Pamela Gates | Arizona Capitol Times

AG challenges governor’s emergency powers

From left are Doug Ducey and Mark Brnovich

The state’s top prosecutor says Gov. Doug Ducey is acting illegally in telling police to ignore restaurants violating certain state liquor laws.

In a new court filing, Attorney General Mark Brnovich said he disagrees with the bar owners suing the governor that the laws granting him emergency powers are an unconstitutional delegation of legislative powers.

“When the pandemic hit, the governor was well within his authority to declare an emergency and close down all non-essential businesses in an even-handed manner until health officials could better determine the nature of this novel virus,” he said.

But Brnovich said that’s not what happened here, with the governor deciding not only that restaurants can open but bars cannot — at least not the way they were designed — but directing state liquor agents and police to turn a blind eye to bars selling alcoholic beverages to go, something specifically prohibited by state law.

And then there’s the fact that Ducey’s emergency has been in place since March.

“It is clear that we are now in a world where the governor is picking winners and losers regarding the economic recovery from the emergency, not reacting to the emergency itself,” Solicitor General Beau Roysden wrote for Brnovich, who is his boss. “But that is a legislative function, and not within the proper scope of the emergency powers that are conferred to address the exigencies of emergencies when they first arise.”

So Brnovich wants Maricopa County Superior Court Judge Pamela Gates, who is handling the case, to interpret the emergency statute being cited by the governor as justifying his actions to be solely “conferring authority to carry out emergency functions and closely related activities, not as an indefinite grant of legislative authority.”

And Brnovich said if Ducey believes restaurants need economic relief — his stated reason for giving them an exception from the laws that now bar them from selling alcohol to go — there is an option.

“The governor can call the legislature into special session to address through legislation the secondary economic effects of the COVID-19 pandemic that his current executive order attempts to address through executive fiat,” he said.

In a prepared response, gubernatorial press aide Patrick Ptak said his boss believes that his actions are legal. But he also said Ducey had good reasons for the decisions he made.

“The pandemic has placed an enormous burden on all Arizonans, both economically and related to public health,” Ptak said. “The governor’s actions have allowed establishments to focus on public health while continuing to maintain operations safely and responsibly.”

But the governor’s own attorney conceded last month that his client was, in fact, making an economic decision in having law enforcement ignore violations of liquor laws by restaurants.

Brett Johnson, in his own legal filing, argued that giving restaurants the “privilege” to sell beer, wine and liquor out the door “qualifies as a recovery and response activity because it aids restaurants.” He said that is because they were previously closed to in-house dining.

Restaurants have since been allowed to serve patrons. But Johnson said the restaurants still need the financial help because they remain “subject to capacity restrictions.”

The gubernatorial edict at issue specifically directs that agents of the Department of Liquor Licenses and Control “shall not enforce the provisions of the Series 12 (restaurant) liquor license that prohibit the sale by restaurants of beer, wine and spirituous liquor off premises.” Ducey’s order also keeps police from enforcing those laws.

Ilan Wurman, representing more than 100 bar owners, says that isn’t fair.

“Giving the restaurants the off-sale privilege and letting restaurants stay open, all while closing down bars, seems to be a clear act of economic favoritism,” he said.

Brnovich, in his filing, agrees that Ducey’s order giving special privileges to restaurants amounts to “discriminating in other respects against similarly situated bars.”

But he said the broader question is the scope and duration of the authority that Ducey claims he has under statutes granting him powers to act in cases of emergency.

“There are not set criteria for ending this emergency, confirming that — seven months into it — the governor has claimed for himself the indefinite power to act legislatively,” Brnovich said.

He said if the law is as broad as the governor claims, it clearly is an unconstitutional delegation by the legislature of its powers.

But rather than challenge the statutes, Brnovich told Gates there’s an easier way to resolve the dispute.

“The court should conclude as a matter of statutory interpretation that (the emergency law) provides a much more temporally constrained power that must be exercised even-handedly to address the exigencies of the emergency,” he said. And once Gates adopts that construction of the law, Brnovich said, she should rule that Ducey’s directive to allow restaurants to violate the liquor law exceeds his authority.

This isn’t the attorney general’s first public disagreement with the governor over the scope of his emergency powers. In July, Brnovich told a federal judge there may be legitimate claims that Ducey exceeded his authority in closing certain business.

That case involved claims by Xponential Fitness against the governor that he had no legal basis to re-close gyms and fitness centers in June after there was a new spike in COVID-19 cases.

Brnovich took no sides in that dispute. But he told the federal judge handling the case that the claims against Ducey “raise serious issues of first impression involving executive authority in an emergency.” And he said these “deserve close and careful consideration by the court.”

That case ended up being dismissed after that fitness center and others were allowed to reopen, albeit with limited capacity.

Bar owners grill health director on end to closure

The state’s top health official testified October 8 she cannot say when the current COVID-19 health emergency will be over, the governor will rescind his orders, and Arizonans will be able to get their lives back to the way they were before.

In fact, Cara Christ said a decline to minimal levels in the benchmarks her agency created to determine the risk of spread won’t necessarily lead her to recommend to her boss, Gov. Doug Ducey, that he dissolve his orders and give up the emergency powers he assumed in March. She said there are other considerations.

But Christ also said that it won’t take the virus being gone for there no longer to be an emergency. She said it may be that Arizonans are just going to have to live with it.

What currently makes any disease an emergency is that it could overwhelm hospitals. That, Christ said, is why there was a declaration in March by Ducey, with the rapid spread of the coronavirus.

At some point, though, she said that won’t be the case.

“That would change with COVID-19 as we continue in this pandemic,” Christ said.

“And then it would just be like living with the influenza,” she continued. “At that point it wouldn’t be a public health emergency anymore.”

Christ’s comments came as she was being questioned in a hearing in Maricopa County Superior Court by Ilan Wurman.

He represents more than 100 owners of bars that remain unable to reopen and operate the way they used to due to the Ducey-declared emergency. And Wurman is trying to convince Judge Pamela Gates that the restrictions on bars make no sense, especially when other businesses, including restaurants that serve alcoholic beverages, are allowed to be open.

All that relates to when Christ thinks the emergency – and the restrictions on business operations, including bars imposed by Ducey – will or should go away.

“That’s hard to predict now because we learn new things every day,” she testified.

One issue in the case is how long Ducey can exercise his emergency authority.

Wurman said there are indicators. He pointed out the Department of Health Services has established “benchmarks” to determine the risk of spread of the virus.

These look at three issues: the number of cases per 100,000 residents, the percentage of tests for the virus that come back positive, and the percentage of patients showing up in hospital emergency rooms with COVID-like symptoms. Each of those can be listed as having a substantial, moderate or minimal risk of spread.

Wurman wanted to know at what point those benchmarks will get to a point when the emergency will be over.

“It’s a little bit difficult,” Christ responded.

“Those benchmarks weren’t established to determine an end to the public health emergency,” she said. “They were really established to set benchmarks for business to be able to reopen and schools to go back into session.”

That didn’t satisfy Wurman.

He told her to assume there will be no vaccine, no “therapeutic” to effectively treat the disease, and no “herd immunity” where enough people have contracted the virus, survived and now have antibodies. Given all that, Wurman asked Christ when she would be willing to recommend to Ducey that he rescind his emergency orders.

“If we were consistently at very, very low cases, if CLI (COVID-like illnesses) stayed low and the percent positivity remains low, below that 3%, we may make that recommendation,” she responded. But no promises.

“Again, it’s hard to predict,” Christ said.

Wurman pressed harder.

“If all three of the benchmarks established by your department indicated we had been at minimal transmission for eight weeks, would that be sufficient for you to recommend repeal?” he asked.

She never responded after attorneys for the state objected, saying she had already answered the question.

One thing Christ did say is that the emergency declaration really isn’t primarily about preventing people from getting sick and wiping out the disease.

“The public health emergency is really protecting our health care system, making sure we keep as few people from getting sick or dying and having access to those resources than it is just eradicating the disease,” she said.

Christ did concede that she could not say whether a single case of coronavirus had been traced to a bar in Arizona. But she said that’s not because none has happened.

“I’m not privy to the contact tracing investigation findings,” Christ said.

But the health director said she remains convinced that the risk of spread is higher at bars than at other businesses.

Some of it, she said, has to do with lack of ventilation indoors.

“There are ways that that can be increased,” Christ said. “But alcohol does tend to affect one’s ability to physically distance and make good decisions.”

And then there’s the environment.

“They tend to have music,” she explained.

“It requires people to speak louder, projecting more droplets into the air, putting more virus,” Christ said. “It also requires people to lean in and get closer to individuals when they are talking because it’s going to be loud.”

Court says Ducey can’t allow restaurants to sell booze to go

Gov. Doug Ducey broke the law when he told police and liquor agents not to enforce statutes that prohibit restaurants from selling alcoholic beverages to go, a judge ruled Monday.

But, for the moment, it appears the governor is going to ignore the ruling — and allow the restaurants to keep competing illegally with bars — as he contemplates an appeal.

In an 18-page decision, Maricopa County Superior Court Judge Pamela Gates brushed aside most of the claims by more than 100 owners of bars throughout the state that it was wrong of the governor to single out their establishments for closure while other alcohol-serving establishments like restaurants were allowed to remain open.

Gates said there was sufficient evidence that bars posed more of a threat to public health due to the spread of COVID-19 than other kinds of business establishments. And with the legislature having granted the governor broad powers during an emergency, he had sufficient justification for the orders.

But the judge said nothing in the Arizona Constitution or even the emergency powers statutes entitles Ducey to ignore laws entirely. And in this case, she said, legislators had expressly prohibited the off-premises sale of alcoholic beverages by restaurants, reserving that privilege for those who obtained licenses to operate bars.

“A provision that bars the enforcement of unlawful conduct is contrary to state law and thus, exceeds the power delegated to the governor,” Gates ruled.

Both Ducey and the Arizona Restaurant Association had argued that the special privilege was necessary to help keep the businesses financially afloat.

They, like the bars, had initially been shuttered entirely. And even now they have to operate with limited capacity.

Gates said that is all legally irrelevant.

“The court takes no position on whether the law should be changed to allow to-go alcohol,” the judge wrote. “It merely holds that action is outside the power delegated to the governor … during a state of emergency because the action is contrary to current Arizona law.”

One reason bar owners brought the claim is that, under state law, they are the ones who can sell drinks and alcohol to go.

That is one of the privileges they get by buying the more expensive bar license versus a restaurant liquor permit. The other is not having to maintain 40% of sales in food as do restaurants.

Attorney Ilan Wurman said that his clients, already harmed by a ban on indoor operations — more recently changed to restrictions — are being further hurt financially as those off-premises sales were going to the restaurants which can be their direct competitors.

Gates as much as acknowledged that in ordering Ducey to rescind his illegal order.

She pointed out that, under other circumstances, anyone who suffers monetary damages from the actions of another can seek to recoup. But that’s not the case here.

“The court … finds the governor’s immunity will likely preclude plaintiffs from collecting damages,” Gates wrote. And that, the judge said, tips the balance in favor of her enjoining Ducey from continuing his order allowing the off-premises sale of alcohol from restaurants.

Ducey press aide Patrick Ptak said that the governor is reviewing the decision.

But there apparently are no immediate plans to actually comply while he contemplates an appeal. And here, too, the issue is providing financial relief to the restaurants.

“We want to make sure that we continue to help small businesses, and the Arizonans they employ, navigate through this pandemic,” Ptak said.

Dan Bogert, chief operating officer of the Arizona Restaurant Association, called the ruling “unfortunate,” pointing out they were closed for all of April and part of May and remain limited now to 50% capacity. The result, he said, is increased reliance on to-go orders — with those picking up meals also wanting alcoholic beverages.

“Without the ability to include alcohol with to-go orders, a key lifeline has been stripped from these businesses,” Bogert said. “This will no doubt lead to less profitability and possibly more permanent closure of our favorite gathering spots.”

For the moment, though, Gates said that other restrictions on bars can stand, even if they don’t apply to restaurants and other similar businesses. She said testimony covinces her there are certain things that happen in bars that make them “likely high-risk environments for the spread of the virus.”

“For example, bar patrons often move between groups and tables, mixing with other groups with whom they did not arrive,” the judge said.

“Also, bars are often loud, which causes individuals to draw closer to hear one another and to speak louder, thus increasing the risk of transmission,” Gates continued. “Furthermore, mask wearing is incompatible with drinking, and drinking alcohol impairs decision-making.”

Then there are the dance floors. The issue, the judge said, is that people not only mix but that limited ventilation and turbulent airflow patterns result in an environment where respiratory droplets are more easily spread.

And, if nothing else, it comes down to who are the patrons.

“Bars also tend to attract a younger adult population, which currently represents a significant demographic carrying COVID-19 in Arizona,” Gates said.

Wurman said the ruling is not the last word.

While Gates refused to immediately enjoin what Wurman said is the disparate treatment of bars, he said that still gives him a chance to make his case at a full-blown trial that there is no legitimate reason for discrimination. And that, he said, is buttressed by testimony from John Cocca, head of the Department of Liquor Licenses and Control, that in many cases there really is no difference between the activities of bars and restaurants.

Court sides with governor in dispute over bars closure

Parlor games like darts and pool are prohibited under social distancing rules during the pandemic. (Photo by Klara Kulikova/Creative Commons)

Gov. Doug Ducey’s order closing bars remains intact, at least for the time being.

In a 14-page order late Tuesday, Maricopa County Superior Court Judge Pamela Gates spurned a request by the owners of more than 100 bars and taverns to block enforcement of executive orders that forbid bars from opening while allowing operation of restaurants with liquor licenses to continue to serve clients. She said Ducey’s orders “are rationally related to expert data and guidance on minimizing the spread of COVID-19 in our community.”

Gates also said she saw no evidence that the orders cause irreparable harm to the bar owners, one of the factors that judges are required to consider when determining if a law or order can remain in effect while it is being challenged.

On paper, Tuesday’s order does not end the legal fight. Gates still has to decide whether a full-blown trial is needed or whether to dismiss most of the claim.

But attorney Ilan Wurman conceded the chances of ultimately convincing Gates that the governor’s actions are illegal remain slim. So he already is eyeing taking the case to the state Court of Appeals.

Tuesday’s ruling was not a complete loss for Wurman and his clients.

Gates, an appointee of Gov. Jan Brewer, said the decision by Ducey to allow restaurants to sell alcoholic beverages to go — something prohibited by state law — “impermissibly stretches” the governor’s emergency powers. That paves the way for Gates to declare such “off-premises” sales illegal.

At the heart of the fight have been decisions made by Ducey going back to March about which kinds of businesses had to close in a bid to slow the spread of the coronavirus. That initially included all bars and restaurants, along with a host of other businesses.

Ducey relented in May, allowing both to operate under certain guidelines. But after a spike in the number of COVID-19 cases he partly reversed course.

Under the current version of his order, establishments licensed as bars cannot open. But establishments licensed under state liquor laws as restaurants — meaning they derive at least 40 percent of their revenue from food — are allowed to operate.

The governor said bars can open if they apply to the state Department of Health Services and detail how they will change their operations.

State health officials have described that in generic terms to operate like a restaurant. That means leading patrons to their seats, having to wear a mask except while eating and drinking, and having to remain at the table.

That means no mingling or informal meet-and-greet. And dancing, darts and pool are definitely out.

Gates first rejected Wurman’s arguments that the legislature acted unconstitutionally in giving broad powers to any governor who declares an emergency. She said those laws entitle Ducey to do only those things “consistent with existing law and the Arizona Constitution.”

The judge also rejected claims that it was discriminatory to shut down bars but allow restaurants to not just remain open but continue serving alcohol.

She pointed out that Ducey has relied on recommendations from the federal Centers for Disease Control and Prevention as well as the White House Coronavirus Task Force, both of which have said there are reasons to distinguish between traditional bars whose primary business is the sale of alcoholic beverages.

Gates cited statements submitted by Dr. Marjorie Bessel, chief clinical officer at Banner Health, who said bars “pose a uniquely dangerous environment for the spread of COVID-19.” Those factors, Bessel said, include the fact that bars typically feature loud environment “which result in raised voices and greater projection of orally emitted viral droplets and cause people to lean in to each other when speaking, posing a greater threat of transmission.”

Then there’s the dancing which Bessel said, couple with limited ventilation, results in an environment where respiratory droplets are more easily spread.

And finally it’s a question of age.

“Bars tend to attract a younger adult population, which currently represents the highest demographic carrying COVID-19 in Arizona,” Bessel said.

Gates said she was convinced, saying that bar patrons “often linger for hours, mixing with different individuals and groups.”

“The consumption of alcohol, even when not to the point of intoxication, can dull one’s sense of caution,” the judge wrote. “In addition, mask wearing is incompatible with sipping and sharing drinks.”

And Gates said there’s another key difference.

At a restaurant, she said, a server routinely comes to the table to tend to patrons.

“Bargoers often mingle throughout the bar and seek out a new drink from the bar top or a server spotted across the establishment,” the judge wrote.

Gates noted that the restrictions on bars is based on weekly reports of virus outbreak in each specific county. And the judge noted that the risk of spread has already has diminished to the point where bars can reopen in Greenlee and La Paz counties based on health conditions there.

Ducey tells court why restaurants get special treatment over bars

Gov. Doug Ducey is justifying his directive to liquor investigators and police to ignore violations of some state laws by restaurants because they need the money from the otherwise illegal sales they are allowed to make.

In new court filings, attorneys for the governor do not dispute that Arizona law prohibits restaurants from selling alcoholic beverages to go. That right is reserved for holders of other types of liquor licenses, including grocery stores and bars.

And they acknowledge that Ducey in March specifically directed that agents of the Department of Liquor Licenses and Control “shall not enforce the provisions of the Series 12 (restaurant) liquor license that prohibit the sale by restaurants of beer, wine and spirituous liquor off premises.” In fact, the governor’s order also keeps police from enforcing those laws.

Attorney Ilan Wurman who is suing Ducey on behalf of more than 100 bar owners, said that’s not fair.

“Giving the restaurants the off-sale privilege and letting restaurants stay open, all while closing down bars seems to be a clear act of economic favoritism,” he said.

“It’s a powerful industry,” Wurman said. “And a lot of them give him money.”

But Brett Johnson, the private attorney who Ducey hired to defend all of his executive orders, said the governor was acting within his emergency powers.

What Johnson is arguing is that giving restaurants the “privilege” to sell beer, wine and liquor out the door “qualifies as a recovery and response activity because it aids restaurants.”

That, said the attorney, is justified because they were previously closed for in-house dining.

They have since been allowed to serve patrons. But Johnson said the restaurants still need the financial help because they remain “subject to capacity restrictions.”

Ducey press aide Patrick Ptak defended the governor’s decision to block enforcement of the laws that prohibit restaurants from making off-site sales of alcoholic beverages. He called it one of many “tough decisions” his boss had to make during the pandemic.

“This has been a way for many establishments to maintain their operations safely and responsibly while continuing to prioritize public health,” Ptak said. And he said Ducey has “broad authority” relating to the enforcement — or non-enforcement — of laws.

Wurman said Ptak is partly right.

Doug Ducey

He said the laws do give Ducey the power to suspend laws dealing with things directly related to the pandemic, like regulation of doctors, hospitals and emergency medical technicians. The governor, in fact, already has done that, expanding the scope of practice allowed under state law to certain medical providers.

But Wurman said there is no basis for Ducey’s argument that he has pretty much unfettered ability to do anything as long as he says it involves “response and recovery” to the underlying emergency caused by COVID-19.

That, he said, would include “anything that alleviates secondary economic, political, cultural, social damage or whatever.” And Wurman said that is unconstitutional.

“It gives him essentially unlimited power,” he said.

What makes all this relevant to Wurman’s clients is that the governor initially closed both bars and restaurants. Yet Ducey unilaterally took away the one legal advantage the bars had over the restaurants: the ability to sell alcoholic beverages to go even if they could not have customers.

Meanwhile, restaurants have been reopened while bars have not. But the governor continues to allow them to violate state liquor laws and sell beer, wine and liquor out the door.

There is reason to believe that Maricopa County Superior Court Judge Pamela Gates, who is hearing the legal arguments, may side with Wurman and against the governor on the question of whether he can simply direct that certain state liquor laws be ignored.

She ruled earlier this month that the governor did nothing wrong in shutting down bars while continuing to allow operation of restaurants with liquor licenses. Gates said Ducey’s orders “are rationally related to expert data and guidance on minimizing the spread of COVID-19 in our community.”

But Gates said it appears to be quite something else for the governor to direct liquor investigators and police to ignore clear state laws which say that those with Series 12 licenses — meaning restaurants — cannot sell alcoholic beverages to go.

“The court finds the executive order banning enforcement of a Series 12 licensee violation of off-premises sales of spirituous liquors impermissibly stretches the governor power he is granted under state laws, the judge said. Said another way, the court fails to find that the enforcement ban against Series 12 licenses in (the executive order) effectuates the purposes of (the laws on emergency powers).”

Gates, however, didn’t overturn Ducey’s order, setting the stage for more legal filings.

Instead she wanted to hear more arguments. And that, in turn, led to Johnson’s arguments that the financial health of the restaurant industry justifies the governor’s actions.

The governor’s attorney has another justification for Ducey’s directive. He said that closing bars for in-person operation while giving off-sale privileges to restaurants “encourages individuals to stay home, reducing the risk of COVID-19 transmission.”

Johnson provided no specifics.

Wurman, however, sees the action through a different lens: politics and campaign donations.

“That doesn’t mean it’s pay-to-play,” he said.

“And it’s not corrupt,” Wurman said. “But it’s favoritism.”

Ptak did not answer questions about who from the restaurant industry lobbied Ducey for the right to ignore state laws about out-the-door sales of alcoholic beverages.

Separately on Monday, attorney Ilan Wurman filed a $12.5 million claim against the state on behalf of the more than 100 shuttered bars he represents.

The number, Wurman said, is an estimate of 70% of what the bars have lost in business from April through the end of August. He said the other 30% is probably what the bars would have lost anyway due to the pandemic.

Wurman contends if the state wants to close them it has the legal responsibility to make up at least some of their lost profits.

Ducey’s next Supreme Court pick stirs speculation

Arizona Supreme Court Justice Andrew Gould speaks at his swearing-in ceremony on December 19. (Photo by Rachel Leingang, Arizona Capitol Times) — Arizona Supreme Court Justice Andrew Gould speaks at his swearing-in ceremony on December 19, 2016. (Photo by Rachel Leingang, Arizona Capitol Times)

The legal community is abuzz speculating about who will be Gov. Doug Ducey’s record-smashing sixth Arizona Supreme Court appointment after the retirement of Justice Andrew Gould.

Many of the state’s justices come straight from the Court of Appeals, and most of the names circulating are judges in those courts. Court watchers and judges pointed to judges Cynthia Bailey, Jennifer Campbell, David Weinzweig, James Morse Jr. and Jennifer Perkins as possibilities, along with Sean Brearcliffe and Maria Elena Cruz, who were finalists for the Supreme Court bench in 2019.

Superior Court Judge Pamela Gates, Paul Avelar of the Institute for Justice Arizona, and House General Counsel Andrew Pappas were also named as potential replacements for Gould.

Gould, appointed by Ducey in 2016, filled one of two openings created when the high court was expanded from five to seven seats. Ducey has appointed all but two of the current justices. Chief Justice Robert Brutinel and Vice Chief Justice Ann Scott Timmer are both Gov. Jan Brewer appointees.

While Ducey has set records across the board for the number of judges he has appointed, including a record number of women and judges from different political parties than his own to the lower state courts, he hasn’t appointed a woman to the state Supreme Court.

Court watchers said Gates, a Brewer appointee, and Bailey, appointed by Ducey, would make strong applicants.

“Many have spoken very highly of both those ladies,” said Doug Cole, COO of Highground Public Affairs Consultants and a former member of the Appellate Court Commission and the Maricopa County Trial Court Commission.

Republican attorney Kory Langhofer, who also operates a Supreme Court of Arizona blog, said he doubted Ducey would strongly consider the candidates’ gender in his decision.

“Every time there’s an opening, people say now’s the time to appoint a woman and then he doesn’t,” Langhofer said. “I would think he’d continue looking past conditions such as gender or ethnicity.”

Justice John R. Lopez IV, who filled the other seat created in the 2016 court expansion, is the first Hispanic to serve on the state’s high court. There are currently no Asian or Black people on the court.

“This lack of diversity does hurt the strength of the court,” Chandler attorney Tom Ryan said. “It’s the combined experiences of people that come from diverse backgrounds that make this Supreme Court a better place. When it’s simply an echo chamber, it does not effectively represent the state of Arizona and get to decisions that will effectively help all Arizonans.”

Geography is another diversity factor to consider, Cole said.

“There are no justices on the court from Pima County or anywhere south of the Gila (River) right now, so I would also aspire to bring in some geographic diversity,” Cole said.

Ducey appoints judges and justices after they’ve gone through the merit selection process where a commission vets applicants and sends a shortlist of top candidates to the governor for an interview. The commission must send at least three names, but often sends five or more.

Judge disqualifies health care initiative from ballot

Arizonans won’t be voting in November on a proposal to hike pay of hospital workers and guarantee that those with pre-existing conditions can get affordable health insurance.

In an extensive ruling late Friday, Maricopa County Superior Court Judge Pamela Gates said there are not enough valid signatures on petitions submitted by a California union to put the issue on the ballot. Gates found that some circulators were not legally qualified to circulate the petitions.

In other cases, she said, some of the 332 circulators subpoenaed by foes of the initiative failed to appear in court to be questioned. Gates said the signatures they gathered also cannot be counted.

All that left the backers of the Healthcare Rising measure with fewer than the 237,645 valid signatures needed to qualify for the ballot.

Campaign spokesman Rodd McLeod said there will be an appeal to the state Supreme Court.

The initiative sought to require a 20% pay hike for hospital workers — excluding executives and doctors — over a four year period.

It also proposed a guarantee that people with pre-existing conditions will be able to obtain affordable insurance if the federal Affordable Care Act is repealed. Another provision was designed to protect patients against “surprise” medical bills from doctors and others in hospitals who turn out to be “out of network.”

And it also sought to require hospitals to comply with certain national standards of infection control.

Foes, led by the hospitals and the Arizona Chamber of Commerce and Industry, filed suit. They cited a litany of what they said were flaws in both how signatures were gathered and in the wording of the description of the initiative provided to petition signers.

They also charged that signers were deceived because the names used by the backers of the initiative and of the campaign committee did not disclose that it was being financed by the California-based Service Employees International Union — Union Healthcare Workers West.

Gates acknowledged that virtually all of the $6.7 million raised by June 30 came from the union. But she also said there was not “sufficient credible evidence” to conclude that potential petition signers were defrauded or that anyone was confused or misled because SEIU-UHW was not included in the committee’s name.

But Gates did find other legal problems, even if some of the signatures are restored.

One, she said, goes to the 100-word description which says it will “prohibit insurers from discriminating based on preexisting conditions.”

Gates said the evidence shows that about 60 percent of Arizonans are insured through an employer’s self-funded insurance plan. More to the point, the initiative would apply only to those who purchase individual or group plans. And she said it was misleading not to tell signers that the provision would not aid a majority of Arizonans.

She also said it was misleading to say that the initiative would set “new minimum wages” for workers at private hospitals. Gates said there was evidence that people, confronted with that phrase, would equate it with some bottom-level wage set by federal and state law and not the fact that the raises would be on top of what could be a current $37-an-hour salary paid to an experienced nurse.

Friday’s ruling was cheered by Garrick Taylor, spokesman for the Arizona Chamber. He said it would “have forced tremendous cost increases onto patients and hospitals.”

Two other initiatives have cleared their first legal challenges, one to legalize recreational use of marijuana by adults and another to give judges more discretion in sentencing “nondangerous” offenders.

But a proposal to increase income taxes on the highest income earners to fund K-12 education was found to have a flawed description.

All of those rulings, however, are subject to Supreme Court review.

Judge says restaurants’ to go liquor sales illegal

A little-noticed provision in a court ruling this week on bars and alcohol sales could end up curtailing business at some restaurants and force them to close.

In her decision Tuesday, Maricopa County Superior Court Judge Pamela Gates upheld the actions by Gov. Doug Ducey in keeping bars closed while allowing restaurants to remain open and continue to serve alcohol. She said that was within his authority to protect public health.

But Gates did not look so kindly on a decision by the governor to tell his own Department of Liquor Licenses and Control to look the other way when restaurants decided to sell beer, wine and liquor out the front door, a move that was designed to help the financially struggling businesses.

That directive, the judge said, hardly fits within the actions Ducey is permitted to take in emergencies. And she said Ducey’s decision to suspend enforcement of a liquor law “impermissibly stretches” the governor’s power.

What remains to be seen is whether the governor will rescind that part of his order.

“We are reviewing the ruling,” said Ducey press aide Patrick Ptak.

But any move in that direction will get opposition from the Arizona Restaurant Association.

In March, Ducey used the emergency powers he had to close all bars and restaurants to patrons. But he agreed to pleas from the restaurant owners to allow them to continue to sell beer, wine and alcoholic beverages to customers who also were getting food to go.

Only thing is, such off-premises sales are illegal under state law. So Ducey instructed agents for the liquor department to simply turn a blind eye to the violations.

Dan Bogert, chief operating officer of the restaurant group, said that move provided a “key lifeline” to restaurants.

“They are helping to keep those places in business and employees employed,” he said.

Since that time, Ducey has loosened the restrictions — at least on restaurants. They can provide dine-in services, but only at 50% of capacity. Bars remain closed unless they agree to operate under additional restrictions.

But the directive to liquor agents to ignore the violations by restaurants of law banning off-premises sales remains.

Ptak said the directive was — and is — justified, calling it one of the “tough decisions” that the governor has had to make.

“This has been a way for many establishments to maintain their operations while continuing to prioritize public health,” he said.

Gates, in her ruling, gave the governor a lot of leeway in deciding the steps he needed to take using his emergency powers to protect public health. That’s why she left undisturbed his orders shutting bars.

“A clear purpose of (the law) is to grant to the governor emergency powers and the authority to establish an agency plan for and coordinate the state’s response to natural or manmade disasters and to alleviate extreme peril to persons or property,” she wrote.

But telling liquor agents to ignore the law, Gates said, doesn’t seem to fit.

“The court finds the executive order banning enforcement of a Series 12 licensee’s violation of off-premises sales of spirituous liquors impermissibly stretches the governor’s power” he is granted under state laws, the judge said. “Said another way, the court fails to find that the enforcement ban against Series 12 licenses in (the executive order) effectuates the purposes of (the laws on emergency powers).”

Bogert said that restaurants still need the state to keep ignoring the violations of selling alcohol to go.. He said many remain in precarious financial condition.

He said a survey done in July, after in-house dining was again allowed, found that 40% of restaurants said they would be forced to close, permanently, within 90 days.

“And what I’m saying is that number would be higher without the to-go alcohol privilege,” Bogert said.

The only reason any of this came to the attention of Gates is the lawsuit filed by more than 100 bar owners challenging the authority of the governor to shut down their operations, especially while allowing the serving of alcohol to patrons dining at restaurants.

Attorney Ilan Wurman pointed out the only distinction is strictly legal.

Restaurants are issued a Series 12 license by the Department of Liquor Licenses and Control. They must generate at least 40% of their revenues from sales of items other than alcoholic beverage.

Bars, licensed as Series 6 for all alcohol sales or Series 7 for bar and wine sales only, have no such restriction. That is part of the reason it costs so much more to acquire a state license to operate a bar, coupled with the fact that the state issues only a limited number of bar licenses in each county.

And there’s something else: Bars — and only bars — can sell alcoholic beverages to go. Wurman said the governor’s executive orders only added insult to injury, forcing the bars to close while at the same time giving the restaurants they normally compete with one key edge they had.

More to the point, Wurman said there’s nothing in the governor’s executive powers that entitle him to simply suspend enforcement of the ban on off-premises sales from restaurants.

Legally speaking, nothing in Gates’ Tuesday ruling requires state liquor authorities to immediately go out and start enforcing the law. That remains for a future hearing.

But she has now put the governor on notice that she is likely to issue a final order saying he has been violating the law and ordering him to stop if he hasn’t done so already.

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Issue: Pamela Gates