Law Profs: IEEPA Decision May Be Nuanced

Lederman said he feels certain there are four justices who would rule that way.

"The problem, of course, is that the easiest way to do that is simply to have a holding that says that IEEPA doesn't authorize the imposition of tariffs full stop."

That's a problem, he said, because some of the justices who feel an unlimited power to put any tariff on any country is not what Congress intended may also believe that Congress did intend to give the president the ability to react quickly to foreign affairs emergencies.

Lederman explained that IEEPA clearly does allow the president to put a full import ban on a country, a more extreme act than putting a 10% tariff on goods.

"So why not the tariffing? Why doesn't the greater include the lesser," he asked rhetorically. He said that the justices' questions at the end of the more than 2.5-hour oral argument suggested ways to grapple with that question.

He said that the Oregon solicitor general and Neal Katyal, the attorney for the small importers, noted that at the time of the founding, politicians were skeptical "about entrusting the president with a taxing power because of the possibility of abuse."

Also, given that other laws delegating tariff power to the president, such as Section 232 and Section 301, have all kinds of justification requirements and limits, why would they have written a law with no such limits?

"But, on the other hand, why would Congress want to preclude the possibility of the use of tariffs when that is the most tailored tool to an actual discrete problem that exists with respect to foreign affairs or national security?"

Lederman said if the Supreme Court wanted to entertain that idea, they could write an opinion that would allow the fentanyl tariffs but forbid the global unbounded tariffs. He said maybe six justices would be on board with that approach.

"The chief [justice] is fully capable of writing an opinion actually, you know, similar to the one that the court of appeals wrote in Yoshida back in 1975, which is kind of a little bit of this, little bit of that. You can go up to this, but no further. It's not the kind of formalist textualist opinion that this court purports to be enamored of these days, but he's fully capable of drawing fine distinctions."

Lederman added that he doesn't know if the justices will decide to head that way.

"It's possible that they'll simply say: Hey, no, IEEPA does not authorize tariffs, there are other tools that do."

He said when you look at IEEPA in the context of the tariff laws as a whole, the argument that Congress was not delegating unbounded power to hike tariffs resonates.

He said he doesn't think the court will give the administration carte blanche to use IEEPA for levying tariffs, "but beyond that, I think anyone who's confident [in the outcome] is kidding themselves about how this is going to come out. I know that's not deeply satisfying, because I'm not giving you like Vegas odds on a vote count or anything like that, but it's just the truth."

Georgetown University Law Center Professor Kathleen Claussen, former associate general counsel in the Office of the U.S. Trade Representative, also declined to predict that five justices would find IEEPA cannot be used to impose tariffs, though she said the court was more inclined to say tariffs were unlawful than she originally expected.

She said at least some of the justices wanted to explore hypotheticals -- like could you threaten a tariff under IEEPA that was never collected, would that go too far?

"We still don't know what theory will be the basis for the decision. So even if we accept the headlines in the press that the government's going to lose, I think a lot remains on the table," she said.

But win or lose, it won't change as much in the trade picture as some think, she said, given all the other tariff authorities at Trump's disposal.

"I don't like to give ideas, but could you imagine a 232 [investigation] that said all foreign products, all foreign products threaten to impair the national security."

A lot of the questions were aimed at the distinction between tariffs as a way to regulate and tariffs as a way to raise revenue, she noted, including a question of whether they could be used to combat climate change.

"Neal Katyal didn't really give a great answer, in my opinion," she said.

However, the idea that these tariffs are not to raise revenue may not be credible, Lederman suggested.

"The solicitor general was at such pains to say, 'This is not for revenue-raising purposes why we're doing this. There's no abuse here. We're not doing this to fill our coffers. We're doing this ... for foreign policy reasons.'

"And then his client apparently came out right after the argument and said, "We really need these tariffs because they're bringing in so much revenue to us."

Lederman added, chuckling, "It's like, you have to deal with the clients that you got, I guess."

The moderator asked Claussen about what a victory for the plaintiffs would mean in terms of refunds for all importers. Claussen said Justice Amy Coney Barrett used the term "a mess" to describe the situation, and Claussen said, "I think it's more of a nightmare."

She pointed out that importers that paid tariffs under IEEPA also often owed standard duties, and perhaps other duties as well.

"Very technical, challenging work ahead for the customs teams," she said.

She said we don't know if the Supreme Court will only authorize refunds for the companies that are parties to these two lawsuits. However, a class action suit was filed recently, and was assigned to the same judge as the Learning Resources case (see 2511050055).

Claussen noted that Katyal suggested the Supreme Court could issue a stay on the refunds element, "so that Congress could intervene to deal with refunds, or, maybe more controversially, the court could decide to give only prospective relief.

"Whether there's an administrative agency solution, a litigation court-based solution, or a congressional legislation solution, or some combination of all three is anyone's guess."