In respective motions to dismiss filed Thursday, Zazzle and Outdoor Research argued that plaintiff Vince Ranalli failed to follow the proper administrative process under the Pennsylvania Tax Code and said the state Department of Revenue is in a better position than the court to clarify the state's position on taxing face coverings.
"To the extent Ranalli alleges Outdoor Research improperly charged sales tax for his purchase of the face mask, the proper remedy is for Ranalli to seek a refund from the Department of Revenue, the administrative agency charged with collecting and refunding sales tax, which has primary jurisdiction over such claim," Outdoor Research said in a brief supporting its motion.
But if the court allows the case to move forward, it should still be dismissed for a number of reasons, Zazzle and OR argued.
Both companies asserted in their briefs that Ranalli's claims are barred by the voluntary payment doctrine, which they said the Pennsylvania Supreme Court has said follows common law doctrine that holds "one who voluntarily pays money with full knowledge of the facts, without any fraud having been practiced upon him, cannot recover it back."
Ranalli's allegations show that the companies disclosed all relevant facts, so he had "knowledge of all the facts" and therefore the doctrine applies, they argued.
The companies also argued that Ranalli has failed to state a claim for his claims of conversion, unjust enrichment and violations of Pennsylvania's Unfair Trade Practices and Consumer Protection Law and the Pennsylvania Fair Credit Extension Uniformity Act.
Additionally, they said his claim for injunctive relief is moot because they do not assess sales tax on face coverings anymore.
The companies also sought to at least limit Ranalli's claims to transactions made after Oct. 30, which they said is when the Department of Revenue issued a communication that he claims reclassified masks and face coverings as nontaxable "everyday wear/clothing" and it did not have a retroactive effect.
Zazzle also argued a stay is warranted on the claims against it because Ranalli agreed to submit any claims to individual arbitration and forego class action claims by accepting the terms of its user agreement.
Ranalli's suit was removed from the Allegheny County Court of Common Pleas to federal court in Pittsburgh on Jan. 20. In his complaint, he alleges that he was charged sales tax in violation of state law on masks he purchased from several outlets, including Amazon, Etsy, Zazzle, Outdoor Research and Brave New Look.
In addition to citing the Department of Revenue's Oct. 30 statement, Ranalli also contends that protective masks and face coverings are nontaxable "medical supplies" and argued that they are exempt under a state of emergency declaration Gov. Tom Wolf issued because of the COVID-19 pandemic beginning on March 6, 2020, according to his complaint.
He seeks compensatory and punitive damages under Pennsylvania's Unfair Trade Practices and Consumer Protection Law and the Pennsylvania Fair Credit Extension Uniformity Act.
The court dismissed Amazon from the case on March 5 after it reached a settlement with Ranalli, according to case records. The retail giant had moved to compel the suit to arbitration and stay or dismiss the complaint.
Counsel for Ranalli, Zazzle and OR did not respond to requests for comment Friday.
Ranalli is represented by Joshua P. Ward and Kyle Steenland of The Law Firm of Fenters Ward.
Zazzle and OR are both represented by Gregory P. Graham, Michael D. Winsko and Danielle M. Vugrinovich of Marshall Dennehey Warner Coleman & Goggin.
The case is Vince Ranalli v. Amazon.com LLC et al., case number 2:21-cv-00088, in the U.S. District Court for the Western District of Pennsylvania.
--Additional reporting by James Boyle. Editing by Ellen Johnson.
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