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The City Prevails in a Legal Challenge by DoorDash for Violations of COVID-19 Emergency Order

December 21, 2020 2:27 PM

The City Prevails in a Legal Challenge by DoorDash for Violations of COVID-19 Emergency Order

In a written decision issued earlier this month, an administrative hearing officer ruled in favor of the City of Santa Monica for violations of Santa Monica’s COVID-19 emergency order challenged by DoorDash this summer.  In August 2020, the City’s Code Enforcement Division issued eight citations to DoorDash, citing a total of 23 violations of the City’s emergency order capping maximum fees that a third-party delivery service can charge a local restaurant for delivery fees, with fine amounts totaling $11,500.   

On May 19, 2020, in the midst of Governor Newsom’s Stay at Home Order and the Los Angeles County Department Public Health’s Safer at Home Order prohibiting restaurants from offering dine-in service and limiting restaurants to delivery and takeout offerings, the City issued the Sixteenth Supplement to its local emergency imposing a 15% cap on delivery fees and a 5% cap on other fees charged to restaurants by third-party food delivery companies.  

In July 2020, a local restaurant, Sushi King, filed a complaint that DoorDash was charging a 20% delivery fee in violation of the City’s emergency order. Code Enforcement investigated the complaint and confirmed the violations. The City issued citations to DoorDash, which DoorDash appealed. DoorDash argued that there was no violation of the order, and that DoorDash and Sushi King “[had] agreed . . . that going forward, a total commission of 20% will be applied to delivery orders placed with Sushi King while Santa Monica’s temporary cap is in place, which combines the 15% cap on delivery fees and the 5% cap on the other fees.” 

The hearing officer, after having reviewed the factual and legal arguments presented by the City and DoorDash, rejected DoorDash’s argument and upheld the citations.  

“The Code Enforcement Division is dedicated to protecting the Santa Monica community through the public health emergency by ensuring our municipal code and emergency orders are understood and followed,” said Code Enforcement Manager Sharon Guidry. “We received a complaint, discovered the facts, and in partnership with the City Attorney’s Office, were able to achieve a positive outcome for this business and many others who use third-party food delivery services.”  

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