Here's a scenario no retail executive war-gamed: your company passes tariff costs to customers for twelve months, the Supreme Court invalidates the tariffs, the government offers a $166 billion refund pool — and the moment you file for your share, your customers sue you for double-dipping.

That is exactly what is now happening across the U.S. retail industry.

The Setup

When the Supreme Court struck down IEEPA-based tariffs 6–3 on February 20, 2026, in Learning Resources, Inc. v. Trump, it invalidated the emergency authority the administration had used to impose triple-digit rates on Chinese goods and sweeping "reciprocal tariffs" on dozens of other trading partners. The U.S. Court of International Trade then ordered Customs and Border Protection to begin processing refunds.

CBP estimates roughly $166 billion in IEEPA duties were collected from February 2025 through early 2026. More than 2,000 companies filed refund claims before the CIT. For large importers in apparel, electronics, home goods, and sporting goods, those refunds represent meaningful windfalls.

The Trap

The problem is that most of those same companies spent 2025 publicly explaining — on earnings calls, in press releases, and in customer-facing FAQs — that they were raising prices specifically because of the tariffs. Plaintiffs' attorneys are now weaponizing those statements.

On March 27, a class action was filed in Michigan federal court against Lululemon, alleging the company passed approximately $240 million in IEEPA tariff costs on to consumers through price increases while simultaneously seeking a full government refund. The suit asserts unjust enrichment and "money had and received," and seeks a nationwide class covering the full tariff period.

A similar class action hit Costco in the Northern District of Illinois on March 11, with seven plaintiffs across four states alleging the same "double recovery." In a notable contrast, Costco CEO Ron Vachris publicly pledged to "find the best way to return this value to our members" — a stance that may prove to be both good PR and good legal strategy.

The Scope

Ballard Spahr documented at least four major lawsuits filed by five different plaintiffs' firms in the three weeks following the February ruling. Arnold & Porter calls this the opening wave — any importer that raised consumer-facing prices and is now pursuing government refunds is a potential target.

Legal analysts at Morgan Lewis warn that any retailer who publicly signaled intent to pursue refunds — or hinted they might "return savings to customers" — has created additional exposure. Prior earnings call transcripts, investor materials, and social media posts are already being cited in demand letters and court filings.

For retailers in general merchandise, the exposure is especially acute: the products most affected by IEEPA tariffs — electronics, apparel, home goods, toys — are exactly where price increases were most visible and most publicly explained.

What This Means for the Industry

There is no clean exit from this bind. Retailers who don't file for refunds leave hundreds of millions on the table. Retailers who do file — and don't share the proceeds — invite litigation. And retailers who publicly promise to share proceeds may be creating legally binding expectations they can't meet on any predictable timeline, since CBP's dedicated refund infrastructure (called CAPE) is still being built.

The safest path, according to multiple law firms, is to say very little: audit past public statements immediately, align legal, finance, investor relations, and communications teams on unified messaging, and avoid language that implies an obligation to customers.

The bitterest irony: many retailers that passed through tariff costs were doing exactly what trade policy intended. Now those same companies are absorbing the legal fallout of a policy their customers never voted for either.

The CIT's March 6 order suspended immediate refund compliance pending further proceedings. CBP has not yet launched its CAPE refund platform. The ultimate timeline for refunds — and the resolution of these class actions — remains uncertain.