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Law360 (March 27, 2020, 4:57 PM EDT ) A would-be class of employers and workers told a federal judge Thursday they'd been left "standing on the precipice of economic collapse" as a result of what they say are constitutionally questionable emergency orders from Pennsylvania's governor shutting down nonessential businesses amid the COVID-19 outbreak.
The lawsuit accused Gov. Tom Wolf of violating the U.S. Constitution's protections against unlawful takings by failing to provide just compensation as part of his recent directives shuttering "non-life sustaining" businesses in the state to help curb the ongoing spread of the deadly coronavirus.
"The governor has placed the cost of these orders — issued for the benefit of the public — squarely upon the shoulders of private individuals and their families, and has failed to justly compensate affected parties for these takings undertaken for their benefit to the public," the complaint said. "These orders jeopardize the sustainability of many Pennsylvania businesses and the livelihoods those businesses provide to individuals."
The lawsuit comes in response to orders Wolf issued beginning March 19 requiring certain designated "non-life sustaining" businesses to indefinitely cease operations at their physical locations as a bid to try to prevent continued person-to-person spread of the virus.
The governor's initial order was supplemented the following day with additional guidance as to what businesses counted as "life-sustaining," and the state has since continued to accept petitions from individual businesses seeking waiver from the shutdown mandate.
But the complaint filed on Thursday said that the orders constituted a taking of private property for public purpose and, as such, required that affected businesses and employees receive compensation under the takings clause of the Fifth Amendment.
The case aims at creating a pair of classes designed to represent businesses as well as individual workers impacted by the governor's orders.
It was brought on behalf of Schulmerich Bells LLC, a Bucks County-based business that purports to be the country's oldest manufacturer of orchestral-quality musical handbells and hand chimes, and two of the company's employees.
As a result of the governor's orders, the complaint said that Schulmerich was forced to close its doors and lay off the two workers — Frank Carbalo and Wendy Helverson — named as plaintiffs in the case.
The complaint said that both Carbalo and Helverson have filed for unemployment since losing their jobs, but that the flood of new jobless claims had left them uncertain when they could expect potential compensation.
"It shocks the conscience, and is arbitrary and capricious, to allow employees — and the small businesses that employ them — to privately bear without compensation the cost of the COVID-19 closure orders, orders which were issued for the public purpose of slowing the spread of the novel coronavirus across Pennsylvania," the complaint said.
Jonathan Goldstein, an attorney with Goldstein Law Partners LLC who also serves as chairman of Schulmerich Bells and filed the complaint on behalf of the company, said in a statement that he'd brought the suit in a bid to stand by his employees.
"We are in this together with our employees," he said. "It was devastating to our people to be laid off; it was devastating to me to have to do it; and it was devastating to us all to see a perfectly healthy business ordered closed — with the use of our property and equipment denied to us by regulatory fiat — with no compensation whatsoever."
A representative for the governor's office did not immediately return a message seeking comment Friday.
The plaintiffs are represented by Jonathan Goldstein and Shawn Rodgers of Goldstein Law Partners LLC.
Counsel information for the administration was not immediately available.
The case is Schulmerich Bells LLC et al. v. Thomas Wolf et al., case number 2:20-cv-01637, in the U.S. District Court for the Eastern District of Pennsylvania.
--Editing by Bruce Goldman.
For a reprint of this article, please contact reprints@law360.com.
