Costco is facing a proposed nationwide class action lawsuit filed in federal court in Illinois, seeking refunds for customers who paid higher prices due to tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA), which were later ruled unconstitutional by the Supreme Court on February 20 [1]. The lawsuit aims to ensure that any refunds Costco receives for tariffs paid are returned to customers who bore the increased costs, rather than being retained by the company [1]. The suit alleges that Costco has not committed to returning any portion of anticipated tariff refunds to consumers, instead promising only a 'possible future benefit to an indeterminate group of future shoppers' [1].
Costco CEO Ron Vachris told analysts last week that it remains unclear if or when businesses will receive refunds for the IEEPA tariffs, but indicated that if Costco does receive the funds, the company plans to channel them into lower prices and improved value for shoppers [1]. The lawsuit, however, seeks to prevent what it calls 'double recovery' by Costco and to require direct compensation to affected consumers [1].
FedEx, another company that filed suit in the U.S. Court of International Trade to recover tariff refunds, is also facing a similar class action lawsuit filed in late February by shippers who paid higher prices due to the tariffs [1]. FedEx stated that if refunds are issued, it will issue refunds to shippers and consumers who originally bore those charges, but the process and timing depend on future government and court guidance [1]. The class action against FedEx claims that the company's promise is not legally enforceable and seeks to ensure shippers and consumers receive the additional funds paid due to the tariffs [1].
The Supreme Court's ruling sent the case back to lower courts, where it is possible that the government could reach an agreement, but the outcome and timeline remain uncertain [1].
CONCLUSION
Costco and FedEx are both facing class action lawsuits seeking to ensure tariff refunds are passed on to consumers who paid higher prices due to unconstitutional tariffs. While both companies have indicated intentions to return refunds, the legal actions aim to secure enforceable commitments. The market impact is medium, as the outcome could affect consumer compensation and company pricing strategies.