Tariff refund applicants go to a small, well-known U.S. court with large litigation experience

March 3 (Reuters) – Importers seeking their share of more than $130 billion in tariff refunds are headed to a little-known U.S. trade court, which must now figure out how to deal with what is expected to be an explosion of litigation.

Multinationals such as FedEx and L’Oreal and hundreds of smaller companies have filed about 2,000 lawsuits at the U.S. Court of International Trade in Manhattan, according to court records, seeking to roll back tariffs imposed by President Donald Trump last year. These cases may be the tip of the iceberg — the tariffs, which were ruled illegal by the Supreme Court on February 20, were imposed on more than 300,000 importers.

The number of cases represents a dramatic increase from 2024, when, according to court data, only 252 new cases were filed in court.

The Supreme Court has not considered refunds, leaving that to customs officials and the eight active judges of the Trade Court, which typically handles disputes over anti-dumping measures and import classifications on everything from window shades to lard.

The Supreme Court cases, brought by toy company Education Resources, spirits importer VOS Choice and other importers, are now back in the Commercial Court.

Lawyers for the five plaintiffs suggested in court on February 24 that their cases should serve as test cases to determine how restitution payments will be calculated and issued.

Meanwhile, other cases will be postponed.

Not everyone wants to wait.

Small importers, who make up the vast majority of companies that have paid tariffs, want to avoid the process of bringing a lawsuit, which can cost thousands of dollars in legal fees.

They hope that Customs and Border Protection will create a simpler, lower-cost process for refunds, such as a dedicated web portal for entering basic information to create a payment.

Trade advocates said CBP could require importers to go through its established administrative process that requires filing formal protests. Complicating the process, returns on tariffs paid as early as 2025 may be different than tariffs paid more recently.

The process, according to John Patterson, a trade lawyer who has filed cases in the current wave of tariff refund claims, is a “mega question.”

CBP did not respond to a request for comment.

Same behavior

In their Feb. 24 filing, the importers’ attorneys noted to the Trade Court that it has experience handling thousands of return cases, although many involve fewer potential claimants and much smaller amounts.

A wave of refund cases like the current demands for tariff payments began after a 1998 US Supreme Court decision struck down taxes that had been collected from exporters for 11 years.

“This court has used a similar approach to challenges to harbor maintenance fees,” the court filing said.

Instead of overseeing thousands of cases at the same time, the Commercial Court turns the cases around and creates a steering committee of plaintiffs’ attorneys who specialize in business that then oversees a case as it progresses. The test case was used for questions such as interest on repayment and the date for trial. The commands entered in the test case are applied to all cases.

Less than six months after the Supreme Court struck down the tax, the court approved the refund process. It requires each claimant to file the claim individually and then send the claim form to CBP. If the importer and CBP disagree or legal questions arise, the parties can ask the court to review the claim.

According to an article about the case published on the Commercial Court’s website, over 2-1/2 years of the Supreme Court’s decision to reduce the port tax, nearly $730 million was awarded to about 100,000 claimants.

The legal team for VOS Options and the four other plaintiffs in the current case asked the Commercial Court to basically follow this model, leaving their cases to establish a return process that could be applied to anyone.

While the port tax case provides a framework, nothing compares to the sheer volume of tariff payments that must be disbursed. As of Dec. 10, illegal tariffs had been collected on about 34 million shipments, according to a government court filing.

“There are still a lot of questions that need to be answered, and any time you have $133 billion at stake, there are going to be disputes,” said Daniel Pickard, a trade attorney who has not filed tariff refund cases. “So you have to think there’s going to be a bunch more cases before this is all over.”

(Reporting by Tom Halls and David Thomas in Wilmington, Delaware in Chicago; Additional reporting by Mike Scarcella; Editing by Nolene Walder, Amy Stevens and Ethan Smith)