The US supreme court's recent ruling deeming Donald Trump's tariffs illegal has opened up a potential $175bn refund pot, with hundreds of thousands of businesses across the US scrambling for advice on how to secure their share. As a result, law firms, hedge funds, and AI companies are poised to reap significant benefits from the ensuing legal battles.
According to Joseph Spraragen, a seasoned New York-based attorney, the ruling has created a "mini-gold rush" for trade lawyers, with his 40-strong team at Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt (GDLSK) already filing hundreds of lawsuits for clients, including luxury brands Prada and Dolce & Gabbana. As Spraragen noted, "It's unprecedented," with clients seeking trade lawyers at a rate unseen throughout his 30-year career.
Jennifer Hillman, a law professor at Georgetown University and former general counsel for the US trade representative office, concurred, stating, "To me, the only winners from this trade war that Trump has launched, have been the lawyers." Hillman explained that the complexities of Trump's tariffs, which resulted in different rates being charged based on where certain parts of a product were manufactured, have put trade lawyers into overdrive, with compliance costs shooting through the roof.
Law Firms and Tariff Refunds
With the supreme court's ruling, law firms across the country have been springing into action, including Quinn Emanuel Urquhart & Sullivan, which quickly publicized the launch of their own "Tariff Refund Task Force," promising to "pursue refunds aggressively" for business clients. The final legal fees likely to pour from tariff refund cases are hard to calculate, but some firms are advertising "flat fees" to get cases filed in court, a sum that is likely to cost businesses $10,000-$15,000 a pop, according to Nicole Bivens Collinson, head of international trade at law firm Sandler Travis and Rosenberg.
Bivens Collinson noted that the refund process could be sorted through automatic refunds, but Trump has warned that the issue could be tied up in courts "for the next five years." This may be by design, she explained, as the administration relies on those tariffs for government revenues. The legal fees that emerge from this potentially lengthy process could yield windfalls for many firms, with the flat fees alone "could be in the millions, many millions, depending on how many clients for which they file."
Hedge Funds and Tariff Refund Claims
Not everyone should take the legal route, however, as Hillman explained that most importers should be able to retrospectively change the tax rate applied to imported items before the charges are formally settled with customs. But that could be a hefty administrative task, and firms with bigger sums on the line, and influential shareholders to appease, will face pressure to do everything they can to get every dime they are owed.
Some firms, such as Kids2, an Atlanta-based toymaker, have opted to sell off the rights to their tariff claims to hedge funds. Richard O'Neill, a partner in the Seattle office of customs and trade law firm Neville Peterson, noted that hedge funds have been approaching his firm in hopes of being linked up with clients. "It happens through law firms, it happens through brokers. I'm sure they reach out directly to the importers. You know, there's no shortage of efforts, by those outfits, to try to purchase claims."
AI Firms and Tariff Refund Processing
Some AI firms are also rumored to be muscling in, offering to process people's applications in exchange for cuts of any future refunds. As Hillman explained, "They're just saying, I'll do all the work for you, but then I get 20%." There are separate concerns about opportunists in the legal sector, with less experienced lawyers willing to take on claims despite having little previous history in trade or customers law.
O'Neill advised importers to go with a law firm that actually litigates these issues, rather than taking a chance with less experienced lawyers. For now, those with the experience are trying to keep their heads above water, with Brian Janovitz, a Washington-based trade lawyer at DLA Piper, spending over a decade as a leading international trade and national security official at the White House and the office of the US trade representative, fielding a non-stop wave of calls and emails from clients since Friday's ruling.
Conclusion and Future Implications
Ultimately, any complaints about legal fees should be aimed at the Trump administration, Hillman said. "To be honest, it's their fault," she said. "If you hadn't done these cockamamie tariffs, and this changing up and down, nobody would have hired a lawyer. I mean, the system was working just fine … before you started screwing around with all these tariffs." For companies who end up successfully securing refunds, the question remains whether they will pass on any of those returns to consumers, barring any legal orders.
