PARADISE CONCEPTS, INC., ET AL. AND OTHERS SIMILARLY SITUATED v. THOMAS W. WOLF, ET AL.
CIVIL ACTION NO. 20-2161
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
AUGUST 31,
SURRICK, J.
MEMORANDUM
In response to the COVID-19 pandemic, Governor Tom Wolf and other Pennsylvania state officials issued various orders and implemented programs to combat the spread of the virus. Plaintiffs, three Pennsylvania businesses that were forced to close as a result of the orders, contend that these government actions have infringed on their constitutional rights.
Presently before the Court is Defendants’ Motion to Dismiss. For the following reasons, the Motion will be granted in part and denied in part.
I. BACKGROUND
On March 19, 2020, in response to the COVID-19 pandemic, Defendant, Governor Wolf, issued an executive order “regarding the closure of all businesses that are not life sustaining.” (SAC ¶ 10 & Ex. A, ECF No. 4.) That same day, Defendant Rachel Levine, Secretary of the Pennsylvania Department of Health, issued a similar order. (Id. ¶ 14 & Ex. B.) These orders effectively closed all non-life sustaining businesses in Pennsylvania. (See id. ¶¶ 10-17 & Exs. A & B.)
The following day, Governor Wolf issued a press release explaining that non-life sustaining business could seek a waiver from the March 19 business closure orders from the Department of Community and Economic Development (“DCED“). (Id. ¶ 18 & Ex. C.) The press release provided that “a team of professionals at DCED [would] review each request and respond based on the guiding principle of balancing public safety while ensuring the continued delivery of critical infrastructure services and functions.” (Id. Ex. C.)
Over 42,000 non-life sustaining businesses applied for waivers and nearly 7,000 were granted, including a waiver for Governor Wolf‘s family business, Wolf Home Products. (Id. ¶¶ 22-23.) On April 3, 2020, before DCED had processed all of the waiver requests that it received, Governor Wolf ended the waiver program. (Id. ¶ 24.) Governor Wolf, Secretary Levine, and DCED Secretary Dennis Davin were responsible for enforcing and implementing the waiver program. (Id. ¶¶ 25-26.)
On April 28, 2020, Defendant Kalonji Johnson, Commissioner of the Pennsylvania Bureau of Professional and Occupational Affairs (“BPOA“), issued “guidance for appraisers, notaries, title companies, and home inspectors,” related to real estate transactions during the pandemic. (Id. ¶ 27 & Ex. D.) According to this guidance, appraisers, notaries, title companies, and home inspectors could operate regardless of the business closure orders, but only with respect to homes that were under contract before March 18, 2020. (Id. ¶ 29.) The guidance also permitted appraisers, notaries, title companies, and home inspectors to perform in-person activities, such as showings, appraisals, and inspections, as long as the participants wore masks, gloves, and foot coverings. (Id. ¶ 30.)
Plaintiff Kenwood Pools operates a retail store in Levittown, Pennsylvania. It
Plaintiff WIN Home Inspection, of Elizabethtown, Pennsylvania, also applied for a waiver. Although WIN‘s competitor, Trimmer Home Inspections, obtained a waiver, WIN‘s request for a waiver was denied. WIN and Trimmer are ten miles from one another and serve the same customers. (Id. ¶¶ 43-47.)
Plaintiff MQRE, a Philadelphia realtor, opted not to request a waiver because it thought that doing so would be futile. It eventually learned, however, that another realtor, just blocks away, received a waiver. (Id. ¶¶ 48-51.)
Plaintiffs initiated this class action suit on May 5, 2020. (ECF No. 1.) On May 8, 2020, they filed a Second Amended Complaint, alleging: (Count I) a violation of their substantive due process rights, as guaranteed by the Fifth and Fourteenth Amendments; and (Count II) a violation of their rights to equal protection, as guaranteed by the Fourteenth Amendment. (SAC ¶¶ 59-87.) On August 3, 2020, Defendants filed this Motion to Dismiss for lack of subject matter jurisdiction and for failure to state a claim. (ECF No. 11.)
II. DISCUSSION
A. Standard of Review
In order to adjudicate a case, a federal court must have subject matter jurisdiction. Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541-42 (1986). Defendants challenge this Court‘s subject matter jurisdiction, pursuant to
Although Defendants do not dispute any of the facts alleged by Plaintiffs, they point to several articles and press releases regarding the course of the pandemic, including the gradual reopening of Pennsylvania and Pennsylvania businesses since the March 19 business closure orders. Indeed, as we indicate below, infra n.1, the essence of Defendants’ jurisdictional argument is that because Plaintiffs are now free to operate their businesses, this matter is now moot. We treat this argument as
With regard to Defendants’ assertion that Plaintiffs have failed to state a claim, “a plaintiff must allege ‘enough facts to state a claim to relief that is plausible on its face‘” to survive a motion to dismiss pursuant to
B. Substantive Due Process Does Not Protect Plaintiffs’ Business Interests1
Plaintiffs allege that they “have a protectable property interest in their right to earn a living, right to operate their businesses free from arbitrary government interference and a right to use their retail locations in a lawful manner.” (SAC ¶ 60.)
The
In a non-precedential decision, the Third Circuit in Bradley held that the “right to engage in business” is “more similar to the type of intangible employment rights that [the court] has rejected as not protected by substantive due process than the real property interests which can be protected by substantive due process.” Id. (internal quotations omitted) (collecting cases). More recent decisions by and within the Third Circuit have cited to this holding approvingly. See, e.g., Joey‘s Auto Repair & Body Shop v. Fayette Cnty., 785 F. App‘x 46, 50 (3d Cir. 2019) (noting that “a substantive due process right to conduct business without zoning interference extends beyond our precedent“); Saucon Valley Manor, Inc. v. Miller, 392 F. Supp. 3d 554, 571-72 (E.D. Pa. 2019) (holding that “neither the right to operate a business nor the property interest in a business license are ‘fundamental’ rights or property interests protected by substantive due process“).
Plaintiffs cite the Third Circuit‘s decision in Piecknick v. Commonwealth for the proposition that “[t]he right to hold specific private employment and to follow a chosen profession free from unreasonable governmental interference comes within both the ‘liberty’ and ‘property’ concepts of the
The business closure orders imposed temporary restraints on businesses. They did not deprive any individuals of their right to pursue a particular line of work. See Greene, 360 U.S. at 492 (noting that the “revocation of security clearance caused [the] petitioner to lose his job and ... seriously affected, if not destroyed, his ability to obtain employment in the aeronautics field“). Moreover, even if there were a deprivation of one‘s right to work, any deprivation was temporary, and the case law strongly suggests that Substantive Due Process only extends to situations in which there is some degree of permanence to the loss of liberty or property. See Six v. Newsom, --- F. Supp. 3d ---, No. 20-877, 2020 WL 2896543, at *7 (C.D. Cal. May 22, 2020) (holding that the right to earn a living “protects against ‘a complete prohibition of the right to engage in a calling’ and not against brief interruptions to that pursuit” (quoting Conn v. Gabbert, 526 U.S. 286, 292 (1999))).
For these reasons, we conclude that Plaintiffs’ claims concerning the right to
C. Plaintiffs’ Equal Protection Claim is Plausible
Plaintiffs allege that Defendants violated their
The
Defendants assert that Plaintiffs cannot satisfy the rational basis element. “Rational basis review is a very deferential standard” that can be met “‘if there is any reasonably conceivable state of facts that could provide a rational basis’ for the differing treatment.” Newark Cab Assoc. v. City of Newark, 901 F.3d 146, 156 (3d Cir. 2018) (quoting United States v. Walker, 473 F.3d 71, 77 (3d Cir. 2007)). To assess the rational basis element on a motion to dismiss, courts typically consider defendants’ arguments in their motion in conjunction with the complaint. See Hunters United for Sunday Hunting v. Pennsylvania Game Comm‘n, 28 F. Supp. 3d 340, 348 (M.D. Pa. 2014); Cradle of Liberty Council, Inc. v. City of Philadelphia, No. 08-2429, 2008 WL 4399025, at *7 n.3 (E.D. Pa. Sept. 25, 2008). “[A]lthough ‘[t]he rational basis standard ... cannot defeat the plaintiff‘s benefit of the broad Rule 12(b)(6) standard,‘” Hunters United, 28 F. Supp. 3d at 348 n.11 (quoting Montanye v. Wissahickon Sch. Dist., 327 F.Supp.2d 510, 520 (E.D. Pa. 2004)), the Court must “‘apply the resulting ‘facts’ [from the complaint] in light of the deferential rational basis standard.‘” Id. (quoting Wroblewski v. City of Washburn, 965 F.2d 452, 460 (7th Cir. 1992)).
Relying strictly on the pleadings, we cannot ascertain any reason why Plaintiffs were treated differently from their nearby competitors.2 Defendants argue that Kenwood Pools and LA Pools had different business models and suggest that the two businesses’ in-person retail operations were different in scope, but the allegations in the Second Amended Complaint cannot be read to support that distinction. To the contrary, the only reasonable inference to be drawn from the Second Amended Complaint is that nearly identical businesses were treated differently under the waiver program.
Accordingly, Plaintiffs’ Equal Protection claim is plausible.
III. CONCLUSION
We are skeptical of claims seeking to challenge emergency government action taken to combat a once-in-a-century global health crisis. See South Bay United Pentecostal Church v. Newsom, 140 S. Ct. 1613, 1613-14 (May 29, 2020) (Mem.) (Roberts, C.J., concurring) (noting that when government officials “undertake[] to act in areas fraught with medical and scientific uncertainties, their latitude must be especially broad” and “should not be subject to second-guessing by an unelected federal judiciary” (internal quotations and citations omitted)). However, our role in adjudicating this Motion is limited to determining whether Plaintiffs have stated a plausible claim.
For the foregoing reasons, Defendants’ Motion to Dismiss will be granted in part and denied in part. An appropriate order follows.
BY THE COURT:
/s/ R. Barclay Surrick
R. BARCLAY SURRICK, J.