Split Appeals Court allows bar owners to proceed with COVID suit against Cooper

CJ photo by Maya Reagan

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  • A split state Court of Appeals panel has ruled that North Carolina bar owners can proceed with their lawsuit challenging Gov. Roy Cooper's 2020 shutdown orders during the COVID pandemic.
  • The 2-1 majority agreed that bar owners had made a sufficient claim that the shutdown violated their constitutional rights to the enjoyment of the "fruits of their own labor."
  • A three-judge trial court panel will address the bar owners' claims challenging state law that led to the shutdown as unconstitutional.

A split state Court of Appeals panel has determined that bar owners can move forward with their lawsuit challenging Gov. Roy Cooper’s shutdown of their operations during the COVID-19 pandemic.

“Plaintiffs’ complaint alleged causes of action under N.C. Const. art. 1, §§ 1, 19, regarding North Carolinians’ right to ‘the enjoyment of the fruits of their own labor’ and to substantive due process under ‘the law of the land.’ We hold sovereign immunity does not bar Plaintiffs’ claims and Plaintiffs state colorable constitutional claims,” wrote Judge April Wood for the 2-1 majority in Howell v. Cooper.

A “colorable” claim means that a legal claim is strong enough to move forward in court.

Part of the suit already had been transferred to a three-judge trial court panel. That panel will deal with the bar owners’ claims that the state Emergency Management Act used to justify the governor’s COVID shutdown was unconstitutional.

The Appeals Court affirmed a trial judge’s February 2022 decision allowing the rest of the case to proceed.

“We conclude the Complaint sufficiently alleges state violations of Plaintiffs’ constitutional rights because it coherently pleaded the Governor’s orders violated their constitutional right to earn a living,” Wood wrote.

Bar owners focused on the impact of the 2020 COVID shutdown on their constitutional rights to enjoy “the fruits of their own labor,” Wood noted. “Plaintiffs have a fundamental right to earn a living from the operation of their respective bar businesses,” she wrote. “The constitutional right to produce a living from the income of one’s business is a protected right under the fruits of labor clause.”

“Where, as here, the complaint alleges that the blanket prohibition — rather than regulation — of an entire economic sector violates one’s right to earn a living, that complaint states a colorable constitutional claim,” Wood explained.

The lawsuit also survives under the “law of the land” clause, which Wood describes as “North Carolina’s version of the federal substantive due process clause.”

Bar owners also “adequately pleaded” at this point in the legal process that they had no other remedy than a lawsuit seeking payments from the state, Wood explained. “Plaintiffs pleaded they do not have an adequate state remedy: ‘The Emergency Management Act under which the Defendants are operating does not provide for a plain, speedy, or adequate remedy at law. The [Plaintiffs] therefore do not have an adequate state remedy.’ We agree there is no other adequate state remedy now that any claim for injunction is moot as the executive orders are no longer in effect.”

Appellate judges took no stance on whether the COVID pandemic justified Cooper’s actions. “We do not address the validity of the Governor’s actions under the Emergency Management Act, as the constitutionality of those statutes has yet to be determined,” Wood wrote.

Judge Fred Gore joined Wood’s opinion. Both are Republicans. Judge John Arrowood, a Democrat, dissented.

Arrowood wrote that the majority should have determined whether Cooper had a “rational basis” for issuing executive orders that shut down the bars involved in the lawsuit.

“Because there is no question that issuing the executive orders was rationally related to a
legitimate government purpose — here, combatting the spread of the COVID-19 virus
and protecting the public’s health and safety — Governor Cooper’s action under the
statute clearly satisfies the rational basis standard,” Arrowood wrote. “Certainly, orders to combat a virus and protect the health and safety of the public during a pandemic cannot be
considered ‘arbitrary.’”

“I would hold Governor Cooper had the statutory authority to issue the executive orders in question and his actions during the pandemic easily meet the rational basis standard,” the dissent added. “Therefore, the complaint did not state a colorable claim.”

Arrowood also emphasized the “practical implications” of the majority’s decision.

“The COVID-19 pandemic was an unprecedented event that caused the death of over 29,000 North Carolina citizens,” he wrote. “It was a novel occurrence in modern times and put our national and state leaders in the position to have to make tough, effective choices to swiftly protect the health and safety of their constituents. Those actions are entitled to the presumption of validity.”

The dissent issued a warning about the future. “If and when we face such a crisis again, the Governor must be able to make rationally related choices to stem the effects of that emergency quickly, without concern that those hard choices will subject them or the State to protracted litigation,” Arrowood wrote. “Curtailing the ability of our Governor to issue executive orders during a state of emergency sets a deadly precedent that will prove to have grave consequences in the future.”

Editor’s note: This article has been updated to include quotations from Judge John Arrowood’s dissent.