A federal judge has ruled Peet’s Coffee didn’t violate state and federal disability discrimination laws by charging more for nondairy products even though some customers are lactose intolerant.
Four women who say they suffer from lactose intolerance and milk allergies and ordered coffee, tea and other drinks with oat, soy and almond milk filed a class action against Peet’s, alleging the company’s 80-cent surcharge for dairy milk alternatives violated the Americans with Disabilities Act along with California’s Unruh Civil Rights Act, Massachusetts’ Anti-Discrimination Law and Texas’ Human Resources Code.
In an opinion filed Nov. 5, U.S. District Judge Jon Tigar granted the company’s motion to dismiss the complaint.
U.S. District Judge Jon Tigar
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Tigar said the lawsuit developed two theories of alleged ADA violations: an illegal imposition of a surcharge and a failure to make reasonable modifications. He rejected both theories.
Citing a 1999 U.S. Ninth Circuit Court of Appeals opinion, Dare v. California, Tigar said there is no legal requirement for a company to provide nondairy alternatives for blended coffees, just as a bookstore isn’t required to sell all its titles in Braille. If alternatives were an ADA requirement, a surcharge would be illegal, he said.
“But Peet’s pricing model also does not constitute a surcharge under the second Dare factor,” Tigar wrote, “because plaintiffs have not shown that only disabled customers would incur the extra cost of paying for drinks made with nondairy alternatives.”
Tigar further said the plaintiffs erred by relying on precedent from a 2015 lawsuit in the same federal court district involving gluten-free alternatives at P.F. Chang’s, explaining that case didn’t apply Dare.
The Peet’s plaintiffs, Tigar wrote, didn’t allege the beverage purveyor “has an entirely separate and more expensive ‘dairy-free’ menu that contains identical items as those on its regular menu, including those items that are naturally dairy-free, such as black coffee or plain tea. Plaintiffs have similarly not alleged that Peet’s directs customers with lactose intolerance or milk allergies to the more expensive menu items that include non-dairy alternatives. Indeed, only one named plaintiff alleged that she even made it known to Peet’s that she had a medical condition that affected her ability to consume milk.”
Regarding whether Peet’s made reasonable ADA modifications, Tigar noted the customers didn’t allege they asked the company to charge the same price for nondairy milks, nor did they allege “actual notice” the company wouldn’t do anything if they asked. They further didn’t adequately allege “the modification sought is ‘necessary’ — meaning failure to provide the accommodation would deprive a lactose intolerant customer from having a ‘like experience’ as non-lactose intolerant customers,” Tigar wrote.
Regarding the California law, Tigar said that beyond the reasoning that doomed the federal claims, the complaint lacks allegations showing Peet’s specifically intended to discriminate against lactose intolerant customers. He further said courts generally apply the challenged Massachusetts law “coextensively with the ADA” and said the Texas Human Resource Code claim failed on similar grounds.
Finally, Tigar rejected an unjust enrichment claim, brought on behalf of a potential national class, as the customers didn’t specify which state laws support their assertions. Even using the laws from the three states invoked elsewhere in the complaint, he said, “unjust enrichment only applies when it would be unjust for that party — usually engaged in wrongful conduct — to retain a benefit it wrongfully received,” and since he found no ADA violation, there is no such conduct on which to calculate damages.
Tigar gave the women three weeks to amend their complaint.
Peet’s did not respond to a request for comment.