Klamath Falls restaurant sues city for discrimination

KLAMATH FALLS, Ore. – A trial date is set for a nearly $12 million-dollar federal lawsuit, against the city of Klamath Falls. The owners of a Mexican restaurant and lounge, in the downtown area said their business suffered because they were targeted and *discriminated against because of their ethnic background.

“This lawsuit was filed a long time ago and because of covid, it’s taken forever to get cases to trial,” said the family’s attorney, Christopher Cauble, with Cauble & Whittington Attorneys at Law in Grants Pass.

The current and previous owners of El Palacio, a restaurant and lounge in a prominent landmark building in downtown Klamath Falls said they were discriminated against and targeted, for a higher level of law enforcement activity because of their race.

“They told me they were being selectively enforced on situations that were going on near their premise,” Cauble said.

Cauble describes the business as a Hispanic owned restaurant, that’s been around since 2004, that also has a bar and hosts dancing and different events in downtown Klamath Falls.

“Klamath falls has a large, in their downtown area has a lot of different bars and theirs is the only non-white owned bar,” Cauble said.

According to court documents, the plaintiffs said the harassment started in 2015.

“They were basically saying every time there was an arrest, they were saying at El Palacio, at El Palacio, or near El Palacio, even though there is a public square right across the street,” Cauble said.

Many of the claims came under former Klamath Falls police chief and now current county commissioner, David Henslee.

“Really it’s the entire city. The city council, the city chief of police and pretty much anybody that’s involved in the enforcement of laws in Klamath Falls directly,” Cauble said.

Court documents said Henslee issued the first notice of public nuisance to the restaurant in August 2015. After that, the Cisneros family met multiple times with then-chief Henslee about what they can do to fix the issue.

They ultimately agreed to hire more security and close earlier on the weekends.

“They had to spend all this money, they had to do all these things and that still wasn’t enough for the city,” Cauble said.

Court documents said Henslee issued El Palacio a 2nd nuisance letter in May 2016 and told them he would go after their liquor license.

“The clients attempted to work with the city and try to work out their OLCC licensing issues, but the city was simply not cooperative,” Cauble said.

In April 2017, the Oregon Liquor and Cannabis Commission revoked El Palacio’s liquor license.

“It essentially resulted in their business being destroyed because they weren’t able to properly run a profit with their OLCC license and they had to do a lot of stuff in order to transfer ownership to their son and stuff like that in order to maintain the business going,” Cauble said.

The Cisneros family is now seeking nearly $12 million dollars in damages.

“Attributing everything to El Palacio, even though issues with fighting and intoxication and things like that are shared amongst everybody in that area, all the other bars, but simply focusing on El Palacio clearly shows that they are being treated differently because of their race,” Cauble said. “It’s a violation of federal law, it’s a violation of the U.S. Constitution to do that.”

The trial is expected to last a week. It’s set to start on Jan. 8, 2024.

We did reach out to the city of Klamath Falls for comment on this lawsuit. The city’s public information officer, Kristina Mainwaring, sent us this statement:

“The city does not generally comment on pending litigation. However, the city strongly disputes the allegations in the lawsuit.”

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Shellye Leggett is an anchor and producer for NBC5 News. You can also catch her anchoring on KMVU FOX26. She comes to the Rogue Valley from Albuquerque, New Mexico where she was a nightside reporter and fill-in weekend anchor for KOAT Action 7 News for 3 years. She has also reported in Colorado Springs, Colorado, South Bend, Indiana and Bozeman, Montana. Shellye was born and raised in Las Vegas, Nevada. She graduated from North Park University in Chicago, Illinois with a B.A. in Communication Studies. She then earned a Master's degree in Broadcast Journalism from DePaul University in Chicago. In her free time, she loves to hang out with her husband who's in the Navy, her cat “Tootsie,” watch scary movies with friends and spend time with her extended family who live all over the West Coast. Shellye is excited to explore Southern Oregon and North California and tell your stories.
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