Below is the first part of an article by Eric Heisig from cleveland.com. It reads…
CLEVELAND, Ohio – A federal judge in Cleveland has allowed a class-action suit to move forward in a case that calls Walmart’s return policies into question.
The federal lawsuit filed in May names Ohio residents Shaun Brandewie and John Newbrough as plaintiffs. It accuses the mega-retailer of not issuing full refunds for products purchased in one county and returned in another.
Brandewie bought products at Walmarts and Sam’s Club stores in Cuyahoga County but returned them in Summit County. Newbrough purchased items at the Walmart on Steelyard Drive in Cleveland and returned them in Portage County.
Both plaintiffs did not receive the full refunds because the sales tax was higher in Cuyahoga County, and the stores in Summit and Portage counties used the local sales tax rates to calculate the refund, according to the lawsuit. Brandewie lost $0.84 after returning three products, while Newbrough lost $0.99.
Through this practice, Brandewie and Newbrough allege that Walmart owes more than $5 million in claims to people who have similar experiences — a hurdle for a class-action lawsuit to be filed.
Walmart denied the claims and asked U.S. District Judge James Gwin to dismiss the suit, saying the matter should be decided by the Ohio Tax Commissioner.
On Friday, Gwin ruled that the commissioner should not hear the case, since the commissioner would only resolve claims where the taxes were sent to the state. In this case, the plaintiffs allege that Walmart kept the taxes and did not pay them to the state.
“At this stage, it is not clear whether Wal-Mart paid Ohio the sales tax that it did not refund to Plaintiffs when they returned the merchandise,” Gwin wrote. “If Ohio has the not-refunded tax, Wal-Mart likely has a winning argument that Plaintiff must make a claim to the Ohio Tax Commissioner. In contrast, if Wal-Mart did not remit to Ohio the sales tax that was not returned to the Plaintiff, then … [case law] allows a direct breach of contract action.”
Gwin noted in his opinion that “the amount lost was minimal for named plaintiffs.” He added that “across the large number of returns that Walmart processes each day, the cumulative amount may be large.”
Spangenberg Shibley & Liber LLP, a Cleveland-based firm known for class-action litigation, is representing the plaintiffs. Dennis Lansdowne, a partner at the firm who is working on the case, said in an email that he is pleased the case is continuing.
“We don’t understand why Walmart can’t do what other retailers do and give consumers what they are owed,” Lansdowne said.
Betsy Harden, a Walmart spokeswoman, said Monday that the company respectfully disagrees with Gwin’s decision on what it said was a “procedural issue.”
“Walmart has properly remitted the sales tax we have collected to the state of Ohio, and we look forward to providing further information to the court,” Harden said.