Advocacy Group Files Its 2nd IEEPA Tariffs Challenge in Texas Court
Conservative advocacy group the New Civil Liberties Alliance filed another lawsuit challenging the legality of the tariffs imposed under the International Emergency Economic Powers Act, arguing that IEEPA categorically doesn't allow for tariffs and that the tariffs imposed by President Donald Trump aren't "necessary" to address the declared emergencies. The alliance filed its suit on July 21 in the U.S. District Court for the Western District of Texas on behalf of outdoor cooking product maker FIREDISC, the Game Manufacturers Association and wood product maker Ryan Wholesale (FIREDISC, Inc. v. Donald J. Trump, W.D. Tex. # 25-01134).
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The alliance currently has another suit challenging the legality of Trump's IEEPA tariffs sitting before the Court of International Trade, though the group initially filed the case in a Florida district court. The Florida court sent the case to CIT after finding that the trade court has exclusive jurisdiction under Section 1581(i) to hear cases concerning tariffs imposed under IEEPA. The alliance's initial IEEPA tariff suit has been stayed pending the appeal of the lead case on the issue (see 2507180010).
Section 1581(i) says only CIT will hear cases arising out U.S. laws providing for tariffs. While the alliance argued that IEEPA doesn't provide for tariffs, stripping the trade court of its exclusive jurisdiction in the case, the Florida court, along with various other district courts, held that IEEPA provides for tariffs, citing Yoshida International v. U.S., which upheld President Richard Nixon's 10% duty surcharge imposed under the Trading With the Enemy Act, IEEPA's predecessor (see 2505210027).
The trade court embraced a slightly different version of its own jurisdiction, finding that it has sole jurisdiction to hear the case, since the matter "arises out of" Trump's executive orders implementing the tariffs. And since the executive orders modify the Harmonized Tariff Schedule and a federal statute says presidential acts modifying the HTS are laws of the U.S. for statutory purposes, the court said the Section 1581(i) hurdle had been cleared.
In its new case on the IEEPA tariffs, the alliance echoed many of the same claims it made before the trade court and the Florida court. The advocacy group argued that IEEPA "is a statute that authorizes presidents to order sanctions as a rapid response to international emergencies. It does not allow a president to impose tariffs on the American people."
In addition, the alliance said Trump's executive orders, which implemented tariffs to address trade deficits and the flow of fentanyl, "show no connection between these problems and the tariffs he ordered -- much less that the tariffs are 'necessary' to resolve those problems." While the group said it's not challenging the "emergencies" Trump declared, the group said it's challenging the "fit" of the tariffs to the emergencies under IEEPA.
If the president can use IEEPA "to bypass the statutory scheme for tariffs, the President will have nearly unlimited authority to commandeer Congress’s power over tariffs," the brief said. "He would be empowered to declare a national emergency based on some long-running national problem, then impose tariffs purportedly in the name of that emergency -- thus sidestepping the detailed constraints Congress has placed on the tariff authority it has granted."