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Supreme Court Flushes Bottled Water Tax Suit Claiming Walgreens Defrauded LaCroix Lovers

Folks who were wrongfully hit with Chicago’s bottled water tax — which does not apply to sparkling water and seltzer — can not sue Walgreens for fraud, the court ruled.

A DNAinfo investigation found Walgreens erroneously taxed sparkling water.
DNAinfo Chicago

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CHICAGO — Lovers of fizzy water who got their LaCroix fix at Walgreens only to be incorrectly hit with the Chicago’s bottled water tax — which does not apply to sparkling water and seltzer — can not sue the drug store for fraud, the Illinois Supreme Court ruled.

The Illinois Supreme Court ruled 6-1 to reject a class action suit brought by Destin McIntosh, who filed suit after he bought sparkling water from a Chicago Walgreens store only to find he had paid Chicago’s five-cent per bottle tax, which should have applied only to plain, bottled water.

The taxing error was first reported by DNAinfo Chicago, which is now Block Club Chicago.

Walgreens corrected the error after the news reports.

The decision authored by Supreme Court Justice P. Scott Neville found Walgreens acted in good faith because officials believed the tax was required, did not attempt to hide the charge from customers and paid the tax to the city.

Chief Justice Lloyd A. Karmeier, and justices Rita B. Garman, Robert R. Thomas, Anne Burke and Mary Jane Theis concurred.

Read the full decision here.

However, dissenting Justice Thomas L. Kilbride said the ruling could establish a precedent that could thwart future consumer fraud claims by relying on the so-called “voluntary payment doctrine.”

That doctrine prevents litigants from recovering payments that were not coerced and if the charge was disclosed.

The suit was originally dismissed by a Cook County judge, but revived by an appeals court. Attorneys for Walgreens appealed that decision to revive the lawsuit.