IEEPA and Beyond: Emerging Topics at the Court of International Trade
Last month’s Judicial Conference of the U.S. Court of International Trade (CIT) gave members of the bar a chance to take stock of where trade litigation stands and where it is headed. The CIT is not an institution we discuss enough on this blog, so I thought I’d take advantage of the opportunity to say a bit about the Court here. The Supreme Court’s decision on the International Emergency Economic Powers Act (IEEPA) in Learning Resources v. Trump has understandably absorbed much of the recent litigation attention. But the CIT’s docket, and the questions it will face in the coming months, extend well beyond one statute.
The toolkit behind the headlines
For those who have only recently turned their attention to the CIT, one might think that the Court is faced with difficult questions of executive authority all the time. The high-profile cases of the last eighteen months include some of the IEEPA tariff challenges (including V.O.S. Selections – the case in which the Supreme Court invalidated the IEEPA tariffs, even though the caption went to the D.D.C. case, Learning Resources, because Learning Resources had taken the unusual step of petitioning while its intermediate appeal was pending and so got there first), the refund proceedings that followed and that continue, the Section 122 litigation now before the U.S. Court of Appeals for the Federal Circuit, and the continuing Section 301 disputes.
Fortunately or unfortunately, the rest of the trade rulebook gets less press but it remains the core of the CIT’s work. If you discount the IEEPA cases (original and refund), the bulk of the docket continues to be antidumping and countervailing duty cases and evasion cases, followed by customs protest cases. The high-profile executive authority disputes have grown on top of that docket and are now intertwined with it, rather than replacing it.
Apart from all that, here are some of the less obvious trends that I see from the docket:
· Trade law is again the vehicle for large doctrinal questions. This is not new. J.W. Hampton and Field v. Clark are both trade cases, and both are foundational in U.S. administrative law. But trade is back as a setting where courts work out constitutional and structural questions, including now with respect to the scope of relief and the management of mass litigation.
· The CIT is a site of procedural and administrative innovation. Handling thousands of related claims, directing refund mechanisms, and deciding who gets the benefit of a ruling are not routine tasks, and the solutions developed at the CIT may not stay there.
· The media focus on pending litigation, while important to litigants and potential litigants, obscures much of what is actually happening in trade law and policy as readers of this blog will know well. Deals negotiated under tariff pressure, threats of wartime tariffs, secondary tariffs and their waivers, exemptions, and other forms of nontransparent rulemaking all shape the trade landscape, and most have yet to reach a courtroom.
· The states have entered the debate. Their role as plaintiffs is a notable development, and it has historical resonance. State-level tariffs were a principal reason the Constitution gave the federal government the power to collect tariffs in the first place. Now states are in court defending the prerogatives of Congress. That reversal points to a larger question that Learning Resources leaves open: the scope of the Foreign Commerce Power.
IEEPA’s tail
The effects of the Learning Resources decision will unfold for some time, and they are most visible in administrative law.
Start with Maple Leaf Fish, the Federal Circuit’s deferential approach to reviewing presidential trade actions. The question raised at the Judicial Conference by my co-panelist Devin Sikes is whether Maple Leaf survives Loper Bright, the Supreme Court’s analysis in Learning Resources, and the broader evolution of administrative law principles. What we did not have time to discuss in detail at the Conference is that there is likely a case for reading Maple Leaf narrowly rather than burying it, both because Learning Resources was so divided and because IEEPA is a different case from a statute that everyone agrees authorizes tariffs. Where the delegation is conceded, the question of how much deference the president’s judgment receives remains live. Many litigants will want to avoid that question, and the courts may let them. But it likely won’t stay avoided for long. Relatedly, the courts’ treatment of the foreign relations exception under the Administrative Procedure Act may bear on how these disputes are framed.
In addition, IEEPA’s tail is long. The president has relied on it to eliminate the de minimis exemption from tariffs for low-value goods, as well as for the elimination of the duty privileges afforded foreign trade zones, also known as free trade zones or FTZs. Each of these has considerable economic impact, especially the former. But only one lawsuit was filed to address either imposition of tariffs, and in that decision, which followed Learning Resources, the CIT panel supported the Administration’s IEEPA-premised imposition of tariffs. FTZ tariffs continue to be collected despite the Supreme Court’s decision and despite that they remain derivative of IEEPA. Similarly situated in their IEEPA-derivative nature are the so-called trade deals the Administration has announced with foreign trading partner governments that raise tariff rates for goods from those countries from what Congress has prescribed.
Of other note
On that same theme, several CIT-related topics deserve more attention than they are getting. I’ll pick just five:
· Conspicuous docket absences. Section 232 has been remarkably free of litigation relative to its importance. Although there have been a couple recent cases, the importer losses of the first Trump term and the interesting and creative ways the second term is playing out may have chilled some of the appetite for litigation on that front. Likewise, Section 338 is now before the CIT, but it took a while and it remains only the project of the Liberty Justice Center.
· Footnote 1. The Supreme Court in Learning Resources noted in its first footnote that the plaintiffs’ claims fell within the exclusive jurisdiction of the CIT. What sort of door might this footnote have opened as the Administration undertakes similar actions through other authorities?
· More labor- and environment-related disputes. While not new, the CIT is faced with cases on the application and enforceability of statutes related to forced labor (not just Section 301). And cases are now arising regarding the Commerce Department’s finally-implemented MMPA “unilateral harmonization” fisheries rule, as I call it, to name just two. Both of these topics are longstanding areas of congressional delegation (one from 1930 and the other from the 1970s) and there are others like them as Tim Meyer explained at the Conference. But now enforcement has picked up, and the CIT is faced with adjudicating whether the government is getting it right, which leads me to…
· Enforcement, enforcement, enforcement. The emphasis on enforcement comes as no surprise, given the DOJ’s standing up of its Trade Fraud Task Force, and recent new rules for customs compliance. All this government activity is expected to keep the trade bar and the CIT busy well into the new year.
· Trade issues that haven’t yet reached the Court. Some policy questions have not prompted litigation, and it is not obvious whether or how they would come before the CIT. Much of that will depend on how the Court’s residual jurisdiction clause is read (see above re footnote 1). Moreover, import litigation does not exist in isolation from investment screening, sanctions, and export controls, yet each is governed by different institutions and, often, different courts. It is hard to litigate those matters singularly. A specialized court with defined jurisdiction, as the CIT is, invites the question of whether specialization is a strength or a limit when the policy tools it reviews work with others it does not.
A look back
The Court’s fiftieth anniversary is not far off, so I went back to the first Judicial Conference, held a few years after the Customs Courts Act of 1980 made the Court a full Article III tribunal with equity powers and broad residual jurisdiction, to review what was discussed then. The Chief Judge at the time used his remarks to defend the Court against charges of activism, arguing that it was applying familiar administrative law doctrines and carrying out congressional intent.
The caseload then looked very different from today’s. Some 6,000 cases were filed in three years, 95 percent of them denied-protest cases and only three percent antidumping or countervailing duty cases. Yet the AD/CVD cases produced 37 percent of the slip opinions. Defendants won 59 percent of final decisions.
Of perhaps greatest interest: from among 46 injunction decisions in those first three years, only 14 granted relief. Casting this against the present moment: a court that once granted about a third of injunction requests has, through one judge, held that all importers who paid IEEPA duties are entitled to the benefit of the decision. That is the power the Chief Judge celebrated in the Court’s early years, now exercised at a likely unanticipated scale. Remedies are now the frontier.
What the scholarship tells us
I also surveyed what scholars have written about the CIT in its almost 50 years. The writing is dominated by remedies and review, not the Court as an institution, and it follows the policy headlines, moving also from the more technical to the constitutional: remedies and trademark in the 1980s, trade agreements and the environment in the 1990s, process and doctrine in the 2000s, jurisdiction and the ITC in the 2010s, and executive power and tariffs in the 2020s.
The gaps are just as telling. Customs classification appears in only a handful of articles, and valuation in even fewer, even though these are core CIT work. China appears in only a few titles, though it is arguably the dominant subject of modern AD/CVD litigation. Some of this is probably a wording effect (I analyzed article titles available in Westlaw). But the lesson is that the scholarship skews toward the big questions, and the day-to-day work of the CIT remains understudied.
The fact that the CIT Judicial Conference was sold out is a reflection of the Court’s importance today. CIT is at the center of national and international economic policy in a way its creators could not have imagined five decades ago.