Court Urged to Certify Papa John’s Delivery Tax Class Action Lawsuit

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Last week, plaintiffs accusing Papa John’s International of unfairly charging them a tax on delivery fees filed to certify their proposed Class with the federal court.

Lead plaintiff Bruce Schojan initially filed the class action lawsuit in Florida federal court in September alleging that Papa John’s applied taxes to delivery fees, a violation of Florida tax law. Papa John’s filed a motion to dismiss the delivery tax lawsuit arguing that state law bars the plaintiffs’ claims against Papa John’s because the taxes are state funds and Papa John’s is only acting on the state’s behalf in collecting their taxes. The correct procedure, argued Papa John’s, would be for the plaintiffs to seek a refund from the state. Papa John’s also argued that the plaintiffs had not sought an administrative remedy for the issue either.

U.S. District Judge Virginia M. Hernandez did not dismiss the plaintiffs’ claims and, in an amended class action lawsuit filed earlier this month, Schojan and other plaintiffs argued that Papa John’s also violated Florida’s Deceptive and Unfair Trade Practices Act and asked for punitive damages. In their motion to certify the Papa John’s class action lawsuit, the plaintiffs contend that under Florida’s Deceptive and Unfair Trade Practices Act, “A plaintiff is not required to prove the defendant had knowledge of a deceptive practice or that plaintiff relied on any representation of the defendant.”

“As a result of PJ International’s deceptive or unfair practice, plaintiffs and all others similarly situated paid sales tax on delivery fees that were not lawfully owed and were damaged as a result of defendant’s practice,” the Papa John’s class action lawsuit says. “Since 2010, Papa John’s restaurants have made over 300 million pizza deliveries in Florida and collected over $5,000,000 in unlawfully charged delivery sales tax from customers in Florida.” In response to Papa John’s argument that the customers should seeks a refund form the state, the plaintiffs contend that Papa John’s should make its franchises and restaurants obtain a refund from the state and then distribute the refunds to its customers plus interest within the three year time-limit on such claims.

“For more than a decade, defendants’ corporate-owned stores in Florida and all but one of its Florida franchisees have uniformly and unlawfully charge[d] and collect[ed] sales tax on separately stated and avoidable delivery fees and continue to do so even now,” allege the plaintiffs in their amended Papa John’s class action lawsuit. “More troublesome, despite knowing since at least April 2014 that unambiguous Florida law makes Papa John’s sales tax practice unlawful, defendants continue to charge and collect, and continue to participate in and allow the franchisee stores to charge and collect, sales tax on separately stated and avoidable delivery fees.”

The plaintiffs contend that the issue is to due Papa John’s former counsel’s misinterpretation of Florida tax law. The misinterpretation was then incorporated into PROFIT, Papa John’s computerized ordering and billing system, through a system wide software upgrade. According to the delivery tax class action lawsuit, Papa John’s has refused to change the settings in PROFIT to reflect Florida law without a court order.

The plaintiffs are represented by Alan F. Wagner and Jason Whittemore of Wagner Vaughan & McLaughlin PA.

The Papa John’s Delivery Tax Class Action Lawsuit is Schojan, et al. v. Papa John’s International Inc., et al., Case No. 8:14-cv-01218, in the U.S. District Court for the Middle District of Florida.