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COVID-19 restrictions have been a roller coaster ride for NY restaurateurs

COVID-19 restrictions have been a roller coaster ride for NY restaurateurs

| Mar 22, 2021 | COVID-19 Concerns

On March 19, indoor dining at New York City restaurants expanded to 50% capacity and at outstate restaurants to 75% capacity, according to the state government website New York Forward. Other restrictions on a variety of New York businesses are slowly loosening. Yet, the New York Times reported on the same day restaurant capacity expanded that the Empire State is second only to New Jersey in recent COVID-19 cases per capita, while the New York City metropolitan area is second nationally in the rate of new infections.

A variety of coronavirus variants are circulating in our state. Gov. Cuomo announced the first confirmation of the Brazilian variant in a New York patient on March 20. These developments raise the question for restaurants whether capacity restrictions could reverse themselves, depending on whether these trends continue. A look at how we got here, including a major state court ruling in Erie County, may inform how the state could put the brakes on dining establishments again and how restaurateurs and bar owners might respond.

Amherst Pizza & Ale House, Inc., v. Cuomo

On Jan. 13, Erie County Supreme Court Justice Henry Nowak issued a preliminary injunction ordering that the almost-100 restaurants and bars that brought the suit be allowed to operate under Yellow Zone restrictions, despite being classified as within an Orange Zone by the state health department.

(The governor’s color-coded micro-cluster focus zones impose restrictions on various industries and social settings based on hospitalization and infection rates and other data within very small areas. Restaurants in Orange Zones are restricted to outdoor dining with additional limits while in less-restrictive Yellow Zones, indoor dining is permitted within certain restrictions.)

When designated within an Orange Zone, the restaurants had to lay off “thousands” of employees and sustained financial distress likely to result in closings.

The judge did not find the state governmental actions unconstitutional, but made other key findings supporting his order:

  • Other areas of Western New York were not red or orange despite meeting the data requirements.
  • Evidence of state inability to collect adequate statistics because of “barriers to contact tracking” undermined proper designation of zones.
  • The state did not have a rational basis for assigning Orange Zone status to portions of Erie County and the petitioning restaurants were likely to succeed on the merits of their claims, supporting injunctive relief.
  • Without an injunction stopping the restrictions of the orange designation, the restaurants faced irreparable injury and the “balance of equities” were in their favor.
  • In addition to the measurable financial damage and negative impact on employment and other hardships on residents, the “loss of goodwill that corresponds with a viable business is not readily quantifiable and constitutes irreparable harm,” supporting the preliminary injunction.

Judge’s order influenced state action to move all restaurants to yellow

The court scheduled a hearing to determine whether the injunction should become permanent, but it was likely cancelled because state action the next day made the issue moot. The governor’s legal counsel issued a statement that all restaurants statewide in Orange Zones could operate under Yellow Zone rules, despite the state disagreeing with the decision.

The Erie County decision was widely discussed in the media and made serious findings about executive branch actions. Should the governor again impose similar restrictions, restaurant and bar owners may have potential legal remedies. After all, Justice Nowak found that state actions were unsupported by consistent or accurate statistical data, making the state’s previous restrictions in Erie County irrational.

 

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