BJ'S WHOLESALE CLUB, INC., ETC., ET AL.,

v.

LAURA BUGLIARO, ETC., ET AL.,

Third District Court of Appeal State of Florida

Opinion filed April¹⁴, 2021. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D20-686 Lower Tribunal No. 15-6256 ________________

BJ's Wholesale Club, Inc., and State of Florida Department of Revenue, Appellants,

vs.

Laura Bugliaro, et al., Appellees.

An Appeal from a non-final order from the Circuit Court for Miami-Dade County, William Thomas, Judge.

Foley & Lardner LLP, and James A. McKee (Tallahassee), Kevin A. Reck and Christina M. Kennedy (Orlando), for appellant BJ’s Wholesale Club, Inc.; Ashley Moody, Attorney General, and J. Clifton Cox, Special Counsel (Tallahassee), for appellant State of Florida Department of Revenue.

Kluger, Kaplan, Silverman, Katzen and Levine, P.L., and Alan J. Kluger, Steve I. Silverman, and Erin E. Bohannon; VM Diaz & Partners, LLC, and Victor M. Diaz, Jr., for appellees.

LOGUE, J.

BJ’s Wholesale Club, Inc. appeals a non-final order granting Laura Bugliaro’s motion to certify a (b)(2) class seeking injunctive relief under Rule 1.220 of the Florida Rules of Civil Procedure. In this case, Bugliaro is challenging the method to determine the taxable sales price of products sold to consumers with discounts funded in part by the merchant and in part by the manufacturer. Bugliaro has brought her challenge as a claim against the merchant to enjoin an unfair trade practice under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), §§ 501.201–.213, Fla. Stat. Both BJ’s and the State of Florida Department of Revenue as an intervenor argue that such a challenge must be brought instead against the State under the various administrative and legal avenues established by the Legislature for taxpayers to challenge the collection of sales taxes. A class should be certified under (b)(2) for an injunction only where an injunction is an available remedy. We conclude, in these circumstances, the taxpayer does not have a cause of action against the merchant for an injunction against an unfair trade practice. Where a merchant has collected and remitted sales taxes to the State in apparent good faith reliance on the

FACTS AND PROCEDURAL BACKGROUND

BJ’s is a membership-only retail club chain that sells consumer goods. Laura Bugliaro is a Florida resident and a member of BJ’s. As part of its membership perks, BJ’s offers promotional discounts in the form of “clipless coupons.” The dispute at issue arose during a 2014 Black Friday sales event when Bugliaro purchased two televisions at separate BJ’s club stores using coupons provided by BJ’s. At the time of purchase, Bugliaro noticed that BJ’s assessed Florida sales tax on the original undiscounted price of each television and not on the discounted price. Bugliaro decided to check how much the televisions would cost on BJ’s’ online store. There she discovered that BJ’s assessed a different sales tax amount on the same television she had purchased at the club store. In its online store, BJ’s applied the sales tax to the discounted price of the television and not the full retail price Bugliaro had been charged at the club store.

The trial court concluded that Bugliaro “demonstrated by competent, substantial evidence that this action meets all the requirements for class certification under Rule 1.220.” The court appointed Bugliaro as class representative and Bugliaro’s attorneys as co-lead class counsel. The trial court’s order did not set forth an express definition of the class being certified, but Bugliaro contends a definition can easily be inferred.¹ BJ’s

7 appealed the certification order and the Department of Revenue joined in the appeal.

DISCUSSION (a) Class certification under (b)(2). We have jurisdiction to review the trial court’s non-final order certifying a class. See Fla. R. App. P. 9.130(a)(3)(C)(vi). “[A]n appellate court reviews a trial court’s grant of class certification for an abuse of discretion.” Sosa v. Safeway Premium Fin. Co., 73 So. 3d 91, 102 (Fla. 2011). Of course, that discretion is to be applied within the structure of rule 1.220. Id. at 103. The prerequisites to class certification are well known: numerosity; commonality; typicality; and adequate representation. Fla. R. Civ. P. 1.220(a). In addition to meeting these threshold requirements, the class must fall within one of the three different types of class actions established in rule 1.220(b). Sosa, 73 So. 3d at 106; Porsche Cars N. Am., Inc. v. Diamond, 140 So. 3d 1090, 1095 (Fla. 3d DCA 2014). Here, the trial court certified a class for injunctive relief under (b)(2). Class certification for an injunction under (b)(2) is appropriate where “the party opposing the class has acted or refused to act on grounds generally applicable to all the members of the class, thereby making final injunctive

8 relief or declaratory relief concerning the class as a whole appropriate.” Fla. R. Civ. P. 1.220(b)(2). We recognize that, at the class certification stage, the inquiry does not focus on whether the class representatives will prevail at trial. Sosa, 73 So. 3d at 105. “Instead, the focus is on whether a litigant’s claim is suited for class certification and whether the proposed class provides a superior method for the fair and efficient adjudication of the controversy.” Diamond, 140 So. 3d at 1095 (quotations and citation omitted). Nevertheless, “if consequential to its consideration of whether to certify a class, a trial court may consider evidence on the merits of the case as it applies to the class certification requirements.” Sosa, 73 So. 3d at 105. In this regard, where injunctive relief is unavailable, certification of a class under (b)(2) for an injunction is improper. For example, in Alderwoods Group, Inc. v. Garcia, 119 So. 3d 497, 504 (Fla. 3d DCA 2013), this Court reversed a non-final order certifying a (b)(2) class for an injunction when res judicata barred the claim for injunctive relief. Our holding is in line with other authorities on this issue. See Christ v. Beneficial Corp., 547 F. 3d 1292, 1298 (11th Cir. 2008) (“Because injunctive relief is not a remedy available under [the Truth in Lending Act] to Christ and the plaintiff class, Rule 23(b)(2) certification under TILA was improper.”); Bolin v. Sears, Roebuck & Co., 231

9 F. 3d 970, 977 n.39 (5th Cir. 2000) (“Of course, the unavailability of injunctive relief under a statute would automatically make (b)(2) certification an abuse of discretion.”). Thus, the issue becomes whether Bugliaro has a cause of action under FDUTPA against BJ’s for an injunction over her claim regarding the method to determine the taxable sales price in these situations involving mixed merchant-manufacturer discounts. (b) Calculation of sales taxes involving discounts based on “splitfunded” coupons. Bugliaro’s complaint goes to the heart of an obscure but important point of Florida sales tax law. Florida’s revenue laws provide different sales tax treatments depending on the source of funding for discounts taken at the time of sale. For example, a discount based on a coupon issued directly by a merchant or dealer, such as BJ’s, reduces the sales price and no sales tax is assessed to the face value of the coupon.² In contrast, a manufacturer’s coupon, or a refund issued directly by the manufacturer of a product, is not considered a reduction in the selling price and sales tax is charged on the

10 full retail price of the product. When there exists a problem in determining the extent the manufacturer will be providing a reimbursement for the discount, the sales tax is assessed on the undiscounted price. These points of tax law are specifically addressed in the tax statutes³ and discussed in the regulations.⁴ Indeed, the Department filed in the lower court a non-binding technical assistance advisement which it contends approves the method of calculating the taxable sales price BJ’s used here.⁵ We note these matters not to

11 approve the method BJ’s used or the Department’s interpretation of the statutes and regulations, but only to underline that the nature of the dispute here concerns the collection and remittance of sales taxes to the State. (c) Remedies for the improper collection of sales taxes. The Legislature has established numerous ways in which a taxpayer can obtain relief from improperly or illegally assessed sales taxes, including an extensive set of protections under the Taxpayer’s Bill of Rights. § 213.015, Fla. Stat.⁶ Most importantly, taxpayers can prosecute informal, formal, and legal challenges to taxes and claims for refunds, § 72.011, Fla. Stat. Taxpayers can challenge Department of Revenue regulations and petition to begin rule making, §§ 120.54(7), 120.56, Fla. Stat. They may seek damages that result from the wrongful or negligent act or omission of a department officer or employee, § 213.015(13), Fla. Stat. In establishing

12 these remedies, the Legislature also established limitations and conditions. See, e.g., Bugliaro I, 273 So. 3d at 1121. (d) FDUTPA. In her complaint, Bugliaro seeks injunctive relief under FDUTPA. Bugliaro contends that BJ’s “uniformly imposes and collects from all class members a charge on the full, undiscounted price of taxable products purchased with a discount funded in whole or in part by BJ’s.” She further asserts that BJ’s’ practice “constitutes an unfair or deceptive act or practice in trade or commerce” in violation of FDUTPA. One of the stated purposes of FDUTPA is to “protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts in the conduct of any trade or commerce.” § 501.202(2), Fla. Stat. To that end, FDUTPA makes unlawful “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Id. § 501.204(1). The terms “trade or commerce” are broadly defined in the statute⁷ and the courts have adopted broad

13 definitions of the term “unfair trade practice.”⁸ FDUTPA’s provisions are to be “construed liberally to promote” its underlying policies. Id. One of the remedies available under FDUTPA is an injunction.⁹ It is far from clear that the assessment, collection, and remittance of sales tax is an act or practice engaging in “trade or commerce” as that term is used under FDUTPA.¹⁰ Without reaching the issue of whether a commerce” shall include the conduct of any trade or commerce, however denominated, including any nonprofit or not-for-profit person or activity. § 501.203(8), Fla. Stat.

14 merchant’s method of collecting sales taxes could ever constitute an unfair trade practice, we conclude that Bugliaro’s claim is not the type of dispute intended to be addressed under FDUTPA. FDUTPA expressly does not apply to an “act or practice required or specifically permitted by federal or state law.” § 501.212(1), Fla. Stat. A merchant, such as BJ’s, is statutorily required to charge, collect, and remit sales taxes to the Department of Revenue.¹¹ Sales tax proceeds collected by merchants and remitted to the Department of Revenue “are state funds from the moment of collection.” § 213.756(1), Fla. Stat. A merchant is prohibited from absorbing all or any part of the sales tax to be charged and collected at the time of sale, including any portion that “will be refunded either

15 directly or indirectly by any method whatsoever.” § 212.07(4), Fla. Stat.¹² Bugliaro does not allege any facts that might serve to remove BJ’s’ actions in collecting and remitting the sales taxes at issue from BJ’s’ statutory responsibilities in this regard. Indeed, in the lower court, Bugliaro conceded that BJ’s has no ultimate stake in the outcome of this dispute because it is merely serving as a conduit to collect and remit the taxes at issue. The Legislature’s creation of extensive remedies for improper sales tax collections, with limits on those remedies, indicates the Legislature did not intend normal and routine tax disputes to be resolved in lawsuits under FDUTPA against the merchant. The structure of the law was clearly intended to ensure a consistent, statewide application of the tax laws to all taxpayers across the State. It was also expressly intended to avoid the problem of merchants being caught in the middle of inconsistent demands from

16 consumers and the Department.¹³ The Legislature’s intent that the tax laws be interpreted in a manner that maintains equal and consistent tax treatment statewide is reflected in the laws providing on one hand that the merchant who fails to collect and remit taxes is subject to penalties, fees, and even criminal liability;¹⁴ and, on the other, that the purchaser or consumer remains liable for the sales tax if the merchant fails to charge and collect the proper amount.¹⁵ In this regime of law, it was clearly the intent of the Legislature that routine challenges to the collection and remittance of sales taxes be brought against the State. Accordingly, because the remedy of an injunction under FDUTPA against the merchant is not available to a taxpayer like Bugliaro in a tax dispute under these circumstances, it was reversible error to certify a (b)(2) class for the purposes of obtaining this unavailable remedy.

17

Reversed.