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Law360 (August 19, 2020, 6:28 PM EDT) -- A federal judge said Wednesday he would quickly decide on a popular Manhattan cafe's request to block New York state liquor authorities from taking its liquor license, after allegations that its "pandemic parties" flouted guidelines for controlling COVID-19.
U.S. District Judge Lewis A. Kaplan, who is handling the Cloister Cafe's suit to block the New York State Liquor Authority's Aug. 7 license revocation, asked for more information but vowed to decide on a possible temporary restraining order by next week.
"The stakes are high all around," Judge Kaplan said. "If I decide to grant a TRO, it's going to mean the license goes back into effect."
The popular East Village cafe's complaint — the first in federal court against Gov. Andrew Cuomo's widely publicized clampdown on bars and restaurants over virus protocols — claims its due process rights were violated during a late-night hearing revocation before a liquor authority "kangaroo court."
The cafe's lawyers say the state acted based on an Aug. 4 story that appeared on the New York City-focused website Gothamist. The article suggested the business was hosting "illicit, underground pandemic parties."
That "uninvestigated and uninformed" report was used by the state as a pretext to inspect the cafe and to take away its license, effectively crippling its business, according to the suit.
"In breach of plaintiff's due process rights, [the liquor authority] gave credence to the Gothamist article," the suit said. "The board was well aware that the Gothamist article was more prejudicial than probative."
State liquor police also mistakenly reported specific violations at the cafe's outdoor spaces and mistakenly concluded that patrons snuck away upon hearing the governor's COVID-19 task force was on the way, the cafe says.
"At its core and on its face, this is unconstitutional," the cafe's lawyer, Robert Garson, told Judge Kaplan on Wednesday. Cloister Cafe now faces months of stalled business operations as it tries to get the license back, Garson said.
The liquor authority called the cafe's assertions false. It said the Aug. 7 visit to the cafe turned up a "multitude of violations."
"We are living in strange times, all of us, due to the COVID crisis," an attorney for the state, James Cooney, told the judge. "What they are doing is protecting all of us."
As of this week, Cuomo's COVID-19 task force had suspended 148 liquor licenses statewide and conducted more than 3,000 compliance checks, according to a press release.
The restaurant is represented by Robert Garson, Kevin Kehrli and Jacob Pargament of Garson Segal Steinmetz Fladgate LLP.
The liquor board is represented by James Cooney of the New York Office of the Attorney General.
The case is Cloister East d/b/a Cloister Cafe v. New York State Liquor Authority, case number 1:20-cv-06545, in the U.S. District Court for the Southern District of New York.
--Editing by Janice Carter Brown.
For a reprint of this article, please contact reprints@law360.com.
