Moxie Owl, Inc. v. Cuomo

• Decision Date: 18 March 2021
• Docket Number: 1:21-cv-194 (MAD/DJS)
• Citation: 527 F.Supp.3d 196
• Parties: MOXIE OWL, INC., doing business as the Yard Hatchet House & Bar, Plaintiff, v. Andrew CUOMO, in his official capacity as the Governor of the State of New York; Vincent G. Bradley, in his official capacity as the Chairman of the New York State Liquor Authority ; Lily M. Fan, in her official capacity as the Commissioner of the New York State Liquor Authority ; and Greeley T. Ford, in his official capacity as the Commissioner of the New York State Liquor Authority, Defendants.
• Court: U.S. District Court — Northern District of New York

527 F.Supp.3d 196

MOXIE OWL, INC., doing business as the Yard Hatchet House & Bar, Plaintiff,

v.Andrew CUOMO, in his official capacity as the Governor of the State of New York; Vincent G. Bradley, in his official capacity as the Chairman of the New York State Liquor Authority ; Lily M. Fan, in her official capacity as the Commissioner of the New York State Liquor Authority ; and Greeley T. Ford, in his official capacity as the Commissioner of the New York State Liquor Authority, Defendants.

1:21-cv-194 (MAD/DJS)

United States District Court, N.D. New York.

Signed March 18, 2021

OF COUNSEL: JAMES C. KNOX, ESQ., JULIE A. NOCIOLO, ESQ., E. STEWART JONES HACKER MURPHY, LLP, 28 Second Street, Troy, New York 12180, Attorneys for Plaintiff.

OF COUNSEL: ANDREW W. KOSTER, AAG, OFFICE OF THE NEW YORK STATE ATTORNEY GENERAL, The Capitol, Albany, New York 12224, Attorneys for Defendants.

MEMORANDUM-DECISION AND ORDER

Mae A. D'Agostino, U.S. District Judge:

I. INTRODUCTION

On February 19, 2021, Plaintiff commenced this action seeking redress against Defendants due to the imposition and enforcement of an allegedly unconstitutional prohibition against serving alcohol at axe-throwing establishments in violation of the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution and Article I, Section 11, of the New York State Constitution. See Dkt. No. 1. Plaintiff moved by order to show cause for a temporary restraining order and preliminary injunction seeking to enjoin Defendants from enforcing this prohibition during the pendency of this action. See Dkt. No. 3. On February 20, 2021, the Court issued a text order temporarily denying Plaintiff's motion due to its failure to comply with the Local Rules. See Dkt. No. 5. Later that day, Plaintiff renewed its motion for a temporary restraining order and preliminary injunctive relief, this time in compliance with the Local Rules. See Dkt. No. 6.

On February 22, 2021, the Court denied Plaintiff's renewed motion for a temporary restraining order, but ordered that the motion for a preliminary injunction would be heard on an expedited basis. See Dkt. No. 8. Plaintiff's motion for a preliminary injunction is now fully briefed. As set forth below, Plaintiff's motion is denied.

II. BACKGROUND

A. The COVID-19 Pandemic and the State's Response

On March 7, 2020, pursuant to New York Executive Law § 29-a, Governor Cuomo issued Executive Order 202, implementing the State Comprehensive Emergency Management Plan and declaring a statewide disaster emergency in response to the COVID-19 pandemic. See Dkt. No. 14-1 at ¶ 14. Following the issuance of Executive Order 202, Governor Cuomo issued additional Executive Orders, continuing the temporary restrictions responding to the state of emergency. See id. at ¶ 20. These Executive Orders included closing schools and businesses and limiting gatherings. See id. Among other actions taken by Governor Cuomo as part of this "New York on PAUSE" initiative, restrictions were placed on the operations of non-essential businesses. See id. at ¶ 24.

Over the course of May and June 2020, as the results of the statewide restrictions began taking effect, and the State's infection and death rates began to stabilize and then decline, New York transitioned from the "New York on PAUSE" initiative to the "New York Forward" initiative: a phased plan to guide the reopening of non-essential businesses. See id. at ¶ 31. The New York Forward initiative was intended to begin reopening New York's economy in a gradual and measured way that would prevent new spikes in COVID-19 cases. See id. at ¶¶ 31-45. In May 2020, as part of the phased reopening of the State, Governor Cuomo began to incrementally relax restrictions on outdoor and indoor gatherings. See id. Those restrictions continued to be relaxed in June, as infection rates in parts of the State reached lower levels. See id.

Thereafter, a resurgence of the COVID-19 pandemic swept through the United States over the winter, this time with new variants of the virus. See id. at ¶ 58. The United States reported the highest seven-day moving average of new COVID-19 cases with the highest number of new cases reported in a single day on January 8, 2021 – 315,179. See id. This resurgence led New York hospitals to begin operating in crisis management mode on December 16, 2020, when the daily positivity rate increased from 0.8% in September to 7.5% in December. See id. at ¶¶ 55, 59. As a result, the lower infection rates and absence of variants that permitted the gradual opening of business from June through October started drastically trending upward, requiring further caution in determining when additional business could safely reopen.

While the infection rates remained level through most of January 2021, they began trending downward thereafter. See Dkt. No. 14-1 at ¶ 60. In anticipation of a continued downward trend, New York has begun scheduling dates in March of the reopening of more businesses. Indoor sports and recreation activities, including games like axe throwing that are offered by businesses that offer food and drink, were permitted to resume service on March 5, 2021. See id. at ¶¶ 67-71.

B. Plaintiff and the Instant Lawsuit

Plaintiff is a bar-restaurant in Albany, New York that also provides its patrons a venue for the sport of axe throwing. Plaintiff is licensed and permitted to serve both alcoholic beverages and food. See Dkt. No. 1 at ¶ 5. On February 12, 2021, a New York State Liquor Authority investigator informed Plaintiff that, pursuant to Governor Cuomo's Executive Orders, it was prohibited from simultaneously serving food and drink and allowing bar games such as axe throwing. See id. at ¶ 32. Plaintiff was told that it would face fines and a suspension of its liquor license unless it ceased axe throwing activities. See id. at ¶ 33. Plaintiff ceased the axe throwing portion of the business but continued to serve food and alcoholic beverages. See Dkt. No. 6-2 at ¶ 34.

C. Guidance Governing New York Restaurants/Bars and Axe Throwing

On February 22, 2021, Governor Cuomo announced updated guidance for sports and recreation activities during the COVID-19 pandemic. See Dkt. No. 14-1 at ¶ 67. This guidance specifies that "pool and billiard halls, and establishments that provide both recreational activities (e.g., darts, toss/bowl/shuffle games, racket games, axe throwing, etc.) and food and beverage service for patrons" can resume service on March 5, 2021, subject to applicable public safety measures. See id. ; see also Dkt. No. 14-23 at 8. These venues with recreational activities can open with, among other restrictions, a 50% capacity restriction, similar to the capacity limits that already exist for casinos and movie theaters. See id. at ¶ 68.

III. DISCUSSION

A. Standard of Review

"When ‘a preliminary injunction will affect government action taken in the public interest pursuant to a statute or regulatory scheme, the moving party must demonstrate (1) irreparable harm absent injunctive relief, (2) a likelihood of success on the merits, and (3) public interest weighing in favor of granting the injunction.’ " Agudath Israel of Am. v. Cuomo , 983 F.3d 620, 631 (2d Cir. 2020) (quoting Friends of the E. Hampton Airport, Inc. v. Town of E. Hampton , 841 F.3d 133, 143 (2d Cir. 2016) ). Generally, courts treat the first two factors as "the most critical." Nken v. Holder , 556 U.S. 418, 434, 129 S.Ct. 1749, 173 L.Ed.2d 550 (2009).

Moreover, the Supreme Court has held that "a plaintiff seeking a preliminary injunction must demonstrate not just that [it has] some likelihood of success on the merits and will suffer irreparable harm absent an injunction, but also that the ‘balance of the equities tips in [its] favor and an injunction is in the public interest.’ " Otoe-Missouria Tribe v. N.Y.S. Dep't of Fin. Svcs. , 769 F.3d 105, 112 n.4 (2d Cir. 2014) (quoting Winter v. Natural Res. Defense Council, Inc. , 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ). "These factors merge when the Government is the opposing party." Make the Rd. N.Y. v. Cuccinelli , 419 F. Supp. 3d 647, 665 (S.D.N.Y. 2019) (citing Nken v. Holder , 556 U.S. 418, 435, 129 S.Ct. 1749, 173 L.Ed.2d 550 (2009) ).

B. Likelihood of Success on the Merits

It is well settled that the police power retained by the states empowers state officials to address pandemics such as COVID-19 largely without interference from the courts. See Jacobson v. Massachusetts , 197 U.S. 11, 29, 25 S.Ct. 358, 49 L.Ed. 643 (1905).¹ This century-old principle has been repeatedly reaffirmed this past year by a host of judicial voices, particularly in the context of constitutional challenges warranting rational basis review. See, e.g. , Hopkins Hawley, LLC , 518 F. Supp. 3d at 711–13 (citations omitted). The police power, however, is not absolute.

Because this case involves a challenge to state action that neither burdens a suspect class nor impinges on a fundamental right, the challenged executive order is subject to rational basis review. See Heller v. Doe by Doe , 509 U.S. 312, 320, 113 S.Ct. 2637, 125 L.Ed.2d 257 (1993).² Utilizing this framework, the Court presumes that the executive action is constitutional, making it incumbent upon the plaintiff to negate "every conceivable basis which might support" it. Armour v. City of Indianapolis , 566 U.S. 673, 681, 132 S.Ct. 2073, 182 L.Ed.2d 998 (2012). That is no easy task, as the plaintiff must disprove all possible justifications for the executive action regardless of whether those justifications actually motivated the underlying decisionmaking. See FCC v. Beach Commc'ns, Inc. , 508 U.S. 307, 313-15, 113 S.Ct. 2096, 124 L.Ed.2d 211 (1993) ("[B]ecause we never require a legislature to articulate its reasons for enacting a statute, it is entirely irrelevant for constitutional purposes whether the conceived reason for the challenged distinction actually motivated the legislature. Thus, the absence of ‘legislative facts’ explaining the...