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Leon
Joined: 31 May 2010
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 Posted: Thu Dec 11, 2014 6:35 am Post subject: Harvard Professor Vs. Chinese Restaurant |
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http://www.boston.com/food-dining/restaurants/2014/12/09/harvard-business-school-professor-goes-war-over-worth-chinese-food/KfMaEhab6uUY1COCnTbrXP/story.html
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Ben Edelman is an associate professor at Harvard Business School, where he teaches in the Negotiation, Organizations & Markets unit.
Ran Duan manages The Baldwin Bar, located inside the Woburn location of Sichuan Garden, a Chinese restaurant founded by his parents.
Last week, Edelman ordered what he thought was $53.35 worth of Chinese food from Sichuan Garden’s Brookline Village location.
Edelman soon came to the horrifying realization that he had been overcharged. By a total of $4.
If you’ve ever wondered what happens when a Harvard Business School professor thinks a family-run Chinese restaurant screwed him out of $4, you’re about to find out. |
Read the rest of the article to see the emails this guy sent to the Chinese place. I am living in the area, and this has exploded in local news. Pretty much everyone here sees the Professor as the villain, but I think the restaurant overcharging people is pretty shady. |
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Plain Meaning
Joined: 18 Oct 2014
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| Posted: Thu Dec 11, 2014 6:52 am Post subject: |
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I thought he was overcharged by $4. It appears he was offered an accommodation of $3.
Both sides look cheap.
http://www.boston.com/food-dining/restaurants/2014/12/09/harvard-business-school-professor-goes-war-over-worth-chinese-food/KfMaEhab6uUY1COCnTbrXP/story.html
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| At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent. Any person receiving such a demand for relief who, within thirty days of the mailing or delivery of the demand for relief, makes a written tender of settlement which is rejected by the claimant may, in any subsequent action, file the written tender and an affidavit concerning its rejection and thereby limit any recovery to the relief tendered if the court finds that the relief tendered was reasonable in relation to the injury actually suffered by the petitioner. In all other cases, if the court finds for the petitioner, recovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater; or up to three but not less than two times such amount if the court finds that the use or employment of the act or practice was a willful or knowing violation of said section two or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said section two. |
First, MGL 93a(9)(3) does not mandate treble damages. It provides for a recovery of the greater of actual damages or $25. The statute allows double to treble damages if the UDAP was a willful or knowing violation" or if the defendant refused, in bad faith to settle. That's quite different from automatic treble damages.
But wait, you say, that just means the HBS professor should have been demanding $25, not $12. Not quite. There's a second problem. MGL 93a(9)(3) requires that before bringing suit the plaintiff send a demand letter to the business asking for rectification of the unfair or deceptive act or practice. That gives the business a chance to settle things for something like actual damages. The whole purpose of the demand provision is to encourage settlement and to act as a control on damages. (Refusal to parlay is one of the hooks that can result in treble damages.)
If the defendant's offer of settlement is rejected by the plaintiff, the defendant can introduce its offer (and its reasonableness) at trial. Here, the restaurant offered the professor a full refund of the overcharge in response to his email (which is fairly understood as a demand letter). Thus, in a lawsuit, if the defendant made a reasonable settlement offer, the court must limit damages not to the $25 minimum, but to the restraurant's reasonable offer. See Kohl v. Silver Lake Motors, Inc., 369 Mass. 795 (Mass. 1976). I don't see how the professor gets to treble damages here.
Indeed, just reading the statute carefully ought to have given the professor some pause. While he makes a big deal in one of the emails about being ethically bound to deal only with an attorney if the restaurant is represented by counsel, it strikes me as a possible ethical problem to be making demands (particularly on an unrepresented party) for which one lacks a legal basis. I don't think negligent belief about the law helps the professor here. |
This display is really bad for consumer protection law. Appalling. A true lawyer (rather than a professor) would have real problems to deal with. |
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Leon
Joined: 31 May 2010
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| Posted: Thu Dec 11, 2014 7:04 am Post subject: |
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| Plain Meaning wrote: |
I thought he was overcharged by $4. It appears he was offered an accommodation of $3.
Both sides look cheap.
http://www.boston.com/food-dining/restaurants/2014/12/09/harvard-business-school-professor-goes-war-over-worth-chinese-food/KfMaEhab6uUY1COCnTbrXP/story.html
| Quote: |
| Quote: |
| At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent. Any person receiving such a demand for relief who, within thirty days of the mailing or delivery of the demand for relief, makes a written tender of settlement which is rejected by the claimant may, in any subsequent action, file the written tender and an affidavit concerning its rejection and thereby limit any recovery to the relief tendered if the court finds that the relief tendered was reasonable in relation to the injury actually suffered by the petitioner. In all other cases, if the court finds for the petitioner, recovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater; or up to three but not less than two times such amount if the court finds that the use or employment of the act or practice was a willful or knowing violation of said section two or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said section two. |
First, MGL 93a(9)(3) does not mandate treble damages. It provides for a recovery of the greater of actual damages or $25. The statute allows double to treble damages if the UDAP was a willful or knowing violation" or if the defendant refused, in bad faith to settle. That's quite different from automatic treble damages.
But wait, you say, that just means the HBS professor should have been demanding $25, not $12. Not quite. There's a second problem. MGL 93a(9)(3) requires that before bringing suit the plaintiff send a demand letter to the business asking for rectification of the unfair or deceptive act or practice. That gives the business a chance to settle things for something like actual damages. The whole purpose of the demand provision is to encourage settlement and to act as a control on damages. (Refusal to parlay is one of the hooks that can result in treble damages.)
If the defendant's offer of settlement is rejected by the plaintiff, the defendant can introduce its offer (and its reasonableness) at trial. Here, the restaurant offered the professor a full refund of the overcharge in response to his email (which is fairly understood as a demand letter). Thus, in a lawsuit, if the defendant made a reasonable settlement offer, the court must limit damages not to the $25 minimum, but to the restraurant's reasonable offer. See Kohl v. Silver Lake Motors, Inc., 369 Mass. 795 (Mass. 1976). I don't see how the professor gets to treble damages here.
Indeed, just reading the statute carefully ought to have given the professor some pause. While he makes a big deal in one of the emails about being ethically bound to deal only with an attorney if the restaurant is represented by counsel, it strikes me as a possible ethical problem to be making demands (particularly on an unrepresented party) for which one lacks a legal basis. I don't think negligent belief about the law helps the professor here. |
This display is really bad for consumer protection law. Appalling. A true lawyer (rather than a professor) would have real problems to deal with. |
The professor is a millionaire, and his job revolves around fighting online fraud. This is the thing that most people don't seem to get, the professor is not doing this because he is a miser. Also, this guy has made major cases against facebook, etc., so it is not the case that he is just a professor.
The professor suggested the treble damages instead of taking the case to court, I'm pretty sure that this guy knows the applicable laws. Was he overbearing, yes, was the restaurant ripping people off, yes, it is pretty clear that they were. I don't see why this keeps getting minimized. |
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Plain Meaning
Joined: 18 Oct 2014
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| Posted: Thu Dec 11, 2014 7:10 am Post subject: |
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| Leon wrote: |
The professor suggested the treble damages instead of taking the case to court, I'm pretty sure that this guy knows the applicable laws. Was he overbearing, yes, was the restaurant ripping people off, yes, it is pretty clear that they were. I don't see why this keeps getting minimized. |
Edelman is not reading the statute right. He's only entitled to treble damages if the restaurant failed to make reasonable accommodations. It took more than one email but Ran Duan agreed to pay the actual damages. Thus, no treble damages. Furthermore, he took the erroneous website information down.
Edelman has won as much as he could, and reasonable accommodations were made. As of the December 7 email, Edelman started to bully the restaurant. |
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Leon
Joined: 31 May 2010
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| Posted: Thu Dec 11, 2014 7:16 am Post subject: |
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| Plain Meaning wrote: |
| Leon wrote: |
The professor suggested the treble damages instead of taking the case to court, I'm pretty sure that this guy knows the applicable laws. Was he overbearing, yes, was the restaurant ripping people off, yes, it is pretty clear that they were. I don't see why this keeps getting minimized. |
Edelman is not reading the statute right. He's only entitled to treble damages if the restaurant failed to make reasonable accommodations. It took more than one email but Ran Duan agreed to pay the actual damages. Thus, no treble damages. Furthermore, he took the erroneous website information down.
Edelman has won as much as he could, and reasonable accommodations were made. As of the December 7 email, Edelman started to bully the restaurant. |
Elderman suggested the treble damages as a reasonable accommodation, not demanding them in a legally binding manner. The thing is, the restaurant really doesn't have a leg to stand on when it comes to bullying, by their own admission, they had misleading information about prices for quite some time, which translates into they knowingly overcharged people for quite some time. The restaurant changed their misleading practice as a result of Elderman, yet he is the bad guy over the Chinese place, who leaked a customer's emails? I don't get it. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Thu Dec 11, 2014 7:54 am Post subject: |
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The Chinese restaurant is misleading people only if they go to that restaurant for value. By all accounts, this place is upscale and the draw their is the food and the fact that the bartender was featured in GQ. It is highly improbable that the difference in price would have caused anyone to change their purchase. It's like if the out of date ad on a website for a brand new BMW is 39,800 instead of 39,900. No one is hinging their purchase of a BMW on 100 bucks.
The restaurant charged the same price as their dine-in menu. I highly doubt this was some sort of elaborate scheme to make a few measly bucks. More likely its lazy maintenance of the website.
If he wanted cheap Chinese food, go to Magic Wok. |
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Plain Meaning
Joined: 18 Oct 2014
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| Posted: Thu Dec 11, 2014 8:22 am Post subject: |
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| Steelrails wrote: |
| The Chinese restaurant is misleading people only if they go to that restaurant for value. By all accounts, this place is upscale and the draw their is the food and the fact that the bartender was featured in GQ. It is highly improbable that the difference in price would have caused anyone to change their purchase. It's like if the out of date ad on a website for a brand new BMW is 39,800 instead of 39,900. No one is hinging their purchase of a BMW on 100 bucks. |
The statute does seem to require reasonable reliance.
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| At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered |
We would have to look at case law to be sure. |
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Leon
Joined: 31 May 2010
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| Posted: Thu Dec 11, 2014 9:01 am Post subject: |
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| Steelrails wrote: |
The Chinese restaurant is misleading people only if they go to that restaurant for value. By all accounts, this place is upscale and the draw their is the food and the fact that the bartender was featured in GQ. It is highly improbable that the difference in price would have caused anyone to change their purchase. It's like if the out of date ad on a website for a brand new BMW is 39,800 instead of 39,900. No one is hinging their purchase of a BMW on 100 bucks.
The restaurant charged the same price as their dine-in menu. I highly doubt this was some sort of elaborate scheme to make a few measly bucks. More likely its lazy maintenance of the website.
If he wanted cheap Chinese food, go to Magic Wok. |
Again, this guy is a millionaire, he most surely does not care about cheap food. His job is to find online fraud and respond to it, which he has done against major companies in the past. I guess it depends on your interpretation of "quite some time," but if they were charging a dollar more on every menu item ordered on every takeout, this stops being a few measly bucks. Laziness is not really a good excuse either, especially considering that most people ordering takeout order based on the online menu. If they knew they had this problem, and didn't fix it, then they knew they were overcharging the majority of takeout orders. |
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Smithington
Joined: 14 Dec 2011
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| Posted: Thu Dec 11, 2014 8:02 pm Post subject: |
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Reading that correspondence reminded me of an awesome time killing / desk warming website. "Emails from an asshole.' Some of his stuff is laugh out loud funny.
http://dontevenreply.com/view.php?post=84 |
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FMPJ
Joined: 03 Jun 2008
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guavashake
Joined: 09 Nov 2013
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| Posted: Fri Dec 12, 2014 3:09 am Post subject: |
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| Before his apology, I would have nominated him for the prestigious B.A.Y. award... Biggest Asshole of the Year |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Fri Dec 12, 2014 5:12 pm Post subject: |
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| Leon wrote: |
Again, this guy is a millionaire, he most surely does not care about cheap food. His job is to find online fraud and respond to it, which he has done against major companies in the past. I guess it depends on your interpretation of "quite some time," but if they were charging a dollar more on every menu item ordered on every takeout, this stops being a few measly bucks. |
Your missing a point, I think part of fraud would be that the difference in price MUST be a significant factor in your purchasing decision. As I said, a price difference in a BMW of 100 dollars isn't going to make you not buy a BMW, especially if there is only one BMW dealership in town. It's only fraud if they would have chosen a different restaurant because of that dollar value. Now, that might be true at a Magic Wok vs. Panda Express. That's probably not true at a restaurant featured in GQ.
Also, the fraud assumes that people checked the online menu price and made their purchasing decision based off of that. Dine-in, Carry-out, and Phone-in customers would have all ordered the correct, higher price, and in the case of phone-ins, might not have seen the price at all.
This restaurant was not patronized for its value, it was patronized for its notoriety and taste. That's what they were purchasing.
About the only case you could make where this higher price resulted in REAL losses, is if someone had the money all ready (say picking up a Dutch pay order for the office) and ordered, but found themselves short upon arrival at the restaurant and had to spend 20 minutes finding an ATM or somesuch and the taste of their food was then affected. They lost taste, time, gas, and maybe an ATM fee dealing with this.
But not simply because the prices listed at an upscale, noteworthy restaurant were out of date by a dollar. |
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Leon
Joined: 31 May 2010
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| Posted: Fri Dec 12, 2014 5:41 pm Post subject: |
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| Steelrails wrote: |
| Leon wrote: |
Again, this guy is a millionaire, he most surely does not care about cheap food. His job is to find online fraud and respond to it, which he has done against major companies in the past. I guess it depends on your interpretation of "quite some time," but if they were charging a dollar more on every menu item ordered on every takeout, this stops being a few measly bucks. |
Your missing a point, I think part of fraud would be that the difference in price MUST be a significant factor in your purchasing decision. As I said, a price difference in a BMW of 100 dollars isn't going to make you not buy a BMW, especially if there is only one BMW dealership in town. It's only fraud if they would have chosen a different restaurant because of that dollar value. Now, that might be true at a Magic Wok vs. Panda Express. That's probably not true at a restaurant featured in GQ.
Also, the fraud assumes that people checked the online menu price and made their purchasing decision based off of that. Dine-in, Carry-out, and Phone-in customers would have all ordered the correct, higher price, and in the case of phone-ins, might not have seen the price at all.
This restaurant was not patronized for its value, it was patronized for its notoriety and taste. That's what they were purchasing.
About the only case you could make where this higher price resulted in REAL losses, is if someone had the money all ready (say picking up a Dutch pay order for the office) and ordered, but found themselves short upon arrival at the restaurant and had to spend 20 minutes finding an ATM or somesuch and the taste of their food was then affected. They lost taste, time, gas, and maybe an ATM fee dealing with this.
But not simply because the prices listed at an upscale, noteworthy restaurant were out of date by a dollar. |
If you look at the Yelp page, there are examples where other people, including dine-in customers, were charged different amounts than the listed price before this incident. It is a matter of reasonable expectations, when you make an order based off of a menu it is reasonable to expect that the prices are accurate, and if there is a disparity, you will be told. It is reasonable to expect that an outdated menu would be replaced in a short period of time, and that in the case of being overcharged, a refund would be offered right away. The restaurant violated all of these reasonable expectations. Your going on about real losses doesn't make sense. If a bank systematically charged customers a few cents on each transaction, I doubt the response would be so sanguine. |
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Chaparrastique
Joined: 01 Jan 2014
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| Posted: Sat Dec 13, 2014 8:11 am Post subject: |
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| They've probably been getting away with overcharging for years. Nice to see them get hammered. |
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FMPJ
Joined: 03 Jun 2008
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| Posted: Sat Dec 13, 2014 6:52 pm Post subject: |
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Hammered?
You do understand that he ended up apologizing to the restaurant, right? |
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