Northern California Record

Tuesday, November 12, 2019

Appeals court agrees to dismiss Costco sales tax case involving Ensure


By Karen Kidd | Aug 18, 2018


SAN FRANCISCO — A California appeals court will not rehear a sales tax case against Costco involving the nutritional supplement Ensure.

California's First District Court of Appeal, Division Three, modified a lower court's opinion but supported a ruling to dismiss the case.

In its July 30 opinion, the appeals court dismissed plaintiff Larry Littlejohn's lawsuit against Costco Wholesale Corp., Costco Wholesale Membership, Abbott Laboratories and California's Board of Certification claiming that consumers were wrongly charged sales tax when they purchased the nutritional drink product Ensure. 

California First District Court of Appeal Justice Peter J. Siggins

Littlejohn claimed that Ensure should be categorized as food, exempt from sales tax, and not a nutritional supplement, which is not exempt from sales tax.

Littlejohn, anticipating his case would become a class action lawsuit, urged the court to order that the sales tax should first be refunded to Costco and then to consumers.

The appeals court denied the petition, filed July 30 to rehear the case, according to the court's single-page Aug. 3 order modifying the opinion. "There is no change in the judgment," the order said. The order was signed by Justice Peter J. Siggins.

In addition to denying the petition, the order added the word "not" to a paragraph in the background portion of the court's July 13 opinion, to re-render a portion of a sentence there to read "not subject to sales tax." 

Littlejohn earlier failed to convince the San Francisco Superior Court, from which he appealed, or the appeals court that he was entitled to a sale tax refund.

Justice Siggins wrote that opinion in which Administrative Presiding Justice William R. McGuiness concurred and Justice Stuart Robert Pollak dissented.

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Abbott LaboratoriesFirst District Court of Appeal California

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