Los Angeles Restaurants Sued in Price-Fixing Class Action Lawsuit

Some of Los Angeles’ most popular and upscale restaurants have been sued in an antitrust class action lawsuit, alleging the owners of these LA eateries, including Lucques and Animal, conspired to fix prices in order to cover the cost of Affordable Care Act required employee health care.

Plaintiff Margaret Imhoff filed this Los Angeles restaurants antitrust class action lawsuit on Sept. 1, alleging owners of AOC Wine Bar and Restaurant, Rustic Canyon Winebar and Seasonal Kitchen, Trois Mec, Son of a Gun, Melisse, and the Hungry Cat orchestrated an agreement to raise prices by 3 percent. According to the antitrust class action lawsuit, chef Josh Loeb allegedly emailed “like-minded” LA restaurant owners in 2014, proposing a secret surcharge agreement.

According to Imhoff’s antitrust class action lawsuit:

“In an attempt to justify their collusion, Defendants have publically cited the Affordable Care Act and labeled the 3% mark up as an employee ‘healthcare surcharge.’ Their justifications are legally irrelevant and simply a smokescreen. … California Courts will not consider any defense seeking to justify a price-fixing agreement as reasonable or required by business or economic considerations; such agreements are deemed illegal.”

Furthermore, restaurants that serviced similar clientele were targeted by restaurant owners to participate in the cartel’s surcharge plan, so as to make the surcharge appear normal to LA consumers, and to allegedly prevent restaurant consumers from finding alternative places to eat that do not apply the surcharge.

Chef Josiah Citrin, co-owner of Melisse, was quoted in the antitrust class action lawsuit as stating, “We decided it would be a good thing to do it as a group … [u]sually when lots of people do things it’s easier to make changes.”

The defending restaurant owners claim that the healthcare surcharge provides benefits to their employees. However, Imhoff argues the alleged surcharge results in a reduction of the employees’ tip pool, as patrons are likely to give a smaller tip when they receive a check that features the 3 percent surcharge.

The plaintiff has filed this Los Angeles restaurants antitrust class action lawsuit on behalf of herself and a Class of similarly situated non-exempt consumers who ate at one or more the restaurants owned by defendants on or after Sept. 1, 2014.

The antitrust class action lawsuit claims this cartel of LA restaurants violated the Cartwright Act and California’s Unfair Competition Law. Under these claims, Imhoff is seeking restitution of ill-gotten gains to plaintiff and the Class, treble damages, as well as attorney’s fees.

Imhoff is represented by Daniel R. Sterrett of Sterrett Law.

The Los Angeles Restaurants Antitrust Class Action Lawsuit is Margaret Imhoff v. Suzanne Goin, et al., Case No. BC593161, in the Superior Court of California for the County of Los Angeles.