TJM 64, Inc et al v. Shelby County Mayor Lee Harris et al

Filing 22

ORDER DENYING 10 APPLICATION FOR TEMPORARY RESTRAINING ORDER. Signed by Judge Jon Phipps McCalla on 7/29/2020. (mom) (Main Document 22 replaced on 7/29/2020 to correct typographical error).

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

TJM 64, INC.; T.J. MULLIGANS, INC.;
RAB MEMPHIS, LLC; HADLEY’S PUB,
INC.; TAVERN 018, INC.; BREWSKI’S
SPORTS BAR AND GRILLE, LLC;
MURPHY’S PUBLIC HOUSE, INC.; and
CANVAS OF MEMPHIS, LLC,
Plaintiffs,
v.
SHELBY COUNTY MAYOR, LEE
HARRIS; SHELBY COUNTY HEALTH
DEPARTMENT DIRECTOR, ALISA
HAUSHALTER; and SHELBY COUNTY
HEALTH OFFICER, BRUCE RANDOLPH,
Defendants.

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Case No. 2:20-cv-02498-JPM-tmp

ORDER DENYING APPLICATION FOR TEMPORARY RESTRAINING ORDER

This substantive due process and takings case is before the Court on Plaintiffs TJM 64,
Inc., T.J. Mulligans, Inc., RAB Memphis, LLC, Hadley’s Pub, Inc., Tavern 018, Inc.,
Brewski’s Sports Bar and Grille, LLC, Murphy’s Public House, Inc., and Canvas of Memphis,
LLC’s (hereinafter collectively “Plaintiffs”) First Motion for Temporary Restraining Order
(“TRO”), filed on July 15, 2020. (ECF No. 10.) Plaintiffs move the Court pursuant to
Federal Rule of Civil Procedure 65 for a TRO preventing Defendants Shelby County Mayor
Lee Harris, Shelby County Health Department Director Alisa Haushalter, and Shelby County
Health Officer Bruce Randolph (referred to hereinafter as “Defendants” or “Shelby County”)

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from enforcing the July 8, 2020 COVID-19 Closure Order issued by Defendants, which
required the closure of Plaintiffs’ bars and limited service restaurants. (See ECF No. 10.)
Defendants filed their Response on July 19, 2020. (ECF No. 16.) Defendants argue
that “Plaintiffs fail to state a claim upon which relief can be granted . . . and do not meet the
standard necessary for the issuance of a TRO.” (Id. at PageID 78.) Defendants also attached
Executive Order No. 38 issued by the Governor of Tennessee to their Response. (ECF No.
16-1.) Plaintiffs filed a Reply Brief on July 24, 2020. (ECF No. 18.)
The Court held a video hearing on the Motion on July 27, 2020. Counsel for both
Plaintiffs and Defendants were present. The Court heard testimony from the following
individuals: Lee Thomas Adams, owner of TJM64, Inc., T.J. Mulligan’s, Inc., and RAB
Memphis, LLC; Tiffany Michelle Brewer, owner of Brewski’s Sports Bar and Grille, LLC;
Robert Coletta, owner of Canvas of Memphis, LLC; Richard Hale, Jr., owner of Hadley’s
Pub, Inc.; Mike Nash, owner of Tavern 018, Inc.; Alisa Haushalter, Director of Shelby County
Health Department; and David Allen Sweat, Deputy Director of the Shelby County Health
Department & Epidemiology. (See Witness and Exs. List, ECF No. 21.) During the Hearing,
Defendant also raised its Motion for Judgment as a Matter of Law under Federal Rule of Civil
Procedure 50.
For the reasons set forth below, Plaintiffs’ Motion for a TRO is DENIED.
I. BACKGROUND
This action was filed on July 13, 2020. (ECF No. 1.) Plaintiffs are the owners of
several establishments licensed as limited service restaurants in Shelby County, Tennessee.
(Id. ¶¶ 19–20.) On July 8, 2020, the Shelby County Health Department issued an order
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requiring all “Bars/Limited Service Restaurants and Clubs” to shut down for forty-five days
because of a spike in COVID-19 cases in Shelby County, TN. (Id. ¶¶ 15–16.) The Order
allowed all other businesses to remain open, except (1) “Bars/Limited Service Restaurants and
Clubs,” (2) “Adult Entertainment venues,” (3) schools, and (4) “[f]estivals, fairs, parades,
large scale sporting events, and large-scale community events.” (Id. ¶ 17.) According to local
regulation, a “Limited Service Restaurant” is a facility that “must not have total gross receipts
of prepared foods in excess of 50% of their overall sales.” (Id. ¶ 18.) Plaintiffs allege that the
July 8, 2020 Closure Order is an “Indefinite Closure” of Plaintiffs’ businesses. (Id. ¶ 22.)
According to the Complaint, not all facilities that sell primarily alcohol have been
required to close. (Id. ¶ 21.) Plaintiffs allege that bars, pubs, and restaurants on Beale Street
and other “heavily trafficked ‘tourist’ areas of Memphis and Shelby County were untouched
by the Order.” (Id.)
Plaintiffs assert two constitutional violations: (1) the July 8, 2020 COVID-19 Closure
Order (also known as Shelby County Health Directive 8) violates the Takings Clause of the
Fifth Amendment, as a regulatory taking; and (2) the Order violates substantive due process
under the Fourteenth Amendment. (Id. at PageID 5, 10.) Plaintiffs assert that the COVID-19
Closure Order “prohibits all economically beneficial and profitable uses of the Plaintiffs’
Tangible Property and Physical Location[,] [and that] [t]he entirety of the Plaintiffs’ property
rights have been extinguished.” (Id. ¶ 33.) Plaintiffs allege that the Order “indiscriminately
chose[] a small group of restaurant/bar owners whose businesses are predominately outside
the curtilage of Memphis and Shelby County tourism centers.” (Id. ¶ 34.) Plaintiffs assert
that the Order qualifies as a categorical taking under Lucas v. South Carolina Coastal Council,
505 U.S. 1003, 1019 (1992), and, alternatively, qualifies as a regulatory taking under the
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framework established by Penn Central Transportation Co. v. New York City, 438 U.S. 104
(1978). (Id. ¶¶ 37–45.)
Plaintiffs’ substantive due process challenge alleges that the COVID-19 Closure Order
is “capricious, irrational, arbitrary and abusive conduct which unlawfully interferes with the
Plaintiffs’ liberty interests protected by the due process clause of the Fourteenth
Amendment . . . .” (Id. ¶ 51.) Plaintiff appears to assert that the Defendants’ Order shocks the
conscience and violates the Fourteenth Amendment’s protections against arbitrary and
capricious government action. (See id. ¶¶ 51–58.)
Plaintiffs seek compensatory damages for the allegedly unlawful takings and for the
violation of Plaintiffs’ substantive due process rights, a declaratory judgment finding the
COVID-19 Closure Order unconstitutional in violation of the Fifth and Fourteenth
Amendments of the Constitution, a permanent injunction preventing Defendants from
enforcing the Order until a mechanism is put in place to provide Plaintiffs compensation for
their forced closures, and attorney’s fees. (Id. at PageID 12–13, Prayer for Relief, ¶¶ 1–6.)
On July 24, 2020, the Shelby County Health Department also issued an updated
COVID-19 Closure Order, entitled Shelby County Health Department Directive 9. 1 (See Hr’g
Ex. 13.) Directive 9 applies to Plaintiffs in the same manner as the July 8, 2020 COVID-19
Closure Order, but additionally imposes restrictions on some full-service restaurants. (See id.)

1

For purposes of this Order, the Court will refer to the Order referenced in Plaintiff’s Complaint, the
July 8, 2020 Closure Order. The Court’s reasoning and analysis applies equally to the subsequent July 24, 2020
Order, as the Order is virtually identical in the way it impacts Plaintiffs.

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II.

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LEGAL STANDARD
A TRO is an “extraordinary remedy ‘designed to preserve the relative positions of the

parties until a trial on the merits can be held.’” Thomas v. Schroer, 116 F. Supp. 3d 869, 874
(W.D. Tenn. 2015) (quoting Tenn. Scrap Recyclers Ass’n v. Bredesen, 556 F.3d 442, 447 (6th
Cir. 2009)); see also Univ. of Texas v. Camenisch, 451 U.S. 390, 395 (1981) (“The purpose of
a preliminary injunction is merely to preserve the relative positions of the parties until a trial
on the merits can be held.”) In deciding whether to issue a TRO, the Court considers four
factors: (1) “whether the movant has shown a strong likelihood of success on the merits”; (2)
“whether the movant will suffer irreparable harm if the injunction is not issued”; (3) “whether
the issuance of the injunction would cause substantial harm to others”; and (4) “whether the
public interest would be served by issuing the injunction.” Overstreet v. Lexington-Fayette
Urban Cty. Gov’t, 305 F.3d 566, 573 (6th Cir. 2002) (citing Leary v. Daeschner, 228 F.3d
729, 736 (6th Cir. 2000)). “These factors are not prerequisites, but are factors that are to be
balanced against each other.” Id. (citing United Food & Comm. Workers Union, Local 1099
v. Sw Ohio Reg’l Transit Auth., 163 F.3d 341, 347 (6th Cir. 1998)). The moving party bears
the burden of proving the necessity of a TRO. Thomas, 116 F. Supp. 3d at 874 (citing
Stenberg v. Cheker Oil Co., 573 F.2d 921, 925 (6th Cir. 1978)). The district court should only
grant the request for a TRO if the “movant carriers his or her burden of proving that the
circumstances clearly demand it.” Id. (citing Leary, 228 F.3d at 739).
III.

ANALYSIS
A. Likelihood of Success on the Merits
1. Fourteenth Amendment Substantive Due Process
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Plaintiffs, as stated supra, allege that Defendants’ July 8, 2020 COVID-19 Closure
Order constitutes arbitrary and capricious government conduct. See supra Sec. II. The global
COVID-19 pandemic warrants special consideration. It is well settled that “a community has
the right to protect itself against an epidemic of disease which threatens the safety of its
members.” Jacobson v. Massachusetts, 197 U.S. 11, 27 (1905). “All agree that the police
power retained by the states empowers state officials to address pandemics such as COVID-19
largely without interference from the courts.” League of Ind. Fitness Facilities and Trainers,
Inc. v. Whitmer, No. 20-1581, 2020 WL 3468281, at *2 (6th Cir. June 24, 2020) (citing
Jacobson, 197 U.S. at 29) (unpublished). Courts from across the country have reaffirmed the
historical principle that states and municipalities are granted broad powers to combat the
spread of dangerous communicable diseases. See S. Bay Un. Pentecostal Church v. Newsom,
--- U.S. ----, 140 S. Ct. 1613, 1613 (May 29, 2020) (Mem.) (Roberts, C.J., concurring) (noting
that “[the State’s] latitude must be especially broad” to combat the COVID-19 pandemic); see
also Whitmer, 2020 WL 3468281, at *2 (collecting cases addressing the states’ broad police
powers to combat the spread of the COVID-19 virus).
The state’s power to regulate during a pandemic is not without its limits. See
Maryville Baptist Church, Inc. v. Beshear, 957 F.3d 610, 615 (6th Cir. 2020). The standard of
review applicable to a state or local government’s promulgation of a public health related
closure order depends on the right allegedly infringed upon by the order. See Whitmer, 2020
WL 3468281, at *1 (“Some [COVID-19 orders] involve individual rights for which precedent
requires courts to apply a heightened level of scrutiny . . . .”); compare Beshear, 957 F.3d at
614–15 (applying strict scrutiny to order infringing on free exercise of religion), with, Tex.

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Democratic Party v. Abbott, 961 F.3d 389 (5th Cir. 2020) (applying rational basis review to a
voting restriction case where the “plaintiffs’ fundamental right is not at issue”).
Plaintiffs assert a Fourteenth Amendment challenge on the grounds that the Shelby
County Government’s actions are arbitrary and capricious. The Court is required to apply a
deferential standard, looking to whether the Defendants’ action in adopting their COVID-19
Order was undertaken in an “arbitrary, unreasonable manner,” or through “arbitrary and
oppressive regulations[.]” Local Spot, Inc. v. Lee, No. 3:20-cv-00421, 2020 WL 3972747, at
*2 (M.D. Tenn. July 14, 2020). A law involving public health emergencies will only be
struck down if it has “no real or substantial relation to those objects, or is beyond all question,
a plain, palpable invasion of rights secured by the fundamental law.” Jacobson, 197 U.S. at
31; see also Whitmer, 2020 WL 3468281, at *1 (noting that many actions challenging
COVID-19 closures orders “involve executive actions that, by precedent, are viewed only
through the lens of a very modest, or ‘rational basis,’ standard of review”).
Plaintiffs’ substantive due process challenge is unlikely to succeed on the merits.
First, given the deferential review applicable to public health orders and based on the record
before the Court, Shelby County’s decision to close certain bars and restaurants is not
“arbitrary and capricious” or “unreasonable.” Defendants weighed the risks posed by
increasing numbers of COVID-19 cases in Shelby County against the risks posed to
businesses. Defendants’ actions reflect a concerted effort to respond reasonably to a pressing
health crisis. The distinction made between certain restaurants and those like Plaintiffs, which
only gross less than 50% of their sales from food sales, and those which receive over 50% of
their gross revenue from food sales, has a “real or substantial relation” to preventing the
spread of COVID-19 within Shelby County. Jacobson, 197 U.S. at 31. Both Defendant
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Haushalter’s and Deputy Director Sweat’s testimony indicate that the decision to close bars
and limited service restaurants was based on significant input from the Center for Disease
Control (“CDC”) and CDC public health Rear Admiral Jonathan Mermin. Rear Admiral
Mermin led a crisis response team deployed to Memphis to provide guidance and assistance to
Shelby County in formulating the Health Department’s response to increasing COVID-19
cases including the Department’s July 8, 2020 Closure Order.
The 50% food sales cut-off is used by Tennessee law to differentiate between “limited
service restaurants” and other restaurants for purposes of health licensures. See Tenn. Code
Ann. § 57-4-102(22)(A)(iii). The Tennessee Code does not provide for the licensure of
“bars.” (ECF No. 16 at PageID 81.)
Defendants have provided testimony from Director Haushaulter and Deputy Director
Sweat that limited service restaurants 2 pose a greater risk for the spread of the COVID-19
virus than other restaurants. Defendants cite literature from the California Health Department
to support their position that “[b]ars present unique risks and challenges (greater and different
than the risks posed in other types of restaurants or service venues) to the Health Department
and the community in attempting to contain the spread of the disease.” (Id. at PageID 79.)
Taken together, Defendants have demonstrated that using the 50% food sales mark as a rubric
for closing bars is not arbitrary and capricious but is reasonably related to the legitimate
government goal of combatting the spread of the COVID-19 virus in Shelby County.
Under Tennessee law, the 50% criterion does not apply to certain bars and restaurants
located in historic districts, such as the Beale Street historic district. See Tenn. Code Ann.

2

The terms “limited service restaurants” and “bars” may be used interchangeably.

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§ 57-4-102(30)(C)(i). (See ECF No. 16 at PageID 81–82.) Those exempted businesses are
licensed as restaurants under Tennessee health regulations, regardless of whether they exceed
the 50% criterion distinguishing restaurants from limited service restaurants. See id.
Plaintiffs argue that this distinction between Beale Street bars and restaurants and their bars
and limited service restaurants is arbitrary and capricious. Defendants have provided practical
justifications for relying on this distinction. Defendants contend that it would be
“impractical” to assess on a case-by-case basis whether bars or restaurants, including those
listed as restaurants for purposes of state licensing on Beale Street, would meet the 50%
threshold:
[Such a measure] would require the [Shelby County] Health Department to
expend its limited resources in the middle of a global pandemic to audit
businesses to determine whether the bulk of their sales are alcohol-related, to
conduct on-site inspections of the businesses to determine whether their
physical layouts and menus are consistent with some definition of a ‘bar,’ and
to revisit those sites on a routine basis to check for changes.
(Id. at PageID 82.) The testimony of Director Haushaulter and Deputy Director Sweat
demonstrates that Plaintiffs’ suggested bar-by-bar, restaurant-by-restaurant evaluation would
be overly burdensome on a Shelby County Health Department that has deployed all of its
resources to combat the coronavirus.
The role of the Court is not to second guess whether Defendants made the right
decision in using this 50% food sales distinction. The Court’s role is to determine whether
Defendants’ decision is reasonably related to the legitimate government goal of fighting the
COVID-19 virus. See Whitmer, 2020 WL 3468281, at *3 (“[T]he Governor’s order need not
be the most effective or least restrictive measure possible to attempt to stem the spread of
COVID-19. Shaping the precise contours of public health measures entails difficult line-

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drawing. Our Constitution wisely leaves that task to officials directly accountable to the
people.” (internal citations omitted)). Shelby County’s Order is reasonably related to the
legitimate government goal of fighting the COVID-19 virus.
Finally, although Plaintiffs argued at the Hearing that no scientific studies or data
backed Defendants’ decisions, the Fourteenth Amendment’s arbitrary and capricious standard
does not require such data-driven, scientifically rigorous decision-making from local officials.
See Whitmer, 2020 WL 3468281, at *3 (“Whether the Governor’s Order is unsupported by
evidence or empirical data in the record does not undermine her decision, at least as a legal
matter.” (internal quotation marks omitted)). Instead, the Constitution only requires that
Defendants’ decisions be based on “‘rational speculation’ that offers ‘conceivable support’ for
the [Defendants’] order.” Id. (quoting FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 313–15
(1993)). In the instant case, Defendants based their decision on the “rational speculation” that
the activities generally associated with “limited service restaurants” pose a significant and
unique risk of spreading the COVID-19 virus among the community, a “rational speculation”
shared by health officials from the CDC. The testimony was that the consumption of alcohol
in bars lowers patrons’ inhibitions, which makes it more difficult to properly social distance
and follow the recommended health guidelines designed to combat the spread of the COVID19 virus. Additionally, activities traditionally associated with bars, such as karaoke, live
music, and other related activities all present a greater risk of spreading the COVID-19 virus.
Shelby County’s justification for its COVID-19 Closure Order therefore passes constitutional
muster.

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In summary, Plaintiffs have not shown that they are likely to succeed on the merits on
their Fourteenth Amendment substantive due process challenge to the July 8, 2020 COVID-19
Closure Order. This factor weighs strongly against granting a TRO.
2. Plaintiffs’ Fifth Amendment Takings Clause Claim
Plaintiffs assert that they are likely to succeed on the merits of their Takings Clause
claim. (See Mem. in Support of Mot. for TRO, ECF No. 10-6 at PageID 62.) In their
Complaint, Plaintiffs assert that the COVID-19 Closure Order is a regulatory taking under
either the “total takings” line of cases following Lucas or under the balancing test for
regulatory takings under Penn Central. (Compl., ECF No. 1 ¶¶ 37–45.)
The Fifth Amendment Takings Clause provides that private property shall not “be
taken for public use, without just compensation.” U.S. Const. amend. V. “The purpose of
forbidding uncompensated takings of private property for public use is ‘to bar Government
from forcing some people alone to bear public burdens, which, in all fairness and justice,
should be borne by the public as a whole.” Connolly v. Pension Benefit Guar. Corp., 475
U.S. 211, 277 (1986) (quoting Armstrong v. United States, 364 U.S. 40, 49 (1960)).
There are two recognized categories of takings: (1) physical takings and (2) regulatory
takings. See Waste Mgmt. v. Metro Gov’t, 130 F.3d 731, 737 (6th Cir. 1997). Plaintiffs’ case
does not implicate a physical taking, as the Government has not physically occupied
Plaintiffs’ limited service restaurants as a result of the July 8, 2019 COVID-19 Closure Order.
There are two lines of cases that discuss where to draw the line between legitimate
government regulation and regulatory takings. One line involves categorical takings, whereby
a regulation “deprives an owner of ‘all economically beneficial uses’ of his land.” Tenn.
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Scrap Recyclers Ass’n v. Bredesen, No. 2:08-cv-2073, 2008 WL 6708174, at *9 (W.D. Tenn.
June 3, 2008) (quoting Tahoe–Sierra Pres. Council v. Tahoe Reg’l Planning Agency, 535 U.S.
302, 330 (1992)) (emphasis in original). A categorical taking occurs “in the extraordinary
circumstance when no productive or economically beneficial use of land is permitted” by the
regulation or ordinance. Lucas, 505 U.S. at 1017 (emphasis in original).
A regulatory taking occurs when the government regulates the use of property and
“engages in . . . essentially ad hoc, factual inquiries . . . .” Tenn. Scrap, 2008 WL 6708174, at
*9 (quoting Penn. Cent., 438 U.S. at 124) (internal quotation marks omitted). The Supreme
Court has identified three factors to consider when determining whether a regulatory taking
has occurred: “(1) the economic impact of the regulation on the claimant; (2) the extent to
which the regulation has interfered with distinct investment-backed expectations; and (3) the
character of the government action.” Id. (citing Penn. Cent., 438 U.S. at 124). Although the
government has the right to regulate property and property use, a “regulation [that] goes too
far . . . will be recognized as a taking.” Id. (citing Penn. Coal Co. v. Mahon, 260 U.S. 393,
414 (1922)).
Plaintiffs are unlikely to succeed on the merits of their claim to the extent they claim
that the COVID-19 Closure Order will result in a total loss of their properties’ value. A total
loss only occurs if the property has no productive or economically beneficial use. See Lucas,
505 U.S. at 1017. Plaintiffs have not shown that their properties have lost all economic value.
The Court does not mean to downplay the dire economic situations facing Plaintiffs’
businesses. The testimony of the owners of these businesses indicates that Plaintiffs will
likely be out of businesses by August or September. The owners’ testimony also indicates
that it would be financially impractical to operate curbside or takeout food and beverage
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services. Each owner testified that they would lose money if they offered such services. That
said, their voluntary decision not to pursue other business alternatives such as take-out or
delivery options that would comply with the Closure Order prevents them from demonstrating
that they have suffered a total loss. See McCarthy v. Cuomo, No. 20-cv-2124 (ARR), 2020
WL 3286530, at *5 (E.D.N.Y. June 18, 2020). While it may not accord with Plaintiffs’ prepandemic financial plans to operate their businesses in ways the Order allows, it does not
follow that the Closure Order has necessarily stripped Plaintiffs’ businesses of all their value.
The Supreme Court has cautioned that a regulation which does not deprive the owners
of all the economic value in their property must be analyzed under the multi-factor analysis
set forth by Penn Central. See Tahoe–Sierra, 535 U.S. at 302. The Court therefore turns to
the Penn Central multi-factor analysis. Upon application of these factors, the Court finds that
Plaintiffs are unlikely to demonstrate the COVID-19 Closure Order qualifies as a regulatory
taking. Although the first and second Penn Central factors support Plaintiffs, the third factor
does not and outweighs the other two factors.
It is undeniable that the COVID-19 Order will have a significant, detrimental impact
on the Plaintiffs’ businesses. Each of the Plaintiffs’ owners’ affidavits demonstrates as much.
(See ECF Nos. 10-1, 10-2, 10-3, 10-4, 10-5.) The owners of the Plaintiff bars and restaurants
testified that the Closure Order jeopardizes the short-term and long-term survival of their
businesses. The value of Plaintiffs’ commercial properties rests in their ability to generate
profits through on-site alcohol and food sales, which are completely suspended by the
COVID-19 Closure Order. As stated supra, these businesses will likely be out of business in
the next two to three months if the Closure Order remains in effect. Such disastrous economic
consequences favor a finding that the Closure Order constitutes a regulatory taking.
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Plaintiffs’ reasonable investment-backed expectations also support a finding that
Defendants’ COVID-19 Order qualifies as a regulatory taking. Plaintiffs invested in their
businesses and properties for the purpose of owning and operating clubs, restaurants and bars.
Most of these restaurants are small neighborhood bars and restaurants that derive their profits
from in-person patronage. It is true that in highly regulated industries an owner’s investmentbacked expectation in their business will be tempered by the possibility of regulatory changes
over the years. See Elmsford Apartment Associates, LLC v. Cuomo, No. 20-cv-4062 (CM),
2020 WL 3498456, at *9 (S.D.N.Y. June 29, 2020) (“[R]easonable investment-backed
expectations cannot extend to absolute freedom from public program[s] adjusting the benefits
and burdens of economic life to promote the common good.” (quoting Penn Cent., 438 U.S. at
124) (internal quotation marks omitted)); see also Connolly v. Pension Ben. Guar. Corp., 475
U.S. 211, 227 (1986) (“Those who do business in the regulated field cannot object if the
legislative scheme is buttressed by subsequent amendments to achieve the legislative end.”
(quoting FHA v. The Darlington, Inc., 358 U.S. 84, 91 (1958)) (internal quotation marks
omitted)).
The COVID-19 Order issued by Defendants is not a “subsequent amendment[] to
achieve the legislative end[s]” of health code regulations imposed on bars and restaurants.
The COVID-19 Order, and COVID-19 restrictions generally, are about limiting the spread of
communicable disease in close quarters. They are unrelated to health restrictions already
imposed on restaurants by local and state health codes. The July 8, 2020 and July 24, 2020
Closure Orders therefore interfere in a significant way with Plaintiffs’ investment-backed
expectations in their properties, despite their status as highly regulated entities.

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The character of Defendants’ actions and the context in which Defendants find
themselves, here facing a national public health emergency, cut strongly against a finding that
the COVID-19 Closure Orders amount to regulatory takings. The Takings Clause does not
render every government action a taking just because it has a detrimental effect on the
owner’s property; the text of the Takings Clause dictates that a regulatory action will only
constitute a taking, and thus require just compensation, when the property is being taken for
the “public use.” See United States v. Droganes, 728 F.3d 580, 591 (6th Cir. 2013) (noting
that the state’s seizure of property was an exercise of its “police power” and did “not
constitute a ‘public use’” (quoting Innovaire Aviation, Ltd. v. United States, 632 F.3d 1336,
1341 (Fed. Cir. 2011))); see also AmeriSource Corp. v. United States, 525 F.3d 1149, 1152
(Fed. Cir. 2008) (“The [Takings] [C]lause does not entitle all aggrieved owners to
recompense, only those whose property has been taken for a public use.”); Lech v. Jackson,
791 F. App’x 711, 719 (10th Cir. 2019) (agreeing with the Federal Circuit that if a
government’s exercise of power to rid an individual of property is not pursuant to its power of
eminent domain but some other police power, the Takings Clause is not implicated). As the
Supreme Court has reiterated, “[L]and-use regulation does not effect a taking if it
‘substantially advance[s] legitimate state interests . . . .’” Lucas, 505 U.S. at 1024 (quoting
Nollan v. California Coastal Comm’n, 438 U.S. 825, 834 (1987)). Where a state “reasonably
conclude[s] that ‘the health, safety, morals, or general welfare’ would be promoted by
prohibiting particular contemplated uses of land,” the state is not required to provide just
compensation to the citizens affected by the regulation. Penn Cent., 438 U.S. at 125.
As stated supra, Defendants, in promulgating the July 8, 2020 Order were acting
pursuant to their broad police powers to address public health concerns during a national,
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state, and local pandemic. See supra Sec. III.A. Defendants’ promulgation of the July 8,
2020 COVID-19 Closure order was not for a “public use” but was instead a valid exercise of
the broad police powers bestowed upon state and local officials to prevent detrimental public
harms by restricting Plaintiffs’ use of their property. It is unlikely that such action would
require compensation under the Takings Clause.
There are also practical reasons supporting this finding. Labeling Defendants’ Order a
taking would require the state to compensate every individual or property owner whose
property use was restricted for the purpose of protecting public health. This would severely
limit the state’s especially broad police power in responding to a health emergency.
Constraining such government actions would exceed the scope of the Takings Clause by
“transform[ing] [the] principle [that ‘all property in this country is held under the implied
obligation that the owner’s use of it shall not be injurious to the community’] to one that
requires compensation whenever the state asserts its power to enforce it.” Keystone
Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 492 (1987) (quoting Mugler v.
Kansas, 123 U.S. 623, 665 (1887)).
On balance, the Court finds that Defendants’ need to effectively and quickly respond
to the COVID-19 pandemic by promulgating the July 8, 2020 Closure Order outweighs any
other considerations warranting a finding that the Order amounts to a taking. Thus, Plaintiffs
are unlikely to succeed on the merits of their takings claim.
B.

Whether the movant will suffer irreparable harm if the TRO is not issued

Plaintiffs have demonstrated through their affidavits and testimony that they will
suffer irreparable harm if the TRO is not issued and the COVID-19 Orders remain in effect.
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PageID 152

All testified that their businesses are closed as a result of the Order. Some of the Plaintiffs, if
not all, will have to close their businesses for good if the Order remains in place for a
protracted period. Plaintiffs testified at the Hearing that they cannot viably operate a curbside
pickup or take-out business as allowed by the Closure Order. Operating in that manner would
only increase these losses (they cannot cover the required operating costs) and hasten their
demise. None of the Plaintiffs testified that they have been able to take part in either federal
or state programs to alleviate the effects of the COVID-19 pandemic. The record is
uncontroverted that Plaintiffs will suffer devastating economic injury if the Closure Orders
remain in effect. This factor weights in favor of Plaintiffs.
C.

Whether the issuance of the TRO would cause substantial harm to others and

whether the public interest would be served by granting the TRO
Enjoining enforcement of the Health Department’s COVID-19 Closure Orders would
likely cause substantial harm to other members of the community and would not be in the
public interest. Preventing Defendants from enforcing the Order would present a risk of
serious public harm and foster the continued spread COVID-19 virus by allowing the Plaintiff
limited service restaurants to remain open.
The Court is not in the best position to make public health decisions. Nor is the Court
tasked with making these decisions. It is the Shelby County Health Department’s role to
decide whether public health would be best served by the continued closure of each category
of bars and restaurants in Shelby County, Tennessee. See Whitmer, 2020 WL 3468281, at *4
(“The decision to impose [costs related to a government’s pandemic response] rests with the
political branches of government . . . .”); see also Talleywhacker, Inc. v. Cooper, --- F. Supp.

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3d ----, 2020 WL 3051207, at *14 (E.D.N.C. June 8, 2020) (“[W]here defendant has taken
intricate steps to craft reopening policies to balance the public health and economic issues
associated with the COVID-19 pandemic, while recognizing the continued severe risks
associated with reopening, and where neither the court nor plaintiffs are better positioned to
second-guess those determinations, the public interest does not weigh in favor of injunctive
relief.”).
The Court recognizes the burden that the Closure Order places on Plaintiffs’
businesses. The Sixth Circuit recently discussed the issue in Independent League of Fitness
Facilities and Trainers, Inc. v. Whitmer:
We sympathize deeply with the business owners and their patrons affected by
the Governor’s Order. Crises like COVID-19 can call for quick, decisive
measures to save lives. Yet those measures can have extreme costs—costs that
often are not borne evenly. The decision to impose those costs rests with the
political branches of government, in this case, Governor Whitmer.
2020 WL 3468281, at *4. The decision to impose extreme costs on Plaintiffs in the name of
public health rests in the hands of Defendants. As such, the costs imposed on Plaintiffs by the
local government’s Closure Order can only be remedied by local government through its
executive and legislative branches. It is not a matter for the Court.
On balance, the Court finds that three of the four factors of the TRO analysis weigh
against granting the TRO. Given that Plaintiffs are unlikely to succeed on the merits of their
constitutional claims and given the potential public health consequences of allowing Plaintiffs
to continue to operate their businesses unfettered by Shelby County Government public safety
and health regulations, the issuance of a TRO preventing the enforcement of the COVID-19
Closure Order is not appropriate in this case. The Court must therefore deny the Motion.

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IV.

PageID 154

CONCLUSION
For the reasons set forth above, Plaintiffs’ Motion for a Temporary Restraining Order

is DENIED.
SO ORDERED, this 29th day of July, 2020.
/s/ Jon P. McCalla
JON P. McCALLA
UNITED STATES DISTRICT JUDGE

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