CUSTOMS LITIGATION | 2026-10-12

IEEPA Tariff Refunds Update: CAPE Phase 3 Opens for Finally Liquidated Entries and the Freestyle Class-Certification Order — What California Importers Need to Know

Two developments in early October 2026 reshaped the IEEPA refund landscape. CBP deployed CAPE Phase 3, finally giving importers with liquidated entries a path to file refund claims, and the Court of International Trade is reported to have certified a class in Freestyle World, Inc. v. United States. Together they expand who can recover unlawfully collected IEEPA duties — but neither delivers refunds to everyone eligible, and timing remains the central uncertainty.

A good portion of the IEEPA tariff refund story has moved quickly and been covered only at a high level in the trade press. Two developments in the first week of October 2026, however, are worth examining closely because they change the practical options available to importers who overpaid duties under the International

Where IEEPA Refunds Stand in October 2026

Since the IEEPA tariff program was invalidated, the central practical question for importers has not been whether the duties were unlawfully collected, but how — and when — a given importer can get its money back. CBP's answer has been CAPE, the Consolidated Administration and Processing of Entries, a capability built inside the Automated Commercial Environment (ACE) to calculate and provide refunds of the additional ad valorem duties that IEEPA imposed. CAPE has rolled out in phases, and each phase has expanded the universe of entries eligible for refund processing.

The first phase of CAPE opened to importers and their brokers on April 20, 2026. A second deployment on June 29, 2026 extended CAPE to unliquidated entries (and entries liquidated within the preceding 80 days) that had been flagged for reconciliation but for which no Reconciliation Entry had been filed. The missing piece — until early October — was the large population of entries that had already been finally liquidated. Under ordinary customs law, final liquidation is the end of the line: once an entry liquidates and the protest window closes, CBP's authority to reopen it is sharply limited. That is precisely why finally liquidated entries required both a court order and a dedicated system build before refunds could flow. CAPE Phase 3 is that build.

CAPE Phase 3 Is Live: What the Latest Brandon Lord Declaration Confirms

On October 6, 2026, CBP filed a sworn declaration from Brandon Lord — the agency's Executive Director for Trade Programs — in the Court of International Trade, responding to the court's September 17, 2026 order. Declarations like this one, made under penalty of perjury pursuant to 28 U.S.C. § 1746, are how the government reports its refund-processing progress to Judge Eaton. Because the figures come directly from CBP's own system of record, they are the most authoritative public snapshot available of how the IEEPA refund machinery is actually performing.

📄 Download the Brandon Lord Declaration (PDF) — CIT No. 26-01088, Filed Oct. 6, 2026

The Phase 3 Deployment

According to the declaration, at 5:10 a.m. Eastern time on October 6, 2026, CBP successfully deployed CAPE Phase 3 — "a new CAPE functionality which covers finally liquidated entries filed by plaintiffs for which the Court has ordered reliquidation." In plain terms, Phase 3 is the system path for entries that had already liquidated with IEEPA duties and that a court has now ordered CBP to reliquidate without those duties. Following deployment, CBP notified, by email to their counsel, the plaintiffs who had submitted a valid importer of record number to CBP by July 30, 2026, that they could begin filing CAPE declarations under Phase 3.

The early uptake was immediate. As of noon Eastern on that same day, October 6, the declaration reports that 477 CAPE declarations had already been accepted for processing in Phase 3 — meaning they had passed both the file and entry validations — covering 425,517 entries. CBP stated it would provide additional instructions regarding Phase 3 to plaintiffs who submitted an importer of record number after July 30, 2026. That last sentence is the crux of the timing problem discussed below: Phase 3 "works," but it does not yet reach every eligible importer, and the declaration offers no date by which it will.

The CAPE Numbers as of October 2, 2026

The declaration also provides an updated accounting of the overall CAPE program as of 3:00 p.m. Eastern on October 2, 2026. These figures put the scale of the IEEPA refund effort in perspective:

Two numbers in that table deserve emphasis. The $126 billion already certified and sent to the U.S. Department of the Treasury shows that the refund pipeline is genuinely moving money — this is not a paper exercise. At the same time, the 6.2 million entries that failed entry-level validation, and the 20,362 refunds stuck for want of banking information, show how many ways an individual importer's claim can fall out of the pipeline for reasons that have nothing to do with the merits. For a California importer, being eligible is necessary but not sufficient; the claim also has to clear CBP's validations and reach a bank account CBP can actually pay.

Who Phase 3 Reaches — and Who It Does Not

The most important limitation in the declaration is stated plainly: Phase 3 opened first to plaintiffs who submitted a valid importer of record number by July 30, 2026. Everyone else — including litigants who provided their importer number later, and the much larger group of importers who never filed suit at all — is left waiting on "additional instructions" that carry no deadline. So while it is accurate to say Phase 3 now functions, it is equally accurate to say it does not yet provide every eligible importer with a working means to seek a refund. That gap is what makes the parallel class-action track so consequential.

The Two Questions That Last Week Left Open

Reading the Phase 3 deployment and the class-certification news together, two questions now dominate planning for importers who have not already been paid:

1. When will CAPE Phase 3 be available to everyone eligible to make a refund claim? The declaration commits CBP to notifying additional importers but supplies no timeline. For importers outside the July 30 cohort, the honest answer today is that the date is unknown.

2. What is the impact of the class-certification order reported on October 8, 2026? Class treatment could, in principle, give non-litigant importers a court-backed path to refunds without filing an individual Court of International Trade case. But as explained below, even a granted certification does not translate into near-term payments.

The Freestyle Class-Certification Order (Reported October 8, 2026)

Freestyle World, Inc. v. United States, Court No. 26-01088, is the lead case in the consolidated IEEPA refund litigation before Senior Judge Richard K. Eaton. It is the same docket in which the Lord declaration was filed. The plaintiff brought the case "on behalf of itself and all others similarly situated," seeking to represent a class of importers who paid IEEPA duties — and critically, a class that would reach importers who did not separately file their own cases at the Court of International Trade. According to industry reporting and client alerts circulating in the trade bar, the court granted class certification on October 8, 2026. (As of this writing, the public dockets and secondary legal commentary available to us confirm the pendency of the certification motion and the case's status as the consolidated lead case; the specifics of the October 8 order are reported in the trade press, and importers should confirm the current docket entries before relying on them.)

Why Class Certification Matters for Non-Litigant Importers

Class certification in the Court of International Trade is governed by USCIT Rule 23, which mirrors Federal Rule of Civil Procedure 23. Its significance here is structural. Earlier refund relief — including the orders that opened CAPE Phase 3 — ran to plaintiffs: importers who had actually filed suit. An importer that sat out the litigation generally had no comparable, confirmed mechanism to compel a refund of finally liquidated entries. A certified class changes that calculus, because a class can, depending on how it is defined, sweep in importers who never filed their own action. For the many California importers who paid IEEPA duties but understandably hesitated to fund a federal customs lawsuit, that is the difference between having a seat at the table and watching from outside.

Why Refunds Are Still Not Imminent

Here is the sobering counterpoint, and it is the single most important point for importers to internalize: certification is a procedural milestone, not a payment. Even accepting the reported October 8 order at face value, the Freestyle case is not going to generate refunds for the class for some time, for several reasons.

• The government must still respond to the complaint. As reported, the order directs the government to answer, which means the merits are not yet resolved as to the class.
• Near-term proceedings are scheduling, not merits. The parties are reported to face a closed hearing on October 13, 2026 and to be under order to submit a scheduling order by October 22, 2026 — steps that set the litigation calendar rather than order money paid.
• An appeal is a realistic prospect. The government has resisted IEEPA refunds vigorously at nearly every turn, and the scope of relief for non-litigants is exactly the kind of question the Department of Justice has already signaled it will contest on appeal. It would be unwise to assume the possibility of an appeal is off the table.

The sensible reading for the trade community is that the Freestyle order is a genuine move in the right direction — it establishes that there is now a court order in place for anyone who makes a claim, regardless of the liquidation status of their entries — but one whose full benefit will take time to be realized. A court order that reaches you is worth having; it is not the same as a check in hand.

What California Importers Should Do Now

For importers moving goods through the Ports of Los Angeles, Long Beach, and Oakland — the largest container gateway in the United States — the right posture in October 2026 is active, not passive. Concrete steps:

1. Pull and map your IEEPA-affected entries. Identify every entry on which IEEPA ad valorem duties were paid, and classify each as unliquidated, recently liquidated (within the 90-day reliquidation window), or finally liquidated. Your eligibility path depends entirely on that status.
2. File CAPE declarations where you already can. If your entries are unliquidated or fall within CAPE's existing phases, there is no reason to wait — file and make sure the declarations clear the file and entry validations. The declaration's own failure statistics (importer/filer mismatches, bad entry numbers, CSV template errors) show that technically defective filings are a leading reason claims stall.
3. Confirm your ACH banking information is on file. With more than $1.1 billion in refunds frozen solely because importers did not supply Automated Clearing House account details or a valid CBP Form 4811 designation, this is the cheapest, highest-return task on the list.
4. Decide, deliberately, between individual suit and class reliance. If you have finally liquidated entries and are outside the July 30 Phase 3 cohort, you face a strategic choice: file your own Court of International Trade action to secure plaintiff status (and an order that runs to you directly), or rely on the reported Freestyle class. Each path has trade-offs in cost, control, and timing that are worth working through with counsel.
5. Preserve protest and Post-Summary Correction rights. For entries where a protest under 19 U.S.C. § 1514 or a Post-Summary Correction remains available, do not let those deadlines lapse while waiting on CAPE or the class case to resolve.

The $1.1 Billion Trap: ACH Information and CBP Form 4811

It is worth dwelling on one number because it is entirely within the importer's control. The declaration reports that 20,362 refunds, totaling roughly $1.1 billion, had not been transmitted to Treasury as of October 2, 2026 for a single reason: CBP did not have Automated Clearing House account information from the importer of record or its authorized CBP Form 4811 designee. These are refunds CBP has already recognized — the money is not in dispute. It simply has nowhere to go because the importer never gave CBP a place to send it.

For a California importer, the lesson is concrete and immediate: verify that your current ACH banking details are on file with CBP and that any CBP Form 4811 designation (which authorizes a third party, often a customs broker, to receive refunds on your behalf) is accurate and current. A refund you have earned but cannot receive is indistinguishable, in cash-flow terms, from a refund you were denied. Do not join the 20,362.

How the IEEPA Refund Mechanisms Interact

Importers sometimes treat CAPE and the litigation as competing options. They are better understood as layers. CAPE is CBP's administrative delivery system — the plumbing through which refunds actually flow, whatever the legal basis. The litigation (including the Freestyle class case and the individual CIT actions) supplies the authority that tells CBP which entries it must reliquidate, especially the finally liquidated ones that administrative law would otherwise leave closed. Phase 3 exists precisely because a court ordered reliquidation of finally liquidated entries for plaintiffs; the system build followed the legal order. For importers, that means the two tracks are complementary: you want both a legal basis that reaches your entries (plaintiff status or class membership) and a clean, validated CAPE declaration with working banking information so that, once authority exists, the refund can be paid without falling into the 6.2-million-entry validation-failure pile or the $1.1-billion ACH freeze.

Frequently Asked Questions

What is CAPE, and what did Phase 3 change?

CAPE — the Consolidated Administration and Processing of Entries — is a capability CBP built inside the ACE system to calculate and pay refunds of IEEPA ad valorem duties. Phase 1 opened April 20, 2026; a June 29, 2026 deployment added certain reconciliation-flagged entries. Phase 3, deployed October 6, 2026, added the ability to process finally liquidated entries that a court has ordered CBP to reliquidate — the category that had been shut out until then.

Does CAPE Phase 3 mean every eligible importer can now file a refund claim?

No. Per the Lord declaration, Phase 3 first opened to plaintiffs who submitted a valid importer of record number to CBP by July 30, 2026. CBP said it would issue additional instructions to importers who provided their numbers later, but gave no timeline. Many eligible importers — especially non-litigants — still lack a working Phase 3 path as of this writing.

What is the Brandon Lord declaration, and can I read it?

It is a sworn statement by CBP's Executive Director for Trade Programs, filed October 6, 2026 in Freestyle World, Inc. v. United States (CIT No. 26-01088), reporting CBP's IEEPA refund progress to the court under 28 U.S.C. § 1746. It is the primary source for the CAPE figures in this article. You can download the full declaration using the link near the top of this article.

What did the reported October 8, 2026 Freestyle order do?

According to trade-press reporting and client alerts, the Court of International Trade granted class certification in Freestyle World, allowing the case to proceed on behalf of importers who did not separately file their own CIT actions. Because the specifics are reported rather than independently confirmed here, importers should verify the current docket in CIT No. 26-01088 before relying on the order's precise scope.

If a class is certified, will I automatically get a refund?

No. Class certification is a procedural ruling about how the case proceeds, not an order to pay. The government has been directed to respond to the complaint, a closed hearing was set for October 13, 2026, and a scheduling order was due October 22, 2026 — all steps that precede any merits resolution. An appeal is also a realistic possibility. Refunds for a class, if they come, will take time.

Should I file my own Court of International Trade case, or wait for the class?

That depends on your entries and risk tolerance. Filing your own action secures plaintiff status and an order that runs directly to you, which is what unlocked Phase 3 for the first cohort. Relying on the class avoids the cost of individual litigation but leaves you subject to the class case's timing, scope, and appellate risk. This is a fact-specific decision best made with trade counsel.

Why are $1.1 billion in refunds stuck?

Because the importers entitled to them never gave CBP Automated Clearing House banking information, or a valid CBP Form 4811 designation. CBP has recognized these 20,362 refunds but cannot transmit them to Treasury without a destination account. Updating your ACH and Form 4811 information is a simple, high-value step.

How can Trembach Law Firm help with my IEEPA refund?

Our attorneys help California importers map their IEEPA-affected entries, file and troubleshoot CAPE declarations, preserve protest and Post-Summary Correction deadlines, set up ACH refund delivery, and decide between filing an individual CIT action and relying on class relief. Call (818) 514-7680 for a confidential consultation.

This article is for general informational purposes only and does not constitute legal advice. The CAPE figures and Phase 3 details are drawn from the October 6, 2026 declaration of Brandon Lord in CIT No. 26-01088; the October 8, 2026 class-certification order is described as reported in trade-press coverage and should be verified against the current court docket. Tariff and refund law is evolving rapidly; importers should consult qualified trade counsel about their specific circumstances. Attorney Anatolii Trembach, Trembach Law Firm.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

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