Consumer Class Actions Over Pass-Through Tariffs: A New Front

The Supreme Court's decision in Learning Resources, Inc. v. Trump resolved a narrow question: whether the International Emergency Economic Powers Act authorized the across-the-board tariffs that the prior administration imposed between February 2025 and February 2026. The Court held that it did not. The decision was short, the reasoning was narrow, and the remedy was refund-focused. The tariffs were unlawful; the importers who paid them were entitled to recovery.

What the decision did not resolve — and what was not before the Court — was the downstream question that is now producing a distinct litigation front. Between February 2025 and February 2026, the duties collected by Customs and Border Protection did not remain with the importers of record. In most cases, they were passed through, in whole or in part, to distributors, wholesalers, retailers, and ultimately consumers. Some retailers broke out the pass-through explicitly as a "tariff surcharge" on invoices or at checkout. Others folded the cost into the shelf price without disclosure. A small number, facing inelastic demand on specific SKUs, absorbed part or all of the duty themselves.

The first category — the retailers who expressly surcharged consumers — are now facing class action complaints filed in federal district courts across the country. The theories vary. The exposure, depending on the retailer's size and pass-through volume, runs from low eight figures to potentially the billions. And the doctrinal questions implicated by the pleadings have not been squarely decided in any prior case.

This article is an editorial overview of the emerging class action docket. It does not take a position on the merits, because the merits have not been adjudicated. It identifies the principal theories, the principal defenses, and the structural questions that are likely to determine whether the docket consolidates into meaningful litigation or fragments into settlement-and-dismissal dockets.

The Three Principal Theories

Plaintiff firms filing consumer class actions over tariff pass-throughs have converged, with notable consistency, on three overlapping theories. Most complaints plead all three in the alternative. Each raises distinct doctrinal questions.

Unjust Enrichment

The first theory is common-law unjust enrichment. The argument is straightforward in its logic: the retailer collected a tariff surcharge from the consumer at the point of sale; the tariff itself has been adjudicated unlawful; the retailer will, in most cases, receive a refund from Customs and Border Protection of the underlying duty; and the retailer therefore sits on a windfall that belongs, in equity, to the consumer who paid the surcharge.

The theory is elegantly simple but doctrinally contested. Unjust enrichment in most states requires (a) a benefit conferred on the defendant by the plaintiff, (b) the defendant's knowing acceptance of the benefit, and (c) circumstances rendering it inequitable for the defendant to retain the benefit without payment. The first two elements are largely uncontested on a tariff surcharge. The third is where the fight will happen. Retailers will argue that the benefit was not inequitable at the time of collection because the tariff was then in force, and that the subsequent judicial invalidation does not retroactively render the collection inequitable. Plaintiffs will argue that the invalidity runs to the origin of the collection, and that equity does not permit a windfall to arise from an unlawful act regardless of the actor's good faith.

State Consumer Protection Statutes

The second theory is statutory. Most states have consumer protection statutes — variously called UDAP statutes, deceptive practices acts, or, in California, the Unfair Competition Law at Business and Professions Code Section 17200. These statutes generally prohibit unfair, deceptive, or fraudulent commercial practices, and they generally provide private rights of action with damages, restitution, or both as remedies.

The pass-through class actions plead these statutes primarily on two grounds. The first is deception: that the retailer represented the tariff surcharge as a pass-through of a lawful duty, when the duty itself was not lawfully owed. The second is unfairness: that charging a surcharge for an unlawful duty, particularly where the retailer will recover the duty in a CBP refund, is unfair as a matter of statutory meaning regardless of any specific misrepresentation.

The statutory theories have the procedural advantage that many state statutes permit class certification on a state-by-state basis, and several — California's Section 17200 being the most prominent — have historically tolerated relatively broad class definitions. The disadvantage is that the substantive standards vary meaningfully by state, and plaintiff firms have not yet settled on whether to pursue single-state classes, multi-state classes, or a single nationwide class pled under a home-state statute with choice-of-law arguments for extraterritorial reach.

Common-Law Fraud or Misrepresentation

The third theory, pled less frequently and in fewer cases, is common-law fraud or negligent misrepresentation. The elements are stricter — the plaintiff must plead scienter, reliance, and damages with particularity — and the theory is harder to sustain on a class-wide basis. Most complaints include the theory as a belt-and-suspenders addition rather than a principal line of attack.

The Principal Defenses

Retailers facing these cases have responded with a set of defenses that track, predictably, the theories against them. Four are worth noting.

The first is the pass-through defense in reverse: that the retailer was itself charged the tariff by an upstream party (the importer of record, or a distributor), and that the retailer's surcharge to the consumer was a lawful cost pass-through consistent with ordinary commercial practice. This defense is stronger where the retailer can document that it did not mark up the tariff surcharge, that it paid the full tariff cost to its upstream supplier, and that its own margin on the underlying goods was unchanged.

The second is the voluntary payment doctrine, which, in most jurisdictions, bars recovery of sums paid voluntarily with knowledge of the relevant facts. The doctrine has historically been applied to bar restitution claims for taxes, utility charges, and other government-imposed costs that were paid without protest. Its application to tariff pass-throughs is not established, and several early rulings have expressed skepticism, but it remains a standard defense.

The third is federal preemption. Retailers will argue that tariff refund claims are governed exclusively by the federal statutes that regulate customs duties, and that state-law consumer protection claims addressing tariff pass-throughs are impliedly preempted as interfering with the federal refund regime. The preemption argument faces a significant obstacle: the federal refund regime addresses refunds to the importer of record, not to downstream consumers, and there is no direct federal remedy for consumer pass-through claims. A court reluctant to leave consumers without a remedy is unlikely to find preemption.

The fourth, and most procedurally significant, is the predominance requirement under Rule 23(b)(3). Retailers will argue that individual issues — specifically, whether each class member actually paid a pass-through, in what amount, and with what knowledge of the tariff's status — predominate over common issues, and that class certification is therefore inappropriate. This defense will be most potent where the retailer's surcharge practices varied by product, channel, or time period.

The Distinction Between Importer Claims and Consumer Claims

It is worth being precise about the relationship between the importer refund claims, which have been the focus of most of our coverage, and the consumer class actions discussed here. They are related but distinct.

Importer refund claims run from the importer of record to the United States Treasury, through CBP's administrative track and the CIT litigation track. The plaintiff is the importer that paid the duty. The defendant is effectively the government. The remedy is a refund of the duty plus statutory interest under 19 USC 1505(b).

Consumer class actions run from consumers to retailers. The plaintiff is the consumer who paid a tariff-related surcharge. The defendant is the retailer (or, in some cases, the distributor that passed the cost through). The remedy is restitution, disgorgement, or damages, depending on the theory pled and the jurisdiction.

For importers, the significance of the consumer class actions is primarily contractual. Many importers' supply agreements with downstream distributors and retailers include representations and indemnification obligations that may be triggered if a downstream party is sued over the pass-through. A careful importer reviewing its position under the refund docket should also review its contractual exposure under distribution and retail agreements. Counsel experienced in both domains is, for obvious reasons, preferable.

What to Watch Over the Next Two Quarters

Several developments are worth watching as the consumer class action docket matures. First is the MDL petition practice. With filings now concentrated in the Northern District of Illinois, the Northern District of California, and the Southern District of New York, the Judicial Panel on Multidistrict Litigation will almost certainly be asked to consolidate. How the Panel resolves the MDL petition — whether it consolidates broadly, consolidates by retailer, or declines consolidation altogether — will substantially affect the docket's trajectory.

Second is the first motion to dismiss ruling. At this writing, no defendant has yet received a ruling on a Rule 12(b)(6) motion in a pass-through case. The first such ruling, whenever and wherever it issues, will be closely read for signals on the three principal theories.

Third is retailer settlement activity. Several retailers have indicated, in investor communications, that they view the pass-through exposure as commercially manageable and are prepared to settle individual matters on a state-by-state basis rather than litigate to class certification. If that pattern holds, the docket may resolve through a series of state-specific settlements rather than a single national class adjudication.

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