Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 1 of 21
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`Micheli & Shel, LLC, individually and on behalf of
`others similarly situated,
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`Case No.:
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`CLASS ACTION
`COMPLAINT
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`JURY TRIAL DEMANDED
`
`Plaintiffs,
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`
`
`
`
`v.
`
`
`GRUBHUB INC., GRUBHUB INC. d/b/a SEAMLESS,
`SEAMLESS NORTH AMERICA, LLC, UBER
`TECHNOLOGIES INC., UBER EATS, POSTMATES
`LLC, and DOORDASH INC.,
`
`
`Defendants.
`
`
`
`
`
`
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`Plaintiff Micheli & Shel, LLC (“Micheli & Shel” or “Plaintiff”), brings this class action on
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`behalf of itself and those similarly situated (the “Class”), by and through the undersigned attorneys,
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`against Defendants GrubHub Inc. (“Grubhub”), GrubHub Inc. d/b/a Seamless. Seamless North
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`America LLC (“Seamless”), Postmates, LLC (“Postmates”), Uber Technologies Inc. (“Uber”),
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`Uber Eats (“Uber Eats”) and DoorDash Inc. (“DoorDash”) (collectively, “Defendants”). The
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`allegations are made on information and belief, and pursuant to investigation by Plaintiff’s counsel.
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`NATURE OF THE CASE
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`1.
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`On March 7, 2020, due to the widespread COVID-19 pandemic, Governor Andrew
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`Cuomo declared a state of emergency for the entire State of New York.
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`2.
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`On March 16, 2020, Governor Cuomo issued Executive Order Number 202.3
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`prohibiting restaurants and bars in the State of New York from serving food or beverages on-
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`premises due to the spread of COVID-19 and limiting orders to takeout or delivery only.
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`1
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 2 of 21
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`3.
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`Effective
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`March
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`22,
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`2020,
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`Governor
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`Cuomo’s
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`“New York on Pause” Program began requiring all non-essential businesses to close in-office
`
`functions.
`
`4.
`
`In the following days, weeks and months, as part of Governor Cuomo’s “New York
`
`State on Pause” executive order, New York City residents were encouraged to stay home to prevent
`
`the spread of COVID-19. Additionally, restaurants and bars were limited to providing take-out and
`
`delivery services only creating an unprecedented demand for delivery services.
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`5.
`
`On May 13, 2020, the New York City Counsel, in an effort to curb the imbalance
`
`of power between small locally owned restaurants and powerful national third-party delivery
`
`companies, passed emergency legislation placing a cap on the exorbitant delivery fees that third-
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`party delivery companies such as Defendants were charging restaurants for their services.
`
`6.
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`Effective June 2, 2020, Local Law No. 52 of 2020, Council Int. No. 1908-B of 2020
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`(the “Delivery App. Legislation”) placed a twenty percent (20%) cap on all fees that Defendants
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`could charge their customers with a specific cap of fifteen percent (15%) on all fees charged for
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`delivery and a five percent (5%) cap for any additional fees including for marketing, credit card
`
`processing or any other fees.
`
`7.
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`The Delivery App. Legislation was amended pursuant to Local Law No. 88 of
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`2020, Council Int. No. 2054-A of 2020 (the “Amended Delivery App. Legislation”), effective
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`September 14, 2020, to allow for “pass-through” costs, such as credit card fees, to be charged to
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`the restaurant above the fifteen percent (15%) and five percent (5%) fee caps.
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`8.
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`Despite the passage of the the Delivery App. Legislation and the Amended Delivery
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`App. Legislation, Defendants proceeded to continue their prior practices of bleeding New York
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`2
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 3 of 21
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`City’s restaurants dry while collecting millions of dollars at their expense in blatant disregard for
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`the laws of the City of New York.
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`9.
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`In fact, despite the passing of the Delivery App. Legislation and the Amended
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`Delivery App. Legislation, Plaintiff and the Class members, continued to be charged in excess of
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`the fifteen percent (15%) delivery fee cap and five (5%) cap on all additional fees.
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`10.
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`Notably, these fees are in addition to the fees Defendants’ also collect from the
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`individuals placing the delivery orders. Put in another way, Defendants continue to profit on both
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`ends of the transaction, yet nevertheless still refused to abide by the mandated fee caps.
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`11.
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`Defendants restructured their fees to appear to comply with the laws, but in
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`actuality continued to charge Plaintiff and the class members above the permitted fee caps. In some
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`cases, for example, Defendants charged a flat twenty percent (20%) service fee without clearly
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`identifying what the fee was for. This ambiguity violates both the delivery fee and the additional
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`fee cap as neither fee may be twenty percent (20%) under the law.
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`12.
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`Other Defendants disingenuously appeared to comply with the cap by keeping their
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`delivery fee under the fifteen percent (15%) fee cap, charging thirteen percent (13%) or fourteen
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`and half percent (14.5%), but then overcharged Defendants with respect to the category of “other”
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`non-delivery fees. These other fees were charged for several categories of fees each individually
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`under the five percent (5%) threshold, but cumulatively added up to well over the five percent
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`(5%) threshold.
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`13.
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`Upon information and belief, Defendants also fraudulently inflated their credit
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`card processing fees in order to further extort fees from Plaintiff and the Class members.
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`14.
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`This Class Action seeks to hold Defendants accountable for their predatory
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`behavior on businesses most impacted by the COVID 19 Pandemic. The Defendants extorted the
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`3
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 4 of 21
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`Plaintiff and other similarly situated Class members that were desperately dependent on their
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`delivery services during a time when the restaurant industry was experiencing a historic decline in
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`sales and the largest disruption the restaurant industry had faced in NYC since Hurricane Sandy in
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`2012 and the September 11, 2001, terrorist attacks.
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`JURISDICTION AND VENUE
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`15.
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`The Court has original jurisdiction over this action pursuant to 28 U.S.C. §
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`1332(d)(2) and (5) because this is a class action in which: (i) the proposed Class consists of more
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`than 100 persons or entities; (ii) the amount in controversy exceeds the sum or value of
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`$5,000,0000 in the aggregate; and (iii) at least some of the members of the proposed Class have
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`different citizenship from Defendants.
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`16.
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`This Court has personal jurisdiction over Defendants because Defendants are
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`authorized to do business and regularly conduct business in this District, and a substantial number
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`of the events giving rise to the claims alleges herein took place in New York.
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`17.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2) because a
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`substantial part of the events or omissions giving rise to the alleged claims occurred in this
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`District, Defendants are authorized to conduct business in this District, and Defendants regularly
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`conduct and transact business in this District and are therefore subject to personal jurisdiction in
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`this District.
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`PARTIES
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`18. Micheli & Shel is a limited liability company existing and operating in good
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`standing under the law of the State of New York with its principal place of business located in
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`New York County, New York. Micheli & Shel operates an Israeli-style bakery located in
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`Manhattan’s Lower East Side neighborhood.
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`4
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`19.
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`Upon information and belief, Defendant GrubHub is a corporation organized and
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`existing under the law of the State of Delaware with its principle place of business located at 111
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`W. Washington Street, Suite 2100, Chicago, Illinois 60602. GrubHub is the parent corporation
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`of Seamless and, upon information and belief, also separately operates as doing business as
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`Seamless. GrubHub is authorized to do business in the State of New York.
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`20.
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`Upon information and belief, Defendant Seamless is a limited liability company
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`organized and existing under the law of the State of Delaware with its principle place of business
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`located at 1065 S. Avenue of the Americas, New York, NY 10018. Seamless is a subsidiary of
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`GrubHub and is authorized to do business in the State of New York.
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`21.
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`Upon information and belief, Defendant Postmates is a limited liability company
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`organized and existing under the law of the State of Delaware with its principle place of business
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`located at 425 Market Street, Suite 8, San Francisco, CA. Postmates is a wholly owned
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`subsidiary of Uber and is authorized to do business in the State of New York.
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`22.
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`Upon information and belief, Defendant Uber is a corporation organized and
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`existing under the law of the State of Delaware with its principle place of business located at
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`1455 Market State, Suite 400, San Francisco, California 94103. Uber is the parent corporation
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`of Uber Eats. Uber is authorized to do business in the State of New York.
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`23.
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`Upon information and belief, Defendant Uber Eats is a wholly owned subsidiary
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`of Uber with its principal place of business located at 1455 Market State, Suite 400, San
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`Francisco, California 94103 and conducts substantial business in the State of New York.
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`24.
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`Upon information and belief, Defendant DoorDash is a corporation organized and
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`existing under the law of the State of Delaware with its principle place of business located at 901
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`5
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`Market Street 6th Fl., San Francisco, CA 94103. DoorDash is authorized to do business in the
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`State of New York.
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`FACTUAL ALLEGATIONS
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`THE PANDEMIC’S EFFECT ON
`NEW YORK CITY’S RESTAURANTS
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`25.
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`On January 21, 2020, the first U.S. case of the COVID-19 virus was confirmed
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`by the Center of Disease Control and Prevention.1
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`26.
`
`On January 30, 2020, the World Health Organization declared the COVID-19
`
`virus a “public health emergency of international concern.”2
`
`27.
`
`On March 7, 2020, Governor Cuomo issued Executive Order Number 202
`
`declaring a state of emergency for the entire State of New York.3
`
`28.
`
`On March 16, 2020, Governor Cuomo issued Executive Order Number 202.3
`
`prohibiting restaurants and bars in the State of New York from serving food or beverages on-
`
`premises due to the spread of COVID-19.4
`
`29.
`
`On March 22, 2020, Governor Cuomo’s executive order “New York State on
`
`PAUSE” required all non-essential businesses to close in-office personnel functions to help stop
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`the infection rate of the COVID-19 virus.5
`
`
`1 See https://www.cdc.gov/media/releases/2020/p0121-novel-coronavirus-travel-case.html (last accessed on May 9,
`2021).
`2 See https://www.cnn.com/2020/01/30/health/coronavirus-who-public-health-emergency-international-concern-
`declaration/index.html (last accessed on May 9, 2021).
`3 See https://www.governor.ny.gov/news/no-202-declaring-disaster-emergency-state-new-york (last accessed on
`May 9, 2021).
`4 See https://www.governor.ny.gov/news/no-2023-continuing-temporary-suspension-and-modification-laws-
`relating-disaster-emergency (last accessed on May 9, 2021).
`5 See https://www.governor.ny.gov/news/governor-cuomo-issues-guidance-essential-services-under-new-york-state-
`pause-executive-order (last accessed on May 9, 2021).
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`6
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`30.
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`The “New York State on PAUSE” executive order also encouraged New York
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`City’s residents to stay home to prevent the spread of COVID-19 and limited restaurants and bars
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`to providing take-out and delivery services only.
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`31.
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`According to a survey conducted by the New York State Restaurant Association in
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`April 2020, restaurant sales declined by seventy-nine percent (79%) compared to the same period
`
`in 2019, approximately eighty percent (80%) of restaurant workers lost their jobs and fifty-one
`
`percent (51%) of restaurant operators moved to takeout and delivery only business models since
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`the start of the pandemic.6
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`32.
`
`On May 13, 2020, the New York City Council, in an effort to curb the already
`
`powerful influence of third-party delivery companies, passed emergency legislation placing a cap
`
`on the delivery fees that third-party delivery companies such as Defendants could charge
`
`restaurants for their services.
`
`33.
`
`Effective June 2, 2020, the Delivery App. Legislation prohibited third-party food
`
`delivery services from charging restaurants a fee of more than fifteen percent (15%) of the
`
`purchase price of each order, exclusive of taxes, for providing delivery services, and a fee of
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`more than five percent (5%) per order for all other types of charges.
`
`34.
`
`On June 22, 2020, NYC launched its Open Restaurants program allowing
`
`restaurants to open for outdoor dining and to increase the number of customers by expanding on
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`to sidewalks, parking spaces and courtyards.
`
`6 See
`https://www.nysra.org/uploads/1/2/1/3/121352550/restaurant_industry_impact_survey___new_york_state__2_.pdf
`(last accessed on May 9, 2021).
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`7
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`35.
`
`By August 2020, six months since the start of the pandemic, approximately 1000
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`bars and restaurants had permanently closed in New York City.7
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`36.
`
`Effective September 14, 2020, the Amended Delivery App. Legislation amended
`
`the Delivery App. Legislation to allow for “pass-through” charges, such as credit card fees to be
`
`charged to the restaurant beyond the fifteen percent (15%) and five percent (5%) fee caps. The
`
`amendment was not retroactive.
`
`37.
`
`On September 30, 2020, indoor dining in New York City was allowed to resume
`
`with a 25% occupancy limit.8
`
`38.
`
`On November 13, 2020, with approximately a half-million of confirmed COVID-
`
`19 cases, NYC restaurants were required to stop indoor and outdoor service at 10 p.m. but were
`
`allowed to continue takeout and delivery after the curfew.9
`
`39.
`
`On November 21, 2020, indoor dining restrictions were put back into effect for
`
`New York City restaurants.10
`
`40.
`
`It was not until February 12, 2021, that indoor dining was allowed to reopen in New
`
`York City at twenty-five percent (25%) capacity.11
`
`
`7 See https://ny.eater.com/2020/8/12/21336334/nyc-closings-lookback-coronavirus-pandemic-2020 (last accessed on
`May 9, 2021).
`8 See https://www.governor.ny.gov/news/governor-cuomo-announces-indoor-dining-new-york-city-allowed-resume-
`beginning-september-30-25#:~:text=September%209%2C%202020-
`,Governor%20Cuomo%20Announces%20Indoor%20Dining%20in%20New%20York%20City%20Allowed,with%2
`025%20Percent%20Occupancy%20Limit&text=to%20Encourage%20Compliance-
`,Governor%20Andrew%20M.,a%2025%20percent%20occupancy%20limit (last accessed on May 9, 2021).
`9 See https://www.nbcnewyork.com/news/coronavirus/new-ny-nj-cases-soar-nearly-50-in-a-week-u-s-could-hit-20-
`million-cases-by-christmas/2716714/ (last accessed on May 9, 2021).
`10 See https://www.ny1.com/nyc/all-boroughs/coronavirus-blog/2020/11/19/city-restaurant-owners-brace-for-
`another-shutdown-of-indoor-dining (last accessed on May 9, 2021).
`11 See https://www.governor.ny.gov/news/governor-cuomo-announces-new-york-city-indoor-dining-can-reopen-
`early-february-12 (last accessed on May 9, 2021).
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`41.
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`On March 19, 2021, nearly a year after the State of New York declared a state of
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`emergency, NYC indoor dining capacity finally expanded to fifty percent (50%) capacity.12
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`42.
`
`On May 7, 2021, Governor Cuomo announced that indoor dining in NYC will
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`expand to seventy-five percent (75%).13
`
`43.
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`On May 19, 2021, NYC restaurants will finally be able reopen at full capacity on
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`provided that customers remain six feet apart.14
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`THE DEFENDANTS
`
`
`44.
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`In an unprecedented time, New York City’s restaurants were forced to fight for
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`their existence reporting massive layoffs and substantial dips in revenue as a result of the
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`pandemic.
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`45.
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`Plaintiff, and the Class members, leaned on Defendants’ third-party delivery
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`services to maximize sales and marketing as a lifeline to their businesses as approximately half
`
`of New York City’s restaurants moved to online platforms for delivery and takeout services.
`
`46.
`
`As expected, third-party platforms for delivery and takeout experienced an
`
`extreme increase in order volume during the COVID-19 pandemic.
`
`
`12 See https://www.governor.ny.gov/news/governor-cuomo-and-governor-murphy-announce-indoor-dining-new-
`york-city-and-new-jersey-will (last accessed on May 9, 2021).
`13 See https://www.governor.ny.gov/news/governor-cuomo-announces-new-york-city-indoor-dining-will-expand-75-
`percent-capacity-beginning - :~:text=April 30, 2021-,Governor Cuomo Announces New York City Indoor Dining
`Will Expand,Percent Capacity Beginning May 7&text=State Health Guidance-,Governor Andrew M.,capacity
`beginning Friday, May 7 (last accessed on May 9, 2021).
`14 See https://gothamist.com/news/new-york-reopen-without-most-capacity-restrictions-may-19th (last accessed on
`May 9, 2021).
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 10 of 21
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`47.
`
`Defendants represent the four major third-party delivery platforms in New York
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`City.15 As of April 2021, Grubhub/Seamless represented 37% of New York City’s sales,
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`DoorDash represented 34%, Uber Eats with 28% and Postmates (also owned by Uber) with 1%. 16
`
`48.
`
`Grubhub (which also owns and operates Seamless) the largest delivery platform
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`operating in New York City, reported tremendous revenue growth of $363 million in the first
`
`quarter of 2020, no doubt at the expense of struggling restaurants nationwide.17 By the third
`
`quarter of 2020, ending on September 30, 2020, Grubhub reported a fifty-three percent (53%)
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`revenue growth reporting $494 million, which is a 53% year-over-year increase from $322
`
`million in the same period in 2019.18 Grubhub’s success has continued into 2021 with reports of
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`a fifty-two percent (52%) revenue growth in the first quarter reporting revenues of $551
`
`million.19
`
`49.
`
`DoorDash is the second largest meal delivery platform and earned a 34% share of
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`New York City’s sales in March 2021.20 DoorDash reported first quarter revenues of 2020 to be
`
`$362 million, second quarter revenues of $675 million, third quarter revenues of $879 million
`
`and fourth quarter revenues of 2020 to be $970 million.21 DoorDash reported an enormous
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`revenue increase of 198% from the first quarter of 2020 with first quarter revenues of the first
`
`quarter of 2021 measuring an astonishing amount of $1.1 billion.
`
`
`15 See “Minutes of the Proceedings for the Stated Meeting of Wednesday, May 13, 2020,” The New York City
`Council, May 13, 2020, New York.
`16 See Liyin Yeo, “Which company is winning the restaurant food delivery war?” available at
`https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/
`17 See https://media.grubhub.com/media/News/press-release-details/2020/Grubhub-Reports-First-Quarter-2020-
`Results/default.aspx (last accessed on May 9, 2021).
`18 See https://media.grubhub.com/media/News/press-release-details/2020/Grubhub-Reports-Third-Quarter-2020-
`Results/default.aspx (last accessed on May 9, 2021).
`19 See https://media.grubhub.com/media/News/press-release-details/2021/Grubhub-Reports-First-Quarter-2021-
`Results/default.aspx (last accessed on May 9, 2021).
`20 See https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/ (last
`accessed on May 9, 2021).
`21 See https://s22.q4cdn.com/280253921/files/doc_financials/2020/q4/Investor-letter_2020_Q4_FINAL-(2).pdf (last
`accessed on May 9, 2021).
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`50.
`
`Uber Eats and Postmates are wholly owned subsidiaries of Uber. Uber Eats is the
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`third largest delivery application serving New York City earning 28% of delivery sales in March
`
`2021.22 Postmates trails with 1% of New York City’s delivery sales as of March 2021.23 Uber
`
`Eats reported a total revenue of $4.8 billion in 2020.24 Postmates generated $500 million in
`
`revenue in 2019 and was acquired by Uber in 2020 for $2.65 billion making a reported 5 million
`
`deliveries.25
`
`DEFENDANTS FLAGRENTLY VIOLATED
`THE DELIVERY APP. LEGISLATION AND
`THE AMENDED DELIVERY APP. LEGISLATION
`
`
`51. While 2020 (and continuing into 2021) proved to be a crushing year full of
`
`extreme financial hardship for Plaintiff and the restaurant industry, Defendants each reported
`
`2020 as the most profitable year yet and appear to show signs of being on a path to topping
`
`2020’s revenue in 2021.
`
`52.
`
`Despite the protections first put in place by the Delivery App. Legislation and
`
`then the Amended Delivery App. Legislation, Defendants nevertheless acted brazenly as though
`
`they were above the law by continuing to bleed restaurants dry by taking advantage of Plaintiff’s
`
`reliance on Defendants’ services and charge above the permissible twenty percent (20%) fee
`
`threshold.
`
`53.
`
`The Delivery App. Legislation states:
`
`(a) It shall be unlawful for a third-party food delivery service to charge a food
`service establishment a delivery fee that totals more than 15% of the purchase
`price of each online order…. (b) It shall be unlawful for a third-party food delivery
`service to charge a food service establishment any fee or fees other than a delivery
`
`
`22 See https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/ (last
`accessed on May 9, 2021).
`23 See https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/ (last
`accessed on May 9, 2021).
`24 See https://www.businessofapps.com/data/uber-eats-statistics/ (last accessed on May 9, 2021).
`25 See https://www.businessofapps.com/data/postmates-statistics/ (last accessed on May 9, 2021).
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 12 of 21
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`fee for the use of their service greater than 5% of the purchase price of each online
`order. Any fees or other charges from a third-party food delivery service to a food
`service establishment beyond such maximum 5% fee per order, and a delivery fee
`collected pursuant to subdivision (a) of this section, are unlawful.
`
`NYC Local Law No. 52 of 2020 (Int. No. 1908-B).
`
`54.
`
`The Delivery App. Legislation defines the term “delivery fee” as follows:
`
`[A] fee charged by a third-party food delivery service for providing a food service
`establishment with a service that delivers food from such establishment to
`customers. The term does not include any other fee that may be charged by a
`third-party food delivery service to a food service establishment, such as fees for
`listing or advertising the food service establishment on the third-party delivery
`service platform or fees related to processing the online order.
`
`NYC Local Law No. 52 of 2020 (Int. No. 1908-B).
`
`
`55.
`
`The Amended Delivery App. Legislation amended the Delivery App. Legislation
`
`as follows:
`
`It shall be unlawful for a third-party delivery service to charge a food service
`establishment any fee [or fees] other than a delivery fee for the use of their service greater
`than 5% of the purchase price of each online order, provided that such cap shall not apply
`to a credit card fee that is charged to the third-party food delivery service and is charged
`in the same amount by the third-party food delivery service to such food service
`establishment. [Any fees or other charges from a third-party food delivery service to a
`food service establishment beyond such maximum 5% fee per order, and a delivery fee
`collected pursuant to subdivision a of this section, are unlawful].
`
`NYC Local Law No. 88 of 2020 (Int. No. 2054-A) (emphasis in original).
`
`56.
`
`Defendants violated the Delivery App. Legislation and the Amended Delivery
`
`App. Legislation by continuing to charge Plaintiff in excess of the caps set forth in the legislation.
`
`57.
`
`Following the enactment of the Delivery App. Legislation, Uber Eats charged
`
`Plaintiff a flat twenty percent (20%) “Uber Service Fee” of the online order. The monthly invoice
`
`presented to Plaintiff showed the flat 20% “Uber Service Fee” was the only fee charged, and
`
`other fee categories listed on the invoice such as “Delivery Network Fee, Order Processing Fee,
`
`Dispatch Fee, and Service Fee %” were recorded as no fee or $0.
`
`
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`12
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`58.
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`Following the enactment of the Amended Delivery App. Legislation, Uber Eats
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`charged Plaintiff an additional flat 2.3% “Order Processing Fee” (as presumably allowed) on top
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`of its flat ambiguous twenty percent (20%) “Uber Service Fee”.
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`59.
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`The Delivery App. Legislation and the Amended Delivery App. Legislation is
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`clear. Defendants were not permitted to charge more than 15% for any delivery fee and more
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`than 5% of any other fee. Uber Eats’ flat 20% “Uber Service Fee” clearly violates the
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`unambiguous cap set forth in the statute.
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`60.
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`Grubhub also blatantly violated the Delivery App. Legislation by keeping its fees
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`for deliveries within the fifteen percent (15%) cap, but exceeding the five percent (5%) cap with
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`respect to the “other” fees as required by the legislation by charging for both marketing and order
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`processing fees resulting in total fees charged to Plaintiff to be in excess of the twenty (20%)
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`cap.
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`61.
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`Grubhub deceitfully charged two separate fees (both under the 5% cap) for
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`marketing and order processing services, appearing to keep all “other” fees under the five percent
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`(5%) cap, yet taken together, the marketing and order processing fees yielded a combined fee
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`that in total exceeded the allowed five percent (5%) threshold and in some cases reached
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`combined fees as high as 8.7%.
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`62.
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`Even after the enactment of the Amended Delivery App. Legislation, Grubhub
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`still could not help itself and continued to charge Plaintiff in exceed of the caps set forth in the
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`legislation by overcharging Plaintiff in excess of the five percent (5%) fee cap for non-delivery
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`fees in addition to credit card processing and delivery fees.
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`63.
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`Postmates also blatantly violated caps imposed by the Delivery App. Legislation
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`by continuing to charge Plaintiff fees in some cases as high as twenty-seven and a half percent
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 14 of 21
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`(27.5%) of the total order. These practices did not change following the enactment of the
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`Amended Delivery App. Legislation as Postmates set up a flat twenty percent (20%)
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`“commission” fee which again violated the spirit and the letter of the Delivery App. Legislation.
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`64.
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`Similarly, DoorDash charged in excess of the delivery caps set forth in the
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`Delivery App. Legislation and continued to defy the legislation following the enactment of the
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`Amended Delivery App. Legislation by also setting up an indiscriminate flat twenty percent
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`(20%) “commission” fee.
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`65.
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`Upon information and belief, Defendants also wrongfully inflated their credit card
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`processing fees to as high at four and half percent (4.5%) in order to further extort fees from
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`Plaintiff and the Class members.
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`CLASS ACTION ALLEGATIONS
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`66.
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`Pursuant to Federal Rule of Civil Procedure 23, Plaintiff brings its claim against
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`Defendants for violation of Local Law No. 52 of 2020, Council Int. No. 1908-B of 2020 and
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`Local Law No. 88 of 2020, Council Int. No. 2054-A of 2020, on behalf of itself and the following
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`“Class” defined below.
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`67.
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`Plaintiff seeks to represent a Class composed of and defined as follows:
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`a. All food service establishments that contracted with Defendants for delivery
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`services, with businesses located within New York City that were improperly
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`charged by Defendants for delivery services.
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`b. The term “food service establishment” shall mean the defined term set forth in
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`§81.03 of the health code of the city of New York defined as “a place where food
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`is provided for individual portion service directly to the consumer whether such
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 15 of 21
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`food is provided free of charge or sold, and whether consumption occurs on or off
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`the premises or is provided from a pushcart, stand or vehicle.”
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`68.
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`Plaintiff reserves the right to expand, limit, modify, or amend this Class definition
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`including the addition of one or more subclasses, in connection with Plaintiff’s motion for class
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`certification, or any time, based upon, inter alia, changing circumstances and/or new facts
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`obtained during discovery.
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`69.
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`Numerosity: The Class is composed of thousands of restaurants (the “Class
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`members”) whose joinder in this action would be impracticable. The disposition of their claims
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`through this class action will benefit all Class members, the parties, and the court system.
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`70.
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`Commonality: There is a commonality in questions of law and fact affecting the
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`Class. These questions of law and fact predominate over individual questions affecting individual
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`Class members, including, but not limited to the following:
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`a. Did Defendants comply with their legal obligations under the terms of the Local
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`Law No. 52 of 2020, Council Int. No. 1908-B of 2020 by limiting their delivery
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`fees to 15% of the total order and 5% of other fees?
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`b. Did Defendants comply with their legal obligations under the terms of the Local
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`Law No. 88 of 2020, Council Int. No. 2054-A of 2020 by limiting their delivery
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`fees to 15% of the total order and 5% of other fees?
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`c. How did Defendants calculate the delivery fees?
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`d. How did Defendants calculate the “other” fees?
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`e. How did Defendants calculate the processing fees?
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 16 of 21
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`f. Did Defendants possess exclusive knowledge of material facts with respect to the
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`methodology of the calculation of the fees charged to the restaurants, i.e., that
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`their delivery fees and other fees would exceed the permissible 20% threshold?
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`g. Did Defendants actively conceal a material fact or facts from the Plaintiff, i.e.,
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`that their fees would exceed the permissible 20% threshold?
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`h. Whether Defendants’ conduct, as alleged herein, was intentional and knowing?
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`i. Whether, as a result of Defendants’ conduct, Plaintiff and other Class members
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`have been injured, and if so, the appropriate measure of damages to which they
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`are entitled?
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`j. What is the amount of revenue and/or profits Defendants received as a result of
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`the conduct alleged herein?
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`k. Whether Defendants will continue to mislead the public and Class members and
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`continue to violate NYC regulations regarding charging Class members in excess
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`of the allowable 20% fee? and
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`l. Whether Plaintiff and Class members are entitled to an award of reasonable
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`attorney’s fees, pre-judgment interest and costs of suit?
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`71.
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`Superiority: In engaging in the conduct described herein, Defendants have acted
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`and/or failed to act on grounds generally applicable to Plaintiff and other Class members. Such
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`conduct requires the Court’s imposition of uniform relief to ensure compatible standards of
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`conduct towards Class members. A class action is superior to all other available means for the
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`fair and efficient adjudication of Plaintiff’s and the Class members’ claims. Few, if any, Class
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`members could afford to seek legal redress of the wrongs complained herein on an individual
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`basis. Absent a class action, Class members and the general public would not likely recover, or
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`Case 1:21-cv-04995 Document 1 Filed 06/07/21 Page 17 of 21
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`have the chance to recover, damages or restitution, and Defendants would be permitted to retain
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`the fruits of their misdeed.
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`72.
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`Typicality: Plaintiff’s claims are typical of, and are not antagonistic to, the claims
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`of all Class members. Plaintiff and the Class members have all be deceived by Defendants’ unfair
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`and unlawful practices in inflating their delivery fees, as alleged herein. The factual and legal
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`basis of Defendants’ liability to Plaintiff and each Class member as a result of Defendants’
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`actions are described herein.
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`73.
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`Adequacy: Plaintiff is an adequate representative of the Class because it is a
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`member of the Class, and Plaintiff’s interests do not conflict with the interest of the other Class
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`members that Plaintiff seeks to rep