Class action against Walmart over sales tax moved back to state court

By Gabriel Neves | Aug 17, 2018

ST. LOUIS – A suit filed by a group of consumers against Walmart over allegations it overcharged sales tax on certain online-ordered items has returned to state court.

U.S. District Judge Ronnie White, on the bench of the U.S. District Court for the Eastern District of Missouri, issued a 12-page ruling on Aug. 10 remanding the case to the 21st Circuit Court of Missouri in St. Louis County, considering that the amount of damages did not exceed $5 million that would have required the case to be moved to a federal court.

The group of customers, led by Nichole Holzum, sued Walmart Stores Inc., et al. on allegations of overcharging sales tax when purchasing food items online with a higher rate than when purchased at its brick-and-mortar stores.

As stated in the ruling, the plaintiffs' proposed class members include shoppers who "purchased retail food items with a 'Nutrition Facts' label at any Walmart store located in Missouri, or online from Walmart for Missouri delivery, that were charged sales tax monies at the 4.225 percent state sales tax rate rather than the reduced 1.225 percent state sales tax rate for qualifying food." 

Holzum and the other customers sought damages resulting of the alleged overcharge.

Walmart moved the case to the U.S. District Court of the Eastern District of Missouri based on the Class Action Fairness Act in 2017.

The defendant justified the move using the amount of sales between Sep. 20, 2014, to Jun. 28, 2017, was of $7.7 million. Nevertheless, the lower court considered as the amount of damages 3 percent of that amount, totaling $232,392.67, "which is significantly less than $5 million dollars," the ruling said.

White also stated the mistaken approach used by the defendant in regards to the amounts.

"The rest of Walmart's purported calculations to reach the $5 million dollar mark are based upon speculation, assumptions and false comparisons, " the ruling said, citing attorneys' fees and punitive damages used in the calculus.

Another issued pointed in the ruling was the amount in controversy, which must be greater than $75,000 per federal law that regulates federal jurisdiction over state law claims.

White said in the memorandum and order the defendant "has failed to identify one plaintiff whose damages would meet the $75,000 threshold," moving the case to the state court.

U.S. District Court for the Eastern District of Missouri case number 4:17-cv-02275-RLW

Want to get notified whenever we write about U.S. District Court for the Eastern District of Missouri ?

Sign-up Next time we write about U.S. District Court for the Eastern District of Missouri, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. District Court for the Eastern District of Missouri

More News

The Record Network