On September 24, 2020, class claims were filed against popular food delivery service, DoorDash Inc., by a Missouri restaurant in federal court in the Northern District of California. The suit claims that the defendant engaged in a pattern of behavior that deceptively directed customers away from restaurants with whom DoorDash does not have a relationship.
In the complaint, named plaintiff Lona’s Lil Eats LLC (“Lona’s), a St. Louis restaurant, alleges that during the COVID-19 pandemic and subsequent shutdown, many restaurants relied on takeout orders from customers using food delivery apps like DoorDash in order to stay open. According to the plaintiff restaurant, many small businesses were put in the difficult position of choosing to partner with DoorDash or declining—and running the risk of losing sales.
The plaintiff alleges that “partnered” restaurants are required to pay DoorDash various commissions and related fees on orders placed through the app. However, the plaintiff argues that restaurants who choose to remain unpartnered with DoorDash face consequences that impact the business. For example, the action claims that the defendant often published false or misleading information about unpartnered restaurants.
The plaintiff accuses DoorDash of frequently reporting to its users that Lona’s was unavailable because it was out of the delivery area. The plaintiff bolstered its argument by showing screen shots from the app stating that Lona’s was out of the delivery range for an address that was located 200 feet from the restaurant. In addition, the plaintiff alleges that DoorDash frequently informs users that the restaurant is closed, when it is actually open. The suit alleges that DoorDash engages in predatory, deceptive and anticompetitive behavior that takes unfair advantage of its market position.
The plaintiff seeks to represent a class made up of all restaurants, entities, and/or individuals with any ownership interest in restaurants or entities in the U.S. that do not do business with DoorDash, but which nevertheless have a landing page on a DoorDash website or app. The suit brings causes or action for false advertising, violation of California False Advertising Laws and violation of California Unfair Competition Law.
The case is: Lona's Lil Eats LLC v. DoorDash Inc., Case No.: 3:20-cv-06703, in the U.S. District Court for the Northern District of California.
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