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A recent decision from the Northern District of California on California's hidden fees law sheds light on how it applies to delivery-related charges.
In Heilman v. Abercrombie & Fitch, the court dismissed claims challenging a retailer's disclosure of a shipping and handling charge under California Civil Code § 1770(a)(29)(A). The plaintiff argued that the charge should have been included in the advertised product price, but it was not disclosed until later in the checkout process.
The interesting part of the case was whether the delivery fee was “mandatory,” as the law only applies to “mandatory” fees. Ultimately, the court concluded that a fee is mandatory if it is required to obtain the advertised good and cannot reasonably be avoided. In this case, the court found that the retailer's charge was not mandatory because consumers could avoid it by selecting a free in-store pickup option rather than home delivery.
How this law will be applied beyond the retail shipping context remains to be seen. Of particular interest is how it applies to restaurant delivery. Of course, there are several important distinctions between traditional retail shipping charges and restaurant delivery charges, and the court did not address the restaurant delivery context. In particular, the analysis may depend on the extent to which a consumer can realistically obtain the same product without paying the challenged fee and how the ordering flow presents those alternatives.
The decision also came at the motion to dismiss stage and was issued with leave to amend. While the future of this case remains to be seen, it does provide some initial clarity for those that charge for delivery in this challenging patchwork of “hidden fee” laws.
