Perras v. H&R Block, No. 14-2892 (8th Cir. 2015)
Annotate this CaseIn 2011, the IRS required tax preparers who were neither attorneys nor CPAs to pass a certification exam and obtain an identification number. H&R, a nation-wide tax service, passed anticipated costs to its customers by charging a “Compliance Fee.” H&R explained at its offices and on its website that the fee would cover only the costs to comply with the new laws. In 2011, the fee was $2; in 2012, the fee was $4. Perras sued on behalf of himself and a putative class. Perras alleged that the amount collected exceeded actual compliance costs. Perras sued under the Missouri Merchandising Practices Act. The district court compelled arbitration of the 2011 claims. Later, the court declined to certify the class, agreeing that the proposed class met the requirements under Federal Rule of Civil Procedure 23(a) of “numerosity, commonality, typicality, and fair and adequate representation,” but Rule 23(b)(3), requires that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” The Eighth Circuit affirmed, reasoning that the Supreme Court of Missouri would likely conclude that the MMPA does not cover the out-of-state transactions. The law applicable to each class member would be the consumer-protection statute of that member’s state; questions of law common to the class members do not predominate over individual questions.
Court Description: Kelly, Author, with Murphy and Colloton, Circuit Judges] Civil case - Class Actions. Plaintiff sought to certify a nation-wide class of tax service purchasers who paid a compliance fee which plaintiff claims was deceptive and a profit-generating scheme in violation of the Missouri Merchandising Practices Act; the district court did not err in declining to certify the class because questions of law common to the class members do not predominate over individual questions of law; the challenged conduct occurred in each class member's home state and the Missouri Merchandising Practices Act does not cover those out-of-state transactions.
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