Chipotle Rounds-Up Bills, Class Action Lawsuit Says

By Sarah Mirando | September 12, 2012

Category: Legal News

By Sarah Pierce

Chipotle Mexican Grill, Inc. has been hit with a class action lawsuit accusing the “fast casual” chain of routinely overcharging customers by rounding up their bills to the nearest 5-cent increment.

Lead Plaintiff Adam Overton cites a news article published the week before he filed the Chipotle Mexican Grill class action lawsuit that investigated the rounding-up scheme. The article quoted a Chipotle spokesman as saying the rounding-up was a time-saving tactic used in busy stores. “The idea is simply to limit the possible combinations of change on cash transactions to keep the lines moving quickly in high volume areas,” Chipotle said. The company said that it wasn’t making a profit off the practice because the totals were adjusted both up and down.

This justification doesn’t sit well with Overton, who’s class action lawsuit says Chipotle does not disclose its practice of rounding-up customers’ bills anywhere in its restaurants and that the practice is “false, misleading, and intended to conceal the fraud and breaches of contract that it has perpetrated.”

If customers had known that Chipotle was rounding up prices, they would have spent their money elsewhere, Overton says in the class action lawsuit.

“First, rounding-up Class Members’ bills to the nearest nickel does not save time by eliminating the time spent counting pennies because Chipotle’s cash registers automatically count the coin change,” the Chipotle class action lawsuit says.

“Second, hundreds of thousands of [customers] pay for the Chipotle Rounded-Up Products with credit or debit cards which simply require swiping at the cash register regardless of the total amount of the bill.”

Finally, the claim that Chipotle is rounding up customers’ bills to curb long lines is bunk, according to the class action lawsuit, which quotes a Chipotle conference call in which CEO Montgomery Moran says, “Even in our busiest restaurants, we’re not having a problem… getting people through the lines.”

The Chipotle rounding-up class action lawsuit is brought on behalf of all California consumers who purchased a Chipotle Rounded-Up Product from August 30, 2008 to the present. It is seeking actual and statutory damages and restitution for Class Members, as well as a permanent injunction barring Chipotle from engaging in the deceptive practices alleged in the lawsuit.

A copy of the Chipotle Mexican Grill Rounding-Up Class Action Lawsuit can be read here.

The case is Adam Overton v. Chipotle Mexican Grill, Inc., Case No. SACV12-1430 MMM (AGRx), U.S. District Court, Central District of California. Overton is represented by Paul R. Kiesel of Kiesel Boucher Larson LLP and Paul O. Paradis, Gina M. Tufaro and Mark A. Butler of Horwitz, Horwitz & Paradis.