Florida's Third District Court of Appeal has issued a favorable ruling to a wholesale discount chain looking to circumvent a class action lawsuit.

An opinion entered by the appellate court Wednesday reversed and remanded a May 2017 order by Miami-Dade Circuit Judge John Thornton granting class certification to Laura Bugliaro, a Florida woman pursuing a deceptive and unfair trade practices claim against BJ's Wholesale Club Inc.

“We reverse and remand the order granting class certification because … the trial court lacked subject matter jurisdiction, as Bugliaro failed to exhaust her administrative remedies, and … the class is not ascertainable,” the order said. The panel's opinion consolidated appeals from the defendant as well as the Florida Department of Revenue.

Bugliaro filed her initial complaint against BJ's in March 2015. She alleged the members-only warehouse business had been “improperly receiving and retaining money from its Florida customers under the guise of collecting Florida sales tax on sales amounts that are not properly taxable.”

“Florida law requires dealer retailers like BJ's to collect sales tax on only the discounted price of an item after the application of a discount issued by the dealer, as opposed to collecting sales on the item's full, undiscounted price,” the complaint said. Bugliaro accused the company of collecting on the full sales tax of purportedly discounted items bought by BJ's customers in Florida. It also contended “the additional money that BJ's improperly takes from its customers … is not actually sales tax at all, and therefore does not have to be remitted to the state.”

Read the appellate court's order: 

An answer to the complaint filed by the defendant denied the charges and asserted BJ's does remit all sales tax to the state.

“BJ's admits only that plaintiff filed this action seeking refund of sales tax,” the filing said. “After reasonable investigation, BJ's lacks knowledge or information regarding other unidentified transactions by other customers and it is unclear how plaintiff is defining 'discounts provided by BJ's.'”

The appellate opinion issued Wednesday held the lower court lacked jurisdiction in part because the plaintiff and prospective class members were seeking damages in addition to injunctive relief.

“Because Count I includes a request for a refund, Bugliaro and any putative class members were required to exhaust their administrative remedies with the Department of Revenue,” the order said, noting the plaintiff had not taken the matter up with the agency before filing the complaint.

The order also ruled the outlined class was ill-defined in its present iteration.

“The tax issue in this case only affects the stores in Florida. However, BJ's has nationwide membership where potentially any member in the nation could travel to Florida and shop at any one of BJ's 31 Florida locations,” the opinion said. “Because BJ's members are not members of particular stores, the reference to 'members of BJ's Wholesale Club's 31 Florida stores' encompasses either every current and future BJ's member nationwide, or the definition does not include anyone, as membership is not limited by state.”

The appellate court added, “Based on the definition of the class, we find that the class is not ascertainable because it has not been defined in such a way that the members of that class can be properly notified of the class action and their right to opt out.”

The Florida Attorney General's Office, which represented the Department of Revenue, referred press inquiries to be directed to their client, but the agency did not respond by press time.

Steve Silverman, a founding member of the Kluger, Kaplan, Silverman, Katzen & Levine law firm and one of Bugliaro's attorneys, remained hopeful about his client's case.

“We believe the Third District's opinion provides a road map for us to be able to protect Florida consumers prospectively with an injunctive class to stop BJ's abusive and deceptive taxing practices for in store purchases made by BJ's customers,” he said.

The Foley & Lardner attorneys representing BJ's did not return requests for comment by press time.

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