Newly formed group seeks to make state pay up

In a lawsuit filed last week, the newly-formed Macomb County Restaurant, Bar and Banquet Association accuses Gov. Gretchen Whitmer and two other top state officials of violating the state constitution in closing establishments over the past 11 months.

The complaint filed Feb. 9 says Whitmer’s original orders following the COVID-19 pandemic arrival as well as the orders transferred to the state Department of Health and Human Services violate the “eminent domain” article that says private property cannot be taken “for public use without just compensation.”

Attorney Al Addis, representing the association, said Wednesday the lawsuit isn’t seeking to reverse the state orders but to make the state pay the plaintiffs for in effect “taking” the plaintiffs’ properties by severely diminishing their value by fully and partially closing the businesses since last March 16.

“This is not an attack on Governor Whitmer,” Addis told MediaNews Group. “The association members are saying, ‘If you’re going to destroy out businesses, so be it, but you have to pay us. You can’t take our land values without compensating us.’”

The plaintiffs point out the devastating impact of the full and partial shutdown on the establishments. Many have closed and some are barely surviving.

“Regardless of the legality of these regulations,” the lawsuit says, “the orders shut down the economy across the state of Michigan, devastating food-service businesses and severely disrupting people’s lives. Businesses that were operated by families for generations were and are disappearing. Favorite neighborhood restaurants that have served as landmarks and social hotspots for decades sit dark and empty. These facts are indisputable.”

The plaintiffs throughout the lawsuit criticize the lack of reasoning for the closures over the past 11 months, as the governor many times has reiterated officials are “following the science” but has failed to provide specific details.

The lawsuit says restaurants, bars and banquet centers have been singled out compared to other businesses.

In reference to one of the more recent orders, the lawsuit says:

“The November 15, 2020, MDHHS emergency order did not provide any wellreasoned rationale explaining why restaurants, bars and banquet halls were and are regulated differently than other businesses, and defendants have yet to provide any science supporting their actions that would meet the minimal evidentiary threshold required in a court of law. Yet, defendants’ regulations have cost the plaintiff’s members millions of dollars.”

Officials from the office of Whitmer and Attorney General Dana Nessel said they do not comment on pending litigation other than through the court.

Addis pointed out the national airline industry also has suffered by has been bailed out by the federal government.

“Washington gets it,” he said.

The orders have shuttered the establishments to personal visits for a total of nearly six months from two separate closures last March shortly after coronavirus cases were detected and last fall following a pandemic resurgence. The facilities also have been open at 50% or 25% capacity during the time. They were allowed to reopen Feb. 1 at 25%. Carryout has remained open during the crisis, and outdoor dining is still permitted.

The association was formed Jan. 26 by Fred Fox, owner of Rec Bowl in Mount Clemens along with the owner of Ernie’s King Mill, Sam Backos, which is located on 19 Mile Road at Garfield Road in Clinton Township.

There are up to 50 members, Addis said, each of whom pay dues.

Fox, who is association president, said in a written statement: “We have shown that we know how to safely operate our businesses. If the State refuses to allow us to operate, it is only right that we be compensated for our losses. No other industry has been shut down like this without just compensation. Without compensation the restaurant business in this county will not recover.”

The lawsuit also names Elizabeth Hertel, DHSS director, and Patrick Gagliardi, chairman of the state Liquor Control Commission, which the lawsuit asserts has illegally served as a policing agency for the DHHS during the coronavirus crisis.

The LCC has cracked down on bars and restaurants for violating orders by closing them, seizing their licenses and issuing fines.

“The defendants unleashed agents of the LCC to fine, threaten and summarily shut down their food service businesses,” the lawsuit says. “It is unclear when, how and why defendant LCC Chair Pat Gagliardi and the LCC became the deputized law enforcement wing of the DHHS,” the complaint says. Under state law, “liquor control inspectors are specifically excluded from the definition of ‘law enforcement officer.’”

Addis also raised questions about the abrupt resignation of former DHHS director Robert Gordon on Jan. 22, the same day he issued an order that establishments could reopen Feb. 1 at 25 percent capacity and total limit of 100, and 10 p.m. curfew. State officials have not provided an explanation and at a press conference earlier this month, Whitmer refused to state anything more other than thanking Gordon for his work.

The lawsuit says Whitmer and Gordon “conspired” to transfer her orders to his department following the October 2020 state Supreme Court ruling that usurped the governor’s ability to issue the orders.

Addis said there has been no other legal claim like this in the state. He said they filed in Macomb County instead of the state Court of Claims because of the common traits among the Macomb establishments.

He said the Michigan Restaurant Association sued the state in federal court and a state bowling organization sued in state court, but both entities eventually dropped their claims. Those organizations sought a reopening via reversal of Whitmer’s orders at the time.

“Two statewide organizations didn’t get anywhere,” Addis said. “They were looking for extraordinary relief. Not many judges are going to take that drastic action.”

The lawsuit also alleges two counts of “tortious interference” in transactional relationships between the plaintiffs and their vendors and landlords.

“Through their intentional actions, defendants induced breaches and terminations of relationships and business expectations between plaintiffs’ members and their vendors,” the lawsuit says of one of the tort claims. Many of the larger establishments have lost their bulk-discount savings in purchases of food and beverages from vendors, Addis noted.

Of the just-compensation claim, Addis acknowledged many businesses have received government grants from the state and federal governments, administered by the county. A release provided to MediaNews Group Wednesday came as it was announced $4.1 million in grants would be distributed to county businesses with many going to dining establishments, and millions of additional dollars from the federal CARES Act have been awarded to Macomb County small businesses, and a total of up to $70 million to all businesses. But Addis said not only do those fall short of losses, but most of the money was passed on to employees. He said the state gained from that situation by not having to help pay unemployment benefits.