, and importers will need to be pro-active to recover the duties they are owed.

The Story So Far:

Following the Supreme Court’s February 20, 2026 decision in Learning Resources v. United States, which struck down the IEEPA tariffs as ultra vires and unconstitutional, Judge Eaton – who was assigned all of the 4,000-plus IEEPA refund cases on the CIT’s docket – ruled that all importers should receive the benefit of the decision and receive refunds on the IEEPA duties they paid. Customs quickly responded that they didn’t have the capacity to do that. So the judge ordered them to get to work on a solution.

What resulted was Customs’ Consolidated Administration and Processing of Entries (CAPE) program – not a refund program per se, but a system for rewriting entries so that they are liquidated, or reliquidated, without regard to IEEPA tariffs. Participating importers would receive refunds of these tariffs when Customs liquidated or reliquidated their entries. Customs’ estimated that CAPE could process $127 billion worth of refunds out of the total of $166 billion unconstitutionally assessed. Customs recently reported that claims for refund of about $85 billion in IEEPA tariffs have been submitted through CAPE, with about $20 billion paid out.

But – and there are a lot of “buts” – CAPE only operates if the importer uploads a request for refunds; CAPE only processes entries which are unliquidated or were liquidated within the past 80 days, leaving a “gap” of liquidated entries. CAPE will not process entries on which a protest was filed, or which are subject to antidumping or countervailing duties, or which were designated as the basis for drawback claims, or which were flagged in Customs’ “reconciliation” program.

And CAPE does nothing for the millions of “informal” entries which were subjected to IEEPA tariffs.

Judge Eaton had ordered Customs to program its CAPE system to handle IEEPA duty refunds for entries which are “liquidated and final” – i.e., finally resolved by Customs, and for which the 180-day protest period has expired. But Customs did not carry out that command – and has now told the Court it has no intention of doing so.

No, Customs has now made explicit what many practitioners suspected – absent an importer-specific court order, it has no intention of paying refunds on entries which are “liquidated and final” – and more entries assume that status every day. The government is scheming to keep as much of the unconstitutionally-assessed $166 billion as it can. Notwithstanding that the Supreme Court struck down the tariffs as unconstitutional, unless you file a refund request in CAPE, the government is going ahead with assessing those tariffs in final liquidations, intent on keeping the money.

It’s the heist of the millennium.

The Coming Conflict

Judge Eaton is not pleased. He has ordered the government to file briefs by June 4 showing cause why Customs should not refund all IEEPA tariffs assessed. And he commanded Rodney Scott, the Commissioner of Customs, to appear in person in court on June 9, 2026, to testify about the refund process.

The government’s response is blunt. It will appeal the CIT’s refund order, taking the position that the Court cannot issue a “national injunction” and can only order relief on liquidated entries for the 4,000 or so companies which have filed cases with court, which cases are currently stayed. And if the Court insists on the Customs Commissioner appearing in person, the government will seek an order of mandamus from the Federal Circuit to block the Commissioner’s appearance.

The government’s audacity is off the charts. The Supreme Court has ruled that these tariffs are unconstitutional, and CBP has announced it will use procedural rules and jurisdictional limits to continue assessing these duties in liquidating entries, and keeping the unconstitutionally-assessed tariffs. A battle over IEEPA refunds is shaping up, which may take a year or longer to resolve.

Will CAPE Continue?

One question posed by the government’s defiant posture is whether Customs will continue to operate the CAPE system or suspend or terminate it.

Approximately 55,000 importers have filed applications to re-process their entries through CAPE, out of more than 300,000 importers who paid IEEPA duties. And only about 4,000 importers have filed refund cases in the CIT. Only one group of small importers, the plaintiffs in VOS Selections v. United States, have final court judgments awarding them refunds of IEEPA tariffs.

The possibility that Customs will stop or suspend the CAPE process is very real. While CAPE has been re-writing entries for importers, even if they didn’t file CIT cases, the system is voluntary and Customs could elect to shut it down. [But then again, the real question is, why did Customs require importers to apply for refunds of IEEPA tariffs at all, instead of just liquidating all entries without the IEEPA tariffs the Supreme Court shot down?]

How Importers Can Protect Themselves

Against this background, what can importers seeking IEEPA refunds do to protect their interests? Two things:

1. File protests against the assessment of IEEPA duties on entries when they liquidate. Importers are already doing this for entries which liquidated more than 80 days before their CAPE filing date. But if Customs suspends or shuts down the CAPE program and allows entries to liquidate with assessments of IEEPA tariffs, importers may need to file protests even for entries they submitted for refunds in CAPE. There is no guarantee that protests will provide a quick or satisfactory result. There is no time limit for Customs to process protests and some government officials have gone on record as claiming CBP’s assessment of IEEPA tariffs is a non-protestable “ministerial” activity, which could lead to another court battle.
2. Most importantly, file a protective action in the United States Court of International Trade, seeking refunds of all IEEPA tariffs paid. This is the one tested alternative that is guaranteed to work. Appellate courts have already held that when a Customs assessment is unconstitutional, protests are irrelevant and unnecessary. An importer can protect its right to refunds by filing a CIT action before the 2-year statute of limitations, which will begin to expire in February 2027. So, whether you’re shy about suing the government, fearful of retaliation, fearful of customers filing class action suits seeking a piece of the refunds, or have other reasons for not filing suit, you’ve run out of excuses. Only a CIT action is guaranteed to protect your refunds. The sooner you file, the better.

A big battle is shaping up, with tens of billions of dollars at stake. You may no longer be able to rely on CAPE to restore your unconstitutionally-taken tariffs.

A more technical memorandum is available here. As always, please contact a Neville Peterson professional if you have any questions.