Summary
Retailers and e-commerce companies are facing a wave of pricing-related litigation and regulation—from hundreds of class actions over false reference prices, mandatory fee disclosure, and promotional email subject lines to emerging legal battles over personalized “surveillance” pricing and consumer suits seeking refunds for unlawful tariffs. These factors create a rapidly shifting compliance landscape that demands immediate attention.
The Upshot
- False reference pricing litigation is surging.
- Email subject line lawsuits have exploded in number.
- “Surveillance pricing” is under scrutiny and regulations could curb consumer-friendly discounts.
- Drip pricing enforcement is intensifying in California.
- Tariff-refund exposure is a new litigation frontier.
The Bottom Line
This Advisory is significant for retailers, e-commerce companies, and their in-house legal and compliance teams because it captures a moment of unusual convergence: multiple distinct pricing-related legal threats are intensifying simultaneously. Rather than facing one or two isolated risks, companies in the retail space are contending with a full spectrum of challenges—class action litigation, novel statutory theories, emerging regulatory frameworks, and post-tariff refund exposure—all at once.
For more on these issues, Meegan Brooks and Stephanie Sheridan will present at the California Retailers Association’s California Retail Policy & Law Conference later this month and will offer practical guidance tailored to companies navigating this rapidly evolving landscape.
From traditional reference-pricing challenges to novel theories involving tariff refunds and growing scrutiny of personalized pricing, the legal landscape is shifting faster than many compliance programs can keep pace with. Five areas warrant particular attention.
The issues addressed in this Advisory are among those that Stephanie Sheridan and Meegan Brooks will examine at the California Retailers Association’s California Retail Policy & Law Conference, September 27-29, 2026, in San Diego.
Join them for “Sticker Shock: The Pricing Regulations and Lawsuits Reshaping California Retail” on September 28, and “Death by a Thousand Suits: The Litigation Threats California Retailers Can't Ignore” on September 29. They’ll share practical considerations for retailers navigating this rapidly changing landscape. Learn more and register here.
False Reference Pricing: When Does a Reference Price Become a Problem?
In the last decade, more than 500 class actions have been filed nationwide against retailers and e-commerce companies, alleging they listed “false reference prices” in order to sell more merchandise. Many of these suits have resulted in seven-figure class settlements. They have targeted a broad range of pricing practices, including allegedly perpetual sales, false value comparisons, and more. These suits have become even more common as the plaintiffs’ bar utilizes tools, such as the Wayback Machine and other online price-scraping tools, to help allege that items are always on sale.
Email Subject Lines: When Does Promotional Language Become False or Misleading?
On April 17, 2025, the Washington Supreme Court’s decision in Brown v. Old Navy opened the floodgates to lawsuits under Washington’s Commercial Electronic Mail Act (CEMA), which plaintiffs claim provides $500 per email, and per recipient, trebled, any time an email subject line contains false or misleading information. Since then, nearly 250 new subject line suits have been filed in Washington, with dozens more in Maryland and California under their state law analogs.
Critical questions remain unresolved: Can plaintiffs bring derivative claims under state consumer protection laws when they cannot allege economic injury caused by allegedly misleading subject lines? Do these claims satisfy Article III standing requirements in federal court? Are subject-line claims preempted by the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act)? Can qualifications in the email body or preheader cure an ambiguous subject line?
‘Surveillance’ Pricing: Are Regulations Threatening Consumer Discounts?
So-called “surveillance pricing,” generally defined as offering or setting a customized price for a good for a specific consumer or group of consumers based in whole or in part on personally identifiable information, is attracting regulatory attention at both the state and federal levels. Joining several other state laws and pending bills on this issue, California’s controversial AB 2564 has been the subject of much debate. Billed as the “toughest restrictions on surveillance pricing in the nation,” it passed in the Assembly in May 2026 and narrowly passed in the Senate on August 31, 2026, but ultimately failed on concurrence in the Assembly later the same day. Separately, on August 19, 2026, the Federal Trade Commission issued a proposed enforcement policy statement on personalized pricing, signaling heightened federal scrutiny.
These proposals go well beyond prohibiting price increases based on personal data; they would also restrict targeted discounts, loyalty program benefits, and personalized offers that consumers expect and that retailers use to drive engagement across websites and apps. While broadly available discounts may remain protected, the line between permissible and impermissible personalized promotions is far from settled—as is how to comply with disclosure requirements. Retailers should monitor developments, address compliance challenges, and prepare for litigation and enforcement exposure.
Drip Pricing/Junk Fees: What Must Be in the Advertised Price?
California’s SB 478—the “Honest Pricing Law”—took effect on July 1, 2024, and generally prohibits businesses from advertising prices that exclude mandatory fees or other charges a consumer must pay, subject to exceptions for certain government-imposed taxes and shipping costs. Dozens of lawsuits have been filed since the amended law took effect, including suits concerning “shipping protection” fees, “handling” fees, parking fees, online processing fees, and more. Because the amendment’s legislative history provides that misleading fees were already illegal under California’s Unfair Competition Law, several suits have targeted conduct predating the amended law.
Tariff Pricing: Will Seeking Tariff Refunds Expose Retailers to Consumer Class Actions?
In the wake of the Supreme Court’s February 20, 2026, decision holding that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful, more than 70 consumer class actions have targeted retailers and carriers nationwide. As of August 14, 2026, a group of plaintiffs is making an effort to consolidate 26 of those tariff-related consumer class actions into a single, multidistrict litigation proceeding (In re: Retailer Tariff Litigation, MDL No. 3202). It is still in the early stages, and the U.S. Judicial Panel on Multidistrict Litigation (JPML) has not yet entered a transfer order.
Plaintiffs allege that companies passed the unlawful tariff costs on to consumers through higher prices, retained the resulting windfall profits, and now stand to receive government refunds without compensating the customers who bore the costs. Retailers should consider whether and how their tariff-related pricing adjustments, surcharges, customer communications, and refund strategies may affect their exposure.
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