Courtney Jorstad  |  December 19, 2014

Category: Consumer News

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Papa John's text settlementA Papa John’s class action lawsuit was granted class certification by a Florida federal judge in a lawsuit alleging that the pizza chain illegally charged state sales taxes on delivery charges.

U.S. District Judge Virginia Hernandez Covington wrote in her Tuesday ruling that Papa John’s International Inc. may be right about the lead plaintiffs lacking claims and defenses typical of the rest of the class that is necessary for class certification, but she said that the typicality requirement does not mean that claims and defenses have to be identical.

“This court acknowledges Papa John’s contention that the typicality element is not met because plaintiffs may be subject to unique defenses and individualized issues based on their individual relationship with Papa John’s that differs from that of members of the potential class,” Judge Covington wrote.

“However, this court finds that those concerns are better addressed under the predominance requirement,” she explained.

“The class is unified by both common questions and common interest. The evidence necessary to establish plaintiffs’ claims is common to both plaintiffs and all class members; they all seek to prove that Papa John’s delivery tax practice was wrongful,” the judge added.

The Papa John’s class action lawsuit was filed on March 28 in a Florida state court by plaintiffs Bruce Schojan, Sean Timmons, and Christopher Tollerton, alleging that Papa John’s deceived customers by giving the impression that the sales tax was for their food items, when it also included the delivery fee.

In May the delivery feee sales tax class action lawsuit was transferred to the Florida federal court at Papa John’s request.

This excess sales tax is a violation of Florida law, they claim.

“Specifically, plaintiffs allege that Papa John’s included in the base amount upon which the tax was calculated a $3.00 delivery fee that plaintiffs claim is exempt from taxation under Florida law because it is not ‘part of the [relevant pizza] sale [s],'” Judge Covington explained.

According to the plaintiffs, Papa John’s alleged illegal practice of taxing the delivery fee resulted in Papa John’s charging more than $5 million in taxes on delivery fees since April 2010.

The plaintiffs had filed a motion for class certification on Sept 30., which the court denied without prejudice, leaving them leave to file an amended Papa John’s class action lawsuit.

A second amended sales tax class action lawsuit was filed on Oct. 6 and a motion for class certification was filed on Oct. 16. Papa John’s filed a motion opposing the class certification on Nov. 18.

The court said that the proposed class is large enough for class certification even if “some of the potential class members identified by plaintiffs may not meet the class definition.”

Following the class certification Tuesday, plaintiffs filed a motion for summary judgement Wednesday.

Papa John’s is facing a similar class action lawsuit in Illinois, alleging that the pizza chain illegally collected taxes on delivery fees.

According to the lead plaintiffs in the Florida Papa John’s lawsuit, the problem began in 1998, when the company’s then attorney misinterpreted Florida law about taxing delivery fees.

The tax on delivery fees was then programed into the company’s computer system that is used when customers place and pay for their orders, the class action lawsuit states.

And this tax was added to the system, which is used at all Papa John restaurants across the country, they allege.

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

The defendants are represented by David Barnett Weinstein and Andrew J. Patch of Greenberg Traurig LLP.

The Papa John’s Illegal Sales 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.

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