Mark Chenoweth and John Vecchione dig into the upcoming Supreme Court arguments over presidential tariff powers. With billions in disputed tariffs at stake, they explore remedies, nationwide injunctions, and why limiting relief could tilt power toward bureaucrats and leave citizens without a way to vindicate their rights.

Mark Chenoweth: If you think that unwritten law doesn't affect you, think again. Whether you're a business owner, a professional, just an average citizen, you are unknowingly going to fall under vague and unofficial rule. And when bureaucrats act like lawmakers, they're really restricting your liberty without the consent of the governed. Welcome to Unwritten Law with Mark Chenoweth and John Vecchione. Glad to have you back with us and we’re going to talk about tariffs, John. There have been a couple of developments and the Supreme Court has granted cert in a couple of cases. And then, there have been some more recent developments even post certs. So, what's the latest that we know?

John Vecchione: So, the first thing is they now have oral argument November fifth. So, this whole thing will have been briefed by the government in September, by the respondents in October; Amicus for the respondents in October 24th and then argued November fifth. And I did notice in her new book, Justice Amy Coney Barrett said she doesn’t read all the amicuses. She has the clerks do that and then they tell her which ones are good. And I think she’s gonna have to follow in this one because this is going to be a lot. But read ours. And –

Mark Chenoweth: That's right. That’s right.

John Vecchione: – read ours if you're listening, Justice.

Mark Chenoweth: Maybe you could leave one in a pew somewhere.

John Vecchione: Right. And I think our last podcast we talked about Constitution Day at Cato, and I was asked a lot of questions there. And one of their questions was “Well, what's the remedy? What’s gonna happen?” And it got me thinking because the case isn’t in a posture to discuss remedies, but it’s gonna have to be done. So, basically Learning Resources has asked that they don’t get tariffed. So, really it’s a minimalist…

Mark Chenoweth: Their case was only ever about them.

John Vecchione: And you know why they're doing that, right? They wanna minimize it, get the win, and then move on from there. And then, you have Trump v. CASA, so if the states have to get complete relief by a nationwide injunction, that can happen. We believe, and we’ll discuss this, I think, a little later that certainly the APA lets a court strike and vacate a regulation like this. And then, class actions, and that's been used quite a lot in the birthright citizenship.

Mark Chenoweth: Well, and if it is true that the CIT has exclusive jurisdiction, that might be yet another reason…

John Vecchione: That's the lesson. And that's the one. So, V.O.S, I’m sure, I haven’t discussed it with them but I’ve looked at their papers, and they certainly think that “Look, if jurisdiction is in CIT, that's just the only court there is for this. So, whatever they say goes for everybody…”

Mark Chenoweth: Well, they’ve already looked at it on Bock –

John Vecchione: Right.

Mark Chenoweth: – for one thing.

John Vecchione: It’s true.

Mark Chenoweth: So, they're not gonna reach a different decision…

John Vecchione: No, but they did it on Bock, they remanded it to the district court to see what the remedy was. They didn't say. The federal circuit didn't say. That's why we’re in this posture. That it’s not like we’ve got “Oh, and here’s what we’re gonna do since we found these are unconstitutional.” The federal circuit said, “No, you district court, I think you should look at what the remedy is again,” which is odd. And so, this is all up in the air as far as the postures and the cases go. But I was asked this quite a bit and there's a lot of handles on this because the government, the administration keeps putting in declarations from, who, Secretary of Commerce Bessent, right –

Mark Chenoweth: Right. Scott Bessent, uh-huh.

John Vecchione: – Scott Bessent and Rubio and everyone that these tariffs are just huge and they're closing the deficit. I think last quarter these illegal tariffs were the second greatest source of revenue in the United States. So, that means an illegal tax on the American people is now the second greatest source of taxes –

Mark Chenoweth: For federal revenue.

John Vecchione: – for federal revenue, which is incredible. Well, what is that? On the one part, that's a terrible violation of our system of government. But on the other part, it’s gonna blow a hole in the budget when you’ve gotta repay it all back and it’s gotta be unwound. So, this unwinding, how does that happen…?

Mark Chenoweth: And is that a real argument against it?

John Vecchione: Yeah.

Mark Chenoweth: And we saw this, John, in the student loan debt forgiveness situation where essentially the Biden administration, I think, was daring the Supreme Court to try to stop it because they were trying to forgive half a trillion dollars in debt. So, the question was almost “Well, what are you gonna do now? We've already forgiven it?”

John Vecchione: And that's why the injunctions were so important in that case because once the money is spent, very hard to get it back from people. And in fact, that is why I think the Court has enjoined these injunctions about giving the money to the colleges and stuff. And what they’ve said is “There's no mechanism for getting it back, whereas the government will have to pay it.” So, the balance of equities there is “We don’t really know how the government’s gonna ever get it back from a lot of these researches and stuff.” They went and they did their laser thing and they bought their laser… It’s gonna be difficult.

Mark Chenoweth: Right. It won’t be liquid anymore.

John Vecchione: It won’t be liquid. So, this issue’s very big. And I was asked by a number of business people “What happens?” And obviously, I think everyone agrees that when you wanna get your tariffs wrongly paid back, you do have to go to the CIT. They have a whole mechanism for it. They have a lot of laws for it.

Mark Chenoweth: So, that's not a Court of Federal Claims issue? It’s a CIT issue?

John Vecchione: It’s Court of International Trade. I guess you can appeal it there if something goes wrong but…

Mark Chenoweth: Well, they both funnel up to –

John Vecchione: Correct.

Mark Chenoweth: – the federal circuit, right?

John Vecchione: That's true but I think it’s the CIT –

Mark Chenoweth: For tariffs.

John Vecchione: – for tariffs, right? So, they're gonna have to put in a process. I don’t know if they're gonna have to have CIT MDL or something, but this is so vast. And there's so many people with so many different amounts that I could see there being a special process put in, like a special order that all tariff cases now come this way or that way.

Mark Chenoweth: Congress could even pass a law. I’m not suggesting that it should but Congress could even pass a law saying, “Well, retroactively we’re just deeming all of this to be fine. And prospectively we’ll deal with something else, but we’re not gonna pay it all back.” They could in theory.

John Vecchione: How? Do you mean they’d make a retroactive tariff?

Mark Chenoweth: Well, I guess that's right. Taxes aren’t supposed to be retroactive, right…?

John Vecchione: They can be, though. They can be. Well, you’ve just given them an idea I hadn’t thought of.

Mark Chenoweth: I think if they ratified it, it might wash. I apologize to all the tariff payers out there for suggesting this idea.

John Vecchione: I hadn’t heard that.

Mark Chenoweth: Well, and I don’t know that the administration will try that but it’s a possibility.

John Vecchione: And so, I hadn’t thought of that one at all. I thought what Congress would do is just make a process of how you get your tariffs back quicker, more than anything. But I do think that it probably will fall on the Court of International Trade to do it. But then, here's the other thing. We have been talking about these nationwide injunctions and there's some hostility to them in the court. Some are saying, “Oh, you can’t loosen the reins of confirming class certification.” I don’t see that that's happening but there's a concern always. The defense bar always has that concern and I’m sure some Justices do. So, well, what are you supposed to do? And I certainly have seen it happen and we did it in Cargill, right? We went back down the district court and he set aside and vacated the regulation.

Mark Chenoweth: That’s right.

John Vecchione: And I think that's the Fifth Circuit’s view.

Mark Chenoweth: And the D.C. Circuit has done it a lot. Well, this has come up at oral argument before at the Supreme Court, and at least Chief Justice Roberts, and I think, Justice Kavanaugh or some of the others that have served on the D.C. Circuit, have said, “Well, wait a minute. We do this all the time. This is sort of the default relief that folks get when the win in the D.C. Circuit.”

John Vecchione: This is the one thing that gives me comfort. The D.C. Circuit people, and they're all D.C. Circuit people, not Gorsuch and some, but a lot of them have sat there and they’ve been doing this for years and I don’t know that arguments that it doesn’t say “vacate,” it says “set aside” are gonna come to the fore….

Mark Chenoweth: I’m not even sure “set aside” is limited to the parties. I know that's the argument that the –

John Vecchione: Right.

Mark Chenoweth: – “set aside” people make, but that's not clear to me as a textual matter of why “set aside” would only mean “for the party in front of the case.”

Mark Chenoweth: Right. “My competitor doesn’t have to pay the tariffs and I do?”

John Vecchione: “But I didn't bring a suit?” Right?

Mark Chenoweth: Yeah.

John Vecchione: “Even though this is an unconstitutional statute?”

Mark Chenoweth: “And it’s already been found that way by the Supreme Court –

John Vecchione: Right.

Mark Chenoweth: – but now I have to bring a suit in order to not have to pay it?” That doesn’t sound right.

John Vecchione: Right. And the other thing is, as I’ve said, John Sauer told the Court that he’s not only gonna listen to their judgments, follow their judgments but their opinions. So, why would you be any different? How could it come out differently?

Mark Chenoweth: Right. I don’t see how that works though because, to your point, John, and you were setting this up earlier, Learning Resources didn't ask for this relief. They only asked relief for themselves. So, how can you grant relief for that wasn’t asked for?

John Vecchione: That's true. But that's not the case where I thought it would be granted. I think they wanted to get the principle down and then they’ll do something later or we will or someone will. You know what I mean?

Mark Chenoweth: Maybe someone will and then maybe that's how it will play out.

John Vecchione: But I wanna read the APA printout because I don’t think the “set aside” language is all you have. Listen to this. “To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret Constitutional and statutory provisions and determine the meaning or applicability of the terms of agency action.” Well, that says, to me, that they can decide whether it’s applicable to the whole world or not. It strikes me that, the start, before you ever get to the “set aside” language, they’ve already given the Court broad discretion to get rid of the whole thing.

Mark Chenoweth: Well, and let me take a step further back and think about this a little more theoretically because I think that when folks look at Trump v. CASA, particularly people on the Right, and they say, “Oh, yeah. One district judge shouldn't be able to contradict the president. It shouldn’t be able to set aside presidential action.” Well, okay, what you're talking about most of the time in these cases is a statute that's been passed by Congress, right? So, you already have one branch of government, Congress, that has passed this law, has signed off on the constitutionality of the action. Then, you have a second branch of government in the person of the president who has also signed off to the constitutionality of this action.

So, if it’s the case that you're dealing with a federal statute and two branches of government have already said, “Yeah, we think this is constitutional,” then I do think that a one, single federal district judge should have a lot of inhibitions about striking down that federal law or even refusing to apply it in the case in front of them; but certainly should hesitate before striking it down nationwide, and maybe doesn't have that power, maybe shouldn’t properly have that power, post Trump v. CASA does not have that power. The reason why I think a rule is different, and this is what none of our Conservative friends at Heritage and other places who have been writing about this topic seem to have groked yet, if I can use the Silicon Valley terminology –

John Vecchione: Very cool. Very cool podcast we have here.

[Crosstalk]

Mark Chenoweth: – thank you, thank you, “Did Congress ever pass this rule?” No. The Legislative branch has not weighed in on this rule at all. Has the president signed off on this rule? Well, in the tariffs case, yes. In the ordinary case that comes in front of a federal district judge, no. The president doesn’t know anything about this rule. In fact, a lot of times the head of the department hasn’t even signed off on the rule. It goes department by department, agency by agency who has to sign off on a rule before it gets put in the Federal Register. Sometimes the General Counsel asks to sign off on that rule; sometimes not.

Sometimes a lower-level bureaucrat at one of these agencies, is able to just insert a rule into the Federal Register, if it’s within their area of competence and responsibility and it’s never been signed off on by anybody at the upper levels of the Executive branch. So, if it’s the case that you have something that’s never been a rule, that's never been signed off on by the Legislature, has never been signed off on by an elected official certainly in the Executive branch and really not even necessarily someone high up in the Executive branch, and then that rule gets in front of a constitutionally appointed officer, a federal district court judge and that judge looks at it and says, “Wait a minute. There's no statutory authority for this rule” or “Wait a minute. This is completely against the First Amendment” or some other constitutional provision, why shouldn’t that district judge be able to set that rule aside for everyone, for the whole country?

Because that rule, it didn't have the kind of pedigree that a federal statute has, and I think there's a real difference there. And let me explain what happens if you don’t look at it that way, if you treat a federal rule with the same sort of awe that you treat a federal statute. Before I get to that, let me say one other thing. We talk about statutes coming to court with a presumption of constitutionality. Well, why? Why do we say that?

John Vecchione: For the reasons you said before.

Mark Chenoweth: For the reasons I said before. Because it’s already been passed by two branches of government. A rule does not come to court with a presumption of constitutionality, nor should it. And if somebody things that it does, I don’t see possibly how, where that would come from. It just doesn’t have the same pedigree, as I said. So, given that that's the case I think a federal district judge looking at that needs to be able to set it aside. And as I started to say, if you don’t look at it that way, then here's what happens. You set it aside for the first person that comes in the Court. Now, the only person who’s ever looked at this who’s a constitutionally responsible officer has said that it’s unlawful.

Now, the second person comes into court with their case. Now, the burden of proof is still on them to show that it’s unlawful? That burden of proof’s not on the government? No. The burden of proof should shift to the government. But that can’t happen in district court. Where that can happen is on appeal. So, if the district judge says that it’s unlawful and it goes up on appeal, well, now the government can challenge that, and it can go all the way up to the Supreme Court. And if the government’s right, the government will win eventually on appeal or at the Supreme Court, and the rule will be vindicated.

Meanwhile, I don’t understand why everybody else wo’s affected by this rule should have to be in the situation of bringing their own lawsuit. I think that's a rule that empowers bureaucracies, John. It’s not a rule that is pro liberty. It’s not a rule that Conservatives should like. It’s certainly not a rule that anybody who distrusts the administrative state should like. And I don’t understand why people are going down that road.

John Vecchione: Well, I do…

Mark Chenoweth: Textualism, I guess.

John Vecchione: No, I don’t think so. I don’t think it’s textualist. I told you. I just read the bill. I think it’s just completely driven by the fact that if Trump doesn’t like it; and they don’t like this happening to them, and it’s happening to them a lot. That's the other thing, the amount of time. Some have been unfair. But when he got to the Supreme Court, he’s won 19 of 21 times….

Mark Chenoweth: Right. So, this is working.

John Vecchione: I know. But that's why. But I will say this, it reminds me a little bit, and I think the Supreme Court, if it went in this direction would be very sad about it because they're always saying they don’t like multiplying litigation, right? They always say, “Oh, we don’t want rules that multiply litigation.” And it reminds me a little bit of the defense bar was always saying that everyone should be in arbitration agreements. And they said, “Oh, arbitration agreements are much better than courts and jury trials and everything…”

Mark Chenoweth: Because they're voluntary too.

John Vecchione: Voluntary, 20 years, much cheaper. They went through the whole thing. And so, for all of these now, there are contract of adhesions. There are arbitration agreements everywhere. And then, the plaintiffs bar came back and said, “Okay.” And they would do mass, mass arbitrations now.

Mark Chenoweth: Like 10,000 people at a time.

John Vecchione: Like 10,000, 20, a hundred, and they would do exactly what the contract said. And now, the defense bar, “Oh, that’s terrible because now –

Mark Chenoweth: Because it’s expensive.

John Vecchione: – you're gaming the system.” But they did this; they said, “No class actions.” Right? They said, “No class actions.” And so, now they're doing individual cases, and for the defendants to be paying their defense attorneys in all these cases they're screaming bloody murder. There’s no perfect solution to something, right? So, don’t go looking for trouble. And that's how I think this is because, if it is that everyone has to sue, there's gonna be like “Here’s my suit.” And then, what happens when the government lose? Then, the government’s gonna have to be attorneys’ fees on a lot of cases, right because if you lost the first one and everyone else has to come on, well, those second, they're all gonna get EAJA fees, it seems to me.

Mark Chenoweth: Well, the other thing that happened, John, and we talked about it at the time, I think, is that the Solicitor General pinky swore that if they lost a case at the district court level, that they would appeal it. I don’t believe them because it creates an incentive if the district judge does not have the power to set aside the rule for everybody, the incentive is for the government not to appeal it and just deal with the fac that that one person doesn’t have the rule apply to them. And then, “Okay, bring on your next one. Who else is gonna come and sue over the rule? Okay. Well, we won’t appeal that one either after we lose.” And now all of a sudden, imagine in the context of the bump stock rule, right –

John Vecchione: Right.

Mark Chenoweth: – for example. So, you're telling me 500,000 people have to sue the government before you get relief? It’s an insane system if that’s how it’s going to work. And you might say, “You’re assuming that the government wouldn't capitulate at some point.” That's right because if it’s important enough to the president or important enough to the Executive branch, they won’t capitulate. They will make everybody sue. And it’s not only a question of cost, which it is. The vast majority of people won’t sue because of the cost, right, and so then their rights will never be vindicated.

John Vecchione: The other thing is that we can’t what the government can do. Let’s look at birthright citizenship. All these injunctions have been put in. If you wanted to go to the emergency doctor right now on the merits of birthright citizenship, you could do it if you were the Solicitor General, and it’s crickets out there. No one’s doing it. But I think he could keep suing until he gets a judge who buys it, right? So far there hasn’t even been any dissent, I don’t think. But it gives the government a huge advantage to find the right place and win one and then press the ideas of that one, which the plaintiffs don’t really get because if you’ve won, you can’t get on on cert. You’ve already won. You can’t file a new case. You gotta go find another plaintiff.

Mark Chenoweth: And you can't force them to appeal.

John Vecchione: Can’t force them.

Mark Chenoweth: And that's the issue too from a public interest law firm perspective. If we can’t force an appeal on these cases that we win, then the case is no longer a public interest case. If literally the only person who can benefit from the lawsuit is the client, that’s not public interest litigation, John.

John Vecchione: Right. I will say –

Mark Chenoweth: It might be pro bono.

John Vecchione: – but you also may have the precedent that then other people use. But then –

Mark Chenoweth: Sure.

John Vecchione: – they have to want to go use it, and most times if there's no money in it, they're not gonna do that.

Mark Chenoweth: They're not gonna do it. They can’t afford to do it. And so, you're leaving a lot of rights out there that can’t be vindicated, and you're leaving a lot of power with the bureaucrats and the administrative state if you go down this road. You were calling out to Justice Amy Coney Barrett. Let me call out to all nine Justices. If you're listening, don’t do that. Do not have a world in which all the power is with the administrative state and there's no ability for ordinary people to vindicate their rights. That is not a world you wanna be in court. There aren’t enough emergency docket cases in the world to solve your problem if you create that situation, whether in the tariffs case or somewhere else.

You need to be able to set aside rules. District judges need to be able to set aside rules. The other thing that bothered me all this time, John, about Trump v. CASA is they acted as though, once the case got to the Supreme Court that then it could be nationwide. But if you don’t ask for nationwide relief at the beginning of the case, you can’t ask for it at the end of the case. You can’t change the relief request in front of the Supreme Court.

John Vecchione: No, you can’t

Mark Chenoweth: So, I don’t understand how they think litigation works because you can’t change your remedy at the end of the day. If they say that this power doesn’t exist, then it doesn’t exist for them just as it doesn’t exist for the district judge. Now, if they rule on it, it is a precedent, then it is good nationwide. I get that. But if you create a situation where everyone has to sue on that in order to vindicate their rights, then most people won’t.

John Vecchione: It won’t work, so it can't happen. Let’s hope I’m right about that.

Mark Chenoweth: That would be good. That would be good because this would be a really bad kind of unwritten law to have to deal with. Well, thank you for tuning in. We will keep you posted on what’s happening in the tariffs cases. Thank you, John, for your expertise and we’ll all be paying attention to oral argument on November fifth. You’ve been listening to Unwritten Law. As we like to say here at NCLA, let judges judge, legislators legislate, and stop bureaucrats from doing either.

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Duration: 22 minutes