The Supreme Court’s 6-3 ruling in Learning Resources, Inc. v. Trump invalidated IEEPA tariffs imposed between February 2025 and February 2026. The CIT’s March 4 order directed CBP to process universal refunds. For in-house counsel, this creates immediate obligations around claim preservation, risk assessment, contractual review, and — for some companies — litigation strategy.
This isn’t just a customs compliance issue that can be delegated to your broker. The legal department’s involvement is critical on several fronts: protecting the company’s recovery rights, managing downstream exposure from customer pass-through claims, reviewing third-party agreements related to the recovery, and ensuring the company’s approach is legally defensible under potential audit. For the full recovery landscape, see the complete guide to IEEPA tariff refunds.
Claim preservation: the non-negotiable priority
Before diving into strategy, there’s one thing that cannot wait: preserving your company’s recovery rights on every eligible entry. The 180-day protest window is a hard statutory deadline. Once it passes, the entry can only be recovered through more expensive CIT litigation.
Immediate action: Direct your trade compliance team or customs broker to identify every liquidated entry within the 180-day window and file protective protests. Even if you haven’t finalized your overall recovery strategy, a filed protest preserves your rights at minimal cost. A missed deadline eliminates options permanently.
Statute of limitations for CIT claims: For entries outside the protest window, the statute of limitations for CIT action is generally two years from the date of the contested government action. Track these dates on every entry. The statute of limitations analysis provides the detailed framework.
Tolling agreements: In some cases, it may be possible to toll the statute of limitations through agreement with the government. This is unusual in customs cases but worth exploring if you have a large portfolio of entries approaching the deadline.
Risk assessment framework
In-house counsel should evaluate the IEEPA recovery opportunity through a structured risk framework:
Legal risk (low)
The Supreme Court ruling was 6-3, with a clear majority opinion. The constitutional basis — that IEEPA does not authorize tariffs as a tool of trade regulation — is well-grounded. The government’s likelihood of overturning this through legislative action or future litigation is minimal. The CIT’s refund order is being implemented. Legal risk to the recovery itself is low.
Residual legal risks:
- Government could seek a narrow rehearing on specific aspects (very unlikely given the margin)
- CBP could impose procedural barriers to slow processing (possible but being monitored by the trade bar)
- Individual entry challenges based on classification or documentation (entry-specific, not systemic)
Financial risk (low to moderate)
The refund amounts are precisely calculable from entry data. The primary financial risk is timing: government processing through the CAPE system takes 18-36 months, during which the company bears the carrying cost of the receivable. Statutory interest partially compensates, but typically below the company’s cost of capital.
For companies pursuing immediate capital through claim assignment, the financial risk shifts from timing to discount — you receive certainty at a lower amount. The time value analysis helps quantify this tradeoff.
Operational risk (moderate)
The operational risk lies in documentation gaps, missed deadlines, and filing errors. These are manageable through proper oversight but require active attention. The trade compliance officer’s playbook covers the operational execution in detail.
Downstream risk (variable)
This is where legal involvement is most critical. If your company passed IEEPA tariff costs through to customers, the recovery creates potential exposure to downstream claims. More on this below.
| Risk Category | Level | Primary Mitigation |
|---|---|---|
| Legal (ruling overturned) | Low | Monitor; 6-3 margin provides stability |
| Financial (timing/discount) | Low-Moderate | Path optimization; immediate capital option |
| Operational (deadlines/errors) | Moderate | Compliance oversight; broker coordination |
| Downstream (customer claims) | Variable | Contract review; proactive management |
Downstream customer claims analysis
If your company increased prices, added tariff surcharges, or adjusted cost-plus contracts to pass IEEPA duties through to customers, those customers may assert claims to a share of the recovery. This is the highest-priority legal issue for in-house counsel.
Contractual pass-through analysis
Explicit tariff surcharges. If you invoiced customers with a separate “IEEPA tariff surcharge” or “China tariff surcharge” line item, customers have a strong contractual argument that the surcharge was a cost pass-through, and the recovery of the underlying cost should flow back to them. Review every customer agreement and invoice template for tariff-specific line items.
Cost-plus contracts. Contracts that calculate price as cost plus a markup may require repricing if the cost basis changes. If IEEPA duties were included in the “cost” component, the refund reduces that cost, and the customer may be entitled to a retroactive adjustment.
Fixed-price contracts. If prices were set without explicit reference to tariffs, the argument for customer claims is weaker. The price was the price, and internal cost fluctuations are the seller’s business. However, if there’s written evidence (emails, pricing letters) linking the price increase specifically to IEEPA tariffs, the argument strengthens.
Distributor and reseller agreements. Some distribution agreements include provisions for price adjustments based on changes in duty rates. Check whether these provisions are triggered by the IEEPA invalidation and refund.
Equitable arguments
Even without a contractual basis, customers may assert equitable claims — unjust enrichment, implied duty of good faith — arguing that retaining a tariff recovery while the customer bore the tariff cost through higher prices is inequitable. These arguments are harder to sustain but can create business relationship pressure even if they lack strong legal footing.
Recommended approach
- Inventory all customer contracts with tariff-related provisions. Flag any agreement that references tariffs, surcharges, cost adjustments, or duty pass-through.
- Quantify potential downstream exposure. Calculate the total tariff surcharges or cost-plus adjustments passed to customers during the IEEPA period.
- Develop a position paper. Before customers come asking, have a clear internal position on which claims you’ll honor and which you’ll defend. Get buy-in from the C-suite and sales leadership.
- Proactive communication. For major customers, consider proactive outreach to discuss the situation. Being responsive is better than being surprised by a demand letter.
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Third-party agreement review
IEEPA recovery often involves third-party service providers — customs brokers, claims advisors, trade attorneys, and potentially claim buyers. In-house counsel should review every agreement related to the recovery.
Customs broker agreements
Your broker’s engagement letter or service agreement may include provisions about additional services (like PSC filings and protests) that fall outside the standard import processing scope. Confirm:
- Fee structure for recovery-related filings
- Scope of authority under the power of attorney
- Indemnification and limitation of liability provisions
- Data ownership and retention obligations
Claims advisory agreements
If you’re working with a claims advisory firm to manage the recovery process, review the engagement terms carefully:
- Fee structure (flat fee, hourly, contingency, or percentage of recovery)
- Exclusivity provisions — are you locked in, or can you pursue parallel paths?
- Termination rights and any tail provisions on fees
- Data use and confidentiality obligations
- Conflicts of interest — does the advisor represent your competitors?
Claim assignment agreements
If you’re considering claim assignment for immediate capital, the assignment agreement is a critical document. Key review points:
Representations and warranties. What are you representing about the validity of the claim, the underlying entries, and the duty amounts? Ensure the representations are accurate and limited to matters within your actual knowledge.
Non-recourse provisions. A true non-recourse assignment means the buyer bears all risk of CBP non-payment. Verify that the agreement doesn’t include hidden recourse provisions — clawbacks, purchase price adjustments, or indemnification obligations that effectively put risk back on you.
Scope of assignment. What exactly is being assigned? The duty refund, the interest, or both? Are you assigning all entries or a subset? Retain flexibility to pursue different paths for different entries.
Confidentiality. Assignment agreements should include mutual NDA provisions. Your entry data, duty amounts, and supplier information are competitively sensitive.
Compliance with customs law. Ensure the assignment structure complies with CBP’s requirements for claim transfers. An improperly structured assignment could jeopardize the recovery.
CIT litigation strategy
For entries outside the protest window, CIT litigation is the only government recovery path. In-house counsel should evaluate:
Case assessment. Is the claim strong enough to justify litigation costs? For IEEPA cases filed after the Supreme Court ruling, the legal merits are clear. The question is whether the amount at stake justifies the expense.
Counsel selection. CIT litigation requires an attorney admitted to the Court of International Trade bar. This is a specialized practice area. Your regular outside counsel may not have CIT experience. Our partner network includes vetted CIT practitioners if you need a referral.
Fee arrangement. CIT cases can be handled on an hourly, fixed-fee, or contingency basis. For straightforward IEEPA refund cases where the legal merits are clear, contingency or fixed-fee arrangements may be more cost-effective than hourly billing.
Consolidation. If you have multiple entries requiring CIT action, consolidate them into a single case where possible. This reduces legal fees and simplifies case management.
Timeline expectations. CIT cases typically take 12-24 months. During that time, the entries are not in the CAPE queue — they’re in the court system. Factor this into your overall recovery timeline planning.
Confidentiality and privilege considerations
IEEPA recovery involves sharing sensitive financial data — duty amounts, import volumes, supplier relationships, pricing strategies. Counsel should establish appropriate protections:
Attorney-client privilege. Legal analysis of recovery strategy, downstream exposure, and litigation options should be protected by privilege. Mark privileged communications clearly and limit distribution to those with a need to know.
Work product protection. Analysis of claim values, risk assessments, and litigation strategy prepared in anticipation of litigation (even if litigation doesn’t ultimately occur) may be protected as work product.
Confidential business information. Entry data shared with customs brokers, claims advisors, and potential claim buyers should be subject to NDAs. Standard customs broker engagement letters may not include adequate confidentiality protections for the volume and sensitivity of data involved in a recovery project.
Trade secret considerations. Your import data — product mix, supplier names, volumes, and pricing — could be valuable to competitors. Ensure that every third party receiving this data is bound by appropriate confidentiality obligations.
Internal reporting and governance
In-house counsel should establish a governance framework for the IEEPA recovery:
Authority matrix. Who has authority to approve recovery filings, assign claims, engage advisors, and initiate litigation? Get this documented before the process begins, not in the middle of it.
Board reporting. If the recovery is material, the board should be informed. Our board briefing template provides a structured format. Legal should review board materials for accuracy and appropriate caveats.
Disclosure obligations. For public companies, the IEEPA receivable may trigger disclosure obligations under SEC rules — in quarterly filings, in the MD&A section, and potentially in material event disclosures if the amounts are significant relative to earnings.
Insurance review. Check whether any insurance policies — trade credit insurance, business interruption, or political risk coverage — have provisions related to tariff recovery or government refunds. Some policies may have notice requirements or coordination obligations.
Insurance and indemnification review
In-house counsel should evaluate whether any insurance policies or indemnification provisions relate to the IEEPA recovery:
Trade disruption insurance. If your company purchased trade disruption or political risk insurance that covered IEEPA tariff costs, the recovery may trigger notice obligations or repayment provisions under the policy. Some policies require insureds to pursue and remit recovery proceeds.
Supply chain insurance. Business interruption or supply chain insurance policies may have been triggered by the IEEPA tariff period. If claims were paid, the IEEPA recovery may constitute a subrogation event. Review policy terms.
D&O considerations. If the IEEPA recovery is material and the board is informed late, there could be governance questions. Ensure timely board notification and documentation of management’s recovery strategy. The board briefing template provides a structured format.
Indemnification in M&A agreements. If your company was acquired during or after the IEEPA period, the purchase agreement may include representations about government receivables, contingent assets, or tax refunds. The IEEPA recovery may fall within those representations.
Regulatory compliance and enforcement considerations
The IEEPA recovery intersects with several regulatory compliance areas that legal should monitor:
False Claims Act risk. Filing knowingly inaccurate recovery claims with CBP could expose the company to False Claims Act liability. While the risk is low for good-faith filings based on accurate entry data, counsel should ensure that every filing is supported by verified data and that no one in the organization is inflating claim amounts or fabricating documentation.
Anti-kickback and fee-splitting concerns. If you’re working with third-party claims advisors or brokers on a contingency fee basis, ensure the fee arrangement complies with applicable regulations. Customs broker compensation is regulated by CBP, and certain fee-splitting arrangements may raise concerns.
Export control coordination. For companies that both import and export, the IEEPA recovery process may intersect with export compliance if the same products are subject to export controls. The recovery filing itself doesn’t implicate export controls, but counsel should ensure that the data shared with third parties during the recovery process doesn’t inadvertently disclose export-controlled technical data.
Sanctions screening. If any of your IEEPA-period imports involved parties that are now subject to OFAC sanctions, the recovery filing should be reviewed for any sanctions implications. This is an edge case but worth screening for.
Building a playbook for future trade disruptions
The IEEPA experience provides a template for how legal should respond to future tariff changes. Document the following for your precedent file:
- The timeline from ruling to first filing — how long did it take your company to act?
- The cross-functional coordination model — who was involved and what worked?
- The contractual provisions that created downstream exposure — which contract clauses should you add or modify going forward?
- The third-party relationships that supported recovery — which advisors and brokers performed well?
- The communication strategy — how did you handle board, customer, and supplier notifications?
Having this playbook ready means your company can respond in days, not weeks, when the next trade policy disruption occurs.
The bottom line for legal
In-house counsel’s role in IEEPA recovery is threefold: protect the company’s recovery rights through claim preservation and deadline management, manage downstream exposure from customer pass-through claims, and ensure every third-party relationship is properly documented and defensible.
The legal work isn’t complex — the Supreme Court ruling is clear, the recovery paths are well-established, and the amounts are precisely calculable. But the stakes are high enough that legal oversight isn’t optional.
Start with an Impact Assessment to quantify the opportunity and identify the entries that need immediate legal attention — especially those approaching the protest window deadline.
Request your free Impact Assessment to identify time-sensitive entries and quantify your recovery →
