Sysco Class Action Says ‘Fuel Surcharge’ is Hidden Price Increase

A class action lawsuit filed against food distributor Sysco alleges that the company charges a “fuel surcharge” that is misleading, because it does not relate to the actual increased cost of transporting its products.

The plaintiffs—both restaurants who purchase food from Sysco—challenge this “surcharge” as “a hidden price increase.”

The plaintiffs in this action are Barnacle Bill’s Oyster Bar and Seafood Restaurant in Florida and The Handlebar & Grill in Arkansas. Both restaurants claim that Sysco’s “fuel surcharge” is the same rate across the U.S., and that it is higher than Sysco’s actual costs for food transportation. The plaintiffs allege violations of both Arkansas and Florida deceptive and unfair trade practice laws.

According to the class action, by using the term “fuel surcharge,” Sysco makes it seem that the fee is “related to the increased fuel costs it incurs in delivering products, that it fluctuates as such costs fluctuate, and that it is used to offset such costs.” The plaintiffs assert that “These representations are false.”

Sysco has filed two motions, one to remove Handlebar as a plaintiff, and the other to dismiss the class action entirely. In support of its motion to “drop” plaintiff Handlebar, Sysco contends that these restaurants are in different states and their claims have nothing in common. In response, Handlebar argues that both restaurants allege the same claim against Sysco, and class actions frequently allow citizens of different states to join together in the same lawsuit.

In its motion to dismiss the entire action, Sysco makes several arguments against the Class. Sysco’s primary defenses are that its fuel surcharge was fully disclosed to all of its customers, and was therefore not deceptive. In addition, because its customers could choose to pay the surcharge or find another distributor, the doctrine of “voluntary payment” bars the plaintiffs’ claims.

In response, the plaintiffs allege that the term “fuel surcharge” has a commonly understood meaning in the industry, which Sysco misleadingly used to hide the true nature of its price increase. The Sysco class action cites several cases where a defendant was found to have violated consumer protection laws by not using a fee as it was disclosed.

The plaintiffs also argue that “the voluntary payment doctrine does not apply unless there is complete knowledge and in this case, not only did Barnacle Bill’s not know—and could not know—the facts which render Sysco’s conduct unlawful, Barnacle Bill’s paid as result of Sysco’s misrepresentations.”

Finally, the plaintiffs ask the court to deny Sysco’s motions, because they properly assert all claims in their original complaint.

The Sysco Deceptive Fuel Surcharge Class Action Lawsuit is Barnacle Bill’s Oyster Bar and Seafood Restaurant Inc., et al. v. Sysco Corporation, Case No. 4:17-cv-00130, in the U.S. District Court for the Northern District of Florida, Tallahassee Division.

UPDATE: January 2018, the Sysco fuel surcharge class action settlement is now open. Click here to file a claim.