Closed restaurant owner sues state, LA County for requiring fees

A restaurant owner filed a class action against Los Angeles County and the state Monday to recoup money spent on state and local fees for liquor licenses and health permits even though government agencies have forced them to close due to the COVID-19 virus.

Brian S. Kabateck of Kabateck LLP said in a statement the class action filed in Los Angeles County Superior Court is the first of many to be filed across the state against the California Department of Beverage Control and different counties.

The lead plaintiff, Walter Schild, is the CEO of Culinary Lab, which operates the 33 Taps pub in Hollywood. The company also owns Pizzeria Ortica in Costa Mesa. Both are permanently closed, according to their websites.

Schild has paid about $7,000 a year in government fees in addition to property taxes but has been unable to get the fees reduced or delayed, he stated.

"I'm being charged late fees up to 50% for failing to pay even though my restaurant has been closed for all [but] a month since mid-March," Schild said in a statement. "We've been pleading with lawmakers for fee relief and now we have no choice but to file a lawsuit."

The class action said the county and the state have required Schild to close or limit operations at his businesses but "continued to charge, collect and fail to partially or completely refund the businesses' public health permit and licensing fees, alcohol beverage control fees, as well as late charges."

Kabateck alleges the county's collection of public health permit and licensing fees despite the closures required voter approval under Proposition 62, approved by voters in 1986, and Proposition 218, a state constitutional amendment passed in 1996.

The class action also demands a refund from the California Department of Alcohol Beverage Control and the county for annual fees paid "in the event that the license application is withdrawn or denied."

The suit seeks a judicial declaration the fees were invalid as well as injunctive relief and damages.

John Carr, a spokesman with the California Department of Alcohol Beverage Control, said Monday the state agency could not comment on ongoing litigation.

"The department understands the effect this pandemic is having on ABC businesses," he wrote in a statement. "ABC has offered multiple forms of regulatory relief including an extension of the time in which a business may pay its annual renewal fee."

The Los Angeles County Counsel's office could not be reached for comment on the lawsuit Monday afternoon.