While the media focus on the political and policy implications of the recent federal appellate court decision upholding in-part (and remanding in-part) a lower court summary judgment against President Trump’s “Liberation Day” tariffs, there are both legal and judicial aspects of the case that merit attention as the case wends its way to expedited consideration by the Supreme Court. (The tariffs remain in place pending the Supreme Court’s decision; oral arguments are scheduled for early November.)
First, it bears underscoring that while the Federal Circuit Court of Appeals endorsed the substantive aspects of the lower court’s decision, it nonetheless remanded the court’s remedy in the case—a permanent injunction—back to the court to apply the subsequently released Supreme Court’s decision in Trump v. Casa, Inc. regarding the authority of lower courts to issue “universal injunctions.”
Secondly, while much of the media group the case under the broad rubric of executive power, the case circles around an issue of statutory interpretation regarding congressional delegation to the president. The case does not relate to the distinct legal issue of inherent executive power (that is, the case does not relate to an exercise of presidential power absent congressional authorization).
The specific question in the case concerns whether Congress statutorily delegated authority to the president to impose Liberation Day tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977. The lower court, a three-judge panel of the US Court of International Trade (CIT), held in a summary judgment that it did not. The Federal Circuit Court of Appeals, in a 7-4 decision, upheld the CIT’s summary judgment.
Both decisions held only that current law does not authorize the imposition of the president’s tariffs. The media often get so caught up in reporting the judicial horse race—who’s winning and who’s losing in court—that they lose focus on the fact that statutory interpretation cases, if decided adversely to the preferences of current policy makers, are fairly easy to reverse.
To wit, irrespective of what the Court decides, Congress was entirely free, and will remain free, to enact new legislation authorizing the tariff system the president wants to impose (provided Congress is careful to provide an “intelligible principle” for its delegation of authority to the president).
Thirdly of note is that the partisan composition of the lower and appellate court coalitions belies oft-repeated narratives of partisan judges. There were bipartisan judicial coalitions at both levels of court decisions.
The Original Decision by the US Court of International Trade
The court of original jurisdiction in this case was a specialized Federal court, the US Court of International Trade. Despite its specialized jurisdiction, it is an Article III court. The three-judge panel for the court unanimously granted the requested injunction against the tariffs in summary judgment. Of note, a majority of the three-judge panel were Republican appointees: President Trump appointed one judge (Judge Reif), Reagan appointed one judge (Restani), and Obama appointed one judge (Katzmann). All agreed that the tariffs exceeded the president’s statutory authorization.
The appellate court in the case, the United States Court of Appeals for the Federal Circuit, is also a specialized court, with appellate jurisdiction over exclusively federal questions related to trade, patents, trademarks, federal employees, and a few other areas.
The full appellate court, less one judge (who is involved in an ongoing dispute with the court unrelated to the tariff decision), affirmed the lower court’s decision, but remanded the question of appropriate remedies back to the trial court. Of the seven judges voting with the majority, one was appointed by a Republican president, and the other six were appointed by Democrats. More notably, among the four dissenting judges, two were Obama appointees and the other two were George W. Bush appointees.
As mentioned above, the CIT granted summary judgment on the tariffs. “Summary judgments” require that there be “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
To reverse a lower federal court’s summary judgment, a court of appeals needs to find that the lower court “made a clear error of judgment in weighing the relevant factors or exercised its discretion based on an error of law or clearly erroneous fact findings.”
Congress and the president need not wait even for an expedited Supreme Court decision to move to enact new legislation.
The CIT’s decision was derived from two conclusions. First, the CIT concluded that IEEPA’s language authorizing the president to “regulate” imports given a national emergency did not extend to what it concluded was the president’s assertion of authority to impose “unbounded tariffs.”
In concluding this, the CIT noted, first, the Delegation Doctrine’s requirement that a congressional delegation required an “intelligible principle” on which presidential action would be based. Secondly, the CIT concluded that the president’s assertion of authority to impose the Liberation Day tariffs did not meet the “intelligible principle” threshold. The court also made passing reference to the Major Questions Doctrine. This recently articulated doctrine requires that congressional delegation be clearly stated when executive authority asserts delegated authority in matters of “vast economic and political significance.”
Secondly, the CIT held that the Administration’s asserted justification for the tariffs did not rise to the level required by the IEEPA. The statute authorizes presidential action in response to an “unusual and extraordinary threat.” The court held that the Administration did not assert “[a] standard inherently applicable to the exercise of delegated emergency” and, as a result, it rejected the Administration’s claim that the tariffs bear “a reasonable relation . . . to the emergency.”
The Decision by the United States Court of Appeals for the Federal Circuit
The appellate court reviewing the CIT’s grant of summary judgment applied a “clear error” standard of review, asking whether the CIT decision resulted from an “abuse of discretion” by making “an error of law or clearly erroneous fact findings.”
The appellate court’s majority nonetheless highlighted different aspects of the case than the CIT decision did.
First, the appellate court made much more of the distinction between taxes and regulations than the CIT’s opinion did. The IEEPA authorizes the president to “regulate” imports in a national emergency. The appellate court argued that taxing something is different than regulating something.
Beyond different dictionary definitions of “tax” and of “regulate,” the majority pointed to laws in which, unlike the IEEPA, the tariff power was delegated to the president in “clear and precise terms.” Drawing on a logic similar to what courts assert in preemption cases, it made the argument that congressional practice habitually delegates tariff authority in express statutory language. Absent that express delegation, the court was reluctant to read the statute to authorize a tax—the tariffs—when the express language of the statute authorized only regulatory power.
Like the CIT, the appellate majority buttressed its argument by appeal to the Major Question’s Doctrine. It concluded,
we discern no clear congressional authorization by IEEPA for tariffs of the magnitude of the Reciprocal Tariffs and Trafficking Tariffs. Reading the phrase “regulate . . . importation” to include imposing these tariffs is “a wafer-thin reed on which to rest such sweeping power.”
As a result, the majority held that the substance of the CIT summary judgment was not in “clear error” even as it remanded the remedy—the universal injunction—back to the CIT.
The four dissenting judges (including, as noted, two judges appointed by President Obama) pointed out in response that, first, while tariffs (and taxes more generally) can be used for raising revenues, they can and have often been used for regulatory purposes as well.
Secondly, the dissenters argued that the IEEPA does meet the Delegation Doctrine’s requirement that a congressional statute provide an intelligible principle for the exercise of delegated authority by the president. Not only does the IEEPA require the “declaration of national emergency,” the dissenters wrote, but it also imposes other conditions in the statute relating to the nature of the external threat to the nation. These were sufficient to provide the required “intelligible principle” for delegation to the president.
Further, the dissenters observed that in articulating its Delegation Doctrine objections, the CIT opinion did not explain why “these particular tariffs” would be an unconstitutional exercise of “’unlimited’ tariff authority.”
The legal issues in the case regarding whether the IEEPA delegates the authority that President Trump asserted in imposing the tariffs notably cut across political lines. This is obvious given the cross-cutting judicial coalitions at both the trial court and appellate court levels. The original CIT panel included a Trump appointee as well as a Reagan appointee; the appellate court dissenters included two Obama appointees as well as two George W. Bush appointees. The decisions do not neatly fit into current narratives on both left and right regarding judges laying down for Trump, on the one hand, or seeking to stymie Trump’s political goals on the other. Beyond that, it merits emphasis that the case implicates “only” an issue of statutory interpretation. Congress and the president need not wait even for an expedited Supreme Court decision to move to enact new legislation that would fully and clearly authorize the president’s preferred tariff policy. Of course, that assumes that the Republican-controlled Congress wants to authorize the president’s tariff policy. But that’s a political issue, not a legal issue.