Federal Appeals Court Keeps Missouri Marijuana Tax Refund Class Action in State Court
- The U.S. Court of Appeals for the Eighth Circuit upheld a decision to send a class action about allegedly unlawful recreational marijuana sales taxes back to Missouri state court.
- The lawsuit involves Missouri dispensaries that collected a 3% county sales tax later ruled unlawful in some incorporated areas by the Missouri Supreme Court in 2025.
- The case was initially moved to federal court but was remanded to state court based on the “Local Controversy Exception” after plaintiffs amended their complaint to limit the class to Missouri citizens affected by the tax.
- The appeals court ruled the amended complaint controls jurisdiction and allowed the case to proceed in state court, without deciding on the merits of the refund claims.
A federal appeals court has upheld a lower court ruling sending a class action seeking refunds of allegedly unlawfully collected recreational marijuana sales taxes back to Missouri state court.
The U.S. Court of Appeals for the Eighth Circuit affirmed the remand in Vick v. Fresh Green, LLC, a lawsuit filed by Missouri marijuana customers against dispensaries that collected a 3% county sales tax later found to be unlawful in certain areas.
The dispute stems from Missouri’s legalization of recreational marijuana in 2022, which authorized local governments to impose an additional sales tax of up to 3%. Dispensaries passed those taxes on to customers.
In 2025, however, the Missouri Supreme Court ruled that counties could not impose the additional tax on marijuana sales made at dispensaries located within incorporated cities, towns or villages.
Following that decision, customers filed a class action alleging that dispensaries were improperly retaining money collected through the county tax and seeking restitution.
The dispensaries moved the lawsuit from Jackson County Circuit Court to federal court under the federal Class Action Fairness Act. Plaintiffs later amended their complaint to limit the proposed class to people who were Missouri citizens as of June 13, 2025, and who paid the disputed tax on recreational marijuana purchases.
U.S. District Judge David Gregory Kays subsequently determined that the revised class qualified for the law’s “Local Controversy Exception” and ordered the case returned to state court.
The dispensaries appealed, arguing that federal jurisdiction should instead be determined based on the version of the complaint that was in effect when the case was originally removed.
The Eighth Circuit rejected that argument, pointing to a 2025 U.S. Supreme Court decision establishing that an amended complaint supersedes the previous complaint when determining federal jurisdiction.
“Jurisdiction follows from (and only from) the operative pleading,” the court said, finding that the plaintiffs’ amended complaint controlled the jurisdictional analysis.
Because the amended class was limited to Missouri citizens and the other requirements of the Local Controversy Exception were satisfied, the appeals court concluded that “remand was proper.”
The ruling does not determine whether customers are ultimately entitled to refunds. Instead, it means the class-action litigation over the disputed marijuana taxes can proceed in Missouri state court.