$150M NYC Restaurateurs’ Health Dept. Lawsuit Dismissed

A lawsuit stemming from the grievances of more than 40 restaurant owners over exorbitant fines and unfair enforcement of city and state health codes has been dismissed.

In Board of Health Public Review Committee v. New York City, restaurant owners – including many Irish pubs and pizzerias based in the Bronx – complained of unjust treatment, noting fines that are unnecessary and penalties that include public letter grades that have damaged business. Generally, fines for simple violations can reach $1,000 each. Such penalties, they asserted, were a means to drive up revenue in the city, but have the effect of driving them out of business.

However, Manhattan Supreme Court Justice Donna Mills tossed the claim, indicating the system of fines, fees, collection and deposit are not unconstitutional, unfair or even all that unusual.

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According to this lawsuit, plaintiffs asserted the city health code is enforced arbitrarily and even maliciously by inspectors who are not properly trained. Inspectors with varying levels of expertise returned to locations that had already undergone inspections and been fined, only to increase penalties for “allegedly overlooked violations,” according to the complaint. Plaintiff business owners sought compensatory and punitive damages, but also intrinsic changes to the appeal process following a violation, which they called fundamentally unfair and a breach of their 14th Amendment rights under the U.S. Constitution.

However, a spokeswoman for the city’s law department had previously countered the city’s enhanced enforcement of health code has resulted in cleaner kitchens, and 8 out of 10 restaurants now earn A grades. The city argued the restaurateurs’ health dept. lawsuit should be dismissed, as the health board was acting well within its range of powers, and the fines were not too severe. Lawyers for the city also denied violating restauranteurs constitutional due process rights.

In offering her opinion, Mills indicated there were two primary questions at hand: The first was whether the city’s council ran afoul of the separation of powers doctrine by improperly granting legislative authority to the board. The second was whether the fine and fee schedule followed by the board was unconstitutional. She answered a firm “No” to both.

She noted council had the power to delegate authority to the board with the goal of protecting and promoting public health. Although council couldn’t create rules that amounted to de facto legislation (the recently overturned large soda law is one good example), the health board’s authority was rooted in basic policy that is seen in many other areas of the state and country.

Further, with regard to inconsistent application of health code laws to different businesses, Mills found the allegations were “bare” and “not meaningful.” She then looked at the fine schedule, which she said would be considered excessive if they were disproportionate to the gravity of the offense. Here, fines aren’t necessarily punishment, but rather a tool used by the board to gain compliance. None of the fines, she said, were inherently unfair.

The restaurant owners have vowed appeal. Representatives insisted they are not against inspections or even fines. They simply want a fairer, more reasonable system.

The Wright Law Firm is a law firm located in Midtown Manhattan dedicated to representing the rights of restaurant owners. Call (212) 619-1500 for a confidential consultation.

Additional Resources:

Judge Tosses Lawsuit Criticizing Restaurant Inspections, Sept. 11, 2014, By Andrew Keshner, New York Law Journal