California Restaurants File Claims for Fee Refunds Due to COVID-19

November 15, 2020 Updated: November 16, 2020

An attorney has filed legal claims against the state of California on behalf of restaurants throughout the state that have been required to pay permit fees despite mandated closures and limited capacities due to the COVID-19 pandemic.

Brian Kabateck is the attorney filing the claims on behalf of restaurants in Orange, Los Angeles, San Diego, and Monterey counties. He told The Epoch Times that a class-action lawsuit against the state will likely result from the filings and that he is seeking to recover more than $100 million in fees on behalf of all restaurants in California.

“These restaurant owners did the right thing and followed the law. They’re law-abiding citizens who, whether they agreed or disagreed with the closure orders, closed their restaurants when they were told to,” Kabateck said.

“Some of them were able to operate modified at a later point in time, some weren’t, but they complied with the law. And at the same time they comply with the law, the government that enforced the law, that created the law that caused them to close, has collected from them fees for the operation of the restaurant.”

The charged fees include liquor licenses, health permits, and tourism fees that most restaurants are required to pay in California. The fees vary by county.

Kabateck noted that the California government requires a person to file a claim before they file a lawsuit. The claim gives the other party 45 days to correct its behavior—yet Kabateck said that in his more than 30 years as a lawyer, he hasn’t seen the government “do the right thing” in that time period.

The claim was filed against the California Office of Tourism and the Department of Alcoholic Beverage Control, and Kabateck notified the state’s Office of Risk and Insurance Management on Oct. 23.

“It’ll end up being a class-action case. The claim is on behalf of all the restaurant owners in these individual counties, as well as on behalf of all restaurant owners in the entire state of California, against the state,” he said.

“What we want back from this is we want a fair, reasonable share of those fees returned for the period of time which the restaurants were either completely unable to operate, or only able to operate a small portion of business.”

John Carr, the public information officer for the California Department of Alcoholic Beverage Control (ABC), told The Epoch Times that his department has no plans to return any fees.

“ABC is not planning on refunding fees; however, it should be noted that the department understands the economic stress that many businesses are facing during the pandemic. The department has provided Temporary Fee Relief by providing extra time for licensees to pay annual renewal fees,” Carr said via email.

He said the department had also adopted regulatory relief measures to accommodate more than 9,000 establishments, including allowing businesses to expand their spaces to spread out patrons and meet social distancing protocols.

“The department has also approved such relief measures as allowing mixed alcoholic beverages to be sold to-go, provided they are in a sealed container with a lid and either sold or delivered to someone of legal age,” Carr said.

Kabateck said he would file claims in the coming weeks for restaurants in all of California’s larger counties, with at least one restaurant in each.

He said he has been collaborating with the California Restaurant Association on various issues since the pandemic started. When the advocacy group reached out to him about the serious problems its members were having, Kabateck volunteered to help.

“There are some cases out there where people think that government closure orders are illegal and unconstitutional,” Kabateck said.

“We’re not weighing in on that one way or another. The only thing we’re talking about here is just these fees, and you know the fees themselves are a relatively small amount of money comparatively speaking, maybe $5,000 to $10,000 per restaurant operation, per location.”

Many restaurants have been forced to shut down permanently after heavily declining revenues due to the pandemic and are eager to have fees returned to them.

Kabateck filed a claim on behalf of one Orange County restaurant, Pizza Ortica in Costa Mesa. However, the restaurant appears to have closed permanently. The phone number has been disconnected, the website no longer functions, and one Yelp reviewer noted that the premises had been vacated.

“There is no business in the state, probably no business in California, that has been hit worse than restaurants, and $5,000 or $10,000 or a share of that money coming back to these restaurants would make a big difference to these business operators,” Kabateck noted.

According to the Yelp Local Economic Impact Report for September 2020, restaurants are among the industries hardest hit by the pandemic. More than 32,000 restaurants had closed nationwide between March 1 and Sept. 1, with over 60 percent of the closures thought to be permanent.