RSS | Print | PDF | Email Page

Jones Day Publications

No Slam Dunk: Filings of New York Sales Tax Class Actions Continue Despite Dunkin' Decision

September 2017


In May 2017, the Second Circuit rejected an attempted class action lawsuit that sought to hold a retailer liable for allegedly overcharging sales tax. In Estler v. Dunkin' Brands, Inc., the court upheld summary judgment in favor of the retailer, finding that, under New York law, if the retailer is merely performing the "ministerial act" of collecting sales tax on the taxing authority's behalf, its customers' exclusive remedy is to seek a refund from the taxing authority.

While the Dunkin' Brands decision should have put the issue to rest, recently, new class actions have been filed in which it appears that certain aggressive plaintiffs' counsel are maneuvering to avoid the Dunkin' Brands holding by alleging factual issues.

These are courses of action retailers may want to consider:
  • Undertake a review of their sales tax practices to ensure compliance with law.
  • If sued, seek to limit discovery to those facts that will lay the groundwork for summary judgment based on Dunkin' Brands.
  • Review exposures in other states.
  • Conduct an internal review, protected by the attorney-client privilege, and consider steps to remedy any noncompliance, including through voluntary disclosure agreements.

Lawyer Contacts 

For further information, please contact your principal Firm representative or the lawyers listed below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com/contactus/.  

Kathy Keneally
New York
+1.212.326.3402
kkeneally jonesday.com

Dennis Rimkunas
New York
1.212.326.3412
drimkunas jonesday.com

Todd S. Wilkinson
New York
1.212.326.7888
tswilkinson jonesday.com

Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our "Contact Us" form, which can be found on our website at www.jonesday.com. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.

Author(s)

Areas of Concentration

Region/Jurisdiction


United States

Files