Case Summary and Outcome

The United States (US) District Court for the Western District of New York enjoined the Chairman of the State Liquor Authority (SLA) from enforcing a rule that banned advertised and ticketed musical events and food/beverage as part of guidelines to combat the spread of COVID-19. The plaintiff was a musician whose business was to coordinate and contract with venues to deliver such events. However, that activity was halted by the “incidental-music rule” in the SLA Guidelines that only permitted incidental music to continue – a cautionary measure amid the pandemic. The plaintiff challenged the rule, claiming it violated the First Amendment, the Due Process Clause, the Takings Clause, and the Equal Protection Clause of the US Constitution. He sought injunctive relief and the defendants – the Governor and the Chairman – sought a motion to dismiss the complaint. US District Court Judge John L. Sinatra Jr. denied the motion to dismiss in relation to the First Amendment and the substantive due process claims and granted the preliminary injunction. The Court found that the rule was arbitrary and not narrowly tailored, making the First Amendment claim sufficient to survive the motion to dismiss. Given that the claim was likely to succeed, that there was irreparable harm, and that the injunction was in the public interest, the Court granted the injunction against the incidental-music rule portion of the SLA Guidelines.

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Facts

The plaintiff in this case was Michael Hund, a musician. As part of his business, the plaintiff coordinated and contracted with venues, including ones in New York State, to “offer, advertise, and perform” [p. 2] live, ticketed music events.

During the COVID-19 pandemic, Governor Cuomo had issued numerous Executive Orders that had imposed restrictions and issued directives to various industries and sectors. One supplement to those Executive Orders was the New York State Liquor Authority’s Phase 3/4 Guidelines for Licensed On-Premises Establishments (the SLA Guidelines). It was promulgated by the Chairman of the SLA, Vincent G. Bradley, and directed to establishments located in regions in Phase 3, i.e., those that were licensed by the SLA.

The SLA Guidelines provided procedures for live entertainment in indoor or outdoor dining areas. The relevant portion of the Guidelines outlined that food/beverage establishments, which had a license through the SLA, were only allowed to offer on-premises music if their license certificate allowed for such activity. It added “that only incidental music was permissible at the time” and “that advertised and/or ticketed shows were not permissible. Music should be incidental to the dining experience and not the draw itself” [p. 3]. The plaintiff sought to challenge the rule concerning incidental music (“the incidental-music rule”).

On August 31, 2020, the plaintiff raised a claim for preliminary and permanent injunctions. The plaintiff alleged that Governor Cuomo and Chairman Bradley (the defendants) violated the US Constitution and sought $100,000 in damages.

On September 16, 2020, the plaintiff moved for a preliminary injunction and a temporary restraining order, seeking to enjoin the defendants from enforcing the rule. At a status conference, the Court informed the plaintiff that it would consider his motion for a temporary restraining order and a preliminary injunction together. The defendants indicated that they would move to dismiss the complaint.

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Decision Overview

District Court Judge John L. Sinatra Jr. of the US District Court for the Western District of New York sought to address the defendants motion to dismiss the plaintiff’s complaint and, in turn, address the plaintiff’s motion for a preliminary injunction.

The plaintiff claimed that the defendants violated the US Constitution, specifically the First Amendment, the Due Process Clause of the Fourteenth Amendment, and the Takings Clause of the Fifth Amendment. He also referenced his rights under the Equal Protection Clause of the Fourteenth Amendment. The plaintiff opposed the defendants motion to dismiss.

In response, the defendants argued that the complaint should be dismissed. They contended that the Court lacked subject-matter jurisdiction and that the plaintiff’s claims failed on the merits. They opposed the motion for preliminary injunction. The defendants also submitted the declaration of Elizabeth M. Dufort, M.D, FAAP who discussed the evolution of COVID-19 in New York, the applicable regulatory scheme, and the concerns that prompted the incidental-music rule. She specifically explained that the rule allowed only incidental music because it did not pose similar risks of coordinated arrival/departure times, gathering and mingling, length of time spent at the venue, increased alcohol consumption, patron numbers, and singing or shouting by patrons. On the other hand, advertised, ticketed live musical events were deemed “potential super-spreader events for COVID-19” [p. 6].

The Court first dealt with the defendants motion to dismiss. It cited the Federal Rules of Civil Procedure 12(b)(1) for the standards of the motion. The provision required courts to dismiss claims if they lacked statutory or constitutional power to adjudicate. The plaintiff had the burden of proving that there was subject-matter jurisdiction by a preponderance of evidence. The Court also cited 12(b)(6) which required dismissal if there was no stated claim upon which relief could have been granted. The plaintiff must allege facts sufficient to make a relief claim plausible on its face and must provide the grounds for the claim that go beyond a speculative degree.

In terms of subject-matter jurisdiction, the defendants specifically argued that the Court lacked jurisdiction because the plaintiff lacked standing to challenge the SLA Guidelines. Also, sovereign immunity prohibited compensatory damages of the plaintiff’s takings claim and it prohibited the plaintiff’s request for prospective injunctive relief against defendant Cuomo.

The Court noted that a plaintiff had standing if he (1) suffered an injury in fact, (2) the injury was fairly traceable to the challenged conduct of the defendants, (3) the injury was likely to be redressed by a favorable judicial decision. In this case, the incidental-music rule injured the plaintiff because previously booked events were cancelled, preventing him from earning a living at venues via live, ticketed musical events. He was conferred sufficient standing.

Since the plaintiff named two state officials as defendants, the Court had to consider whether the Eleventh Amendment barred his claims. Firstly, when suing a state official for violation of federal law, an injunction could only be awarded for future conduct and there was no retroactive monetary relief. Consequently, the Eleventh Amendment barred the plaintiff from seeking damages as part of his takings claim. Secondly, the Eleventh Amendment exempted prospective injunctive reliefs if the state officer had a connection with the enforcement of the act in question. That includes those who are expressly directed to oversee the enforcement of the act. In this case, defendant Cuomo did not meet this exception because governors were not covered merely on the basis that they served as the executive of the state and were responsible for the execution of laws. Therefore, defendant Cuomo was “immune” [p. 13] from the plaintiff’s claims under the Eleventh Amendment and claims against him were dismissed. On the other hand, defendant Bradley was part of the exception to sovereign immunity and the plaintiff’s claims for prospective injunctive relief survived against him.

Turning to the claims themselves, the Court began with the First Amendment claim. The plaintiff alleged that the rule was an unconstitutional content-based restriction and advertising was a form of expression. Defendant Bradley assumed the plaintiff’s claim involved commercial speech and focused on the advertising portion of the rule and argued that there was not an articulated claim for violating commercial speech rights.

The Court firstly noted that the rule, on its face, did not prevent the plaintiff from advertising lawful performances, but only prohibited certain licensed on-premises establishments from hosting advertised or ticketed shows. Therefore, commercial speech was not a proper focus of the First Amendment claim. However, the rule did affect the plaintiff’s ability to perform live music as per advertised or ticketed events at licensed on-premises establishments, which did implicate the First Amendment. In this vein, the Court sought to decide whether the rule, as a regulation of speech, was content-based or content-neutral by determining whether the speech regulation was adopted because of a disagreement with the speech’s message, i.e., content.

The plaintiff implicitly acknowledged that the rule was content-neutral by saying that the SLA Guidelines were promulgated pursuant to Executive Orders related to COVID-19. Since the justification of the rule did not concern the content of the speech, it was deemed content neutral. Ordinarily, content-neutral regulations spark intermediate scrutiny to determine compliance with the First Amendment, but the parties disputed the applicability of Jacobson v. Massachusetts 197 U.S. 11 (1905) and whether it displaced intermediate scrutiny. The Court found that the rule fell under Jacobson’s deferential review. It thus analyzed the claim under both perspectives.

The Court outlined that the US Constitution permitted state officials to take “necessary, rational, and temporary measures” [p. 16] to address an emergency. States’ police powers over public health issues were balanced against constitutional rights but could bend in accordance with extreme public health situations to accommodate “impositions that [were] moderate in severity, short in duration, and tailored to the disease” [p. 16]. But police powers could not prejudice constitutional rights in their effort to protect public health. Thus, the Constitution would be given effect by the courts for laws that purported to protect public health if they did not maintain a nexus to that aim or infringed rights. There was no nexus if the law was exercised in an arbitrary or unreasonable manner and beyond what is required for public safety.

Based on Jacobson’s principles, the incidental-music rule restricted one type of live music and allowed another. The disparate treatment was arbitrary because either type would require the same precautions to be used. Other activities, like trivia night at similar establishments, were allowed despite inviting the same exposure risks that Dr. Dufort identified for live, advertised, ticketed musical events. Specifically, other permitted activities caused similar concerns surrounding arrival/departure times and the length of time spent at dinner tables – the Court noted that a quick turnaround would have required doubling patrons which would have increased COVID-19’s spread. Thus, the Court found that the distinction drawn had no substantial relation to public health and was arbitrary. Without a standard-based logical difference, the rule was not found to satisfy Jacobson.

The Court also noted that the incidental-music rule failed under intermediate scrutiny review. Such review applied to time, place, or manner restrictions. The Court outlined that content-neutral regulations could limit the time, place, or manner of expression as long as the restrictions were reasonable and narrowly tailored to serve a particular interest – they could not hinder alternative ways to convey information. In this case, there was no dispute over the interest itself; the issue was whether the regulation was narrowly tailored as to advance such an interest which would have been “achieved less effectively absent the regulation” [p. 19]. Expression could not be regulated to a degree that did not comport with the regulation’s goals or to a degree that restricted a “substantial quantity of speech” [p. 20] unrelated to the “evils” [p. 20] the government sought to remove.

On this basis, the incidental-music rule was not narrowly tailored to serve the stated interest of protecting public health. Putting aside any arbitrariness or mitigation of the risks involved, the rule burdened the plaintiff’s First Amendment rights by restricting a substantial quantity of speech unrelated to the same evils the defendants sought to preclude. The defendants were entitled to impose measures to prevent against the spread of COVID-19, but without unduly restricting the plaintiff’s rights – as was done with trivia night events which were allowed despite entailing similar risks. Thus, because the rule failed the Jacobson review and the intermediate scrutiny review, the plaintiff’s First Amendment claim survived the defendants’ motion to dismiss.

Regarding the plaintiff’s due process claims, the Court addressed whether the rule violated substantive due process rights by impeding the plaintiff’s ability to earn a living from his chosen profession, and whether the rule violated the procedural due process rights by eliminating the plaintiff’s remedy to challenge the rule’s adverse impact. In terms of substantive due process, the Court found that the plaintiff pleaded a liberty interest sufficient to survive the defendant’s motion to dismiss. In addition, the infringement of the plaintiff’s liberty interest was arbitrary, based on the Jacobson review. In terms of procedural due process, the Court noted that only adjudicative action was subject to the Due Process Clause’s procedural requirements, not legislative action. The incidental-music rule was deemed legislative and not protected under the procedural requirements. Accordingly, the procedural due process claim was dismissed.

Regarding the plaintiff’s Equal Protection claim, he contended he was a member of a protected class – those effected by the rule who were deprived of “the right to pursue a lawful calling” [p. 28]. The Court noted that musicians do not comprise a protected class as per equal protection and that claim could not be alleged. Accordingly, the plaintiff’s claim failed.

The Court also addressed whether the rule constituted a taking of the plaintiff’s property under the Takings Clause for which he sought damages and injunctive relief. Damages were dismissed by the Court pursuant to the Eleventh Amendment, and injunctive relief could not be obtained if processes were still available for the plaintiff to receive a compensation remedy for any taking. The plaintiff did not allege that he was without such a compensation process and New York law did offer a process for obtaining compensation. Accordingly, the Court dismissed the injunctive relief portion of the plaintiff’s takings claim.

The Court shifted to deciding the plaintiff’s motion for a preliminary injunction, which was deemed a prohibitory injunction. The preliminary injunction standard required the plaintiff to demonstrate that (1) there was irreparable harm; (2) there was a likelihood of success on the merits; (3) the preliminary injunction was in the public interest.

In terms of likelihood of success on the merits, the Court found that the plaintiff was likely to succeed on the merits of the First Amendment claim based on its analysis under the motion to dismiss. Thus, the plaintiff was likely to succeed on that claim. Since the plaintiff had to demonstrate he was likely to succeed on the merits on at least one of his claims in order to secure a preliminary injunction, the Court found it unnecessary to consider whether the other claims were likely to succeed.

In terms of irreparable harm absent preliminary injunctive relief, the Court noted that irreparability of the harm could be presumed where an injury is alleged from a regulation towards First Amendment rights. The effect of the rule on the plaintiff’s rights was direct by “foreclosing his ability to play live music at advertised, ticketed events” [p. 34]. Thus, because the plaintiff’s First Amendment claim was sufficient to survive the motion to dismiss and was likely to succeed, it was established that he would suffer irreparable harm absent an injunction.

Lastly, in terms of public interest, the Court noted that “ample protected measures” [p. 35] existed independent of the incidental-music rule. Consequently, any change to that rule by the preliminary injunction would not affect the State’s “efforts to ease restrictions while mitigating the risk of COVID-19 spread” [p. 35] as argued by the defendants. Instead, the injunction would serve the public interest by guaranteeing that “only narrowly tailored and permissible time, place, or manner restrictions [were] imposed on speech and expression” [p. 35] – the injunction was therefore in the public interest.

Based on these reasons, the Court granted in part and denied in part the defendants’ motion to dismiss. Specifically, it granted the motion to dismiss for all claims except the plaintiff’s First Amendment claim and substantive due process claim. The plaintiff’s motion for a preliminary injunction was thus granted, enjoining defendant Bradley and authorities under his control from enforcing the incidental-music rule portion of the SLA Guidelines. The Court’s order did not preclude the defendants from enforcing other portions of the SLA Guidelines or from enforcing any Executive Order.

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