Bar and Restaurant Owners Sue Local Governments


From shutdowns to curfews, capacity restrictions to required outdoor dining, bar and restaurant owners across the nation are jumping through hoops to try to keep their businesses open and viable. The entire service industry has been severely affected by the COVID-19 pandemic. Many bar and restaurant owners have become increasingly frustrated with the back-and-forth actions of local governments and feel their adherence to COVID-19 recommended health and safety protocols should be sufficient to allow them to stay open. While the COVID-19 pandemic has caused death and pain to millions and will continue to do so, it has also created an economic crisis for bar and restaurant owners.

In an attempt to keep their doors open, many restaurant and bar owners have filed lawsuits against local governments, challenging restrictions placed on their businesses. Restrictions vary across each state and even within each city, as does the enforcement of those restrictions, and the confusion this creates hurts our local economies and business owners. In the first six months of the pandemic, more than 163,700 businesses listed on Yelp, the crowd-sourced review site, had closed, according to a September Yelp report.

Bar and restaurant owners believe their industry is being unfairly targeted in comparison to other industries even though data shows they are not a leading cause of increases in transmission. While many lawsuits are based on challenging the authority of state and local governments to impose and enforce restrictions, judges seem reluctant to rule against public authorities trying to control the pandemic. As such, these businesses now want government officials to provide scientific evidence to back their decisions to impose and enforce crippling restrictions. Furthermore, some lawsuits argue government orders restricting businesses have resulted in inverse condemnation in which the government takes or damages private property through action or regulation but fails to pay the property owner.

Texas Restaurant Lawsuits

Texas has seen its fair share of lawsuits filed against Governor Abbott to overturn COVID-19 restrictions. In the summer of 2020, two such lawsuits were filed. The first alleged bar and restaurant owners’ rights were “trampled” by Governor Abbott while “thousands of businesses are on the brink of bankruptcy.” A second lawsuit was filed just days after the first by several Texas bar owners who are members of the Texas Bar and Nightclub Alliance. The plaintiffs sued to overturn Abbott’s executive order shutting down bars and reducing restaurant capacity to 50% in the summer to prevent further spread of the virus. These bar owners alleged their constitutional rights to due process, equal protection, and for their patrons to assemble were violated by the shutdowns.

In an attempt to support restaurant and bar owners, Governor Abbott approved a temporary waiver that allowed restaurants and bars with permanent kitchens to sell mixed drinks to go, in addition to beer and wine, which had previously not been allowed. This, unfortunately, did not include the majority of Texas bars, as they do not have permanent kitchens. Many other restaurants that sold more alcohol than food were tangled up in this particular shutdown because they were classified as bars.

More recently, in December of 2020, the Texas Attorney General sued the city of Austin, Texas after city officials imposed more restrictions on restaurants over New Year’s weekend. Attorney General Ken Paxton filed for a temporary injunction and restraining order against the restrictions that limited restaurants to to-go orders, curbside orders, and delivery services between 10:30 pm and 6:00 am. City officials imposed these restrictions in an attempt to prevent large gatherings for New Year’s celebrations that could cause a surge in coronavirus cases. Austin Mayor Steve Adler and Travis County Judge Andy Brown imposed the four-day restrictions, which Paxton deemed as violating previous orders from Governor Abbott. He therefore directed the officials to rescind or modify the directive.

“Mayor Adler and Judge Brown do not have the authority to flout Gov. Abbott’s executive orders by shutting down businesses in Travis County and our state’s capital city,” Paxton said in a statement. “The fact that these two local leaders released their orders at night and on the eve of a major holiday shows how much contempt they have for Texans and local businesses.” Mayor Adler, Judge Brown, the city of Austin, and Travis County were named as defendants in this lawsuit. There has been significant confusion over who has authority to impose coronavirus restrictions on businesses and Texans with cities, counties, and the state often providing conflicting information.

Coronavirus and the Hospitality Industry

With vaccines slowly rolling out across the country, COVID-19 restrictions on restaurants and bars will eventually ease, but that may not be for many months. The United States is still seeing daily numbers of coronavirus cases in the thousands. Many cities and states have ended in-person dining restrictions but that could change depending on ICU availability. Restaurant and bar owners are still seeking financial support from the government and will most likely continue to file more lawsuits to keep their businesses open and operating.