CAFC Stay Order Neutral on Merits of IEEPA Cases, Indicates Decision by August, Attorneys Say
The U.S. Court of Appeals for the Federal Circuit's stay of the Court of International Trade decision vacating all International Emergency Economic Powers Act tariff action likely doesn't signal a win for either side on the merits of the issue, various attorneys told us. In addition, the court's move to set a July 31 oral argument date and have all active judges hear the case indicates a decision will likely be issued in August, the attorneys said.
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On June 10, the appellate court stayed the trade court's ruling regarding President Donald Trump's tariff action taken under IEEPA pending the government's appeal of the case (see 2506100076). In a per curiam order, the court said both the U.S. and the plaintiffs, comprising 12 U.S. states and five importers, "have made substantial arguments on the merits."
The court merely said it "considered the traditional stay factors," and said a "stay is warranted under the circumstances. The order cited a recent Supreme Court decision, Trump v. Wilcox, which said the purpose of interim relief isn't to "conclusively determine the rights of the parties, but to balance the equities as the litigation moves forward."
One trade attorney told us that this specific invocation of Wilcox indicates that the court isn't making a determination on the merits of the case. In another case cited by the CAFC in the stay order, Niken v. Holder, the Supreme Court said the "authority to hold an order in abeyance pending review allows an appellate court to act responsibly," adding that the reviewing court can't always "bring considered judgment" quickly enough to "afford relief to the party aggrieved by the order under review."
The aggrieved party in this case is the government, the attorney said, noting that the importers and states challenging the tariffs can receive remedies in the form of refunds if they prevail but that there's no such option for the U.S. "If the tariffs are not enforceable, even for a temporary period of time, that is (substantial) revenue that the Government cannot recover," the attorney said.
Lawrence Friedman, partner at Barnes Richardson, agreed that the stay order is neutral as to the merits of the case. He said the court's note that the case is of "exceptional importance" isn't a "signal other than to say that it is not a slam dunk on either side."
As part of its stay order, the appellate court decided to have all active judges hear the case, as opposed to proceeding with its ordinary course of appointing a three-judge panel to hear the case. One attorney suggested the court balanced its decision to deny a stay of the CIT ruling with the decision to have all of the judges hear the case and on an expedited basis. The plaintiffs should "take some solace in the indication that the court does not see the issues raised by the appeal as even remotely frivolous," the attorney said.
Friedman emphasized the unusual nature of the en banc decision, saying he isn't aware of any trade cases where the appellate court has decided at the outset to hear the case en banc. This type of review at any stage of the proceeding is rare in trade cases, with the court last reviewing a trade case en banc in January 2020. The court has only ever issued four en banc decisions in trade cases in its history.
Regarding the timing of the case, Friedman said the court's July 31 oral argument date indicates an August decision. "Of course, if there is a lot of internal disagreement on the actual language of the opinion or the outcome, it may take longer," he added.