CIT show-cause hearing: CAPE Phase 3 refund tool by end July

On 9 June 2026 Senior Judge Richard K. Eaton of the U.S. Court of International Trade held a show-cause hearing in the consolidated IEEPA-tariff refund proceedings — lead case Euro-Notions Florida, Inc. v. United States, Court No. 25-00595 — on U.S. Customs and Border Protection’s compliance with the court’s refund orders implementing the Supreme Court’s 20 February 2026 ruling in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act, 50 U.S.C. § 1702(a)(1)(B), does not authorise the President to impose tariffs.¹² CBP Executive Assistant Commissioner for Trade Susan Thomas testified that refund claims accepted in Phase 1 of the Consolidated Administration and Processing of Entries (CAPE) tool covered approximately $90 billion of the approximately $166 billion in IEEPA duties collected from roughly 330,000 importers across roughly 53 million entries, that approximately $23 billion in refunds had been approved or transmitted, and that Phase 3 of the CAPE tool — the build addressing refunds on finally liquidated entries — will be operational by the end of July 2026.¹³ Judge Eaton had ordered CBP Commissioner Rodney S. Scott to appear in person; after the Department of Justice sought mandamus and the U.S. Court of Appeals for the Federal Circuit stayed the testimony order, the CIT amended its order on 5 June 2026 to permit substitute testimony, and Thomas appeared in Scott’s place.⁴ The government on 2 June 2026 noticed an appeal to the Federal Circuit contesting the refund order to the extent it requires reliquidation of finally liquidated entries of importers not before the court.⁵

1. The Consolidated Administration and Processing of Entries (CAPE) tool is U.S. Customs and Border Protection’s technical platform for processing tariff refunds at scale. CAPE Phase 1, deployed 20 April 2026, covers unliquidated entries and entries within 80 days of liquidation; Phase 2, announced for deployment in the following weeks, covers reconciliation-flagged entries; and Phase 3 is the substantially larger build addressing refunds on finally liquidated entries. The end-of-July 2026 readiness target stated at the 9 June 2026 hearing applies to the Phase 3 technical capability; the legal disposition of finally liquidated entries remains subject to the government’s pending appeal.³⁶

2. The government’s contested position rests on the protest-and-reliquidation framework of 19 U.S.C. § 1514, which provides at § 1514(a) that decisions of the Customs Service relating to liquidation are “final and conclusive” unless a timely protest is filed; § 1514(c)(3) sets a 180-day protest window from liquidation; and § 1520 addresses refunds and errors not amounting to a protestable decision. The government’s position is that entries liquidated more than 180 days before the IEEPA-tariff disposition are not subject to refund under § 1514 absent a timely protest, regardless of the Supreme Court’s substantive ruling that the underlying duties were not authorised by statute. Judge Eaton’s orders direct reliquidation without regard to the IEEPA duties for all affected importers; the Federal Circuit appeal contests that direction as applied to finally liquidated entries of non-litigants.⁷⁸⁵

3. The court’s refund oversight runs through successive orders of Senior Judge Eaton — the 4 March 2026 order directing liquidation and reliquidation without IEEPA duties, the CAPE status declarations beginning 12 March 2026, and the show-cause process of May-June 2026 — with the lead case reassigned from Atmus Filtration, Inc. v. United States (dismissed at the plaintiff’s request) to Euro-Notions Florida, Inc. in early April 2026.⁹ The end-of-July 2026 CAPE Phase 3 milestone is the next procedural inflection point at which the court is expected to address the disputed finally-liquidated-entry refunds.

4. The government stated in the CIT proceedings that approximately $166 billion in IEEPA duties were collected; the refund flow appears as offsets to customs receipts in the Treasury Monthly Treasury Statement, with interest at the 19 U.S.C. § 1505(c) statutory rate accruing from the date of deposit. The timing and scope of the remaining refund flow depend on resolution of the finally-liquidated-entry appeal and on CBP’s CAPE Phase 3 deployment in the end-of-July 2026 window; importers preserving refund rights on entries within the § 1514(c)(3) protest window continue to file protests under existing CBP guidance.¹⁰¹¹