Garland v. Dunkin Donuts LLC

Background

Ten plaintiffs challenged Dunkin’s charge of between $0.50 and $2.15 for substituting soy, oat, coconut, or almond milk for cow’s milk in beverages. They alleged that the alternatives did not materially differ in price and did not require additional employee work. They claimed that lactose intolerance and milk allergies are disabilities and sued under Title III of the Americans with Disabilities Act, California and other states’ anti-discrimination laws, and common-law unjust enrichment. They sought to represent a national class and state subclasses and requested damages, repayment of allegedly unlawful charges, and declaratory relief.

Personal Jurisdiction

Dunkin moved under Federal Rule of Civil Procedure 12(b)(2), which permits dismissal for lack of personal jurisdiction—the court’s authority over the defendant. Dunkin stated that it is incorporated in Delaware, has its principal place of business in Massachusetts, and does not own, operate, or lease the Dunkin-branded restaurants in California. It argued that all California restaurants are franchised and that the franchise agreements were with a different entity, Dunkin’ Donuts Franchising LLC.

The plaintiffs alleged that Dunkin operated stores in several California locations and operated more than 125 stores in California. The court held that the plaintiffs had not shown that Dunkin purposefully directed activities toward California or purposefully used the benefits of conducting activities there, or that their claims arose from or related to Dunkin’s California activities. The court therefore granted Dunkin’s motion to dismiss for lack of personal jurisdiction, with leave to amend.

The court denied Dunkin’s request for judicial notice of a roughly 500-page Franchise Disclosure Document. The court found that the requested facts—including who owned and operated the relevant restaurants and who controlled prices—were disputed and could not be treated as established facts on that request. The court found the plaintiffs’ request for jurisdictional discovery appropriate and stated that it intended to grant limited discovery concerning ownership, operation, or leasing of the relevant stores and whether Dunkin required franchisees to impose the surcharge. The parties were directed to discuss its scope and timing at the case-management conference.

Failure to State a Claim

Dunkin also moved under Rule 12(b)(6), which requires dismissal when a complaint does not allege enough facts to support a legally recognized claim. The court agreed that the complaint did not plausibly allege that the plaintiffs were disabled under the ADA. The ADA requires an individualized assessment of whether an impairment substantially limits a major life activity.

The complaint generally stated that each plaintiff was substantially impaired and needed non-dairy alternatives, but it did not explain how most plaintiffs’ conditions affected them personally. The complaint described possible symptoms of lactose intolerance and milk allergies generally. It gave some additional information about two plaintiffs, including one plaintiff’s medical treatment and another plaintiff’s diagnosed milk allergy, but did not state what type of milk allergy that plaintiff had. The court concluded that the allegations were conclusory and did not plausibly establish an ADA disability. This was an additional ground for dismissal, and the court again granted leave to amend.

Issues Not Decided

The court did not decide the parties’ arguments concerning the remaining elements of the ADA claim or the state-law claims. It also did not decide Dunkin’s alternative argument that the claims of out-of-state plaintiffs should be dismissed because their injuries lacked a causal connection to Dunkin’s California contacts. The court stated that those arguments could be raised again if the plaintiffs established jurisdiction and adequately alleged that they were disabled under the ADA.

Disposition

The court granted the motion to dismiss the complaint for lack of personal jurisdiction and failure to allege sufficient facts, with leave to amend. The court also stated that it intended to grant the request for limited jurisdictional discovery.