San Francisco’s Highest-Powered Restaurants Might Sue to Reopen Their Dining Rooms

The man behind many of San Francisco’s most prominent restaurants is thinking about suing the city, and he’s hoping that the region’s best-known chefs might join his charge. His goal is to force the city to reopen indoor dining — or, at the very least, offer a plan and metrics for when service inside might return.

Hanson Li is the founder of Salt Partners Group, which you probably haven’t heard of. What you have heard of are most of the restaurants the ground has created, managed, and has ownership in: Everything in multi-Michelin lauded Crenn Dining Group (that’s Atelier Crenn, Petit Crenn, and Bar Crenn), ice cream mini-empire Humphry Slocombe, High-Proof (that’s the bar group behind spots like Horsefeather and Last Rites), and many others. He’s the man behind the curtain, if you will.

But Li has stepped out onto center stage this week, sending an email to a long list of high-profile local restaurateurs, some of whom say they’ve only met him in passing. (“How did I get on this email?” one powerful food group’s owner self-deprecatingly asked Eater SF.) In the email, Li says that he’d like to file a lawsuit similar to a $2 billion class action suit filed by hundreds of restaurants in the outer boroughs of New York City earlier this month. The New York suit, which names Gov. Andrew Cuomo, New York City Mayor Bill de Blasio, and New York’s attorney general, says that restaurants in the city are suffering “irreparable harm” by being closed for indoor dining, and claim that Cuomo’s decision to keep the city outdoor-only is “random, arbitrary and unfair.”

A few days after the New York lawsuit was filed, Cuomo agreed to allow indoor dining as of September 30. Correlation does not imply causation, and a lawsuit filed a week before an announcement does not mean that one incident prompted the other. But according to Li, a similar suit in SF might prompt New York-style results.

As you might recall, San Francisco is — at the state level — allowed to reopen dining rooms at 25 percent capacity, and has been since August 31. But the city’s dining rooms remain shut down, with SF Director of Public Health Grant Colfax saying that he found it too risky to reopen dining rooms during a press conference to announce the resumption of a number of indoor activities. Over two weeks later, the city still has not released any sort of guidance or timeline for indoor dining.

It’s that lack of a publicly stated plan, Li says, that sent him and Tim Stannard (the founder of Bacchus Management Group, which owns Michelin-starred Spruce and the Village Pub, mini-chain Pizza Antica, and several other California restaurants) to meet with a high-powered group of lawyers on September 11. The global legal practice, which Li says is the “world’s best litigation firm,” also “represented Tesla to sue Alameda County during the factory closure/reopening brouhaha,” he notes.

According to Li, the firm offered a reduced rate to file a suit to push for reopening, but the amount of money is still significant: It will cost the plaintiffs in the mid six-figures just to seek “a temporary restraining order or preliminary injunction,” Li says. Given how tight finances are for every restaurant in the city, Li says that he’s hoping to spread the costs over a large group. With enough participants, the cost could be as low as $3,000 to $10,000 per plaintiff, maybe less, Li suggests.

Of course, even a couple thousand is a lot these days — and the strength in numbers Li is seeking might not be there. Of the recipients of Li’s email who were contacted by Eater SF, almost all who responded either said that they had no comment or would not be participating.

Very few were willing to speak on the record. Lazy Bear’s David Barzelay, a former lawyer himself, sent a statement via email that spoke critically of the city’s policies so far, saying that its “refusal to elucidate any standards or targets for when it would allow even reduced-capacity reopening makes the city’s decision-making seem arbitrary and ad hoc,” and that “it feels at best like the goalposts are constantly moving, and at worst like the decisions aren’t based on science at all, but rather on politics and optics.”

Despite that, Barzelay says, “a lawsuit seems a rather extreme (and costly) way” to get city officials to perform that elucidation, and that though he’s “carefully considering Hanson’s proposal,” he says that “the best-case scenario for restaurants and for taxpayers is that the city quickly provides more clarity and metrics for reopening indoor dining, and makes this lawsuit effort moot.” (You can read his full statement here.)

That lack of clear standards and targets that Barzelay cites was reiterated in several conversations Eater SF had over the course of reporting this article, with one prominent restaurant owner saying that Colfax has a “seemingly indifferent attitude with respect to the demise of restaurants” and another saying that city and county health officer Tomás Aragón “can’t explain why he makes the decisions he does.” These owners all agreed that takeout and outdoor dining cannot sustain their businesses for much longer, especially as the weather gets colder and nightfall comes earlier. “I’m not sure that indoor at 25 percent capacity will be enough,” one of the city’s best-known chefs tells Eater SF. “But it’s more money than we’re making now.”

While Colfax has been the public face of San Francisco’s health orders, speaking at most of the city’s COVID-19-focused press events, it’s Aragón who holds all the cards — and calls the shots. What reopens, including under what circumstances and when, is his decision, and his alone — while the mayor’s office can argue, they do not have the ability to override his decisions, nor does the city’s Board of Supervisors. (Here’s a May 20 memo from San Francisco’s city attorney’s office that lays out the breadth of Aragón’s powers.)

All this to say that a — thus far hypothetical — lawsuit will bet solely on its filers’ ability to intimidate Aragón, should they file. It’s an expensive gamble, especially for spots that are almost literally looking for change in the couch cushions to keep the lights on. (When contacted by Eater SF, John Coté, the spokesperson for the city attorney — who would defend SF in a suit like the one Li is proposing — says “we don’t comment on hypothetical lawsuits.”)

It’s worth noting that New York’s biggest restaurant lobby declined to participate in that city’s lawsuit, and the same is true in SF. Andrew Rigie, the executive director of the NYC Hospitality Alliance, tells Eater SF that “all options were always on the table for us, but we were able to work collaboratively with government to start reopening at a 25 percent occupancy with a roadmap to 50 percent, while making it clear that none of this will save restaurants and we need a lot more ongoing support.”

It’s a sentiment that was echoed by Laurie Thomas, Rigie’s counterpart at the Golden Gate Restaurant Association (GGRA), San Francisco’s restaurant industry group. They, too, do not have an immediate plan to join in any suit, Thomas says. Like many others, she expressed fears that a lawsuit could derail the ongoing, diplomatic negotiations she and other leaders in the restaurant industry have been engaged in at City Hall.

According to Li, filing a lawsuit “would ensure that we get to indoor dining by October,” and “would pull up the indoor dining timeline by at least two months (assuming a December timeline if we don’t do anything) and potentially a lot more.” But what he’s really looking for — what all SF restaurant owners seem to be looking for — is just a plan from the city, a timeline, or dates. If that were announced, Li says, “along with a statement like ‘a, b, and c needs to happen,’ and then we can reopen,” he says he wouldn’t feel the need to continue down the litigation path.

But until then, Li says, he will continue to try to gauge support for a lawsuit, as it seems like the only way his industry might get the answers they seek. “If the restaurant industry doesn’t come out to support a lawsuit, then we know,” he says. “But right now, all everyone is looking for is some idea of what to expect.”

Here’s the text of Li’s email. Out of confidentiality concerns, some figures and his law firm’s name have been redacted:

(It’s a longish email - about 6 minute to read through. Tldr: I’d like to bring a lawsuit against the city on indoor dining a la NYC. I have talked to the world’s best litigation firm and they will represent our cause. They are giving a friends and family rate on a fixed fee basis but it’s still a lot. I am hoping you can respond via this form to indicate your support (or not). Thanks - Hanson)

Hi all, I think everyone here knows me but in case not - I own and run Salt Partners - Crenn Dining Group, Humphry Slocombe, B-Side at SFJAZZ, Horsefeather & Last Rites, Califorrito, Fat Buffalo, and Sunday at the Museum. I also cofounded LocoL with Roy and Daniel.

It’s been 2 weeks since CA state provided the new guidelines that would have allowed us in SF to open up indoor dining for 25% capacity. It’s also been 2 weeks since we’ve heard nothing but indifference from the city. I was particularly irked by this gem from the presser on 9/1: “At that point, Colfax interrupted himself to point out that outdoor dining and takeout are open, saying with a smile “certainly there are opportunities there.” Another least-favorite was the DPH tweeting out “it’s just too risky” in answer to indoor dining questions - basically saying ‘just trust us.’

I’ve heard that GGRA had had calls with the Mayor and her team including Dr. Colfax and Aragon the last 2 weeks. The latest, as reported, is that indoor dining is pretty low on their priority list and “TBD” or “December” or “next year” was bantered around. Beyond a date, I am further disappointed with the lack of transparency and the city’s capricious decision making for our industry. There’s no ‘plan’ that I have heard of. Today Colfax completely sidestepped a question for indoor dining with a whole lot of platitudes.

Which brings me to this: I’m sure all of you have seen NYC - a coalition of restaurants sued the city and the mayor for $2Bn. The restriction on indoor dining was lifted soon thereafter.

I want to be the squeaky wheel.

Tim Stennard (Bacchus - Spruce, The Saratoga, Village Pub, etc.) and I talked with partners at [redacted] last Friday to sue the city of SF. [Redacted] is the world’s largest litigation firm. For example, they represented Tesla to sue Alameda County during the factory closure/reopening bruhaha and John Hopkins against the Trump administration (in regards to sending students on visa back home). Tim talked with GGRA and it does not appear GGRA wants to lead this.

The goal is to either get SF to follow the state guidelines (i.e. we are now “Red” and therefore 25% would be allowed if any restaurant so chooses) OR give us a much clearer metrics on the path towards indoor dining. I fret about the coming rain, cold weather, and shorter days (daylight savings is just 7 weeks away). If we can’t get to indoor dining by Oct, then I don’t see how we can get to 50% capacity by November. (Aside 1: this raises the question/concern on whether anyone can manage a sustainable operation with 50% capacity, doing business in SF for the long term etc... I don’t pretend to offer solutions to these larger questions - the focus for this is just to give us the option to reopen and a path towards more indoor capacity). (Aside 2: reopening requires asking ourselves, our staff, and our guests to take on health risk. I have my opinion but certainly am no authority on the safety or the wisdom of reopening of our restaurants. My concern is that the people with the policy authority in SF do not have the discipline on establishing what that risk line is. Just as a 25 mph speed limit throughout the city is probably a safer speed - but yet the government and its people accept that 40 mph in some places is okay).

The lawsuite [sic] doesn’t come cheap. There are probably cheaper law firms to use but I think using [redacted] would ensure that we get to indoor dining by Oct. I believe that this lawsuit would pull up the indoor dining timeline by at least 2 months (assuming a Dec timeline if we don’t do anything) and potentially a lot more. The pessimist in me says that even as the attitude by SF city relaxes in terms of new cases, etc., the reopening of everything else (from schools, to churches, to gyms, to salons ) all will contribute to stats that will at best be flat and probably a rise. The restaurant industry is then forever behind the eight ball - they can continue to point to ‘worsening’ stats to indefinitely push off indoor dining.

ASK: I am hoping to get 75 ‘yes’ and [redacted] committed by end of this week to really get [redacted] going. I propose a sliding scale of $250 to $5000 contribution, with the average target of $2500 per business.

If we get to those goals then over the weekend, I would kick off these actions:

- The creation of a small committee (4 people) to spearhead this and coordinate with [redacted]

- Together, we would reach out to other colleagues for a broader coalition to recruit restaurants of all stripes and neighborhood. I recognize that the coalition needs to include a representation of all restaurants in the city.

- Start the equivalent of a GoFundMe to support the legal fund - I hope that our investor base can help seed the momentum of this GFM and bring more general population to demonstrate support

- Start a virtual auction for us to contribute our wares to raise money for this... just as what non-profits have asked all of us all these years

To get started, please fill out this simple form to indicate your support (or not). Please also forward to other restaurant owners you know and have them also fill out the form. Appreciate it. Hanson