KBK Files Restaurants’ Claim for Refund of Fees and Permits During COVID-19

In a first-of-its-kind action, California restaurants have unified to file a government claim seeking a refund for state and local fees, including liquor licenses, health permits, and state tourism assessments. The claims come as restaurants across the state face unprecedented challenges to stay open and maintain cash reserves in the COVID-19 era.

According to the latest Yelp Local Economic Impact Report released in September 2020, as COVID-19 has spread across the world, the restaurant industry sustained one of the heaviest blows. Since March, 53% of restaurants are now listed as permanent closures on its platform, while OpenTable said 1 in 4 restaurants were at risk for closure. Research by the National Restaurant Association revealed that the industry has lost more than $120 billion in sales.

Restaurants owners have learned to adapt by ramping up online orders, encouraging curbside pickups, and implementing outdoor dining with limited guests. Other restaurants have started using food delivery apps to keep their customers. In California, counties with the highest infection rates are limited to outdoor dining only, along with takeout and delivery. Many restaurants struggled to survive the tight restrictions placed due to the pandemic, which forced many business owners to shut their doors to consumers, and those that did keep their restaurant open during this time found their revenue decline.

The California Restaurant Association has urged Gov. Gavin Newsom to work on an aid package for their businesses, claiming, “Restaurants cannot sustain themselves or their employees when they operate with strict capacity limits, which means the state should long ago have crafted a comprehensive aid package to help these small businesses.”

Owners recently revealed that 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.

Kabateck LLP recently filed government claims on behalf of restaurant operators across California who are seeking various fees and permit refunds amid industry disruption from COVID-19. Restaurants are seeking to recover more than $100 million in fees for liquor and health permits and tourism charges that they say were assessed even though their businesses were shuttered or only partially operating under long-running coronavirus orders.

“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,” said attorney Brian Kabateck. “We simply want the government to return those fees to those restaurants who followed the law and closed.”

A government claim, filed for individual restaurants and on behalf of other businesses in the sector, is a required initial step before filing a class-action lawsuit against government agencies in California. The claims were filed in Los Angeles, Orange, San Diego, Sacramento, and Monterey counties. Additional claims are expected to be filed in San Francisco, Fresno, and Placer counties. Officials have 45 days to respond until it moves on to a class-action lawsuit.

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