First day of testimony in 'last call' lawsuit by bar owners

A hearing in Denver District Court on Wednesday could determine whether two executive orders — a "last call for alcohol" at 10 p.m. and limits on how many patrons a restaurant can host — will remain in place.

The Tavern League of Colorado is seeking a temporary restraining order against those executive orders. In court documents, the league said the governor’s decisions around limiting capacity on June 30 and the last call order on July 21 were arbitrary and not based on any scientific data, in contrast to other public health orders that the governor has said rely on science, such as the mandatory mask order issued earlier this month.

The capacity limitation is 50 for small restaurants and up to 100 for larger ones. It spells a "death knell" for many of the league's 200 members, the lawsuit claimed.

Testimony from restaurant owners called Polis’ claim that young people are going to bars and restaurants, getting drunk and failing to wear masks or socially distance “offensive.”

In a July 21 news conference, Polis said alcohol does not cause COVID-19, but that the "state of inebriation in a public place is inconsistent with social distancing.”

Mark Berzins owns Little Pubs Holdings, which now includes 21 restaurants and pubs, all in Denver or in neighboring suburbs. His restaurants range from a limit of 60 to one that can accommodate more than 400 people.

When restaurants and bars were ordered closed in March, Berzins said it was “surreal, unbelievable.” He had 12 hours notice on the shutdown, which came in conjunction with cancellation of Denver’s St. Patrick’s Day Parade, March Madness and the NHL and NBA seasons. Berzins choked up as he described laying off 406 people in one day. He kept only his human resources manager and controller to handle the paperwork.

“It was the most devastating experience of my life,” Berzins said, although he said he understood why it had to be done.

One of his more prominent restaurants, the Ice House on Wynkoop, is running at a third of its capacity. “These losses are not sustainable,” he said, and estimated that most of his larger restaurants may have to close.

As to the last call order, Berzins had harsh comments for Polis. The governor made several statements about the industry that were unfair, Berzins testified. “We are responsible for enforcing [public health orders] on our nickels and our back and under pain of being shut down by the health department or liquor enforcement if we fail to enforce these rules” on masks, social distancing, sanitation and not serving visibility intoxicated patrons. “Our staff pride themselves on being compliant. Their tolerance for shenanigans is zero. To suggest they are failing in their duties ... is offensive.”

Berzins said his employees are panicked about losing their jobs again. He also pointed out that he’s on the state liquor enforcement rulemaking board. The agency did a compliance check on July 4, he said, and out of 500 establishments, only seven required any kind of corrective action. “We’re getting the job done. To suggest we’re not and it’s some kind of free-for-all where customers are contracting COVID-19 is simply not true.”

One of the issues raised by the plaintiffs is how Polis handled the executive order. He initially said all establishments selling liquor, including restaurants, distilleries, breweries and liquor stores, would have to close at 10 p.m.

However two days later, Polis amended the order to allow liquor stores to remain open until midnight, which the Tavern League called unfair, implying his change of heart may have come from lobbying by the liquor stores.

Berzins said they compete with liquor stores. Professional sports are starting back up, which makes up a big part of the restaurant business. The problem is that Colorado’s sports teams are in western conferences, which means late start times. Berzins explained fans will not go to a restaurant to watch a game that goes until 11:30 when last call is at 10 p.m.

Steven Alix, owner of X Bar on East Colfax Avenue, also said his employees do not serve alcohol to those who are visibly intoxicated. “It’s our main liability,” he said. Alix said he’s heard from customers who complain about the 10 p.m. cutoff that they’ll just go across the street to a liquor store.

At the Blake Street Tavern, owner Chris Fuselier said he’s lost $1.7 million in business in the last four months. He had to lay off 15 employees and furloughed another 65 to 70 when the stay-at-home order was issued, and has since brought back about 30.

“It was a perfect storm,” Fuselier said. They lost $100,000 on St. Patrick’s Day alone, and another $150,000 from the cancellation of the Rockies home opener. September and March are his best months, he said. He echoed what Berzins said about sports contests. Customers believe “last call” is the same as closing, and fans won’t come if they have to leave in the middle of a game if it’s going on past 10 p.m.

Jill Hunsaker Ryan, executive director of the Colorado Department of Public Health, testified that she was not involved in the conversations about the last call order.

“We do have outbreak data on restaurants, but a lot of times it’s among the staff," she said, adding that the hard part is linking clients to restaurants. Ryan said she also had no hand in the decision on liquor stores.

Ryan was asked about other venues: Would a house party with a lot of people who bought alcohol at a liquor store present a COVID-19 risk? Yes, she said, noting that house parties are a known source of infections.

In the July 29 CDPHE state outbreak report, a fraternity at Colorado State University reported an outbreak on July 23 with seven cases.

Ryan admitted that she had not looked at studies demonstrating that a 10 p.m. curfew could hinder the spread of COVID-19. She also admitted that a 10 p.m. last call order is not contained within recommendations from the Centers for Disease Control and Prevention.

State epidemiologist Dr. Rachel Herlihy testified that the state is seeing increased case counts, beginning in early July, that can be a warning sign of exponential growth of the virus. She said she believed the closure of restaurants and bars in March were effective in limiting the spread. Eliminating a limit on the number of people who could be served in a restaurant would result in a “superspreading event” where one infected person could affect many more, she said.

Herlihy testified that she expressed a concern to the governor, prior to the last call order, about the continued risk of COVID-19 transmission in bars and restaurants, where mobility data showed increased activity among 20-to 29-year-olds. She also saw an increase in cases in the 20- to 29-year-old age group.

When considering the effectiveness of a last call order, Herlihy said her recommendation was to close bars as high-risk settings. She didn’t mention restaurants.

Attorney Jordan Factor, representing the Tavern League, elicited from Herlihy that the basis for the last call order, in addition to mobility data, was from outbreak data that came from one bar in Michigan.

Herlihy testified that she had not looked at Michigan’s guidelines on social distancing, sanitation, masks and other public health requirements to see how they compared to Colorado’s requirements. That outbreak resulted in 100 cases, she testified, and it demonstrated significant potential for outbreaks tied to large gatherings. 

Of the 21 sit-down restaurant outbreaks listed in Wednesday’s CDPHE report, two had cases marked as resolved in May and June, before the last call order was issued. Ninety-one staff tested positive out of those 21 restaurants with an additional 10 cases suspected.

No customer cases are reported in the July 29 data. That's out of 463 total outbreaks since March and 5,637 positive or possible positive staff cases in a variety of facilities, including nursing homes, meat packing plants, grocery stores and jails or prisons.

The hearing will continue Thursday, and a ruling on the request from the Tavern League for a temporary restraining order could come as soon as later in the day, according to Judge Brian Whitney.