Daily Dicta: Judge Tosses Suit Against No-Tip Restaurants
Sometimes the real mystery isn't which side will win a lawsuit, but on what grounds. Failure to state a claim? Lack of personal jurisdiction? Improper venue? Failure to effect service? Or just general stupidity?
January 08, 2019 at 01:24 PM
7 minute read
Sometimes the real mystery isn't which side will win a lawsuit, but on what grounds.
Failure to state a claim? Lack of personal jurisdiction? Improper venue? Failure to effect service?
Or just general stupidity?
In what should come as a surprise to no one, a would-be antitrust class action targeting restaurants that eliminated tipping got the boot by U.S. District Judge Jeffrey White in the Northern District of California on Monday.
You might recall from Lit Daily's prior coverage that plaintiff Timothy Brown sued a handful of prominent restaurants in California and New York including Reynard in Brooklyn, Gramercy Tavern in Manhattan, Comal in Berkeley and Camino in Oakland.
The reason? All opted to include the gratuity in the price of the food.
Represented by David Lavine and Guy Edward Mailly of Mailly Law and solo practitioner Steven Uhr, Brown said this alleged antitrust price-fixing conspiracy “unlawfully transfers millions of dollars from customers and servers to restaurant owners in violation of federal and state antitrust laws.”
Or not.
The restaurants lawyered up big time: Union Square Hospitality Group and restaurateur Danny Meyer tapped a team from Baker Botts led by Jonathan Shapiro; celebrity chef Thomas Colicchio and Craft Worldwide turned to Gordon Rees Scully Mansukhani; Eleven Madison Park and its owners hired Boies Schiller Flexner; 140 NM LLC and Bar Agricole was represented by Zelle LLP; the New York City Hospitality Alliance, Inc. hired Duane Morris; Happy Cooking Hospitality, Inc. went with Hueston Hennigan LLP; Momofuku retained Bryan Cave Leighton Paisner.
Overkill? Perhaps. But you can't blame the restaurants for not wanting to let the suit—which in theory could have resulted in massive treble damages—get off the ground.
Still, the judge did give the plaintiff a little traction: “Brown alleges that he paid $5.00 more for a fried-chicken sandwich than he would have absent the alleged price fixing conspiracy. The court concludes that, at the pleading stage, Brown has alleged sufficient facts to show he has standing to seek damages,” White wrote.
But the judge added, “That does not mean these same facts will be sufficient to state a claim.”
White let the New York defendants off the hook for lack of personal jurisdiction. He also found some of the New York defendants were not properly served. (The process server claimed to have delivered one complaint to a restaurant manager with brown hair who was between 5'4” and 5'8” tall, when the actual manager had thinning red hair and stood 6'2”.)
In his 24-page opinion, White only skimmed the merits of the case, like, say, how can a restaurant in a Manhattan museum be considered part of the same market for antitrust purposes as an upscale Mexican eatery 3,000 miles away in Berkeley?
Or for that matter, what's unlawful about charging the prices listed on a menu? If you think it's too expensive, go eat somewhere else. There are about 660,000 restaurants in the United States.
The judge simply wrote that Brown failed “to allege facts from which it would be reasonable and plausible to infer that the California defendants compete with the New York defendants.”
He continued, “Brown does not include many details about the alleged price increases, but the allegations do not show the decision to do so was simultaneous or that the increases were uniform. Indeed, some of the New York defendants are alleged to have eliminated tipping four years after the California defendants eliminated tipping.”
As for the California defendants, the judge noted that because Brown alleged they “raised menu prices (by some unspecified amount) and added a 20 percent service charge to their menus, it is not clear to the court which prices he contends are fixed.”
He added, “Brown does not include any other allegations from which the court can infer that the California defendants agreed to increase menu prices, let alone agreed to a uniform increase in prices. If it is the service charge, the court concludes he has not alleged facts showing he was injured by that practice because he does not allege he would have paid less than 20 percent as a tip.”
Still, White did allow Brown to amend his complaint against the California defendants, though he added, “It is not clear to the court how Brown will be able to allege a plausible price fixing conspiracy that consists of just four restaurants, given the number of restaurants in the Bay Area.”
What I'm Reading
Federal Judiciary Says 'Limited Funds' Will Run Out by Jan. 18
But during the last major shutdown, in 2013, more than two dozen courts declared all of their employees “essential.”
U.S. District Judge Dabney Friedrich of the District of Columbia upbraided Reed Smith partner Eric Dubelier, who represents Concord Management and Consulting, over what she described as “personal attacks” on the special counsel and federal prosecutors.
The plaintiffs team won a $117 million verdict against J&J last year in New Jersey.
The current appeal came after U.S. District Judge Jed Rakoff of the Southern District of New York denied Rajat Gupta's motion to vacate his conviction in the wake of the Second Circuit's 2014 decision in Newman.
“After hearing Aaron Schlossberg's views on the video, we decided to fire him from the single case for which we had hired him. Schlossberg was never our in-house counsel,” said the statement by Niche Music president Stephen Wilde.
Religious activists claimed that Drag Queen Storytime advances a religion in violation of the Establishment Clause of the First Amendment. Hmm and what religion might that be? “Secular humanism.”
In case you missed it…
It's a valuable cautionary tale for those so caught up in feeling wronged that they may not fully consider the ramifications of litigation.
|This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllA Reporter and a Mayor: Behind the Scenes During the Eric Adams Indictment News Cycle
Of Predictive Analytics and Robots: A First-Year Federal Judge's Thoughts on AI
A Hearing Grappling With Tom Girardi's Memory Sends the Lit Daily Looking to the Past
The High Art of Keeping Big Law Worker Bees Pleased (Or at Least Pleased Enough Not to Leave)
Trending Stories
- 1Cravath Elevates 7 to Partnership, Up From Last Year
- 2Kline & Specter Hit With Lawsuit From Another Former Associate
- 3USPTO Director Kathi Vidal Announces Resignation Ahead of Administration Change
- 4As Gen AI Acceptance Grows, Lawyers Race to Mitigate Risks
- 5Decisions Have 'Real-Life Consequences': Juvenile Court Judge Considered for Appellate Bench
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250