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The Honolulu Advertiser
Posted on: Tuesday, December 9, 2008

Isle hotels sued over service charges

Advertiser Staff

A Honolulu law firm has filed a second lawsuit on behalf of consumers over alleged improper handling of food and beverage service charges by hotels or restaurants.

Perkin & Faria filed the suit on Friday against Hilton Hawaiian Village Resort & Spa on behalf of Aryn Nakaoka, who held a wedding reception at the Waikiki hotel in June, and other Hilton Hawaiian Village customers who have paid similar service charges.

A Hilton representative declined to comment because the issue involves pending litigation.

The suit focuses on a state law passed in 2000 that requires clear disclosure to consumers if hotels or restaurants apply a food and beverage service charge that isn't entirely distributed as tip income to employees.

Perkin & Faria filed a similar suit Wednesday against The Kahala Hotel & Resort on behalf of a customer who held a wedding reception there.

Both suits seek class-action status to represent other customers.

A Boston law firm, Pyle Rome Lichten Ehrenberg & Liss-Riordan, also has seized on the tip law, suing five Maui hotels last month in individual cases on behalf of employees. The five hotels in those cases are the Fairmont Kea Lani Hotel & Resort, Four Seasons Resort Maui, Grand Wailea Resort Hotel & Spa, The Ritz-Carlton Kapalua, and Wailea Marriott Resort.

Under Hawai'i Revised Statutes Section 481B-14, customers must be advised if a hotel or restaurant keeps a portion of a gratuity that is automatically included in a food or beverage bill. According to the law, not making such a disclosure constitutes unfair competition, and is deceptive to consumers who may assume all of the gratuity is retained by service employees.