Where the litigation stands as of June 18, 2026
The tariff-authority merits are resolved. In V.O.S. Selections, Inc. v. Trump the Federal Circuit sitting en banc affirmed that the trafficking and reciprocal tariffs exceeded IEEPA, and it addressed the universal-injunction problem in light of Trump v. CASA, Inc. On February 20, 2026 the Supreme Court resolved the consolidated IEEPA tariff cases by rejecting the government's theory that IEEPA authorizes the challenged tariffs. The two cases were not decided on the same ground. The Learning Resources line turned on jurisdictional posture, while the V.O.S. Selections ruling supplied the operative affirmance on IEEPA's lack of tariff authority, so the two cases' procedural treatments should not be collapsed into a single affirmance, and any framing that Learning Resources sends the refund mechanics straight to the CIT oversimplifies what the Court actually did.
The refund remedy is a separate and unsettled matter. The refund litigation is proceeding at the CIT before Senior Judge Richard Eaton, the judge designated for IEEPA refund cases. His orders required CBP to liquidate and reliquidate entries without the IEEPA duties, and the scope expanded over successive orders to reach finally-liquidated entries and non-plaintiff importers. CBP later resisted refunding finally-liquidated entries absent an importer's own CIT judgment, Eaton ruled against the government, and DOJ appealed to the Federal Circuit on or about June 3, 2026. That appeal, which tests the remedial scope of the refund order, is the single most important open variable in this fight. One docket detail should be flagged rather than asserted. The original lead vehicle was an Atmus Filtration case, later succeeded by a Euro-Notions matter after a voluntary dismissal, and the successor docket number is not independently confirmed here and is left out pending verification.
The money at stake
The amounts are large, contested, and interest-bearing. Public estimates vary. The Penn Wharton Budget Model and Reuters have put the potential refund exposure at up to roughly 175 billion dollars, while other trade-law and policy commentary has used lower figures depending on the cut-off date and the treatment of accrued interest. Interest is accruing at a material monthly rate either way, which makes timing economically significant and sharpens every party's incentive to lock down the pool now.
How CBP's refund machine actually pays
The asymmetry sits in the refund process itself. CBP runs refunds at scale through its Consolidated Administration and Processing of Entries module, the CAPE system inside the Automated Commercial Environment. Phase 1 covers unliquidated entries and recently liquidated entries that CBP can process through its existing liquidation and reliquidation machinery. Only the importer of record or its authorized customs broker can file, and refunds consolidate by importer of record or Form 4811 designee. CBP set Phase 2 for June 29, 2026, focused on reconciliation entries, and a later Phase 3 is expected to address finally-liquidated entries and the more complex refund scenarios. One feature of the design is fixed. CAPE's payee is the importer of record or its Form 4811 designee, and nothing routes money to anyone behind the entry. Every downstream economic-burden claim therefore has to find a way around that design, either by inserting a reservation step through the CIT, by suing the government directly through the CFC, or by suing the importer under scattered state-law theories.
What the downstream payors are asking for
According to Inside U.S. Trade reporting by David LaRoss, the tariffed-payor coalition argues that parties who paid the now-reversed IEEPA duties through importers are shut out of a refund process built around importers of record alone, regardless of who actually bore the economic burden. The reported framing is that where importers acted as collection conduits for the government they did not bear the burden, and the tariffed payors did. The coalition asks Judge Eaton to add a certification, reservation, and coordination mandate to CAPE. Importers would certify the payor-attributable share of each payment, and those sums would be reserved pending a court determination of entitlement. The coalition does not ask Eaton to decide ownership. That question is routed to a separate CFC class action reportedly led by the New York retailer H.M. Nabavian and Sons. The reported efficiency pitch is that reserving now preserves a defined pool, avoids a second wave of fragmented litigation over the same dollars, and lets the CFC rely on CBP's centralized calculations instead of recreating them through case-by-case discovery. Absent reservation, the argument runs, payors are driven into scattered refund-of-refund suits nationwide under disparate state contract and unjust-enrichment theories, with a real risk of inconsistent outcomes. These formulations track the reporting rather than a filing reviewed in full, and they should be confirmed against the brief before any publication-critical use.
The government's jurisdictional counterattack
DOJ reportedly moved to dismiss the Nabavian CFC action on June 15, 2026, arguing that tariff-refund claims fall within the CIT's exclusive jurisdiction and cannot be repackaged as Tucker Act claims. The reported position is that only the CIT can hear tariff-payment suits and that the Tucker Act does not reach duty claims, on the principle that a claim within the CIT's jurisdiction cannot simultaneously sit in the CFC. DOJ also reportedly presses a redressability point, that the government never required importers to pass tariff costs downstream, so a court cannot redress an injury that flows from the independent action of a third party not before it. Until the motion is checked against the CFC docket this should be treated as a reported position rather than a verified filing summary.
The doctrine that decides it
Three doctrinal lines govern the outcome. The first is CIT exclusivity. 28 U.S.C. § 1581(i) grants the CIT exclusive jurisdiction over civil actions arising from laws that provide for tariffs and duties on imported merchandise for reasons other than raising revenue, and 28 U.S.C. § 1491(c) reinforces the divide by withholding from the CFC any action that lies within the CIT's exclusive jurisdiction. Both the en banc Federal Circuit and the Supreme Court treated the IEEPA claims as arising out of tariff-schedule modifications squarely within the CIT's domain.
The second is the illegal-exaction doctrine, and it cuts against the payors. The Tucker Act illegal-exaction theory lets a party that paid money to the government under an unlawful exaction recover even without a money-mandating statute, on a non-frivolous allegation that the government violated the Constitution, a statute, or a regulation in taking the money. The structural problem for the payors is that the remedy runs to the party that paid the government, and the tariffed payors paid importers rather than CBP. That is precisely why they filed at the CFC and at the same time asked the CIT only to reserve funds rather than adjudicate ownership.
The third is pass-through standing, which is an analogy rather than controlling law. In Hanover Shoe and Illinois Brick the Supreme Court rejected the passing-on theory in antitrust and generally limited recovery to the direct purchaser. Those are not customs cases and the doctrine does not transfer directly, but they supply the closest structural analogy, because U.S. law is generally wary of reconstructing economic incidence through multiple downstream transactions when the legal payment was made by a direct payor. A dissenting Justice flagged this risk in advance, warning that refunds could flow to importers that had already passed their costs downstream to consumers or others. There is no controlling precedent recognizing a downstream payor's standing to recover duties directly from the government.
Why this is new
Tariffs are almost never refunded en masse, so the legal system has never had to confront at scale the question of who owns a refund when the economic burden was passed down a supply chain. The payors' two-court choreography is an attempt to thread that needle. It concedes the CIT's exclusive jurisdiction over the fund while routing the ownership question to the CFC as a money claim. DOJ's reported response collapses the distinction and argues that the whole dispute arises out of tariffs and belongs to the CIT alone, where downstream payors have no entry posture, no protest right, and on DOJ's view no standing. If DOJ wins the jurisdictional point at the CFC, the reservation theory at the CIT loses its destination and likely collapses with it. If the CFC action survives, it creates a parallel money claim that materially raises the stakes, and the clawback risk, for every importer of record.
What importers of record should do
Importers should treat certification exposure as a near-term risk rather than a hypothetical. If Eaton grants any version of the reservation mandate, importers filing CAPE declarations could be required to certify payor-attributable shares, which creates potential false-certification exposure if the underlying data is inaccurate, so the entry-level data should be reconciled against downstream pass-through records now. Contracts should be audited for pass-through, surcharge, change-in-law, most-favored-nation, and indemnity clauses, because those terms drive both the retained-value calculus and the exposure to refund-of-refund claims, and where IEEPA charges were itemized to customers the importer should assume it is a target. Importers should also not assume that CAPE refunds are clean. A reservation mandate or downstream litigation could claw back value after receipt, and refunds may be offset against other amounts owed, so contested amounts should be reserved against and finance, legal, and compliance should coordinate before any refund is booked as income.
What downstream payors should do
Downstream payors should recognize that the federal path is legally fragile and that the cleanest theory is contractual. A direct contract or unjust-enrichment claim against the importer or carrier that charged a discrete IEEPA line item is more viable than a federal refund claim, and invoices showing itemized IEEPA charges are both the strongest evidence and the basis for the discrete-and-identifiable framing. The CFC motion to dismiss is the bellwether to watch. A dismissal on jurisdictional grounds would knock out the destination for the CIT reservation theory, while a denial would validate the parallel track and shift leverage decisively.
The benchmarks to watch
Three developments would change the calculus. A Federal Circuit ruling that affirms Eaton's refund order and endorses broad CIT remedial authority would strengthen the argument that a reservation mandate is within his power. A CFC denial of DOJ's motion to dismiss would legitimize a parallel money claim and raise importer clawback exposure. Refund-timing or pass-through legislation could moot parts of the fight, and the detail to watch is whether any bill addresses downstream pass-through with binding language rather than a non-binding sense of Congress.
Caveats
Several load-bearing documents have not been verified in full text. The reported June 17 payors' brief, the H.M. Nabavian and Sons CFC complaint, and the reported June 15 DOJ motion to dismiss all rest here on Inside U.S. Trade and World Trade Online reporting rather than on filings reviewed directly, and a web check did not independently surface a Nabavian tariff-refund action on the CFC docket, so the verbatim formulations reported in the press should be confirmed against the filings or the CIT and CFC dockets before any publication-critical reliance. The specific Federal Circuit precedent that DOJ reportedly quotes on the CIT versus CFC divide is not identified here and should be pulled from the motion itself rather than reconstructed. Refund-size estimates vary across sources, roughly in the range of 166 to 175 billion dollars, and this draft leads with the higher up-to figure rather than asserting a single confirmed number. The economic-burden and pass-through theory at scale is new, no controlling precedent recognizes downstream-payor standing to recover duties from the government, and the forward-looking account describes a possible claim rather than settled law. Procedural status is current as of June 18, 2026 and is moving quickly, and the Federal Circuit appeal of the refund order and the CFC motion to dismiss are the two events most likely to reshape the landscape, so both should be re-checked immediately before publishing.