Spiegel Stuff: The Gavel: A new tariff refund battle emerges

By Zach Schonfeld and Sophie Brams | Wednesday, June 17

A new tariff refund battle emerges

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A fight is brewing over refunding President Trump’s tariffs.

Billions of dollars have been processed after the Supreme Court’s decision, but the administration says it doesn’t plan to automatically return some of the remaining deposits.

It believes a judge overstepped. And now, it has started putting up a fight.

“Commandeering the refund process, including through uniform supervision, is simply not within any trial court’s power,” the Justice Department wrote in court filings this month.

It has opened a new chapter in the legal saga over Trump’s tariffs, which has been raging for over a year.

After the Supreme Court in February invalidated Trump’s use of an emergency statute to enact his “Liberation Day” tariffs and global trade war, the administration began standing up a new electronic refund system.

Since its April launch, it has accepted for processing roughly $95 billion of the $166 billion in tariffs the government collected, court filings show.

And some importers have confirmed to us they’ve successfully gotten their funds back.

But not everyone.

If a tariff payment has been finalized for more than 90 days, Customs and Border Protection (CBP) says it can no longer simply refund it. Those importers must each individually sue, the administration says.

“Congress has not given CBP the authority to pay refunds on entries that are liquidated and final. To make refunds available for such entries, an importer must file suit in this Court, and the Court must enter an importer-specific order,” the Justice Department wrote in a recent filing.

As support for its position, the administration also points to the Supreme Court’s decision last year spurning universal injunctions.

The tariff challengers disagree.

Neal Katyal and the legal team that defeated Trump’s levies at the Supreme Court, who’ve long looked to play a role in the refund fight, are fighting back.

In a recent motion, Katyal wrote that “the government’s position is dead wrong.”

He’s asked U.S. Court of International Trade Judge Richard Eaton, who oversees the refunds, to certify a class of all importers who paid the invalidated tariffs but aren’t currently eligible to enroll in the online system.

If the appointee of former President Clinton agrees, it would create a mechanism that could force the administration’s hand.

Meanwhile, the administration is taking its arguments to the U.S. Court of Appeals for the Federal Circuit.

The court hears appeals on specialty topics like patents and government contracts, and it’s also in charge of handling tariff appeals.

One of the judges won’t be voting.

U.S. Circuit Judge Pauline Newman, 98, remains suspended after her colleagues barred her from hearing new cases after she refused to submit to mental health testing. She says it’s unconstitutional, but on Monday, the Supreme Court declined to take up her fight.

Newman didn’t participate last year when her colleagues considered Trump’s previous tariffs, and she can’t vote on any future tariff battles, either.

And there’s one more fight brewing.

Last year, Trump also suspended the de minimis tariff exemption, which allowed low-value goods worth up to $800 to enter the country duty-free. Trump did so by invoking the same emergency law the Supreme Court ruled doesn’t authorize tariffs.

Automotive parts distributor Detroit Axle has filed a lawsuit arguing that’s illegal, too. The government disagrees, insisting that ending an exemption isn’t the same as authorizing a new tariff.

The clock is ticking. Regardless of how judges view Trump’s executive orders, the One Big Beautiful Bill Act is set to eliminate the exemption starting this July.

“The window for Detroit Axle to obtain forward-looking relief is shrinking by the day,” the company wrote in court filings.

Welcome to The Gavel, The Hill’s weekly newsletter unpacking the intersection of courts & politics from Zach Schonfeld and Sophie Brams. Email us tips at zschonfeld@thehill.com and sbrams@thehill.com. You can also reach out to us on X (@ZachASchonfeld and @sophiebrams) or Signal (zachschonfeld.48 and sbrams.32).

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IN FOCUS

Catching up with the lawyer defending independent agencies at SCOTUS

The Supreme Court will soon decide whether President Trump can sack independent agency leaders without cause. It carries massive implications for presidential power.

With a decision landing as soon as Thursday, we checked in this week with Amit Agarwal, who argued the case against Trump.

Most court watchers suspect Agarwal is headed for a loss. Many believe the court will go as far as overruling its 91-year-old precedent, Humphrey’s Executor v. United States, which has enabled Congress to shield certain executive agency leaders with firing protections.

But Agarwal isn’t ready to put the precedent on its deathbed quite yet.

“I wouldn't want to make a prediction about how the court will rule,” he told us on Tuesday. “We will carefully study the court's decision when it comes out. We are very interested to see whether the court will protect the independence of traditional independent agencies.”

Agarwal represents Rebecca Slaughter, a Federal Trade Commission member whom Trump terminated last year. Her lawsuit has emerged as the make-or-break case for Trump’s firings at independent agencies across the government.

“It would be a radical expansion of presidential power,” Agarwal said if the court overturned Humphrey’s Executor, “and that's because we're not talking about one agency, or two agencies, five or 10 or 15, or even 20.”

“We're talking about — and this is undisputed — we're talking about more than two dozen traditional independent agencies.”

Those agencies investigate plane crashes, oversee product recalls, manage union disputes, protect nuclear safety and more.

Agarwal and other defenders of the firing protections say the public should want those agencies to be led by experts who enjoy a degree of independence from the White House.

“It would protect their safety, it would protect their freedom, it would guard against corruption. It would tend to ensure that decisions are made based on expertise and not partisan political considerations,” Agarwal said.

“So, in a wide range of ways independent agencies protect the American people,” he added. “And if you eliminate the independence of traditional independent agencies, the practical result of it will be that the American people will be less rich, less safe and less free.”

Agarwal is a special counsel at Protect Democracy, an anti-authoritarian organization that frequently battles Trump in court. He’s a former clerk to Justice Samuel Alito and then-Judge Brett Kavanaugh when he served on a lower court.

SIDEBAR

5 top docket updates

Trump’s name comes off Kennedy Center: President Trump’s name was officially stripped from the exterior of the Kennedy Center early Saturday morning after a federal appeals court panel rejected a last-ditch attempt to halt a previous order requiring his name come down by June 12. DOJ attorneys confirmed the removal in court filings, but a tarp hanging over the façade was still blocking public view as of Tuesday afternoon.
Judge orders restoration of National Parks displays: A federal judge in Massachusetts has ordered the Interior Department to restore displays removed from national parks over the past year as part of a crackdown on diversity, equity and inclusion (DEI) content and climate change information. The Trump administration is reviewing its appeal options.
SCOTUS declines bid to revive lawsuit against Comey: The Supreme Court has denied a bid from a former Trump campaign adviser to revive his lawsuit against former FBI Director James Comey. The decision upholds lower court rulings that found Carter Page was too late in filing his suit against Comey and seven others over issues with a warrant application to surveil him during the 2016 campaign.
Fight night at the White House: A UFC fight on the White House lawn went ahead as scheduled on Sunday after a federal judge in D.C. denied a request by two Virginia residents to block the event. The judge found the plaintiffs lacked standing to bring their challenge but did not rule on the merits of their arguments.
National Guard shooting suspect faces new charges: The Justice Department unsealed eight new charges against Rahmanullah Lakanwal, the suspect accused of fatally shooting a West Virginia National Guard member and wounding another just blocks from the White House in November. Lakanwal, an Afghan national, has pleaded not guilty to the 17 charges he currently faces.

In other news

DOJ official heads to law firm: Brian Nieves, who served as chief of staff under Deputy Attorney General Todd Blanche, is leaving the administration to become a partner resident at the law firm Holtzman Vogel. Nieves said in a statement, “The firm has built the kind of serious, battle-tested team that clients need.”
Legal fight over Texas Tech QB eligibility ends: A legal fight over whether Texas Tech quarterback Brendan Sorsby was eligible to play in the NCAA after admitting to betting on college football games has come to an end, as he plans to enter the NFL supplemental draft. The NCAA had challenged a Texas judge’s previous ruling that effectively overturned Sorsby’s season-long suspension for violating its gambling policy.
Supreme Court blocks nitrogen gas execution in Alabama: The Supreme Court on Friday blocked Alabama from executing a man by nitrogen gas, upholding a lower court ruling that found the method violated Eighth Amendment protections against cruel and unusual punishment. Jeffrey Lee is on death row for the murders of a pawn shop owner and employee during a robbery in 1998.

THE ORDER LIST

Cases the Supreme Court is taking up — or passing on — this term.

IN: Immigration, death row and 12-person juries

The Supreme Court took up three new cases for its next term.

The one grabbing the most attention is Genalo v. Black. It predates Trump’s second term, but it poses impacts for his immigration agenda.

Federal law mandates detention for certain noncitizens. But lower courts have split on whether the Constitution’s due process protections guarantee those noncitizens a bond hearing when their detention becomes prolonged. Now, the justices will decide.

Next, they took up the death row case we previewed last week.

In Guerrero v. Johnson, Texas argues that Dexter Johnson shouldn’t have been allowed to proceed with a successive habeas petition to try to argue that he is intellectually disabled and can’t be executed.

Finally, the justices also took up Kian v. Florida, a case we previewed two weeks ago.

The court will decide if the Constitution guarantees a 12-person jury to defendants facing serious felonies. Florida conducts criminal trials with a six-person jury in many cases.

Justice Neil Gorsuch must be celebrating. He has long urged his colleagues to invalidate the practice, even calling on voters to step in after failing to convince his colleagues to take up the issue in 2024.

“If we will not presently shoulder the burden of correcting our own mistake, they have the power to do so,” Gorsuch wrote at the time. “For, no less than this Court, the American people serve as guardians of our enduring Constitution.”

OUT: 98-year-old judge’s suspension fight

U.S. Circuit Judge Pauline Newman turns 99 this weekend.

Unfortunately for her, the Supreme Court just turned away her challenge to her suspension that bars her from hearing new cases.

Three years ago, Newman’s colleagues suspended her after clerks raised concerns about her behavior and she refused to submit to mental fitness testing. Newman says she’s still fit to serve and sued her fellow judges, claiming they’re acting unconstitutionally.

“It is a dark day for the independence of the federal judiciary,” New Civil Liberties Alliance President Mark Chenoweth, whose group represented Newman, said in a statement.

Separately, Alito penned a solo dissent making clear he wants to examine the limits of Hazelwood School District v. Kuhlmeier. That’s the landmark 1988 Supreme Court precedent allowing a public high school to exercise editorial control over its student newspaper.

The decision is rooted in the idea that it was part of the school’s curriculum. Alito said clarification “is in order” to ensure judges don’t allow improper school censorship of students’ private speech.

The conservative justice unsuccessfully voted to take up an appeal from a high schooler, who founded a Students for Life club and sought to hang a flyer that contained pictures of students with “Defund Planned Parenthood” signs. After the school refused to approve them, the student’s parents sued under the First Amendment, launching E.D. v. Noblesville School District.

PETITION PILE

Petitions for the Supreme Court to take up cases I'm keeping an eye on

Damages against government officials: The Supreme Court has a new chance to look at Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, a 1971 decision that allows damages lawsuits against federal officials for violating certain constitutional rights. The justices have repeatedly declined to broaden it. Now, the Trump administration wants them to clarify someone can’t attempt a Bivens claim if they have alternative remedies available. The cases are Nielsen v. Watanabe and Mohan v. Watkins.
Arizona proof-of-citizenship law: Two voting laws Arizona passed after the 2020 election are now at the Supreme Court. At the center of the battle are requirements that require applicants to provide proof of citizenship to vote, and whether they are preempted by federal law or barred by a consent decree. The cases are RNC v. Mi Familia Vota, Petersen v. Mi Familia Vota and Arizona v. Promise Arizona.

ON THE DOCKET

Don’t be surprised if additional hearings are scheduled throughout the week. But here’s what I’m watching for now.

Today

A federal judge in California will hear arguments in a case brought by various California and Oregon cities challenging conditions placed by the Trump administration on federal agency grants.
The singer accused of fatally stabbing 14-year-old Celeste Rivas Hernandez will appear in a Los Angeles County courtroom for a preliminary hearing. David Burke, known professionally as D4vd, has pleaded not guilty to murder and other charges and is being held without bail.
Gilgo Beach serial killer Rex Heuermann will be sentenced in a New York courtroom for the murders of seven women between 1993 and 2011.

Thursday:

The Supreme Court is set to announce opinions.
A federal judge in Oregon will hear evidence in a case challenging the construction of a security fence around the federal building in Eugene, Ore. Six individuals have sued the General Services Administration, arguing the fence violates the First Amendment by blocking a large portion of a common protest area.
The D.C. Bar will honor retired Supreme Court Justice Stephen Breyer with the 2026 Thurgood Marshall Award at their annual Celebration of Leadership.

Friday:

The federal courts are closed for Juneteenth.

Monday:

The Supreme Court will release an order list.

Tuesday:

A federal judge is set to hear arguments in the state of Illinois’s bid to dismiss a lawsuit brought by the federal government over a state law that prohibits civil immigration arrests of anyone in and around courthouses who is attending state court proceedings and allows individuals to sue federal immigration officers who knowingly violate their constitutional rights. The Justice Department argues the law violates the Supremacy Clause, but Illinois says the federal government lacks jurisdiction to challenge it.
The U.S. Court of International Trade will hear arguments that Trump’s suspension of the de minimis tariff exemption last year was illegal.