The state of California expects restaurants to continue to pay permitting fees even though many have been forced to close or partially shutter due to COVID-19 restrictions, according to an attorney representing the interests of restaurants.
“I've had restaurants tell me that they called their county officials or the Alcohol Beverage Control and the only help they’ve been offered is deferral for a few months,” attorney Brian Kabateck said. “They've been told they could lose their license if they don't pay the fee.”
Kabateck filed class action lawsuits this week in several superior courts of California naming the health care agencies of Orange, San Francisco, Sacramento, Fresno, and San Diego counties as well as the California Department of Alcohol Beverage Control (ABC).
“The governor put a provision in his 2021-2022 budget that would provide some kind of credit or relief in the future for restaurants permit fees for alcohol licensing but that doesn't help people in the past,” Kabateck told the Southern California Record. “I haven't had any meaningful conversation with county health officials except for Fresno, which seems to be doing the right thing.”
Fresno is reportedly working with Kabateck to create a plan to refund health fees paid by restaurant owners.
“Each county has its own health fees but the state legislature could mandate it for everybody including mandating that the counties give the money back but they haven't done that and the individual counties could take care of their own like Fresno is doing,” Kabateck added.
As previously reported in the Southern California Record, Kabateck filed the same claim against Los Angeles County last month.
Additional class actions are planned for Monterey, Placer, Alameda, Riverside, San Bernardino, and Contra Costa counties, according to a press release. The causes of action in all of the complaints are the same. They include the following:
Unjust enrichment, which challenges receiving pay or advancement without being entitled to it.
“The state and counties have gotten money that they're not entitled to because they didn't allow the service that the permit was issued for,” Kabateck said.
Southern California region restaurants, for example, have been limited to 25% capacity for indoor dining and prohibited from offering outdoor dining options.
Violation of government code § 53723, which does not allow the state to tax other than what has been approved by the legislature.
“When you keep money and you're not providing a direct service for that money, like a permit, then it becomes a tax,” Kabateck said.
Violation of the California Constitution, which does not allow taxation retroactively.
“These fees paid were never approved by the legislature to be a tax and these permits were for a specific purpose,” Kabateck said. “It’s like taking money to issue a permit to build a home and then telling the homeowner or property owner, ‘you can't build your home there’ without refunding their money. It’s a straightforward proposition in my mind.”