On Dec.16, 2020, in Midway Venture LLC v. County of San Diego, the San Diego Superior Court preliminarily enjoined enforcement of two COVID-19-related California public health restrictions as applied to two adult entertainment businesses and all other San Diego County businesses with restaurant service.

The California Court of Appeal did not take long to weigh in.

On Jan. 22, in the first published court of appeal opinion regarding the constitutionality of California's COVID-19 public health restrictions as applied to businesses, the Fourth Appellate District of the California Court of Appeal reversed.[1]

The court of appeal's opinion illustrates the steep and narrow path to challenging California's COVID-19-related public health restrictions, even in connection with activities protected by the First Amendment, albeit in its outer ambit.[2]

The Trial Court's Opinion

Pacers and Cheetahs — two San Diego adult entertainment businesses with restaurant service — alleged that enforcement of California's regional stay at home order[3] and Blueprint for a Safer Economy infringed their First Amendment right to expressive conduct. The plaintiffs had been barred from staging live performances for most of the pandemic and attempts to restart performances had been met with cease-and-desist orders from local authorities.

The trial court found that the plaintiffs were likely to succeed on their claims and issued a preliminary injunction. It noted that nude dancing constitutes expressive conduct warranting First Amendment protection.

Moreover, citing a statement by a San Diego County public health official that "penalizing sectors like restaurants and gyms for the case increase is wrong," the court determined that the county had offered no evidence that San Diego restaurants present any health risk.

The court also questioned whether any rational nexus existed between restaurants offering live entertainment and hospital capacity in the Southern California region — the metric that triggered more stringent restrictions under the regional stay at home order.

Finally, although the plaintiffs had focused on the First Amendment protection applicable to nude dancing, the trial court extended the injunction to all San Diego County businesses with restaurant service.

The Court of Appeal's Reversal

The court of appeal reversed on three principal grounds. 

First, the court of appeal found that extending the injunction to all San Diego County businesses with restaurant service violated due process. The plaintiffs had only challenged the public health restrictions with regard to live entertainment, and the government defendants had been given no notice that the broader restaurant service restrictions were being challenged. 

Second, the court of appeal determined that neither of the public health restrictions ran afoul of the First Amendment.[4] In fact, the court held that the regional stay at home order, which prohibited restaurant service beyond takeout and delivery, did not even implicate the First Amendment.

Applying the U.S. Supreme Court's 1986 opinion, Arcara v. Cloud Books Inc.,[5] the court concluded that the First Amendment applies only when "it was conduct with a significant expressive element that drew the legal remedy in the first place," or "where a statute based on a nonexpressive activity has the inevitable effect of singling out those engaged in expressive activity."

The Fourth District concluded that it was the threat of COVID-19 that prompted the regulations; there was no showing that conduct with a significant expressive element drew the restrictions. The court further found that the breadth of the regional stay at home order was inconsistent with any singling out of expressive activity.

Exceptions for religious and political gathering did not demonstrate discrimination against live adult entertainment because the restrictions on entertainment were triggered by the plaintiffs' restaurant service — not by the expressive conduct — and applied equally to all restaurants. 

Because the First Amendment was inapplicable, the court of appeal held that only rational basis review applied to the regional stay at home order. Although it did not determine whether that standard had been met — it had not been argued in the trial court — the court confirmed that rational basis is an "exceedingly low standard."

A statutory classification survives rational basis review if "there is any reasonably conceivable state of facts that could provide a rational basis for the classification."[6]

The court of appeal determined that the First Amendment did apply to the Blueprint for a Safer Economy order, likely because the blueprint expressly regulated live entertainment at restaurants. Nonetheless, the court found that the blueprint met First Amendment requirements.

Because the state's purpose in regulating live entertainment through the blueprint was unrelated to the suppression of expression, the court applied the U.S. Supreme Court's less stringent four-part test from U.S. v. O'Brien,[7] decided in 1968, rather than the more demanding standards that apply if the government's interest related to expression.

Under O'Brien, courts inquire whether: (1) the regulation is within the government's power; (2) the regulation "furthers an important or substantial government interest"; (3) "the government interest is unrelated to the suppression of free expression"; and (4) "the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest."

The Fourth District determined that the blueprint met this test. The plaintiffs had conceded the first and second factors in the trial court. The court noted that the government's interest was in preventing the spread of disease — not in the suppression of expression.

The court quoted the U.S. Supreme Court's 1989 decision Ward v. Rock Against Racism[8] to elaborate on what sorts of restrictions on First Amendment freedoms are no greater than essential: "So long as the means chosen are not substantially broader than necessary to achieve the government's interest ... the regulation will not be invalid simply because a court concludes that the government's interest could be adequately served by some less-speech-restrictive alternative."

The blueprint's restrictions on live entertainment at restaurants met this standard because the state and county parties had shown that public gatherings create a high risk of COVID-19 transmission and the restrictions only limited live entertainment to the same extent they limited restaurant service.

The lack of COVID-19 cases traced to the establishments was not dispositive: "It is the risk of COVID-19 transmission that prompted the restrictions on the adult entertainment businesses. The state and county need not wait until an outbreak has actually occurred at a specific business location."[9]

Third, the court of appeal found that the trial court's preliminary injunction order was overly vague. The injunction purported to allow restaurants to continue operation "subject to protocols that are no greater than is essential to further Defendants' response to control the spread of COVID."

Because the trial court's order did not provide guidance regarding which COVID-19 protocols are essential, it did not provide sufficient guidance to either businesses or the government.

Takeaways

While the court of appeal's opinion in Midway reflects the unique injunction at issue, it also illustrates the narrow grounds upon which businesses might challenge public health restrictions designed to combat the spread of COVID-19.

Even businesses plausibly engaged in conduct protected by the First Amendment will face significant challenges. It is not enough that no COVID-19 cases have been traced to the business, nor is it enough that the government did not use the least restrictive means possible to prevent the spread of COVID-19.

Instead, the public health restrictions related to COVID-19 that have been overturned on First Amendment grounds have singled out protected First Amended activity. For example in November 2020, in Roman Catholic Diocese v. Cuomo,[10] the U.S. Supreme Court invalidated New York state public health restrictions on religious services because "they single[d] out houses of worship for especially harsh treatment."[11] 

Other California businesses have challenged California public health restrictions on a variety of other grounds, including under the U.S. Constitution's equal protection, takings and due process clauses, and the California Constitution's right to liberty clause. Success has been elusive.

For example, in May 2020, the U.S. District Court for the Eastern District of California in Best Supplement Guide LLC v. Newsom[12] recognized "neither the Supreme Court nor the Ninth Circuit has ever held that the right to pursue work is a fundamental right, entitled to heightened constitutional scrutiny."[13]

While the court of appeal in Midway did not consider these alternative grounds, courts in these cases have made it clear that the path to a successful challenge on non-First Amendment grounds is also narrow. Time will tell whether courts are more receptive to constitutional challenges to California's COVID-19-related public health restrictions as the public health crisis dissipates.

[1] Midway Venture LLC v. Cty. of San Diego , 60 Cal. App. 5th 58 (2021).

[2] Krontz v. City of San Diego , 136 Cal.App.4th 1126, 1132 (2006).

[3] The Regional Stay at Home Order was so called because it broke the state into regions and set restrictions based on the hospital bed capacity in a given region.

[4] The opinion does not address whether the result would differ under the California Constitution's free speech protections, but past cases analyzing restrictions on nude dancing rejected "arguments [that] the California Constitution grants broader protection." Krontz, 136 Cal. App. 4th at 1140.

[5] Arcara v. Cloud Books, Inc. , 478 U.S. 697 (1986).

[6] F.C.C. v. Beach Communications, Inc. , 508 U.S. 307, 313 (1993).

[7] U.S. v. O'Brien , 391 U.S. 367 (1968).

[8] Ward v. Rock Against Racism , 491 U.S. 781 (1989).

[9] Midway at 59.

[10] Roman Catholic Diocese v. Cuomo , __ U.S. __, 141 S. Ct. 63 (2020).

[11] On February 5, the U.S. Supreme Court also enjoined enforcement of the Blueprint's ban on indoor religious services in the counties most affected by COVID-19 while the Court considers hearing the case. S. Bay United Pentecostal Church v. Newsom, No. 20A136, 2021 WL 406258 (U.S. Feb. 5, 2021). The Court allowed capacity restrictions and bans on singing and chanting to stay in place. Id.

[12] Best Supplement Guide LLC v. Newsom, No. 2:20-CV-00965-JAM-CKD, 2020 WL 2615022 (E.D. Cal. May 22, 2020).

[13] 2020 WL 2615022 at *6 (quoting Sagana v. Tenorio, 384 F.3d 731, 743 (9th Cir. 2004)) (rejecting constitutional challenges by a gym to state public health restrictions).