From the perspective of consumers who bought products at inflated prices, it would seem natural to expect that once the Supreme Court ruled the tariffs illegal and the government began issuing refunds, the amount they had paid would eventually come back to them. Yet on July 20, 2026, Nintendo filed a motion to dismiss with the court that does exactly the opposite—rejecting that very argument. The company's position is that no legal obligation exists to retroactively adjust the consideration for already-completed transactions. While similar lawsuits have spread to Sony and Microsoft, logistics giants FedEx and UPS have moved to voluntarily refund their customers, highlighting a structure in which the costs borne by consumers who paid the tariffs simply vanish with nowhere to go.
What's in Nintendo's Motion to Dismiss Filed with the Court
On April 21, 2026, two individuals, Gregory Hoffert and Prashant Sharan, filed a class action lawsuit against Nintendo in the U.S. District Court for the Western District of Washington (Hoffert v. Nintendo of America Inc., Case No. 2:26-cv-01360). Hoffert resides in Fair Oaks, California, and Sharan in Seattle, Washington. The proposed class covers all U.S. consumers who purchased Nintendo products at tariff-related increased prices between February 1, 2025, and February 24, 2026. The complaint's argument is straightforward: having collected tariff surcharges from consumers by adding them to product prices, and then receiving refunds after those very tariffs were confirmed illegal, effectively amounts to Nintendo being paid twice.
In response, Nintendo filed a motion to dismiss on July 20, 2026 (U.S. time). The response deadline had already been extended by 60 days from the original date, making this a filing that came right at the wire. The core of the motion is captured in the following passage: "The common thread among Plaintiffs' claims is that it is somehow 'unfair' that Nintendo has not retroactively adjusted its prices for completed sales in response to the outcome of the tariff litigation. But that is not how commercial transactions work." Nintendo's position is that consumers received the products they agreed to purchase at the price they agreed to pay, and that a subsequent policy change is no reason to rewrite a transaction that has already been completed.
Why Nintendo Can Claim It Has "No Legal Obligation to Return the Refunds"
The U.S. Supreme Court ruled tariffs imposed under the International Emergency Economic Powers Act (IEEPA) illegal on February 20, 2026, in a 6-3 decision in Learning Resources, Inc. v. Trump (Case No. 24-1287). However, many of the Nintendo products subject to price increases had already completed their sales before that date. Under contract law principles, a sales agreement is considered final once it is formed and performance is complete, and it is not subject to retroactive modification even if external circumstances later change. Nintendo's logic follows that at the time of the transaction, adding the tariff cost to the price was a lawful pricing decision, and a later ruling of illegality does not automatically void a sales contract that had already been fully executed.
Another legal principle at play is unjust enrichment. This doctrine is typically applied to one-sided transfers of benefit without consideration, and is considered difficult to apply to transactions where a consumer voluntarily agreed to pay a price and received the product in return. In addition, Nintendo argues that its price increases stemmed from multiple factors beyond tariffs alone—including soaring memory prices and rising labor costs—making it practically difficult to determine what portion of any refund would correspond to tariff-driven price increases specifically. The company also contends that it itself bore the primary burden of the tariffs.
Notably, Nintendo itself filed a lawsuit with the U.S. Court of International Trade on March 6, 2026, seeking a refund with interest of the tariffs it had paid. The irony of exercising its own right to recover tariffs from the government while denying consumers the same logic is not necessarily inconsistent under contract law, but it does raise questions about corporate consistency that warrant explanation. The same structure applies to Sony and Microsoft, both of which also face ongoing class action lawsuits over post-price-increase products.
The scale of IEEPA tariff refunds spans more than 330,000 importers nationwide, totaling an estimated $166 billion. According to Judge Richard Eaton of the U.S. Court of International Trade, interest alone is accruing at a rate of approximately $650 million per month. This figure represents the aggregate for all U.S. importers, not Nintendo's refund alone, and how much Nintendo itself will actually receive remains unclear. Even so, given that Nintendo is positioned within this massive flow of refunds, it is easy to understand why consumers would want at least a portion of that refund returned to them.
While FedEx Refunds $800 Million, Nintendo Chooses to Refuse
Logistics giants FedEx and UPS have reportedly announced they will pass on tariff refunds to customers—approximately $800 million for FedEx and up to $5 billion for UPS. In its motion to dismiss, Nintendo has clearly refused to do the same. Sony and Microsoft also face similar class action lawsuits, but Sony has not yet filed a motion to dismiss, and Microsoft, having been sued in June 2026, only had its case transferred to federal district court on July 17—its court response is still forthcoming. Regarding Sony, a lawsuit titled Walker et al v. Sony Interactive Entertainment LLC was filed on May 6, 2026, in the U.S. District Court for the Northern District of California, challenging the $50 price increases implemented in August 2025 across the PlayStation 5, Pro, and Digital Edition models. Against Microsoft, Trevor Hastings filed suit in June 2026, challenging the trajectory by which the Xbox Series X rose from $500 to $800 over three price increases across two years.
FedEx and UPS are logistics companies that maintain ongoing, day-to-day transactional relationships with both corporate and individual customers, meaning that reputational risk from refusing refunds translates directly into customer attrition. In contrast, the class action lawsuits facing the three game console manufacturers are the kind of matter that gets resolved through a lengthy litigation process, and all three share a common posture of trying to handle the question of refunds within the legal framework of "a contract is a contract." This divergence in approach reveals underlying differences in the nature of the relationship between these companies and their customers.
That said, what Nintendo's motion to dismiss addresses is only the contract-law question of "was the consideration properly received?" Neither Nintendo's own filing, nor at least the major reports and litigation materials referenced for this article, directly address the underlying question of whether it was appropriate for consumers to keep paying the surcharge even though the tariffs were illegal.
A Cost Structure That Also Ripples to Consumers in Japan
On May 25, 2026, Nintendo raised the manufacturer's suggested retail price of the Japan-only version of the Nintendo Switch 2 by ¥10,000, from ¥49,980 to ¥59,980. Nintendo cited mid-to-long-term shifts in market conditions, such as rising memory prices and currency fluctuations, as the reasons—U.S. tariffs were not directly cited as an explanation. Even so, the U.S. price increases were driven by the same pressures of memory price surges and currency fluctuation, meaning the underlying cost structure Nintendo faces is shared between Japan and the U.S. While the U.S. lawsuits may appear unrelated to consumers in Japan, in terms of cost structure, the two are connected.
In its earnings forecast for the fiscal year ending March 2027, announced on May 8, 2026, Nintendo projected net profit would fall 26.9% year-on-year to ¥310 billion, incorporating approximately ¥100 billion into cost of goods sold as the impact of surging memory prices and tariff measures. In the U.S., class action lawsuits have arisen over the consideration paid after price increases, while in Japan, the cost increase has been passed directly onto consumers in the form of a price revision. How far Nintendo's arguments succeed in the U.S. litigation could serve as a reference point for how the company might respond if Japanese consumers eventually demand an explanation for the price increase.
The Dividing Line for Whether This Becomes Precedent
The class action lawsuits facing Nintendo, Sony, and Microsoft are all still pending, with no rulings or settlements reached yet. Whether Nintendo's motion to dismiss is granted is likely to have a direct impact on the lawsuits against Sony and Microsoft as well, giving it precedential significance for the game console industry as a whole. All three companies share the common structure of tariff-driven price increases, and for Sony and Microsoft—which remain behind in their court responses—whether the legal reasoning Nintendo has put forward first succeeds or is rejected will serve as an important factor in shaping their own litigation strategies.
On July 21, 2026, the day the motion to dismiss was reported, Nintendo's stock price also fell 4.1%, according to Forbes JAPAN. However, it has been pointed out that speculative trading ahead of an upcoming release in a popular series, as well as lingering effects from the 27% profit decline forecast announced in May, may have also been factors that day, so there is little evidence to directly link the stock decline to the motion to dismiss. It would be more appropriate to treat the litigation developments and the stock price movement as two separate facts reported on the same day.
Even if the motion to dismiss is granted, no obligation will arise for Nintendo to explain to consumers where the refunds it receives ultimately go. The tariff cost gets passed on through prices, the government refund returns to the importing company, and consumers alone are left in a position where neither reaches them. Given that FedEx and UPS have already demonstrated the option of voluntary refunds, if Nintendo, Sony, and Microsoft are to break from this structure, the path of acting on their own—without waiting for a court ruling—remains open to them. Whether the three companies choose to take that path depends less on the outcome of the litigation than on the management judgment of how they choose to position their relationship with consumers.