Section 122 CIT Ruling: Refund Scope, Appeal Stay, and Importer Checklist

Quick Answer

On May 7, 2026, the U.S. Court of International Trade issued Slip Op. 26-47 in the consolidated Section 122 cases. The court declared Proclamation No. 11012 invalid as contrary to law, entered a permanent injunction for The State of Washington and its instrumentalities, Burlap and Barrel, Inc., and Basic Fun, Inc., and ordered Section 122 duties paid by those importer plaintiffs before implementation to be refunded with interest as provided by law.

The ruling is important, but it is not a universal refund instruction for every importer. The court declined a universal injunction and dismissed the other state plaintiffs for lack of standing. The government then appealed on May 8, 2026. The Federal Circuit entered an administrative stay on May 12, 2026, and the CIT denied the government's separate stay request on May 20, 2026. Unless the Federal Circuit modifies or dissolves its administrative stay, that appellate stay remains the practical gating order.

If your entries show 9903.03.*, preserve the records and watch for CBP implementation guidance, Federal Circuit stay/merits activity, or further court orders before treating Section 122 refunds as generally available.

June 8 review note: no new substantive Section 122 order or general CBP refund workflow was identified after the May 20 CIT stay denial in the source set reviewed for this page. Keep monitoring the Federal Circuit dockets and CBP CSMS guidance.

Informational only - not legal advice.

What happened on May 7

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

Case	Court number	Who brought it
The State of Oregon, et al. v. United States	26-01472-3JP	State coalition challenging the Section 122 proclamation and agency implementation
Burlap and Barrel, Inc.; Basic Fun, Inc. v. United States	26-01606-3JP	Private importer plaintiffs challenging the same surcharge

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 happened after the ruling

The litigation did not stop on May 7.

Date	Event	Practical meaning
May 8, 2026	The government filed appeals in the Federal Circuit: State of Oregon v. Trump, No. 26-1804, and Burlap and Barrel, Inc. v. Trump, No. 26-1805.	The Section 122 ruling moved into an active appellate posture.
May 11, 2026	The government moved for an emergency stay pending appeal and to consolidate the appeals.	The government asked to pause the CIT judgment/injunction while the appeal proceeds.
May 12, 2026	The Federal Circuit consolidated the appeals and granted an administrative stay until further notice while it considers the stay motions.	The CIT judgment and permanent injunction are temporarily stayed.
May 13, 2026	The Federal Circuit held the stay motion in abeyance pending the CIT's disposition of stay motions there and stated that the May 12 administrative stay remains in effect.	The appellate administrative stay remained in effect while the CIT considered the stay request.
May 20, 2026	The CIT denied the government's motion for a stay of enforcement of the judgment pending appeal.	The CIT did not grant a trial-court stay; importers still need to watch the Federal Circuit administrative stay and any later appellate stay order.

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.

Do not mix up the remedy

The court invalidated the proclamation, but the judgment's injunction and refund language is specific to the importer plaintiffs. That distinction matters for non-party importers until CBP, the court, or an appellate court says more.

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:

The CIT has declared the legal basis invalid.
The court declined a universal injunction.
The Federal Circuit temporarily stayed the CIT judgment and permanent injunction on May 12, 2026.
The CIT denied the government's separate stay request on May 20, 2026.
CBP has not yet published a general Section 122 refund workflow in the sources reviewed for this update.
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:

Topic	IEEPA refunds	Section 122 after May 7
Statute	IEEPA	Trade Act of 1974, Section 122
Chapter 99 family	IEEPA-specific headings	`9903.03.*`
Current CBP workflow	CAPE Phase 1 in ACE for eligible IEEPA entries	No public general Section 122 CAPE workflow verified
Court posture	Supreme Court invalidated IEEPA tariff authority; CIT refund orders drove CAPE	CIT invalidated Proclamation No. 11012 and denied the government's stay request, but the Federal Circuit administrative stay still controls operational timing unless changed

What importers should do now

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

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

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

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What to watch next

Posture as of June 8, 2026: The government appealed on May 8. The Federal Circuit consolidated the appeals and entered an administrative stay on May 12. A May 13 Federal Circuit order held the stay motion in abeyance pending CIT action, and the CIT denied the government's separate stay request on May 20. No new substantive Section 122 order or general CBP refund workflow was identified in this June 8 review. The key next event remains Federal Circuit action on the administrative stay or stay-pending-appeal request.

Federal Circuit stay activity. Watch whether the administrative stay is lifted, replaced by a stay pending appeal, or otherwise modified.
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.

Frequently Asked Questions

Did the Court of International Trade strike down the Section 122 tariffs?

Yes. On May 7, 2026, the CIT declared Proclamation No. 11012 invalid as contrary to law in Slip Op. 26-47. The court held that the proclamation used trade and current-account concepts in place of the balance-of-payments deficits required by Section 122.

Does the Section 122 ruling automatically refund all importers?

No. The CIT judgment ordered refunds with interest for the importer plaintiffs and declined a universal injunction. The government appealed on May 8, 2026. The Federal Circuit temporarily stayed the CIT judgment and permanent injunction on May 12, and the CIT denied the government's separate stay request on May 20. Non-party importers should not assume automatic Section 122 refunds without later CBP guidance, a broader order, or counsel-specific advice.

Who is covered by the permanent injunction?

The permanent injunction applies to The State of Washington and its instrumentalities, Burlap and Barrel, Inc., and Basic Fun, Inc. The court dismissed the other state plaintiffs for lack of standing.

Is Section 122 covered by CAPE?

No. CAPE is the CBP workflow for IEEPA refunds. Section 122 is a separate statute and uses the 9903.03.* Chapter 99 family.

Was the Section 122 ruling stayed on appeal?

Yes, temporarily. The Federal Circuit consolidated the two appeals and granted an administrative stay on May 12, 2026. On May 20, the CIT denied the government's separate request for a stay pending appeal, but that did not itself dissolve the Federal Circuit's administrative stay.

Sources & Verification