By Matt Fair

Law360 (August 31, 2020, 7:23 PM EDT) -- A federal judge said Monday a Philadelphia-area pool supply store can proceed with a proposed class claim that its right to equal protection was violated when, unlike several nearby competitors, it was denied a waiver to remain open when Gov. Tom Wolf shuttered non-essential businesses in mid-March due to the pandemic.

Senior U.S. District Judge R. Barclay Surrick ruled that he had yet to see any rational basis why Paradise Concepts Inc., which operates in Bucks County as Kenwood Pools, was denied a waiver to keep its doors open when several nearby competitors were allowed to remain in business through the height of the COVID-19 outbreak in the spring.

"Relying strictly on the pleadings, we cannot ascertain any reason why plaintiffs were treated differently from their nearby competitors," the judge said. "The only reasonable inference to be drawn … is that nearly identical businesses were treated differently under the waiver program."

The proposed class action from Kenwood Pools challenges a program set up by the Wolf administration designed to allow businesses to apply for waivers through the Department of Community and Economic Development that would allow them to remain in business despite orders inked by the governor in mid-March closing all nonessential businesses.

According to court records, the state ended up receiving some 42,000 applications for waivers, of which 7,000 were granted before the program was halted at the beginning of April.

Kenwood said it decided to apply for a waiver after learning that two of its competitors in Bucks County had received permission from DCED to remain in business during the shutdown.

Unlike its competitors, however, Kenwood said its application was denied.

Kenwood's complaint leveled claims that the administration of the program ultimately ran afoul of its equal protection and due process rights.

The Wolf administration argued in a motion to dismiss at the beginning of August that the state was owed deference in making fact-intensive decisions aimed at protecting the health and welfare of citizens during a pandemic. The administration also argued it had determined that the business models of Kenwood and one of its competitors differed enough that the waiver decision was rational.

But Judge Surrick disagreed.

"Defendants argue that Kenwood Pools and [its competitor] had different business models and suggest that the two businesses' in-person retail operations were different in scope, but the allegations in the ... complaint cannot be read to support that distinction," he said.

The judge did agree, however, to strike Kenwood's due process claim on the grounds that the right to operate a business was not protected under the 14th Amendment.

"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," the judge said. "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."

Walter Zimolong, an attorney with Zimolong LLC, said he was pleased with the decision.

A spokeswoman for the governor's office declined to comment.

The plaintiffs are represented by Walter Zimolong of Zimolong LLC.

The commonwealth is represented by Stephen Kovatis and Karen Romano of the Office of Attorney General.

The case is Paradise Concepts Inc. v. Thomas Wolf et al., case number 2:20-cv-02161, in the U.S. District Court for the Eastern District of Pennsylvania.

--Editing by Marygrace Murphy.

Update: This story has been updated with responses from representatives from the parties.

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