Trade Court Certifies Non-Litigant Importer Class in IEEPA Duty Refund Litigation

On Thursday, October 8, the U.S. Court of International Trade (CIT) shifted the landscape in the ongoing litigation over tariffs unlawfully imposed under the International Emergency Economic Powers Act of 1977 (IEEPA) when it certified a class of importers currently excluded from claiming refunds of IEEPA duties that were paid on older imports. As we have discussed, Judge Richard K. Eaton's extant universal injunction requiring U.S. Customs and Border Protection (CBP) to refund all IEEPA duties collected to all importers who paid them is stayed for parties that have not yet filed suit pending the government's partial appeal. The class certification order in Freestyle World, Inc. v. CBP, the second ever for the CIT, may eventually provide an alternative to filing an individual case and open the refund spigot to non-litigant importers of older entries. Read on for more on the decision and what to consider if your company has impacted claims.

Status of IEEPA Duty Refund Claims

As readers will recall, CBP has made full refunds available to importers for most types of entries that are "unliquidated" or liquidated within the last 80 days through the Consolidated Administration and Processing of Entries (CAPE) claims portal. CBP created CAPE following Judge Eaton's March 4 refund order, extending access to all importers based on its voluntary reliquidation authority under 19 U.S.C. § 1501. As of October 2, according to the government's latest court filing, over 75% of the roughly $166 billion in IEEPA duties collected have been refunded with interest.

Then, beginning October 6, CBP opened "Phase 3" of CAPE, which is also capable of processing refunds on finally liquidated entries, meaning, for CAPE purposes those that liquidated more than 80 days ago. CBP is granting Phase 3 access, on a rolling basis, to nearly 7,000 importers that have filed nearly 4,000 lawsuits in the court, all of which have received individual orders mirroring Judge Eaton's injunction. CBP did not release a Cargo Systems Messaging Service (CSMS) announcement of the opening or update its informational website, as has been customary in earlier phases, but the same government filing describes a successful launch.

However, non-plaintiff importers with finally liquidated entries have been locked out of CAPE while the government appeals their right to claim refunds of duties based on the injunction, arguing that its universality is barred by Supreme Court precedent. Enter Freestyle World, a sustainable baby products company that filed a purported class action complaint on February 19, one day before the Supreme Court decision, which would later become the test case for IEEPA duty refunds. After the government filed its appeal on June 3, which delayed CAPE access for this third category of claims, Freestyle World filed a motion for class certification on June 23.

Freestyle World Decision

In his October 8 opinion and order, Judge Eaton granted Freestyle World's motion "in the hope, and expectation, that this certification will lead to the liquidation or reliquidation of all of the entries on which the unlawful IEEPA duties were imposed, and the refund of those duties to the importers of record that paid them." The class is defined as:

All importers of record who paid duties imposed by the Challenged Tariff Orders between February 1, 2025, and February 19, 2026, excluding any entity that has separately filed an action seeking to recover IEEPA duties payments.

Judge Eaton held that the proposed class met all four requirements of CIT Rule 23(a), also found in its counterpart in the Federal Rules of Civil Procedure, namely numerosity of members, commonality of questions, typicality of claims, and adequacy of representation. Nearly 330,000 importers paid IEEPA duties, and most would be part of the class—the common questions among the class members being "whether the Government has lawfully imposed and collected IEEPA duties on their entries, and whether the Government must liquidate or reliquidate their entries without regard to the IEEPA duties." Any individual refund claim would be calculated by CBP upon liquidation or reliquidation rather than by the court itself after an injunction was issued. For the same reasons, the proposed class satisfied Rule 23(b)(2), which allows for certification to award classwide injunctive and nonmonetary relief if an opposing party "has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole."

Finally, the motion was held timely under Rule 23(c). The complaint was styled as a class action alleging all of the requirements of Rule 23 for class certification. The class certification motion was filed before a merits decision in Freestyle World and only once the need for a class became clear. The government also opposed class certification on the basis that it would allow for one-way intervention in that a potential class member could "wait[] on the sidelines to see how the lawsuit turns out" and then join or leave the proposed class. However, Rule 23(b)(2) contains no opt-out provision that could allow for one-way intervention, although importers could essentially opt out by filing an individual case.

Implications for Non-Plaintiff Importers

The class presumably covers all importers who paid IEEPA duties but haven't filed suit for claims on finally liquidated entries, so relief would eventually be available to those importers without the need to file individual cases. This begs the question of whether non-plaintiff importers with refund claims on finally liquidated entries should or must still file their own cases. That determination depends on a number of factors, in particular how large those claims are and how quickly an importer wants its money back. Regarding claim size, smaller claims may not merit the legal and filing fees required for a case, which can be avoided by remaining in the class.

But more importantly, regarding refund timing, although the class of non-plaintiff importers that paid IEEPA duties has been certified—which the government is all but sure to appeal, for many reasons—Judge Eaton has not yet issued a classwide relief order, and based upon his opinion and order is unlikely to do so before the government answers the complaint. On the other hand, in DWT's experience, obtaining an individual refund order from the CIT has been relatively smooth and quick. Barring an error in the pleadings, we have seen that Judge Eaton has issued an individual refund order within four business days of filing a case, after which CBP has granted future CAPE access within one business day of receiving importer information. Therefore, filing an individual case is still likely to yield a favorable result most quickly.

In any case, for those affected importers with smaller claims or in no rush, we remind you that the limitations period for filing a refund case under 28 U.S.C. § 1581(i) runs through February 4, 2027, at the earliest, allowing a limited time to see how the class litigation plays out. The CIT established a website where documents related to the litigation will be posted and available. We also note that IEEPA duties were still being collected through February 23, 2026, and "Challenged Tariff Orders" does not include those imposing IEEPA tariffs on Brazilian and Indian goods, so any importers with these claims would be outside the class and still need to file individually, although the original CIT IEEPA tariff challenge, V.O.S. Selections, Inc. v. Trump, also has a fully argued class certification motion pending where the class may include these claims. And, of course, the government's appeal of the original universal injunction is still ongoing, with oral argument to be scheduled soon.

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DWT's international trade, investment & national security team can advise clients on the individual merits of filing CIT cases to obtain IEEPA duty refunds and can represent them in such cases. Please contact the authors if you have any questions or need assistance. To stay informed, sign up for our alerts.