When The Government Creates a “Mess”, It, Not the Victims Should Pay for It
At the argument in Learning Resources v. Trump at the Supreme Court, Justice Barrett asked Neal Katyal, representing the challengers to the tariffs, whether the Court ruling against the administration would create “ a mess.” His response appeared to convince her that it would be, as she repeated, “a mess.” The briefing by the Government in Learning Resources, also focused on the “parade of horribles” that would follow the Court’s striking down the blatantly unlawful International Emergency Economic Powers Act (“IEEPA”) tariffs:
“Suddenly revoking the President’s tariff authority under IEEPA,” he warns, “would have catastrophic consequences for our national security, foreign policy, and economy.” Ibid. The President has made clear that “[i]f the United States were forced to pay back the trillions of dollars committed to us, America could go from strength to failure the moment such an incorrect decision took effect.” Id. at 1-2. In short, President Trump and his advisors have determined that erroneously invalidating the IEEPA tariffs “would have catastrophic consequences for our national security, foreign policy, and economy.” CAFC Doc. 154, at 1.
A reoccurring question is what happens if the tariffs are declared unlawful? Well, the Government will have to give the money back. There has been speculation that the Court will avoid this by making the decision “prospective”, but that would be a miscarriage of justice even if allowable. In fact, the Court of International Trade (CIT) has procedures for recovering improperly paid tariffs. If the Government mis-categorizes your imported product or part you can apply or “protest” the payment and get it back in the CIT. There have not been “trillions” collected in tariffs yet, thankfully. But the $150 billion that have been wrongfully paid out by Americans can be returned to them and should be.
The Government should not be able to unlawfully seize billions of dollars from Americans and then plead that its wrongful seizure of the money makes restitution too disruptive. It is a basic maxim of law since Roman times that Nullus commodum capere potest de injuria sua propria. Roughly, “the wrong doer should not benefit from his wrongdoing.” In this case the plea that so much has been taken from so many Americans across so many transactions that unraveling it will be too hard should fall on deaf ears.
Large companies like Costco, that, unlike NCLA’s clients from Emily Ley’s Simplified, to FireDisc to Smirk & Dagger, have done nothing to overturn this unlawful executive action, are now leaping on the tariff refund bandwagon. This is all to the good, because the next time the Executive attempts such a move it should be reminded of how much the Government had to pay back with the concomitant actions it had to defend as well. Finally, the small companies and individuals who paid small amounts should also get those amounts returned. The question remains: will they be able to do so by class action or another method that allows them to recover without attorney’s fees being a prohibitive bar to attempting recovery?
