Houlihan’s Can’t Duck Price Discrimination Suit | Courthouse News Service
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Houlihan’s Can’t Duck Price Discrimination Suit

(CN) - A man can pursue claims against the Houlihan's Restaurant chain for forcing him to pay more than other customers for his alcoholic drinks, a federal judge ruled.

While at a Houlihan's restaurant in Brick, N.J., Ted Pauly ordered several beers and mixed drinks whose prices were not listed on the menu.

Pauly says he did not discover the beverage prices until after he consumed them and received his bill.

Although Pauly paid his bill in full, he now claims Houlihan's prices were unreasonable and that he was charged more than other customers for the same items.

Pauly commenced a civil action against Houlihan's Restaurants, Inc. in New Jersey Superior Court, and Houlihan's then removed the action to the District of New Jersey.

In his amended complaint, Pauly alleges unjust enrichment and breach of contract, and claims that the case is appropriate for certification as a class action.

Instead of filing an answer, Houlihan's filed a motion to dismiss for failure to state a claim.

U.S. District Judge Jerome Simandle denied the motion on late last week.

In doing so, Simandle brushed aside the claim of Houlihan's Vice President Cynthia Parres, who argued the corporation does not own, operate or control its franchisee in Brick.

"The defendant's argument that it has no direct relationship to plaintiff is supported solely by the extraneous declaration of its vice president. The defendant's argument completely disregards the allegations in plaintiff's pleading and seeks to present an issue of fact which is inappropriate on a motion to dismiss," the judge wrote.

The court also tossed aside Houlihan's claims that it had no contract with Pauly, that his complaint failed to present such facts as what he paid for the drinks, or even states what he believes reasonable prices to be.

"Specifically, the amended complaint alleges that no price was listed on the menu for the alcoholic drinks plaintiff ordered and the defendant subsequently fulfilled plaintiff's order by delivering the beverages. These are sufficient grounds for a court to find that an agreement between Mr. Pauly and Houlihan's existed and that the plaintiff agreed to pay a reasonable price of the beverages," the 19-page opinion states.

Simandle found that by paying his bill in full, Pauly did not assent to overpricing.

"Equitable reasons exist to find that the plaintiff did not necessarily waive his right to contest his bill by paying in full at the restaurant after he consumed his beverages. It would be unreasonable and inequitable to hold that a person must risk criminal exposure in order to challenge a restaurant's policy of omitting prices from their menus and ultimately charging unreasonable and discriminatory rates for their food and beverages," the judge wrote.

The court also held Pauly's unjust enrichment claim was valid.

"Plaintiff maintains that if he knew this price discrimination was occurring, he would not have ordered his drinks. Plaintiff then was charged an unreasonably high amount for the drinks he ordered and ultimately paid this unreasonable amount to the defendant. This sufficiently states a claim for unjust enrichment as it would be unjust for the defendant to retain the benefit of plaintiff's excess payment," Simandle concluded.

The judge refrained from addressing class certification at this time.

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