Los Angeles County District Attorney Nathan Hochman
LOS ANGELES - Chipotle Mexican Grill has agreed to pay a civil judgment of $246,000 to settle a lawsuit filed in Ventura County Superior Court by California district attorneys alleging the restaurant chain failed to let consumers cash out company gift cards with balances of under $10.
The company, whose California restaurants number more than 500, agreed to pay $145,467 in civil penalties, according to the settlement, which was signed on Oct. 9 by Superior Court Judge Dana K. Caudill. This payout will allow four county district attorney offices – Los Angeles, Ventura, Sonoma and Shasta – to each receive $36,367.
In addition, Chipotle will pay $88,533 in public-agency investigative costs, with each of the district attorney offices receiving $20,000 and the state Department of Consumer Affairs receiving a check for $8,533, the settlement documents state.
A final $12,000 will go to the California Consumer Protection Prosecution Trust Fund, which supports investigations, enforcement actions and court proceedings related to California consumer protection statutes.
The Los Angeles County District Attorney’s Office told The Record in an email that the office’s in-house staff exclusively handled the consumer action.
“No private outside counsel or appointed ‘special district attorneys’ assisted the Los Angeles County District Attorney’s Office in pursuing this legal action,” the statement said. “The Consumer Protection Division does not typically hire outside counsel to advance civil lawsuits against companies over consumer protection issues.”
The statement went on to say that only deputy district attorneys working in the district attorney’s Consumer Protection Division take part in the filing of civil enforcement actions on behalf of the L.A. District Attorney’s Office.
“Gift cards are real money purchased with hard-earned cash,” Los Angeles County District Attorney Nathan J. Hochman said in a prepared statement. “California law is clear that consumers have the right to redeem gift cards with a balance under $10 for cash.”
Companies throughout the state are held accountable in such consumer protection matters as a result of the work of public prosecutors, according to Hochman, who thanked his colleague, Deputy District Attorney Duke Chau of the Consumer Protection Division, for handling the Chipotle case with partner district attorney offices.
“Consumers are watching every penny in today’s economy and should never have to fight for rights guaranteed under state law,” Rafael Carbajal, director of the Los Angeles County Department of Consumer and Business Affairs, said. “This settlement makes clear that Los Angeles County will hold businesses accountable when they fail to follow consumer laws."
Chipotle, which did not acknowledge any liability or wrongdoing, did not respond to a request for comment.
As part of the agreement, the restaurant company agreed to provide a website portal allowing consumers to enter gift certificate information and request cash refunds for cards carrying balances of under $10. The company also agreed that its future gift cards would contain notices advising consumers that they can redeem the certificates for cash when the balance is under $10.
In addition, Chipotle has pledged not to use data collected with the gift card rebates for any purpose unrelated to the redemptions, including in advertising or marketing, unless the company obtains the consumer’s consent.
