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FOX 40 | Restaurant owners sue state, counties to recoup fees paid while shut down during pandemic

By Melanie Townsend

SACRAMENTO, Calif. (KTXL) – Restaurant owners in Sacramento County are now part of a major class-action lawsuit against the county and state.

Attorney Brian Kabateck told FOX40 the owners want to be reimbursed for the fees they’ve paid while being shut down during the pandemic.

“We’re just saying it’s not fair to close us, and at the same time, keep our money,” Kabateck explained.

California’s 60,000 restaurants and 1.5 million employees have struggled during the ongoing pandemic, most scaping by with outdoor dining and curbside pickup while paying thousands of dollars in fees for liquor licenses and health permits.

Kabateck said the owners feel that compensation is in order.

“We filed a series of lawsuits yesterday against Sacramento, San Francisco, Orange and San Diego,” Kabateck said. “We’ve filed in December against the county of Los Angeles and we have lawsuits comings for Placer, Alameda, Santa Clara, Monterey, Riverside, San Bernadino.”

With the potential of more counties to follow, Kabateck said the lawsuit covers all restaurants and bars that have followed restrictions and paid their dues.

“The state of California issues tens of thousands of alcohol licenses every year and collects millions and millions of dollars, so our best estimate overall, this is at least $100 million in fees that have been collected and a fair share of that should go back to these businesses,” Kabateck explained.

The president of the California Restaurant Association, Jot Condie, told FOX40 that he agrees the lawsuit is not only fair, but necessary for hurting businesses.

“State, local governments have been sending bills, tax bills, fee bills to restaurants as if they were open and they expected to pay it,” Condie explained. “The average profit margin for a restaurant is 3-5%. These days, a nickel has the size and weight of a manhole cover.”

“I don’t think anyone has been hit as hard as the restaurant industry, and restaurants have failed and restaurants are struggling,” Kabateck said. “Restaurants have had to lay off people. Restaurants may never come back as a result of this.”

Even though the state has loosened its restrictions down to a purple tier, that only means restaurants can do outdoor dining and curbside pickup, not indoor dining.

Restaurant owners said that is still not enough for their businesses to profit from and will take years to get back to normal.

Restaurant owners sue state, counties to recoup fees paid while shut down during pandemic