On October 29, 2026, the Federal Trade Commission (FTC) and the attorneys general (AGs) of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah filed a lawsuit against Toast Inc. and several affiliated entities in the U.S. District Court for the Northern District of California. Los Angeles County and the City of San Francisco also joined on behalf of California. The complaint alleges that Toast, a restaurant-focused point-of-sale and fintech provider, imposed hidden and unauthorized fees, pushed unwanted add-ons, and made its services difficult to cancel.
Background and the Alleged Conduct
According to the complaint, Toast allegedly required restaurants to enroll in auto-renewing subscriptions averaging roughly $900 per month, without clear disclosure of several associated charges. The allegations include:
- Hidden and unauthorized fees. From September 2021 through late July 2023, Toast allegedly added a 99-cent fee on certain online orders over $10 without adequate disclosure or consent. The fee reportedly went to Toast, not the restaurants, on top of the fees restaurants already paid.
- Early termination and hardware charges. Customers who cancel early allegedly owe $150 for each month remaining on their contract. Customers who do not begin processing payments within 120 days must reportedly return their hardware or pay its full retail value.
- Misleading cost and support claims. The complaint alleges that Toast told customers their cost was “$0” and promised 24/7 customer support, while restaurants struggled to get timely help.
- Difficult subscription cancellation practices. Toast failed to provide customers with a simple cancellation process, instituting a counterintuitive, multistep, complicated cancellation process, and charged high, unexpected early termination fees.
The federal claims rest on Section 5(a) of the FTC Act and Section 4 of the Restore Online Shoppers’ Confidence Act (ROSCA). The states add claims under their own consumer protection statutes.
Toast has denied the allegations and says it will vigorously defend itself. It argues that ROSCA, which is aimed at consumer protection, does not apply to contracts negotiated between two businesses.
Why It Matters
This lawsuit extends well beyond Toast and the restaurant industry, particularly for companies that sell to other businesses:
- Hidden fees are a risk in B2B contexts, too. Regulators are applying deceptive pricing theories to sales made to small businesses, not just to individual consumers. All fees and charges should be clearly and conspicuously disclosed.
- Subscription and auto-renewal terms face close scrutiny. Businesses offering recurring services must ensure that charges, renewal terms, and early termination fees are fully disclosed, that consent is informed, and that cancellation is straightforward.
- ROSCA’s reach into B2B contracts may be tested. Toast’s argument that ROSCA does not cover negotiated B2B agreements sets up a question that could matter to any company selling subscriptions to commercial customers. Until a court addresses it, B2B providers may wish to consider whether negotiated contracts could fall within these requirements.
- Marketing and support promises must match reality. Claims like “$0 cost” or “24/7 support” can potentially become the basis of deception allegations if the actual terms or service differ.
- Coordinated state-federal actions raise the stakes. When the FTC and multiple state and local authorities proceed together, the scope of potential liability and the complexity of any resolution both increase.
Troutman Pepper Locke State Attorneys General Team
| Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation. |
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| Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation. |
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| Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies. |
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| Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes. |
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| Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations involving state attorneys general and other state and federal governmental enforcement bodies including the CFPB and FTC. He regularly represents clients in highly regulated sectors such as financial services, emerging technologies, health care, insurance, and education. |
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| Michael Yaghi Mike handles high-profile investigations led by state attorneys general, the FTC, and other federal and state regulatory bodies. He assists clients through these complex government inquiries, assisting them throughout the entire life cycle of investigations, from regulatory enforcement through formal litigation. |
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| Matthew J. Berns Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions. |
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| Reade Jacob Reade counsels gaming companies, financial institutions, fintech and social media platforms, and other commercial clients on regulatory, enforcement, and compliance matters spanning three core areas: gaming and sports betting, consumer protection, and privacy and data security. His gaming practice covers daily fantasy sports investigations, state wagering licensure, social casino litigation, and federal and state gambling compliance. On the consumer protection side, he has represented clients before the CFPB, FTC, and state AGs, negotiating settlements and consent orders, and litigating high-stakes matters in administrative courts and arbitration proceedings. |
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| Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests. |
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| Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs. |
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| Zoe Schloss Zoe represents clients in litigation and government investigations. As former deputy attorney general for the Delaware Department of Justice, she is an experienced litigator who understands the enforcement priorities that impact her clients. Zoe works with individuals and corporate entities in highly regulated industries, including financial services, health care, and energy. |
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| Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology. |
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| Sydney Goldberg Sydney is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She advises clients on regulatory compliance and state attorney general (AG) investigations in highly regulated industries, including health care and life sciences. She routinely helps clients navigate alcohol compliance and licensing issues, helping proactively manage regulatory risk. |
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| Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals. |
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| Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting. |
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| Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general. |
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| William LaRosa Bill represents clients in complex regulatory investigations, state attorneys general matters, and enforcement proceedings. He draws on his experience as a former assistant U.S. attorney and as a private-sector litigator advising corporations in high-stakes litigation and regulatory investigations, including multistate AG investigations. |
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| Lane Page Lane represents financial institutions and other clients in federal and state regulatory investigations and complex civil litigation. He is particularly focused on consumer protection and fair lending issues. |
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| Dascher Pasco Dascher provides strategic counsel and representation to clients navigating regulatory compliance, enforcement, and high-stakes litigation. She regularly represents clients in both single and multistate state attorney general (AG) investigations and enforcement actions, as well as before other state enforcement bodies and local government agencies. |
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| Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review. |
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| Timothy Shyu Timothy advises clients on regulatory compliance and enforcement in highly regulated industries, including health care and life sciences, data privacy and cybersecurity, and emerging technology. He assists companies in navigating complex investigations and enforcement actions, helping them mitigate regulatory risk proactively. |
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| Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues. |
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| Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals. |
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| Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department. |
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