Third District Court of Appeal
State of Florida
Opinion filed April 14, 2021.
Not final until disposition of timely filed motion for rehearing.
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No. 3D20-686
Lower Tribunal No. 15-6256
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BJ's Wholesale Club, Inc., and
State of Florida Department of Revenue,
Appellants,
vs.
Laura Bugliaro, et al.,
Appellees.
An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, William Thomas, Judge.
Foley & Lardner LLP, and James A. McKee (Tallahassee), Kevin A.
Reck and Christina M. Kennedy (Orlando), for appellant BJ’s Wholesale
Club, Inc.; Ashley Moody, Attorney General, and J. Clifton Cox, Special
Counsel (Tallahassee), for appellant State of Florida Department of
Revenue.
Kluger, Kaplan, Silverman, Katzen and Levine, P.L., and Alan J.
Kluger, Steve I. Silverman, and Erin E. Bohannon; VM Diaz & Partners, LLC,
and Victor M. Diaz, Jr., for appellees.
Before FERNANDEZ, LOGUE and GORDO, JJ.
LOGUE, J.
BJ’s Wholesale Club, Inc. appeals a non-final order granting Laura
Bugliaro’s motion to certify a (b)(2) class seeking injunctive relief under Rule
1.220 of the Florida Rules of Civil Procedure.
In this case, Bugliaro is challenging the method to determine the
taxable sales price of products sold to consumers with discounts funded in
part by the merchant and in part by the manufacturer. Bugliaro has brought
her challenge as a claim against the merchant to enjoin an unfair trade
practice under the Florida Deceptive and Unfair Trade Practices Act
(FDUTPA), §§ 501.201–.213, Fla. Stat. Both BJ’s and the State of Florida
Department of Revenue as an intervenor argue that such a challenge must
be brought instead against the State under the various administrative and
legal avenues established by the Legislature for taxpayers to challenge the
collection of sales taxes.
A class should be certified under (b)(2) for an injunction only where an
injunction is an available remedy. We conclude, in these circumstances, the
taxpayer does not have a cause of action against the merchant for an
injunction against an unfair trade practice. Where a merchant has collected
and remitted sales taxes to the State in apparent good faith reliance on the
2
tax laws without any improper attempt to obtain a competitive advantage,
Florida law provides that the taxpayer must seek its remedy against the State
and leave the merchant out of the middle of its tax dispute. For this reason,
we reverse the order certifying a (b)(2) class for an injunction.
FACTS AND PROCEDURAL BACKGROUND
BJ’s is a membership-only retail club chain that sells consumer goods.
Laura Bugliaro is a Florida resident and a member of BJ’s. As part of its
membership perks, BJ’s offers promotional discounts in the form of “clipless
coupons.”
The dispute at issue arose during a 2014 Black Friday sales event
when Bugliaro purchased two televisions at separate BJ’s club stores using
coupons provided by BJ’s. At the time of purchase, Bugliaro noticed that BJ’s
assessed Florida sales tax on the original undiscounted price of each
television and not on the discounted price.
Bugliaro decided to check how much the televisions would cost on
BJ’s’ online store. There she discovered that BJ’s assessed a different sales
tax amount on the same television she had purchased at the club store. In
its online store, BJ’s applied the sales tax to the discounted price of the
television and not the full retail price Bugliaro had been charged at the club
store.
3
Bugliaro contacted a BJ’s district manager to understand the
discrepancy in sales tax. The district manager apologized, explained that it
was BJ’s’ policy to charge Florida sales tax on the full, undiscounted retail
amount of the product, and offered a one-time courtesy refund of the
additional sales tax she had paid at the store. Bugliaro, however, declined
the refund and sued BJ’s instead.
The problem here stems from a nuance in State sales tax law
regarding how to calculate the taxable sales price when a product is
discounted. In some circumstances, the discount is funded entirely by the
merchant, in which case, the taxable sales price is the discounted price paid
by the consumer. In other circumstances, however, the discount is funded
by the manufacturer, so that the merchant is reimbursed for the full discount,
in which case the taxable sales price is the undiscounted amount. In other
cases, the discount is funded in part by the merchant and in part by the
manufacturer, known as a “split-funded” discount, which is the type of
discount involved here.
The trouble with split-funded discounts arises from the fact that the
amount the manufacturer reimburses BJ’s may depend on the expected
volume of sales of a given product. When split-funded discounts are issued,
BJ’s is sometimes unaware at the point of sale what portion of the split-
4
funded promotional discounts will be funded by the manufacturer. Thus, split-
funded discounts are typically advertised by BJ’s as a single coupon
regardless of the ultimate source of funding. The coupons used by Bugliaro
were split-funded discounts. BJ’s remitted all the sales tax it collected in
Bugliaro’s transactions to the Department of Revenue.
On March 17, 2015, Bugliaro initially filed a class action against BJ’s
seeking damages in the form of a tax refund. Bugliaro also sought
prospective injunctive and declaratory relief to end BJ’s’ alleged practice of
overcharging sales tax on products purchased with split-funded discounts in
violation of FDUTPA and rule 12A-1.018 of Florida’s Administrative Code.
The Department of Revenue was granted the right to intervene pursuant to
Florida Rule of Civil Procedure 1.230 as an interested party because the
action involved a sales tax dispute and the Department is statutorily charged
with ensuring the “fair and consistent application of the tax laws of this
state[.]” § 213.015(21), Fla. Stat. (2015).
On September 9, 2016, Bugliaro moved to certify a rule 1.220(b)(2)
class on her injunctive relief claim under FDUTPA. After the trial court
certified the class, BJ’s appealed. This Court reversed the first certification
order because (1) the trial court lacked subject matter jurisdiction since
Bugliaro had failed to exhaust her administrative remedies, and (2) the class
5
was not ascertainable. BJ’s Wholesale, Inc. v. Bugliaro,
273 So. 3d 1119,
1121 (Fla. 3d DCA 2019) (Bugliaro I). On remand, Bugliaro filed her fourth
amended class action complaint which removed any claim for a refund and
sought only prospective injunctive and declaratory relief.
On November 27, 2019, Bugliaro moved for re-certification of the
following class for prospective injunctive relief under Count I (FDUTPA):
All non-tax exempt members of BJ’s Wholesale Club who reside
in Florida, who will make in-store purchases at one of BJ’s 31
Florida stores, and who will purchase products with a discount
funded in part by BJ’s, within the statutory period(s).
The trial court concluded that Bugliaro “demonstrated by competent,
substantial evidence that this action meets all the requirements for class
certification under Rule 1.220.” The court appointed Bugliaro as class
representative and Bugliaro’s attorneys as co-lead class counsel. The trial
court’s order did not set forth an express definition of the class being
certified, but Bugliaro contends a definition can easily be inferred. 1 BJ’s
1
The class that can be inferred appears to be slightly different from the class
requested. The trial court order refers to the class members as including
“Florida residents who are non-tax-exempt members of BJ’s Florida
Wholesale Clubs who will make in-store purchases at BJ’s Florida stores and
will be subject to BJ’s improper imposition and collection of an excessive
charge,” thus apparently not including the requirement that purchases
include a “discount funded in part by BJ’s.” We are reversing on other
grounds but note that the failure to include an express definition of the class
has been held to be reversible error. See, e.g., Sonic Automotive, Inc. v.
Galura,
961 So. 2d 961, 965 (Fla. 2d DCA 2007).
6
appealed the certification order and the Department of Revenue joined in the
appeal.
DISCUSSION
(a) Class certification under (b)(2).
We have jurisdiction to review the trial court’s non-final order certifying
a class. See Fla. R. App. P. 9.130(a)(3)(C)(vi). “[A]n appellate court reviews
a trial court’s grant of class certification for an abuse of discretion.” Sosa v.
Safeway Premium Fin. Co.,
73 So. 3d 91, 102 (Fla. 2011). Of course, that
discretion is to be applied within the structure of rule 1.220.
Id. at 103. The
prerequisites to class certification are well known: numerosity; commonality;
typicality; and adequate representation. Fla. R. Civ. P. 1.220(a). In addition
to meeting these threshold requirements, the class must fall within one of the
three different types of class actions established in rule 1.220(b). Sosa,
73
So. 3d at 106; Porsche Cars N. Am., Inc. v. Diamond,
140 So. 3d 1090, 1095
(Fla. 3d DCA 2014).
Here, the trial court certified a class for injunctive relief under (b)(2).
Class certification for an injunction under (b)(2) is appropriate where “the
party opposing the class has acted or refused to act on grounds generally
applicable to all the members of the class, thereby making final injunctive
7
relief or declaratory relief concerning the class as a whole appropriate.” Fla.
R. Civ. P. 1.220(b)(2).
We recognize that, at the class certification stage, the inquiry does not
focus on whether the class representatives will prevail at trial. Sosa,
73 So.
3d at 105. “Instead, the focus is on whether a litigant’s claim is suited for
class certification and whether the proposed class provides a superior
method for the fair and efficient adjudication of the controversy.” Diamond,
140 So. 3d at 1095 (quotations and citation omitted).
Nevertheless, “if consequential to its consideration of whether to certify
a class, a trial court may consider evidence on the merits of the case as it
applies to the class certification requirements.” Sosa,
73 So. 3d at 105. In
this regard, where injunctive relief is unavailable, certification of a class under
(b)(2) for an injunction is improper. For example, in Alderwoods Group, Inc.
v. Garcia,
119 So. 3d 497, 504 (Fla. 3d DCA 2013), this Court reversed a
non-final order certifying a (b)(2) class for an injunction when res judicata
barred the claim for injunctive relief. Our holding is in line with other
authorities on this issue. See Christ v. Beneficial Corp.,
547 F.3d 1292, 1298
(11th Cir. 2008) (“Because injunctive relief is not a remedy available under
[the Truth in Lending Act] to Christ and the plaintiff class, Rule 23(b)(2)
certification under TILA was improper.”); Bolin v. Sears, Roebuck & Co., 231
8
F.3d 970, 977 n.39 (5th Cir. 2000) (“Of course, the unavailability of injunctive
relief under a statute would automatically make (b)(2) certification an abuse
of discretion.”).
Thus, the issue becomes whether Bugliaro has a cause of action under
FDUTPA against BJ’s for an injunction over her claim regarding the method
to determine the taxable sales price in these situations involving mixed
merchant-manufacturer discounts.
(b) Calculation of sales taxes involving discounts based on “split-
funded” coupons.
Bugliaro’s complaint goes to the heart of an obscure but important
point of Florida sales tax law. Florida’s revenue laws provide different sales
tax treatments depending on the source of funding for discounts taken at the
time of sale. For example, a discount based on a coupon issued directly by
a merchant or dealer, such as BJ’s, reduces the sales price and no sales tax
is assessed to the face value of the coupon. 2 In contrast, a manufacturer’s
coupon, or a refund issued directly by the manufacturer of a product, is not
considered a reduction in the selling price and sales tax is charged on the
2
The statutes use the term “dealer” which includes “every person . . . who
sells at retail or who offers for sale at retail, or who has in his or her
possession for sale at retail; or for use, consumption, or distribution; or for
storage to be used or consumed in this state, tangible personal property . . .
.” § 212.06(2)(c), Fla. Stat.
9
full retail price of the product. When there exists a problem in determining
the extent the manufacturer will be providing a reimbursement for the
discount, the sales tax is assessed on the undiscounted price. These points
of tax law are specifically addressed in the tax statutes 3 and discussed in the
regulations. 4
Indeed, the Department filed in the lower court a non-binding technical
assistance advisement which it contends approves the method of calculating
the taxable sales price BJ’s used here. 5 We note these matters not to
3
§ 212.02(16), Fla. Stat. (“‘Sales price’” also includes the full face value of
any coupon used by a purchaser to reduce the price paid to a retailer for an
item of tangible personal property; where the retailer will be reimbursed for
such coupon, in whole or in part, by the manufacturer of the item of tangible
personal property; or whenever it is not practicable for the retailer to
determine, at the time of sale, the extent to which reimbursement for the
coupon will be made.”).
4
Rule 12A-1.018(3), Fla. Admin. Code (giving examples and providing a
“coupon or refund issued directly by the manufacturer is not to be construed
as a reduction in selling price by the dealer. In this case, as illustrated by the
following examples, the full selling price of the product is taxable.”).
5
Sales Tax - Trade Discounts and Manufacturers Coupons, Technical Ass’t
Advm’t 95A-011,
1995 WL 476722, at *2, 13 (Fla. Dep’t of Revenue 1995)
(“The manufacturers and the Company negotiate their coupon arrangements
with the intent that the coupons be fully funded, with the exception of an
unexpected sales volume, or an instance in which promotional costs are
shared . . . . The Department hereby confirms that the Company’s current
collection and remittance of sales tax on the full face value amount of the
vendor-funded coupons . . . is correct.”).
10
approve the method BJ’s used or the Department’s interpretation of the
statutes and regulations, but only to underline that the nature of the dispute
here concerns the collection and remittance of sales taxes to the State.
(c) Remedies for the improper collection of sales taxes.
The Legislature has established numerous ways in which a taxpayer
can obtain relief from improperly or illegally assessed sales taxes, including
an extensive set of protections under the Taxpayer’s Bill of Rights. §
213.015, Fla. Stat. 6 Most importantly, taxpayers can prosecute informal,
formal, and legal challenges to taxes and claims for refunds, § 72.011, Fla.
Stat. Taxpayers can challenge Department of Revenue regulations and
petition to begin rule making, §§ 120.54(7), 120.56, Fla. Stat. They may seek
damages that result from the wrongful or negligent act or omission of a
department officer or employee, § 213.015(13), Fla. Stat. In establishing
6
The overarching right “guaranteed Florida taxpayers in the Florida Statutes
and the departmental rules is “[t]he right to fair and consistent application of
the tax laws of this state by the Department of Revenue.” § 213.015(21), Fla.
Stat. Before paying taxes, taxpayers are entitled to prompt and accurate tax
information and assistance and to this end the Department is required to
maintain a taxpayer hotline, § 212.185, Fla. Stat.; taxpayers can obtain a
technical assistance advisement from the Department of Revenue as to the
Department’s position on the tax consequences of a particular transaction, §
213.22, Fla. Stat.; and taxpayers can obtain a declaratory statement
regarding a state agency’s interpretation of a statute or rule, § 120.565, Fla.
Stat.
11
these remedies, the Legislature also established limitations and conditions.
See, e.g., Bugliaro I, 273 So. 3d at 1121.
(d) FDUTPA.
In her complaint, Bugliaro seeks injunctive relief under FDUTPA.
Bugliaro contends that BJ’s “uniformly imposes and collects from all class
members a charge on the full, undiscounted price of taxable products
purchased with a discount funded in whole or in part by BJ’s.” She further
asserts that BJ’s’ practice “constitutes an unfair or deceptive act or practice
in trade or commerce” in violation of FDUTPA.
One of the stated purposes of FDUTPA is to “protect the consuming
public and legitimate business enterprises from those who engage in unfair
methods of competition, or unconscionable, deceptive, or unfair acts in the
conduct of any trade or commerce.” § 501.202(2), Fla. Stat. To that end,
FDUTPA makes unlawful “[u]nfair methods of competition, unconscionable
acts or practices, and unfair or deceptive acts or practices in the conduct of
any trade or commerce.” Id. § 501.204(1). The terms “trade or commerce”
are broadly defined in the statute 7 and the courts have adopted broad
7
“Trade or commerce” is broadly defined as:
the advertising, soliciting, providing, offering, or distributing,
whether by sale, rental, or otherwise, of any good or service, or
any property, whether tangible or intangible, or any other article,
commodity, or thing of value, wherever situated. “Trade or
12
definitions of the term “unfair trade practice.” 8 FDUTPA’s provisions are to
be “construed liberally to promote” its underlying policies. Id. One of the
remedies available under FDUTPA is an injunction. 9
It is far from clear that the assessment, collection, and remittance of
sales tax is an act or practice engaging in “trade or commerce” as that term
is used under FDUTPA. 10 Without reaching the issue of whether a
commerce” shall include the conduct of any trade or commerce,
however denominated, including any nonprofit or not-for-profit
person or activity.
§ 501.203(8), Fla. Stat.
8
See Diamond,
140 So. 3d at 1098 (discussing definition of term “unfair trade
practice”).
9
Section 501.211, Florida Statutes, provides the following remedies for a
violation of FDUTPA:
(1) Without regard to any other remedy or relief to which a person
is entitled, anyone aggrieved by a violation of this part may bring
an action to obtain a declaratory judgment that an act or practice
violates this part and to enjoin a person who has violated, is
violating, or is otherwise likely to violate this part.
10
Cf. Montero v. Duval Cnty. Sch. Bd.,
153 So. 3d 407, 412 (Fla. 1st DCA
2014) (holding that school board’s ministerial act was not an act constituting
“trade or commerce” within the meaning of FDUTPA, but rather was required
or specifically permitted by state law, thus the trial court correctly construed
FDUTPA in dismissing appellants’ claim because they did not allege
sufficient facts to establish that the school board had engaged in an act
constituting “trade or commerce”); Eirman v. Olde Disc. Corp.,
697 So. 2d
865, 866 (Fla. 4th DCA 1997) (holding that conduct alleged to be violation of
FDUTPA was authorized by rules of United States Securities & Exchange
Commission, thus FDUTPA is inapplicable).
13
merchant’s method of collecting sales taxes could ever constitute an unfair
trade practice, we conclude that Bugliaro’s claim is not the type of dispute
intended to be addressed under FDUTPA.
FDUTPA expressly does not apply to an “act or practice required or
specifically permitted by federal or state law.” § 501.212(1), Fla. Stat. A
merchant, such as BJ’s, is statutorily required to charge, collect, and remit
sales taxes to the Department of Revenue.11 Sales tax proceeds collected
by merchants and remitted to the Department of Revenue “are state funds
from the moment of collection.” § 213.756(1), Fla. Stat. A merchant is
prohibited from absorbing all or any part of the sales tax to be charged and
collected at the time of sale, including any portion that “will be refunded either
11
See § 212.07(2), Fla. Stat. (“A dealer shall, as far as practicable, add the
amount of the tax imposed under this chapter to the sale price . . . . Except
as otherwise specifically provided, any dealer who neglects, fails, or refuses
to collect the tax herein provided upon any, every, and all retail sales made
by the dealer or the dealer’s agents or employees of tangible personal
property or services which are subject to the tax imposed by this chapter
shall be liable for and pay the tax himself or herself.”); see also Gaulden v.
Kirk,
47 So. 2d 567, 571 (Fla. 1950) (“”[T]he power to enact tax laws is
inherent in the state as an attribute or characteristic of government[.]”); Cash
v. State,
628 So. 2d 1100, 1101 (Fla. 1993) (noting the tax statutes “make
retailers agents of the state by authorizing them to operate and collect and
remit the sales tax proceeds to the state”).
14
directly or indirectly by any method whatsoever.” § 212.07(4), Fla. Stat. 12
Bugliaro does not allege any facts that might serve to remove BJ’s’ actions
in collecting and remitting the sales taxes at issue from BJ’s’ statutory
responsibilities in this regard. Indeed, in the lower court, Bugliaro conceded
that BJ’s has no ultimate stake in the outcome of this dispute because it is
merely serving as a conduit to collect and remit the taxes at issue.
The Legislature’s creation of extensive remedies for improper sales tax
collections, with limits on those remedies, indicates the Legislature did not
intend normal and routine tax disputes to be resolved in lawsuits under
FDUTPA against the merchant. The structure of the law was clearly intended
to ensure a consistent, statewide application of the tax laws to all taxpayers
across the State. It was also expressly intended to avoid the problem of
merchants being caught in the middle of inconsistent demands from
12
Section 212.07(4) specifically provides:
A dealer engaged in any business taxable under this chapter
may not advertise or hold out to the public, in any manner,
directly or indirectly, that he or she will absorb all or any part of
the tax, or that he or she will relieve the purchaser of the payment
of all or any part of the tax, or that the tax will not be added to the
selling price of the property or services sold or released or, when
added, that it or any part thereof will be refunded either directly
or indirectly by any method whatsoever.
15
consumers and the Department. 13 The Legislature’s intent that the tax laws
be interpreted in a manner that maintains equal and consistent tax treatment
statewide is reflected in the laws providing on one hand that the merchant
who fails to collect and remit taxes is subject to penalties, fees, and even
criminal liability; 14 and, on the other, that the purchaser or consumer remains
liable for the sales tax if the merchant fails to charge and collect the proper
amount. 15 In this regime of law, it was clearly the intent of the Legislature
that routine challenges to the collection and remittance of sales taxes be
brought against the State.
Accordingly, because the remedy of an injunction under FDUTPA
against the merchant is not available to a taxpayer like Bugliaro in a tax
dispute under these circumstances, it was reversible error to certify a (b)(2)
class for the purposes of obtaining this unavailable remedy.
13
The tax statutes limit the taxpayer’s remedy against a merchant to only a
refund of taxes collected that were not remitted to the State. § 213.756, Fla.
Stat.
14
§ 212.07(3)(a), Fla. Stat. (“A dealer who fails, neglects, or refuses to collect
the tax or fees imposed under this chapter by himself or herself or through
the dealer’s agents or employees, in addition to the penalty of being liable
for paying the tax or fee, commits a misdemeanor of the first degree . . . .”).
15
§ 212.07(2), Fla. Stat. (“Such tax shall constitute a part of such price,
charge, or proof of sale which shall be a debt from the purchaser or
consumer to the dealer, until paid, and shall be recoverable at law in the
same manner as other debts.”).
16
Reversed.
17
