Port Orchard restaurant’s fight with state coming to a head

That One Place faces $132,000 fine for reported COVID violations

By Mike De Felice

Kitsap News Group

PORT ORCHARD – The seemingly never-ending legal clash between That One Place restaurant and the state may finally be headed to a conclusion.

The state Department of Labor and Industries (L&I) fined the Port Orchard restaurant $132,000 for allegations that it repeatedly served patrons when indoor restaurant service was banned by a state COVID-19 mandate.

An administrative hearing has been set for May where the popular eatery will face off against L&I over its appeal of the fines. That One Place is a diner with a ‘50s décor located in a shopping center off Mile Hill Drive.

The hearing will be held over a series of days. L&I will present witnesses May 3 and 4 and the restaurant will present its case on May 17 and 18, according to L&I spokeswoman Dina Lorraine. It is unclear if the proceeding will be live or remote via Zoom.


The battle between That One Place and the department began soon after the state took steps to tamp down the spread of COVID in restaurants.

On Nov. 15, 2020, Gov. Jay Inslee issued a proclamation that stated “restaurants and bars are closed for indoor dine-in service.” The mandate, which was extended several times, was imposed due to an increasing number of COVID-19 cases across the state.

After indoor restaurant service was halted, inspectors drove past That One Place on Dec. 16 and 30, 2020, and Jan. 7 and 8, 2021, and observed indoor dining taking place, L&I reported in court paperwork.

The restaurant was cited 11 times for unlawfully serving customers, Lorraine said. The violations, described as “willful serious” by the state, each carry a $12,000 fine.

That One Place owner Craig Kenady has steadfastly denied accusations that his restaurant violated any of the governor’s mandates. Previously, he claimed his restaurant was closed on some of the days the state claimed unlawful service took place.

Kenady declined to comment on the upcoming trial for this article since the matter is in litigation. The owner did speak about his legal battle on prior occasions.

“We don’t owe [the state] any money and will expect them to prove this claim that we put our employees in ‘immediate danger of death’ as they claim as their reasoning,” he told the Independent in the fall of 2020.

“We will not negotiate a fine, as doing so would be admitting to violating some policy that we didn’t violate. We will not bow down to the tyrannical government that controls our state,” Kenady said in another interview.

A long and winding road

The restaurant was cited numerous times by the Department of Labor and Industries for allegedly serving patrons indoors when such service was banned in late 2020 and early 2021.

On Jan. 5, 2021, L&I issued an “order of immediate restraint” for the restaurant to cease dine-in service. An investigation showed that even after the order was issued, unlawful indoor service continued at the business, L&I officials said.

After That One Place allegedly continued to unlawfully conduct indoor service, the state went to Kitsap County Superior Court. The state petitioned for a temporary restraining order to stop the restaurant’s practice because officials said it posed a threat to public safety.

The state’s petition for the restraining order stated, “By continuing to offer indoor dining, That One Place is endangering the health and safety of its employees … and the general public. … This creates an immediate and irreparable probability and risk of serious injury or death.”

Judge Michelle Adams granted the restraining order against the restaurant on Jan 20. Soon after, however, the state moved to lift the order when officials concluded the restaurant was taking “good faith efforts” to come into compliance with indoor food service restrictions. Dismissal of the restraining order, however, left the $132,000 of fines already imposed on the restaurant in place, Lorraine said.

Kenady filed an appeal over those fines in early 2021. The appeal is all that remains active in the ongoing dispute. The case is before the Board of Industrial Insurance Appeals, an administrative agency that hears appeals of L&I orders.

The appeal of the fines has slowly moved through the legal system. Two hearings on the matter were delayed when Kenady did not appear. In both instances, the restaurant owner indicated the state failed to provide him notice of the hearing dates. He only learned about one court date when the Kitsap News Group contacted him for a comment, Kenady said.

Another hearing had to be put off when Kenady fired his attorney and his new counsel requested time to prepare. Even if the trial takes place in May, the judge is not expected to immediately hand down a ruling at the conclusion. Typically, a decision is made within 60 days of the conclusion of the hearing, L&I’s Lorraine said.

Once the judge’s ruling is made, either party could seek a review of the decision by a three-member panel appointed by the governor. If an appeal is eventually made over the panel’s ruling, the case would then go to Superior Court, according to officials.

The COVID-related fines That One Place is fighting is not the first time the restaurant has tangled with the state.

Prior to the imposition of the $132,000 in fines, the state Liquor and Cannabis Board suspended the restaurant’s liquor license for 180 days in December 2020. The suspension was handed down over other instances in which the establishment reportedly conducted indoor service.

The liquor license suspension was believed to be the first license suspension of its kind in Kitsap County of an establishment failing to follow COVID-19 health-related requirements, according to board spokeswoman Julie Graham.

That One Place is not the only restaurant dealing with L&I fines for allegedly providing indoor food service when the practice was banned.

There are three other cases around the state, according to the L&I spokeswoman. Farm Boy, located in Maytown, faces $491,589 in penalties. Spiffy’s restaurant and bakery in Napavine — which has since gone out of business — was hit with $400,419 in fines. Stuffy’s 2 in Longview racked up $954,000 in penalties. Each case is pending.