Washington Lawyer September/October 2026
By Inna Brady
In August 2025, Nathan Ward bought a pair of Ray-Ban sunglasses. Like many consumers that summer, he paid more than he would have a few months earlier. Six months later, Ward sued the manufacturer, EssilorLuxottica, for unjust enrichment, alleging that the price premium stemmed from tariffs the U.S. Supreme Court later struck down as unlawful.
In its 6–3 opinion in Learning Resources, Inc. v. Trump, issued on February 20, 2026, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. The ruling has invalidated billions of dollars in import duties since early 2025.
In April 2026, U.S. Customs and Border Protection (CBP) launched its automated Consolidated Administration and Processing of Entries refund system. According to tax and professional services firm BDO USA, the approximate refund amount is $166 billion plus interest, of which $104 billion had been accepted for processing by late June 2026.
The refund line does not end at CBP. In the months following the Learning Resources decision, a wave of class actions and high-stakes consumer lawsuits hit dockets across the country, with plaintiffs seeking a share of the same dollars the importers of record are now recovering from the government.
Tariff Response & Recovery
The driver of this litigation is a structural mismatch between who can claim the refund and who actually absorbed the cost. Under federal law, only the "importer of record" — the party that filed the entry with CBP — or its authorized customs broker has standing to seek a refund from the government for an improperly assessed tariff. But the importer of record is not always the party that ultimately bore the economic burden of the tariff. It may have passed the entire cost downstream, shared it with supply chain partners, or absorbed only a portion itself. The importer of record can be almost anyone in the supply chain: a domestic end user, a retailer, a wholesaler or distributor, a foreign seller, a customs broker, or the manufacturer.
After the Liberation Day tariffs took effect in April 2025, importers and their commercial counterparties generally responded in one of three ways:
Absorption. Some importers absorbed the costs under fixed-price contracts, taking the margin loss.
Pass-through. Other importers passed some or all of the costs downstream through price adjustments, contract amendments, explicit surcharges, or informal cost-sharing arrangements.
Restructuring. A third group restructured the underlying transaction — using concessions, discounts, or rebates — to shift or neutralize the tariff impact without an explicit surcharge.
A 2025 Thomson Reuters Institute survey captured the scale of the response: 72 percent of companies changed sourcing patterns, 52 percent renegotiated supplier contracts, and 49 percent front-loaded inventory ahead of the duties.
The pricing strategy that a company chose in 2025 now shapes its exposure in 2026, with claims following Learning Resources running up and down the supply chain from each importer of record.
Shortly after CBP launched its refund system, many plaintiffs filed consumer class actions claiming their entitlement to the IEEPA dollars. Although the docketed cases remain at the pleading stage, with consolidation and motions to dismiss still pending, several trends are already visible, each reaching beyond the immediate importers of record and beyond the face value of the tariffs themselves.
Exposure of Distribution Chain
Importers of record that passed through the tariff as surcharges face exposure on two fronts: They are suing the government to recover duties while simultaneously defending against customer claims for the pass-through surcharges. Whether an importer of record has a duty to seek tariff refunds may turn on its commercial agreements or terms of service. Even absent a contractual duty, companies may still face exposure for claims.
In Reiser v. Federal Express Corp., filed in the Southern District of Florida in February 2026, the plaintiff bought tennis shoes from Germany in January 2026 and now seeks a refund of the paid tariffs from FedEx. The plaintiff also seeks the brokerage and clearance fees, arguing those ancillary charges were never warranted and likewise constitute unjust enrichment. FedEx, which collected itemized IEEPA tariff surcharges directly from shipping customers, publicly stated in February that "[i]f refunds are issued to FedEx, we will issue refunds to the shippers and consumers who originally bore those charges."
While FedEx promised to return the IEEPA refunds to customers, other companies may be debating whether or not they should do the same. Some may not want to file a complaint to claim a refund if the recovery must be passed through to customers anyway. However, these decisions will need to be carefully weighed in view of potential derivative shareholder lawsuits.
Public promises to refund tariff surcharges do not automatically protect companies from lawsuits. Customers in the FedEx case sued to recover ancillary fees layered on top of tariffs, such as brokerage, clearance, and similar charges. Clarity as to what happens to those ancillary fees in case of subsequent illegality of those tariffs, as well as the cost burden of seeking refunds from the government, may need to be spelled out in the contract or terms of service.
It is also worth noting that although Reiser named only FedEx in his suit, the underlying theory reaches any business in the distribution chain that passed tariffs through. A domestic distributor that passed costs to retailers, or a retailer that passed costs to consumers, faces analogous exposure in commercial litigation settings.
Tracing Embedded Price Hikes
Stockov v. Costco Wholesale Corp., filed in March 2026 in the Northern District of Illinois, illustrates the trend of multistate consumer protection claims targeting major retailers across industries. This proposed nationwide class action alleges that Costco benefited from raised prices while recouping IEEPA tariff costs and is now positioned to receive "potentially more than one billion dollars." Plaintiffs also allege that such benefit would amount to "double recovery," as well as unjust enrichment and violations of consumer protection statutes in 10 states.
Costco moved to dismiss on two principal grounds. First, Costco has not yet received any IEEPA refund from CBP, so the alleged "double recovery" has not yet occurred. Second, on the consumer protection claims, Costco argued in its motion to dismiss that the transactions were not deceptive: "Plaintiff[s] got what [they] paid for, and Costco never suggested that it would … refund part of the purchase price."
Plaintiffs opposed the motion, arguing that Costco misled consumers by promising commitment to low, stable prices while passing the tariffs' burden on to them through discrete price increases.
The core of the opposition rested on the concept that consumers trust in Costco's commitment to low, stable prices and are not making purchase decisions based on cost, thereby forcing them to rely on Costco's pledge to tariff-free staples. The court has not yet ruled on the motion.
Ward v. EssilorLuxottica and Neuman v. Lululemon USA, Inc. also claim unjust enrichment and "money had and received," framing the combined recovery as a prohibited double recovery.
At the center of these class actions stand the price-structuring practices, public statements about expected price increases in relation to the tariffs, and even entire business models of companies. For example, the complaint in Ward relies on the company's vertical, manufacturer-to-consumer business model where the tariffs may be traced directly to consumers, allowing them to be treated as de facto tariff surcharges.
It is becoming apparent that the consumer class action lawsuits heavily rely on public statements by CEOs or CFOs and correlate the price hikes to the IEEPA tariff timing. Any public statements about increasing prices "because of" tariffs may indicate the connection with the tariffs and may invite lawsuits claiming de facto surcharges. The clearer the causal link, the more inviting the target for plaintiffs.
Plaintiffs will still need to prove which portion of the price increase was the "tariff surcharge" (and not, for example, inflation or increased transportation costs). The proof may be especially difficult where only a portion of the product was subject to tariffs. Many companies at least partially absorbed the costs, and many made complex business decisions involving resourcing, rerouting, or renegotiation with their suppliers, as noted in the Thomson Reuters report.
Furthermore, a company's business model and price structuring may affect plaintiffs' ability to show direct causation between the price increase and the tariff surcharges. The Ward complaint, for instance, leans on EssilorLuxottica's vertical model, and the other suits similarly scrutinize defendants' pricing.
Considerations in New Tariff Landscape
While consumer class actions preoccupy the largest retailers and wholesalers, a parallel set of commercial disputes is taking shape lower in the supply chain. Reported decisions have yet to emerge, but the contours of these disputes are visible in prelitigation posturing. The recurring friction points include the following questions:
Does the importer of record have an obligation to seek IEEPA refunds, and what is refundable to its client? Some agreements specify who serves as importer of record and what happens if it receives reassessed refunds. However, when the agreement is silent or unclear, the disputes may arise around what is meant by a tariff surcharge; whether ancillary fees, such as clearance and brokerage fees, should still be considered nonrefundable; who bears the costs of seeking tariff refunds; and whether the illegal tariffs should be automatically credited to the client — do they depend on the actual receipt of the refunds? The answers turn on contract interpretation, the governing law, and available equitable remedies.
Is the IEEPA tariff a refundable surcharge or is it included in a fixed price? If the importer of record passes the tariffs to its client as a surcharge, the client may be entitled to the tariff refund, depending on the issues mentioned previously. However, in many cases buyers agree to a fixed price, which encompasses everything, including the tariff costs. If so, the seller bears the risk of tariff fluctuation, but the buyer buys predictability with the risk of overpaying should the tariffs be declared illegal. The disputes may arise when the agreement is nonexistent or confusing about the price structure.
If the parties amended their agreement to address the IEEPA tariff allocation, what happens with the tariff refund allocation? In the Thomson Reuters report, 52 percent of respondents stated that they renegotiated their supply agreements to reallocate the tariff burden. Provisions renegotiated with refunds in view may have spelled out what happens if the tariffs become illegal.
However, amendments that did not mention this scenario may trigger disputes and another round of renegotiations. Allocation becomes hard to trace if companies implemented complex concession systems. For example, many companies implemented a price cap, renegotiation triggers, volume discounts, or other integrated pricing structures.
For some companies, the potential tariff refunds make the pre-amendment contract more attractive, and these companies are likely to consider raising mutual mistake, frustration of purpose, failure of consideration, duress, or other defenses.
Another consideration is contractual flexibility to change sourcing patterns. SupplyChainBrain reported last year that more companies reshored their suppliers to the countries that were less affected by the tariffs. Approximately 40 percent of U.S. companies indicated their intent to relocate at least part of their supply chains to North America in 2026, the report said. Since Learning Resources changed the tariff cost landscape, companies will most likely reconsider their sourcing pattern yet again, which means changes in procurement, ordering, scheduling, and sometimes suppliers. Questions of contract flexibility allowing for these changes are resurfacing.
In one sense, the post-IEEPA litigation is sui generis: a sweeping tariff regime invalidated by the Supreme Court, generating both consumer class action refund claims and commercial disputes. But the underlying trade policy is anything but sui generis. It is a structural feature of the current trade environment.
Of legal trade professionals surveyed by Thomson Reuters for its 2026 Global Trade Report, 76 percent believe the new tariffs are a more permanent approach for the next four years, not a short-term tool of the current administration. Supply chain companies may map tariff costs, evaluate public statements and promises about tariff refunds, and review last year's contract amendments. Most importantly, these companies may consider realigning their risk-mitigation strategies in view of the long-term trend of tariff volatility.
D.C. Bar member Inna Brady founded her boutique commercial litigation firm in 2021. She represents manufacturers, suppliers, and distributors in supply chain disputes.
