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Court Moves Forward With Anti-Trust Lawsuit Against LA’s Biggest Restaurant Names

AOC, Rustic Canyon, Republique, and more could be on the hook for their 3% healthcare surcharge

a.o.c., Los Angeles
a.o.c., Los Angeles
Farley Elliott is the Senior Editor at Eater LA and the author of Los Angeles Street Food: A History From Tamaleros to Taco Trucks. He covers restaurants in every form, from breaking news to the culture, people, and history that surrounds LA's dining landscape.

Looks like an anti-trust lawsuit brought against some of Los Angeles’ biggest restaurant names will move forward. An L.A. County Superior Court judge last week overruled some preliminary arguments from the defendant’s legal counsel that would have helped to throw out the charges, which means soon enough owners from AOC, Rustic Canyon, Animal, Republique, Melisse, and more could be headed to trial.

Restaurant Hospitality carries all the details on the lawsuit update from last week, and it’s looking more and more likely that some of the city’s most prominent players will either have to defend their right to a 3% surcharge in court, or settle before it comes to that.

The issue being presented — whether a group of restaurants can collectivize in their agreement to add a 3% health care surcharge for their workers onto any bill — could also carry some larger ramifications for the restaurant industry as a whole. It is important to note here that the lawsuit actually leans rather heavily on the "collectivize" side of the argument, using anti-trust laws to allege that restaurateurs knowingly engaged in back-room dealings to mutually agree on the 3% surcharge all at once, thus drowning out competition and creating an unfair restaurant marketplace.

Of course, the affected restaurants argue that the surcharge is a more transparent way of informing the customer of the cost of running a business, and that the 3% is, as stated, being used to provide much-needed healthcare to staff. By simply raising prices on menu items without informing diners, they not only risk alienating some cost-averse customers, but also limit the consumer's transparency in knowing how their dollar is being spent.

The affected restaurants listed in the lawsuit include Lucques, Melisse, The Hungry Cat, AOC, Animal, Trois Mec, Rustic Canyon, and Son of a Gun. Daniel Sterrett, who is representing plaintiff Margaret Imhoff, says other restaurants could be named later as well. So for now, the lawsuit proceeds as it has done since last September, though with a trial date potentially looming.