Companies are Filing Lawsuits to Preserve Tariff Refund Rights: What You Should Know

By Brett W. Johnson, T. Troy Galan, and Thomas Williams

As the U.S. Supreme Court evaluates whether the executive branch has the lawful authority from the legislative branch under the International Emergency Economic Powers Act (IEEPA) to impose global tariffs, importers face a material and time-sensitive question: how can organizations preserve refund rights before entries liquidate?

During the November 5, 2025, oral argument in Learning Resources, Inc. v. Trump, multiple Justices questioned whether IEEPA authorizes unilateral tariff authority. While a ruling invalidating this tariff regime would be significant, it does not guarantee automatic refunds, and companies that have already paid IEEPA-based tariffs could lose eligibility if entries liquidate before rights are preserved.

For context, when an “importer of recorder” (a key party, because most companies that pay tariffs do not meet this definition) brings products into the United States, a tariff is calculated based on the applicable Harmonized Tariff Schedule and country of origin. At that time, most importers did not think twice. However, U.S. Customs and Border Protection (CBP) has up to a year to ensure that an importer paid the correct tariff. This is the liquidation process. When the product is entered, the importer has the ability to make a statement indicating, “the tariff is X, but it is unconstitutional and I object to the tariff being imposed.” The statement then informs the liquidation process and CBP can either agree or disagree.

Once “liquidated,” the importer then has 180 days to “protest” arguing that the tariff was not correctly applied (e.g., unconstitutional). However, the concern is that the documentation is not correct, or the liquidation has already (or is about) to occur (since liquidation usually takes 314 days and, again, most importers are ignorant of this timing).

Recognizing this risk, major retailers and manufacturers have now filed lawsuits in the U.S. Court of International Trade (CIT) to suspend liquidation and preserve refund eligibility. Litigation is being increasingly viewed not as an escalation, but as a necessary compliance tool to prevent the loss of refund rights.

This trend reflects settled trade law: federal courts have held that once an entry has liquidated, refund recovery is generally unavailable, even if the underlying tariff is later determined to be unlawful.¹ Companies acting now are not speculating on the outcome of the U.S. Supreme Court case — they are preserving eligibility in case refunds become available.

I. Refund Rights Are Not Automatic

Even if the U.S. Supreme Court invalidates the IEEPA tariffs, the path to recovery is uncertain. During oral argument, the Justices directly asked whether a ruling would provide refunds for all importers or only the parties to the lawsuit. Counsel acknowledged that for “everyone else,” recovery would likely require navigating the specialized customs protest and administrative regime under 19 U.S.C. § 1514.

Justice Barrett summarized the administrative and procedural challenge succinctly: the recovery landscape is “a mess.”²

Many of the complaints filed with the CIT makes this risk tangible.³ If the IEEPA tariffs are unconstitutional, companies that do not suspend liquidation or otherwise protect entries may be barred from recovering the full amount of tariffs they paid, even when the underlying assessment was later determined to be unlawful. The legal risk is not abstract — absent preservation, refund rights may be permanently lost.

II. Liquidation Drives the Risk

The urgency exists because refund eligibility is tied directly to liquidation (and possibly what was inserted in the pre-liquidation statement).⁴ Again, CBP normally liquidates entries within 314 days, but liquidation typically occurs earlier and without advanced notice. Many importers assume liquidation occurs at the end of the statutory window; in practice, liquidation can occur weeks or months sooner, and customs brokers often do not inform importers unless asked directly.

Entries subject to the first round of IEEPA trafficking tariffs imposed on February 4, 2025, are already reaching liquidation. As December 2025 liquidation dates approach, importers have sought extensions from CBP to preserve rights, but CBP has denied multiple requests.

This is the fundamental reason importers are litigating now: liquidation closes the door, regardless of whether the U.S. Supreme Court ultimately finds the tariffs unlawful.

III. When Filing Suit Makes Sense

A judicial filing is not a universal requirement. The decision is case-by-case and depends on import volume, expected liquidation timing, cost of litigation, and tariff exposure. If multiple high-value entries are likely to liquidate soon, litigation to suspend liquidation may be warranted to preserve eligibility.

Filing suit does not prevent administrative options such as post-summary corrections or protests, and litigation can be withdrawn if circumstances change. However, waiting until after liquidation eliminates the ability to preserve rights, and the cost of inaction may be far greater than the cost of temporary litigation.

The practical question is not whether litigation guarantees recovery — it does not. The question is whether inaction would make recovery impossible.

IV. A Changing Tariff Landscape

If the U.S. Supreme Court invalidates the IEEPA tariffs, the Administration still retains authority to impose alternative tariff structures under other statutory tools, including Section 232 or Section 301. However, those tariffs would apply prospectively, not retroactively, which means refund opportunities tied to IEEPA should be pursued regardless of the Administration’s future actions.

V. The Strategic Next Step

The immediate priority for importers is to determine whether liquidation timing requires actions. Companies should understand which entries are approaching liquidation and whether administrative relief is feasible, or whether judicial suspension is the only mechanism to maintain refund eligibility until the U.S. Supreme Court provides clarity.

This analysis is highly factual and time sensitive. Trade counsel experienced in customs liquidation, injunction practice, and CIT procedures can assess whether litigation is warranted, how soon action must be taken, and how to avoid administrative or enforcement complications. A short consultation can prevent permanent loss of refund rights and provide a framework for evaluating longer-term tariff strategy.

In short, litigation can be withdrawn later, but lost eligibility cannot be reversed.

VI. Conclusion

With U.S. Supreme Court review pending and liquidation deadlines rapidly approaching, the Costco litigation signals a moment of urgency for importers. Companies do not need to predict how the U.S. Supreme Court will rule; they need to ensure that liquidation does not foreclose eligibility before the justices decide. Filing suit does not guarantee a refund, but it may be the only mechanism to preserve eligibility if adverse liquidation occurs.