Plaintiffs Push for Approval of Wal-Mart Sales Tax Settlement

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On July 8, the plaintiffs of a Wal-Mart sales tax class action lawsuit urged an Ohio federal judge to approve a proposed $5 million settlement, which would provide monetary relief to Class Members in the form of store credit as well as a change in the retailer’s return policy.

The proposed Wal-Mart settlement will resolve claims that Wal-Mart Stores Inc. did not fully refund consumers by employing deceptive return policy practices, allowing the store to apply lower sales tax rates during a refunded purchase, shortchanging Wal-Mart customers.

The proposed $5 million sales tax class action settlement will cover the cost of plaintiffs’ attorney fees and provide each Wal-Mart Class Member with $3 to $15 gift cards (depending on the size of the Sales Tax Class), which will be redeemable at Wal-Mart and Sam’s Club retail locations. Additionally, Wal-Mart has agreed to install an electronic system that will allow for the automatic calculation of applicable sales tax refund when consumers return an item to a store with a different tax rate. These electronic systems will be installed by Nov. 1, 2016, according to the sales tax class action settlement.

Wal-Mart and plaintiffs Shaun Brandewie and John Newbrough hammered out the terms of this sales tax class action settlement when all parties entered into mediation back in April. The motion for approval of this proposed Wal-Mart settlement references the number of hurdles both plaintiffs and defendants overcame in order to reach the current terms of the class action settlement.

One major issue noted in this document was the difficulty of claiming such small monetary damages for sales tax differences, and whether or not potential Class Members would care enough about the small potential awards to even participate in the settlement.

However, according to the Wal-Mart sales tax class action settlement documents: “As the court noted in conference, a settlement that accomplished only injunctive relief — fixing the problem — would be a meaningful one in the face of those hurdles. The class members got both: The settlement provides complete injunctive relief and $5 million in compensatory relief.”

The plaintiffs originally filed this Wal-Mart sales tax class action lawsuit in May of last year, alleging the national retailer violated the terms of the sales agreement by refunding Wal-Mart consumers less than the paid purchase price.

Several times over the course of this litigation, Wal-Mart attempted to have the sales tax class action lawsuit dismissed, including arguing that the sales tax refund claims fall under the jurisdiction of Ohio Tax Commissioner, and therefore should be dismissed. However, U.S. District Judge James Gwin disagreed with the retailer’s argument, and the Wal-Mart class action lawsuit survived.

The size of the proposed Wal-Mart sales tax Class is potentially nationwide, as it will include anyone who was refunded less than the original purchase price of a returned Wal-Mart or Sam’s Club item within a four year period prior to the filing of this sales tax class action lawsuit. As soon as the Wal-Mart settlement is approved, a 75-day notice period will be established, at which point Class Members will have 60 days after this period ends in order to claim their Wal-Mart sales tax reimbursement.

The plaintiffs are represented by William B. Eadie, Nicholas A. DiCello, Daniel Frech, Dennis R. Lansdowne and Stuart E. Scott of Spangenberg Shibley & Liber LLP; and Daniel J. Myers of Myers Law LLC.

The Wal-Mart Sales Tax Class Action Lawsuit is Shaun Brandewie, et al. v. Wal-Mart Stores Inc., et al., Case No. 1:14-cv-00965, in the U.S. District Court for the Northern District of Ohio.

UPDATE: Instructions on how to file a claim for the Wal-Mart sales tax settlement are now available! Click here or visit www.WalmartSalesTaxSettlement.com for details.

UPDATE 2: On April 12, 2018, Top Class Actions readers reported that they have received $15 electronic Walmart gift cards from a class action settlement over allegations that the retailer failed to provide consumers a full refund that included sales tax when they returned merchandise.