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Alleged Price-Fixing Lawsuit Against Tip-Free Restaurants Returns in California

It’s got one more chance to proceed

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A proposed class action lawsuit against tip-free restaurants and their owners has one more chance to proceed, but only in California. Lawyers for the plaintiff, an unhappy diner at a few tip-free restaurants in the Bay Area, submitted an amended complaint this week.

The original complaint, which alleged conspiracy price-fixing among no-tipping restaurants, named California restaurants as defendants alongside New York restaurateur Danny Meyer and his Union Square Hospitality Group (Union Square Cafe, Gramercy Tavern) plus other tip-free restaurants and their owners in New York. But earlier this month, a US District Court judge granted the New York defendants’ motion to dismiss the case based on a lack of personal jurisdiction. California defendants were dismissed in a joint motion.

The amended complaint, filed in US District Court in Northern California, now names only California defendants: Bar Agricole, Trou Normand, and owner Thaddeus Vogler, Camino and its owners Allison Hopelain and Russell Moore, and Comal and Comal Next Door and its owners John Paluska and Andrew Hoffman. Ironically, and perhaps diminishing the plaintiff’s arguments, Camino has closed, and Bar Agricole and others have returned to a tipping model.

With the amended complaint, “We’re confident we’ll prevail,” says Guy Mailly, co-counsel for the plaintiff. Save for its exclusion of the New York defendants, the amended complaint closely resembles the previous one, Mailly says.

Its central allegation: “[A] significant number of Bay Area restaurants agreed ‘as a group’ to eliminate tipping and increase prices by around twenty percent, either by adding a surcharge or increasing menu prices...”

“Participating restaurants have disingenuously portrayed the no-tipping movement as intended to promote social justice and equality, when the real aim and effect is greater profit at the expense of workers and consumers,” lawyers for the plaintiff claim.

Jonathan Shapiro, a partner at the law firm Baker Botts L.L.P. based in San Francisco, remains skeptical of the proposed class action suit.

“This is no closer to a real lawsuit than the two past complaints,” said Shapiro, who represented the now-dismissed New York defendants Danny Meyer and the Union Square Hospitality Group.

If the complaint does move forward, the proposed class — all diners at the restaurants with no-tipping policies — would be large.

“I would expect there’d be thousands and thousands of diners at these restaurants who have ben harmed,” said Mailly.