This update follows our March 5 memo regarding Judge Eaton’s unprecedented Orders in Atmus Filtration.

Bottom Line

Judge Eaton has made his position clear that all IEEPA duties must ultimately be refunded to all importers. The scope of that relief is unprecedented, but the power of the U.S. Court of International Trade to order such universal relief beyond the parties to a lawsuit has never been attempted. As we previously advised, this bold approach may run into problems with the Supreme Court’s recent decision in Trump v. CASA., which indicated that District Courts must shape injunctive relief only to protect the interest of parties to litigation.

While Customs expressed hope to the Court that it might be able to create an administrative relief process, it has not affirmatively stated that such a process is feasible. And the government may appeal any final order or injunction Judge Eaton enters, at least to the extent it purports to grant relief to non-parties to litigation. With the situation very much in fluz, our advising remains unchanged:

Importers seeking refunds should continue to pursue actions under 28 U.S.C. § 1581(i) in the Court of International Trade while monitoring liquidation and protest deadlines and assembling entry data necessary to support refund claims so that we are prepared with necessary data when and if an administrative refund process is in place.[1]

Amended Scope of the Refund Order

On March 5, Judge Eaton amended the earlier order directing U.S. Customs and Border Protection (“CBP”) to liquidate or reliquidate entries without IEEPA duties, suggesting that his directive applies only to entries on which IEEPA duties were imposed on or before April 14, 2025 (the date the V.O.S. Selections test case was filed in the CIT).

Immediate Implementation Temporarily Suspended

Judge Eaton on March 6, 2025 issued an additional order suspending the requirement that CBP immediately implement the Court’s refund orders from earlier this week. The Court’s amended order of March 5 therefore remains in effect, but its immediate implementation has been paused while the mechanics of the refund process are addressed.

Court Emphasizes Urgency of Refund Process

In a separate order issued the same day, the Court emphasized the magnitude of the refund obligation. Judge Eaton noted that CBP collected approximately $165 billion in IEEPA duties, which must now be refunded with interest. According to the Court, interest is accruing at roughly $650 million per month, a cost to the taxpayer that could reach $10 billion if refunds are not issued before year-end.

To ensure progress, the Court ordered the government to submit a report by March 12, 2026, describing CBP’s progress in developing a refund mechanism.

CBP Declaration

CBP Executive Director Brandon Lord advised the Court that CBP cannot feasibly process refunds entry-by-entry. CBP estimates that more than 53 million entries were subject to IEEPA duties, with approximately 20 million entries still unliquidated. Mr. Lord claims that manual processing of refunds for all entries would require more than 4.4 million personnel hours.

CBP therefore proposes developing new functionality within CBP’s Automated Commercial Environment (“ACE”) which would allow refunds to be issued on an importer basis rather than entry-by-entry. Under the proposed approach:

• importers would submit a declaration through ACE identifying entries on which IEEPA duties were paid;
• ACE would validate those entries and recalculate duties without the IEEPA tariffs;
• CBP would verify the calculations and liquidate or reliquidate the entries; and
• the Department of the Treasury would issue aggregated electronic refunds with interest.

CBP indicated that it believes this functionality could be operational within approximately 45 days. Whether this is a realistic timeline remains to be seen.

Practical Implications

These developments reinforce the advising outlined in our earlier memoranda.

Although the Court has directed refunds of IEEPA duties, the scope of that relief will likely be subject to appellate review, particularly in light of the Supreme Court’s decision in Trump v. CASA addressing nationwide injunctions. In addition, the amended order now limits the current refund directive to duties imposed on or before April 14, 2025, meaning that further judicial action may be required to address later-imposed tariffs.

The CBP declaration also confirms that the refund process will likely require active participation by importers, including identifying affected entries and submitting claims through ACE.

Please contact a Neville Peterson professional if you have any questions regarding IEEPA or refund procedures.

[1] Importers should also ensure they are registered on the ACE portal to receive ACH refunds.