The owners of a nightclub and a guide to the islands catering to the LGBTQ+ community filed a federal lawsuit alleging anti-gay discrimination by investigators with the Honolulu Liquor Commission and the Department of Commerce and Consumer Affairs’ Regulated Industries Complaints Office.

The complaint, filed on behalf of Scarlet Honolulu Inc. and Gay Island Guide LLC, names two DCCA-RICO investigators and two HLC investigators.

The investigators allegedly engaged in an “ongoing campaign of unlawful, unconstitutional, and highly discriminatory anti-gay harassment of Scarlet, Gay Island Guide, and generally, the Honolulu LGBTQ+ community” that lasted more than six years, according to the complaint, authored by attorney James DiPasquale.

“These allegations against the Honolulu Liquor Commission are alarming; it shows that discrimination is still prevalent in our communities. The LGBTQ+ community faces discrimination daily, so I want to commend the plaintiffs for their courage in bringing this lawsuit forward. Regardless of the outcome of this lawsuit, there is still much work to be done to ensure full equality free from discrimination,” said state Rep. Adrian K. Tam, vice chairman for the Committee on Health, Human Services, and Homelessness, in a statement to the Honolulu Star-Advertiser.

On Oct. 24, 2015, during a fundraiser for the Life Foundation, a Hawaii AIDS nonprofit organization, a HLC investigator arrived to inspect Scarlet’s “Tiki Bar.” The investigator was overtly homophobic, aggressive and unprofessional throughout his inspection, which concluded with him shutting down Scarlet under claim that the Tiki Bar was not authorized under its license, according to court documents.

Four days later, Scarlet’s owners allegedly learned the investigator was not authorized to shutter a business, triggering an internal investigation into whether Scarlet was legally permitted to operate the Tiki Bar in its establishment, “causing significant financial damage.”

In the fall of 2017, an HLC investigator would “broadly denigrate all of Scarlet’s trans gendered employees but would consistently single out one employee specifically who performed under the stage name Mercedes,” according to the complaint. During each of his inspections, he would look for her and issue a citation “for some perceived violation or another.” On Oct. 14, 2017, the investigator told Scarlet’s owners that he saw Mercedes outside of the club, in her costume, taking a break. Perez remarked to Scarlet’s owners: “It (sic) can’t be outside dressed like that, kids may see it (sic).” He repeatedly referred to her, and all of Scarlet’s transgendered employees, as “it,” according to the complaint.

Scarlet was closed for most of 2020 and 2021 but was permitted to operate for five weeks in June and July 2020. Due to administrative and scheduling issues, Scarlet opened for only eight days during that time frame, and was inspected by the HLC six times in eight days.

Other “non-gay-identified venues were not similarly targeted” like the District Nightclub, which was inspected once between June 1 and July 31, 2020.

“We have not been served with the complaint and have not yet had the opportunity to review it with our client, the Department of Commerce and Consumer Affairs,” said Gary Yamashiroya, special assistant to the attorney general, in a statement to the Star-Advertiser.

Mayor Rick Blangiardi has been a “strong proponent of resolving matters and ensuring that the LGBTQ+ community is treated fairly and appropriately,” and sent formal complaints to the attorney general and the Ethics Commission, according to a news release.

“Discrimination has no place in government and Mayor Blangiardi is committed to ensuring that everyone can fully exercise and enjoy their rights as members of our community,” said Krishna Jayaram, first deputy corporation counsel, in a statement to the Star- Advertiser. “The Blangiardi administration has referred past concerns raised by Scarlet Honolulu to entities with the authority to investigate the allegations made. We are reviewing this complaint carefully, will engage with the Honolulu Liquor Commission, and if necessary will take additional internal actions as appropriate.”