California Restaurants Want Fee Money Back From a Government That Isn't Letting Them Operate to Capacity

Restaurants in five counties are threatening legal action.


A group of California restaurants have filed claims to get back over $100 million in various fees paid to state and local government, arguing that since coronavirus restrictions now prevent them from being able to survive economically, they should no longer be on the hook for these government-imposed costs of doing business.

California's COVID-19 restrictions on restaurant operation vary county by county, and the claims filed this week via lawyer Brian Kabateck involve establishments in Los Angeles, Monterey, Orange, Sacramento, and San Diego counties, with more legal action from more counties threatened.

As reported in Desert Sun via the Associated Press, "state and county governments have continued to charge fees for liquor licenses, health permits and tourism assessments—even though the restaurants were closed down by government orders or permitted to operate with limited capacity and dining."

The restaurants involved in the claims—which could be a prelude to a class-action lawsuit—"contend they have been being unjustly punished for following the law and are being charged for permits they can't use," notes the Desert Sun. One Los Angeles restaurateur paid over $7,000 in yearly fees beyond property taxes to legally operate and gripes he's now being hit with late fines for fees he can't pay because he can't operate.

Some of the restaurants are forbidden from offering indoor dining while others may operate indoors with limited capacity. But outdoor dining and delivery are often not enough to keep them afloat. The California restaurant industry had employed 1.4 million people, but thanks to COVID-19, reports the California Restaurant Association, up to one million of them have faced layoffs or furloughs.

As Kabateck told the Sacramento Bee, forcing restaurants to pay for operating permits when they are being forced to operate in a manner that can't keep them going is "offensive and tone deaf….Restaurant owners are obligated to pay these government fees just to operate, yet the same government entities who have collected those fees have forced these businesses to close their doors or drastically restrict operations due to the pandemic."