Tariff Whiplash: Consumer Class Actions Seek Retailer Refunds

The retail sector faces a new wave of litigation. The Supreme Court’s February 20 decision in Learning Resourcesdismantled a tariff regime imposing duties up to 25% across various industries since early 2025. While importer retailers anticipate tariff refunds from the U.S. Customs and Border Protection (CBP), customers, through well known class action firms, have targeted retailers for their own refunds.

To date, consumers have filed dozens of class actions against retailers, with new actions filed almost daily.

Current Theory and Claims

Across the current litigation landscape, plaintiffs maintain the same central theory—consumers are owed any refunds that retailers receive because consumers, not retailers, actually paid the tariff costs. Consumers argue that, while retailers made tariff payments to the CBP, retailers passed these costs to consumers, and any refunds should pass through again. Otherwise, plaintiffs contend, retailers would unjustly obtain a windfall.

For example, in Hoffert v. Nintendo of America Inc., plaintiffs allege an importer escalated prices specifically to offset a 25% tariff. Plaintiffs argue that federal refunds to the importer would constitute an unearned “windfall profit” since the importer was already compensated through the increased prices on the imported goods.

Consumer complaints typically allege:

• Breach of Contract: Asserting that charging and retaining amounts attributed to now-unlawful tariffs breach consumer agreements.
• Unjust Enrichment: Asserting it is inequitable for a retailer to retain tariff refunds after offsetting tariff costs. 
• State Consumer Protection Violations: Alleging that offsetting unlawful tariff costs, retaining tariff refunds and/or failing to disclose the intent to retain tariff refunds violate(s) consumer protection laws.
• Restitution and Disgorgement: Demanding that retailers pass 100% of refunds back to the consumers.
• Declaratory Judgment: Seeking the right to recover tariff costs (including interest) from retailers.

To advance these theories, plaintiffs allege and incorporate:

• how retailers passed off tariff costs (i.e. line-item expense, standalone charge or through product prices);
• public statements by the retailer regarding how tariff costs affected the company and its customers; and
• the retailer’s stated plans, or lack thereof, for providing consumer relief.

Recent cases against Amazon, who is not seeking federal refunds, exemplify consumer reliance on these refunds to assert most claims. Among consumer protection and quasi-contract claims, plaintiffs sue to compel Amazon to proactively seek refunds, admitting their “inability to seek such refunds . . . for themselves.”

Furthermore, while unjust enrichment and restitution claims seek the overcharged or refunded amounts, the consumer protection claims are premised on standalone statutory violations, irrespective of whether the company sought or obtained refunds.  

Current Defensive Landscape

Ongoing Dispositive Briefing

So far, only Costco has moved to dismiss, challenging actions as premature, speculative and meritless. Costco contends that consumers cannot recover potential refunds of unknown amounts and premise such recovery on alleged increases in prices. On the merits, Costco argues that consumer protections neither prevent price increases nor require refunds to consumers, and any equitable relief would constitute judicial overreach. Briefing in these matters complete in July with argument to follow.

So far, no retailer has filed an Answer.

Upcoming Dispositive Briefing

Additional retailer responses are on the horizon, as early as late June and early July. By then, we will have heard from Walmart, IKEA, Dollar General, Lululemon and Fabletics, who face substantially similar claims to Costco.  

Ahead of these deadlines, retailer defendants and counsel have circled up into joint defense groups to share key litigation insights and gameplan strategies and defenses applicable to and repeatable by the spectrum of potential retailer defendants. Manatt, Phelps & Phillips, LLP’s participation in these joint defense groups, coupled with our ongoing advisory conversations with retailers, has positioned us on the cutting edge of retailer defense against consumer tariff suits.

Actionable Strategy: Defensive and Proactive Posturing

In advance of any consumer litigation, retailers should take immediate defensive steps:

Audit Historical Pricing Language: Review marketing materials, checkout screens and invoices from the 2025–2026 tariff window. Determine whether internal tariff costs were explicitly communicated to consumers. Keeping costs embedded inside an MSRP remains the strongest defense to consumer tracing.

• Compile Margin and Cost-Absorption Records: Work with financial and supply chain officers to document IEEPA tariff absorption. Showing absorption through diminished markups or compressed operating margins undercuts the narrative of a 100% pass-through overcharge.
• Tighten Digital Terms of Sale: Ensure your digital checkout flow contains robust mandatory arbitration provisions and class action waivers. Funneling consumer grievances into individual arbitration short-circuits the leverage of aggregate class action filings.
• Review Vendor and Distributor Agreements: For retailers who are not the direct importer of record but purchased tariff-exposed goods from domestic distributors, review your vendor agreements. Determine which entity is entitled to seek the CBP refund and whether indemnification clauses are in place.

Consider Refunds to End-Consumers?

Currently, there is no prevailing guidance on issuing consumer IEEPA refunds. A small set of companies, some of whom face lawsuits, have promised to pass 100% tariff refunds to consumers.

Costco and Walmart, who both face lawsuits, have promised to reinvest refunds to benefit consumers indirectly through future lower prices. Some lawsuits against Costco use these statements against it, undercutting the value such promises have in stemming lawsuits.

Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026).

90 Fed. Reg. 9114, 9118, 9122–9123 (Feb. 1, 2025); 90 Fed. Reg. 15045-49 (Apr. 2, 2025); Stefan Mesingschalger, Court Day, not Liberation Day: option-value statecraft and the volatility premium of U.S. transnationalism in Trump’s second term, Austl. J. of Int’l Aff., 80(3), 459-467 (2026).

U.S. Customs & Border Prot., Fact Sheet: IEEPA Duty Refunds (Apr. 17, 2026), https://www.cbp.gov/document/fact-sheets/fact-sheet-ieepa-duty-refunds.

See, e.g., Stockov v. Costco Wholesale Corporation, Compl. ¶¶3, 25-27, Case No. 1:26-cv-02734 (N.D. Ill. Mar. 11, 2026); Neuman v. Lululemon USA Inc., Compl. ¶¶3, 22, 27, Case No. 2:26-cv-1102 (E.D. Mich. March 27, 2026).

Case No. 2:26-cv-01360 (W.D. Wash. Apr 21, 2026).

Compl. ¶¶3, 6, 39, 47.

Id. ¶¶1, 57.

See, e.g, Deburro v. Fedex Express Corporation, Case No. 2:26-cv-0224 (W.D. Tenn. Mar. 6, 2026); Ward v. EssilorLuxottica S.A, Case No. 1:26-cv-01133 (E.D.N.Y. Feb 26, 2026); Singh vs. Fabletics, Inc., Case No. 26CV175119 (Cal. Super. Ct. Mar 10, 2026).

Markland et al. v. Amazon.com Inc., Case No. 2:26-cv-01670 (W.D. Wa. May 15, 2026); Rosen et al. v. Amazon.com Inc., Case No. 2:26-cv-01823 (W.D. Wa. May 28, 2026).

Rosen v. Amazon, Case No. 2:26-cv-01823, Compl. ¶¶95-96.

Stockov v. Costco Wholesale Corporation, Mot. to Dismiss (Doc. No. 23), at 12-13.

Id. at 13-15.

Id. at 15-22.

See Aaron B. Flaaen, Ali Hortaçsu, Felix Tintelnot, Nicolás Urdaneta & Daniel Xu, Who Pays for Tariffs Along the Supply Chain? Evidence from European Wine Tariffs, Nat’l Bureau Econ. Rsch., Working Paper No. 34392, at 26-27 (Oct. 2025).