Judge Dismisses California’s Tariff Lawsuit, Teeing up Appeal

A U.S. judge dismissed the state of California’s challenge to President Donald Trump’s tariffs, allowing the state to file an appeal over the court’s ruling that the dispute should have been filed in a specialized U.S. trade court in New York.

The ruling, handed down late on Monday by U.S. District Judge Jacqueline Corley in San Francisco, did not delve into the merits of California’s lawsuit. Now, three separate U.S. appeals courts may simultaneously consider the legality of Trump’s sweeping tariffs on U.S. trading partners and a separate set of tariffs targeting imports from China, Mexico and Canada.

Since February, Trump has issued new tariffs, paused tariffs from taking effect, and raised and lowered rates as he attempts to negotiate new trade deals with other nations. The on-again and off-again tariffs have whipsawed businesses who work with international suppliers.

Although legal experts expect that the U.S. Supreme Court will ultimately decide the legality of the tariffs, rulings from different intermediate courts in the meantime could further sow confusion.

A panel of three judges in the Manhattan-based U.S. Court of International Trade and a federal judge in Washington D.C. have already declared that Trump did not have unilateral authority to impose tariffs without input from Congress. The Trump administration has appealed both rulings, in cases brought by 12 U.S. states and several small businesses.

Corley’s ruling is more limited than either of those decisions and does not address the legality of Trump’s tariffs.

Instead, Corley ruled that California should have sued in the Court of International Trade, which has exclusive jurisdiction over tariff disputes in the U.S.

California, which opposed the transfer, had asked the judge to dismiss its case rather than transfer it, which will allow it to appeal to the 9th U.S. Circuit Court of Appeals.

The U.S. Court of Appeals for the Federal Circuit in Washington, D.C. has temporarily paused the trade court’s ruling, which allows the tariffs to remain in place for now, while it considers whether to impose a longer term stay while an appeal of that ruling plays out.

California argues that any federal court can hear the case because it raises constitutional objection to Trump’s use of tariff powers that are reserved for Congress unless delegated to a president.

The law that Trump has cited to justify the tariffs, the International Emergency Economic Powers Act, does not authorize tariffs at all, so it can not force California to litigate in the trade court, California’s Attorney General Rob Bonta said.

“Our argument is straightforward. Trump doesn’t have the authority to impose these destructive tariffs,” Bonta said in a statement.

The lawsuits challenge Trump’s so-called “Liberation Day” tariffs on imports from most U.S trading partners, as well as a separate set of tariffs levied on China, Mexico and Canada.

The latter are related to his accusation that the three countries were facilitating the flow of fentanyl into the U.S., allegations the countries deny.

(Reporting by Knauth; Editing by Alexia Garamfalvi and Bill Berkrot)