Consumer Protection Statutes May Not Be Used To Fight Tax Overcharges By Retailers.

In a four to three decision, the California Supreme Court held that California’s consumer protection statutes may not be utilized when a retailer charges tax on take-out coffee, which is contrary to law. The majority opinion states: “We conclude that the tax code provides the exclusive means by which plaintiffs’ dispute over the taxability of a retail sale may be resolved and that their current lawsuit is inconsistent with tax code procedures.” The dissent states: “Whether Target may charge sales tax on a cup of coffee is probably not the most gripping issue before the California Supreme Court this term. But this is not really a tax case. This is a case about the reach of consumer protection statutes that prohibit unfair business practices, including misrepresentations by a retailer as to what its customers are actually paying for. Today’s decision weakens those statutes by blessing an arrangement that mutually benefits retailers and the state treasury at the expense of everyday consumers.” The dissent also states: “In her amicus brief, the Attorney General notes that she ‘receives thousands of complaints each year and is not in a position to investigate and prosecute all of them. Legitimate actions by private litigants are necessary to supplement law enforcement efforts and to vindicate consumers’ rights.’” (Loeffler v. Target Corporation (Cal. Sup. Ct.; May 1, 2014)58 Cal.4th 1081, [324 P.3d 50, 171 Cal.Rptr.3d 189].)