IN THE SUPREME COURT OF 

CALIFORNIA

MICHAEL MCCLAIN et al.,

Plaintiffs and Appellants,

v.

SAV-ON DRUGS et al.,

Defendants and Respondents.

AND CONSOLIDATED CASE.

S241471

Second Appellate District, Division Eight

B265011 and B265029

Los Angeles County Superior Court

BC325272 and BC327216

March 4, 2019

Justice Liu authored the opinion of the court, in which Chief 

Justice Cantil-Sakauye and Justices Chin, Corrigan, Cuéllar 

Kruger, and O’Leary*concurred.

Justice Kruger filed a concurring opinion in which Justices 

Chin, Corrigan, and O’Leary concurred.

__________________________________________________________

 

* Presiding Justice of the Court of Appeal, Fourth Appellate 

District, Division Three assigned by the Chief Justice pursuant 

to article VI, section 6 of the California Constitution.
MCCLAIN v. SAV-ON DRUGS

S241471

Opinion of the Court by Liu, J.

California retailers are generally required to pay the state 

a sales tax on the retail sale of any “tangible personal property.” 

(Rev. & Tax. Code, § 6051.) Retailers submit payment to the 

California Department of Tax and Fee Administration (CDTFA

or Department) as a percentage of their gross receipts under a 

rebuttable presumption that all gross receipts are subject to the 

sales tax. (Id., §§ 6051, 6091.) Retailers may charge customers 

a “sales tax reimbursement to the sales price” for sales subject 

to the tax, or they may absorb the tax and opt to build it into the 

price charged to consumers. (Civ. Code, § 1656.1; see Loeffler v. 

Target Corp. (2014) 58 Cal.4th 1081, 1103, 1117 (Loeffler).)

If a retailer believes it has paid sales tax in excess of the 

amount legally due, it can file an administrative claim with the 

Department for a refund of any amount not required to be paid. 

(Rev. & Tax. Code, § 6901.) If it “has been ascertained” that a 

customer has paid a retailer more sales tax reimbursement than 

the amount of sales tax the retailer owes, the retailer upon 

notice by the Department or the customer “shall . . . return[]” 

the excess sales tax reimbursement to the customer; if the 

retailer “fail[s] or refuse[s] to do so,” the retailer “shall . . . 

remit[]” the funds to the state. (Id., § 6901.5.) A customer who 

has paid excess sales tax reimbursement has no statutory 

remedy to obtain a refund from the Department directly. (See

Javor v. State Bd. of Equalization (1974) 12 Cal.3d 790, 800 

(Javor).) (The Legislature created the CDTFA in 2017 and 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

2

transferred to it most of the tax-related duties and powers 

previously vested in the Board of Equalization (Board). (Assem. 

Bill. No. 102 (2017–2018 Reg. Sess.) § 1.) In this opinion, the 

terms “Department” and “Board” refer to the same 

administrative entity.)

The question here is whether customers who have paid 

sales tax reimbursement on purchases they believe to be exempt 

from sales tax may file suit to compel the retailers to seek a tax 

refund from the Department when there has been no 

determination by the Department or a court that the purchases

are exempt. In Javor, we authorized a customer suit where the 

Board, upon determining that certain retailers had collected 

excess sales tax reimbursement, had promulgated rules to 

provide refunds to overpaying customers. The trial court 

declined to extend Javor to authorize a similar judicial remedy 

in this case, and the Court of Appeal affirmed. (McClain v. SavOn Drugs (2017) 9 Cal.App.5th 684, 700–702 (McClain).) We

agree with the courts below in refusing to extend Javor and 

affirm the judgment sustaining defendants’ demurrer.

I.

Section 6369, subdivision (e) of the Revenue and Taxation 

Code exempts “[i]nsulin and insulin syringes” from sales tax if 

“furnished by a registered pharmacist to a person for treatment 

of diabetes as directed by a physician.” (All undesignated 

statutory references are to the Revenue and Taxation Code.) In 

2000, the Board issued a regulation interpreting the exemption 

in section 6369, subdivision (e) to cover “[g]lucose test strips and 

skin puncture lancets furnished by a registered pharmacist” for 

use by a diabetic patient “in accordance with a physician’s 

instructions.” (Cal. Code Regs., tit. 18, § 1591.1, subd. (b)(5)
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

3

(hereafter regulation 1591.1(b)(5)); see § 7051 [“The board . . . 

may prescribe, adopt, and enforce rules and regulations relating 

to the administration and enforcement” of the sales tax].) The 

Board’s Final Statement of Reasons explained that the test 

strips and lancets are “so integrated with the operation of 

insulin and insulin syringes (the syringes cannot be used until 

the patient has first tested his blood sugar using the lancets and 

test strips) that the Legislature intended that their sales be 

exempt from tax as part and parcel of the exemption for sales of 

insulin syringes under section 6369(e).” (State Bd. of 

Equalization, Final Statement of Reasons/Plain English: 

Regulations 1591, 1591.1, 1591.2, 1591.3 & 1591.4 (Dec. 28, 

1999) p. 4.)

In 2003, in response to “inconsistencies” in how regulation 

1591.1(b)(5) was being applied, the Board’s Program Planning 

Manager sent a letter to California retail pharmacies setting 

forth the conditions for when the sale of a test strip or lancet is 

exempt from tax. (State Bd. of Equalization Program Planning 

Manager Charlotte Paliani, letter to Albertson’s re regulation 

1591.1, June 18, 2003 (hereafter Paliani Letter).) The letter 

explained that the retailer must be provided with a copy of the 

patient’s physician instructions, that the retailer must maintain 

a copy of the instructions in its records, and that the lancet or 

test strip must be kept in a secure location and dispensed by a 

registered pharmacist. Only then, according to the letter, is the 

sale exempt from tax. (Paliani Letter, supra [“However, if your 

customers are able to remove the items directly off the shelf and 

pay for them at your store’s registers, without a pharmacist’s 

intervention, the sales are subject to tax.”].)

Plaintiffs Michael McClain, Avi Feigenblatt, and Gregory 

Fisher bought glucose test strips and skin puncture lancets from 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

4

retail pharmacies owned or operated by defendants Sav-On 

Drugs, Gavin Herbert Company, Longs Drug Stores 

Corporation, Longs Drug Stores California, Inc., Rite Aid 

Corporation, Walgreen Co., Target Corporation, Albertson’s 

Inc., The Vons Companies, Inc., Vons Food Services, Inc., and 

Wal-Mart Stores, Inc. (collectively, pharmacy defendants). 

These defendants charged plaintiffs sales tax reimbursement on 

those sales and remitted the amounts they collected to the 

Department. Plaintiffs contended that their purchases of test 

strips and lancets were exempt from sales tax, and they filed a 

class complaint against the pharmacy defendants and the 

Department for a refund of the sales tax reimbursement they 

paid. In particular, plaintiffs maintained that all pharmacy 

sales of test strips and lancets were exempt and that the 

conditions for application of the exemption set forth in the 

Paliani Letter were void. In addition to claims alleging breach 

of contract, negligence, and violations of consumer protection 

statutes, the operative complaint sought declaratory and 

injunctive relief compelling the pharmacy defendants to file a 

tax refund claim with the Department and ordering the 

Department to award refunds to be passed on to consumers. The 

pharmacy defendants and the Department demurred.

The trial court sustained the demurrer without leave to 

amend. Rejecting plaintiffs’ reliance on Javor, the trial court 

said: “What was so unique about the Javor circumstance is, ‘The 

Board has admitted it must pay these refunds to retailers.’ 

That’s something the Board has certainly not admitted in this 

case.” The court explained that “[t]his case is more like Loeffler

than Javor” because whether the sales at issue met or had to 

meet the conditions for tax exemption was “very hotly in 

dispute.” The Court of Appeal affirmed, although it noted that 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

5

the result “is not an entirely satisfying one. . . . [O]ur 

Constitution chiefly assigns the task of creating tax refund 

remedies to our Legislature, and our Legislature has yet to 

address the situation that arises when the legal taxpayer has no 

incentive to seek a direct refund and the economic taxpayer has 

no right to do so. It is a topic worthy of legislative 

consideration.” (McClain, supra, 9 Cal.App.5th at p. 706.)

We granted plaintiffs’ petition for review on the dismissal 

of their claims for breach of contract and relief under Javor.

II.

Article XIII, section 32 of the California Constitution 

states that a taxpayer may bring an action to challenge a tax 

only “[a]fter payment” and “in such manner as may be provided 

by the Legislature.” The Legislature has enacted a 

comprehensive scheme “to resolve . . . tax questions and to 

govern disputes between the taxpayer and the [Department].” 

(Loeffler, supra, 58 Cal.4th at p. 1103.) A taxpayer may 

challenge the imposition of sales tax by paying the tax and then 

filing with the Department an administrative claim for a refund. 

(§ 6901.) In the context of the sales tax, “[t]he retailer is the 

taxpayer, not the consumer.” (Loeffler, at p. 1104, fn. omitted; 

see City of Pomona v. State Bd. of Equalization (1959) 53 Cal.2d 

305, 309 [sales tax is a tax on the “ ‘privilege of conducting a 

retail business,’ ” not a tax on the goods sold].)

As noted, the Legislature has provided no mechanism for 

consumers to obtain directly from the Department a refund of 

excess sales taxes that retailers have paid and for which 

retailers have charged sales tax reimbursement to consumers. 

In Javor, supra, 12 Cal.3d 790, we addressed whether customers

may bring suit to compel retailers to seek a refund of sales taxes 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

6

paid in excess of the amount owed. In that case, the repeal of a 

federal excise tax on motor vehicles entitled retail car dealers to 

a partial refund of sales tax on cars sold because the excise tax 

had been included in the price of the cars on which sales tax had 

been assessed. (Id. at pp. 794, 801–802.) The Board agreed that 

a refund was due and promulgated rules to effectuate the 

refunds. (Id. at p. 794.) But retail car dealers had “no particular 

incentive to request the refund” since they would have been 

required to pass on any refunds to customers. (Id. at p. 801.) 

We held that a customer suit against the retailer was an 

appropriate remedy, and we allowed customers to join the Board 

as a party to such suits. (Id. at p. 802.) In so holding, we 

observed that the Legislature had “provide[d] no procedure by 

which [the customers] can claim the refund themselves” (id. at 

p. 797) and that allowing such a lawsuit was “consonant with 

existing statutory procedures” (id. at p. 800). We further noted 

that this judicially crafted remedy was “based on broad 

principles of restitution” that took into account relevant 

equitable factors. (Id. at 797.) The remedy, we said, “is clearly 

mandated by the Board’s duty to protect the integrity of the 

sales tax by ensuring that the customers receive their refunds. 

The integrity of the sales tax requires not only that the retailers 

not be unjustly enriched . . . , but also that the state not be

similarly unjustly enriched.” (Id. at p. 802, citation omitted.)

Javor authorized a judicial remedy in light of a prior 

determination by the Board that a refund was appropriate. As 

the Court of Appeal in this case correctly understood, the fact 

that the Board had already determined that consumers were

entitled to a refund was a key premise of our reasoning in Javor. 

(McClain, supra, 9 Cal.App.5th at p. 700; see Javor, supra, 12 

Cal.3d at p. 794.) The remedy we authorized in Javor was 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

7

designed to facilitate a refund to consumers of excessive sales 

tax reimbursement that all parties acknowledged was 

“erroneously collected” (Javor, at p. 795); it was not designed to 

facilitate resolution of whether sales tax reimbursement charged 

on a particular item was erroneously paid. Although additional 

factors may be relevant in determining the availability of a 

Javor remedy, we hold that in order to be eligible for a Javor

remedy, plaintiffs must show, as a threshold requirement, that 

a prior legal determination has established their entitlement to 

a refund.

This requirement means that a judicially created remedy 

is available only when the issue of taxability has already been 

resolved. In Javor, “[t]he Board ha[d] admitted that it must pay 

these refunds to retailers.” (Javor, supra, 12 Cal.3d at p. 802.) 

The customers were “unequivocally entitled” to the refunds; 

without a remedy, the state would have been unjustly enriched. 

(McClain, supra, 9 Cal.App.5th at p. 698.) “[I]t was the certainty

of this unjust enrichment that offended the Board’s ‘vital 

interest in the integrity of the sales tax’ and warranted judicial 

intervention.” (Ibid.) Further, our characterization of this 

prerequisite as a threshold requirement underscores that even 

when it has been satisfied, additional legal and equitable 

hurdles still may lie between a consumer and a Javor remedy. It 

bears repeating that a Javor remedy is available “in limited 

circumstances” (Loeffler, supra, 58 Cal.4th at p. 1122) — in 

other words, only rarely. (Cf. Javor, at p. 802 [noting “the 

unique circumstances” before the court that justified crafting a 

judicial remedy].) This said, eligibility to pursue a judicially 

created remedy as a matter of law does not depend on a finding 

at the outset that the particular person seeking the remedy is 

entitled to a refund. Whether any particular individual is 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

8

entitled to a refund will require an evidentiary determination 

specific to that individual. (Cf. Javor, supra, 12 Cal.3d at p. 802 

[recognizing the possibility that some retailers may have 

“already claimed and received a refund from the Board”]; id. at 

p. 794 [sales tax “will be refunded to the retailer, provided he 

also repays to the consumer the amount collected from him as 

sales tax reimbursement”].)

Plaintiffs do not dispute that no prior legal determination 

has been made as to whether sales tax was owed on the goods at 

issue here. Instead, they contend that Javor should not be read 

to require such a prior determination because Javor authorized

a remedy where it was not certain but only “very likely” that the 

Board would “become enriched at the expense of the customer.” 

(Javor, supra, 12 Cal.3d at p. 802.) But Javor’s use of the term 

“very likely” in no way suggested that the underlying issue of 

taxability was an open question. We repeatedly observed that 

the Board had already determined that a refund was due. 

(Javor, at pp. 794, 802.) “All that plaintiffs [sought in Javor

was] to compel defendant retailers to make refund applications 

to the Board and in turn to require the Board to respond to these 

applications by paying into court all sums, if any, due defendant 

retailers.” (Id. at p. 802.) The plaintiffs in Javor sought no

ruling by the Board or the court on any taxability question. The 

terms “very likely” and “if any” simply signaled the possibility 

that some retailers “had already claimed and received a refund 

from the Board,” a factual issue that had not yet been 

determined in the suit. (Ibid.)

Plaintiffs further contend that foreclosing a Javor remedy 

where the taxability issue has not already been resolved is at 

odds with the Department’s “duty to protect the integrity of the 

sales tax.” (Javor, supra, 12 Cal.3d at p. 802.) Without any 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

9

means of obtaining a determination on the taxability question, 

plaintiffs argue, the state will be unjustly enriched to the extent 

that the purchases at issue actually are not subject to sales tax.

But it is not clear that plaintiffs have no other recourse. 

“[C]onsumers who believe they have been charged excess 

reimbursement . . . may complain to the Board, which may in 

turn initiate an audit” or a “deficiency determination.” (Loeffler, 

supra, 58 Cal.4th at pp. 1103–1104; see §§ 6481, 6483, 7054.) 

Consumers, as “interested person[s],” also have the ability to 

“obtain a judicial declaration as to the validity of any regulation” 

promulgated by the Department. (Gov. Code, § 11350, subd. (a); 

see also id., § 11340.6 [generally providing that “any interested 

person may petition a state agency requesting the adoption, 

amendment, or repeal of a regulation”].) Plaintiffs say they do 

not claim regulation 1591.1(b)(5) is invalid or that it should be 

amended or repealed. They say they “rely upon [the regulation] 

as the source of the tax exemption for test strips and lancets”; 

their objection is to the interpretation of the exemption 

contained in the Paliani Letter. But plaintiffs contend that the 

Paliani Letter itself qualifies as a “regulation” subject to the 

Administrative Procedures Act, and they do not explain why 

they cannot seek a judicial declaration of its invalidity under 

Government Code section 11350. (See Morning Star Co. v. State 

Bd. of Equalization (2006) 38 Cal.4th 324, 334–335; Gov. Code, 

§ 11342.600 [“ ‘Regulation’ means every rule, regulation, order, 

or standard of general application or the amendment, 

supplement, or revision of any rule, regulation, order, or 

standard adopted by any state agency to implement, interpret, 

or make specific the law enforced or administered by it, or to 

govern its procedure.”].)
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

10

We have no occasion to express a definitive view on what 

qualifies as a prior legal determination for purposes of a Javor

remedy because it is clear that no such determination has been 

made exempting the lancets and strips at issue here. We 

likewise have no occasion to consider what remedies might be 

available to a claimant who has been unable to obtain a 

determination about the taxability of particular transactions 

using the available avenues. The Court of Appeal here noted

that many of the remedial options available to plaintiffs are “the 

practical equivalent of allowing them to tug . . . at the Board’s 

sleeve.” (McClain, supra, 9 Cal.App.5th at p. 706.) Even so, 

there is no indication in the record that plaintiffs have pursued 

any avenues other than this lawsuit for obtaining a resolution 

of the taxability question that underlies their claim for relief.

We see an important difference between circumstances 

like those in Javor, where the taxability issue had already been 

resolved, and the circumstances here, where the taxability issue 

remains disputed. Where the taxability issue has been resolved, 

the avoidance of unjust enrichment is the primary concern with 

respect to ensuring the integrity of the sales tax. (See Javor, 

supra, 12 Cal.3d at p. 802.) Where the taxability issue is 

disputed, the avoidance of unjust enrichment remains a concern, 

but there is a countervailing interest in the orderly 

administration of the sales tax. In Loeffler, a case concerning 

the taxability of retail sales of hot coffee, we said “[t]he 

taxability question lies at the center of the Board’s function and 

authority. . . . [T]he sales tax law is exceedingly comprehensive 

and complex; its application to specific types of transactions is 

debatable in innumerable circumstances. The Legislature has 

subjected such questions to an administrative exhaustion 

requirement precisely to obtain the benefit of the Board’s 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

11

expertise, permit it to correct mistakes, and save judicial 

resources.” (Loeffler, supra, 58 Cal.4th at p. 1127.) We 

explained that allowing consumers to sue retailers under 

consumer protection statutes “based on a dispute over the 

taxability of a sale would require resolution of the taxability 

question in a manner inconsistent with this system, forfeiting 

these benefits.” (Ibid.) In light of Loeffler, we reject plaintiffs’ 

contention that limiting judicially created refund remedies to 

circumstances where the taxability issue has already been 

resolved would undermine the integrity of the sales tax.

For similar reasons, we do not agree with plaintiffs that 

the unavailability of a judicially created refund remedy in this 

case violates due process of law. As noted, plaintiffs may have 

other avenues to obtain a determination of the taxability 

question at the heart of their complaint. (See ante, at pp. 9–10.) 

Moreover, although sales tax exemptions redound to the benefit 

of consumers, it must be remembered that “[t]he retailer is the 

taxpayer, not the consumer.” (Loeffler, supra, 58 Cal.4th at 

p. 1104.) We are not presented here with a taxpayer’s claim that 

no means of challenging an illegal imposed tax is available. (Cf.

McKesson Corp. v. Division of Alcoholic Beverages & Tobacco 

(1990) 496 U.S. 18, 39 [due process requires states to “provide 

taxpayers with . . . a fair opportunity to challenge the accuracy 

and legal validity of their tax obligation” and a “ ‘clear and 

certain remedy’ ”].) Nothing in the sales tax statutes establishes 

that consumers have a vested right to applicable exemptions. 

(See § 6901.5 [requiring retailers to return excess sales tax 

reimbursement to consumers or else remit it to the state].)

Javor does not suggest otherwise. There we said that 

when the taxability issue has already been resolved (which is 

not the case here), a judicially created remedy is “clearly 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

12

mandated by the Board’s duty to protect the integrity of the 

sales tax” (Javor, supra, 12 Cal.3d at p. 802); we did not say the 

remedy was constitutionally compelled. In enacting a 

“comprehensive” law of exemptions “governing every imaginable 

type of sales transactions” (Loeffler, supra, 58 Cal.4th at 

p. 1105), the Legislature did not run afoul of due process by 

choosing to establish an administrative framework for ensuring 

that retailers claim exemptions and for resolving disputes over 

the applicability of exemptions — even if that framework relies 

on market mechanisms, agency initiative, and consumer 

influence short of lawsuits directly seeking sales tax 

reimbursement refunds. As the Attorney General explains, “the 

system is designed to ensure that, in general, the benefits of tax 

exemptions flow to consumers as a class (though not necessarily 

in a perfect manner, or in every possible transaction).” Given 

the competing interests involved in designing the system, due 

process does not require that tax exemptions flow to consumers 

in a more perfect manner.

Finally, plaintiffs contend that this tax refund system, by 

unjustly enriching the state at the expense of consumers, works 

an unconstitutional taking. But even if the state’s retention of 

amounts that have been judicially or administratively 

determined to be excess sales tax reimbursement could be 

regarded as a taking, no such determination has been made 

here. And the absence of a legislatively or judicially created 

refund action to compel such a determination does not itself 

constitute a taking.

III.

Plaintiffs’ complaint also alleged that the pharmacy 

defendants breached their contractual duties under Civil Code 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

13

section 1656.1 by misrepresenting the sales tax owed on the 

purchases at issue. The Court of Appeal granted defendants’

demurrer with respect to all claims in the operative complaint, 

and plaintiffs seek to revive this claim as well. Civil Code 

section 1656.1, subdivisions (a) and (d) establish a “rebuttable 

presumption[]” that retailers and purchasers “agreed to the 

addition of sales tax reimbursement to the sales price of tangible 

personal property sold at retail to a purchaser” if certain notice 

requirements are met. Plaintiffs argue that if they are not 

permitted to claim breach of contract on the ground that they 

agreed only to pay sales tax reimbursement on purchases 

actually subject to tax, then the rebuttable presumption will 

improperly become an irrebuttable presumption.

This argument is foreclosed by Loeffler. In that case, we 

held that consumers could not bring actions under the Unfair 

Competition Law or the Consumer Legal Remedies Act to 

challenge a retailer’s alleged misrepresentation of the taxability 

of hot coffee. (Loeffler, supra, 58 Cal.4th at p. 1092.) We said “it 

is clear that a remedy that is directed at requiring the taxpayer 

to make a claim for refund from the Board, rather than one 

involving a direct claim by the consumer against the retailer, is 

the remedy that is consistent with the current governing 

statutory scheme.” (Id. at p. 1133.) We explained that “a Javortype remedy for consumers,” which compels retailers to file a 

refund claim with the Department, is “an appropriate means to 

vindicate a consumer interest in a refund of a reimbursement 

charge” and that Javor “do[es] not suggest” that taxability 

issues “should be resolved in a consumer action” against the 

retailer. (Ibid.) Loeffler’s reasoning does not convert the 

rebuttable presumption set forth in Civil Code section 1656.1 

into an irrebuttable presumption. It simply means that the 
MCCLAIN V. SAV-ON DRUGS

Opinion of the Court by Liu, J.

14

avenues available to plaintiffs for rebutting the presumption 

must be ones consistent with the tax code.

CONCLUSION

We affirm the judgment of the Court of Appeal.

LIU, J.

We Concur:

CANTIL-SAKAUYE, C.J.

CHIN, J.

CORRIGAN, J.

CUÉLLAR, J.

KRUGER, J.

O’LEARY, J.*

 

* Presiding Justice of the Court of Appeal, Fourth Appellate 

District, Division Three assigned by the Chief Justice pursuant 

to article VI, section 6 of the California Constitution.
MCCLAIN v. SAV-ON DRUGS

S241471

Concurring Opinion by Justice Kruger

I agree with the majority that plaintiffs in this case do not 

have an equitable cause of action to compel the retailers to seek 

a refund of sales taxes paid to the state. Although we fashioned 

such a remedy in Javor v. State Board of Equalization (1974) 12 

Cal.3d 790, we did so with the recognition that the Legislature 

that enacted the sales tax laws had not provided a direct refund 

remedy for consumers (who are not, technically speaking, the 

taxpayers under California’s sales tax law). (Id. at p. 800.) We 

held, however, in the “unique circumstances” of that case—in 

which the State Board of Equalization had publicly announced 

that refunds were owed to consumers, thanks to intervening 

changes in federal tax law, but retailers had not stepped forward 

to facilitate their disbursement—that a judicially created 

remedy was necessary to ensure consumers actually received 

the refunds. Without such a remedy, we concluded, the state 

would be unjustly enriched. (Id. at p. 802.) Here there are no 

comparable “unique circumstances”; this is, rather, a more 

typical contest over the applicability of the sales tax to a 

particular category of transactions. To recognize an equitable 

Javor-type cause of action under the facts of this case would not 

comport with the basic structure of the refund procedure 

provided by statute.

I write separately to address the role that “taxability” 

determinations play in this analysis. (Maj. opn., ante, at p. 7.) 

As the majority notes, the law does provide avenues for plaintiffs 
MCCLAIN v. SAV-ON DRUGS

Kruger, J., concurring

2

to challenge the applicability of the sales tax to the transactions 

at issue here, such as seeking a judicial declaration of the 

validity of governing tax regulations. (Maj. opn., ante, at pp. 9–

10.) The majority faults plaintiffs for failing to take that step, 

seeing “an important difference between circumstances like 

those in Javor, where the taxability issue had already been 

resolved, and the circumstances here, where the taxability issue 

remains disputed.” (Maj. opn., ante, at p. 10; see id. at p. 11.) 

I agree that plaintiffs’ failure to pursue their available 

statutory options is relevant to the determination of whether to 

fashion an equitable remedy here. But while consumers may 

have alternative mechanisms to obtain an official determination 

that a transaction is exempt from sales tax (see maj. opn., ante, 

p. 9), I would not characterize these mechanisms as the 

functional equivalent of administrative remedies that plaintiffs 

must exhaust before pursuing a Javor action. The central 

difficulty with plaintiffs’ claim, as I see it, is not that they have 

skipped any particular set of procedural prerequisites to suit. It 

is, rather, that any cause of action to compel retailer refund suits 

will create a certain amount of tension with a statutory scheme 

that presumes goods are taxable (Rev. & Tax. Code, § 6091), and 

empowers the retailer to waive a potentially applicable tax 

exemption if it so chooses (id., § 6905). In such a system, the 

question becomes: under what circumstances can we say the 

state has been unjustly enriched by the retention of funds the 

retailers have turned over, such that consumers should be 

permitted to compel retailers to pursue restitution claims on 

their behalf? The answer to that question is not easily reduced 

to a simple formula. Accordingly, as the majority says, even 

when there has been a legal determination of some sort bearing 

on the taxability of a particular transaction, “additional legal 
MCCLAIN v. SAV-ON DRUGS

Kruger, J., concurring

3

and equitable hurdles still may lie between a consumer and a 

Javor remedy.” (Maj. opn., ante, at p. 7.)

Javor itself did not involve an official determination that 

a particular transaction was not taxable; it involved a 

determination that refunds were owed to consumers. Other 

claims of unjust enrichment, based on other types of 

determinations, might raise different administrative and other 

considerations. At present, however, given the policy choices 

embodied in the statutory scheme, plaintiffs have not 

demonstrated circumstances that counsel crafting a common 

law restitutionary remedy.

With these observations, I concur.

KRUGER, J.

We Concur:

CHIN, J.

CORRIGAN, J.

O’LEARY, J.*

 

* Presiding Justice of the Court of Appeal, Fourth Appellate 

District, Division Three, assigned by the Chief Justice pursuant 

to article VI, section 6 of the California Constitution.
See last page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion McClain v. Sav-On Drugs

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding

Review Granted XXX 9 Cal.App.5th 684

Rehearing Granted

__________________________________________________________________________________

Opinion No. S241471

Date Filed: March 4, 2019

__________________________________________________________________________________

Court: Superior

County: Los Angeles

Judge: John Shepard Wiley, Jr., and Emilie H. Elias

__________________________________________________________________________________

Counsel:

The Kick Law Firm, Taras P. Kick, G. James Strenio, Robert J. Dart; McKool Smith Hennigan, Bruce R. 

MacLeod and Shawna L. Ballard for Plaintiffs and Appellants.

Chavez & Gertler and Mark A. Chavez for Public Citizen, Inc., as Amicus Curiae on behalf of Plaintiffs 

and Appellants.

Jonathan M. Coupal, Trevor A. Grimm, Timothy A. Bittle and Laura E. Murray for Howard Jarvis 

Taxpayers Foundation as Amicus Curiae on behalf of Plaintiffs and Appellants.

Law Office of Daniel Berko and Daniel Berko for Larry Littlejohn as Amicus Curiae on behalf of Plaintiffs 

and Appellants.

Law Office of Tony J. Tanke, Tony Jerome Tanke; Hattis Law and Daniel M. Hattis for A. Bekkerman, B. 

Griffith, J. Lee and C. Lisser as Amici Curiae on behalf of Plaintiffs and Appellants.

Reed Smith, Douglas C. Rawles, James C. Martin, Kasey J. Curtis; Morgan Lewis & Bockius, Joseph 

Duffy and Joseph Bias for Defendants and Respondents Walgreen Co. and Rite Aid Corporation.

Berry & Silberberg, Berry Silberberg Stokes, Robert P. Berry and Carol M. Silberberg for Defendant and 

Respondent Wal-Mart Stores, Inc.

Morrison & Foerster, David F. McDowell and Miriam A. Vogel for Defendant and Respondent Target 

Corporation.

Holland & Knight, Richard T. Williams, Alan Watson and Shelley Hurwitz for Defendants and 

Respondents CVS Caremark Corporation, Longs Drug Stores Corporation and Longs Drug Stores 

California, Inc.

Theodore Keith Bell for Defendants and Respondents The Vons Companies, Inc., and Vons Food Services, 

Inc.
Page 2 – S241471 – counsel continued

Counsel:

Hunton & Williams, Hunton Andrews Kurth, Phillip J. Eskenazi and Kirk A. Hornbeck for Defendants and 

Respondents Albertson’s, Inc., and Sav-On Drugs.

Kamala D. Harris and Xavier Becerra, Attorneys General, Edward C. DuMont, State Solicitor General, 

Janill L. Richards, Principal Deputy State Solicitor General, Diane S. Shaw, Assistant Attorney General, 

Max Carter-Oberstone, Associate Deputy State Solicitor General, Lisa W. Chao, Stephen Lew and Nhan T. 

Vu, Deputy Attorneys General, for Defendant and Respondent State Board of Equalization.

Colantuono, Highsmith & Whatley, Michael G. Colantuono and Andrew C. Rawcliffe for League of 

California Cities and California State Association of Counties as Amici Curiae.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Taras P. Kick

The Kick Law Firm

815 Moraga Drive

Los Angeles, CA 90049

(310) 395-2988

David F. McDowell

Morrison & Foerster

707 Wilshire Boulevard, Suite 6000

Los Angeles, CA 90017-3543

(213) 892-5200

Janill L. Richards

Principal Deputy State Solicitor General

1515 Clay Street, 20th Floor

Oakland, CA 94612

(510) 879-1300