Judge hears testimony of L&I, That One Place owner in hearing over COVID lockdown fines

The determination of fines That One Place restaurant in Port Orchard will be ordered to pay following the violation of Gov. Jay Inslee's lockdown orders in 2021 rests with a state judge following three days of testimony that wrapped up this week.

Craig Kenady, owner of That One Place, appealed penalties of $132,000 that the state's Department of Labor and Industries levied on him in 2021 after he opened his restaurant to in-person dining in violation of Inslee's "Stay Home, Stay Healthy" order that limited eateries to outdoor dining and takeout in December and January 2021. Kenady continued to operate indoor dining in his restaurant following the loss of its liquor license for failure to abide by the governor's orders and was subject to a restraining order.

Kenady as well as witnesses called by the state, represented by the Attorney General's Office, spoke in front of Jeffrey Friedman, a judge with the Board of Industrial Insurance Appeals over three days in May.

Dig deeper: Despite updated rules, state says That One Place is risking contempt of court fines by serving diners inside

Kenady, responding to questions from his attorney, Brian Padgett, said on Tuesday that he opened his restaurant to in-person dining in January 2021 over concerns that keeping only takeout and outside dining could have a negative effect on employees, nearly all of whom are in treatment for addiction, in work release or participating in the county's Drug Court.

“You really have to be around people that can support you in that," said Kenady, who himself is in recovery and entered the restaurant business following his release from prison. "We hire workers from the work release, and also take workers involved in a different type of drug programs, drug court,” he said. “Pre-COVID we had (Narcotics Anonymous) meetings seven nights a week. They were held right after we closed. By the time COVID hit we had over 50 people there one night.”

Kenady testified that a beloved former employee suffered from an overdose and died in the summer of 2020, which he said was the result of the employee choosing to take unemployment and losing the accountability of co-workers.

"When you are an addict, you cannot just lose your support system and be around other addicts," Kenady said.

He also said that he took many measures to ensure the safety of patrons and employees, such as using an HVAC system, opening windows and doors, and using fans. Kenady claimed to have no COVID-19 cases among employees until much later in the year.

“We followed all the rules they laid out as best as we could,” Kenady said.

State: Restaurant willfully violated order

The state's attorneys presented Inslee's proclamation as an exhibit, which showed that indoor dining was completely restricted and explained the outdoor seating requirements.

Kenady said that he was trying to work with the state to come into compliance with the governor's order after being ordered to shut down from L&I, but that officials from L&I were not providing assistance in doing so.

State attorneys representing L&I presented Facebook posts as exhibits that showed Kenady willfully defying Inslee's order restricting in-person dining in both January 2021 and in May 2020.

On Jan. 15, 2021, Kenady wrote on That One Place’s page, “Good Morning! This morning (Attorney General) Bob Ferguson and crew are going to attempt to put a restraining order on us. We will have a court date set today and we will plan a protest at the courthouse at our court hearing time," eventually adding: "We will not close due to this. It’s merely a bump in the road.”

On May 24, 2020, when restaurants were also closed to in-person dining, Kenady wrote: "We will be open tomorrow! We have decided as a team to protest the uncertainty of this lockdown.”

COVID lockdown: Port Orchard's That One Place restaurant opens sit-down dining in protest

Kenady was questioned by the state's attorneys about the Facebook posts on That One Place’s page and the protests he planned to defy the governor’s order. Kenady claimed he wasn't knowingly violating the governor’s orders, saying he was going above and beyond to create a safe environment for workers and diners by creating airflow throughout the restaurant and abiding by strict sanitation procedures.

John Stebbins, who works for L&I's division of occupational safety and health as an industrial hygiene technical specialist, was called as a witness by the state's attorneys and was asked if placing fans in the doorway as Kenady did would constitute compliance with the open-air dining guidance.

"No," Stebbins replied, adding, "They have a full permeable wall with the presence of fans. They would provide additional air to the space, but it's not the level of airflow that we see in outdoor spaces."

Padgett called an independent industrial hygienist, Kevin Headd, as a witness. He said that face coverings were worn at the restaurant, markers for social distancing were laid out, and fans were blowing air out the building.

“Kenady created an environment almost or better than outdoor dine-in, you've created an outdoor environment inside,” Headd said.

During questioning of Headd, Brian Dew, assistant attorney general, commented that during the time in question, only outdoor seating was allowed, a clear violation of the governor's order.

Other restaurant fines

Friedman said that he hopes to have a decision on fines levied on That One Place by mid-June.

That One Place was one of a handful of restaurants that stacked up hefty fines by remaining open in violation of state lockdown orders in 2020 and 2021, according to L&I. Others were Farm Boy in Olympia, which received fines of over $491,000; Stuffy’s in Longview, which received a $126,000 fine; Spiffy’s in Chehalis which received more than $457,000 in fines; and Creekside Cafe in Longview, with a fine of over $74,000.

Of those restaurants, L&I is waiting on Board of Industrial Insurance Appeals decisions for Farm Boy and Stuffy's, according to Dina Lorraine, an L&I spokesperson.

Spiffy's, which closed in 2021, has paid $1,541.31 from bank levies and has a remaining balance of $457,424.40, but Lorraine said the restaurant has indicated it will not pay any more.

"We have warrants filed and have levied banks,” Lorraine said.

This article originally appeared on Kitsap Sun: Restaurant appeals $132K fine for violating coronavirus lockdown order