TRADE LAW | 2026-10-06

Customers Want a Share of Your IEEPA Tariff Refund: Consumer Class Actions, Surcharge Contracts, California UCL Exposure, and How Importers Can Prepare

Within days of the Supreme Court's IEEPA ruling, customers began suing businesses that had passed tariff costs downstream. By late summer 2026 roughly a hundred putative class actions had been filed. For California importers, the refund strategy and the litigation strategy are now the same strategy.

When the Supreme Court held in Learning Resources, Inc. v. Trump on February 20, 2026 that IEEPA does not authorize tariffs, importers of record gained a path to recover the duties they paid. Their customers noticed. The same day, the first putative class actions were filed against major parcel carr

Tariff refunds are usually discussed as a customs problem: identify the entries, file the CAPE declaration, protest the liquidation, or sue in the Court of International Trade. For many businesses, that is only half of the problem. If the tariff was passed on to customers — as a separate surcharge, a contractual price adjustment, or an increase built into list prices — the refund raises a second question: who is entitled to keep it?

That question is now being litigated across the country. This article summarizes what has been filed, the legal theories in play, the defenses businesses are raising, how California law shapes the risk, and what importers can do now.

What Has Been Filed So Far

The litigation began almost immediately after the Supreme Court's ruling and has expanded from logistics companies to retailers and consumer brands. Publicly reported cases include:

Parcel carriers. Putative class actions were filed beginning February 20, 2026 against FedEx and UPS on behalf of customers who paid tariff-related charges, including brokerage and duty-advancement fees, with additional cases filed in several federal districts in the following weeks.
EssilorLuxottica. A purchaser filed a proposed class action in late February 2026 against the eyewear maker, alleging that tariff-related price increases should be returned if the company recovers the duties.
Costco. Stockov v. Costco Wholesale Corp., No. 26-cv-02734, was filed in the U.S. District Court for the Northern District of Illinois on March 11, 2026 on behalf of members who allegedly paid tariff-inflated prices. Costco reportedly moved to dismiss, arguing among other things the voluntary payment doctrine and lack of injury.
Consumer brands in California. Mattel disclosed in its quarterly SEC filing that two putative class actions were filed in July 2026 in the U.S. District Court for the Central District of California relating to its American Girl products, including claims under California's Unfair Competition Law.
Other retailers and technology companies. Trade and legal press have reported suits against a range of retailers and consumer-electronics companies, and reported that the Judicial Panel on Multidistrict Litigation in early October 2026 centralized a group of tariff-refund suits against Amazon in the Western District of Washington.

By June 18, 2026, Holland & Knight reported more than 80 putative class actions; by August 18, 2026, it reported approximately 100 cases across nearly 30 federal districts, with new complaints continuing to be filed. As of this writing, we have not located a reported decision on a motion to dismiss in these cases, though commentators have noted that several motions are fully briefed. The law is, in other words, unsettled, and the first rulings will matter.

The Legal Theories Plaintiffs Are Using

Unjust enrichment and money had and received

The most common theories are equitable. Plaintiffs allege that the defendant collected tariff costs from them, that the tariffs were unlawful, and that a defendant who recovers the duties from the government while keeping the customer's payment is unjustly enriched. "Money had and received" is the older common-law form of the same idea: money that in equity belongs to the plaintiff.

Breach of contract

In the logistics cases, contract claims are central. Plaintiffs allege that shipping terms permitted pass-through of lawful duties only, or did not authorize the surcharges and fees charged. Where a contract does authorize a surcharge, plaintiffs argue that an implied term requires refund of the surcharge if the underlying tariff is refunded. Business-to-business supply contracts with tariff-adjustment or most-favored-pricing clauses raise similar questions outside the class action context.

State consumer protection statutes

Plaintiffs also plead state unfair and deceptive practices statutes, alleging that businesses misrepresented the nature of surcharges or price increases, or failed to disclose that customers would not benefit if tariffs were refunded. Some complaints seek declaratory relief establishing the plaintiffs' entitlement to a share of any refund.

California Law: Where the Exposure Is Concentrated

California matters disproportionately because of the size of its consumer market and the reach of its consumer protection laws.

The Unfair Competition Law

California's Unfair Competition Law, Business and Professions Code § 17200 et seq., prohibits any unlawful, unfair, or fraudulent business act or practice. A private plaintiff must have lost money or property as a result of the practice, Bus. & Prof. Code § 17204, and the California Supreme Court explained that economic-injury requirement in Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (2011).

The UCL's remedies are limited. In Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (2003), the California Supreme Court held that UCL restitution is limited to returning money or property in which the plaintiff has an ownership interest, and that non-restitutionary disgorgement of a defendant's profits is not available. That limit may matter a great deal in tariff cases. A customer who paid a separately itemized tariff surcharge can more readily describe that surcharge as "their" money than a customer who paid a general list-price increase that the business attributed in part to tariffs. How a court will apply Korea Supply to these facts remains to be seen.

Unjust enrichment in California

California does not recognize a standalone cause of action for unjust enrichment in the way some states do. The Ninth Circuit explained in Astiana v. Hain Celestial Group, Inc., 783 F.3d 753 (9th Cir. 2015) that a court may construe such a claim as a quasi-contract claim seeking restitution. The California Supreme Court has recognized restitution claims based on unjust enrichment in appropriate circumstances, as in Hartford Casualty Insurance Co. v. J.R. Marketing, L.L.C., 61 Cal.4th 988 (2015). A quasi-contract theory, however, generally does not lie where an enforceable contract governs the same subject matter, which makes the terms of sale and shipping contracts especially important.

Arbitration and class waivers

Many consumer and commercial contracts contain arbitration agreements with class action waivers. Under AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the Federal Arbitration Act generally preempts state rules that would invalidate such waivers. Where an enforceable arbitration agreement exists, it may be the single most important defense. Whether a given agreement covers these claims, and whether it was validly formed, is a contract question that should be answered early.

The Defenses Businesses Are Raising

Commentary on the pending motions identifies several recurring defenses:

Ripeness. Before a defendant has actually received a refund, the claim that it will be unjustly enriched is speculative. This defense weakens as refunds are paid, and CBP has now paid very large amounts.
Standing and injury. A customer who paid an advertised price and received the product has arguably received the benefit of the bargain. Defendants have argued there is nothing unjust about selling a product at a disclosed price.
Voluntary payment doctrine. In many jurisdictions, money voluntarily paid with knowledge of the facts cannot be recovered simply because the payer later concludes it was not owed.
Contract terms. Arbitration clauses, class waivers, limitation-of-liability provisions, pricing discretion, and the absence of any refund promise all bear on the claims.
Causation and tracing. Where tariffs were one of many inputs into pricing decisions, plaintiffs may have difficulty proving how much of any price was attributable to IEEPA duties, as opposed to other tariffs, freight, or market conditions.

None of these defenses is uniformly strong. Their force depends on the facts — and the facts are largely created by how the business priced, documented, and communicated its tariff response.

How Pass-Through Was Structured Matters Most

Commentators have repeatedly identified the same risk gradient. From highest to lower risk:

A separate, itemized tariff surcharge, especially one described as recovering "IEEPA tariffs" or "tariff costs" dollar for dollar.
Public statements tying price increases to tariffs, including press releases, earnings calls, SEC filings, and customer emails.
Contractual tariff-adjustment clauses in business-to-business agreements, which may require a reverse adjustment when the tariff is removed or refunded.
General price increases set for many reasons, with tariffs as one factor and no specific promise.
Absorbed costs, where the business did not change prices and bore the duty itself.

Some businesses have chosen to return refunds voluntarily. FedEx publicly stated that if refunds are issued to it, it will refund the shippers and consumers who originally bore those charges. UPS stated in April 2026 that it would request refunds where it was the importer of record and pass them to payors once CBP pays. DHL has said it is returning refunds it receives. Those decisions reflect each company's contracts, customer relationships, and litigation posture; they are not a legal standard, but they shape customer expectations across industries.

What Importers Should Do Now

Inventory your pass-through. For each product line and customer segment, document whether IEEPA costs were absorbed, built into prices, charged as a surcharge, or adjusted by contract. Preserve the pricing analyses and approvals.
Audit public and customer statements. Gather press releases, investor statements, website notices, invoices, and customer communications about tariffs. Complaints rely heavily on these.
Review contracts. Identify arbitration clauses, class waivers, tariff-adjustment clauses, most-favored-customer clauses, and refund terms in both consumer terms of sale and business-to-business agreements.
Coordinate refund and litigation strategy. Statements made in CAPE declarations, protests, or Court of International Trade pleadings about who bore the duties can surface in consumer litigation. Make them accurately and consistently.
Decide the customer question deliberately. Voluntarily sharing a refund may reduce litigation risk and preserve relationships; it may also be unnecessary or set an expensive precedent. The decision should be made with counsel, not by default.
Consider tax consequences. The timing of income from the refund and deductions for customer payments may not match. See our guide to the income tax treatment of IEEPA refunds.
Think about transactions. If the business is being sold, pass-through exposure should be addressed alongside refund rights in the purchase agreement. See our analysis of tariff refund rights in M&A deals.

Timing, Insurance, and Records: Three Questions to Answer Early

How long does the exposure last?

Limitations periods vary by claim and by state. In California, an action under the Unfair Competition Law must be commenced within four years after the cause of action accrued, under Bus. & Prof. Code § 17208. Contract and quasi-contract claims carry their own periods, and when a claim "accrues" in this setting — when the customer paid, when the tariff was held unlawful, or when the business received its refund — is itself likely to be contested. Importers should assume that exposure will outlast the refund process by years, and plan record retention accordingly.

Will insurance respond?

Businesses facing these suits should promptly tender them to their insurers and review their commercial general liability, directors and officers, and other policies. Coverage for restitution-type claims is frequently disputed. The California Supreme Court held in Bank of the West v. Superior Court, 2 Cal.4th 1254 (1992) that restitution under the Unfair Competition Law is not "damages" within the meaning of the policy at issue. Defense costs may still be available under some policies even where indemnity is not, so the tender should not be skipped simply because coverage looks uncertain.

What should a litigation hold cover?

Once a claim is reasonably anticipated, relevant records should be preserved. For tariff pass-through claims, that typically includes pricing models and approvals, surcharge configurations in e-commerce and billing systems, customer-facing notices and FAQs, investor and press statements, customer complaints, CAPE and protest filings, refund remittance records, and communications among pricing, finance, and customs teams. Preservation also protects the business: the same records are often the best evidence that tariffs were absorbed or were only one factor in a pricing decision.

Keeping Refund Filings and Litigation Positions Consistent

The refund process requires importers to make statements to CBP and, in litigation, to the Court of International Trade. Those statements concern the entries, the duties paid, and the importer's status. They generally do not require the importer to say who economically bore the duty. Importers should avoid volunteering characterizations in refund filings — for example, that the company "absorbed" or "passed on" the tariffs — unless the statement is accurate, necessary, and reviewed with litigation counsel. Consistency across customs filings, SEC disclosures, customer letters, and court pleadings is one of the most effective risk controls available.

Business Customers Are Asking Too

The class actions are the most visible part of the pass-through problem, but for many California importers the more immediate pressure comes from business customers. Distributors, retailers, and manufacturers that accepted tariff surcharges or price increases in 2025 are asking suppliers whether they will share refunds. Those requests are governed primarily by contract. Supply agreements may contain tariff-adjustment clauses that work in both directions, price-renegotiation provisions, audit rights, or most-favored-customer terms that make a refund to one customer a de facto obligation to others. Where the contract is silent, the business relationship often matters more than the legal theory.

A consistent approach helps. Importers should decide, before responding to the first customer letter, what their position is, what documentation supports it, and who in the organization is authorized to communicate it. Inconsistent answers to different customers create the evidentiary record plaintiffs look for.

An Illustrative Example

The following example is hypothetical and is provided for illustration only.

A San Diego direct-to-consumer apparel company added a line item labeled "tariff surcharge" to online orders in mid-2025, and its website FAQ said the surcharge "covers the new import tariffs." The company is now recovering its IEEPA duties. A second company with similar products raised list prices by 8 percent in 2025, citing "rising costs including tariffs" in a single press release. The first company faces a cleaner restitution theory: an itemized charge, expressly tied to the tariffs, that customers can identify on their receipts. The second company faces a harder-to-prove claim that depends on showing how much of a general price increase was attributable to IEEPA duties. Both companies should check their terms of sale for arbitration and class-waiver provisions and preserve their pricing records, but their risk profiles differ significantly.

Frequently Asked Questions

Do I have to give customers part of my IEEPA refund?

There is no general rule requiring it, and no court had issued a reported merits ruling in these cases as of this writing. Whether you have an obligation depends on your contracts, how the cost was passed through, what you told customers, and the governing state law.

How many tariff refund class actions have been filed?

Holland & Knight reported approximately 100 putative class actions across nearly 30 federal districts as of August 18, 2026, with new filings continuing.

Can California customers sue under the Unfair Competition Law?

Yes, a customer who lost money or property can bring a UCL claim under Bus. & Prof. Code §§ 17200 and 17204, and UCL claims have been pleaded in at least one set of tariff refund cases in the Central District of California. UCL restitution is limited to money in which the plaintiff has an ownership interest under Korea Supply Co. v. Lockheed Martin Corp.

Is a separately itemized tariff surcharge riskier than a price increase?

Generally, yes. Commentators consistently identify itemized surcharges expressly tied to tariffs, and statements promising that customers would benefit from refunds, as the highest-risk facts.

Can an arbitration agreement stop a tariff class action?

Often it can, if the agreement is valid and covers the claims. Under AT&T Mobility LLC v. Concepcion, the Federal Arbitration Act generally preempts state rules invalidating class action waivers in arbitration agreements.

Should I wait to see how courts rule?

Waiting on the legal question is reasonable; waiting on preparation is not. Preserve records, review contracts, and align your refund filings and public statements now.

Related Customs & Trade Guides

Talk to a Trade Attorney About Refunds and Pass-Through Risk

Recovering an IEEPA refund and managing what customers may claim from it are now connected problems. Trembach Law Firm helps California importers pursue refunds while reviewing pass-through contracts, customer demands, and UCL exposure. Call (213) 645-2246 for a consultation.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

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