Lawsuit alleges Costco must pass tariff refunds to customers

A proposed class action against Costco turns on a narrow but consequential question: if a retailer raised prices to cover tariffs that were later ruled unlawful, can it keep any government refund without paying customers back? The case was filed on March 11 in federal court in Chicago by Costco member Matthew Stockov, who says shoppers absorbed the cost of tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. Costco has denied it owes customers anything and moved this week to dismiss the case. The dispute comes as U.S. Customs and Border Protection processes billions of dollars in refunds tied to the Supreme Court’s Feb. 20 ruling in *Learning Resources, Inc. v. Trump*. ### What exactly is the lawsuit accusing Costco of? The complaint in *Stockov v. Costco Wholesale Corporation* says Costco passed the “economic burden” of the IEEPA tariffs on to consumers through higher prices and then stood to recover those same tariff costs from the government after the tariffs were invalidated. The suit frames that as a “double recovery” theory: customers paid more at checkout, and Costco could later receive tariff refunds from Customs. (classaction.org) March 11 is the filing date listed for the case in the U.S. District Court for the Northern District of Illinois, where it is docketed as 1:26-cv-02734. The complaint invokes consumer-protection statutes from multiple states, according to summaries of the filing. ### Why does the case hinge on the Supreme Court’s tariff ruling? (classaction.org) The Supreme Court ruled 6-3 on Feb. 20, 2026, that IEEPA did not authorize the president to impose the tariffs at issue in *Learning Resources, Inc. v. Trump*. That decision invalidated the legal basis for those duties and set off the current refund process for importers that paid them. (classaction.org) A March 4 order from the Court of International Trade then directed that unliquidated entries be processed without IEEPA tariffs, creating an administrative path for some overpayments to be returned through ordinary customs procedures. Trade advisers and news reports have described the ruling as opening the door to a large refund pool, though the mechanics differ depending on whether entries were liquidated. (supremecourt.gov) ### Where does the $35 billion figure come from? U.S. Customs and Border Protection had processed refunds including interest worth $35.46 billion as of May 11, according to a Reuters report surfaced in search results. That figure refers to refunds to importers and other entities that paid the duties, not to household consumers shopping at retail stores. (bakertilly.com) USA Today reported on May 14 that the Trump administration had begun paying back billions in tariff refunds through a new system intended to speed reimbursements to affected businesses. The consumer lawsuits against retailers, including Costco, arise from the gap between those importer refunds and the absence of any automatic mechanism sending money to shoppers. (msn.com) ### What has Costco said in response? Costco told the court in a May 18 filing that the case is speculative and that the named plaintiff was not harmed, according to a Reuters excerpt reproduced by Above the Law. The company argued that the plaintiff “freely chose to purchase valuable products for accurately posted prices” and that Costco never suggested it might later refund part of the purchase price. (usatoday.com) That response goes to the core legal issue in the case: whether a posted retail price, even if influenced by tariffs later struck down, creates any obligation to return money to the buyer once the seller seeks or receives a customs refund. The complaint says yes under consumer-protection theories; Costco says no. (abovethelaw.com) ### Is this about all Costco shoppers getting checks? The lawsuit is a proposed class action, not a ruling that customers are entitled to payment. No court has ordered Costco to refund shoppers, and the publicly available reporting does not show any settlement or class certification. May 25 is the next date visible on the docket summaries now available online: an initial status report is due then in the Northern District of Illinois before Judge Steven C. (classaction.org) Seeger. Costco’s motion to dismiss, filed this week in Chicago federal court, is the next immediate step in the case. (dockets.justia.com) (courtlistener.com)