Patrons Perplexed as Tap Is Turned Off at 5 Red Onions

The lunch crowd streamed into the Red Onion restaurant in Santa Ana, past the lobby sign adorned with bright blue, red and yellow balloons.

“The ABC will not allow us to sell alcoholic beverages temporarily,” the sign said. “Thank you for your patience.”

But few of the restaurant’s customers were asking why.

“Complaints of racial discrimination? I’m shocked,” said Mark Michini, 24, of Huntington Beach when he was told why the Alcohol Beverage Control Board had suspended the restaurant’s liquor license. “It’s not right. This is supposed to be 1987, not the 1960s.”

Some customers said waiters told them the suspension “had something to do” with getting caught serving alcohol to minors.

Thursday was the third day of a 10-day suspension of the Santa Ana restaurant’s liquor license that resulted from a state investigation that found racial discrimination at various locations of the popular Southern California chain. Licenses of four other Red Onion restaurants--in Riverside, Palm Desert and Orange County--also have been temporarily suspended. The Carson-based company has 14 restaurants.

The terms of the suspensions were negotiated between the ABC and the Red Onion chain.

Red Onion legal counsel Ralph B. Saltsman said in a phone interview Thursday that the company had decided not to fight the suspensions “to avoid dragging the matter out further.”

“It didn’t seem to be in anyone’s best interest to do that. The problem is old and over with.”

He added that the management of Red Onion restaurants had “absolutely not” conceded that it had ever been guilty of discrimination.

Santa Ana restaurant manager Jeff Special said that, in keeping with the belief of the chain’s president, Ronald Newman, that the investigations, lawsuits and publicity concerning alleged Red Onion discrimination should be viewed as a “challenge,” his restaurant is planning a 20th anniversary party to coincide with the end of its suspension June 5.

Under terms of the suspensions, Red Onion restaurants in Lakewood and Fullerton are barred from selling alcohol for five days. The Santa Ana, Riverside and Palm Desert restaurants are prohibited from selling liquor for 10 days, a more severe penalty because they were responsible for more complaints, said Richard Cottingham, ABC deputy chief in Cerritos.

“The restaurants can conduct business,” Cottingham said. “They don’t have to go dark. But they can’t sell, or permit to be sold, or have alcoholic beverages consumed during the suspension.”

Cottingham said the agency has no way of knowing how much revenue will be lost because of the suspensions. But industry sources estimated that the suspensions could cost each restaurant, depending on location and size, up to $6,000 a night.

A great deal of the Red Onion restaurants’ business is at night, when hundreds of customers are attracted to live music, dancing and other entertainment.

The negotiated ABC suspensions mark the second time the Red Onion chain, through its parent corporation, International Onion Inc., has entered into such an agreement with a state agency.

Last year, under a settlement with the state Department of Fair Employment and Housing, the Red Onion chain agreed to pay $500 each to 39 people who complained that they were barred because of racial and ethnic bias.

At the Santa Ana restaurant, which caters to an upscale singles crowd, blacks, Latinos and Middle Easterners had complained that they were stopped at the front door and told they could not enter because the photos on their driver licenses did not look like them or they were improperly dressed.

ABC investigators were told that door monitors had to watch the customer mix, and on some occasions were pressured for having “too many Mexicans.” Daily operation logs often noted that, in reference to ethnic mix, the room was “too dark” or it “looks like Africa in here tonight.”

“Many of my clients are still angry,” said Russell Kerr, a Westminster attorney representing 25 people who have filed a lawsuit against the restaurant chain seeking damages for alleged bias.

Kerr said the suspensions by the state board “were sufficient” for what “limited control” the ABC has, but he described the penalty as a “slap on the hand.”

“From my clients’ perspective, they don’t get anything from (the suspensions), only the satisfaction from the fact they’ve been vindicated. But nothing for the emotional insult or redress for what they underwent personally.”

What effect the suspensions will have, if any, on future business for the restaurants was unclear.

At the Santa Ana restaurant Thursday, one customer who ordered beer was told simply that the restaurant “got caught” by the ABC.

“I assumed they got caught serving liquor to a minor, not this,” said Paul Dimon, 32, a ceramic tile contractor from Lake Elsinore.

Another customer remarked that restaurants serving the public should not discriminate against anyone.

“They seem to be the Al Campanis of the restaurant set,” said Mark Jerman, 28, referring to the Los Angeles Dodgers vice president who resigned after making remarks that were criticized as racist in a TV interview concerning the lack of blacks in administrative jobs in baseball.

“It’s pretty bad for a restaurant that’s supposed to be serving the public,” Jerman said.