Embattled leggins retailer, LuLaRoe, will again be made to answer a law suit originally filed by a customer in September 2018 under Alaska’s Unfair Trade Practices and Consumer Protection Act, AS 45.50. The case was dismissed in March 2019 by Alaska’s federal district court and reinstated in June 2020 after successful appeal to the Ninth Circuit Court of Appeals. Representing the class, named plaintiff Katie Van alleges consumers in tax-free jurisdictions like Alaska were wrongly charged sales tax when remotely purchasing clothing from consultants located in taxable states. More specifically, the complaint asserts from April 2016 to June 2017, LuLaRoe wrongly charged sales tax on more than 72,000 transactions with customers in Alaska. Collecting sales tax for Alaska, which does not have a state-level sales tax, meant LuLaRoe had no taxing authority to which it would then remit the taxes collected from Alaskan consumers. Although LuLaRoe eventually refunded the erroneously collected tax to customers like Van, the Ninth Circuit reasoned class plaintiffs could claim injury for the temporary loss of use of amounts paid to LuLaRoe in sales taxes until returned. Certification of the class means wronged consumers do not need to pursue legal action against the clothing marketer individually. The case is Katie Van et al. v. LLR Inc. dba LuLaRoe et al., Case No. 3:18-cv-00197, in the U.S. District Court for the District of Alaska. For more information about the class action suit, interested Alaskans should contact Carlson Lynch, LLP, legal counsel on the case. LuLaRoe’s legal woes have been documented in a series on Amazon Prime and detailed in many news publications.
