Fabletics Sued Over Passing Illegal Tariff Surcharges to Customers

Fabletics is being sued for allegedly passing illegal tariff surcharges on to its customers and keeping the money.

A class action lawsuit filed in Cook County Circuit Court in Chicago accuses the Kate Hudson-cofounded activewear brand of charging consumers extra to offset tariffs imposed under the International Emergency Economic Powers Act (IEEPA) — tariffs the U.S. Supreme Court ruled unconstitutional on February 20, 2026. The Court held in a 6-3 decision that IEEPA does not authorize the president to impose tariffs, calling it an overreach of executive power. Only Congress has the authority to levy taxes under the Constitution.

The lawsuit alleges that Fabletics added tariff surcharges to customer orders — reportedly up to $6 per order — to cover its own costs on goods imported from factories in China, Vietnam, and other Asian countries. Fabletics designs its clothing in Los Angeles but manufactures overseas. According to the complaint, the named plaintiff paid $14.58 in tariff surcharges across three separate purchases.

Now that the Supreme Court has struck down the IEEPA tariffs, companies like Fabletics can pursue refunds from the federal government. But the lawsuit argues that if Fabletics gets that money back while also keeping what it charged customers, that creates a windfall that, according to the complaint, is oppressive and causes financial injury to consumers.

The case also argues that even if Fabletics never receives a government refund, it was still wrong to charge customers for tariffs that were unconstitutional in the first place. Consumers had no way to negotiate or refuse those charges.

Fabletics is one of several companies facing similar lawsuits in the wake of the Supreme Court's IEEPA ruling. FedEx, for example, was hit with a $5 billion class action over tariff-related shipping charges. The case seeks to cover all U.S. customers who were charged IEEPA tariff surcharges by Fabletics.

There is no settlement yet. Fabletics has not responded to the complaint in court.

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