CIT Invalidates Section 122 Tariffs: May 7, 2026 Ruling

Informational only - not legal advice.

What happened on May 7

The CIT ruling covers two consolidated three-judge-panel cases:

The panel was Chief Judge Mark A. Barnett, Judge Claire R. Kelly, and Judge Timothy C. Stanceu. Judges Barnett and Kelly formed the majority. Judge Stanceu dissented.

What the court held

The majority held that Proclamation No. 11012 exceeded Section 122 because it used trade-deficit and current-account concepts in place of the specific "balance-of-payments deficits" Congress had in mind when it enacted Section 122 in 1974.

The practical holding:

• Proclamation No. 11012 is invalid. The judgment declares the February 20, 2026 proclamation invalid as contrary to law.
• Importer plaintiffs get injunctive relief. The permanent injunction applies to The State of Washington and its instrumentalities, Burlap and Barrel, and Basic Fun.
• Refunds are ordered for those importer plaintiffs. Section 122 duties they paid before the injunction is fully implemented must be refunded with interest as provided by law.
• Implementation deadline is five days. The judgment requires defendants to implement the injunction within five days.
• No universal injunction. The court declined to extend the injunction to all importers.

Who is covered now

The ruling separates the plaintiffs into two groups.

Covered by the permanent injunction

• The State of Washington and its instrumentalities
• Burlap and Barrel, Inc.
• Basic Fun, Inc.

The court treated those parties as importer plaintiffs with direct import-duty injury.

Not covered by the injunction in this judgment

The court dismissed the remaining state plaintiffs without prejudice for lack of standing. That includes Oregon, Arizona, California, New York, Colorado, Connecticut, Delaware, Illinois, the Governor of Kentucky (suing in his official capacity), Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, the Governor of Pennsylvania (suing in his official capacity), Rhode Island, Vermont, Virginia, and Wisconsin.

For the broader importing public, the ruling is a major legal development, but the judgment does not itself operate like a public CBP refund portal.

What this means for Section 122 refunds

For the importer plaintiffs, the judgment is explicit: Section 122 duties paid before the injunction is implemented must be refunded with interest as provided by law.

For everyone else, the safer reading is:

1. The CIT has declared the legal basis invalid.
2. The court declined a universal injunction.
3. CBP has not yet published a general Section 122 refund workflow in the sources reviewed for this update.
4. Any government appeal or stay request could affect timing and operational treatment.
5. Non-party importers should preserve rights and records entry-by-entry rather than assume automatic repayment.

If your entries show 9903.03.01, 9903.03.02, or another 9903.03.* heading, keep a separate Section 122 workstream from your IEEPA CAPE workstream.

What this does not change about CAPE

CAPE is still an IEEPA refund workflow. CBP announced CAPE Phase 1 for IEEPA refunds in CSMS #68315804. That process removes IEEPA HTS numbers and recalculates entries without IEEPA duties.

Section 122 is different:

What importers should do now

For entries from February 24, 2026 at 12:01 a.m. ET forward:

1. Identify every entry with a 9903.03.* line.
2. Record the entry number, entry date, IOR, filer, port, duty amount, and liquidation status.
3. Separate Section 122 amounts from IEEPA, Section 232, Section 301, AD/CVD, and base duties.
4. Ask your broker or counsel whether any PSC, protest, suspension, or litigation-preservation step applies to your entry posture.
5. Watch for a government stay request, appeal, CBP CSMS guidance, or a broader remedial order.

For IEEPA refunds, keep using the IEEPA/CAPE materials. The Section 122 ruling does not make a 9903.03.* line eligible for CAPE.

What to watch next

Posture as of May 8, 2026: No government stay request or notice of appeal docketed at CIT or CAFC in the reviewed source set.

• Stay or appeal activity. Watch for any government stay request, appeal, or appellate order; this update does not verify a stay order.
• CBP implementation guidance. The judgment requires implementation for importer plaintiffs within five days; CBP may issue operational guidance.
• Non-party importer remedies. Watch whether later orders, protests, test cases, or agency instructions create a clearer refund path for importers outside the judgment.
• HTS and ACE behavior. Entry filing instructions for 9903.03.* may change if CBP implements the judgment more broadly or if a stay changes collection status.