Erie County restaurants win ruling in lawsuit over indoor-dining ban

State Supreme Court Justice Henry J. Nowak on Wednesday granted the restaurants' request for a preliminary injunction to prevent the state from enforcing the Covid-19 restriction.  

Corey Hogan, a lawyer for the restaurants, has pointed to contact-tracing figures from the state as proof that the restaurants are not responsible for spreading the virus.

"The restaurants are not causing the problem. There's no proof anywhere that they are," Hogan said at a recent court hearing.

The state opposed the restaurants' request.

The restaurants joined together in a legal action asking the State Supreme Court justice to prevent the state from enforcing an order banning indoor dining in areas designated by the state as an "orange zone," which has covered most of Erie County since Nov. 18. Color-coded zones are part of the state's microcluster strategy, designed to target Covid-19 hot zones while avoiding more sweeping regulations such as the state's "pause" last spring that shuttered all nonessential businesses.

Under the judge's ruling, the restaurants are permitted to operate under the prior yellow zone restrictions, which limit hours, number of people at tables and require other safety precautions.

"This court cannot find evidence that the state had a rational basis to designate portions of Erie County as an orange zone on Nov. 18," Nowak said in his written ruling.

Nowak said the restaurants "have also demonstrated that the orange zone designation has caused loss of revenue, unemployment, potential foreclosure and hardship upon Erie County residents."

In principle, the cluster action initiative "is an ingenious strategy, certainly in the interest of the health or welfare of the public and reasonably necessary to aid the disaster effort," Nowak said. "In practice, however, it is entirely dependent on proper identification of clusters, through contact tracing or other means."

Nowak said the state has not demonstrated that the orange zone portions of Erie County have reached 85% hospital capacity, nor has the state Department of Health determined that the region’s rate of hospital admissions is unacceptably high and a zone designation is appropriate to control the rate of growth.

"There is no dispute that Covid-19 positivity rates have continued to rise in Western New York," Nowak said. "Curiously, the most significant rise documented in the record occurred after the orange zone designation was made."

Erie County's daily positivity rate reached 9.4% on Nov. 30, and the Western New York region’s 7-day rolling average positivity rate as of Jan. 3 was 8.4%, with the daily positive rate for Jan. 3 at 10.2%.

"Such figures greatly exceed metrics previously set for the red zone designation, much less orange zone designation, Nowak said.

"The DOH clearly is not relying upon such data for their designations, as much of the Western Region has no designation at all and portions of Erie County remain in the yellow zone," Nowak said.

Dozens of restaurant owners, in court affidavits, said no Covid-19 cases have been traced to their businesses. They said they were able to safely operate when Erie County was designated as a less-restrictive yellow zone and they could offer indoor dining. They say they have not heard any reason why they would be unable to safely operate following the same safety protocols under the orange zone designation, or under an even more restrictive red zone designation if it is made.

The restaurateurs pointed to a slide displayed during Gov. Andrew Cuomo's Dec. 11 news conference showing that only 1.4% of Covid-19 cases came from restaurants and bars.

At the recent court hearing, Assistant Attorney General Joel J. Terragnoli said the arguments on behalf of the restaurant owners exhibited "a fundamental misunderstanding of contact tracing."

The assistant attorney general called the 1.4% figure "one data point that informs our decisions, but it is not the end-all, be-all."

A state Health Department official submitted an affidavit acknowledging contact tracing, of course, relies on cooperation from the individuals who are contacted and that compliance is not always 100%.

"While limitations with contract tracing casts doubt on the statistic relied upon by (the restaurants), it also undermines and inhibits the DOH’s ability to properly designate specific areas under the microcluster-strategy, which is premised upon the state’s ability to identify areas of infection on a block-by-block basis," the judge said in his ruling.

The state has considered contact tracing data in crafting its Covid-19 response, but the limitations to the tracing mean it cannot be the sole driving factor in deciding what restrictions should be imposed, state officials have said. The contact tracing data does not displace the science and other information that state public health officials have accumulated and relied on during the past nine months, Terragnoli said.

The restaurants' lawsuit revealed financial losses that reach into the millions at some of the bigger, well-known establishments, but also losses in the tens and hundreds of thousands of dollars that were just as crushing to the smaller restaurants involved in the legal case.

Affidavits from two dozen Buffalo area restaurants also showed at least 856 job cuts since March.