Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 1 of 27
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF PENNSYLVANIA
`
`TIFFIN EPS, LLC and TIFFIN MOUNT
`AIRY, LLC, on behalf of themselves
`and all others similarly situated,
`
` Plaintiffs,
`
` v.
`
`GRUBHUB INC.,
`
`Defendant.
`
`Case No. ________________
`
`CLASS ACTION COMPLAINT
`
`JURY TRIAL DEMANDED
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`Plaintiffs Tiffin EPS, LLC and Tiffin Mount Airy, LLC (“Plaintiffs”), by and through
`
`their undersigned counsel, bring this class action on behalf of themselves and a proposed class of
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`all others similarly situated, against Defendant Grubhub Inc. (“Grubhub”). Plaintiffs make the
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`following allegations based upon personal knowledge as to themselves and their own acts, and
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`upon information and belief as to all other matters, based upon, inter alia, the investigation
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`undertaken by their counsel of the contracts at issue, Grubhub financial records, public records,
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`Grubhub’s filings with the Securities and Exchange Commission (“SEC”), and online postings
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`and articles.
`
`I.
`
`NATURE OF THE CASE
`
`1.
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`For at least seven years, if not longer, Grubhub has been withholding
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`commissions for sham telephone food orders, depriving more than 80,000 restaurants of
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`revenues and profits that rightfully belong to them.
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`2.
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`While Grubhub boasts that it is “the leading online and mobile platform” for
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`restaurant takeout orders and brags that by using the platform “diners do not need to place their
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`orders over the phone,” Grubhub has nevertheless been charging restaurants commissions on
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`120693552_1
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 2 of 27
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`telephone calls, regardless of whether those calls were actually made to place orders for takeout.
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`Grubhub has done this, even though the restaurants― not Grubhub― take the telephone orders,
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`process them, and prepare the food.
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`3.
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`Moreover, Grubhub charges these commissions without verifying whether the
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`calls generated actual food orders and has instead relied solely on the length of the call to justify
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`its withholding of revenues and profits that belong to the restaurants―not Grubhub.
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`4.
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`In fact, Grubhub has admitted that restaurants “may have been incorrectly
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`charged” for these sham telephone orders.
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`5.
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`Grubhub’s wrongful conduct includes: (1) failing to disclose in its standard form
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`contracts that Grubhub does not take telephone orders and that instead it issues a new telephone
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`number per restaurant that is advertised on Grubhub’s microsite and, when dialed, Grubhub
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`redirects the call to the restaurant itself and records the call; (2) misrepresenting that
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`commissions will only be charged on actual food and beverage orders; (3) failing to disclose in
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`its standard form contract Grubhub’s method, if any, for determining which phone calls generate
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`actual food and beverage orders; (4) failing to disclose that Grubhub does not undertake any
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`analysis to determine which telephone calls actually result in food and beverage orders before
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`charging commissions for them; and (5) misrepresenting that commissions are being charged for
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`orders placed through GrubHub.com and generated by Grubhub.
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`6.
`
`Grubhub’s actions, and failure to act when required, have caused Plaintiffs and
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`tens of thousands of other restaurants across the country to suffer harm, including but not limited
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`to lost profits in the tens of millions of dollars over the past seven years.
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`7.
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`Plaintiffs seek to remedy these harms and prevent their future occurrence,
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`individually and on behalf of themselves and a proposed class of all other similarly situated
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 3 of 27
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`consumers who were wrongfully charged for telephone orders by Grubhub. Plaintiffs assert
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`claims for themselves and on behalf of a nationwide class of consumers for Grubhub’s (1) breach
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`of contract, (2) conversion, and (3) violations of the Illinois Consumer Fraud and Deceptive
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`Business Practices Act.
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`8.
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`Plaintiffs seek to recover, for themselves and a proposed class of all others
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`similarly situated, actual and statutory damages, injunctive relief, restitution, disgorgement,
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`costs, and reasonable attorneys’ fees.
`
`II.
`
`JURISDICTION AND VENUE
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`9.
`
`This Court has original jurisdiction over this matter pursuant to 28 U.S.C.
`
`§ 1332(d)(2) because: (i) there are 100 or more members of the Class; (ii) the amount in
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`controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs; and (iii) at
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`least one member of the Class is a citizen of a State different from Grubhub.
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`10.
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`This Court has personal jurisdiction over Grubhub because Grubhub is authorized
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`to do business and regularly conducts business throughout the United States, including
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`Pennsylvania.
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`11.
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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 claims occurred in this District,
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`Grubhub is authorized to conduct business in this District, and Grubhub regularly conducts and
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`transacts business in this District and is therefore subject to personal jurisdiction in this District.
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`III.
`
`THE PARTIES
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`12.
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`Tiffin EPS, LLC is a Pennsylvania Limited Liability Company with its principal
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`place of business located at 8080 Old York Road, Elkins Park, Pennsylvania 19027 (“Tiffin
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`Elkins Park”). Tiffin Elkins Park owns and operates a restaurant, Tiffin Indian Cuisine, at that
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`location. Tiffin Elkins Park was injured as a result of Grubhub’s conduct described herein.
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`13.
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`Tiffin Mount Airy, LLC is a Pennsylvania Limited Liability Company with its
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`principal place of business located at 7105 Emlen Street, Philadelphia, Pennsylvania 19119
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`(“Tiffin Mount Airy”). Tiffin Mount Airy owns and operates a restaurant, Tiffin Indian Cuisine,
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`at that location. Tiffin Mount Airy was injured as a result of Grubhub’s conduct described
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`herein.
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`14.
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`Grubhub Inc. is a corporation organized and existing under the laws of the State
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`of Delaware with its principal place of business located at 111 W. Washington Street, Suite
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`2100, Chicago, Illinois 60602.
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`IV.
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`FACTUAL BACKGROUND
`
`A.
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`15.
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`Grubhub’s Business Model And Ordering Platform
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`Grubhub considers itself to be “the leading online and mobile platform for
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`restaurant pick-up and delivery orders, which the Company refers to as takeout.” Grubhub’s
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`Form 10-K, dated February 28, 2018, at 3 [hereinafter, “2018 Form 10-K”].1 Grubhub uses its
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`platform to connect more than 80,000 restaurants with diners in more than 1,600 cities across the
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`United States. Id. Grubhub contends that its “powerful two-sided network” creates enhanced
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`value for both diners and restaurants. Id.
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`1.
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`Grubhub’s Service To Diners
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`16. With respect to diners, Grubhub contends that it “makes takeout accessible,
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`simple and enjoyable, enabling them to discover new restaurants and accurately and easily place
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`their orders anytime and from anywhere.” Id. at 5.
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`17.
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`Grubhub’s platform helps diners search for and locate local restaurants and place
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`food orders with those restaurants “from any internet-connected device.” Id. at 3. Grubhub
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`1 Grubhub’s Form 10-K, dated February 28, 2018, is incorporated by reference as if fully set forth herein.
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 5 of 27
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`“generates revenues primarily when diners place an order on its platform.” Id. Indeed, the
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`number of diners using Grubhub’s platform “is a key revenue driver.” Id. at 29.
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`18.
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`Simply put, a hungry diner visits Grubhub’s ordering platform―either the
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`website or the mobile app―and searches for restaurants according to various parameters, such as
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`type of food or location. The diner can then browse the restaurant’s menu and place an order for
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`takeout via Grubhub’s platform. Grubhub processes the order and transmits it to the restaurant to
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`be fulfilled. The restaurant prepares the food and delivers it to the diner, though Grubhub offers
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`delivery services as well.
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`19.
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`Grubhub boasts that by using the platform, “diners do not need to place their
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`orders over the phone” which allows diners to order food “without having to talk to a distracted
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`order-taker in an already error-prone process.” Id. at 5.
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`20.
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`As of December 31, 2017, Grubhub claimed to have 14.5 million “active diners”
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`and more than 334,000 “daily average grubs.” Id.
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`2.
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`Grubhub’s Service To Restaurants
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`21.
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`For restaurants, Grubhub contends that it provides them “with more orders, helps
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`them serve diners better, facilitates delivery logistics in many markets, and enables them to
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`improve the efficiency of their takeout business.” Id. at 4-5.
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`22.
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`Diners use Grubhub’s platform to place takeout orders with restaurants that have
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`enlisted Grubhub’s services. In turn, restaurants pay a commission on food orders that are
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`processed through Grubhub’s platform. Id. at 3. Grubhub contends that it only gets paid on food
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`orders it generates for restaurants that use its services. Id.
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`5
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`23.
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`The commissions can vary by restaurant but are “typically a percentage” of each
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`transaction, ranging from 15% to 20% per order. To increase their prominence and exposure to
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`diners on Grubhub’s platform, restaurants can opt to pay a higher commission rate. See id. at 4-5.
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`24.
`
`Though Grubhub primarily markets its online and mobile platforms, it also
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`charges commissions on food orders taken over the telephone. However, Grubhub contracts
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`require that an actual food order must be placed through Grubhub.com for any commission
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`obligation to arise.
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`25.
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`For example, the Grubhub contracts with Plaintiffs Mount Airy and Elkins state:
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`I agree to pay the advertising fee provided circled above for each
`“order” (term defined as food and beverage subtotal, including
`delivery fee, placed through GrubHub.com to my restaurant).
`
`26.
`
`The Plaintiff Mount Airy Grubhub contract further states that:
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`In the event orders are placed by telephone using contact
`information from GrubHub.com the fee shall be determined by my
`restaurant’s monthly fee average as determined from month to
`month.
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`27.
`
`Plaintiff Elkins’ Grubhub contract permits commissions on “orders” but contains
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`no language about orders placed by telephone through Grubhub.com.
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`28.
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`In reality, there is no Grubhub telephone food ordering system. As set forth more
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`fully below, Grubhub creates a local telephone number for each restaurant and advertises that
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`number on the restaurant’s microsite on the Grubhub platform. When a diner uses that telephone
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`number to place a food order (as opposed to ordering on Grubhub’s online or mobile platforms),
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`the diner’s call is rerouted to the restaurant itself, and Grubhub does not interface with the diner
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`at all. In fact, Grubhub does not play any role in the processing of telephone food orders.
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`Moreover, because the restaurant, rather than Grubhub, handles the telephone calls, Grubhub
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`does not know whether the call actually resulted in a food order or whether it was another type of
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`6
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 7 of 27
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`phone call. Because Grubhub is not privy to these phone calls as they are taking place, Grubhub
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`simply assumes that any conversation longer than 45 seconds is a food order and charges a
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`commission without verifying whether an order for food was actually placed.
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`29.
`
`Diners typically pay for their meals via credit card. See 2018 Form 10-K. After a
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`diner places an order on Grubhub’s online or mobile platform, Grubhub “collects the total
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`amount of the diner’s order net of payment processing fees from the payment processor and
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`remits the net proceeds to the restaurant less [Grubhub’s] commission.” Id. Grubhub “also
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`deducts commissions for other transactions that go through its platform, such as cash transactions
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`for restaurant partners, from the aggregate proceeds received.”
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` Id.
`
` Grubhub then
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`“accumulates” these funds and “remits the net proceeds to the restaurants on at least a monthly
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`basis.” Id.
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`30.
`
`For the calendar year ending December 31, 2017, Grubhub served more than
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`80,000 restaurants and generated $683.1 million in revenue. Id. at 8, 31. Grubhub is on track to
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`generate over $1 billion in revenue for the 2018 calendar year.
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`B.
`
`Grubhub Creates Misleading Telephone Numbers Taking Advantage Of
`Unsuspecting Restaurants
`
`
`31.
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`Grubhub touts that it “offers a more targeted marketing opportunity than the
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`yellow pages, billboards or other local advertising mediums since diners typically access the
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`Company’s platform when they are looking to place a takeout order[.]” Id. at 8.
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`32.
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`As part of its marketing services to restaurants, Grubhub creates and has sole
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`editorial control over a restaurant’s microsite on the Grubhub platform. While the restaurant
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`provides restaurant-specific content that includes menus, photos, trademarks, and logos, Grubhub
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`ultimately controls how the restaurant’s content is presented on the Grubhub platform. Id.
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`7
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`33.
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`Unbeknownst to many of its restaurant customers, however, Grubhub also creates
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`content for restaurants’ microsites on Grubhub’s platform. Specifically, Grubhub obtains a local
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`telephone number for each restaurant and lists that phone number on the restaurant’s Grubhub
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`landing page. For the most part, restaurants are unaware that Grubhub is not advertising their
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`actual phone numbers and instead promotes these Grubhub-issued local telephone numbers.
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`34.
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`Likewise, many diners are unaware that they are calling a Grubhub-issued local
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`telephone number. Because the Grubhub-issued telephone numbers are local telephone numbers,
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`diners searching for restaurants believe that the phone numbers they see on Grubhub’s platform
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`are the actual telephone numbers for the restaurants. They are not.
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`35.
`
`One of Grubhub’s founders, Mike Evans, explains:
`
`Quora,
`
`available
`
`at
`
`https://www.quora.com/How-does-GrubHub-monitor-orders-and-
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`accordingly-charge-fees-to-the-restaurants-when-the-diner-directly-phones-in-the-restaurant-
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`8
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 9 of 27
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`using-the-restaurants-phone-number-appearing-on-its-GrubHub-page
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`(last visited Dec. 31,
`
`2018).
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`36.
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`In addition, some diners may use these Grubhub-issued telephone numbers
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`without even intending to place an order via Grubhub’s platform. For example, if a diner uses a
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`search engine like Google to search for a specific restaurant, that diner will invariably click onto
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`the restaurant’s Grubhub landing page, as Grubhub has secured primary placement with all
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`popular search engines. Typically, a restaurant’s microsite on Grubhub is the first search result
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`that appears, even above the restaurant’s own website. After landing on the Grubhub page, the
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`diner would then dial the telephone number advertised there, mistakenly believing that he/she is
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`contacting the restaurant directly. Instead, Grubhub diverts these calls to the restaurants and
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`records the calls.
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`37.
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`Conversely, restaurants are unaware that they are receiving a telephone food order
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`diverted to them from a Grubhub-issued local telephone number masquerading as the local
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`restaurants’ phone numbers on Grubhub microsites, as opposed to receiving a call from a diner
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`directly.
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`C.
`
`Grubhub Impermissibly Charges Commissions For Telephone Calls That Do
`Not Generate Food Orders
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`38.
`
`As set forth above, Grubhub creates its own local phone number for each
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`restaurant in order to “track the calls and bill accordingly.” When diners use those numbers,
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`those calls are then diverted to the restaurant and recorded.
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`39. With respect to the telephonic food orders, the restaurants do all of the work: they
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`take the phone order; they process the order; they prepare the food; and they deliver it. Grubhub
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`plays no role in the process. In fact, because Grubhub is not involved in with the food orders
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`placed over the phone, it charges the restaurants a commission based upon the average
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 10 of 27
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`commissions charged to the restaurant a “monthly fee average as determined from month to
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`month.”
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`40.
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`Even though Grubhub records the calls that are placed via the Grubhub-issued
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`phone numbers, Grubhub does not listen to those recordings to verify that the calls are actually
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`calls to place food orders. Instead, Grubhub merely assumes which calls are food orders―as
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`opposed to other types of calls―based upon the length of the call.
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`41.
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`Grubhub has acknowledged that it does not verify which calls are for food orders.
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`In 2013, when asked how Grubhub differentiates between phone calls generating food orders and
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`other types of calls, Grubhub’s founder explained:
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`10
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`Quora,
`
`available
`
`at
`
`https://www.quora.com/GrubHub-How-does-grub-hub-differentiate-
`
`between-phone-calls-for-delivery-and-phone-calls-for-inquiry (last visited Dec. 31, 2018).
`
`42. More recently, a Grubhub representative explained that Grubhub’s “algorithm
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`determines whether a call results in an order; the length of the call is one factor that goes into
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`that determination. The review system is in place so that if our algorithm makes a mistake, we
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`can rectify that with the restaurant.” Tribeca Citizen, Why Restaurants Hate GrubHub Seamless,
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`available at https://tribecacitizen.com/2016/03/01/why-restaurants-hate-grubhub-seamless/ (last
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`visited Dec. 31, 2018).
`
`43.
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`For at least six years, however, the length of the call has been the only factor that
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`Grubhub considers when determining whether a call is a food order or not. Indeed, as set forth
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`more fully below, a Grubhub account advisor made clear that Grubhub automatically charges a
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`telephone commission for any phone call that exceeds 45 seconds in length―regardless of
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`whether that call is to place a food order or not. In fact, most telephone calls are not food orders.
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`44.
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`Thus, Grubhub has been unlawfully charging commissions and withholding
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`restaurants’ receivables under the guise that Grubhub generated food orders by telephone. On
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`the contrary, Grubhub merely created a local telephone number for the restaurant, diverted
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`diners’ calls to the restaurant, and played no part in taking, processing, or delivering the
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`order―if one was even made.
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`45.
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`Grubhub claimed that restaurants had access to all telephone recordings, but in
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`reality no restaurant had any access to a single telephone recording because Grubhub had
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`universally disabled such access in an effort to conceal Grubhub’s unlawful business practice.
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`Moreover, one of Grubhub’s account advisors acknowledged that without these recordings,
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`11
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`restaurant orders cannot review the calls and audit them to determine which calls actually
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`generated food orders.
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`D.
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`Plaintiffs’ Experiences With Grubhub and Sham Telephone Orders
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`1.
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`Plaintiffs’ Contract With Grubhub
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`46. Munish Narula (“Narula”) is the President and CEO of Tiffin.com, Inc.
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`(“Tiffin.com”) which owns various restaurants in Pennsylvania and New Jersey, including
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`Plaintiffs Tiffin Elkins Park and Tiffin Mount Airy.
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`47.
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`Narula’s restaurants first contracted with Grubhub in 2011, and Grubhub orders
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`make up nearly 15% of Tiffin.com’s revenues.
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`48.
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`On or about April 26, 2011, Tiffin Elkins Park and Tiffin Mount Airy each
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`executed a “Grubhub Sign-up Form” with Grubhub. These contracts between Grubhub and
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`Tiffin Elkins Park and Tiffin Mount Airy are “governed by and interpreted in accordance with
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`the laws of Illinois.”
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`49.
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`As part of their contracts with Grubhub, Tiffin Elkins Park and Tiffin Mount Airy
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`agreed to pay a commission, or “advertising fee,” on each “order.” An “order” is defined as the
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`“food and beverage subtotal, including delivery fee, placed through GrubHub.com to [the]
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`restaurant.”
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`50.
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`Grubhub’s contracts with Plaintiffs do not provide for the imposition of a
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`commission or fee for telephone orders taken by and placed with the restaurant itself. Indeed,
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`the Tiffin Elkins Park contract does not even reference telephone orders.
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`51.
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`At no point did Grubhub advise Narula or his restaurants that it would create local
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`phone numbers for each of the restaurants and advertise those numbers on the restaurants’
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`Grubhub microsites.
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`52.
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`For example, Tiffin Elkins Park’s actual phone number is 215-635-9205, yet the
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`Grubhub landing page for this restaurant lists the Grubhub-issued phone number, 215-948-9308.
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`53.
`
`Consistent with Grubhub’s practices, when diners visit the Grubhub page and use
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`this number to call to place a food order over the telephone, the call is redirected to Tiffin Elkins
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`Park. There, Tiffin staff members take and process the order. Grubhub does nothing.
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`54.
`
`Likewise, Tiffin Mount Airy’s actual phone number is 215-242-3656, while the
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`Grubhub-issued number, 215-948-9309, is the only number listed on the landing page.
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`13
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`55.
`
`Again, diners who end up on Grubhub’s page use this number to place food
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`orders over the telephone. Grubhub merely forwards those calls to Tiffin Mount Airy, where the
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`restaurant staff do all of the work to both take the order and prepare it.
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`56.
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`Grubhub charges a commission on these telephone food orders, even though it
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`does nothing to generate them.
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`2.
`
`Plaintiffs Discover Grubhub’s Scheme
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`57.
`
`On March 15, 2018, while reviewing the Grubhub ledgers online, a member of
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`Narula’s team questioned the telephone order commissions charged by Grubhub. Narula
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`explained his belief that Grubhub takes orders by telephone and transmits those orders to the
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`restaurants; however, he was unsure about how those orders were being transmitted. Narula
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`tested the system by placing an order through Grubhub’s telephone system. He was shocked to
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`learned that when he dialed the Grubhub-issued telephone number associated with one of his
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`restaurants, that he was redirected to his own restaurant and the restaurant’s caller identification
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`displayed Narula’s own cell phone number.
`
`58.
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`Narula then noticed that any call over a certain amount of time was automatically
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`treated like an actual food order on the Grubhub ledger for the restaurant. For example, he dialed
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`the Grubhub-issued phone number, had the restaurant place the call on hold for 2 minutes, and
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`then hang up. Just minutes later, this call had been recorded by Grubhub as a legitimate food
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`order for which a commission was assessed.
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`59.
`
`That same day, a female customer called the Grubhub-issued phone number to
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`one of the Tiffin restaurants to ask questions about the menu because she had food allergies.
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`Narula observed that this telephone call about food allergies was also treated by Grubhub as an
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`actual food order for which commissions were assessed. That same woman proceeded to place a
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`food order online at Grubhub.com shortly after her call to the restaurant, and Grubhub charged
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 15 of 27
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`the restaurant two commissions - once for her call about food allergies and the other for the
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`online order placed by the woman immediately after the phone call. Finally, Narula observed that
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`during time frames where no delivery orders had been placed, Grubhub was charging its
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`restaurants telephone order commissions.
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`60.
`
`Narula then sought to listen to the telephone recordings and discovered that he
`
`was unable to access the recordings. He sought to access recordings that went as far back as
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`2011, to no avail. None of the recordings were accessible. Narula confirmed with at least four
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`other restaurants that they likewise could not access these so-called telephone order recordings.
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`The inability for restaurants to listen to recordings was a system-wide issue.
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`61.
`
`By intentionally disabling the restaurants’ ability to listen to these recordings,
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`Grubhub was able to conceal that: (1) it had no role in placement of food orders over the
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`telephone; and (2) Grubhub was charging restaurants a commissions on any telephone call over
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`45 seconds regardless of whether or not a food order was placed.
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`62.
`
`That same day, March 15, 2018, Narula contacted a Grubhub account advisor to
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`object to the imposition of telephone commissions on orders taken by the restaurants themselves,
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`not Grubhub. Narula also objected to the fact that he was unable to listen to any of the recordings
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`of calls made through the Grubhub-issued telephone number.
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`63.
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`A Grubhub account advisor told Narula that Grubhub’s system is automated to
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`charge a telephone order commission on each and every call made to the restaurants via the
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`Grubhub-issued telephone number that exceeds 45 seconds in length, regardless of whether a
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`food order is actually placed. The Grubhub account advisor also claimed that the recordings were
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`not accessible due to a glitch impacting only Tiffin restaurants when this was clearly false as
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`confirmed by at least four different restaurants that Narula had contacted earlier that same day.
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 16 of 27
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`That same account advisor then threatened to suspend Grubhub’s services for all of Narula’s
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`restaurant locations if Narula took legal action or went to the media about Grubhub’s telephone
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`order scheme, threatening to cut off 15% of Narula’s revenues.
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`64. When Narula elevated his complaint to a Grubhub manager, the manager
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`promised to investigate why the recordings could not be accessed and respond to Narula’s
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`complaint within 24 hours. Instead of explaining why the recordings could not be accessed or
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`correcting the disabled recordings, Grubhub’s manager had the same account advisor contact
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`Narula the next day to offer to waive all future telephone commissions for Tiffin restaurants,
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`proposing “to just make all calls .01 cents. That way it will make up for any calls you may have
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`been incorrectly charged in the past. . . .”
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`65.
`
`On or around August 2018, Grubhub started making recordings available to
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`restaurants but continued assessing commissions on phony telephone food orders.
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`66.
`
`Narula reviewed the available recordings of calls made to his restaurants via the
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`Grubhub-issued phone numbers. Those recordings revealed that Grubhub’s “algorithm” for
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`determining which calls are food orders is deeply flawed. For example, the following calls were
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`all made to Narula’s restaurants via the Grubhub-issued numbers, and each of the calls exceeded
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`45 seconds in length. Thus, according to Grubhub’s policy, they were all charged as food orders,
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`though―quite clearly―none of them were.
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`August 20, 2018, 5:45pm: Hi, um I just placed an order through Grubhub but I didn’t
`get a confirmation text or email but I just wanted to make
`sure it went through.
`
`August 21, 2018, 8:05pm: Hi. I ordered a delivery to Manton Street like, an hour and
`twenty minutes ago, and it’s still not here.
`
`August 24, 2018, 8:15pm: Hi. I’m ordering off of Grubhub and I was wondering if
`you guys had tofu. Do you carry tofu?
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 17 of 27
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`August 31, 2018, 11:20am: Hi. Is this Tiffin? Okay, I just wanted to know what time
`you guys started – start to, um, do delivery.
`
`September 3, 2018, 3:55pm: Yeah, I have a question. You guys are delivering through
`Grubhub, right? On your menu, do you have any hummus?
`Do you make hummus there?
`
`September 9, 2018, 5:20pm: Hi. We’re . . . placing an order on Grubhub and wanted to
`know if the curries comes with rice or if that’s separate.
`
`September 12, 2018, 5:00pm: Yes, um, are you guys non-vedge and vedge? Do you have
`non-vedge as well? Okay, I just wanted to…See, I’m a
`vegetarian, so I wanted to make sure, you know, the
`cooking is okay. So do you guy – does the chef cook
`separately or use separate containers?
`
`67.
`
`These recordings are fair representations of the types of calls that the restaurants
`
`usually receive. In fact, diners primarily call the restaurants to check on the status of their
`
`delivery orders or to ask questions about the menu. These recordings also showed that Grubhub
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`continued charging phony telephone commissions to Narula’s restaurants on the basis of
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`telephone calls that exceeded 45 seconds despite that they resulted in no food orders.
`
`68.
`
`Given the primary placement of Grubhub’s restaurant pages with popular search
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`engines and the frequency with which diners place non-food-order calls, the amount of false food
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`order fees charged by Grubhub is likely substantial. Indeed, Narula estimates that 80% of the
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`telephone commissions that his restaurants were charged were not linked to an actual food order.
`
`E.
`
`Other Restaurants’ Experiences With Grubhub And Charges For Sham
`Telephone Orders
`
`69.
`
`Grubhub provides its services to over 80,000 restaurants across the country, and
`
`imposes commissions for sham telephone orders on other restaurants as well.
`
`70.
`
`For example, in 2016, an anonymous restaurateur in New York complained that
`
`Grubhub “charge[s] us a minimum of $3 for any call under 30 seconds. If the call is longer, the
`
`fee can be up to $7.” Tribeca Citizen, Why Restaurants Hate GrubHub Seamless, available at
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`17
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 18 of 27
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`https://tribecacitizen.com/2016/03/01/why-restaurants-hate-grubhub-seamless/ (last visited Dec.
`
`31, 2018).
`
`71. More recently, another New York restaurant owner voiced similar allegations,
`
`complaining that “the site never show our real number to contact, and if someone called us from
`
`their website, Grubhub will charge us 3$ for phone order no matter what that phone call is
`
`about.” Medium, Why my restaurant stop doing delivery through Seamless/Grubhub/ Eat24,
`
`available at https://medium.com/@mynguyen_66342/why-my-restaurant-stop-doing-delivery-
`
`through-seamless-grubhub-eat24-47f3ab83c332 (last visited Dec. 31, 2018).
`
`V.
`
`CLASS ACTION ALLEGATIONS
`
`72.
`
`Pursuant to Federal Rule of Civil Procedure 23, Plaintiffs bring their claims
`
`against Grubhub for breach of contract, conversion, and violations of the Illinois Consumer
`
`Fraud and Deceptive Business Practices Act (the “Illinois Act”) on behalf of themselves and the
`
`following “Class” defined as follows:
`
`All restaurants in the United States who were improperly charged
`by Grubhub for a telephone food order.
`
`73.
`
`Grubhub, its officers and directors, as well as the judge to whom this case is
`
`assigned are excluded from the Class.
`
`74.
`
`The Class consists of millions of individuals, making joinder impractical, in
`
`satisfaction of Fed. R. Civ. P. 23(a)(1). The exact size of the Class and the identities of the
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`individual members thereof are ascertainable through Grubhub’s records.
`
`75.
`
`The claims of Plaintiffs are typical of the claims of the other Class members.
`
`Plaintiffs’ claims and those of the Class members are based on the same legal theories and arise
`
`from the same unlawful conduct, resulting in the same injury to Plaintiffs and the Class
`
`members.
`
`18
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`Case 2:18-cv-05630-PD Document 1 Filed 12/31/18 Page 19 of 27
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`76.
`
`The respective class has a well-defined community of interest. Grubhub has
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`acted, and failed to act, on grounds generally applicable to Plaintiffs and the Class members,
`
`requiring the Court’s imposition of uniform relief to ensure compatible standards of conduct
`
`toward the Class.
`
`77.
`
`There are many questions of law and fact common to the claims of Plaintiffs and
`
`of the other Class members, and those questions predominate over any questions that may affect
`
`only individual Class members. Common questions of fact and law affecting members of the
`
`Class that predominate over any individualized questions include, but are not limited to, the
`
`following:
`
`a) Whether