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Comment by s_dev | Hacker News Reader

Trading under another brands name -- by listing them as an ordering place with an unofficial dark kitchen associated in your app -- seems like the most egregious form of trade mark infringement.

Why aren't GrubHub concerned about the legal reprecussions of this?

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>Why aren't GrubHub concerned about the legal reprecussions of this?

When is the last time a company was SERIOUSLY threatened by the repercussions of doing something illegal in the US? When was the last time a company was fined/sued out of existence for something they were doing to average people?

All I know is I’m still waiting for my Equifax settlement check. Any day now, I’m sure!

I got a mortgage in 2005. Company had problems with fraudulent stuff and class action suit brought against them. Outside of whatever their behavior was that triggered the class action, they had poor service to me as an individual, so I'm not terribly surprised they probably cut many other corners (ethically/legally/etc). Anyway... I got my class action settlement checks yesterday. $71 and $74. w00t.

EDIT: this was more in reaction to "still waiting on those Equifax checks" comment. Just give it another 10 years...

I agree that class actual settlements are Usually underwhelming, but were you specifically (even in expectation/probabilistically) hurt by those wrongs, and if so, what do you think is the more accurate figure for the harm you faced?

I don't know if I experienced direct harm from their actions. Certainly they had a culture of being ... not good, and that probably filtered down to customer service and processing, which hosed me over multiple times in the short time I had used them. They ended up costing me hundreds of dollars in fines and late fees because they mishandled escrow (and I was told it wasn't just me, they mishandled a lot in my county), so... ~$140 15 years later is probably not all the useful. A more accurate figure may have been, let's say, ~$1000 15 years ago, to cover the late fees/penalties along with my own time/stress figuring it all out (multiple trips and calls to county office, time away from work, etc).

>> class actual settlements are Usually underwhelming

not for the firms that bring them: millions in fees & billing, ranging from the upfront certification efforts (riskier) to the payment & settlement (at this stage, risk-free and very lucrative)

I preface this by saying I’m not ok with how this is. I’m just explaining the reasons “class action” lawsuits are the way they are.

----

That’s because the purpose of “class action” lawsuits isn’t to provide relief to the harmed class (despite what many think). It’s to punish the company (financially) for their wrongdoing. It doesn’t always work out that way,[a] but that’s the idea.

The reason (supposedly) for not getting relief is that the injured class members can still file their own cases against the company with their own lawyers. But then you need to pay out-of-pocket for that lawyer and hope the judge not only sides with you, but awards cost in addition to the claimed damages.

Of course, there’s always the perverse incentive of the lawyers working for the class to take a bigger cut for themselves (“why would I take a $5 million payday when I could get $15 million instead?”). There’s also a push to settle because then they work less, but still get their payday.

[a]: Especially if the payout is less than they made harming the class

Congrats on the free money. It's pretty well known class action suits serve only to enrichen counsel, and in rare occasions may have a side effect of marginally disrupting a business's cash flow.

Heh, in the state I used to live in there was a huge controversy regarding a power company, corrupt politicians, amassive infrastructure project failure who's cost was passed on the the consumer, and strange mergers . People were promised compensation and the the three cent checks eventually trickled in.

Same here, my area's energy company increased their rate sto build a new nuclear plant, spent some of the money, and then never finished it... Years later I think I got a check for $2.67 for that.

Curious now if we lived in the same area lol or if this is just some sad coincidence.

I know there's been a lot of criticism of the details of the settlement, but Purdue Pharma was sued out of existence by the DOJ last week.

I don't know if I would count that as any sort of a win, given how the primary owners acquired $11 billion, then were fined only $225 million. I guess crime pays out at 98%.

https://arstechnica.com/science/2020/10/sacklers-who-made-11...

Purdue actually paid 8 billion out of 11 billion profit. That seems reasonable as tons of people using their drugs did have a legitimate need.

The 235 Million in personal civil liabilities PLUS their losses from owning so much of the company.

https://www.justice.gov/opa/pr/justice-department-announces-...

> 8 billion payout on 11 billion profit. That seems reasonable. Not all of the people using their drugs were being prescribed without good reason. > Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy. Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.

They made off with at least $3 billion in profit, are responsible for (at minimum) the deaths of thousands of Americans, and will ride off into the sunset with their billions.

The DOJ delivered a slap on the wrist just in time for the election so that they could claim a win on the opioid crisis.

I don't blame people in this thread for having zero confidence whatsoever in the "justice" system.

Of course they shouldn't profit from people they've harmed.

Is it okay to profit from the other people they've helped?

In any case Rhodes Pharmaceutical was started in 2007 by the Purdue family. It makes opioids too and should be shut down.

I think the outrage around the Sacklers and the money they kept from sales of opioids is justified.

That said, I think you're arguing that if Purdue Pharma were to continue pushing opioids and the Sacklers continued to profit handsomely, that would be equivalent to them stopping now? Stopping them now isn't any sort of win?

A judgement against a corporate entity after the owners have already cashed out is analogous to a judge ordering the return of stolen lemons, but the thief gets to keep the lemonade she's already squeezed out of them.

I don't think being left with 3 billion in profit is being sued out of existence.

It happens all the time, but usually to small businesses and startups, not established businesses with lots of money and lawyers.

I believe there's been for profit colleges that were sued out of existence

Because "justice" in the US is not about who's right and who's wrong, it's about who's got the most money and resources to pursue a lawsuit.

At some point the question of "who is actually right, and who is actually wrong" has to be answered through the work of people. Those people have to be paid. For criminal work, that's taxpayers footing the bill -- sometimes just for one side. For civil, the government provides a judge and the rest has to be paid for privately. It's not awful, but it can be so inefficient that it can break down due to resource exhaustion, or worse, a vector for abuse.

How many mom and pop restaurants do you know of who have the extra financial capital to find a lawyer to sue over an issue like this against a company as well-funded as grubhub or doordash?

>How many mom and pop restaurants do you know of who have the extra financial capital to find a lawyer to sue over an issue like this against a company as well-funded as grubhub or doordash?

It's much, much worse than that. many of those restaurants thrived for years on 5-10% profit margins. Grubhub comes along and charges them 12-30% "commissions" just for forwarding orders and processing credit cards.

Forget about paying a lawyer -- many of these restaurants are out of business because of this.

What's the mechanism that forces restaurants to partner with these food delivery services? Threat of competition if they don't?

>What's the mechanism that forces restaurants to partner with these food delivery services? Threat of competition if they don't?

The mechanism is the ubiquity of folks using "apps" instead of contacting restaurants directly.

It used to be in NYC that every time a restaurant made a delivery, they'd leave paper menus for the residents.

Now, you either go through an "app" (read: an inferior interface to a website) or a search engine to find restaurants.

Aside from the fact that a low/mid-priced restaurant likely doesn't have the tech expertise to set up an online ordering platform, or the financial resources to purchase a point-of-sale system that includes such functionality or to contract with a developer/hosting provider to do so, getting on these sites may seem to be the only way they can maintain their business.

And since GrubHub, et. al use SEO spam to get themselves at the top of search listings, have contracts that forbid restaurants from charging less if orders don't use them, and then take all the profit (and then some) from the bulk of transactions, the deck is stacked against such restaurants.

I suppose you could argue that if a restaurant can't compete in the market, it should fail. And most do. The average lifespan of a restaurant is just five years, and the vast majority fail within one year[0].

But those aren't the restaurants I'm talking about. I'm talking about neighborhood institutions that have been open for decades being forced to close because all their profit and then some is being taken by services like GrubHub that aren't even providing delivery services, just listing on their site (which runs from ~12-30% on every single order).

The insertion of the middle man here, taking up to a third of the revenue on every single order which provides just a listing service (they actually charge the customer for delivery service if the restaurant doesn't provide it -- not the norm here in NYC), has put many wonderful restaurants out of business.

This increases prices, reduces the diversity and choice of cuisine and quality, without providing any value, except in listings and credit card processing.

[0] https://www.usatoday.com/story/money/restaurants/2018/08/09/...

Seems like part of it is that at least GrubHub seems to go ahead and do it anyway.

How many lawyers do you know who would love to represent the restaurants in general as a class, that they may make class-action-lawsuit money?

Well, I don't know any either, but if there's a good solid case then it only takes one.

Isn't that exactly what the OP says is being done?

breaking laws/operate in the gray area is often touted as "silicon valley disruption" from AirBnB, Uber...etc.

Mind elaborating on where the dark kitchen comes into play?

If I sell you some 2nd hand Lego bricks, the same logic aplies.

I am not affiliated with Lego, yet the thing I am selling was legitimately made by Lego a while ago. When I describe what I'm selling, I clearly say I am offering lego bricks for sale.

Here grubhub seems to be doing the exact same thing with food. Hard to see how one can be illegal while the other isn't.

No, this situation would only be analogous if you listed yourself as “Official LEGO(TM) Store” and had a link to LEGO.com on your Amazon profile, and you had “contact LEGO Sales by phone” but the listed phone number was actually your private line, and LEGO did not give you permission for any of this.

The obtuseness in these comments is really something else.

If you register officiallegostore.com, put the Lego logo front and center, and start selling Lego, used or otherwise, I can assure you that you will get in trouble.

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