Tariff-ied of a Refund Lawsuit? Takeaways From the Early Complaints

Many retailers celebrated when the Supreme Court in Learning Resources, Inc. v. Trump struck down all tariffs imposed under the International Emergency Economic Powers Act (IEEPA), leading the U.S. Court of International Trade to order refunds to importers of record. In the weeks since the Court’s February 20, 2026 decision¹ a wave of class action lawsuits has swept across multiple industries, targeting major retailers and consumer goods companies seeking refunds. These suits pose serious legal and financial exposure. Any company that passed tariff costs on to consumers and is now pursuing refunds should treat this as an urgent priority requiring immediate legal review.

These lawsuits collectively illustrate a significant and rapidly escalating litigation risk for any company that (1) passed IEEPA tariff costs on to consumers through higher prices and (2) is now seeking or has obtained refunds from the government for those same tariffs.

Overview of the Early Lawsuits

Between February 26 and March 16, 2026, at least five different plaintiffs’ firms have already filed four lawsuits against companies pursuing refunds.² The suits each allege that the defendant is poised to obtain an improper “double recovery” by collecting tariff refunds from the government while retaining the higher prices it had already charged consumers for tariffed goods. Only one of the complaints alleges that the defendant imposed an explicit fee as a result of the tariffs.

Under federal trade law, only the “importer of record” has standing to seek a refund from the government for an improperly assessed tariff—even when the importer has passed 100% of the tariff cost on to consumers through higher prices. Plaintiffs are seizing on this perceived gap. They allege that each defendant raised prices on tariffed goods throughout the class period (generally February 1, 2025 through February 24, 2026) and is now positioned to receive substantial government refunds—potentially hundreds of millions of dollars or more—without any obligation to pass those refunds back to the customers who actually bore the economic burden.

Put otherwise, if a company charged consumers higher prices to account for tariffs, and then receives a government refund of those same tariffs, the company has allegedly been made whole twice—once by its customers and once by the government. The consumer, meanwhile, has no direct mechanism to recover the tariff component embedded in the price they paid.

Early Complaints Lack Many Fundamental Elements of Fraud Claims

While courts are often reluctant to dismiss consumer class actions at the pleadings stage, these cases suffer from many vulnerabilities.

No Deception: To bring a fraud-based claim, plaintiffs must typically plead that the retailer either (a) made an affirmative misrepresentation that customers relied on, or (b) failed to disclose something that it had a duty to disclose. In these cases, the plaintiffs arguably allege neither. While the complaints cite specific statements by the retailers that they raised prices or charged a fee to help offset tariffs, or target the retailer’s alleged failure to disclose their simultaneous pursuit of tariff refunds, courts will hopefully find their theories of deception lacking. To the extent retailers did raise prices as a result of tariffs, it was truthful to say so, and they had no duty to disclose that they might be refunded later.

No Causation: Plaintiffs would face substantial difficulty establishing a causal link between the IEEPA tariffs and any specific price increase on any specific product—at least in cases where the tariff cost was embedded in general pricing rather than separately itemized. Retailers adjust prices in response to a multitude of factors—including supply chain disruptions, changes in consumer demand, slowed sales volumes, currency fluctuations, and competitive dynamics—not solely to offset the cost of tariffs. During the class period, companies also faced genuine uncertainty about whether tariff refunds would ever materialize, which itself justified pricing decisions that accounted for the risk of permanent cost increases. Disaggregating the tariff component from these other pricing inputs would be an extraordinarily complex—and potentially impossible—exercise for any plaintiff class.

No Materiality or Injury: Plaintiffs agreed to buy merchandise at a listed price because they thought the merchandise was worth that price. The amount of money that a retailer made from that sale was not a basis of the bargain. A retailer’s margin structure is a proprietary business matter, and no consumer protection statute obligates a company to price goods at or near cost. The fact that a company may, as a result of a refund, make more money from a given sale does not mean that the customer somehow received less or was otherwise injured.

Minimal Damages: Finally, even if plaintiffs could overcome these hurdles, any monetary relief would be limited to the amount of the alleged tariff-driven price increase on each product, not the full purchase price. Given that tariff surcharges on individual consumer goods are often modest in dollar terms, the per-class-member recovery could be quite small, which may undermine the economic viability of the litigation and weaken the case for class certification.

Take the Money

Given the uphill battle that plaintiffs are facing with these claims, retailers should not be discouraged from pursuing a full refund of illegal tariffs from the government. According to declarations filed by U.S. Customs and Border Protection (CBP), over 330,000 importers paid IEEPA tariffs totaling $166 billion on over 53 million “entries” of goods. CBP intends to set up an automated system for processing refunds that will require importers to identify the entries for which they paid IEEPA tariffs, but the expectation is that after that initial input, importers will eventually receive one consolidated refund check from the U.S. Treasury. Importers may need to take certain steps to preserve their refund rights in the meantime, depending on how quickly the new CBP system comes together. But higher profile actions, like suing CBP in the Court of International Trade as over 2,000 importers have already done, will hopefully be unnecessary. Retailers can and should pursue refund claims, and need to work diligently to ensure that all of their eligible tariffs are refunded, including those paid by (and refunded to) third party importers reimbursed by the retailer. Ballard Spahr lawyers recently published a webinar providing greater detail on pursuing refund claims, which can be viewed here. This process will unfold over many months and require close monitoring, but there is every reason to believe that the money will eventually be returned.

Conclusion

CBP has outlined a process for returning $166 billion, plus interest, to hundreds of thousands of importers. Any of those importers could, in theory, face consumer claims similar to those discussed above if they cannot demonstrate that they have established a mechanism to return the tariff component of inflated prices to the end consumers who paid them. The breadth of the defendants already targeted—an eyewear giant, an online marketplace, and a beloved warehouse club—suggests that no industry or business model is immune.

That said, the weaknesses identified above suggest that many of these suits face an uphill battle. The disconnect between the plaintiffs’ theories of harm and the realities of retail pricing—where margins, causation, and the modest size of any per-consumer recovery all cut against the plaintiff—means that defendants have strong arguments to defeat or significantly narrow these claims. For many retailers, the potential amount of a refund is easily worth the litigation risk.

Ballard Spahr’s Retail & E-Commerce Team is ready to help businesses navigate their potential litigation needs in light of these developments.

1. See SCOTUS Disarms President Trump in Trade War, Scrapping Tariff Authority.

2. Russell v. Whaleco Inc., No. 2026CH02456 (Ill. Cir. Ct. Cook Cnty. filed Mar. 13, 2026); Ward v. EssilorLuxottica S.A., No. 26-cv-1133 (E.D.N.Y. filed Feb. 26, 2026); Stockov v. Costco Wholesale Corp., No. 1:26-cv-02734 (N.D. Ill. filed Mar. 11, 2026); Gower v. Costco Wholesale Corp., No. 26-2-08898-5 SEA (Wash. Super. Ct. King Cnty. filed Mar. 16, 2026).

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