Unpacking the US Supreme Court's IEEPA Tariff Decision: The Outlook for Future Disputes

On 20 February 2026, the United States Supreme Court issued its decision in Learning Resources, Inc. v. Trump, consolidated with Trump v. V.O.S. Selections, Inc., addressing whether the President has authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The Supreme Court held that IEEPA did not authorize the President to impose the tariffs at issue, and that the challenged tariffs therefore exceeded the scope of delegated statutory authority. Our International Trade, Investment Controls, and National Security colleagues wrote about the recent decision here.

Throughout 2025 and 2026, parties facing IEEPA tariffs grappled with a variety of mechanisms to address the issue of how to deal with increased costs of performance. We wrote about the challenges and limitations of existing contract clauses to deal with these scenarios here. 

As our International Trade, Investment Controls, and National Security team points out, the Trump administration plans to continue to pursue its tariff agenda using different statutory tools. Tariffs imposed under different authorities from IEEPA remain unchanged. For tariffs implemented under IEEPA, however, the Supreme Court decision raises many questions as to how, when, or if the estimated US$175 billion in IEEPA tariffs paid prior to 20 February 2026 will be refunded and who ultimately will be entitled to retain refund proceeds.

The potential for a variety of commercial, class, shareholder, and investor disputes is pronounced. Parties that bore the risk of increased tariffs or that otherwise suffered damage from their imposition will now look for ways to recoup those expenditures. Shareholders, consumers, and other stakeholders may also seek a portion of any refunds that are ultimately given to importers. 

Our firm is tracking the various options for companies, individuals, and investors to assert and defend their rights in this emerging area. Among the issues we are tracking are:

Commercial Contract Claims

Post-closing price adjustment clauses may be implicated, along with executory contracts that specifically provide for allocating any tariff windfall. Contracts for the assignment of tariff refund proceeds will also be scrutinized and may lead to disputes between refund recipients and parties that purchased tariff liability and accompanying refund rights. Force majeure and contract termination claims previously advanced may need to be revisited or renegotiated. Parties with downward price adjustment rights will also look to see if there are actionable measures to account for tariff refunds. Material pricing in construction, manufacturing, and other material-intensive industries may see disputes surrounding lower expected project costs and which parties capture this benefit.

Government Refunds

There are ordinarily two ways importers can seek a refund: (1) seeking a refund from, or lodging a protest with, the Customs and Border Protection; and (2) suing the United States in the Court of International Trade. Importers should consult with counsel to determine the appropriate path and take affirmative steps to ensure they preserve all available remedies.

Investment Treaty Claims

The IEEPA ruling does not automatically create a wave of investor state claims against the United States, but it strengthens certain arguments foreign investors may raise where tariffs were imposed without clear statutory authority, later declared unlawful, and caused measurable investment level harm. The United States is a party to approximately 50 bilateral investment treaties or free trade agreements that contain investor-state arbitration rights.

Class and Shareholder Disputes

Class actions are likely premature, given whether and when any refunds will be provided remain in flux. However, shareholder disputes may arise if corporations fail to seek refunds. 

We continue to monitor this situation and will be reporting on new developments as they occur. Our Commercial Disputes team stands ready to guide clients through this complex and evolving landscape, offering strategic counsel, regulatory insight, and experienced strategic advocacy at every stage of the process. Please contact Thomas Allen, Michael Stortz, or Lindsay Bishop if we can be of assistance.