WASHINGTON — When Mark Fink and his son-in-law decided to open the Cajun restaurant in their home town of New Orleans in 2011, the family had no idea how to run it.
They hired an attorney, but the family never received a check.
In the months leading up to the opening, Fink, a retired city attorney, was trying to figure out what to do with a $50,000 debt he owed the restaurant’s owners, who had leased the space for five years.
“I was going to have to take on the debt myself, but I didn’t know how,” Fink said.
After the restaurant closed in December 2012, Finks and his wife filed a claim against the owners.
After nearly three years, they finally received a payment from the city — $3,000, the amount he had owed the owners, a $200 check he had sent to the city.
In a court filing last week, the city acknowledged that the $3.8 million they paid the owners was a breach of a contract that barred the city from seeking a refund of the money it paid.
The city also said it “did not intend to pursue this case in a timely manner.”
The case is one of the first federal lawsuits filed against restaurant owners, the owners of a chain of fast-casual eateries, and the city that handles their affairs.
In many states, restaurant owners can file lawsuits to recover damages from owners and their agents for alleged violations of state and federal law.
But the laws don’t cover claims brought by owners against private businesses.
In Washington, attorneys general have brought dozens of similar cases against restaurants over the past year.
Last year, Washington’s Attorney General Ken Cuccinelli, a Republican, filed a lawsuit on behalf of the owners and the owners’ agent, the restaurant owners’ association, challenging Washington’s Restaurant Owner’s Bill of Rights, which says owners have the right to sue their private business owners for damages if they violate their rights.
The Washington Attorney General’s Office has filed several similar lawsuits in other states, and several attorneys general are challenging the legality of these claims.
The cases are challenging claims that restaurant owners are not entitled to a refund or any type of reimbursement for the money they pay to restaurants, said Josh Mosely, an attorney with the Washington law firm Withers & Smith, which represents the owners in the Washington case.
The owners and attorneys have argued that Washington’s Bill, which has not yet been enforced, doesn’t give them any protections against future lawsuits.
In 2015, a Washington judge issued a preliminary injunction that prevents Washington from enforcing its existing law against the restaurant owner’s agents and the restaurant operators’ association.
In February, the court sided with the owners against the city, saying that a law requiring restaurant owners to seek reimbursement for all payments they have received is an overbroad law and would amount to an illegal payment restriction.
“The plaintiffs seek to use the Bill of Right to obtain refunds for payments that they have already paid,” the judge wrote.
“It is unclear whether the plaintiffs can prevail on this point without first proving that they are entitled to refundable payments.
The plaintiffs’ claim for refundable damages is not based on the Bill and thus cannot succeed.”
The Washington attorney general’s office said it is appealing the judge’s decision and intends to file a motion to strike down the ruling.
Fink is not alone.
The restaurant owners group that represents the Washington restaurant owners is also appealing the city’s ruling, which it called an abuse of discretion.
“We’re disappointed that the court took a pass on the merits of the case,” said Mike Lott, the group’s general counsel.
“Washington has not made a decision yet on whether it will enforce the Bill, but we’re hopeful that it will.
That said, we’re confident that the city will prevail on its claims.”
In New Orleans, a law passed in 2008 prohibits city government from seeking refund or reimbursement from private businesses, but state and local governments have taken similar action in other cases.
The law was meant to protect private businesses from claims by owners that the governments owed them money.
But it has not been enforced in any of the states where restaurants operate.
In January, New Orleans sued two private businesses that operate restaurants and other businesses in New Orleans — the owner of the restaurant in New York and the owner and manager of the restaurants in Washington, DC.
The lawsuit said the businesses owe New Orleans $1.2 million in unpaid bills.
The owner of one of those restaurants has agreed to pay New Orleans for the $1 million owed to the owner in Washington.
The restaurants owner in New Jersey agreed to take over the operation of the New York restaurant and give it to the New Jersey restaurant, but that agreement was voided by the New Orleans judge.
The lawsuits against private restaurants are a challenge to the way that Washington has dealt with the business owners’ claim that it should not be allowed to recover money from private companies