Sometimes the Little Guy Is Just Being a Jerk

Back in 2020, due to a nationwide coin shortage, Chipotle was not providing its customers with change. A normal person would just consider the missing change a tip. Not so Bridget McMahon and James Rice (Plaintiffs). They sued Chipotle Mexican Grill, Inc. (Chipotle) on behalf of a class of people desperately in need of a used copy of Don’t Sweat the Small Stuff. 

Plaintiffs alleged conversion, unfair trade practices, breach of contract, and unjust enrichment. They sought an injunction that would compel Chipotle to prestidigitate non-existent coins. The court had already refused to certify a class. Plaintiffs continued to press their claims. I’m so confused. How is it not sanctionable for an attorney to continue to pursue this claim in federal court when the amount in controversy per plaintiff is less than one dollar? And how does a federal court have jurisdiction? There is no federal question, and the amount in controversy certainly does not merit diversity jurisdiction. Any help?*

In McMahon v. Chipotle Mexican Grill, Inc., the District Court for the Western District of Pennsylvania granted Chipotle’s motion to dismiss. The opinion begins by recounting how the plaintiff for the purported class enlisted his daughter and her friends to try an “experiment” to see if Chipotle would refuse them change. The first experiment failed, not because Chipotle gave change, but because the would-be named plaintiff paid with a credit card. The second experiment failed because the would-be plaintiff forgot to get a receipt. However, the third experiment worked, and so a misguided class-action was born.

The court first found that a contract arose when Chipotle sold food to Plaintiffs. However, the fact that there was a contract eliminated Plaintiffs’ tort claims (misappropriation, conversion) under Pennsylvania’s “gist of the action” doctrine, which sounds like a version of the economic loss rule. Plaintiffs’ statutory claim for fraudulent, unfair, or deceptive trade practices also failed. They claimed that Chipotle lured them with a certain price and then charged them a higher price. However, as Plaintiffs knew all along that they were not going to get any change, Plaintiffs could not establish that they were deceived. One Plaintiff was informed before she tendered payment that she would not receive change. She proceeded nonetheless. The other was a Chipotle regular who was not deceived by the listed price because he knew what he wanted and never looked at the menu. He too could have remonstrated over the lost change if he cared to, but he said he didn’t want to cause a commotion.

Plaintiffs’ breach of contract claims also failed. The court, relying on Pennsylvania’s version of UCC § 2-209, concluded that one Plaintiff had agreed to a modification of their contract with Chipotle. Chipotle effectively suggested a price increase of forty or fifty cents, and Plaintiff took their food without objection.  The other Plaintiff waived any objection when he chose not to create a commotion, took his burrito, and consumed it. Plaintiffs could not proceed with their unjust enrichment claim, because the court had determined that an express agreement existed.

*My colleague Mike O’Shea provided an answer. “Congress greatly expanded federal subject matter jurisdiction over putative class actions in the Class Action Fairness Act of 2005, 28 U.S.C. 1332(d).  It basically allows federal jurisdiction over any putative class action where there’s minimal diversity of citizenship and over $5 million in controversy.  So the federal court’s denial of class certification didn’t deprive it of subject matter jurisdiction over the action.” In further discussion, we arrived at some hypotheses as to why the litigation continued. Plaintiffs attorneys were likely after injunctive relief and likely hoped for some class certification down the road. Chipotle wants to get the entire case dismissed in federal court so that it doesn’t have to defend multiple suits in state courts.