On June 17, the plaintiff-appellees in Learning Resources, Inc., et al v. Donald Trump, et al petitioned the Supreme Court of the United States for certiorari, asking the Court to consider the lawfulness of tariffs President Trump imposed under the putative authority of the International Emergency Economic Powers Act (IEEPA). With the appeal currently pending before the Court of Appeals for the District of Columbia Circuit (D.C. Circuit), the petition takes the uncommon step of requesting “cert before judgment” under Rule 11, which allows immediate Supreme Court review of a matter on which the appellate court has yet to rule.
Concurrently with the petition for certiorari, the Learning Resources plaintiffs also requested expedited consideration of the certiorari petition, asking the Court to order a response by June 23 to allow for review of the petition at the Court’s June 26 conference, the final scheduled conference in the current term before the Court adjourns for its summer recess (from which it returns in the new October term). On June 20, the Court denied the motion for expedition.
Background
The Learning Resources original action, filed on April 22 by two small businesses that market educational toys, asked the D.C. District Court to invalidate certain of the tariffs that President Trump had imposed under IEEPA. Specifically the case seeks to invalidate tariffs targeting China (predicated on the flow of fentanyl and precursor chemicals through China) and the reciprocal tariffs, sometimes deemed the “Liberation Day” tariffs (intended to address trade imbalances). On May 29, the D.C. District Court entered summary judgment in favor of the plaintiffs, ruling that IEEPA confers no authority on the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs. Although the district court enjoined the implementation of the tariffs as to the two plaintiffs, that injunction has been stayed pending appeal. The U.S. Government appealed the decision invalidating to the D.C. Circuit. That appeal is currently pending on an expedited basis and is likely to be argued before a three-judge panel in late summer. No argument date has been set yet, but briefing will be complete on August 8.
Notably, another suit challenging the President’s IEEPA tariff authority is winding its way through the courts in parallel. In that case, V.O.S. Selections, Inc. et al. v. United States of America et al. (consolidated with The State of Oregon et al. v. United States Department of Homeland Security et al.), the Court of International Trade (the C.I.T., a court of specialist jurisdiction) invalidated the IEEPA tariffs in a summary judgment decision the day before the D.C. District Court ruling.
The C.I.T. decision addresses all tariffs imposed under IEEPA and therefore the order applies to tariffs on goods from Mexico and Canada, unlike in Learning Resources. The C.I.T. also held — and multiple district courts have agreed — that it enjoys exclusive jurisdiction over disputes concerning the IEEPA tariffs because they “arise[] out of any law of the United States providing for…tariffs, duties, fees, or other taxes on the importation of merchandise[.]” The D.C. District Court however has reasoned that, because IEEPA is not a law that provides for tariffs, jurisdiction over these cases rests with the district courts of general jurisdiction. An appeal of the C.I.T. decision is currently pending and is due to be argued before the Court of Appeals for the Federal Circuit en banc on July 31.
The orders in both Learning Resources and V.O.S. Solutions have been stayed pending appeal, meaning that the challenged tariffs remain in effect.
An Unusual Petition
The petition requests the Supreme Court to rule before the appellate court (the D.C. Circuit), an unusual step reserved under the Court’s Rule 11 for cases “of such imperative public importance as to justify deviation from normal appellate practice and to require immediate determination in this Court.” In arguing for immediate review, the petition points to the economic importance and urgency of the matter, the simplicity and starkness of the issues presented, and the inevitability that the permissibility of the IEEPA tariffs would ultimately come before the Court. The petitioners allege that the IEEPA tariffs put their businesses under an immediate and existential threat, which further justifies direct review by the Court.
The petition is also unusual insofar as the prevailing parties are requesting Supreme Court review. While Supreme Court Rules do not restrict a prevailing party from seeking certiorari, it is much more common for the losing party to request review. In other circumstances where the prevailing party has sought certiorari, it has usually been to seek a broader or more definitive ruling than was obtained in the lower courts.
The Petition’s Central Arguments
The petition raised the arguments below in support of the underlying decision.
IEEPA , § 1702(a)(1)(B), states that “the President may…regulate…importation or exportation of… any property in which any foreign country or a national thereof has any interest” (emphasis added). The petitioners argue that “regulate” cannot encompass the imposition of tariffs, particularly because the U.S. Constitution adopts a distinction between the “[p]ower [t]o lay and collect Taxes, Duties, Imposts, and Excises” and the power to “regulate” foreign commerce, using them in separate clauses. The petition also emphasizes the difference in the plain meaning of the terms, pointing to their distinct dictionary definitions.
The petition then looks to statutory conventions; many laws give various agencies the authority “regulate”, but this does not endow them with the power to impose tariffs or any similar measures. Similarly, in instances where Congress has authorized the President to impose tariffs it uses unambiguous language to do so.
Turning to the history of IEEPA, the petition notes that no president until now has relied on IEEPA to impose tariffs — though the petition acknowledges that the Nixon administration relied on its predecessor statute after the fact to defend a challenge to a 10% surcharge on imported goods in 1971. The petition also observes that the U.S. Government’s preferred interpretation would lead to a constitutional impasse, because it would mean that the President would also have the power to impose duties on exports, which the Constitution expressly proscribes.
The petition distinguishes Yoshida II, a Court of Customs and Patent Appeals 1975 decision where the U.S. Government successfully argued the IEEPA’s predecessor statute confers tariff authority on the President, in a case involving the 10% duty referenced above. The petition observes that nothing in IEEPA’s legislative history suggests that Congress intended to codify Yoshida II and the existence of a single lower court decision is not the type of settled precedent that would establish a presumption that the new law ratifies the Yoshida II decision. Additionally, the petition argues that intervening enactment of § 122(a) of the Trade Act of 1974 (i.e., after the imposition of the 1971 tariff but before the Yoshida II decision) expressly authorizing surcharges at issue in Yoshida II, casts further doubt on its reasoning.
What’s Next?
The Learning Resources cert petition seeks to bring the IEEPA tariff challenges to the Supreme Court on a faster time schedule. The Court’s recent ruling means that the U.S. Government will have until July 17 to file its substantive response to the petition. By that time, the Court will have adjourned for its summer recess, so it won’t decide on the petition until it returns for the October term, barring an emergency conference (which the Court would likely deem unwarranted, given its refusal to expedite certiorari in the first place). By that time, the D.C. Circuit will likely have heard arguments and may have even ruled on the appeal. It also remains to be seen what impact, if any, this petition will have on the conduct of the V.O.S. Selections appeal.
