Learning Resources, Inc. v. TrumpLearning Resources, Inc. v. Trump
- Reporters:
- ,
- Before:
- Rudolph Contreras
DENYING DEFENDANTS’ MOTION TO TRANSFER VENUE; GRANTING PLAINTIFFS’ MOTION FOR A PRELIMINARY INJUNCTION
I. INTRODUCTION
Learning Resources, Inc. and hand2mind, Inc. (“Plaintiffs”) are small businesses that develop educational toys and products for children. They manufacture most of their products in China, Taiwan, Korea, Vietnam, Thailand, and India. After President Donald Trump invoked the International Emergency Economic Powers Act (“IEEPA”),
Defendants have moved to transfer this action to the United States Court of International Trade, arguing that that court has exclusive jurisdiction under
This case is not about tariffs qua tariffs. It is about whether IEEPA enables the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy. The Court agrees with Plaintiffs that it does not. For the reasons discussed below, the Court denies Defendants’ motion to transfer and grants Plaintiffs’ motion for a preliminary injunction.
II. BACKGROUND
Six months after the United States entered World War I, Congress passed the Trading with the Enemy Act of 1917 (“TWEA”), which gave the President a broad range of powers over international trade in times of war and, as amended in 1933, national emergencies. Pub. L. No. 65-91, 40 Stat. 411 (1917), codified as amended at
In 1977, Congress responded by limiting TWEA’s application “solely to times of war.” Id. at 227 (majority opinion); see also
Section 1701 of IEEPA provides that President can use the statute “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States,” if he declares a national emergency “with respect to such threat” pursuant to the National Emergencies Act,
When Section 1701’s conditions are met, Section 1702(a)(1) establishes that the President may, “by means of instructions, licenses, or otherwise”:
(A) investigate, regulate, or prohibit—
i. any transactions in foreign exchange,
ii. transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,
iii. the importing or exporting of currency or securities,
by any person, or with respect to any property, subject to the jurisdiction of the United States;
(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States; and[]
(C) when the United States is engaged in armed hostilities or has been attacked by a foreign country or foreign nationals, [take additional actions].
Beginning in February 2025, President Trump issued a series of executive orders invoking IEEPA to unilaterally impose tariffs on many foreign goods. The executive orders used three other statutory provisions to implement the tariffs: the National Emergencies Act; Section 604 of the Trade Act of 1974, which authorizes the President to edit the Harmonized Tariff Schedule of the United States (“HTSUS”); and
The February 1 China Order. On February 1, the President issued an executive order imposing 10 percent ad valorem tariffs on Chinese goods. Exec. Order No. 14,195, Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China, 90 Fed. Reg. 9121 (Feb. 1, 2025) (“February 1 China Order”). The order was predicated on the influx of synthetic opioids into the United States through China, which exports fentanyl and “related precursor chemicals” to the U.S. Id. The order “expand[s] the scope of the national emergency” at the
The March 3 China Amendment. Around one month later, President Trump raised the China tariffs to 20 percent based on his determination that China had “not taken adequate steps to alleviate the illicit drug crisis through cooperative enforcement actions.” Exec. Order No. 14,228, Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China, 90 Fed. Reg. 11463 (Mar. 3, 2025) (“March 3 China Amendment”). Then he ordered the elimination of duty-free de minimis treatment for goods subject to the tariffs, contradicting a statutory program permitting duty exemptions for imported goods valued at less than $800. Exec. Order No. 14,256, Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China as Applied to Low-Value Imports, 90 Fed. Reg. 14899 (Apr. 2, 2025). The Department of Homeland Security (“DHS”) and Customs and Border Patrol (“CBP”) implemented the President’s China orders by modifying the HTSUS. See Implementation of Additional Duties on Products of the People’s Republic of China Pursuant to the President’s February 1, 2025 Executive Order Imposing Duties To Address the Synthetic Opioid Supply Chain in the People’s Republic of China, 90 Fed. Reg. 9038-01 (Feb. 5, 2025) (implementing 10 percent tariff from February 1 China order); Further Amended Notice of Implementation of Additional Duties on Products of the People’s Republic of China Pursuant to the President’s Executive Order 14195, Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China, 90 Fed. Reg. 11426-01 (Mar. 6, 2025) (implementing 20 percent tariff from March 3 China Amendment).
Universal and Reciprocal Tariff Order. On April 2, President Trump announced sweeping tariffs on virtually every U.S. trading partner.2 Exec. Order No. 14,257, Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits, 90 Fed. Reg. 15,041 (Apr. 2, 2025) (the “Universal and Reciprocal Tariff Order”). These “Liberation Day” tariffs encompassed a 10 percent universal tariff plus additional country-specific tariffs ranging from 11 to 50 percent. Id. at 15045, 15049–50. The Universal and Reciprocal Tariff Order also announced a new national emergency “arising from conditions reflected in large and persistent annual U.S.
April 8 Reciprocal China Amendment & April 9 Reciprocal Modification. But on April 8, President Trump responded to retaliatory tariffs from China by raising the reciprocal tariff rate for China from 34 percent to 84 percent. Exec. Order No. 14,259, Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports From the People’s Republic of China, 90 Fed. Reg. 15,509 (Apr. 14, 2025) (“April 8 Reciprocal China Amendment”). Then, on April 9, President Trump suspended for 90 days the reciprocal tariffs listed in the Universal and Reciprocal Tariff Order for all countries but China. Exec. Order No. 14,266, Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment, §§ 2, 3, 90 Fed. Reg. 15625 (Apr. 15, 2025) (“April 9 Reciprocal Modification”). The April 9 Reciprocal Modification also increased the China reciprocal tariff rate to 125 percent. Id. At the highest level, the total tariffs on most Chinese goods reached a minimum of 145 percent. Ana Swanson & Alan Rappeport, Tariff Truce With China Demonstrates the Limits of Trump’s Aggression, N.Y. Times (May 12, 2025), available at https://www.nytimes.com/2025/05/12/business/economy/trump-trade-china-tariffs.html [https://perma.cc/BKS4-NTGJ]. After trade talks in Geneva, the U.S. lowered the minimum tariffs on Chinese goods to 30 percent. Id. The ten percent universal tariffs from the Universal and Reciprocal Order are still in effect. 90 Fed. Reg. at 15626.
President Trump has stated that the tariffs originating in the Challenged Orders will raise “billions of dollars, even trillions of dollars” in revenue. Mot. Prelim. Inj. at 13 (quoting Bailey Schulz, Trump is Rolling Out More Tariffs This Month. Where Does the Tariff Money Go?, USA Today (Apr. 4, 2025), https://www.usatoday.com/story/money/2025/04/03/trump-tariffs-where-will-money-go/82792578007/ [https://perma.cc/T5DN-73XL]). Treasury Secretary Scott Bessent estimated that the tariffs will enable the United States to collect up to $600 billion annually, paid mainly by U.S. businesses and consumers. Id. (citing Richard Rubin, Bessent Says Tariff Revenue Could Reach $600 Billion Annually, Wall St. J. (Apr. 4, 2025), available at https://www.wsj.com/livecoverage/stock-market-tariffs-trade-war-04-04-2025/card/bessent-says-tariff-revenue-could-reach-600-billion-annually-QJfDGCPYDY1C72Ljg1pt [https://perma.cc/R2RV-PNAW]).
Among that group are Plaintiffs. Learning Resources and hand2mind are family-owned companies based in Illinois that sell award-winning toys that help young children develop verbal, counting, and fine motor skills, and that introduce older children to science, technology, engineering, and math.3 Compl. ¶¶ 4, 10, ECF No. 1. They have more than 500 employees and sell their products in over 100 countries. Id. Plaintiffs pay tariffs to the federal government pursuant to the Challenged Orders because they import most of their products from China and other countries subject to IEEPA tariffs. Id. ¶ 24. According to the companies’ CEO, Richard Woldenberg, the new China tariff rates “are so high as to effectively prevent importation.” Decl. of Richard Woldenberg in Supp. of Pls.’ Mot. for Prelim. Inj. (“Woldenberg Decl.”) ¶ 6, ECF No. 9-1. The “scale of the IEEPA tariff burden is unsustainable” for their businesses, which may be forced to raise prices by 70 percent or more “as a matter of pure survival.” Id. ¶¶ 6, 9. Because Plaintiffs have “no realistic way” to cover the costs associated with the increased tariffs, “the tariffs act as an immediate ban on the products [they] import.” Id. ¶ 15. They estimate that the tariffs will increase their annual costs over forty-fold. Mot. Prelim. Inj. at 3.
Plaintiffs brought this lawsuit on April 22 against President Trump; Kristi Noem, Secretary of DHS; the Department of Homeland Security; Scott Bessent, Secretary of the Department of the Treasury; the Department of the Treasury; Howard Lutnick, Secretary of Commerce; the Department of Commerce; Pete R. Flores, Acting Commissioner of CBP; Customs and Border Patrol; Jamieson Greer, U.S. Trade Representative; and the Office of the U.S. Trade Representative (collectively, “Defendants”). See Compl. Two days later, Defendants filed a motion to transfer this action to the United States Court of International Trade (“CIT”). Defs.’ Mot. Transfer, ECF No. 8; Mem. of Law in Supp. of Defs.’ Mot. Transfer (“Mot. Transfer”), ECF No. 8, and Plaintiffs filed a motion for a preliminary injunction. Mot. Prelim. Inj.
The Court of International Trade is an Article III court that takes its current
Plaintiffs oppose the government’s motion to transfer on the grounds that IEEPA is not a law providing for tariffs. See Pls.’ Response to Mot. Transfer (“Pls.’ Transfer Opp’n”), ECF No. 18. The government filed an opposition to Plaintiffs’ preliminary injunction motion, Mem. of Law in Opp’n to Pls.’ Mot. for Prelim. Inj. (“Defs.’ PI Opp’n”), ECF No. 16, and Plaintiffs filed a reply, Pls.’ Reply in Supp. of Mot. for Prelim. Inj. (“Pls.’ PI Reply”), ECF No. 17. The government also filed a reply in support of its motion to transfer. Reply in Supp. of Defs.’ Mot. Transfer (“Defs.’ Transfer Reply”), ECF No. 21.
Three groups submitted amicus briefs. America First Legal Foundation (“America First”) filed a brief in support of Defendants’ motion to transfer. Br. of Amicus Curiae America First Legal Foundation in Supp. of Defs.’ Mot. Transfer (“America First Amicus Br.”), ECF No. 22. A group of law professors, former politicians, and legal experts filed a brief in support of Plaintiffs’ motion for a preliminary injunction. Law Professors’ Amicus Br. And finally, a group of small businesses affected by the Challenged Orders filed a brief in opposition to Defendants’ motion to transfer. Joint Br. of Amici Curiae Emily Ley Paper, Inc., D/B/A Simplified; Kilo Brava LLC; Kim’s Clothes and Fashion LLC; and Rokland LLC in Opp’n to Defs.’ Mot. Transfer (“Small Business Amicus Br.”), ECF No. 24.
Defendants also submitted three notices of supplemental authority: a hearing transcript from a similar case before the Court of International Trade, where a three-judge panel of the CIT heard argument on a motion for a preliminary injunction and a motion for summary judgment; a Florida district court’s order granting the government’s motion to transfer in a similar case; and a CIT decision dismissing a similar case, brought by a pro se plaintiff, for lack of standing. See Notice of Suppl. Authority, ECF Nos. 25, 25-1 (CIT hearing transcript); Notice of Suppl. Authority, ECF Nos. 26, 26-1 (decision in the Northern District of Florida transferring Emily Ley Paper to the CIT); Notice of Suppl. Authority, ECF Nos. 31, 31-1; (decision of the CIT dismissing for lack of standing in Barnes). Plaintiffs filed responses to the two court opinions. See Response to Notice of Suppl. Authority, ECF No. 27; Response to Notice of Suppl. Authority, ECF No. 32. Defendants also submitted as “additional exhibits” in support of their preliminary injunction opposition four declarations of U.S. government officials originally filed in a case pending before the CIT. Notice of Add’l Exs., ECF No. 34; see also Decls., ECF No. 34-1 (declarations of Secretary of State Marco Rubio (“Decl. of Marco Rubio”), Secretary of Treasury Scott Bessent (“Decl. of Scott Bessent”); Secretary of Commerce Howard Lutnick (“Decl. of Howard Lutnick”); and United States Trade Representative Jamieson Lee Greer).
III. LEGAL STANDARDS
A. Motion to Transfer for Lack of Jurisdiction
Federal courts, as courts of limited jurisdiction, have an obligation to ensure that the actions they consider are “limited to those subjects encompassed within a statutory grant of jurisdiction.” Ins. Corp. of Ireland, Ltd. v. Compagnie Des Bauxites de Guinee, 456 U.S. 694, 701 (1982). A plaintiff bears the burden of establishing a court’s subject-matter jurisdiction. Sweigert v. Perez, 334 F. Supp. 3d. 36, 40 (D.D.C. 2018). If a court where an action is filed finds “there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action . . . to any other such court . . . in which the action or appeal could have been brought at the time it was filed.”
B. Preliminary Injunction
“A preliminary injunction is ‘an extraordinary remedy that may only be awarded upon a clear showing that the [movant] is entitled to such relief.’” John Doe Co. v. Consumer Fin. Prot. Bureau, 849 F.3d 1129, 1131 (D.C. Cir. 2017) (quoting Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008)). “A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Winter, 555 U.S. at 20. “The last two factors ‘merge when the Government is the opposing party.’” Guedes v. Bureau of Alcohol, Tobacco, Firearms & Explosives, 920 F.3d 1, 10 (D.C. Cir. 2019) (quoting Nken v. Holder, 556 U.S. 418, 435 (2009)). “Of course, the movant carries the burden of persua[ding]” the Court that these factors merit preliminary relief, Fla. EB5 Invs., LLC v. Wolf, 443 F. Supp. 3d 7, 11 (D.D.C. 2020) (citing Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004)), and must do so by making a “clear showing,” Cobell, 391 F.3d at 258. A district court must generally consider each of these factors in deciding whether to issue a preliminary injunction. See Sherley v. Sebelius, 644 F.3d 388, 392–93 (D.C. Cir. 2011).
IV. ANALYSIS
A. Subject-Matter Jurisdiction & Likelihood of Success on the Merits
At the outset, Plaintiffs must establish that the Court has subject-matter jurisdiction over their claims. See Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992). The CIT has exclusive jurisdiction over “any civil action commenced against the United States, its agencies, or its officers, that arises out of any law of the United States providing for,” in relevant part, “tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue.”
This is undisputably a civil action against agencies and officers of the United States that “arises out of” IEEPA. See Kosak v. United States, 465 U.S. 848, 854 (1984) (interpreting “arising out of” to “include[] a claim resulting from”); Int’l Lab. Rights Fund v. Bush, 357 F. Supp. 2d 204, 208 (D.D.C. 2004) (analyzing the CIT’s jurisdiction based on “the substantive law giving rise to [the plaintiffs’] claims”). So subject-matter jurisdiction turns on whether IEEPA is a “law . . . providing for” “tariffs, duties, fees or other taxes on the importation of merchandise for reasons other than the raising of revenue.”
Defendants argue that this Court must transfer the case to the CIT because “all of [P]laintiffs’ arguments concern the imposition of tariffs.” E.g., Mot. Transfer at 1; see also Defs.’ PI Opp’n at 10–20. They essentially take the position that all “tariff cases,” “tariff challenges,” and “tariff matters” must go to the CIT for that court to determine in the first instance whether it has jurisdiction. See Mot. Transfer at 9–10 (emphases added). That is not how the CIT’s jurisdictional statute operates. The statute is categorical: the jurisdictional hook is the nature of the statute that a case arises out of, not the character of a plaintiff’s claims. See K Mart Corp., 485 U.S. at 188 (“Congress did not commit to the Court of International Trade’s exclusive jurisdiction every suit against the Government challenging customs-related laws and regulations.”) (emphasis in original);
Defendants claim that this Court cannot consider whether IEEPA provides for tariffs because that necessarily involves deciding the underlying merits (or, at this stage of the litigation, whether Plaintiffs have shown a likelihood of success on the merits). But “courts always have jurisdiction to determine their jurisdiction,” Ilan-Gat Eng’rs, Ltd. v. Antigua Int’l Bank, 659 F.2d 234, 239 (D.C. Cir. 1981), including in instances where the CIT may ultimately have exclusive jurisdiction. K Mart Corp., 485 U.S. at 191 (resolving circuit split by rejecting Federal Circuit’s position that the CIT had exclusive jurisdiction over certain actions
Since the Founding, the Constitution has vested the “Power to lay and collect Taxes, Duties, Imposts and Excises” with Congress.
Because courts “must enforce plain and unambiguous statutory language according to its terms,” the Court looks to IEEPA’s text to determine whether it is a law providing for tariffs. See Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 251 (2010);
The Court agrees with Plaintiffs that the power to regulate is not the power to tax. See Mot. Prelim. Inj. at 18. The Constitution recognizes and perpetuates this distinction.
“Tariff” and “regulate” also take different plain meanings. To regulate something is to “[c]ontrol by rule” or “subject to restrictions.” Regulate, The Concise Oxford Dictionary of Current English 943 (6th ed. 1976); see also Regulate, New Webster’s Dictionary of the English Language
The other verbs in Section 1702(a)(1)(B) confirm that the President’s power to “regulate . . . [the] importation or exportation” of property does not encompass the power to tariff. Per the principle of noscitur a sociis, “a word is given more precise content by the neighboring words with which it is associated.” E.g., United States v. Williams, 553 U.S. 285, 294 (2008). Even if regulate may take a broad meaning in other contexts, see Defs.’ PI Opp’n at 12, the words immediately surrounding it “cabin the contextual meaning of that term” here, see5
Yates v. United States, 574 U.S. 528, 543 (2015). The President’s IEEPA power to “regulate” is part of a list of verbs otherwise including “investigate, block during the pendency of an investigation, . . . direct and compel, nullify, void, prevent or prohibit.”
Nor does IEEPA include language setting limits on any potential tariff-setting power. Every time Congress delegated the President the authority to levy duties or tariffs in Title 19 of the U.S. Code, it established express procedural, substantive, and temporal limits on that authority. E.g.,
Those comprehensive statutory limitations would be eviscerated if the President could invoke a virtually unrestricted tariffing power under IEEPA.6 See Law Professors’ Amicus Br. at 9 (“If IEEPA meant what the government says it means, it would enable the President to impose, revoke, or change tariffs for essentially any reason he describes as an emergency, without complying with any of the limitations that Congress attached to every statute delegating tariff authority.”), cf. Morton v. Mancari, 417 U.S. 535, 550–51 (1974) (discussing the principle that in statutory interpretation, the specific prevails over the general); Guidry v. Sheet Metal Workers Nat’l Pension Fund, 493 U.S. 365, 375 (1990) (same). The Court will not assume that, in enacting IEEPA, Congress repealed by implication every extant limitation on the President’s tariffing authority. See Posadas v. Nat’l City Bank, 296 U.S. 497, 503 (1936) (“The cardinal rule is that repeals by implication are not favored.”). “Congress has enacted a comprehensive scheme” detailing the conditions where the President may impose tariffs. See RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639, 645 (2012) (quoting Varity Corp. v. Howe, 516 U.S. 489, 519 (1996) (Thomas, J., dissenting)). “It would be anomalous,” to say the least, “for Congress to have so painstakingly described the [President’s] limited authority” on tariffs in other
Historical practice further indicates that IEEPA does not encompass the power to levy tariffs. In the five decades since IEEPA was enacted, no President until now has ever invoked the statute—or its predecessor, TWEA—to impose tariffs. See Mot. Prelim. Inj. at 21, 27; Christopher A. Casey et al., Cong. Rsch. Serv., R45618, The International Emergency Economic Powers Act: Origins, Evolution and Use, R45618 at 25–26, 58–62 (2024). IEEPA has been consistently understood by the Executive to authorize targeted economic sanctions on the person7 or state responsible for the underlying threat to U.S. national security. See Loper Bright Enters. v. Raimondo, 603 U.S. 369, 386 (2024) (“[T]he longstanding practice of the government . . . can inform a court’s determination of what the law is.”) (cleaned up) (quoting NLRB v. Noel Canning, 573 U.S. 513, 525 (2014)); Mot. Prelim. Inj. at 21–27. “This lack of historical precedent, coupled with the breadth of authority that the [President] now claims, is a telling
indication that the [tariffs] extend[] beyond the [President‘s] legitimate reach.” See Nat‘l Fed‘n of Indep. Bus. v. Dep‘t of Lab., Occupational Safety & Health Admin., 595 U.S. 109, 119 (2022) (per curiam) (internal quotation marks omitted). Nor have IEEPA cases traditionally been filed in the CIT. Hundreds of district court cases cite IEEPA Sections 1701 and 1702, but excluding the cases recently filed challenging President Trump‘s IEEPA tariffs, not one CIT case cites either provision. See Pls.’ Transfer Opp‘n at 10. This makes sense because the mine run IEEPA case has nothing to do with the CIT‘s “unique and specialized expertise in trade law.” See, e.g., Holy Land Found. for Relief & Dev. v. Ashcroft, 333 F.3d 156 (D.C. Cir. 2003) (IEEPA case seeking to vacate Office of Foreign Asset Controls designations); OKKO Bus. PE v. Lew, 133 F. Supp. 3d 17 (D.D.C. 2015) (IEEPA case seeking to unblock a wire transfer); TikTok Inc. v. Trump, 507 F. Supp. 3d 92 (D.D.C. 2020) (IEEPA case seeking to enjoin ban on social media application).
General administrative practice also illustrates—and demands—a distinction between the power to regulate and the power to tax. When a statute authorizes an agency to promulgate regulations on a topic, the agency can implement rules or restrictions relating to that topic. See, e.g.,
Defendants’ counterarguments cannot and do no overcome IEEPA‘s plain meaning. For one thing, their proposed interpretation of Section 1702(a)(1)(B) conflicts with the provision‘s textual limits. The President‘s IEEPA powers extend only to “any property in which any foreign country or a national thereof has any interest.”
And as Plaintiffs pointed out at oral argument, Defendants’ interpretation could render IEEPA unconstitutional. IEEPA provides that the President may “regulate . . . importation or exportation.”
Defendants’ interpretation would also create a jurisdictional split between IEEPA actions initiated by the government, which are not “commenced against the United States, its agencies, or its officers,” and would fall under the jurisdiction of the district courts; and IEEPA actions initiated against the government, which would go to the CIT. See
Defendants lean heavily on United States v. Yoshida International, Inc. (”Yoshida“), 526 F.2d 560, a 1975 decision from the Court of Customs and Patent Appeals, the Federal Circuit‘s predecessor, but that case is not binding on this Court. See Defs.’ PI Opp‘n at 2, 4, 12, 14, 16–19, 23, 26–28, 32, 35; see also Coal. to Preserve the Integrity of Am. Trademarks v. United States, 790 F.2d 903, 905–07 (D.C. Cir. 1986), aff‘d in part sub nom. K Mart. Corp., 485 U.S. at 190–91 (rejecting Federal Circuit‘s jurisdictional analysis). Nor does the Court find it persuasive.8
The Court of Customs and Patent Appeals reversed based on “the intent of Congress” and “the broad purposes of the [TWEA].” Yoshida, 526 F.2d at 583; see also id. at 573 (emphasizing that “the primary implication of an emergency power is that it should be effective to deal with a national emergency successfully“). That is no longer how courts approach statutory interpretation. See Am. Fed. of Gov. Empls., Nat‘l Council of HUD Locals Council 222, AFL-CIO v. FLRA, 99 F.4th 585, 590 (D.C. Cir. 2024) (discussing how purposivism was, by the end of the twentieth century, “largely rejected in favor of a stricter focus on a statute‘s text” (citing John F. Manning, Textualism and the Equity of the Statute, 101 Colum. L. Rev. 1, 6–7 (2001))); Loper Bright, 603 U.S. at 443 n.6 (Gorsuch, J., concurring) (describing how in 1984 “there were many judges who abhorred plain meaning and preferred instead to elevate legislative history and their own curated accounts of a law‘s purposes over enacted statutory text,” but now courts have “a more faithful adherence to the written law” (cleaned
And in deciding that case, the Court of Customs and Patent Appeals acknowledged that “nothing in the TWEA or in its history . . . specifically either authorizes or prohibits the imposition of a surcharge,” and that “Congress did not specify that the President could use a surcharge in a national emergency.” Yoshida, 526 F.2d at 572–73, 576. Yoshida also expressly rejected the premise that the TWEA enabled the President to “impos[e] whatever tariff rates he deems desirable,” id. at 578, which is the power President Trump has claimed in issuing the Challenged Orders. Yoshida is further distinguishable because the tariffs at issue there applied only to goods already subject to tariff reductions, and at rates that did not exceed the original statutory maximum set out by Congress. See Law Professors’ Amicus Br. at 12 n.2.
As Plaintiffs point out, other events confirm that Congress did not intend for the language “regulate . . . importation” to delegate the authority to impose tariffs. See Pls.’ PI Reply at 11–12. Just before enacting IEEPA, Congress passed Section 122 of the Trade Act of 1974. Pub. L. No. 93-618, 88 Stat. 1978 (1975). That statute specifically authorized the tariffs President Nixon had imposed in Proclamation 4074 by providing that the President may impose an “import surcharge . . . in the form of duties . . . on articles imported into the United States” to “deal with large and serious United States balance-of-payments deficits.”
Finally, the President‘s IEEPA powers were designed to be “more limited in scope than those of [TWEA].” H.R. Rep. No. 95-459, at 2 (1977). The Court disagrees with Defendants that, by adopting the TWEA‘s language in IEEPA, Congress endorsed Yoshida‘s holding. See Pls.’ PI Reply at 13 (arguing that courts only assume Congress adopts an earlier judicial construction of a phrase where there is “settled precedent” on the interpretation of a statute, and that conflicting lower court decisions do not constitute settled precedent (quoting United States v. Collazo, 984 F.3d 1308, 1328 (9th Cir. 2021))). Contra Defs.’ PI Opp‘n at 4, 12, 14. Yoshida is not a reason for this Court to reject IEEPA‘s plain meaning.
* * *
Two conclusions follow from the Court‘s analysis. First, because IEEPA
B. Irreparable Harm
Plaintiffs have established that they will likely suffer irreparable harm absent a preliminary injunction because the tariffs originating in the Challenged Orders pose an existential threat to their businesses. See, e.g., Woldenberg Decl. ¶ 28; Mot. Prelim. Inj. at 41; see also League of Women Voters of U.S. v. Newby, 838 F.3d 1, 8–9 (D.C. Cir. 2016) (reiterating that “a preliminary injunction requires only a likelihood of irreparable injury“). They cannot offset the highest IEEPA tariffs without raising prices 70 percent or more “as a matter of pure survival,” Woldenberg Decl. ¶ 9; their customers have already canceled over $1 million in orders, id. ¶ 10; and they face an immediate 40 or 50 percent decline in sales, year-over-year, id. ¶ 11. The companies “cannot possibly absorb the costs of the increased tariffs” without “changing [their] pricing radically.” Id. ¶¶ 6, 14. But they cannot pass price increases onto their customers without selling substantially fewer products. Id. ¶¶ 16, 18. Plaintiffs are not “massive entities that can withstand such losses in their core business[es].” See Everglades Harvesting & Hauling, Inc. v. Scalia, 427 F. Supp. 3d 101, 116 (D.D.C. 2019). Nor can they reduce the quality of their products to support lower prices: reducing quality is “unthinkable” for “premium brands” like Plaintiffs, and is practically unworkable because it would require them to “change the design and/or production of more than 2,000 products at once.” Id. ¶ 15.
Without an injunction, Plaintiffs may have to refinance loans on unfavorable terms; significantly scale back operations and product offerings; close facilities; lay off employees; or possibly sell their businesses. Mot. Prelim. Inj. at 41. Granted,
The government argues that Plaintiffs’ harms are speculative and conclusory. See Defs.’ PI Opp‘n at 37–39. The Court disagrees. See Pls.’ PI Reply at 20–21 (detailing, to the extent possible, the specific costs that Plaintiffs have incurred because of the Challenged Orders). How could Plaintiffs possibly describe the exact costs they will face from paying tariffs that the President imposes, pauses, adjusts, and reimposes at will? See Woldenberg Decl. ¶¶ 7–8 (describing the “ever-changing situation with the IEEPA tariffs” and “considerable uncertainty about future economic conditions and trade rules“). The instability and unpredictability of the changing tariff rates cause “massive disruptions in [their] supply chain, business relations, and business operations.” Id. ¶ 8; see Tex. Children‘s Hosp. v. Burwell, 76 F. Supp. 3d 224, 242 (D.D.C. 2014). Without preliminary relief, Plaintiffs will be subjected to ongoing “supply chain chaos, an incredibly burdensome and constantly shifting tariff landscape, and a very high price to be paid for incorrect logistical judgments.” Woldenberg Decl. ¶ 10. And because their financial recovery is limited to the value of any tariffs they wrongly pay, see
As Plaintiffs stated at oral argument, to the extent the tariffs cause them not to import goods in the first instance, they cannot recover the value of the resulting lost sales, business opportunities, market share, or customer goodwill. See Mot. Prelim. Inj. at 38–39. In this context, those harms qualify as irreparable. See, e.g., Patriot, Inc. v. U.S. Dep‘t of Housing & Urban Dev., 963 F. Supp. 1, 5 (D.D.C. 1997) (“damage to [a company‘s] business reputation” can be “irreparable harm“); Nalco Co., 786 F. Supp. 2d at 188 (finding irreparable harm where petitioner would “suffer the loss of ‘[l]ong-standing clients . . . [that may be] unwilling, or unable, to do business‘” with them absent an injunction (alterations in original) (quoting Feinerman v. Bernardi, 558 F. Supp. 2d 36, 50–51 (D.D.C. 2008))). Contra Defs.’ PI Opp‘n at 38 (stating, without support, that Plaintiffs’ “loss of business opportunities and goodwill” could be “indirectly” redressed through refunds). The Court is therefore satisfied that Plaintiffs have demonstrated irreparable harm.
C. Balance of Equities & Public Interest
Finally, the Court considers whether the balance of equities and the public interest favor a preliminary injunction. When the government is the party to be enjoined, these two factors merge. See Nken, 556 U.S. at 435. The Supreme Court has instructed that “[a]n injunction is a matter of equitable discretion; it does not follow from success on the merits as a matter of course.” Winter, 555 U.S. at 32. “In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary
Without a preliminary injunction, Plaintiffs will sustain significant and unrecoverable losses. They take the position that if the Court grants their motion, the government will face a pause of the IEEPA tariffs only as directed to two small businesses whose imports are relatively inconsequential to the national economy. See Mot. Prelim. Inj. at 43 (requesting that the Court “enjoin the agency Defendants and their agents, employees, and all persons acting under their direction and control, from taking any action to collect tariffs from Plaintiffs under the Challenged Orders“) (emphasis added). And “[t]he public interest is served when the legislation that Congress has enacted,” like IEEPA, “is complied with.” American Rivers v. U.S. Army Corps of Eng‘rs, 271 F. Supp. 2d 230, 262 (D.D.C. 2003); see also League of Women Voters, 838 F.3d at 12 (holding that is there generally no public interest in unlawful agency action).
On the government‘s side, four Cabinet officials submitted declarations outlining the “catastrophic harm to American foreign policy and national security that would ensue from granting the relief requested in [P]laintiffs’ motion.” Notice of Add‘l Exs. at 1; see also Decl. of Howard Luntick ¶ 19 (“All told, an invalidation of President Trump‘s ability to use IEEPA would dismantle a cornerstone of President Trump‘s national security architecture, irreparably harm the government‘s ability to respond to evolving foreign threats, . . . jeopardize vital trade agreements, collapse ongoing negotiations, allow for Chinese aggression during a period of strategic competition, leave the American people exposed to predatory economic practices by foreign actors, and threaten national security.“). Secretary of State Marco Rubio stated that an order enjoining the tariffs “would cause significant and irreparable harm to U.S. foreign policy and national security” because negotiations with trading partners are “in a delicate state.” Decl. of Marco Rubio ¶¶ 3, 9. “These negotiations could address the urgent threats of mass migration at our northern and southern borders, the flow of fentanyl into our country, and the erosion of our domestic production capacity,” id. ¶ 8, and constitute “one of the country‘s top foreign policy priorities.” Id. ¶ 10. According to Secretary Rubio, “much of U.S. global diplomacy has been focused on these negotiations.” Id. ¶ 10; see also Decl. of Scott Bessent ¶ 9. Every ongoing negotiation is “premised on the ability of the President to impose tariffs under IEEPA.” Decl. of Marco Rubio ¶ 11.
The Cabinet officials claim that were a court to enjoin the tariffs announced in the Challenged Orders, U.S. trading partners could retaliate against the tariffs.; the U.S. would be embarrassed on the global stage; and the U.S.‘s manufacturing position may be so weakened that the country may “not be able to produce the weapons and other resources necessary to defend itself.” Id. ¶¶ 12–14. These consequences go to “critical” foreign policy and national security interests. Id. ¶ 16; see also Decl. of Howard Lutnick ¶¶ 4–4 (describing that the national emergencies underlying the Challenged Orders “threaten[] the lives of [U.S.] citizens“). The Court agrees with Defendants that the public has a compelling interest in the “President‘s conduct of foreign affairs and efforts to protect national security.” See Defs.’ PI Opp‘n at 41; see also Winter, 555 U.S. at 24.
But on May 28, a three-judge panel of the CIT issued an order permanently enjoining the IEEPA tariffs. See Opinion, V.O.S. Selections, Inc. v. Trump, No. 25-00066, at 48–49 (Ct. Int‘l Trade May 28, 2025). The consequences described by the government officials in their declarations will flow, if at all, from that court‘s sweeping order. Under the circumstances, enjoining the application of the Challenged Orders to two family-owned toy companies will have virtually no effect on the government. Contra Defs.’ PI Opp‘n at 41–42 (arguing that “[P]laintiffs’ proposed injunction would be an enormous intrusion on the President‘s conduct of foreign affairs and efforts to protect national security under IEEPA and the Constitution“). It will, however, protect those companies from irreparable injury should the CIT order be stayed or reversed. The Court concludes that the balance of equities and the public interest therefore favor Plaintiffs. Besides, “[i]t is emphatically the province and duty of the judicial department to say what the law is.” Marbury v. Madison, 5 U.S. 137, 177 (1803) (Marshall, C.J.). The President cannot act unlawfully and then use the effects of having that action declared unlawful as a putative shield from judicial review.
V. CONCLUSION
Because IEEPA is not a law providing for tariffs and because Plaintiffs have satisfied the preliminary injunction factors, Defendants’ motion to transfer venue is DENIED; and Plaintiffs’ motion for a preliminary injunction is GRANTED. The Court will stay operation of the preliminary injunction for 14 days. An order consistent with this Memorandum Opinion is separately and contemporaneously issued.
Dated: May 29, 2025
RUDOLPH CONTRERAS
United States District Judge