Class Action Lawsuit Alleges Fabletics Charged Consumers Illegal Tariff Fees

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Fabletics has been hit with a proposed class action lawsuit that alleges the activewear and lifestyle brand collected unlawful tariffs from consumers imposed under the International Emergency Economic Powers Act (IEEPA).

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The 12-page lawsuit asserts that Fabletics wrongfully collected tariff-related charges from consumers directly and indirectly as a way to offset its own tax burden stemming from “erratic” and “illegal” tariffs levied by President Donald Trump under IEEPA. Fabletics has failed to reimburse consumers for any money wrongfully collected due to the tariff on imports, the suit claims.

The Fabletics lawsuit is one of a surge of cases filed shortly after the February 20 Supreme Court ruling that struck down tariffs levied under IEEPA. The ruling held that the president was not authorized to impose the tariffs, as it was an overreach of presidential power. The case says that the Supreme Court noted in a slip opinion that the Constitution allows only Congress, not the president, to exercise taxation powers.  

Based on the Supreme Court ruling, any IEEPA tariffs charged to Fabletics and passed onto consumers were “unlawful and unconstitutional,” and the company has a right to pursue a refund from the federal government, the suit contends.

However, the case pointedly adds that if Fabletics receives a refund, it will provide the clothing brand with a “windfall” of ill-gotten cash, as it has already charged consumers for the collection of illegal tariffs. Any retention of funds from the government “offends” public policy, is “oppressive,” and will cause financial injury to consumers, the case says.

Additionally, the lawsuit says the plaintiffs had “unequal bargaining power” and were unable to negotiate payment of the IEEPA tariffs with Fabletics and, as a result, had no opportunity to refuse paying the unlawful tariffs.

“Even if [Fabletics] does not receive a refund,” the lawsuit states, “it is still unfair, oppressive, unscrupulous, and causes substantial injury…to charge consumers the cost of unconstitutional, unlawful IEEPA tariffs that provide no benefit to [the] plaintiff or other consumers in any way.”

The plaintiff purchased clothing from the Fabletics website on multiple occasions and was charged an additional $14.58 in unlawful tariffs across her purchases, the filing states.

The Fabletics class action lawsuit seeks to cover all individuals in the United States who were charged IEEPA tariffs by the activewear brand within the applicable statute of limitations period.

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