Several bars across Texas have filed suit against Governor Greg Abbott challenging his executive orders related to the classification of bars and restaurants.
On June 26, 2020, Governor Greg Abbott issued Executive Order GA-28, which permitted restaurants to reopen that have less than 51% of their gross receipts from the sale of alcoholic beverages. Any bar that reclassified as a restaurant is required to follow the same restrictions that apply to restaurants, including mandating masks, limiting occupancy to 50% and following health and sanitation procedures. This executive order permitted bars affiliated with other facilities to reopen, such as hotels, bowling alleys, and bars in restaurants, but required standalone bars to remain closed.
In response to GA-28, owners of sixteen bars that have not been permitted to reopen filed a lawsuit in Travis County, Stand for Something Group Live, LLC, et al. v. Greg Abbott as Governor of Texas, et al. The plaintiffs own bars located in cities across Texas, including Arlington, Odessa, Fort Worth, Seabrook, Beaumont, Harker Heights, Houston, Abilene and Galveston. The lawsuit argues that allowing restaurants, but not bars, to open at limited capacity is unconstitutional. According to allegations in the petition, GA-28 fails “to treat like with like without a rational basis: standalone bars are shuttered while other bars, e.g., those inside hotels and restaurants, remain open for business.” The bar owners assert claims under the Texas Constitution, including the right to Equal Protection, protection from retroactive laws, protection against regulatory takings, and right of Texans to assemble for their common good.
The plaintiffs also take issue with the lack of legislative involvement in the decision and specifically request the Court to enjoin the TABC from forcing the closure of some bars based on Governor Abbott’s executive orders. In response to the lawsuit, the attorney general’s office has asserted that the Texas Legislature properly delegated power to allow the Governor to act in the state’s best interest during time of disaster, including the COVID-19 pandemic, and the directives in GA-28 fall within his delegated powers.
On August 25, 2020, the Texas Alcoholic Beverage Commission amended its Rule 33.5, which governs food and beverage certificates. The TABC removed the requirement of an on-site commercial kitchen for a business to obtain a food and beverage certificate. The amendments also permit bars to count sales from prepackaged food and food trucks as food revenue. These revisions help bars raise their total revenue from food above 51%, the threshold needed to qualify for a food and beverage permit and reopen as a restaurant under GA-28.
Stand for Something Group Live, LLC, et al. v. Greg Abbott as Governor of Texas, et al., remains pending in the 200th Judicial District Court of Travis County, Texas. For more information on this litigation or the amendments to the TABC rules, please contact Jackson Walker’s litigation team, Denise Rose, or Suzan Kedron.
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