Chipotle Defeats Suit Over Lack of Change During Coin Shortage

Chipotle Mexican Grill Inc. defeated a proposed class action from consumers alleging deceptive practices because the company failed to provide exact change to those who paid in cash during a national coin shortage in 2020.

One of the plaintiffs went to Chipotle specifically because “she knew about the change issue and wanted to be shortchanged,” and the other couldn’t have been deceived because he testified he never looked at the prices on the menu, Judge William S. Stickman IV of the US District Court for the Western District of Pennsylvania said Wednesday.

Bridget McMahon and James Rice brought the proposed class action after they said they bought food with cash at Chipotle in August and October 2020, respectively, but didn’t receive exact change for their purchases. As a result of the Covid-19 pandemic in 2020, the Federal Reserve reported a significant coin shortage that summer going into fall which spurred the creation of a coin task force.

Both McMahon and Rice testified that after cashiers informed them the store was unable to provide coins, before they left with their food. In addition to claims for unfair trade practices and breach of contract, they brought claims for misappropriating customer funds and conversion.

Stickman dismissed the unfair trade practices claim based on deceptive advertising because “in their own ways, neither McMahon nor Rice relied upon the posted prices on Chipotle’s menu in choosing to make a purchase” and they both “had the opportunity to withdraw from the transaction but instead decided to follow through.”

McMahon testified that she went to Chipotle as an “experiment” after her lawyer, through his daughter, asked her to so he could sue Chipotle. The plaintiffs didn’t show the McMahon went to purchase food for any other reason.

Contract Modified

Rice said he’d never looked at the menu before buying his food because he was a regular. The plaintiffs didn’t allege that “Rice has the prices memorized” so “these circumstances make it hard to understand how he would have known about Chipotle’s allegedly false representation as to price before the moment he glanced at his receipt,” Stickman said.

The breach of contract claim failed for McMahon because the cashier told her the store couldn’t provide exact change before the sale was complete, which constituted a contract modification. “No consideration is needed for a contract modification to be binding,” Stickman said.

The contract claim failed for Rice because even though the cashier informed him about the inability to provide exact change after the transaction, he didn’t follow up on that. “Under those circumstances, Rice knowingly waived Chipotle’s alleged breach,” Stickman said.

Stickman dismissed the misappropriation and conversion claims because Third Circuit precedent said that such claims are barred when the parties’ relationship is formed out of a contract-based transaction.

McMahon and Rice were represented by Rothman Gordon PC.

Chipotle was represented by Martenson Hasbrouck & Simon LLP and Seamans Cherin & Mellott LLC.

The case is McMahon v. Chipotle Mexican Grill Inc., W.D. Pa., No. 2:20-cv-01448, 5/1/24.