In January 2021, the owner of a restaurant filed with the Superior Court of California a class action seeking refunds for the fees, taxes, and/or charges (and any penalty fees) levied by the County and State entities against them during the period when they were forced to close or to severely limit their business activities on account of COVID-related executive orders.
Plaintiffs alleged that their business category had been significantly hit by the pandemic and that they had continued to pay these fees despite the relevant money not being used by the County and State entities for their benefit as intended. While they did “not dispute the propriety of the health and safety Orders”, Plaintiffs asked for fairness and thus for reimbursement of taxes paid while they were forced to close.
In January 2023, the parties to the dispute reached a friendly settlement of the case. The parties acknowledged that the defendant had previously provided substantial financial relief to restaurants in Orange County that were adversely affected by the pandemic, including allocating over $75 million of financial support for small businesses. Hence, the defendant managed to come up with a lower amount of reimbursement than the plaintiffs originally asked for and agreed to pay the overall amount of $1.7 million which will be distributed on a pro rata basis based on the permit fees charged by the County to restaurants during the Settlement Period (i.e., from 17 March 2020 to 15 June 2021, the period of operation of COVID-related measures).
Reference: Pizzeria Ortica et al v. County of Orange et al., Superior Court of California.
