Judge caps off class action accusing Walgreens of wrongly collecting Chicago's 5 cent bottled water tax

By Jonathan Bilyk | Feb 10, 2017

A Cook County judge has put a lid on a class action lawsuit against Walgreens brought by a man who claimed the drug store chain wrongly charged him and others a 5 cent city of Chicago sales tax on bottled drinks, which should have applied only to bottled water.

On Jan. 27, Cook County Circuit Judge Diane J. Larsen dismissed with prejudice the complaint brought by plaintiff Destin McIntosh against the Deerfield-based Walgreens Boots Alliance.

The original lawsuit had been filed last August. In that complaint, McIntosh alleged Walgreens should be made to pay for improperly charging the special Chicago city bottled water tax on an assortment of other bottled beverages, including sparking water, soft drinks, flavored waters and mineral waters.

McIntosh specifically 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.

McIntosh conceded he did not keep his receipts from the purchases, but asked the judge for discovery to use Walgreens records to prove he had been wrongly charged by the retailer under the city’s Bottled Water Tax.

McIntosh asserted Walgreens’ alleged overcharge violated the Illinois Consumer Fraud Protection Act.

McIntosh noted his lawsuit had been spurred by news reports about Walgreen’s alleged improper collection of the tax. And while Walgreens, in response to those news reports, had publicly asserted the company had corrected the taxation problem, McIntosh argued the company also should have sought to refund the allegedly improper charges to its customers.

The lawsuit had asked the court to award unspecified “actual and statutory damages,” plus attorney fees.

In November, Walgreens asked the judge to dismiss the case, arguing the charges had been printed on receipts McIntosh would have received at the time of purchase, yet McIntosh had never protested paying the tax until after seeing news reports about it.

Under this so-called “voluntary payments doctrine,” presented in case law in the 1985 Illinois First District Appellate Court opinion in Lusinski vs Dominick’s Finer Foods, plaintiffs in McIntosh’s position, who did not pay a tax under protest, can have their claim barred if they cannot demonstrate “facts sufficient to form a basis for protesting the tax under duress.”

In its motion to dismiss, Walgreens argued 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 her Jan. 27 dismissal order, Judge Larsen said she relied on Walgreens’ arguments under Lusinski  to dismiss the case.

McIntosh was represented in the case by attorney Joseph Siprut of Siprut P.C., of Chicago.

Walgreens was defended by the firm of Morgan, Lewis & Bockius LLP, of Chicago.

Editor’s note: Scott Holland contributed to this report. 

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

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