Even After the Supreme Court’s IEEPA Decision, Customs Fraud Cases Are Still Coming
Last month’s ruling in Learning Resources v. Trump struck down the president’s emergency tariff authority. But the tariff landscape that actually drives customs fraud enforcement—Section 301, Section 232, antidumping and countervailing duties—was untouched. Here is what changed, what did not, and what it means for whistleblowers.
What the Court Actually Decided
On February 20, 2026, the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not give the president authority to impose tariffs. The decision struck down the entire edifice of IEEPA-based duties that had been the defining feature of U.S. trade policy since early 2025: the “Liberation Day” reciprocal tariffs, the fentanyl-related tariffs on Canada, Mexico, and China, and the universal baseline levy that had raised the effective U.S. tariff rate to its highest level since World War II.
The majority, written by Chief Justice Roberts, held that while IEEPA permits the executive branch to “regulate” importation during a declared national emergency, that language does not clearly authorize the imposition of taxes on imports. Tariff authority of that magnitude, the Court held, requires explicit congressional delegation—which IEEPA does not provide. Justices Thomas, Kavanaugh, and Alito dissented.
Within hours of the ruling, the administration issued three executive orders: terminating the IEEPA tariffs, imposing a replacement 10 percent global surcharge under Section 122 of the Trade Act of 1974 (subsequently announced to be raised to the statutory maximum of 15 percent, effective February 24), and—critically—explicitly continuing the suspension of the de minimis exemption under separate authority. The Section 122 tariff carries a hard ceiling of 15 percent and expires in 150 days, on July 24, 2026, unless Congress acts.
The refund question is unresolved. An estimated $160 to $179 billion in IEEPA duties was collected between February 2025 and February 24, 2026, when CBP stopped assessing them. The Supreme Court remanded the refund issue to the Court of International Trade, and the administration has signaled it will contest refund claims aggressively. Importers who paid IEEPA duties and have not yet filed protests or court actions should consult customs counsel immediately—liquidation deadlines are running.
The short version: IEEPA tariffs are gone. Section 301, Section 232, antidumping and countervailing duties, and the de minimis suspension all survived. The tariff environment that has generated record-breaking customs fraud enforcement since 2018 is still fully intact.
What Was Not Affected
For anyone evaluating the significance of the ruling for customs fraud enforcement, the more important question is not what the Court struck down but what it left standing. The answer is: almost everything that matters.
Section 301 tariffs on Chinese goods remain fully in force. These are the tariffs—originally imposed in 2018 and 2019, ranging from 7.5 to 25 percent across four product lists, with some categories at higher rates—that triggered the wave of country-of-origin fraud and transshipment schemes that has dominated customs enforcement ever since. Every ongoing customs fraud investigation premised on Chinese goods being routed through Vietnam, Malaysia, India, or Mexico is premised on Section 301 liability. The IEEPA ruling does not affect a single one of those cases.
Section 232 tariffs on steel (50 percent), aluminum (50 percent), copper (50 percent), and automobiles (25 percent) also survived. These tariffs have generated their own wave of origin fraud—false mill certifications, transshipment of steel and aluminum through exempt countries, and false product descriptions designed to land outside the order’s scope. None of that enforcement activity is affected by the ruling.
Antidumping and countervailing duty orders are a creature of statute, administered by the Department of Commerce and enforced by CBP, entirely independent of IEEPA. The hundreds of ADD/CVD orders currently in effect—covering steel products, solar panels, seafood, furniture, and dozens of other categories—are unchanged. Evasion of ADD/CVD orders remains one of the highest-value customs fraud theories under the False Claims Act, with ADD rates that can exceed 200 percent of the dutiable value.
The de minimis suspension survived specifically because the administration anticipated the IEEPA ruling and issued a new executive order on February 20 re-grounding the suspension in separate authority. More importantly, the One Big Beautiful Bill Act, signed July 4, 2025, permanently repeals the statutory basis for de minimis effective July 1, 2027. Even if the executive order were challenged successfully, legislative reinstatement is essentially foreclosed. The era of duty-free direct-from-China e-commerce shipments is over.
The Fraud Incentives Are Unchanged
The customs fraud cases that have proliferated since 2018 were driven not by IEEPA but by Section 301. A company importing steel furniture from China faces a base duty plus a Section 301 surcharge that can bring the total well above 25 percent. A company importing solar panels faces even higher combined rates. The financial incentive to misrepresent those goods as Vietnamese, Malaysian, or Mexican in origin—and the corresponding incentive for whistleblowers to come forward when they see that fraud occurring—is a function of Section 301, not IEEPA. The ruling last month did not touch it.
This matters for several populations who may be reading this:
• Employees and former employees of importers who are aware of transshipment schemes, false factory records, or misrepresented country-of-origin certifications: the legal framework that makes your information valuable to the government is completely intact.
• Customs brokers who have been directed to file entries with origin information they know to be false: your professional liability and your potential status as a relator under the False Claims Act are both unaffected by the IEEPA ruling.
• Competitors of importers who have watched rivals undercut your pricing by cheating on duties: Section 301, Section 232, and ADD/CVD enforcement all remain available as the basis for a False Claims Act qui tam complaint. The government’s interest in pursuing these cases has, if anything, increased.
• Trade compliance officers at companies with complex supply chains: the IEEPA ruling does not reduce your reasonable care obligations under 19 U.S.C. § 1484, nor does it affect the False Claims Act liability that attaches to knowingly false entry documentation.
What Changes: IEEPA-Specific Fraud Theories
There is one category of customs fraud case where the ruling does create a meaningful change: fraud premised specifically on IEEPA-based duties. Some importers, facing the 2025 IEEPA reciprocal tariffs, engaged in fraud schemes to avoid them—misrepresenting country of origin to claim a lower country-specific IEEPA rate, or fabricating supply chain documentation to qualify for product exclusions from IEEPA tariffs. Those specific fraud theories are complicated by the ruling, because the underlying duty obligation has been extinguished.
Whether False Claims Act liability survives for past IEEPA fraud—duties that were genuinely owed at the time of the false filing but whose legal basis has since been struck down—is a question that courts have not yet addressed. It is not an easy question. The FCA’s “reverse false claim” theory requires a legally cognizable obligation to pay; if the tariff itself was always unconstitutional, the obligation may never have existed in the legally required sense. Relators who brought, or are considering, cases premised primarily on IEEPA duty evasion should discuss this development with counsel immediately.
This is a narrow carve-out, however. The overwhelming majority of customs FCA cases in the pipeline—and the cases most likely to be brought in the future—are Section 301 and ADD/CVD cases. For those cases, the IEEPA ruling is irrelevant.
The Enforcement Environment Is, If Anything, Getting Hotter
In February 2026, just days before the Supreme Court ruling, Deputy Assistant Attorney General Michael Granston addressed the Federal Bar Association’s annual qui tam conference and specifically singled out customs and tariff fraud as a DOJ enforcement priority. “The False Claims Act has also proven to be a powerful tool for combatting those who seek to avoid the payment of customs duties on imported goods,” Granston said, “including goods subject to anti-dumping or countervailing duties, which are intended to protect the American economy against illegal foreign trade practices.” That statement was made against a Section 301 and ADD/CVD backdrop, not an IEEPA backdrop. It is unaffected by last month’s ruling.
The data from recent settlements confirms the same picture. The Ceratizit case (E.D. Mich., $54.4 million, December 2025) involved Section 301 tariff evasion on imported cutting tools—entirely independent of IEEPA. So did Allied Stone (N.D. Tex., $12.4 million, August 2025) and Evolutions Flooring (C.D. Cal., $8.1 million, March 2025). Harman International’s $11.8 million settlement in November 2025 was an origin fraud case. None of those cases were premised on IEEPA, and none of them would be decided differently today.
Meanwhile, the elimination of de minimis has created an entirely new category of customs entry—hundreds of millions of previously exempt packages that are now subject to full entry procedures, valuation requirements, and HTS classification. The compliance infrastructure for that volume of new entries does not exist at most companies that relied on de minimis. The fraud risk from that structural gap—shipment splitting, undervaluation of newly-dutiable packages, false origin claims to avoid differential duty rates—is substantial and growing. The FCA cases arising from de minimis fraud have not yet been filed. They are coming.
The practical picture: Section 301 remains the dominant source of customs FCA liability. ADD/CVD evasion remains the highest-rate fraud theory. De minimis fraud is the emerging wave. The IEEPA ruling is a significant legal development that affects the tariff refund landscape—but it does not meaningfully reduce the enforcement environment for customs fraud whistleblowers.
What to Do If You Have Information About Customs Fraud
If you are an employee, former employee, customs broker, freight forwarder, or competitor who has witnessed customs fraud—false origin certifications, double invoices, fabricated factory records, misclassification of goods to avoid Section 301 or ADD/CVD duties—the February 20 ruling does not diminish the value of that information. The False Claims Act’s qui tam provision remains fully available, and the government’s share of recoveries in customs cases—and therefore relators’ 15 to 30 percent share—are determined by Section 301 and ADD/CVD duty amounts that are completely unaffected by the IEEPA litigation.
There is one timing consideration that applies regardless of the IEEPA ruling: if you are aware of ongoing fraud, or if your employer has been discussing a prior disclosure to CBP, speaking with an attorney before any disclosure is made is critical. A prior disclosure to CBP under 19 C.F.R. § 162.74 can interact badly with a potential False Claims Act filing in ways that are difficult to undo. The decision about whether and when to contact CBP versus filing a qui tam complaint under seal involves strategic considerations that are specific to customs FCA practice.
This firm—Greene LLP—filed its first customs duty False Claims Act case in 2011, fifteen years ago. We have been representing relators in customs FCA matters through every iteration of the tariff landscape: Section 301, Section 232, the ADD/CVD enforcement surge, and now the post-IEEPA environment. If you have information about customs fraud and want to understand your options confidentially, we are available at the contact information below.
LEGAL NOTICE
This post is provided for informational purposes only and does not constitute legal advice. No attorney-client relationship is created by reading or responding to this content. Case outcomes described are illustrative and do not guarantee similar results. The False Claims Act and customs law are complex and fact-specific; anyone considering legal action should consult qualified counsel. Attorney: Ryan P. Morrison, Greene LLP.
