PITTSBURGH – A federal judge has declared that jurisdiction in his court for a class action lawsuit against Chipotle Mexican Grill, which claimed that the chain restaurant fails to provide proper amounts of change to its customers in exchange for purchased food, is both proper and necessary.
Megan Fox and Bridget McMahon of Allegheny County (on behalf of themselves and all others similarly situated) first filed suit in the Allegheny County Court of Common Pleas on Aug. 20 versus Chipotle Mexican Grill, Inc. (doing business as “Chipotle”) of Newport Beach, Calif.
“On Aug. 13, 2020, plaintiff Fox entered the Chipotle store in Wexford, Pennsylvania, ordered a steak burrito for $8.72 and tendered a $20 bill to the cashier. Consistent with what is believed to be defendant’s corporate policy, the defendant’s representative accepted the tender of $20, and handed Fox a receipt, her order and $11 change. The Chipotle receipt showed change due to Fox of $11.28, which was not the amount returned to her by Chipotle,” the suit said.
“On Aug. 18, 2020, plaintiff McMahon entered the Chipotle store in Allison Park, Pennsylvania, to purchase prepared food to go. Plaintiff’s total purchase was $15.51. To pay for the purchase, plaintiff tendered cash in the form of a $20 bill. The defendant’s cashier accepted the tender. After plaintiff McMahon’s order was prepared and bagged, the defendant’s cashier did not return the $4.49 in change indicated on the receipt. Instead, Chipotle returned only $4.00 to plaintiff, thereby converting $0.49 without providing a credit or other compensation to plaintiff.”
The named plaintiffs said they, and others just like them, were the victims of Chipotle pocketing and misappropriating funds belonging to the consumer for Chipotle’s financial benefit, rather than either (a) giving the correct amount of change, (b) rounding the purchase price down to benefit the consumer, or (c) giving the consumer credit toward a future purchase to offset the loss to the consumer.
“The actual price charged by Chipotle for food purchased is different, and more than the advertised price of the food. Moreover, the receipts provided to plaintiffs Fox and McMahon deceptively indicated that the plaintiffs, had, in fact, received change of more than they were actually given, thus covering up evidence of Chipotle’s improper actions,” the suit said.
The matter of venue in the case remains to be seen, as Chipotle filed to remove the case to the U.S. District Court for the Western District of Pennsylvania on Sept. 25, citing diversity grounds pursuant to the Class Action Fairness Act of 2005 (CAFA) and the amount in controversy, which could total more than $5 million.
However, the plaintiffs filed a counter-motion to remand the case on Sept. 29, arguing that Chipotle’s removal notice was filed beyond the 30-day statutory window.
On Dec. 9, U.S. District Court for the Western District of Pennsylvania Judge Mark R. Hornak disclosed that he was recusing himself from the case. Hornak’s colleague, Judge William S. Stickman, was then assigned to preside over the case.
UPDATE
Stickman issued a memorandum opinion on Feb. 23, denying the motion to remand the case to the Allegheny County Court of Common Pleas.
The judge explained that discovery revealed that Eduardo Macias, a contract security guard, signed for the mailed removal notice at Chipotle’s Newport Beach headquarters on Aug. 25, 2020.
“Macias signed the mail receipt, but did not know which letter corresponded with the mail receipt, did not open the letter, did not know who had sent it and did not know what its contents included. Chipotle did not authorize Macias to accept legal process on Chipotle’s behalf,” Stickman said.
Stickman said the burden was on the plaintiffs to show they served the proper agent of a corporation.
Chipotle asserted that the plaintiffs did not properly serve it on Aug. 25, 2020 and rather, the Court should count from Aug. 27, the day the sheriff in Allegheny County served Chipotle. Thus, Chipotle alleged its notice of removal was timely filed on Sept. 25, 2020.
“The Court finds that plaintiffs’ process of service by certified mail was improper. Thus, Chipotle’s Sept. 25, 2020 notice of removal was untimely,” Stickman stated.
Since Macias was not an executive officer, partner or trustee of Chipotle, was not authorized to receive service of process on behalf Chipotle and was not a manager, clerk or person in charge, Stickman explained he could not be an example of proper service.
Furthermore, the Court determined that removal under CAFA was both fair and appropriate, given the size of the class involved (over 100 members) and the damages in question, at least $5,000,000 – thereby, conferring jurisdiction on the federal court.
For counts of misappropriation and conversion, unfair trade practices, breach of contract/unjust enrichment and injunction, the plaintiffs are seeking an injunction preventing Chipotle from refusing to provide correct change to customers who tender cash as a form of payment for Chipotle’s goods or services, requiring Chipotle to provide a credit to their customers in those circumstances and for it to not market goods towards non-credit card paying-customers at a higher price than it does for credit card customers. The plaintiffs also request a trial by jury.
The plaintiffs are represented by Frank G. Salpietro of Rothman Gordon, in Pittsburgh.
The defendants are represented by Lindsey C. Kennedy of Eckert Seamans Cherin & Mellott in Pittsburgh, plus Elizabeth Bulat Turner and Robert Jennings Mollohan Jr. of Martenson Hasbrouck & Simon, in Atlanta, Ga.
U.S. District Court for the Western District of Pennsylvania case 2:20-cv-01448
Allegheny County Court of Common Pleas case GD-20-008917
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com