The N.C. Department of Justice plans to sue the Ritz-Carlton Charlotte over its “CIAA Service Charge.”

Special Deputy Attorney General Harriet Worley wrote Ritz-Carlton attorney Clay Wheeler on June 9 to alert him to NCDOJ’s intent to file suit within 14 business days. The cause, she wrote, was the hotel’s lack of response in providing a resolution to the levy imposed during the week of the CIAA’s basketball tournament three months after complaints surfaced. Among the questions in Justice’s inquiry: When did management decide to impose the surcharge, if it was imposed on all patrons during tournament week and whether similar fees were levied for other events.

“As a result of the lack of progress made in resolving the matter, we feel that we have no choice but to take formal legal action against your client and to seek appropriate injunctive relief, consumer restitution, and penalties from a court,” Worley wrote. … “If the Ritz Carlton world like to try to resolve the issue prior to that time, we are still open to discussing the matter.”

NCDOJ, Worley said, hasn’t received definitive guarantees from Ritz-Carlton that it would rectify how it applies surcharges in the future or adhere to N.C. law.

“However, we began discussing this issue more than two months ago, and, at this point, the issues and concerns we have raised remain largely unresolved, and in our view, the Ritz-Carlton has not taken sufficient steps to fully address the issue and to ensure that this type of problem does not occur again going forward,” Worley wrote. “We are disappointed that your client does not seem to be interested in expeditiously providing a resolution to this issue outside of formal legal channels.”

In March, CIAA Commissioner Jacqie McWilliams said the league is awaiting the results of NCDOJ’s probe into the Ritz-Carlton’s practice of charging an automatic 15 percent gratuity during CIAA week. The hotel admitted it doesn’t mandate a similar charge for sporting events such as the NCAA basketball tournament, Belk Bowl football game or NASCAR race weeks.  The CIAA tournament, one of the largest college basketball showcases in the country, draws more than 150,000 people – predominantly black – to Charlotte annually.

“They see the CIAA as a high brand,” McWilliams said. “That’s good and bad. They’re going to market and manage however they see necessary to manage the crowd. Our thing is we want you to be fair on how you do that, not just with the CIAA, but with all events.”

Tournament fans who visited the Ritz-Carlton complained about the service charge for services in its lobby during the tournament, prompting the probe by N.C. Attorney General Roy Cooper into possible violations of state law.

Letter to Ritz-Carlton's attorney

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