The Cloister East, Inc. v. New York State Liquor Authority

CourtDistrict Court, S.D. New York
DecidedSeptember 28, 2021
Docket1:20-cv-06545
StatusUnknown

This text of The Cloister East, Inc. v. New York State Liquor Authority (The Cloister East, Inc. v. New York State Liquor Authority) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Cloister East, Inc. v. New York State Liquor Authority, (S.D.N.Y. 2021).

Opinion

USDC SDNY UNITED STATES DISTRICT COURT DOCUMENT SOUTHERN DISTRICT OF NEW YORK ELECTRONICALLY FILED . |! wy 8 Ficus bes □□□ PROC ING EF Bl DATE FILED:_4/2.3/2.| Plaintiff,

-against- 20-cv-6545 (LAK) NEW YORK STATE LIQUOR AUTHORITY, et al., Defendant. ee ee ee ee ee ee □□ ee ee ee □□ ee K MEMORANDUM OPINION Appearances: Robert Garson Kevin Kehrli Jacob Pargament GARSON, SEGAL, STEINMETZ, FLADGATE LLP Attorneys for Plaintiffs James B. Cooney Benjamin D. Liebowitz Matthew L. Conrad Assistant Attorney General LETITA JAMES ATTORNEY GENERAL OF THE STATE OF NEW YORK Attorneys for Defendants

LEWIS A. KAPLAN, District Judge. Life in New York changed dramatically in March 2020 when the Governor of New York declared a state of emergency due to the COVID-19 pandemic.’ Almost immediately, movie N.Y. Exec. Order No. 202.

theaters, gyms, and other venues were directed to shut down. Restaurant and bars were permitted to serve food for off-site consumption only.’

For many months thereafter, New York struggled to stem the spread of the COVID- 19 virus. From February 29 to June 1, 2020, more than 200,000 cases of COVID-19 were reported in New York City alone, resulting in more than 18,000 deaths.2 The pandemic brought unprecedented challenges also to those lucky enough to stay healthy, From February to April 2020, nearly two million New Yorkers lost their jobs.* And all New Yorkers had to contend with many months of “lockdown” and the isolation and uncertainty that ensued. As the summer approached, New Yorkers understandably were eager to return to

some semblance of normal life and commerce. Nonetheless, a state of emergency remained in effect, and reopening occurred in cautious phases. To that end, the Governor issued an executive order on June 6, 2020 allowing restaurants and bars to serve food and beverages only outdoors and in compliance with guidelines promulgated by the New York Department of Health (the “DOH”).° N.Y. Exec, Order No. 202.3. Corinne N. Thompson, Jennifer Baumgartner, et al., COVID-19 Outbreak — New York City, February 29—June 1, 2020, Morbidity and Mortality Weekly Report 2020; 69:1725-1729, U.S. CENTER FOR DISEASE CONTROL AND PREVENTION, https://www.cde.gov/mmwr/volumes/69/wr/mm6946a2.htm?s_cid=mm6946a2_w (last visited Sept, 22, 2021). New York’s Economy and Finances in the COVID-19 Era, OFFICE OF THE COMPTROLLER, https://www.ose.state.ny.us/reports/new-yorks-economy-and-finances-covid-19-era-mar ch-30-2021 (last visited Sept. 9, 2021). N.Y. Exec. Order No. 202.38,

This case involves one particular effort by the New York State Liquor Authority’s (the “SLA”) efforts to enforce those guidelines. Plaintiffs — The Cloister East, Inc., which operates a restaurant known as Cloister Café, and its owners — claim that the SLA improperly suspended their liquor license after an article published on the Gothamist.com reported that Cloister Café was hosting illegal “pandemic parties.” They seek damages, declaratory and injunctive relief pursuant to 42 U.S.C. § 1983 based on alleged violation of their constitutional rights by the SLA and various of its officers and employees.

Background L Executive Orders and DOH Guidance Executive Order 202.38, issued on June 6, 2020, allowed a restaurant or bar to serve patrons “on-premise only in outside space, provided such restaurant or bar is in compliance with Department of Health guidance promulgated for such activity.”® The applicable DOH guidance (the “DOH Guidance”) defined “outdoor spaces” as “open-air space designated for the consumption of food and/or beverage,” which may have a “temporary or fixed cover” if the “cover has at least two sides open for airflow.” The guidelines did not set occupancy limits for outdoor

spaces. However, they directed that “[t]o minimize further spread, social distancing of at least six Id. Interim Guidelines for Outdoor and Take-out/Delivery Food Services During the COVID- 19 Public Health Emergency, NEW YORK STATE DEPARTMENT OF HEALTH, https://www.governor.ny. govw/sites/default/files/atoms/files/OutdoorTakeoutDeliveryFoo dServicesMasterGuidance.pdf (last visited Sept. 22, 2021) at 3.

feet must be maintained between individuals, where possible.”* To that end, the guidelines required that “outdoor capacity [must be] limited to the number of tables that can be safely and appropriately arranged such that each table is a minimum of six feet away from another.’ It mandated also that tables be limited to 10 patrons each and that “individuals seated at a table [] be members of the same party,” The Governor subsequently issued Executive Order 202.43, which, in order to “prevent|ed] the unnecessary congregation of people to slow the spread of [COVID-19],” provided that restaurants and bars were required to ensure that the social distancing and face covering requirements set forth in the DOH Guidance were followed by all persons within 100 feet of the premises.!' If these requirements were not adhered to, the restaurant or bar was required to cease serving alcoholic beverages.” Finally, Executive Order 202.52 directed restaurants and bars to serve alcoholic beverages only if accompanied by food items.'’ It emphasized also that while New York State had succeeded in lowering the COVID-19 infection rate through the state’s careful approach to Id. atl. Id. 10 Id, at 4. N.Y. Exec, Order No, 202.43. 12 Id. 13 N.Y, Exec. Order No. 202.52,

reopening, it was “incumbent” upon “business owners and local governments” to continue to “enforce public health requirements to allow [the] safe reopening to continue.”"

iT. The SLA's Authority and Procedures The SLA is an agency of the State of New York that is responsible for administering the New York State Alcohol Beverage Control Law. The SLA may suspend, cancel, or revoke a liquor license “for cause.”!° “Cause” includes “the existence of a sustained and continuing pattern of noise, disturbance, misconduct, or disorder on or about the licensed premises, related to the operation of the premises or the conduct of its patrons, which adversely affects the health, welfare

or safety of the inhabitants of the area in which such licensed premises are located.”!® Generally, it may suspend, cancel, or revoke a license only “after a hearing at which the licensee shall be given an opportunity to be heard.”!’ However, Section 401, subd. 3, of the New York State Administrative Procedure Act (“SAPA”) allows state agencies — including the SLA — to order the summary suspension of a license if it “finds that public health, safety, or welfare

14 id. 15 N.Y, Alco. Bey, Cont. Law § 118. 16 Id. at § 118(3). 17 Id. at § 119(2). A more detailed discussion of these provisions is set forth in the Court’s prior decision denying plaintiffs’ motion for injunctive relief. See Cloister E., Inc. v. New York State Liquor Auth., 483 F. Supp. 3d 221, 227-9 (S.D.N.Y. 2020).

imperatively requires emergency action.”'* In such cases, the SLA is not required by statute to provide notice or an opportunity to be heard before ordering a summary suspension. Instead, a summary suspension order takes effect “pending proceedings for revocation or other action,” which “shall be promptly instituted and determined.”

HL. The Events of August 2020 On August 4, 2020, the Gothamist.com, an online outlet, published an article that claimed that Cloister Café was hosting “illegal, illicit pandemic parties.” Allegedly prompted by that article, Officer Charles R.

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