Overview
In a ruling last week, Judge Failla dismissed a purported class action suit against Darden Restaurants, the owner of the Red Lobster and Olive Garden restaurant chains. The plaintiff, Ted Dimond, sought to represent a class of Darden’s customers, accusing the restaurant giant of violating New York state consumer protection laws by illegally adding an 18 percent tip to diners’ checks and by failing to list beverage prices on menus. He claimed that a gratuity is a “voluntary act,” and that therefore it was “materially misleading to label this… surcharge as a ‘gratuity.’” Judge Failla disagreed, finding that Darden placed the tip “conspicuously” on its menus for diners to see before ordering and that diners “had the option of leaving” if they had a problem with the charge. The Judge also held that gratuities between 18 and 20 percent are “not uncommon” in New York City, “undercutting… the argument that patrons were deceptively tricked” into paying a tip they would not have otherwise. Judge Failla also ruled that the failure to list beer and soft drink prices was not misleading because customers could learn those prices by asking. (Hat tip Reuters.)