On Tuesday, September 24, 2024, U.S. District Court Judge Analisa Torres ruled in favor of Doordash, Grubhub, and Uber Eats in a lawsuit contesting the City of New York’s law requiring the food delivery services to share diners’ information with restaurants.
When Doordash, Grubhub, and Uber Eats users place an order on the apps, restaurants typically only receive a user’s first name, first initial of their surname, and the order’s contents. In an effort to support local restaurants that utilize food delivery services, the City of New York passed a law in August 2021 that requires food delivery services to provide restaurants with a user’s full name, email address, phone number, delivery address, and order contents. The law took effect on December 27, 2021. The law contains an opt-out provision whereby users may request that food delivery services not provide the information in question to restaurants. However, the law presumes that users of food delivery services consent to the disclosure of their information unless they specifically indicate otherwise.
Doordash, Grubhub, and Uber Eats filed separate lawsuits against the City of New York challenging the data-sharing law in the U.S. District Court for the Southern District of New York. In the consolidated actions, the plaintiffs argued that the law violates the First Amendment, the Takings Clause of the Fifth Amendment, and the Contracts Clause of the U.S. Constitution. The plaintiffs also argued that the law violates the New York Constitution by overstepping the City of New York’s police powers. The plaintiffs filed a motion for summary judgment, which Judge Torres granted as to the First Amendment claim.
As to the First Amendment claim, the plaintiffs contended that the law in question infringed upon their rights “by requiring them to furnish data to restaurants that they otherwise would not provide.” Judge Torres analyzed whether the law regulates speech within the meaning of the First Amendment. Judge Torres, citing Sorrell v. IMS Health, found that the law implicates speech. “Customer data is information within Plaintiffs’ possession. And, the Customer Data Law restricts how Plaintiffs can use the customer data they collect. Previously, when restaurants requested customer data from Plaintiffs, they could decline to provide it.”
The defendant argued that the data-sharing law regulates the plaintiffs’ conduct, not their speech, since “the First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech.” However, Judge Torres clarified that this rule only applies “when a restriction on speech is a necessary byproduct of the government’s regulation of conduct.” Judge Torres provided examples where such a rule might apply.
The defendant also argued that the First Amendment is not implicated since the food delivery services “are nothing more than passive intermediaries for diners’ speech.” Judge Torres rejected this argument, comparing the food delivery services more like brokers rather than mere transmitters of information. The food delivery services “mak[e] a market between the diner who is searching for food and the restaurant who is searching for customers. . . Because Plaintiffs exercise discretion over who (if anyone) will receive customer data, they are not a mere ministerial mechanism for its dissemination.”
The defendant contended that the data in question is customers’ speech under the data-sharing law since “diners consent to the disclosure of their information to the restaurant.” However, Judge Torres found that the law “‘presume[s]’ that customers would like to share their data, then obligates Plaintiffs to carry out the speech act.” Judge Torres found that this structure did not constitute an expressive act by the customers themselves.
Judge Torres applied a balancing test in order to determine whether the data-sharing law passes intermediate scrutiny. “Courts inquire into (1) ‘whether the asserted governmental interest is substantial,’ (2) ‘whether the regulation directly advances the governmental interest asserted,’ and (3) ‘whether [the regulation] is not more extensive than is necessary to serve that interest.’” Judge Torres ruled that the City of New York did not have a substantial interest in ensuring that restaurants obtain data about diners. Even if such an interest existed, Judge Torres found that the City of New York did not demonstrate that the law was “appropriately tailored to this goal” since the City of New York could enact less restrictive alternatives to further said interest.
Judge Torres held that the City of New York’s data-sharing law violates the food delivery services’ First Amendment rights since the law fails intermediate scrutiny. Because the ruling on the First Amendment claim is sufficient to provide the relief requested, Judge Torres declined to issue advisory opinions on the remaining claims.
Additional Reading
Judge finds NYC’s data-sharing demand on food delivery apps unconstitutional, Courthouse News Service (September 24, 2024)
DoorDash, Inc. v. City Of New York (Case No. 1:2021cv07695)
Portier, LLC v. City of New York (Case No. 1:2021cv10347)
Grubhub Inc. v. City of New York (Case No. 1:2021cv10602)
Opinion and Order in DoorDash, Inc. v. City Of New York
Photo Credit: Tada Images / Shutterstock.com