Florida Court Sends IEEPA Tariffs Case to CIT, Says IEEPA Provides for Tariffs

The Florida case is one of four lawsuits challenging tariffs imposed under IEEPA filed in a federal district court as opposed to the trade court. In all four, the U.S. has sought to transfer the cases to CIT on the grounds that the trade court has exclusive jurisdiction to hear the lawsuits under Section 1581(i). This provision lets CIT exclusively hear civil cases arising out of any law of the U.S. providing for tariffs.

The plaintiffs, a group of small importers represented by conservative advocacy group the New Civil Liberties Alliance, argued that CIT didn't have exclusive jurisdiction, since IEEPA doesn't provide for tariffs (see 2505060017). The alliance's claim largely turned on whether IEEPA's grant of authority, which lets the president "regulate" imports, provides for tariff-setting authority.

Wetherell rejected the plaintiffs' argument on the basis that the Yoshida court previously found that the same operative language allowed for the imposition of tariffs. The Yoshida court said "the power to regulate commerce necessarily includes the power to tax and lay duties on imports" and that TWEA's "broad delegation of authority to regulate 'by means of instructions, licenses, or otherwise'" allowed the president to impose duties.

The Florida court said this reasoning is "persuasive," adding that the court "sees no reason why it would not apply to IEEPA because the operative language of IEEPA is identical to the operative language in TWEA."

In a footnote, Wetherell said his jurisdictional determination isn't meant to be a decision on the merits of the alliance's claims. He clarified that it will be up to the trade court to determine to what extent, if at all, the jurisdictional decision on whether IEEPA provides for tariffs will affect the alliance's claims. The judge added that his ruling doesn't mean the tariffs themselves are lawful, since, according to Yoshida, the president's means of imposing the tariffs must bear a "reasonable relation to the particular emergency confronted" -- a question for CIT to decide in the first instance.

The alliance made four arguments against the notion that IEEPA provides for tariffs: the statute doesn't refer to tariffs, the power to "regulate" doesn't include the power to tax imports via tariffs, IEEPA is unlike other tariff laws, and reading the statute to authorize tariffs would "contravene the major questions doctrine." Wetherell said these first three arguments were all settled by Yoshida for the government, noting that even under the plaintiffs' definition of the term "regulate," a tariff can reasonably be viewed as the "regulation" of importation, since it fixes, establishes and directs a condition on which imports are allowed.

However, Wetherell said the issue of the major questions doctrine "presents a slightly closer question," given that the Supreme Court has more fulsomely embraced the doctrine, which requires there to be explicit grants of authority when the executive regulates areas of major political or economic significance. The judge said assuming the doctrine applies here, he agrees with the U.S. that "Congress provided the 'clear authorization' required under the modern major questions doctrine cases when it incorporated TWEA’s operative language -- along with Yoshida’s judicial gloss on that language -- into IEEPA verbatim."

The judge dedicated a footnote to a discussion of IEEPA's history and the arguments of the alliance and various amici on this point, finding that the history of IEEPA "is not as definitive as those amici argue." While the parties argued that IEEPA was passed specifically to limit the president's powers in times of emergency, particularly in light of Nixon's 10% tariff imposed under TWEA, the Florida court said that while the committee report on IEEPA suggests the law was meant to "grant more limited powers to the president than he had under TWEA, the report does not show that the authority to impose import duties was one of the excepted powers."

In fact, since the legislative history shows that Congress was "specifically aware" of the past use of TWEA to impose tariffs and the Yoshida decision sustaining that act, "the fact that such power was not specifically excepted from the powers granted by IEEPA supports an inference that IEEPA (like TWEA) includes that power."

Wetherell also addressed the alliance's claim that Congress' passing of Section 122 of the Trade Act of 1974, which specifically lets the president impose limited tariffs to address balance of payments issues, strips IEEPA of tariff-setting authority. The judge said he "sees nothing in the language of that statute, or the act amending TWEA and creating IEEPA, that undermines" the Yoshida court's decision sustaining Nixon's duty surcharge, particularly in light of a footnote in the Yoshida decision declaring that TWEA's authority is "supplemental to the authority provided in other statutes."

The judge concluded the decision by quoting an amicus brief from the America First Legal Foundation, a Trump-aligned legal group, that emphasized the importance of CIT exclusively deciding tariff matters. CIT hearing the case "ensures a single trial-level court hears challenges to civil suits arising out of statutes related to certain trade actions that are national -- really, international -- in effect," the group argued. Wetherell added that at this point "it makes no sense for this case to remain in this Court because the CIT is already considering multiple nearly identical suits."