Posted by AdmiralAsshat 6 days ago
> That plan enraged customers who joined Costco based on the proposition that Costco would operate on the slimmest possible margins to ensure they never pay more for goods than Costco can afford to sell them.
I feel like Costco is generally a pretty good company, but this is a wild fantasy when dealing with any commercial entity with a fiduciary responsibility to shareholders.
Consider the Target backlash last year. They’re since down 14% vs Walmart (up 30-ish%). Regardless of anyone’s political beliefs, I don’t think a 14% loss seemingly caused by behavior that a segment of customers considered hostile is thinking of the shareholders.
To be fair, they’re being sued by customers who were marketed memberships.
Is that the case history? Or bullshit assumption? Because this looks plaintiff sponsored.
I mean, one of the legal firms behind this is Milberg PLLC, https://en.wikipedia.org/wiki/Milberg, who has been charged with illegally paying plaintiffs to sue in order to enrich themselves.
"Fiduciary duty" is less strict than you'd expect. Courts generally recognize a "business judgment rule," where executives are offered broad discretion in strategy subject to some basic reasonability tests.
This would allow Costco to say "in order to cultivate goodwill and maintain our reputation, after we receive refunds we will distribute them to our customers based on purchased goods with refunded tariffs." It would also allow the directors to book the refund as profits, or use it for later incentives or marketing, or a variety of other actions.
The 'fiduciary duty' aspect here is mostly a myth. Directors do indeed have a fiduciary duty, but that duty is towards the corporation as a whole – including its long-term interests – rather than strictly towards short-term profit maximization. The fiduciary duty doctrine exists more to prevent graft and self-dealing, where managers and directors 'loot' the company by smuggling out profits in ways that benefit themselves personally rather than the company as a whole.
I can see the appeal of an immediate refund check, but using the tariff refund to lower future prices for customers in a way that drives continued sales seems like both responsible thing to do from a fiduciary perspective and a not unreasonable compromise for the customer. Many companies would, and will, simply pocket the refund.
This whole this is just lawyering at its core. I find the outrage “on behalf of customers” to be disingenuous.
I think that this is a standard play to seek a settlement to make the pain in the backside disappear.
Hear me out on an alternative POV: the government engaged in lawless economic coercion, and the coercion trickled down. If you don't like it, sure, you can always go get coerced somewhere else, it's your free choice. I don't see why anyone would object to that, assuming of course they are a corporation or a government
Almost everyone on this forum buys retail products, and every American’s purchases were affected by tariffs.
This article claims the victims feel “rage” about this. Have you ever felt rage for prices going up due to goods becoming more expensive? I could believe that. If so, was that rage aimed at the retailer who was forced to pay more for the imported goods, or to the person who imposed them? Weird, but okay.
If so, assuming the retailers were the target of your “rage”, did you become further enraged when you learned that the unconstitutional tariffs collected were being sought to be refunded by the people who were forced to pay them? What political Venn diagram are we in now?
And lastly, do you shop at Costco or were marketed to by Costco? If so, you would be the single person in the world that might be able to claim you are the enraged victim here. It doesn’t make sense.
I’ve talked to plenty of people who are mad about tariffs, or mad at capitalism, and certainly mad at Trump. But it’s rare to find a Costco member that thinks Costco is treating them unfairly. They’re kinda famous for the opposite in a sea of exploitive retailers. (They are “famous” for never doing loss-leader shenanigans or charging more than limited markups of 11-14% on any product.)
Hell, Costco is the only retailer that wouldn’t surprise me if they turned around and gave ME a tariff refund if they are successful.
To literally sue a company for seeking refunds to levied taxes that were declared illegal, appears to be some combination of victim blaming, political distraction, or more likely: convenient enrichment for class action mills.
Corporations claiming the refund on my behalf (and then not propagating that refund to me) is just icing on that shit-cake.
I think what you and the plaintiff need to show (direct connection between supplier costs and consumer prices) fundamentally goes against free business in the US. I mean, companies change prices all the time for whatever reasons they want, no?
But IANAL, "unjust enrichment" is apparently a real claim (though not sure if it applies to a store-consumer relationship) and consumer protection laws exist, so maybe I'm wrong.
Companies get to benefit from higher prices being standardized (once a price baseline go up, they rarely go back down) and they get another check from Uncle Sam.