On June 11, 2026, the U.S. Court of Appeals for the Federal Circuit granted the federal government’s motions for a stay pending appeal in State of Oregon v. Trump (Nos. 2026-1804, 2026-1805), consolidated appeals from two decisions of the U.S. Court of International Trade (CIT) that had enjoined enforcement of tariffs imposed under Proclamation No. 11012 and Section 122 of the Trade Act of 1974. While the appeal proceeds on the merits, the government may continue to collect the Section 122 “balance-of-payments” tariffs as to the parties covered by the underlying injunctions, including the State of Washington, Burlap and Barrel, Inc., and Basic Fun, Inc., pending further order of the Federal Circuit.
Background
The underlying CIT proceedings involved challenges by a coalition of 21 states and two private companies to Proclamation No. 11012, 91 Fed. Reg. 9339 (Feb. 20, 2026), which imposed tariffs purportedly justified by a “balance-of-payments deficit” under Section 122. On May 7, 2026, the CIT ruled that the Proclamations were beyond the powers of the executive branch and enjoined collection of the duties as to the plaintiffs before it. The Court held that Section 122’s reference to a “balance-of-payments deficit” is limited to three recognized measures: (1) liquidity, (2) official settlements, and (3) basic balance.
The government appealed and moved for an immediate administrative stay and a stay pending appeal, which the Federal Circuit granted on June 11, 2026, applying the traditional four-factor test from Nken v. Holder, 556 U.S. 418, 434 (2009). The court concluded that three of the four factors favored the government, with the fourth (public interest) being neutral.
Key Takeaways from the Federal Circuit’s Order
The panel found that the government made a sufficient showing of likely success on the merits, but it expressly declined to adopt any final interpretation of “balance-of-payments deficit” at this stage. The court found the legislative history cited by the government and by Judge Stanceu’s dissent sufficient to call into question the CIT majority’s three-measure framework and was unpersuaded “at this time” by plaintiffs’ nondelegation arguments. The court emphasized that this assessment does not prejudice the merits panel’s ultimate disposition.
The panel credited the government’s argument that even a narrow injunction would have outsized practical effects because other importers were “highly likely” to file follow-on suits seeking the same relief, noting that two such cases (Cleaner’s Supply Inc. v. United States, No. 26-cv-3012, and Tarte Cosm. v. CBP, No. 26-cv-3022) had already been filed as of the government’s reply. The court also accepted that the CIT’s refund-with-interest remedy could create “unrecoverable financial losses” for the government and impose administrative burdens on CBP.
The court concluded that plaintiffs would not be substantially injured by a stay because a refund with interest, if plaintiffs ultimately prevail, adequately addresses the harm of having paid the duties. The court treated additional harms asserted by the private plaintiffs, such as operational disruption, reputational harm, lost profits, and constraints on growth, as flowing from plaintiffs’ own risk calculus rather than from the stay itself.
The panel found the public-interest factor neutral, declining to weigh in on the ultimate lawfulness of the tariffs at this preliminary stage. With three of the four Nken factors favoring the government, the court granted the stay.
Next Steps
The consolidated appeals (Nos. 2026-1804, 2026-1805) will now proceed before a merits panel, which will address the proper interpretation of “balance-of-payments deficit” under Section 122, the nondelegation arguments raised by the private plaintiffs, and whether Proclamation No. 11012 was validly issued.
McGuireWoods and McGuireWoods Consulting will continue to monitor developments closely and are available to assist clients with assessing the impact of these changes on their operations, revising import/export strategies and ensuring compliance with the evolving trade framework.