Federal judge denies P.F. Chang’s motion to dismiss amended complaint over its gluten-free menu

By Jessica Karmasek | Dec 15, 2015

SAN FRANCISCO (Legal Newsline) - A California federal judge ruled last month that a class action lawsuit brought against P.F. Chang’s for allegedly charging more for gluten-free menu items can continue.

Judge Ronald Whyte, in his Nov. 23 order, denied the restaurant chain’s motion to dismiss plaintiff Anna Marie Phillips’ first amended complaint.

“Neither party has cited, and the court has not found, any case specifically discussing whether celiac disease constitutes a disability under the ADA (Americans with Disabilities Act) or Unruh Act,” Whyte wrote in his 13-page ruling. “However, accepting the additional detail in the FAC (first amended complaint) about the consequences of ingesting or being exposed to gluten, which plaintiff must guard against, plaintiff has pled sufficient facts to support her claim that she has a disability that impacts a major life activity.

“The court notes that on a more complete factual record, the court might reach a different conclusion.”

Phillips sued P.F. Chang’s in a California state court last December, and the defendant later removed the case to U.S. District Court for the Northern District of California.

The restaurant chain first moved to dismiss Phillips’ class action in February, claiming her celiac disease does not make her a disabled person under the ADA. It urged Whyte to dismiss the lawsuit before the entire restaurant industry was impacted.

Whyte heard oral arguments in May. According to the case’s docket, the motion to dismiss was “tentatively granted” at the hearing, with a final ruling to be issued by the court later.

In August, the judge granted P.F. Chang’s motion to dismiss Phillips’ original complaint. Whyte ruled that the plaintiff failed to allege facts showing that the restaurant chain discriminated against her and other guests with celiac disease or a gluten allergy/intolerance, by charging $1 more for some gluten-free menu items compared to non-gluten-free versions of menu items with a similar name but prepared and handled much differently.

However, Whyte granted Phillips a leave to amend.

In doing so, the judge expressed his “reservations” about whether the plaintiff could ever state a viable claim under her discrimination theory.

Phillips filed her first amended complaint soon after.

In September, P.F. Chang’s filed a motion to dismiss the new complaint, arguing that it asserts the same disability-discrimination claims and offers “few additional facts” and “none that warrant a different result.”

But a detailed list of Phillips’ symptoms and reactions when ingesting gluten forced the judge to change his mind.

In his order last month, Whyte concluded that Phillips, in her new complaint, pled sufficient facts to state a claim that celiac disease -- an immune reaction to eating gluten -- meets the definition of a “medical condition” under the state’s Unruh Act. The law specifically outlaws discrimination based on sex, race, color, religion, ancestry, national origin, age, disability, medical condition, marital status or sexual orientation.

In her new complaint, Phillips also alleges that the disease is an “inheritable and hence genetic characteristic.”

P.F. Chang’s argues that the plaintiff must allege that she actually inherited characteristics known to cause disease under the second prong of the “medical condition” definition.

“Defendant cites no authority in support of its argument, and defendant’s position appears to call for more than the statute requires,” Whyte wrote.

The judge also found that the plaintiff has: adequately pled that P.F. Chang’s discriminates by charging more for gluten-free meals; pled sufficient facts to support a “plausible inference” that the restaurant chain intended to discriminate against patrons with celiac disease; adequately stated an unfair business practice; and sufficiently alleged the chain unjustly retained a benefit from her.

“Plaintiff’s allegations may not be able to be proved,” Whyte noted in his order. “As with plaintiff’s prior complaint, plaintiff admits certain facts that seem to contradict plaintiff’s assertion that the items on defendant’s gluten-free menu are, in essence, the same as those on defendant’s regular menu. Gluten-free means that barley, wheat, and rye cannot be used. Gluten-free meals cannot ‘have been exposed to gluten.’ Thus, according to plaintiff’s own allegations, even if two menu items contain the same naturally gluten-free ingredients, they cannot be prepared in the same way.

“The evidence may establish that gluten-free items are different products for which defendant can charge what it determines is appropriate. That would not be discriminating against a customer with celiac disease because the gluten-free meals are offered to all customers at the same price.”

The judge continued, “The ultimate question is whether P.F. Chang’s, in providing gluten-free meals, is providing different products or whether the price differential with regular meals is a pretext for discrimination against those with celiac disease. Accepting plaintiff’s allegations as true, she has stated a plausible claim for relief.”

In an answer to the first amended complaint, filed with the federal court last week, P.F. Chang’s argues that the plaintiff’s proposed relief -- to charge guests with celiac disease or a gluten allergy or intolerance less than other guests for the same items on the gluten-free menu -- would be “impossible to execute in practice” and would violate both federal and state law prohibiting “the very discrimination” the proposed relief would compel.

The restaurant chain contends that the proposed remedy also implicates separation of powers concerns and is barred because the court does not have the power to create a new “regulatory regime” regarding gluten-free food items served as restaurants absent authorization from a lawmaking body.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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