Hannah Fredrickson v. Starbucks Corp

' This is a class action brought against Starbucks by three baristas who used to work at the company’s coffee shops in Oregon. They challenge the legality of Starbucks’ practice of withholding state and federal toes from baristas’ paychecks based on the cash tips they receive. We must decide whether the district court-may hear this case given the constraints imposed by the Tax Injunction Act, the Anti-Injunction Act, and the federal-state comity doctrine.

I

A familiar sight at any neighborhood Starbucks is the tip jar near the cash register inviting customers to leave tips for the baristas. According to the plaintiffs (and what follows is drawn entirely from their complaint), the baristas pool the tips left by customers and divide them up at the end of each week. As a general practice, the baristas do not report to Starbucks how much they receive in tips. In stead, for tax withholding purposes, the company simply imputes 50 cents per hour in estimated tip income to each barista and withholds state and federal taxes from the baristas’ paychecks based on that amount.

The plaintiffs allege that neither state nor federal tax law allows Starbucks to withhold taxes in this…