Many Bars Remain Closed, AG Argues Ducey’s Executive Order Is Illegal

Citing her need for more time to read nearly 1,000 pages of pleadings filed in one day, a Maricopa County Superior Court judge apologized Friday to bar owners who hoped she would override one of Gov. Doug Ducey’s COVID-19 executive orders so they could reopen this Labor Day weekend.

Judge Pamela Gates heard arguments Friday afternoon from multiple attorneys about whether Ducey’s executive orders keeping numerous bars shuttered are “fundamentally arbitrary and discriminatory,” as Attorney General Mark Brnovich’s office contends in a brief filed in the case brought by nearly 130 bar owners who claim they are being treated unfairly by the governor.

Ducey has allowed nearly 5,000 bars in restaurants, hotels, and clubs to open in the last two months, subject to social distancing and other public health measures. But bars holding a Series 6 or 7 liquor license have been remained closed under Ducey’s executive order for nearly five months, causing “irreparable economic harm,” according to their attorney Ilan Wurman.

A Series 6 license allows for the sale of beer, wine and spirits, while a Series 7 license allows for the sale of beer and wine. Both licenses permit off-sale business and no not require a percentage of revenue to be generated by food sales, which is why such licenses are traditionally 10 to 20 times more expensive than a Series 12 held by a restaurant.

But when Ducey ordered that Series 12 license holders could reopen during the summer, he also granted them off-sale privileges without having to pay an additional license fee.

“The only relief they seek today is an order requiring that they be treated like every other bar that is open in this State, with the same restrictions that apply to those bars,” explained Wurman, an ASU law professor. “There is absolutely no connection between the two legal distinctions (of licenses)…and the public health” issues.

The executive order doesn’t take into consideration the ability of the Series 6 & 7 bars to implement and comply with public health measures, Wurman noted. Instead, he argued that Ducey’s order is based solely on the “general presumption” that patrons of such bars will consume more alcohol, resulting in “more intoxication” and possibly less adherence to social distancing rules.

Wurman’s arguments were bolstered by the brief submitted with the Court by Brnovich’s office. During Friday’s hearing, Assistant Attorney General Beau Roysden argued that Ducey “is not a lawmaker” and cannot continue to act alone without the constitutional checks-and-balance of the legislative and judicial branch.

The AGO brief takes the position that Ducey’s statutory powers under the state’s emergency management law need to be questioned in light of the fact the governor “has contravened” state law by giving off-site sales privileges to Series 12 license holders.

Another executive order prohibits local law enforcement from enforcing the state’s liquor laws if they are in conflict with current executive orders.  And Ducey has imposed “temporary” changes to other statutes, including one related to the training of caregivers at assisted living facilities.

“Therefore, the question of the scope of the Governor’s powers under (ARS 26-303(E)(1)—nearly six months into a declared emergency—is both important and recurring,” the brief states.

But Ducey’s attorney, Brett Johnson of Snell & Wilmer LLP, argued that operating a bar in Arizona is not a fundamental right and that license-holders can be required to adhere to various administrative rules and requirements. He also questioned whether the bar owners have undertaken any actions to mitigate their economic losses in response to the closure order.

Johnson noted business owners could have sought assistance through various government and financial aid offers, such as programs such as Paycheck Protection Program, the Main Street Lending Program, or the SBA’s Emergency Disaster Loans.

The Governor, Johnson said, is trying to balance the economic needs of the plaintiffs with the public health concerns. He added that Ducey has a “rational basis” for his executive orders, including the goal of limiting people, particularly those under 40, from congregating in situations that can cause community spread of COVID-19.

Johnson further argued the fight against the pandemic “is unprecedented” and the executive orders are intended as temporary measures. But he also conceded the efforts require “a give and take” and as a result “there may be winners, there may be losers.”

Judge Gates questioned the governor’s attorney on whether anyone can say when the orders will come to an end. “How do we know that it’s limited and temporary?” she asked.

Johnson didn’t have an answer, but acknowledged community spread appears to the slowing down. That doesn’t mean, however, that Ducey would revise any of the current executive orders at a particular time.

“We’re still in an emergency situation and the governor’s authority is real,” he argued, admitting there may still be executive orders in place at Christmas.

Gregory Falls, the attorney representing Arizona Department of Health Services and Arizona Department of Liquor Licenses and Control, argued against Gates issuing a court-order allowing the bars to open this weekend.

Falls echoed the Governor’s argument that Series 6 & 7 bars pose a higher danger of community spread, even though some Series 12 establishments have had their licenses suspended in recent weeks for violating social distancing requirements.

After more than 80 minutes of arguments, Gates acknowledged Wurman’s “impassioned plea” on behalf of the bar owners. She also recognized the concern that the longer the closure is in place the more likely some will suffer “irreparable economic harm.”

However, she could not issue a ruling today, Gates said, because the printed pleadings filed in the 24-hours prior to the hearing stood more than one-foot high. She needs time to read those filings and review the various arguments put forth in the case.

“I understand your impassioned plea for the Court to be able to make a ruling before the Labor Day weekend,” she told Wurman. “I understand the seriousness of the arguments presented to the Court and the need for the Court to be deliberate in its decision and fair and just and complete in its decision.”

A ruling will not be issued until Tuesday at the earliest, Gates announced.