IN THE CIRCUIT COURT OF PULASKI COUNTY, ARKANSAS Stir of Fayetteville, Inc. d/b/a BIG; Shotz, Inc., d/b/a Shotz; ‘Yee-Hawg, Inc. d/b/a Yee-Hawg; OKP, LLC d/b/a The Piano Bar; WWDD, LLC d/b/a Cannibal & Craft Fayetteville, Arkansas; Sideways, Inc. d/b/a Sideways Bar; Block 23, LLC d/b/a Pinpoint Fayetteville; MPT, Inc. d/b/a Buster Bellys Bar; Kingfish; Speakeasy, Inc. d/b/a C4 Night Club and Lounge; Gitwith Bubbly, LLC d/b/a Maxines Taproom; Ryleighs Inc,, d/b/a Ryleighs Bar; WPGL, INC. d/b/a Boar's Nest BBQ, Bar and Grill; S, DrewTurner, LLC d/b/a On the Mark Sports Bar and Grill; Van and Company, LLC d/b/a 2330; Arkansas Black, d/b/a Smoke & Barrell; C124 d/b/a Crossroads Tavern; Bugsy’s, Inc. d/b/a Bugsy's PETITIONERS v. 6ocv-2021- JOSE ROMERO, MD Secretary of the Arkansas Department of Health, In his official capacity, ASA HUTCHINSON, Governor of the State of Arkansas, In his official capacity, and DORALEE CHANDLER, Director of the Alcohol Beverage Control Commission, In her official capacity RESPONDENTS: RY INJUNC OR TEMPORARY RESTRAINING ORDER AND/OR TEMPORARY INJUNCTION Comes now the Petitioners by and through its attorneys Gary J. Barrett and B.C. Pickett and for their Motion for Preliminary Injunction states as follows: 1|Page1. Petitioners have filed a Complaint for Preliminary and Permanent Injunction and Damages against Respondents. Petitioner affirmatively incorporates by reference the allegations set forth in the Complaint. 2. As demonstrated in the incorporated brief, Petitioner will likely succeed on the merits of its complaint and suffer irreparable harm in the absence of preliminary injunctive relief. The balance between any harmed caused by an order granting this Motion is far outweighed by the certain harm that will result if it is denied, The public interest will also be served by granting this Motion. 3, Pursuant to Arkansas Rule of Civil Procedure 65, Petitioner is entitled to a ex parte temporary restraining order and preliminary injunction enjoining Respondents from the Orders. 4, Asupporting brief is incorporated into this Motion. This Motion is also accompanied by the following exhibits: a. Affidavits from the Petitioners; b, Governors Proclamation; and c __ Directive for hours of operation to Alcohol Beverage Control on- premise permitted locations, |EMORANDUM OF LAW IN SUPPORT. 2|PagePursuant to Rule 65 of the Arkansas Rules of Civil Procedure, Petitioners move for a ‘temporary restraining order and/or a temporary injunction to enjoin Arkansas Governor Hutchinson's executive order, Secretary Romero's directive and Director Chandler's enforcement regarding 11 p.m. closure of bars. In determining whether to issue a preliminary injunction pursuant to Rule 65, the trial court must consider two things: (1) whether irreparable harm will result in the absence of an injunction or restraining order, and (2) whether the moving party has demonstrated a likelihood of success on the merits. Three Sisters Petroleum, Inc. v. Langley, 348 Ark 167, 72 S.W.3d 95 (2002). ‘The decision to grant or deny a preliminary injunction falls within the sound discretion of the trial court. Smith v. Am. Trucking Assoc. 300 Ark. 594, 597, 781 S.W.2d 3, 5 (1989). STATEMENT OF FACTS ‘On November 17%, 2020 Governor Hutchinson held a press conference in which he states, "Decisions to restrict businesses should be data driven. And that the data says iti small gatherings that are our challenge.” On November 19", 2020 Dr. Romero, MD issued a directive stating that Alcohol Beverage Control on-premises permitted locations shall close at 11:00 p.m. On November 3[Page9%, 2020, the Arkansas Department of Health published the following graph: Active Cases By Associated Activity in Arkansas Data fram Arkansas Department of Health November 19th Reports 3b ‘The graph reflects that lowest number of active cases by associated activity in Arkansas is Bars with the highest being Public School Districts. ‘The only business type that was regulated under the November 19%, 2020 directive was Bars. The supermajority of a Bars business is between 10:30 and 1:45 am, and the operation during these hours is how a Bar business can survive. Separate Respondents Hutchinson and Romero used the most restrictive means to regulate the Bar business. a|PageAt no point did the Separate Respondents regulate the hours of business for any other industry. The current regulation of hours to the bar business is tantamount to regulating a hotel business from 7 p.m. to 7 a.m, a daycare from 7 am. to 3 p.m, a barbershop from 10 a.m. to 5 p.m, a church from 10:30 a.m, to 1 p.m. and a school from 10 am.to2 pm. On or about November 20', 2020, of the roughly 18,000 active cases in Arkansas, only 3% (610) people say they visited a restaurant in the window of 2 weeks since testing positive. While that number is still higher than we would like, consider this. Most restaurants close well before 11pm. So it is only late night restaurants and bars that are being restricted against. Bars (the most impacted category) accounted for 00.2% (37 cases). Churches account for 4%, retail stores (which does include grocery) account for a whopping 10%. In fact, based on the report, a bar is about the safest place you can go. Yet no other category is being suggested at shutting down. The big elephant in the room, however, s schools. Of the cases reported, 3,453 are identified as active cases from either a student, teacher, or faculty. That is nearly 20% of all cases that are directly tied to a school. ‘This does not take into account contract tracing where parents, relatives, or other associated people contracted COVID from a student who was asymptomatic ‘The Separate Respondents have set the most restrictive hours of operation in the industry that has the least number of active cases by activity. On December 29", 2020 Governor Hutchinson issued his 7 Amended Executive Order. The Governor cited A.C.A. §§ 12-75-101, et seq and A.C.A § 20-7-110 as his authority * Greg Henderson, https://www.rockeltyeats.com/food-for-thought-closing-down-or-clasing-early-restourants for- covid/ 5|Pagefor issuing this order. At the same time Dr. Romero issued a renewal of the directive for hours of operation until February 3"!, 2021. On January 5", 2021, Governor Hutchinson stated, “Makes no sense to burden a business operating on slim margins or cost people jobs if restrictions are not based on the data showing where infections are happening.” Dr. Romero went on to say, “Data show bars, restaurants aren't sources of infection.” Without proper justification the Separate Respondents have effectively restrained the trade and commerce of the Petitioners for the last 45 days and the next 30 days. As recently as January 5*, 2021 a contact tracer has contacted an individual with COVID trying to pressure the individual into stating the individual was ata bar in the last two weeks and the individual responded that she was not at a bar at a gathering and the contact tracer stated, “she wasn't concerned with any gathering in residential homes and that she didn’t take down data for that only for public places.” The contact tracer continued to pressure the individual to tell the tracer that she had been to a bar/restaurant, The Director of the Department of health, a sole, unelected bureaucrat within the Arkansas Department of Health, has been authorized to impose criminal penalties on citizens of the State of Arkansas, and the Alcohol Beverage Control Division through its Director, Doralee Chandler have been charged with enforcement of the Director's directives. Separate Respondent Director Chandler through her office has issued citations to businesses in response to violations of the Orders. Separate Respondents Hutchinson and Romero used the most restrictive means to regulate the Bar business. 6|PageA. Petitioners are Substantially Likely to Succeed on the Merits of Their Due Process Claims and Takings Claim, 1. Procedural Due Process Petitioner seeks a judicial declaration that the Orders violate procedural due process because the underlying basis to issue and enforce the Orders is capricious and not based upon any facts that support the decision process and in violation of Petitioners constitutional rights. Petitioners also seek a temporary restraining order and/or temporary injunction to stop Respondents from enforcing the Orders. ‘The Arkansas Constitution provides that “[n]o person shall be deprived... of his life, liberty, or property” without due process of law. Ark Const. art. 2 § 21. Due process requires at a minimum that a person be given notice and a reasonable opportunity for a hearing before he or she is deprived of property by state action. See State of Wash. v. Thompson, 339 Ark. 417, 425, 6 S.W.3d 82, 87 (1999). Further, an agency's action is considered arbitrary and capricious when it is not supported on any rational basis. See Arkansas Bd. of Registration for Prof! Geologists v. Ackley, 64 Ark. App. 325, 984 SW.2d 67 (1998). Avalid due-process claim consists of four elements: action under color of state law; a right, privilege, or immunity secured by the constitution such as property; a loss of property amounting to a deprivation; and an absence of due process. City of Little Rock v. Alexander Apartments, LLG, et al, 2020 Ark, 12 (2020) citing Sanford v, Walther, 2015 Ark. 285, at 9, 467 S.W.3d 139, 146. ‘The ability to sell alcohol pursuant to a license issued by the Alcohol Beverage Control Board is a property right that must be afforded due process. 7|Page‘The Respondents action is causing irreparable harm and will continue to cause irreparable harm to the Petitioners. The Arkansas Supreme Court has held that a “statute authorizing a temporary or permanent injunction without notice and an opportunity to be heard fails to meet the fundamental requirements of the due process clause of ..article 2, section 21 of the Constitution of the State of Arkansas.” Franklin v. State, 267 Ark. 311, 316, 590 S.W. 2d 28, 31 (1979). ‘The Respondents actions of taking away the legal right to sell alcohol until 2 a.m. without a hearing or factual investigation is a violation of the Petitioners Due Process. Substantive Due Process Arkansas has “a rich and compelling tradition” of protecting individual liberties guaranteed by its Constitution. jegley v. Picado, 349 Ark. at 631-62, 80 S.W.3d at 349-50, Among the rights explicitly guaranteed to all Arkansans under the State Constitution is the enjoyment of life and liberty and individual happiness, Section 2, titled “Freedom and Independence,” provides: “All men are created equally free and independent, and have certain inherent and inalienable rights, amongst which are those of enjoying and defending life and liberty; of acquiring, possessing and protecting property and reputation; and of pursuing their own happiness. To secure these rights governments are instituted among men, deriving their just powers from the consent of the governed.” Ark, Const. art. Il, § 2. ‘The Arkansas Supreme Court has explained that the right to life, liberty, and property embraces “all of our liberties, ci cal; in short all that makes personal and poli life worth living,” and that each of these rights “carries with it, as natural and necessary coincident, all that effectuates and renders complete and full, unrestrained enjoyment of that right.” Carroll v. Johnson, 263 Ark. 280, 289, 565 S.W.2d 10 (1978) B|Page‘The Orders shock the conscience, interfered with, and continue to interfere with Petitioners deeply-rooted liberty and property rights, including the right to work, right to contract, and right to engage in commerce. Preventing Petitioners from exercising their right to engage in commerce. Preventing Petitioners from exercising their right to enjoy the gains of their own industry through lawless and arbitrary enforcement of Respondents fiats is a clear violation of the Arkansas Constitution. 3. Takings Clause of the Arkansas Constitution Respondents have seized, without compensation, Plaintiff's real and personal property by forcing material limitations on their businesses. These uncompensated seizures violate the takings clause of the Arkansas Constitution, which states “The right of property is before and higher than any constitutional sanction; and private property shall not be taken, appropriated or damaged for public use, without just compensation therefore. Ark. Const. art. 2 § 22. The United States Supreme court has held that “when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name ofthe common good, that is, to leave his property economically idle, he has suffered a taking,” Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019, 112 S. Ct. 2886, 2895, 120 L. Ed. 2d 798 (1992). The Arkansas Supreme Court has declared that “[s]tatutes relating to the exercise of the right of eminent domain, especially where there is an alleged delegation of the power, should be strictly construed in favor of the landowner and against the condemnor, largely because they are in derogation of the common right.” Little Rock v. Raines, 241 Ark. 1071, 1079-1080 (Ark. 1967). 9|Page‘The Arkansas Constitution's takings clause does not prohibit the government's authority to interfere with private property, but it does require the government to pay adequate compensation for a taking ‘The Orders state that the resources of Arkansas are committed “to protect the public health.” Therefore, the regulation was clearly done for public use. This regulation of businesses caused a de facto shutdown of Plaintifi’s businesses at 11:00 p.m. Respondents have placed the cost of any public benefit on the shoulders of the private businesses such as Petitioners and have failed to offer appropriate compensation for these takings. This is a complete taking of Petitioners Property because it has rendered Petitioners property useless after 11:00 p.m. ‘The Orders materially and substantially jeopardize the sustainability of Petitioners businesses and Petitioners rights to property ownership. As a result of the Orders, Petitioners, and those similarly situated will lose the economically beneficial use of their real and personal property. The Orders are effectively an unconstitutional taking without just compensation. Each Petitioner could and can conduct business in full compliance with CDC recommendations and other safe measures tailored to the unique nature of their operations, Indeed, most businesses in Arkansas are free to operate however after 11:00 pm, There is no restriction on grocery stores or convenience stores selling food or beverages. The mandates in the Orders lead to truly bizarre outcomes. This is illogical, arbitrary, and in no way furthers the goals Respondents are purportedly secking to achieve. 10|PageThus, the Orders are not narrowly tailored to achieve a compelling governmental interest. There is also no rational basis to deprive Petitioners of their liberty and property interests in performing services for willing customers when they can do so safely and in the same (or reasonably safe equivalent) manner as other businesses allowed to operate. In the alternative, the Orders are not reasonably related to a legitimate governmental interest. Plaintiffs seek a declaration that the Orders violate the substantive component of the due process clause and an injunction against further infringements of their rights under this clause. Summary Petitioners are substantially likely to win on all claims because Respondents simply have no response to the issues raised by the Petitioners. There is no factual basis (by the Respondents own admissions) to limit the closing hours of the bars to 11 p.m, B. _ Plaintiffs Will Suffer Irreparable Harm if the Orders Continue to be Enforced. Plaintiffs will suffer serious and irreparable harm in the absence of a temporary restraining order and temporary injunction. The Orders have been in effect for over 45 days and Petitioners have already been significantly harmed. The harm is not nominal, theoretical, or speculative. Each Petitioner has suffered harm in the thousands of dollars thatis directly attributable to the Orders. The harm involves real people and businesses suffering real financial loss, Any assertion that Petitioners have not suffered harm as a result of the Orders flies in the face of all logic and common sense. Petitioners are normally open until 2:00 am. It is well known that the supermajority of the beverage sales at bars are from 10:30 to 1:45. Asa result of the Respondents actions the Petitioners cannot stay 1|Pageopen past 11 to earn and any past earnings are forever gone. As is clear from the harm detailed below, the damage and loss are immediate and irreparable. Stir of Fayetteville, Inc. d/b/a BIG is a business located in Fayetteville, Arkansas, Prior to the Orders BIG was open until 2:00 a.m. After being threatened with fines and imprisonment BIG has closed significantly earlier than its normal closing time and completely during the month of December. Asa direct result of the Orders, revenue on beverage sales at BIG has decreased significantly and continues to decrease. OKP, LLC d/b/a The Piano Bar (The Piano Bar) is a business located in Fayetteville, Arkansas. Prior to the Orders The Piano Bar was open until 2:00am. After being threatened with fines and imprisonment The Piano Bar has closed significantly earlier than its normal closing time. Asa direct result of the Orders, revenue on beverage sales at The Piano Bar has decreased significantly and continues to decrease. WWDD, LLC d/b/a Cannibal & Craft Fayetteville Arkansas (C&C) is a business located in Fayetteville, Arkansas. Prior to the Orders C&C was open until 2:00 am. After being threatened with fines and imprisonment C&C has closed significantly earlier than its normal closing time. As a direct result of the Orders, revenue on beverage sales at C&C has decreased significantly and continues to decrease, Sideways, Inc. d/b/a Sideways Bar is a business located in Fayetteville, Arkansas. Prior to the Orders the Sideways Bar was open until 2:00 am. After being threatened with fines and imprisonment The Sideways Bar has closed significantly earlier than its normal closing time. As a direct result of the Orders, revenue on beverage sales at The Sideways Bar has decreased significantly and continues to decrease. 12|Page