Twenty-three non-importer states have filed a notice of cross-appeal from the U.S. Court of International Trade's May 7, 2026 decision in State of Oregon v. United States (Ct. No. 26-01472), challenging the trade court's tariffs imposed under Section 122. The cross-appeal targets the CIT's decision to limit injunctive relief to only three parties.
The Narrow Injunction Below
In its May 7 ruling, the CIT granted injunctive relief only to Burlap and Barrel, Basic Fun, and the State of Washington, finding that those were the only plaintiffs with standing to contest the Section 122 tariffs. The court held that the remaining state plaintiffs failed to identify actual indirect harm resulting from the Section 122 duties, and on that basis denied them injunctive relief.
The Standing Question on Appeal
Practitioners view the cross-appeal as focused squarely on the standing analysis as applied to the 23 non-importer states excluded from the injunction. Notably, Washington -- the only state the CIT found to have standing -- is not among the cross-appellants. The non-importer states had advanced standing theories based on increased prices attributable to the Section 122 tariffs, and in some instances on being importers even where they did not themselves pay the duties.
Unless one or more of the states can show that they actually paid Section 122 duties, those standing theories may be difficult to sustain. Vendor correspondence attributing price increases to the tariffs may not, by itself, be enough to establish standing. The Federal Circuit may be hesitant to recognize standing premised on indirect tariff costs out of concern that doing so would open the floodgates to suits by parties only tangentially affected by the duties.
A Sovereign-Interest Theory
One rationale for the states' appeal is that, because Washington obtained standing, the other states may view themselves as having a responsibility to protect the financial interests of their citizens with respect to the disposition of tax dollars -- a potentially unique sovereign obligation that could support standing in cases of this type. Whether the Federal Circuit, or ultimately the Supreme Court, will expand standing doctrine to permit states to sue the federal government on this indirect-harm theory remains uncertain, and such an outcome appears unlikely though not impossible.
We will continue to monitor the Section 122 litigation and provide updates as the appeal proceeds.
This post is provided for informational purposes only and does not constitute legal advice.