Walgreens has asked a judge to dismiss a class action complaint it faces over a nickel beverage tax. 

In a Nov. 2 Cook County Circuit Court filing, Deerfield-based Walgreens Boots Alliance asked Judge Diane J. Larsen to dismiss a complaint Destin McIntosh filed Aug. 15, in which McIntosh claimed the pharmacy giant improperly charged a 5-cent tax. 

According to the initial complaint, instead of complying with a Chicago tax on bottled water, Walgreens also charged customers the same tax for things that should have been excluded, including carbonated beverages, such as seltzer water, sparkling waters, sold under such brands as Perrier or La Croix, or soft drinks; flavored water, which would include such brands as Sobe Life Water or Vitamin Water; and mineral water or water sold by “delivery services in a container not sold with the water.” 

McIntosh claimed he bought sparkling water drinks from Walgreens stores in Chicago “on multiple occasions in 2015, asserting he shopped at Walgreens stores in the Loop, the South Loop, Rogers Park and Lakeview, near his home, his job and friends’ homes. The lawsuit noted McIntosh did not keep his receipts from the purchases, but believes “Walgreens’ records should demonstrate that (he) was in fact charged and paid the Bottled Water Tax.” 

McIntosh said the improper taxation violated the Illinois Consumer Fraud Protection Act. But in moving for dismissal, Walgreens argued the tax was disclosed at the time McIntosh paid it and remitted to the city. As such, it said, the voluntary payment doctrine bars the claim. 

In a memorandum Walgreens filed to support its motion for dismissal, the company said its bottled water inventory is distributed and taxes in two ways. For water the company ships from a central warehouse to its retail stores in the city, “Walgreens self-assesses the Bottled Water Tax and remits the tax to the city” each month. For all other products, vendors ship products directly to the stores. In those cases, Walgreens remits the tax to the vendor, which is in turn responsible for remitting payment to the city. Walgreens further said taxes on McIntosh’s purchases were printed on sales receipts, and he only came to believe he was improperly charged after seeing news reports. 

Walgreens explained the voluntary payment doctrine bars McIntosh’s claim in that it “provides that absent fraud, misrepresentation or mistake of fact, ‘money voluntarily paid under a claim of right to payment and with knowledge of the facts by the person making the payment cannot be recovered back on the ground that the claim was illegal.’” 

In the memorandum, Walgreens cited the 1985 Illinois First District Appellate Court opinion in Lusinki v. Dominick’s Finer Foods, in which justices determined a plaintiff in McIntosh’s position, who did not pay the tax under protest, can only avoid having a claim barred under the voluntary payment doctrine by “alleging a lack of facts sufficient to form a basis for protesting the tax or duress.” Further, “the ‘duress’ exception applies only when refusal to pay the tax would result in loss of access to an essential good or service.” 

Walgreens maintains it “clearly disclosed and itemized the tax” on McIntosh’s receipts when he bought the water in question. 

Joseph Siprut, of Siprut P.C., of Chicago, is representing McIntosh. 

Walgreens is represented by Morgan, Lewis & Bockius LLP, also of Chicago.

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Morgan, Lewis and Bockius LLP Siprut P.C. Walgreens Boots Alliance

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