After the Supreme Court’s decision invalidating tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the plaintiffs’ bar has found a new hook for challenges affecting retailers. The litigation risk is landing not just on importers seeking refunds from the government, but on retailers, marketplaces, and service providers that passed tariff costs through to consumers. Unfortunately, this means that many companies affected by the tariffs in the first instance will now be hit by another target.
On February 20, the Supreme Court held that IEEPA does not authorize the president to impose tariffs, invalidating a broad swath of tariffs imposed in 2025. (Watch a recording of this webinar to learn more.) IEEPA-based tariffs were terminated shortly after the decision, and the ruling created significant refund exposure. Critically, the Court did not address how refunds should be handled. That last point is the opening plaintiffs’ lawyers are using.
Traditionally, tariff disputes have involved customs law, administrative procedure, and the Court of International Trade. But once companies passed those tariff costs along to consumers, the issue expanded to include consumer pricing concerns.
Link to New Wave of Tariff Class Actions New Wave of Tariff Class Actions
This, in turn, has resulted in class action challenges. For example, we have seen a proposed class action against a major retailer alleging consumers paid “inflated” prices tied to now-invalid tariffs. Similar claims are emerging against logistics providers that imposed explicit “tariff surcharges”
One theory alleges that if the underlying tariff was unlawful, companies should not be permitted to retain the amounts charged to consumers that were expressly or implicitly tied to those tariffs.
Link to Key Legal Theories Driving Claims Key Legal Theories Driving Claims
Plaintiffs are testing other overlapping theories, including that companies were unjustly enriched and must provide restitution of the tariffs. The core argument: companies collected money tied to unlawful government action and should not retain the benefit. This is particularly potent where companies listed itemized tariff-related charges or publicly attributed price increases to tariffs, for example, in public filings or in consumer-facing communications
Under state consumer protection and UDAP statutes, plaintiffs argue that representations about pricing—explicit or implied—were misleading once the tariffs were invalidated. These include “tariff surcharge” line items, statements linking price increases to government-imposed tariffs, and failure to reduce prices after the Supreme Court’s decision.
We anticipate the cases will turn heavily on what companies have said about tariffs in marketing and customer communications, whether surcharges were disclosed clearly and accurately, and how pricing explanations were framed.
Link to Defending Tariff Pricing Litigation Risk Defending Tariff Pricing Litigation Risk
Hope is not lost. Defendants can argue that importers—not consumers—are entitled to refunds from the government; tariffs were only one component of pricing, and any “pass-through” was partial, variable, and not traceable to the tariffs. Other viable defenses exist. Among others, defendants can argue that there was no deception, plaintiffs cannot show that the tariffs caused their injury, the tariffs’ direct impact on pricing was not material to plaintiffs’ purchasing decisions, plaintiffs cannot set forth a viable damages model on a class-wide basis.
Defendants can point to the numerous market factors that impact pricing over time to show that companies are permitted to set prices based on current market conditions and are not required to reimburse customers when those conditions improve (such as when input costs are low and companies stockpile and pass on a higher cost to consumers).
Defendants can argue that a contrary decision would upend basic tenets of pricing and the marketplace in the United States. Indeed, even plaintiffs acknowledge the structural problem: importers are the parties legally entitled to refunds, even if consumers bore the economic burden.
At base, these cases boil down to the unsettled question: When an unlawful government charge is embedded in consumer prices, who is entitled to the refund? Three competing answers are emerging:
- The traditional rule that importers keep the refund
- Plaintiffs’ theory that consumers should be entitled to the restitution
- No clean remedy arises, because of traceability and administration problems
Courts will need to wrestle with pass-through economics, Article III standing, damages models in highly variable pricing environments, and the intersection of federal trade remedies and state consumer protection law.
Link to Practical Takeaways for Companies Practical Takeaways for Companies
If your business touched tariffs—even indirectly—now is the time to act:
- Audit past pricing communications referencing tariffs
- Review surcharge disclosures for clarity and consistency
- Assess refund exposure scenarios, including class action risk
- Coordinate trade and consumer protection strategies (these silos can no longer operate independently)
- Be cautious about post-decision messaging—what you say now may define liability
And perhaps most importantly, do not assume this is just an importer problem. Click here to learn other ways the tariffs may affect advertisers.
If you have questions about whether and how to claim tariff refunds while reducing risk of these challenges, please contact the authors.