Burger Joint Says Postmates Penalizes Nonpartner Eateries

By Bill Donahue
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Law360 (February 25, 2021, 12:36 PM EST) -- A California burger joint is suing Uber Inc.'s Postmates for trademark infringement over accusations that the delivery giant inaccurately listed the restaurant as "closed" in an effort to coerce the eatery to partner with the platform, the latest case filed against food apps by pandemic-ravaged eateries.

In a lawsuit filed Wednesday in Los Angeles federal court, Lucky Boy Burgers said it has chosen to avoid Postmates because of the company's 30% fee, but that its name nonetheless shows up in search results on the platform.

"Lucky Boy does not want to be affiliated or associated with defendant," Lucky wrote. "However, Postmates runs its business to penalize Lucky Boy for not signing up by intentionally diverting business [from] Lucky Boy."

According to the lawsuit, Postmates has sometimes listed Lucky Boy as "closed" rather than simply delisting the business or stating that it is not available through the platform.

"The dining establishments were not closed at the time this image was taken," Lucky wrote, including a screenshot of a "closed" notice. "This diverts consumers to other restaurants because they falsely believe Lucky Boy is closed."

A spokesperson for Postmates did not immediately return a request for comment Thursday.

The case is the latest against online delivery services amid the COVID-19 pandemic, as eateries rely more on takeout orders to survive amid dining restrictions.

Both GrubHub and DoorDash are facing class actions that accuse them of falsely advertising that nonpartner restaurants are closed. Another case, an antitrust lawsuit, challenged the use of "no price competition" clauses by a slew of platforms that force eateries to charge the same price for both delivery and dine-in customers.

In addition to the "closed" marker, Lucky Boy's lawsuit claims Postmates also offered a menu for Lucky Boy featuring inaccurate prices. The suit also says the platform should not have offered alternatives when users searched for Lucky Boy.

"Postmates is using unfair business practices in an attempt to 'coerce' Lucky Boy to become one of its restaurants," the restaurant wrote. "Postmates' actions are fraudulent, oppressive, and malicious."

Lucky Boy said it has "repeatedly contacted defendant Postmates requesting ... all references to Lucky Boy be removed from all online resources," but that Postmates has refused.

Lucky Boy is represented by Jeffrey G. Sheldon and Katherine M. Bond of Cislo & Thomas LLP.

Counsel information for Postmates is not yet available.

The case is Lucky Boy Hamburgers Inc. v. Postmates Inc., case number 2:21-cv-01706, in the U.S. District Court for the Central District of California.

--Editing by Marygrace Murphy.

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