Los Angeles County Sues Grubhub for Unfair Business Practices and False Advertising

Ervin Cohen & Jessup LLP

Ervin Cohen & Jessup LLP

On February 21, 2024, Los Angeles County filed a complaint for injunctive relief and damages against Grubhub alleging that the company engaged in false and deceptive advertising and unfair business practices that harm consumers, delivery drivers, and restaurants. The lawsuit was filed by the office of County Counsel. The County’s press release announcing the lawsuit states that it was filed “in response to complaints from consumers and restaurant owners.”

The unlawful business practices alleged in the complaint include:

  • Bait-and-switch delivery pricing, in which Grubhub promises a flat delivery fee, but then increases additional fees for the same delivery service;
  • Deceptive offer to “order online for free”;
  • Misrepresentations about driver benefits since December 2020;
  • Paid restaurant search results, in which customers are not told that default restaurant listings are arranged based on paid marketing arrangements rather than impartial criteria; and
  • Unilateral customer refunds made with restaurant funds without the restaurant authorization or consultation.

The County’s lawsuit was brought under the California Unfair Competition Law and False Advertising Law. The lawsuit notes that the tactics used by Grubhub would also be prohibited under Senate Bill 478, California’s new junk fee law, which will go into effect in July 2024.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Ervin Cohen & Jessup LLP

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