By Jeannie O'Sullivan

Law360 (June 19, 2020, 1:44 PM EDT) -- A New Jersey federal judge knocked out a gym's bid for permission to operate as it litigates its constitutional challenge to Gov. Phil Murphy's COVID-19 business shutdown orders, reasoning Friday that the battle belongs in state court.

During a hearing held via Zoom, U.S. District Judge Robert B. Kugler declined to grant an injunction to Atilis Gym Bellmawr LLC over its objections that gyms have been arbitrarily excluded from the types of businesses allowed to operate during the state's phased reopening. Instead, Judge Kugler sided with the state's contention that the federal lawsuit is precluded by a doctrine barring federal courts from hearing civil claims arising from state court prosecutions.

Atilis is already facing summonses and a civil action in state court for opening in defiance of Murphy's nonessential business ban during the pandemic, Judge Kugler noted. The gym should have lodged its constitutional argument in the form of a state court appeal of the matters already underway in that forum, but the gym indicated it wasn't going to, the jurist concluded.

"It's hard for me to conclude there's irreparable harm when they really haven't done much to exercise their rights," Judge Kugler said, citing the standard for consideration of preliminary injunctive relief.

To enjoin the state from enforcing the shutdown orders could lead to more outbreaks of the coronavirus, which has "terrible consequences for society," Judge Kugler said. New Jersey's shutdown and similar orders by other governments were based on recommendations by scientists and doctors, the judge said.

Judge Kugler also rejected Atilis' argument that the orders favor certain business sectors over others, noting that some businesses had advantages over others in capitalism. He cited the example of tax credits for the manufacture of electric vehicles, doubting the incentives could form the basis of a court claim for traditional automakers like Ford.

But this is a case of first impression, Atilis attorney James G. Mermigis told the court.

"Basically, the governor has unprecedented powers — tyrannical powers, in my opinion —  to do what he wants without any oversight," Mermigis said.

During the hearing, Mermigis argued that Murphy has allowed for personal care businesses like hair salons, barber shops, tattoo parlors and tanning salons to open, with capacity limits, on June 22. But the governor has yet to set an opening date for gyms, contrary to at least 30 other states that have done so, Mermigis said.

Atilis can afford better social distancing than those other types of businesses given its 14,000-square-foot space with 25-foot-high ceilings, according to Mermigis.

Mermigis further argued that when the shutdown orders came down in March, Atilis' owners turned the facility into a "fortress" of precautionary measures. Machines were spaced 6 feet apart, everyone got a disinfectant bottle and a thermal scanner was installed to take temperatures of those seeking to enter, Mermigis said.

Justifying the forum for the gym's lawsuit against the state, Mermigis said the purpose of filing it in federal court was so that the litigation could have a neutral arbiter.

The litigation stems from Murphy's mid-March directive to shut down all nonessential businesses and limit the operations of others in order to contain the spread of the coronavirus. Murphy has justified the shutdown orders during daily press updates about the coronavirus case count and death toll, frequently emphasizing the need for social distancing.

Atilis made local and national headlines after it reopened May 18 and co-owner Ian Smith became a vocal critic of Murphy's orders, appearing on the Fox News show "Tucker Carlson Tonight" and drawing coverage from Philadelphia-area newspapers and TV news stations.

Police issued summonses after the gym continued to defy health officials' orders to close, and the state filed a civil action enjoining it from opening. Atilis responded with a May 26 lawsuit in federal court targeting Murphy's original March shutdown order and two 30-day extensions Murphy signed in May amid the continuing pandemic.

The gym claimed the orders run afoul of federal civil rights laws as well as the due process and equal protection clauses of the Fifth and 14th amendments to the U.S. Constitution. Atilis warned that the orders would inflict "massive and widespread economic damage" if left intact.

In opposition to the gym's preliminary injunction request to open while the lawsuit plays out, the state invoked the 1971 U.S. Supreme Court case of Younger v. Harris, which held that federal courts must abstain from hearing civil claims arising from matters already being addressed in state court.

After the hearing Friday, Atilis attorney Christopher Arzberger of Russell Friedman Law Group said he was disappointed in the ruling but planned on pursuing an appeal in the state Appellate Division, as the judge had advised. 

The gym is represented by Christopher Arzberger of the Russell Friedman Law Group LLP and James G. Mermigis of The Mermigis Law Group PC.

The state is represented by New Jersey Attorney General Gurbir S. Grewal, Assistant Attorneys General Jeremy M. Feigenbaum, Daniel M. Vannella and Michael C. Walters, and Deputy Attorneys General Deborah A. Hay, Bryan Edward Lucas, Robert J. McGuire, Jessica Jannetti Sampoli and Michael R. Sarno.

The case is Atilis Gym Bellmawr LLC v. Philip D. Murphy et al., case number 1:20-cv-06347, in the U.S. District Court for the District of New Jersey.

--Editing by Abbie Sarfo.

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