Powers in a Pandemic: Can the Governor Shut Down My Business Due to COVID-19

January 20, 2021

2020 is coming to a close and because of COVID-19, businesses have suffered immense losses this year, especially the service industry. An unhelpful aspect of this pandemic has been the ever-shifting government regulations saying what people can and cannot do. This has left many wondering: Can the Governor shut down certain businesses in the name of safety? The answer is more complicated than just a yes or no.

Colorado constantly faces all sorts of emergencies, including wildfires, floods, blizzards, and now, a pandemic. To help meet the challenges posed by these disasters, the legislature passed the Colorado Disaster Emergency Act (“CDEA”). See C.R.S. § 24-33.5-701 et seq. The CDEA provides the Governor with statutorily authorized power to meet “the dangers to the state and people presented by disasters.” C.R.S. 24-33.5-704. The definition of a disaster, under the act, includes a long list of things that pose an imminent threat to life or property. Things like fire, oil spills, explosions, insurrection, and even epidemics. C.R.S. 24-33.5-703(3).

When facing one of these disasters, the Governor may declare a state of emergency. This declaration activates the Governor’s authority to protect life and property. Once a state of emergency is declared, the Governor is authorized to issue “executive orders, proclamations, and regulations and amend or rescind them.” C.R.S. 22-33.5-704(2). Further, the Governor has the express authority to “[s]uspend the provisions of any regulatory statute prescribing the procedures for conduct of state business or the orders, rules, or regulations of any state agency, if strict compliance with the provisions of any statute, order, rule, or regulation would in any way prevent, hinder, or delay necessary action in coping with the emergency.” C.R.S. 22-33.5-704(7)(a). The CDEA, also, authorizes the governor to “suspend or limit the sale, dispensing, or transportation of alcoholic beverages, firearms, explosives, or combustibles.” C.R.S. 22-33.5-704(7)(h).

Governor Polis declared a “state of emergency” due to COVID-19 on March 11, 2020 through executive order D 2020 003 (Declaring a Disaster Emergency Due to the Presence of Coronavirus Disease 2019 in Colorado), and has extended the state of emergency on a nearly monthly basis since then. Using his authority under the CDEA, the Governor has required business to take certain precautions like social distancing, masks, and crowd limits. However, some of the most impactful regulations the Governor has issued relate to the restaurant and bar industry. Citing the pandemic, the Governor has regulated indoor dining and service of alcohol in an attempt to limit Coloradans’ exposure to COVID-19. Much of the conversation surrounding the impact of COVID-19 revolves around the Governor’s authority to regulate the bar and restaurant industry in such a way.

In an effort to curb indoor dining and enforce the Governor’s orders, the Colorado Department of Health and Environment promulgated multiple public health orders to effectuate the Governor’s orders, including Public Health Order 20-36. Public Order 20-36 created the color-coded dial system that determines what kind of business activity is allowable or prohibited based on the prevalence of COVID-19. Notably, Public Health Order 20-36 is enforceable by “penalties, including jail time, and fines” and violation of the order could result in “discipline on a professional license based upon the applicable practice act.” In fact, the State announced that “violation of a public health order is a misdemeanor and can be punished by a fine of up to $1,000 or up to one year in jail” and that “individuals who violate an order may also be responsible for some costs of the health agencies in abating the cause of sickness and could have a state license—such as a restaurant or liquor license— revoked.” See C.R.S. 25-1-516(1), (3); See C.R.S. 18-1.3-501.

Some have argued that these regulations go beyond the pale and are unconstitutional. The Colorado Supreme Court recently analyzed the extent of the Governor’s authority under the CDEA in Ritchie v. Polis, 467 P.3d 339 (Colo. 2020). The Supreme Court in Ritchie v. Polis held that the CDEA is constitutional and that the Governor is legislatively authorized to suspend statutes, rules, and regulations, but may not go so far as to suspend or change Colorado’s constitutional requirements. Ritchie v. Polis, 467 P.3d at 345 (Colo. 2020).

So, can the governor shut down a business in the name of public safety? The short answer is yes; the long answer is yes, but the Governor cannot arbitrarily choose which businesses to close. The Governor, instead, must issue rules that provide businesses fair notice of regulation and penalty. See United States v. Davis, 139 S.Ct. 2319 (2019); see also Sessions v. Dimaya, 138 S.Ct. (1204 (2018); People v. White, 656 P.2d 690 (Colo. 1983); People v. Nerud, 360 P.3d 201 (Colo. App. 2015). Once these regulations are public knowledge, a business violating the Governor’s orders under the CDEA can be subject to penalties, including the loss of licenses.

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At Jorgensen, Brownell & Pepin, our attorneys have the experience and knowledge necessary to help you protect your most important assets and keep others from taking advantage you. Our legal team is available to help advise you on your rights under to operate your business in light of the COVID-19 and the related government regulations.

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