4 minute watch | March.11.2026
Ron D'Aversa and Danny Rubens, partners in Orrick's Restructuring and Supreme Court & Appellate practices, break down the Supreme Court's landmark tariff ruling and what it means in practice.
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Ron: It's a major development.
Danny: That's the $175 billion question.
Ron: Hi, I'm Ron D'Aversa. I am the chair of Orrick's Restructuring Practice, and I'm based in New York.
Danny: Hi, I'm Danny Rubens. I'm a partner in Orrick's Supreme Court and Appellate Group, also in New York.
Ron: The Supreme Court just struck down the president's tariffs, but refunds, next steps, and market impact are still uncertain. Danny, bottom line, what exactly did the court decide, and why is this important for businesses and investors?
Danny: The Supreme Court was considering tariffs imposed under a specific statute that was passed in the 1970s. Everyone in this litigation agreed that the president doesn't have inherent authority to impose tariffs during peacetime. That authority has to come from a statute.
And what the Supreme Court majority held was that this statute, which had never been used before to impose tariffs, does not authorize tariffs.
Ron: Did the court say anything about how refunds will work in practice?
Danny: It did not. The court said nothing at all about refunds or the refund process. So that's sort of the $175 billion question hanging out there. That's going to be taken up by the Court of International Trade, which is the trial court. And that court, in coordination with the parties and with Customs and Border Patrol, is going to work out — hopefully — a process to refund these tariffs.
Ron: So, what should companies be doing to make sure they're in the best position to get refunds?
Danny: Well, there currently is a lot of uncertainty because the Supreme Court didn't address that question, and what's going to happen next will play out in the Court of International Trade.
I'd recommend just monitoring what's going on in that case and seeing if the Court issues guidance or sets up a refund process. I'd also mention that the Supreme Court's decision affected tariffs under this particular statute, but it didn't address tariffs under other authorities. Companies should keep in mind that there could be other tariffs or alternative tariff authorities that are used, and that's not going to be affected by anything that happens through this refund process.
Danny: Ron, we've been talking a lot about the litigation, but how are businesses thinking about the tariffs decision and how it's affecting things commercially?
Ron: Many companies already adjusted their pricing to deal with tariffs. They either absorbed the cost or passed them through to their customers. It's not clear that the pricing is going to automatically snap back.
Vendors may be sitting on inventory that they paid tariffs on, so it may be premature for them to pass on the refunds to those customers. In some cases, there could be supply contracts where vendors used contractual force majeure provisions to increase prices to deal with the tariffs, and in those cases there could be contractual provisions where the vendor is obligated to either indemnify or give back those tariffs because of the refunds.
Danny: Ron, I understand that there's a market for tariff refund claims. I was wondering if you could give a little color on that market and how it's responded to the Supreme Court's decision.
Ron: While the decision makes it much more likely that the refunds are going to be paid, there's still a lot of uncertainty around timing and process. Not surprisingly, the market has moved up in pricing, but it's still not trading anywhere near par. And as always, parties need to do their diligence to determine the validity of the claims, and whether that seller is going to be subject to any kind of refund or other kind of claim from its customers or supply chain parties.
Danny: The bottom line is that the Supreme Court answered the legal question, but practical questions like refunds, timing, and alternative tariffs are still very much in play.
Ron: Exactly. Investors and sellers — they should be aware that there could be changes coming rapidly over the next weeks and months. Stay tuned, everyone.