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Texas Restaurant Law

Help: The City Wants To Shut Down My Restaurant!

Posted in Alcohol, Liability, Litigation, Negotiation

The unthinkable has happened – your restaurant, your baby, is being threatened by the “man”, and it’s up to you to save the day. Don’t worry – help is on the way!

How Did This Happen?

Let’s first discuss why this may have happened. Most cases of restaurant closure fall into the following categories:

(1) Condemnation – the city or state needs the land;
(2) Health Code Violations – the city believes that your food is not fit to eat; or
(3) Alcohol Violations – the Texas Alcohol and Beverage Commission is pulling your alcohol license.

What To Do For Restaurant Condemnation

The most serious of the three possibilities is restaurant condemnation. Basically, the government can take anyone’s property at any time for a legitimate government purpose. The good news is that you still must be paid the fair market value for your property.

Condemnation is the most serious of the three possibilities because there are very few defenses. Still though, there are things you can do. For instance, you can argue that the value offered is not the fair market value, which is the most common defense. You can also argue that the purpose of the government’s taking is not legitimate. This is generally not effective because of the broad powers of the government‘s taking ability, but it is a possibility.

What To Do For Health Code Violations

If health code violations are so severe that a restaurant is threatened with closure, it should come as no surprise because there should have been severe warnings up to that point. Still, there are ways to fight alleged violations and potential closure related to them.

The first thing to do is to work with a health code inspector, not against them. There are gray areas in their ability to assess a restaurant, and playing nice is the best strategy.

Failing that, the next thing to do is to obtain copies of all paperwork related to an alleged offense. Analyze the results carefully to determine errors and inconsistencies.

You then have two options. The least expensive alternative is to take the findings yourself to the municipal health code department to dispute them. If that fails, you may have to file suit against the department to challenge the findings.

What To Do For Alcohol And TABC Violations

The Texas Alcohol And Beverage Commission (the “TABC”) has broad sweeping powers related to alcohol sales and violations. The TABC can issue fines, terminate a permit, or even put you in jail. Therefore, like health code violations, it’s critical to work with and not against TABC inspectors.

If the TABC has issued a fine (or threatened to pull your alcohol permit), you can work directly with the TABC to take the corrective action they have requested. However, certain disclosures can be very damaging, and we highly recommend engaging counsel as early as possible. Your attorney may only need to work in the background to advise you, but failure to get prompt legal counsel could be much worse.

Take Aways

No matter why the city wants to take or shut down your restaurant, we always recommend the following:

  • Work with and not against the government;
  • Get the facts as early as possible;
  • Engage counsel sooner than later to avoid missteps that could cost you.

Has your restaurant been taken or shut down? What did you do? Please let us know!

About the author: Matthew Sanderson is a restaurant lawyer in Texas. “Good service with a smile” is his motto. Click here to find out more about Matthew Sanderson’s legal practice and how he can help you today. Follow him on Twitter @dealattorney.