Class Action Lawsuit Filed Against Giant Eagle Grocery Store Over Sales Tax Charges

The Giant Eagle grocery store company is facing a new class action lawsuit that claims it unlawfully charges Pennsylvania sales tax on 5-Hour Energy drinks.

Giant Eagle customer Christopher Lisowski filed the class action lawsuit Oct. 5 after he was charged the sales tax on a 2-pack of the energy drink he bought at one of the company’s Pittsburgh locations. Lisowski says the drinks are not beverages, but dietary supplements and are therefore exempt from sales tax under the Pennsylvania tax code.

To prove his point, Lisowski said Giant Eagle stocks the 5-Hour Energy drink products in the stores’ “medicine, drug and medical supply section.”

The class action lawsuit was filed in the Court of Common Pleas of Allegheny County in Pittsburgh. The court documents say it is unclear whether the Giant Eagle grocery store chain intentionally collects the sales taxes on exempt items or unintentionally, but either way the stores have misappropriated the money.

While the plaintiff says he doesn’t yet know the scope and amount of overcharges Giant Eagle has collected, “its sophisticated Point of Sale and Advantage Card systems [have] the capability of identifying, among other things, the number of transactions where dietary supplements were sold, the amount converted through the improper collection of funds under the guise of sales tax charged” and in the case of all non-cash transactions, the identity of the customer, the class action lawsuit says.

Lisowski estimates the total to be in excess of $1 million.

In addition to the misappropriation claims, the class action lawsuit accuses the Giant Eagle grocery store chain of breach of trust, unfair business practices, and unjust enrichment, or reaping financial benefits at the cost of its customers. Under state law, retailers can receive a 1% credit on sales taxes collected, the class action says.

The Pennsylvania Department of Revenue provides retailers throughout the state with a guide to sales taxing, which Lisowski’s lawyers cite in the class action lawsuit. It says “dietary supplements and substitutes, in any form” are exempt from sales tax. The 5-Hour Energy drinks are labeled, on the front of each bottle, as dietary supplements.

To further support his claim, Lisowski includes in his class action a reference to a case of a woman who was also charged sales tax when she bought 5-Hour Energy drinks. In her case, the purchase was made at a Sunoco gas station and convenience store in Pittsburgh and she appealed the tax payments to the state Department of Revenue.

Copies of the department’s records, which were filed along with Lisowski’s lawsuit, show the customer got a refund from the state after her appeal was investigated.

Lisowski is asking the court to certify his case as a class action lawsuit. While it has not yet been determined how many potential Class Members could end up participating, Lisowski estimates there could be tens of thousands.

The Giant Eagle grocery store company includes Giant Eagle supermarkets and GetGo convenience stores, among other subsidiaries. Combined, the company has 474 stores in Pennsylvania, Ohio, West Virginia, Indiana and Maryland.

Have you purchased 5-Hour Energy drinks at a Giant Eagle store and been charged sales tax? Have you been charged sales tax on any other dietary supplements you bought from a Giant Eagle or GetGo? Tell us about it in the comment section below.

Lisowski and the proposed Class Members are represented by Frank G. Salpietro and Emily E. Town of Rothman Gordon, P.C., and Steffan T. Keeton of The Keeton Law Firm, LLC.

The Giant Eagle Grocery Store Class Action Lawsuit is Christopher Lisowski, et al. v. Giant Eagle, et al., Case No. GD-20-010525, in the Court of Common Pleas of Allegheny County, Pennsylvania.

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