On February 4, 2014, at 10:00 a.m. in Sacramento, the California Supreme Court will hear oral argument in Loeffler v. Target Corp., No. 173972, in which review was granted in 2009. The case arose out of a shopping trip to Target, where the plaintiff was charged sales tax on a cup of hot coffee "to go."
This is the issue on review, according to the docket:
Does article XIII, section 32 of the California Constitution or Revenue and Taxation Code section 6932 bar a consumer from filing a lawsuit against a retailer under the Unfair Competition Law (Bus. & Prof. Code sections 17200 et seq.) or the Consumers Legal Remedies Act (Civ. Code, section 1750 et seq.) alleging that the retailer charged sales tax on transactions that were not taxable?
The Court of Appeal (Second Appellate District, Division Three) held that "plaintiffs are attempting to resolve a sales tax dispute by using consumer and common law remedies rather than the procedure set forth by the Legislature [in the Revenue and Taxation Code]. This they cannot do under article XIII, section 32." Loeffler v. Target Corp., 173 Cal.App.4th 1229, 1235 (2009).
My original take on this case was that it involved obscure issues involving the state tax code. The Court of Appeal opinion says almost nothing about the UCL or CLRA. But the UCL and CLRA issues appear to be moving to the forefront. On December 16, 2013, the Court ordered supplemental briefing on these issues:
(1) May a cause of action be brought under the UCL (see Bus. & Prof. Code, § 17200 et seq.) or CLRA (see Civ. Code, § 1750 et seq.) based on an allegation that a retailer misrepresented that it was collecting an amount as tax reimbursement when in fact the retailer failed to remit the amount to the Board of Equalization?
(2) If so, do the allegations in plaintiffs' second amended complaint state a cause of action under the UCL or CLRA on this theory, and, if not, should plaintiffs be afforded an opportunity to amend their complaint to state such causes of action?
A few months earlier, on April 11, 2013, the Court ordered supplemental briefing on a very different issue:
The parties are requested to serve and file simultaneous supplemental letter briefs addressing whether and, if so, in what manner the doctrine of primary jurisdiction (see Jonathan Neil & Assoc., Inc. v. Jones (2004) 33 Cal.4th 917, 931-937), appropriately may be invoked and applied in the present case, including whether the issue was preserved in the trial and appellate courts and whether article XIII, section 32 of the California Constitution would be implicated by applying the doctrine.
Here are copies of some of the briefs:
- Opening Brief on the Merits (filed 11-09-09)
- Answer Brief on the Merits (filed 01-11-10)
- Reply Brief on the Merits (filed 02-01-10)
- Amicus Curiae Brief of State Board of Equalization (filed 04-15-10)
- Target's Consolidated Answer to Amicus Curiae Briefs (filed 05-05-10)
- Plaintiff's Consolidated Answer to Amicus Curiae Briefs (filed 05-05-10)
- Plaintiff's Request for Judicial Notice in Support of Consolidated Answer to Amicus Curiae Briefs (filed 05-05-10)
- Supplemental Amicus Curiae Brief of State Board of Equalization (filed 07-08-11)
- Plaintiffs' Response to Supplemental Amicus Curiae Brief of State Bd. of Equalization (filed 08-08-11)
- Target's Letter Brief re Primary Jurisdiction (filed 04-22-11)
- Plaintiff's Letter Brief re Primary Jurisdiction (filed 04-22-11)
- Target's Reply Letter Brief re Primary Jurisdiction (filed 04-25-11)
- Plaintiff's Reply Letter Brief re Primary Jurisdiction (filed 04-26-11)
- Target's Supplemental Brief re UCL and CLRA (filed 01-13-14)
- Plaintiff's Supplemental Brief re UCL and CLRA (filed 01-13-14)
There are several "grant and hold" cases also pending in the Supreme Court. Does anyone know if any cases raising similar issues have been stayed in the lower courts pending resolution of Loeffler?
Also, if anyone plans to attend the argument and would like provide a report for publishing here (with or without attribution), please drop me a line.