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Law360 (April 27, 2020, 5:11 PM EDT ) A group of California companies is suing state and county officials in federal court, demanding that they overturn orders closing nonessential businesses in an effort to slow the spread of COVID-19.
California-incorporated firms ranging from entertainment entities to restaurants to tourism services argue in their Friday complaint that the coronavirus-related "shelter in place" orders violate their constitutional rights and will drive them out of business. Fearing the havoc that is already crippling the state's economy, the businesses' mass action challenges the orders as an infringement on their civil rights and liberties under the U.S. and state constitutions.
"If allowed to stand, defendants' orders will not only continue to violate plaintiffs' rights under both the California and U.S. constitutions, but will continue to inflict massive and widespread economic damage to plaintiffs, all while unconstitutionally placing the burden of defendants' respective orders on the backs of both small and large 'non-essential' businesses such as those of plaintiffs, who have already been financially crippled, forced to shut their doors for business and to conduct mass layoffs," the suit said.
The suit points to Gov. Gavin Newsom's March 4 state of emergency order and his March 19 executive order mandating that all people living in California must stay home unless they are needed to support critical infrastructure sectors — including the food, energy and health care sectors — as outlined by the U.S. Department of Homeland Security's Cybersecurity and Infrastructure Security Agency.
A total of seven mass action plaintiffs including entertainment company Hernandez Productions Inc. of South El Monte in Los Angeles County, five La Sirenita restaurants in Los Angeles and Ventura counties, and Newport Beach gondola service Gondola Adventures Inc. seek to enjoin enforcement of the state's orders.
Hernandez was forced to lay off all 35 of its employees since Newsom and Los Angeles County instituted shut-down orders, even though it "could have safely operated their business within the Centers for Disease Control and Prevention's recommended social distancing guidelines," according to the suit.
Three of La Sirenita's five restaurants have been able to offer carryout but two have been closed since the shut-down orders, although they "could have safely operated their business within the CDC's recommended social distancing guidelines," according to the suit. Gondola Adventures, too, had to close and lay off all of its 40 workers despite its ability to operate under safe-distancing guidelines, the suit says.
The businesses ask the federal court for a declaration that their civil rights have been violated under the federal Civil Rights Act, the due process and equal protection clauses of the U.S. Constitution's 5th and 14th amendments, and sections of the California Constitution.
A lawyer for the businesses, Harmeet K. Dhillon of Dhillon Law Group Inc., told Law360 on Monday that her firm has been deluged by requests from firms to represent them in virus-related suits lodging constitutional claims.
"The California government's picking of winners and losers has no rational basis and doesn't stand up to scrutiny," according to Dhillon, a former vice chair of the California Republican Party. "There has been no due process and there's no equal protection in categorizing businesses as essential or non-essential."
Dhillon said she has already filed two COVID-19 suits asserting constitutional claims, would file two more cases Monday and planned to file another one Tuesday.
Representatives for California did not immediately respond Monday to requests for comment.
The businesses are represented by Harmeet K. Dhillon, Mark P. Meuser and Nitoj P. Singh of Dhillon Law Group Inc., and Mark J. Geragos, Ben J. Meiselas and Matthew M. Hoesly of Geragos & Geragos APC.
Counsel information for the state of California was not available.
The case is Gondola Adventures Inc. et al. v. Newsom et al., case number 2:20-cv-03789, in the U.S. District Court for the Central District of California.
--Editing by Abbie Sarfo.
For a reprint of this article, please contact reprints@law360.com.
