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Gilroy
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June 12, 2021

Local businesses sue state, county to reopen

Lawsuit claims state, county have strictly limited constitutional rights

Two South County business owners are among the plaintiffs in a lawsuit alleging that state and county officials have limited their constitutional rights and caused financial damages by implementing stay-at-home orders and other restrictions related to the Covid-19 pandemic.

The lawsuit, initially filed in October in the U.S. District Court for Northern California, claims that Gov. Gavin Newsom, Santa Clara County Public Health Officer Dr. Sara Cody and other officials have arbitrarily limited the plaintiffs’ rights to free speech and assembly, and the due process right to earn a living.

Among the plaintiffs who filed the lawsuit are Kirigin Cellars owner Dhruv Khanna and Old City Hall restaurant co-owner Frances Beaudet. Both businesses are in Gilroy.

Even though the state and county restrictions on public gatherings related to Covid-19 seem to be continually changing—most recently to allow more outdoor business—the plaintiffs are suing as a result of damages and losses they say they suffered during previous shelter-in-place orders.

“California has now been in a state of emergency for seven months, with no end in sight. During this time, the basic religious, political, and economic freedoms guaranteed by the United States Constitution have been effectively abrogated for nearly 40 million people,” reads the introduction to the lawsuit. “In the name of stopping the spread of Covid-19, state and local officials have closed churches and businesses; banned political events; and even prohibited individuals from hosting small gatherings in their homes.”

In a Nov. 18 response to the lawsuit, the defendants argue that the state and county restrictions did not wholly ban or prohibit the plaintiffs’ business, free speech or religious activities—the restrictions merely required them to operate in a different way. This includes not only population or customer capacity limitations, but also hygiene and cleanliness guidelines.

“(They) are permitted to have limited outdoor gatherings or unrestricted virtual ones and are permitted to run their businesses with limited numbers of people and without group events,” the defendants, represented by then-Attorney General Xacier Becerra’s office, replied in November. “By contrast, the State has a compelling interest in containing the spread of Covid-19, especially now in the face of the current wave of infections, and protecting all Californians, including Plaintiffs.”

Khanna said the state and county government are “making things worse than they already are” with the Covid-19 restrictions. He purchased Kirigin Cellars in 2000, subsequently replanting vineyards, building new event spaces and adding sports fields.

The property is an active winery that produces and bottles wine for sale in small batches, but the “overwhelming majority” of Kirigin Cellars’ business is for events such as weddings, parties and other social gatherings, according to the lawsuit. In recent years, Kirigin Cellars has hosted more than 1,000 youth soccer games.

But since the state and county enacted Covid-19 restrictions, these activities have been largely prohibited, even outdoors. Kirigin Cellars had to cancel more than 30 scheduled events in 2020, and let go of about 30 percent of its staff.

The suit claims that Kirigin Cellars has the space to host up to 200 people for outdoor events, with social distancing between households. However, at the time the complaint was filed, outdoor gatherings (other than protests and religious ceremonies) were limited to 60 people.

“It makes no sense you can have people inside Costco and Walmart but you can’t have an outdoor wedding,” Khanna said in a brief interview with this newspaper. “This is ridiculous. The law is very clear: when you take away civil liberties you have to have good reason; and you have to restrict in a rational way that addresses the problem.”

Khanna added that he respects the seriousness of Covid-19 and “we’re not here to take risks with anybody’s lives,” but he thinks the restrictions amount to overkill.

Beaudet, co-owner of Old City Hall restaurant in Gilroy, has also seen a major drop in business since the Covid-19 restrictions were implemented. Since Newsom and the county implemented the restrictions in early 2020, Old City Hall has been unable to use any of its 25,000 square feet of indoor dining space, according to the lawsuit.

“This has reduced the restaurant’s business by 60 percent compared to last year,” says the lawsuit. “Beaudet is thus experiencing extreme financial hardship as a result of defendants’ orders.”

Beaudet did not return a phone call requesting comment.

The plaintiffs also include Ritesh Tandon, a Santa Clara County resident who ran in the Nov. 3 election for California’s 17th congressional district; Pastor Jeremy Wong of Orchard Community Church; Karen Busch, who hosted bi-weekly bible study sessions at her home before the pandemic started; San Mateo County residents Terry and Carolyn Gannon, who used to host in-person gatherings for political discussions; Connie Richards, owner of Better Life Fitness Academy in Nevada County; Julie Evarkiou, co-owner of Wavelength salon in Los Gatos; and Maya Mansour, owner of The Original Facial Bar in Santa Clara County.

The plaintiffs are represented by attorneys from the San Jose-based Eimer Stahl LLP firm.

The plaintiffs’ complaint asked the court for a preliminary injunction to strike down the Covid-19 restrictions, which has not been granted. The next hearing in the case is scheduled for Feb. 17.

Similar lawsuits have been filed by businesses and individuals in other counties and states since jurisdictions all over the U.S. began enforcing Covid-19 shutdowns and restrictions last year. 

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