A state judge yesterday handed down an $800,000 civil judgment against the owner of the Kahala Hotel & Resort in a class-action lawsuit over service fees charged for food and beverages.
A jury determined that the resort improperly charged customers $269,114 in service fees over the past five years because it did not disclose to them that the money is used to pay costs and expenses rather than tips and wages for employees as required by state law.
Circuit Judge Gary W.B. Chang awarded $807,344, or three times the overcharge, because the resort violated the state antitrust law designed to protect consumers. Chang can also award the plaintiffs attorney fees and costs.
Lawyers for the hotel did not respond to requests for comment.
The judgment is for a lawsuit filed by Oahu resident Jason Kawakami, who paid more than $4,800 in service fees when he held his wedding reception at the Kahala Hotel in July 2007.
Other consumers and food and beverage workers have filed similar class-action lawsuits against other hotels and resorts on Oahu and the neighbor islands.
Kawakami’s was the first to go to trial.
The period of overcharge is from November 2005, when the current owner took over operation of the hotel, to last month.
The hotel provided a list of customers it charged food and beverage service fees during that period, said Brandee Faria, one of the lawyers for Kawakami’s suit. They will be contacted and asked whether they want to make a claim, she said.
Even after Kawakami filed his lawsuit in December 2008, and Chang found in September that the hotel was in violation of the law, the operators continued to charge food and beverage service fees without proper disclosure, Faria said.
"That’s what makes (the violation) especially egregious," she said.