A popular fast-casual hamburger chain in Kuwait that now has two locations in Los Angeles is being sued by its landlord as it seeks to open a third spot Downtown, in a case that involves the USA Patriot Act.
The landlord, GID Development, is suing the company that owns Rock House Sliders for failing to provide necessary documents, including one that complies with the USA Patriot Act anti-terrorism law.
Run by Nasser and Mishari Marafie, Rock House Sliders opened its first U.S. location on Sunset Boulevard last July, then another in Century City, expanding from its 11-restaurant operation in the Persian Gulf country of Kuwait.
Rock House Sliders was planning to move into an 1,853-square-foot store for its third location in Downtown at 321 West Olympic Boulevard. But in a lawsuit filed in L.A. County Superior Court, GID Development claims the Marafies failed to produce insurance policy certifications, final plans for the space and building permits.
The lawsuit also alleges the owners did not produce the necessary “certification related to the USA Patriot Act,” which requires the tenant to sign under affidavit that their business has no ties to terrorism or “corrupt” foreign individuals.
It also stipulates that the tenants attest they are not listed on U.S. government-denied or blocked persons list, and that they are not terrorists or narcotics traffickers. It requires the property owners and tenants adhere to a 2001 executive order blocking property and prohibiting transactions from people who committ, threaten to committ or support terrorism.
Seth Stodder is an attorney with Holland & Knight who previously served as assistant secretary of Homeland Security for border and immigration policy. He also teaches counter terrorism law at USC Law School. He said the Patriot Act doesn’t require tenants to sign any such certification, and that it wouldn’t immunize someone from terrorist acts, either.
The Marafies’ RHS USA Inc. had agreed to pay $1.32 million over the 10-year lease period that started in August 2018, according to the lawsuit. The lease required they provide plans and specifications for the property to be approved.
GID is suing for damages, including $1.32 million for loss of future rent and maintenance costs, as well as $103,200 for the cost of preparing the site and attorneys fees.
In February, GID served RHS with a 30-day notice, then a notice of termination of lease in March.
GID purchased the building at 321 W. Olympic Boulevard through Olive Street Development Holding LLC for $14 million in 2014, records show. The property includes 14,886 square feet of leasable space, according to a listing.
Through RHS USA Inc., the Marafies could not be reached for comment. Frank Coughlin and Steven Bolanos, attorneys who represent GID and Olive Street Development, did not return requests for comment.