La Scala described the event as a 1920s Prohibition-era "Speak Easy"-themed dinner to be held indoors New Year's Eve. Some customers who were picking up food found the invitations in their takeout bags.
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Current Los Angeles County and state of California regulations prohibit in-person dining at restaurants, whether indoors or outside. The county is trying to limit the coronavirus surge that has put significant strain on local hospitals and left almost no room available in intensive-care units.
In a brief statement to Eyewitness News, the L.A. County Department of Public Health called the event a "serious violation" but did not specify if any action would be taken.
The Beverly Hills Police Department said it was aware of the event and the city's Code Enforcement division was handling the matter.
La Scala, which opened in 1956, is a Beverly Hills institution best known for its chopped salad and its celebrity sightings.
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The news is generating backlash, with the restaurant's Instagram feed being filled with comments describing the party plan as "selfish and destructive" and "disgusting."
"I'm surprised a restaurant would attempt to do this, seeing as we have a stay-at-home order right now," said Marcel Logan of West Hollywood. "I personally don't think it's a good idea. Both my parents had COVID. We just got out of the hospital."
"If everyone took it serious and did what we're supposed to do we can have more indoor parties when the time is right."
The restaurant has not publicly responded to the controversy. The restaurant's website said it was closed on Christmas Day and the day after, as well as Dec. 31.
News of the New Year's Eve party comes as Gov. Gavin Newsom pleads with the public not to gather over the holidays saying it will only add to the COVID-19 surge.
"The peril will be a surge on top of a surge, where we are today, on top of yet again another surge in the middle and latter part of January and February," Newsom warned.