Court News Ohio
Court News Ohio
Court News Ohio

Bar Cannot Recover Liquor Permits Lost for Violating Pandemic Rules

Image of a red sign with white lettering that says 'Closed' hanging in a window.

The Court rejected an Akron bar’s attempt to have a COVID-19 pandemic rule that closed the bar declared unconstitutional.

Image of a red sign with white lettering that says 'Closed' hanging in a window.

The Court rejected an Akron bar’s attempt to have a COVID-19 pandemic rule that closed the bar declared unconstitutional.

An Akron bar’s attempt to have a COVID-19 pandemic rule declared unconstitutional was rejected by the Supreme Court of Ohio today. The Court found the rule is no longer in effect and a similar rule is “ not reasonably likely” to appear again.

The state adopted “Rule 80,” a 120-day emergency rule imposed by Gov. Mike DeWine in July 2020 to reduce the hours that liquor could be sold in bars and restaurants during the height of the pandemic. The Ohio Liquor Control Commission revoked the liquor permits of the Highland Tavern after investigators found the bar was violating “Rule 80.” Highland Square Tavern, the owners of Highland Tavern, sought to have Rule 80 declared unconstitutional as part of regaining their liquor permits.

Writing for the Court, Justice Jennifer Brunner explained that the justices did not address the issue of whether the rule was unconstitutional because the rule had expired and the case is moot. She also noted that even if the Court declared the rule unconstitutional, the bar took the wrong path to try to  “reinstate” Highland’s liquor permits.

Justice Michael P. Donnelly joined Justice Brunner’s decision. Sitting for Justice Patrick F. Fischer, Fifth District Court of Appeals Judge Craig Baldwin also joined Justice Brunner’s opinion.

Justice Joseph T. Deters concurred with the last three paragraphs of Justice Brunner’s opinion, which summarized the Court’s conclusions. He concurred in judgment only with the remainder.

Chief Justice Sharon L. Kennedy and Justice Melody Stewart concurred in judgment only. Sitting for Justice R. Patrick DeWine, Twelfth District Court of Appeals Judge Matthew Byrne also concurred in judgment only.

Bar Challenged COVID-19 Restrictions
Ohio liquor laws allow certain permit holders to sell alcohol until 1 a.m., and some until as late as 2:30 a.m. Within the few first months of the pandemic, the Liquor Control Commission restricted the on-site sale of alcohol to 10 p.m. and consumption on the premises to 11 p.m. The rule took effect on July 31, 2020.

The following month, Ohio Department of Public Safety agents, who enforce liquor laws, visited the bar, and observed Highland employees serving drinks after 10 p.m. and patrons drinking after 11 p.m. They issued Highland three citations.

The commission conducted a hearing on the citations a few weeks later. Highland’s attorney questioned state witnesses with the goal of developing an argument that the rule was unconstitutional. Administrative agencies do not rule on constitutional issues. Constitutional claims can be addressed if an administrative agency decision is appealed to a common pleas court under state administrative law.

Highland’s lawyer asked an Ohio Department of Health official to explain why the restrictions were applied to bars and restaurants, when other places where crowds gather, such as retail establishments and sporting events, were not facing similar restrictions. Highland’s attorney maintained that the bar was being “targeted” by a rule that was unconstitutional under the equal protection clause of the U.S. Constitution’s Fourteenth Amendment. The Liquor Commission found Highland violated the rule and ordered that its permits be revoked in early October.

Tavern Submitted Two Legal Challenges to Permit Revocation
Highland appealed the commission’s order to the Franklin County Common Pleas Court and asked the judge to stay the revocation of its operating permits until the court decided its appeal. The judge denied the request, and the bar closed on Oct. 2 while its appeal was pending in the trial court.

During the time the appeal of its permits was under consideration by the trial court, Highland filed a separate civil action in Franklin County Common Pleas Court. Highland sought a declaratory judgment, asking the court to find Rule 80 unconstitutional. The civil case was assigned to a different common pleas judge than the judge hearing the administrative appeal. The judge in the first case upon learning of the second case filed, stayed the administrative appeal pending the outcome of the constitutional challenge in the later filed case.

Highland’s declaratory judgment case was filed in late November 2020, just four days before Rule 80 would expire. As part of the case, Highland sought an injunction “to prevent further harm” from the rule.

The Ohio Attorney General’s Office asked the trial court to dismiss the second case, arguing the bar was improperly attempting to bypass the administrative appeal process, which was still pending. The trial court agreed with the attorney general and also noted that Highland should have filed its claim on the rule’s constitutionality before it violated the rule and was cited. In March 2021, the trial court dismissed the declaratory judgment case.

Administrative Appeal Ended While Constitutional Claim Advanced
Once the trial court dismissed the declaratory judgment case, proceedings in the administrative appeal were restarted. Highland then argued to the original trial court that Rule 80 was unconstitutional. That trial court rejected the claim and in September 2021 upheld the revocation of the bar’s permits. Highland did not appeal this decision.

Highland instead appealed to the Tenth District Court of Appeals the declaratory judgment decision denying an injunction against enforcing Rule 80. The appellate court affirmed this trial court’s decision, and Highland appealed that decision to the Supreme Court, which agreed to hear the case.

Supreme Court Analyzed Tavern Claims
Justice Brunner explained the bar’s challenges could have been streamlined in the lower court proceedings. The tavern could have filed its appeal of its permit revocation and the declaratory judgment lawsuit in a single case that would have gone before a single judge. She also noted the two common pleas court judges on their own could have consolidated the cases so that only one judge considered the matter.

As it did in the lower court cases, the attorney general asked the Supreme Court to rule that the case was moot because the statewide order expired in November 2020. The opinion explained the only action the Court was being asked to take at this time was to declare the expired rule unconstitutional and prohibit it from being enforced in the future. Highland argued that the issue was not moot because the state could in the future adopt a similar rule, which would be an unconstitutional infringement on the rights of liquor permit holders.

“Although a case may present a live dispute at the time it was filed, subsequent events may transform it into one involving only a hypothetical dispute,” the lead opinion stated. “That is what happened here.”

The Court found the potential for a similar rule to be initiated is extremely unlikely because of several events that have occurred since Rule 80 expired. The opinion noted that the General Assembly enacted a new law in March 2021 that limits the governor’s power to declare of state of emergency and issue emergency orders.

The new law limits a state of emergency declaration to 90 days, and gives the legislature power to terminate the declaration after 30 days. The General Assembly also now has the power to terminate any administrative rule adopted in response to a state of emergency.

The Court noted that any rule similar to Rule 80 would be in effect for only 30 to 90 days and allows for more public response to emergency orders. The opinion also stated that, since Rule 80’s expiration, two federally approved COVID-19 vaccines were approved. After the rollout of the vaccines, the state did not attempt to shut bars and restaurants through any emergency rules similar to Rule 80 even after there were spikes in COVID-19 cases from the delta and omicron variants.

“Finally, to the extent Highland suggests that a similar restriction may be imposed in the future in reaction to events unrelated to the Covid pandemic, it relies entirely on speculation,” the Court concluded.

Because the Court found no viable situation where a similar rule would be adopted and that the bar would not get its permits back if the Court were to declare the rule unconstitutional, the Court remanded the case to the common pleas court with instructions to dismiss it.

2022-0014. Highland Tavern, LLC v. DeWine, Slip Opinion No. 2023-Ohio-2577.

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