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Consumer fraud suit vs McDonald's over 'pop tax' collection falls flat over misread receipt

COOK COUNTY RECORD

Tuesday, December 24, 2024

Consumer fraud suit vs McDonald's over 'pop tax' collection falls flat over misread receipt

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An attempt at suing McDonald’s restaurants in Chicago and suburban Cook County for allegedly charging a few cents too much tax while collecting Cook County’s “pop tax” has fizzled, after a more careful reading of sales receipts revealed the plaintiffs had no case.

On Aug. 15, Cook County Circuit Judge Thomas Mulroy allowed attorneys with the firm of Seidman Margulis & Fairman LLP to voluntarily dismiss a lawsuit they had filed just last week against McDonald’s and a number of its franchisees in and around the city, alleging the restaurant operators had improperly “double taxed” beverages.

The Seidman Margulis firm, along with the firm of Heller & Richmond, of Chicago, had represented plaintiff Yvan Wojtecki, a serial litigant the Seidman firm had represented in at least three other lawsuits, according to court records first reported by The Chicago Tribune.

Wojtecki and the Seidman lawyers had filed suit in Cook County Circuit Court on Aug. 8, asserting Wojtecki and others were being charged too much tax when buying drinks at McDonald’s restaurants in the county.

Specifically, the lawsuit alleged Wojtecki was charged 2 cents too much in tax when he purchased a drink at the McDonald’s restaurant at 23 S. Clark St. on Aug. 8. The lawsuit alleged the restaurant had assessed sales tax on a “beverage surcharge” listed on the receipt, which the restaurant had charged to ensure it collected Cook County’s new 1 cent-per-ounce sweetened beverage tax.

The plaintiffs had demanded the court order McDonald’s and its franchisees to cough up compensatory and punitive damages “equal to at least 1 percent of the annual revenue of each of Defendants’ Cook County stores during each year the violations occurred,” plus attorney fees.

According to published reports, McDonald’s restaurants averaged more than $2.7 million in annual sales, as recently as 2015.

However, a few days after filing the lawsuit, the judge indicated the lawyers realized they had misread Wojtecki’s receipt, the key piece of evidence around which the case had been built, and neither Wojtecki nor anyone else had been charged sales tax on the beverage surcharge.

“After further investigation into the facts surrounding the present cause, in spite of Plaintiff’s initial good faith conclusion to the contrary at the time of filing his Complaint … it appears sales tax was not applied to the amount charged to Plaintiff under Cook County’s new Sweetened Beverage Tax,” Judge Mulroy wrote in his order dismissing the case. “Accordingly, and because Plaintiff has no reason to believe that customers were ‘double taxed’ at any other McDonald’s restaurant in Cook County, Plaintiff hereby voluntarily dismisses his lawsuit, with prejudice, as to all Defendants.”

In the meantime, two other class action lawsuits remain pending against retailers Walgreens and 7-Eleven over allegations those retailers also improperly collected the county’s beverage tax. Retailers have placed the blame for such lawsuits on what they call the poor and confusing manner in which the ordinance and accompanying enforcement rules were written.

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