Arizona Governor Defends Businesses Rights to Sell To-Go Liquor
By Howard Fischer
Capitol Media Services
PHOENIX -- Gov. Doug Ducey is justifying his directive to liquor investigators and police to ignore violations of some state laws by restaurants because they need the money from the otherwise illegal sales they are being allowed to make.
In new court filings, attorneys for the governor do not dispute that Arizona law prohibits restaurants from selling alcoholic beverages to go. That right is reserved for holders of other types of liquor licenses, including grocery stores and bars.
And they acknowledge that Ducey in March specifically directed that agents of the Department of Liquor Licenses and Control "shall not enforce the provisions of the Series 12 (restaurant) liquor license that prohibit the sale by restaurants of beer, wine and spirituous liquor off premises.'' In fact, the governor's order also keeps police from enforcing those laws.
Attorney Ilan Wurman who is suing Ducey on behalf of more than 100 bar owners, said that's not fair.
"Giving the restaurants the off-sale privilege and letting restaurants stay open, all while closing down bars seems to be a clear act of economic favoritism,'' he said.
"It's a powerful industry,'' Wurman said. "And a lot of them give him money.''
But Brett Johnson, the private attorney who Ducey hired to defend all of his executive orders, said the governor was acting within his emergency powers.
What Johnson is arguing is that giving restaurants the "privilege'' to sell beer, wine and liquor out the door "qualifies as a recovery and response activity because it aids restaurants.''
That, said the attorney, is justified because they were previously closed for in-house dining.
They have since been allowed to serve patrons. But Johnson said the restaurants still need the financial help because they remain "subject to capacity restrictions.''
Ducey press aide Patrick Ptak defended the governor's decision to block enforcement of the laws that prohibit restaurants from making off-site sales of alcoholic beverages. He called it one of many "tough decisions'' his boss had to make during the pandemic.
"This has been a way for many establishments to maintain their operations safely and responsibly while continuing to prioritize public health,'' Ptak said. And he said Ducey has "broad authority'' relating to the enforcement -- or non-enforcement -- of laws.
Wurman said Ptak is partly right.
He said the laws do give Ducey the power to suspend laws dealing with things directly related to the pandemic, like regulation of doctors, hospitals and emergency medical technicians. The governor, in fact, already has done that, expanding the scope of practice allowed under state law to certain medical providers.
But Wurman said there is no basis for Ducey's argument that he has pretty much unfettered ability to do anything as long as he says it involves "response and recovery'' to the underlying emergency caused by COVID-19.
That, he said, would include "anything that alleviates secondary economic, political, cultural, social damage or whatever.'' And Wurman said that is unconstitutional.
"It gives him essentially unlimited power,'' he said.
What makes all this relevant to Wurman's clients is that the governor initially closed both bars and restaurants. Yet Ducey unilaterally took away the one legal advantage the bars had over the restaurants: the ability to sell alcoholic beverages to go even if they could not have customers.
Meanwhile, restaurants have been reopened while bars have not. But the governor continues to allow them to violate state liquor laws and sell beer, wine and liquor out the door.
There is reason to believe that Maricopa County Superior Court Judge Pamela Gates, who is hearing the legal arguments, may side with with Wurman and against the governor on the question of whether he can simply direct that certain state liquor laws be ignored.
She ruled earlier this month that the governor did nothing wrong in shutting down bars while continuing to allow operation of restaurants with liquor licenses. Gates said Ducey's orders "are rationally related to expert data and guidance on minimizing the spread of COVID-19 in our community.''
But Gates said it appears to be quite something else for the governor to direct liquor investigators and police to ignore clear state laws which say that those with Series 12 licenses -- meaning restaurants -- cannot sell alcoholic beverages to go.
"The court finds the executive order banning enforcement of a Series 12 licensee violation of off-premises sales of spirituous liquors impermissibly stretches the governor power he is granted under state laws, the judge said. Another way, the court fails to find that the enforcement ban against Series 12 licenses in (the executive order) effectuates the purposes of (the laws on emergency powers).''
Gates, however, didn't overturn Ducey's order, setting the stage for more legal filings.
Instead she wanted to hear more arguments. And that, in turn, led to Johnson's arguments that the financial health of the restaurant industry justifies the governor's actions.
The governor's attorney has another justification for Ducey's directive. He said that closing bars for in-person operation while giving off-sale privileges to restaurants "encourages individuals to stay home, reducing the risk of COVID-19 transmission.''
Johnson provided no specifics.
Wurman, however, sees the action through a different lens: politics and campaign donations.
"That doesn't mean it's pay-to-play,'' he said.
"And it's not corrupt,'' Wurman said. "But it's favoritism."
Ptak did not answer questions about who from the restaurant industry lobbied Ducey for the right to ignore state laws about out-the-door sales of alcoholic beverages.
Separately on Monday, attorney Ilan Wurman filed a $12.5 million claim against the state on behalf of the more than 100 shuttered bars he represents.
The number, Wurman said, is an estimate of 70% of what what the bars have lost in business from April through the end of August. He said the other 30% is probably what the bars would have lost anyway due to the pandemic.
Wurman contends if the state wants to close them it has the legal responsibility to make up at least some of their lost profits.