Waitr asks Louisiana federal court to toss fee hike suit

    Waitr Holdings Inc. is asking a Louisiana federal court to drop Bobby’s Country Cookin’ LLC’s suit accusing the food delivery app of breaking its contract with thousands of eateries last year by raising the fee it charges per order.

    In a July 22 motion to dismiss the suit, Waitr alleges the proposed class action fails because the lead plaintiff agreed to a service fee hike—from 10% to 15%—the delivery service proposed in a July 12, 2018, notice. Bobby’s could have ended its arrangement with Waitr when it learned of the fee increase, Waitr says, but instead it agreed to the increase by continuing to accept orders through the app and not taking any action to terminate the relationship.

    “Bobby’s cannot reap the benefits of the substantial order volume that comes with being included in Waitr’s network of restaurant partners,” the motion says, “and then pursue recovery of the fees it voluntarily paid to Waitr in exchange for the customers and orders Waitr brought to the restaurant.”

    The motion comes three months after Little Rock-based Bobby’s slapped Waitr with a proposed class action, claiming the app raised its service fee last year after its announced acquisition by an investment firm but before its initial public offering. The company breached its contractual obligation to customers, the restaurant claims, when it imposed the fee increase to maximize its revenue ahead of the securities sale.

    “The unilateral increase was intended to glean millions of unearned dollars from its customers to falsely burnish its financials before a public offering,” the complaint says.

    Lake Charles-based Waitr went public Nov. 16, six months after its $308 million acquisition by Landcadia Holdings, a special purpose acquisition company run by Texas hospitality magnate and Houston Rockets owner Tilman Fertitta. Since then, the company has merged its management with Minnesota-based Bite Squad. It also plans to soon roll out new partnership terms leaving many Baton Rouge restaurants to consider pulling their partnerships.

    Damon E. Schramm, Waitr’s chief legal officer, told Law360 in an email the company doesn’t comment on pending litigation. Lawyers for Bobby’s couldn’t be reached for comment before this morning’s deadline.

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