Trade & Customs Oct 10, 2026 · 8 min read

Two new routes to IEEPA tariff refunds: a class action and CAPE Phase 3

Trade court opens an IEEPA refund route for importers that never sued. On 8 October the US Court of International Trade certified a nationwide class of importers that paid IEEPA tariffs (emergency tariffs the Supreme Court struck down in February) between 1 February 2025 and 19 February 2026 and never filed their own lawsuit. Without a class, the court estimates about $30 billion could stay with the government, according to Supply Chain Dive. In our view this matters more to small importers than Phase 3 of CAPE, the US customs refund system, which since 6 October covers old, closed entries only for importers that sued. But no class money moves yet. The government has until 23 November to appeal. We expect it to, and we expect no class payouts before mid-2027.

Trade court opens a refund route for importers that never sued, while CBP starts paying litigants on closed entries
On Thursday 8 October, the US Court of International Trade (CIT) certified a nationwide class of importers in Freestyle World Inc. v. United States. The class covers every importer that paid IEEPA tariffs between 1 February 2025 and 19 February 2026 and has not filed its own lawsuit. The court estimates that without a class, about $30 billion of unlawfully collected duties would stay with the government, according to Supply Chain Dive.
Two days earlier, on 6 October, US Customs and Border Protection (CBP) opened the third phase of its refund system. That phase pays out on old, closed entries, but only for importers that sued.
So there are now two new routes back to the money. One is fast but narrow. The other is wide but slow. Our view is that the class is the bigger story for forwarders’ customers, because it reaches the small importers who never acted. But nobody should book that money yet.

How we got here

IEEPA is the International Emergency Economic Powers Act. The administration used it to impose sweeping tariffs in 2025. On 20 February 2026 the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that IEEPA does not authorise tariffs, according to a Troutman Pepper Locke client note. The class period ends on 19 February, the day before that ruling.
The trade court then ordered CBP to refund about $166 billion collected under those tariffs, according to Supply Chain Dive. CBP built a system called CAPE, short for Consolidated Administration and Processing of Entries, to handle it. Phase 1 launched on 20 April 2026, according to Perkins Coie. It covered entries that were unliquidated, or liquidated within 80 days. Liquidation is CBP’s final calculation of the duty owed on an entry. Perkins Coie warned at launch that “CAPE is not a “blanket” refund process.”
CAPE has moved a lot of money. Troutman put disbursements at over $86 billion in mid-August. As of 2 October, CBP had accepted about $136.6 billion in potential and certified refunds and sent about $126 billion in duties and interest to the Treasury for disbursement, according to Supply Chain Dive and Charles M. Schayer & Co.
The hard part is what is left. Entries liquidated long ago are “finally liquidated”. CBP says it cannot reopen them without a court order. Troutman’s note describes CBP as having “no current administrative pathway to refund those duties absent a court order.” That is why more than 4,000 refund suits have been filed, according to the court’s order. In mid-August, Troutman counted about 3,700.

Route one: CAPE Phase 3, for importers that sued

Phase 3 handles those finally liquidated entries, but only for importers that sued and are covered by the trade court’s refund order. It was first targeted for the end of July, according to Supply Chain Dive. A 20 August date was then postponed, according to Cherry Bekaert. It finally went live on 6 October.
Eligibility is tight. Only plaintiffs that gave CBP a valid importer of record (IOR) number by 30 July 2026 can file now. The IOR is the party legally responsible for the entry and its duties. Plaintiffs that sent the number later must wait for further instructions. CBP has not said when those will come, according to Supply Chain Dive.
Early volume is real. As of 6 October, CBP had accepted 477 Phase 3 declarations covering 425,517 entries, according to a CBP court filing reported by Supply Chain Dive. That works out to roughly 890 entries per declaration on average, which suggests to us that the early filers are larger, organised importers. Phase 3 is expected to handle about $11.4 billion, or 6.9% of IEEPA tariffs.
Kelly Nelson of KPMG Trade & Customs Services called it “Another important step in the CAPE process” on LinkedIn, as quoted by Supply Chain Dive. She added that it is “one importers involved in the tariff litigation will want to continue to monitor”.
One practical snag carries over from earlier phases. In September, CBP reported that “approximately $1.3 billion in payments have not yet been transmitted as they lack Automated Clearinghouse (ACH) information,” according to Cherry Bekaert. ACH is the US electronic bank transfer system. Missing bank details have already parked real money.

Route two: the class, for importers that did not

The class is the bigger idea. A class action lets one case stand in for many parties with the same claim. Here, it means an importer that never sued could still be covered by a single refund order.
Judge Richard Eaton has been weighing this since at least the summer. At an August hearing he warned that “tens of thousands of importers” could still be denied refunds they are owed, according to the Washington Examiner. The order explains who they are. It says some importers of record “have not taken advantage of CAPE,” and that they are believed to be “overwhelmingly small importers”, held back by cost, effort or not knowing the programme exists, according to Supply Chain Dive.
That is why forwarders should pay attention. Small importers are often a forwarder’s customers. Many of them filed nothing with CAPE and hired no lawyer.
But the order does not pay anyone. James Kim of ArentFox Schiff said “The decision doesn’t immediately expand refund eligibility or direct payment,” as quoted by Supply Chain Dive. “It does, however, create a potential path forward for non-litigants, toward a single order requiring refunds to be issued to importers that have not pursued individual lawsuits.”
The next steps are procedural. A closed conference is set for 13 October, and proposed scheduling for further class filings is due on 22 October, according to Supply Chain Dive. The government has until 23 November to appeal, according to Schayer. Separately, the Justice Department is still appealing the order to refund all finally liquidated entries. It argues the court can only order refunds for importers that sued, according to Supply Chain Dive. That appeal sits at the Federal Circuit.
Schayer’s summary is the line to remember: “Importers should not assume that refunds will arrive automatically.” It also notes that some parties that are not the importer of record may fall outside the class.

What happened last time

The closest precedent is the Harbor Maintenance Tax. In 1998 the Supreme Court ruled in United States v. U.S. Shoe Corp. that the tax could not be charged on exports, according to FreightWaves. Customs then set up a refund process.
It did not go smoothly. Refunds ran through a database that proved inaccurate against paper records. Claims ran into key-entry mistakes, illegible filings, and older claims for which Customs no longer had the paperwork. Ford recovered more than $17 million, but about $2.5 million was still in dispute when the Federal Circuit ruled against it in April 2012, according to FreightWaves. That was 14 years after the Supreme Court decision.
The lesson for this cycle is simple. Refunds go to whoever can prove the entry and the payment. Records decide outcomes.

What it means for forwarders, shippers and lanes

For brokers with litigant clients, Phase 3 is live work now. Check that each client gave CBP a valid IOR number by 30 July. Confirm ACH details are complete. File declarations for finally liquidated entries.
For non-litigant customers, the class is a reason to prepare, not to relax. Pull entry reports from ACE, CBP’s Automated Commercial Environment. Map each entry’s liquidation date. Size the refund. Then let the customer decide, with a customs lawyer, whether to rely on the class or sue on their own.
That decision has a clock. Troutman notes that the two-year window to sue for some early-2025 entries could close as early as February 2027. It also warned that a “wait and see” approach could let deadlines pass before the appeals are resolved. Troutman flagged another catch. The class sought in a parallel case, V.O.S. Selections, was under Rule 23(b)(2), which has no opt-out. Members of a class like that are bound by its result.
The IOR question matters on DDP shipments, where the seller pays duty and delivers to the buyer. If a forwarder or an overseas seller acted as IOR, the refund flows to them, not to whoever bore the cost. In our view, that will turn into contract disputes between sellers, buyers and service providers in 2027.
This is not one lane’s problem. Our read is that the exposure is heaviest wherever small importers dominate: e-commerce, consumer goods and fragmented trans-Pacific freight.

Our call

We expect the government to appeal the class certification before the 23 November deadline. Its whole Federal Circuit case rests on the idea that only importers that sued can be refunded on closed entries. Letting a class stand would concede that point.
That ties the class to the Federal Circuit’s timetable. We do not expect any class member to receive a refund under the class before mid-2027.
In the meantime, the safest route is still to sue. We expect the count of individual CIT refund suits to pass 5,000 before the February 2027 filing deadlines arrive, as importers with large closed-entry exposure stop waiting for the class.

Sources