New Class Action Threat:  Surcharges 

by MARIE TRIMBLE HOLVICK, GORDON & REES

The law on surcharges is very unclear. Surcharges are definitely legal, but the rules around how to advertise a surcharge are far from clear. A risk adverse business would be best-suited to eliminate the surcharge. A business that is willing to take on the risk of a surcharge should list the surcharge in every possible location – paper menus, menu boards, at the cash register, website, on the check, etc. Anywhere that a price is listed, the surcharge should be advertised. For example, if a restaurant has a refrigerator or cooler with drinks, they should put a sign near the drinks notifying the consumer that a surcharge will be added.  This may seem like overkill, but plaintiff’s attorneys are looking for excuses to bring a claim.

The sad reality is that it is far more expensive to fight these claims than to pay a little money to resolve them quickly. The plaintiff’s attorneys know that, and they are banking on quick settlements. They are sending out the same form letters across the Bay Area, and filing identical lawsuits.  Very few of these claims are actually being litigated due to cost.   Right now, there is no case law for us to point to in defending these claims since they are not being litigated through trial.  There is a suit going through the court in Southern California and we’ll keep you apprised of its progress.

Please feel free to reach out to us at GGRA to let us know if you have been contacted about your surcharge or have any questions.

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