Tariff Refund Lawsuits Surge Amid Uncertainty About US Plans

The number of companies suing for tariff refunds has spiked in recent weeks, a sign that many importers aren’t confident yet in the Trump administration’s plans to create a claims process after the US Supreme Court struck down the president’s trade policies.

Nearly 1,000 new cases were filed in a US trade court since March 1, according to a Bloomberg News review of publicly available records. That’s roughly a third of the more than 3,000 tariff lawsuits brought over the past year.

Customs officials have told a judge that they’re building a new system to handle repayment demands after he ordered the administration to launch the refund process. But trade lawyers say there are still unknown factors that make it prudent for clients to sue in court, including whether the government will exclude certain tariff payments from its process or challenge the scope of the judge’s authority to manage it.

“It all boils down to uncertainty,” said Michael Roll, a partner at Roll & Harris who has filed tariff refund lawsuits, including more than a dozen in the last week alone. If the administration’s claims system doesn’t work as intended or there’s disagreement about a specific company’s tax situation, “the advantage is you’re there, you’ve filed in court, now you have a seat at the table,” he said.

Spokespeople for Customs and Border Protection and for the Justice Department, which has handled the government’s litigation, did not immediately respond to requests for comment.

The latest group of plaintiffs has included the companies behind apparel brands Versace and Adidas, motorcycle maker Ducati North America, shipping giant DHL Express, and a trio of airlines — Alaska Airlines, Hawaiian Airlines and Horizon Air.

Related: Trump Faces 2,000 Tariff Lawsuits Following Supreme Court Loss

In a statement, DHL said that it was taking “precautionary measures to protect the interests of our customers even though we see good progress in the matter being addressed by the court and CBP.” The company said that it “will provide further information as soon as additional clarity becomes available.”

Representatives of the other companies didn’t immediately respond to requests for comment.

Judge Richard Eaton of the US Court of International Trade is presiding over all of the tariff lawsuits after the Supreme Court on Feb. 20 declared Trump’s use of the International Emergency Economic Powers Act unlawful. Earlier this month, Eaton ordered Customs and Border Protection to recalculate duties paid by importers without the challenged levies, a process that normally would trigger refund payments.

The administration objected, telling Eaton that redoing the tariff calculations under the current system would be nearly impossible and asking for a delay to streamline the process by creating a web-based portal. Eaton agreed to the pause but has required regular updates. As of March 12, an official said the portal was about 70% complete. The next report is due Thursday.

Given the growing pool of interested parties, attorneys for a filtration technologies company whose case has become the de facto lead lawsuit asked Eaton on Wednesday to change how he’s managing the litigation. They asked him to create a new “master case” and appoint a steering committee of lawyers to coordinate responses to the government. Eaton denied the request with no explanation.

Trade lawyers said that although Eaton’s order to begin refund calculations was styled as a broad directive, it was worded in a way that may not cover all of the tariffs that hundreds of thousands of importers paid on millions of goods that entered the US under Trump’s use of the emergency powers law. The government has said it collected approximately $166 billion in contested duties, and has committed to paying interest on refunds.

Jessica Rifkin, a principal at OFW Law who has filed refund lawsuits over the last two weeks, said that it isn’t clear when the government’s portal will be fully operational. She said that an official shared in the last progress report that the system wouldn’t be available right away for companies whose tariff payments present “complicated scenarios.”

Some attorneys have expressed concern that the government’s process will place the burden on importers to pursue repayments, and that smaller businesses may not have the resources or expertise to participate.

Rifkin said she’s also looking for clarity on whether the Justice Department will challenge the reach of Eaton’s power. The trade court’s ability to impose so-called universal relief, regardless of whether companies are part of the legal proceedings, hasn’t been settled. The Trump administration has broadly advocated restricting judicial authority to block its actions and won a favorable ruling last year from the Supreme Court.

“Filing an individual suit is an insurance policy,” Rifkin said. “There’s so much money at stake. If you can afford to do so, take all the routes.”

The case is Atmus Filtration Inc. v. US, 26-cv-1259, US Court of International Trade.

Photo: The Port of Los Angeles. Photographer: Eric Thayer/Bloomberg