Grubhub Sued by Massachusetts AG for Overcharging Restaurants Amidst Pandemic

A complaint filed on Thursday in Massachusetts’ Suffolk County Superior Court has accused online food delivery service Grubhub of exceeding statutory limits on restaurant fees during the COVID-19 crisis. Massachusetts Attorney General Maura Healey explained that the company violated a provision of the state’s temporary economic development legislation by charging several percentage points more than the 15% of an online order limit.

The state’s “Delivery Fee Cap Statute” went into effect in January and lasted until mid-June when the governor lifted the state of emergency. The attorney general’s press release noted that Healey sent letters to Grubhub and other online food delivery service platforms reminding them of the fee cap in February. Several months later, the state’s chief law enforcement officer sent Grubhub a cease and desist letter to the same effect.

Now, the lawsuit seeks recompense on behalf of restaurants who were illegally overcharged. “We allege that Grubhub knowingly and repeatedly violated the fee cap statute, raising costs by thousands of dollars and harming restaurants that were already financially distressed and trying to survive,” Healey said in a statement. The lawsuit also asks for civil penalties of $5,000 per violation, together with the costs of investigating and prosecuting the suit.

The Massachusetts case comes in the wake of others similarly targeting Grubhub and competing platforms like DoorDash, Uber Eats, and Postmates for restaurant fee cap law violations. A class action brought by New York City restaurants is proceeding while on the other side of the country, DoorDash and Grubhub are fighting the imposition of a law permanently capping restaurant fees in San Francisco, California.