Westchester restaurants that took on one of the largest beer distributorships in the U.S. have won a $5.75 million class action settlement for small businesses that had paid an obscure 10-cents deposit fee.
U.S. District Court Judge Cathy Seibel approved the settlement against Manhattan Beer Distributors on April 24.
“From the get-go, this case has been distinguished by its intensely litigated proceedings,” one of the restaurants’ attorneys, J. Burkett McInturff, stated in a declaration that describes the settlement.
Manhattan Beer, based in the Bronx, sells beer and beverages throughout New York City, Long Island and the Hudson Valley.
The case was filed originally in 2022 by Armonk House, a defunct restaurant that claimed small businesses were being charged an extra 10 cents per case of beer while bigger customers, such as supermarkets, didn’t have to pay the fee.
The extra dime per case added up to an extra $2.25 million every year for small businesses, according to the lawsuit.
Village Social Restaurant Group – including Village Social restaurants in Mount Kisco and Rye and Pubstreet, in Pleasantville – eventually joined the lawsuit. Manhattan Beer founder, Simon Bergson, and vice president Michael McCarthy also were named as defendants.
The restaurants claimed that their invoices improperly included an extra dime per case that was combined with the state-mandated $1.20 per case bottle recycling fee.
The ten cent fee, according to the settlement, was for cardboard mother cartons: large shipping boxes that protect smaller containers.
The restaurants calculated that the billing practice had cost small businesses nearly $9.4 million.
In 2023, Judge Seibel sustained charges of racketeering, deceptive business practices, fraud, and misrepresentation. She dismissed charges of unjust enrichment, breach of contract, breach of good faith and fair dealing, public nuisance and violation of the state’s Bottle Bill.
Manhattan Beer denied that it had done anything wrong, but a year ago it voluntarily acknowledged $2.6 million in overcharges and began issuing separate invoices for cardboard deposits.
The $2.6 million in credits are in addition to the $5.75 million settlement, according to court documents, in effect bringing the total settlement to $8,350,000.
The restaurants’ attorneys identified 31,785 businesses eligible for reimbursements.
Judge Seibel also approved a $1,916,666 legal fee for the restaurants’ attorneys at Wittels McInturff Palilovic, of Manhattan.
