Judge overrules attempts to dismiss Los Angeles antitrust case

Judge overrules attempts to dismiss Los Angeles antitrust case

Lawsuits charges restaurants with price fixing for discussing healthcare surcharge

A Los Angeles Superior Court judge on Thursday cleared the way for a price-fixing lawsuit to proceed in a case involving a group of restaurants that instituted a 3-percent surcharge to cover employee healthcare costs.

Judge Lisa Hart Cole overruled arguments on behalf of the restaurants to have the charges dismissed, and she agreed that the conduct at issue amounted to a per se violation of California antitrust law, according to attorney Daniel Sterrett, who represents plaintiff Margaret Imhoff in the potential class action.

The ruling allows the case to proceed to trial, unless there is a settlement sooner. The court is expected to rule on the lawsuit’s proposed class-action status in March.

The antitrust case began in September after a group of restaurateurs, including some of the city’s most popular restaurants, were charged with colluding on price in establishing a 3-percent surcharge to address the costs of providing healthcare.

The restaurants cited in the case include Animal, AOC, The Hungry Cat, Lucques, Melisse, Rustic Canyon, Son of a Gun and Trois Mec, though Sterrett said other restaurants may be included.

According to the complaint, the restaurants violated state antitrust laws in 2014 after the owners of Rustic Canyon emailed a group of “like-minded” restaurant operators to plan a course of action for implementing the surcharge.

Josh Loeb, co-owner of the Rustic Canyon Family of Restaurants, said in a statement that motions to dismiss are often difficult to win in such cases and the judge decided to let the lawsuit proceed for now.

“However, we continue to believe the claims here have no merit whatsoever,” Loeb said. “We’re very proud of the fact that we have been able to help our staff get great, fully covered health care, and we have all always been very transparent with our customers about the nature of the surcharge.

“We will continue to fight what we believe is a groundless case and are confident we will prevail when all is said and done,” he added.

UPDATE: Aug. 12, 2016 This story was updated to include a response from the defendants in the antitrust lawsuit.

Contact Lisa Jennings at lisa.jennings@penton.com
Follow her on Twitter @livetodineout

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