NJ Gym Forced Out of Business by Murphy’s Extended COVID-19 Restrictions Sues State for Damages

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FRANKLIN, NJ – After filing a lawsuit against Gov. Phil Murphy in September for his violations of the Disaster Control Act, the business owner who filed the suit says she must close her business at the end of October.

“This has crushed me, I can’t even make a dent in my rent,” said Darlene Pallay who owns JWC Fitness LLC., a business in Sussex County’s Franklin Borough, which does business as CKO Kickboxing Franklin.

Pallay said with the restrictions the Murphy Administration has placed on businesses in the fitness industry, she is unable to offer unlimited classes to her clients, per the CKO franchise business model. Pallay said because her classes are high-intensity, interval training sessions, when she holds classes indoors at the 25 percent maximum state occupancy levels, it requires 200 square feet between each student. This limits her class size to only 10 per class, with typically less than that on the average in attendance in each class.

“The Murphy Administration hasn’t moved the needle past 25 percent; and I don’t see him doing so anytime soon,” she said.

Pallay said New Jersey is a stark difference from Long Island and North Carolina, where some members of her family also reside; and where fitness businesses are operating at full capacity. Since the shutdown in March, Pallay said her business has whittled from more than 200 loyal members, to approximately 20.

According to the reply brief regarding the upcoming closure of her business, submitted to the court on Thursday along with a supplemental affidavit by Pallay’s attorneys Robert W. Ferguson, Esq., of the law firm of Stern, Kilcullen and Rufolo, LLC of Florham Park and Catherine M. Brown, Esq., of Denville, Pallay – a “law-abiding, taxpaying citizen of this State” – helped to support her family over the last decade with her business, including her three young children.

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“She complied fully with the Governor’s Executive Orders, notwithstanding the personal economic cost to her and her family,” the brief read. “She won Congressional recognition for COVID-related activities that benefitted her community.”

“Mrs. Pallay’s circumstances are parlous, dynamic and worsening,” the brief further stated, emphasizing in addition to facing an eviction proceeding from her commercial landlord, “she has creditors and she has expenses she cannot afford to pay.”

“As Mrs. Pallay is losing her business, Governor Murphy is playing politics,” said Chairman of the Board of Rescue New Jersey, Donald Dinsmore.
Rescue New Jersey is the newly formed, not-for-profit, non-partisan, advocacy group that helped to facilitate Pallay’s lawsuit.

“The legal system is supposed to be here to protect Mrs. Pallay and instead, it has failed her so far, hopefully, she will find some justice through this action,” said Dinsmore.
The suit that Ferguson and Brown filed for Pallay on Sept. 23, challenged Murphy’s Executive Orders that forced New Jersey businesses like Pallay’s to shut down beginning in March. The demand asked for a declaratory judgment against Murphy, for his failure to comply with the compensation requirements of the Disaster Control Act, when he ordered what he deemed were non-essential businesses to close. As required by the Act, Murphy was mandated to establish Emergency Compensation Boards in each of New Jersey’s 21 counties during the prolonged COVID-19 state of emergency, which the declaratory judgment sought for him to do.

Per the Act, individuals or businesses are entitled to petition their respective county Compensation Board for reasonable compensation, in exchange for the Governor taking, using or controlling their property, even temporarily, during the state of emergency. In a state of emergency, Ferguson said the statute gives the Governor one power with respect to private property, and that he can only do so subject to compensation.

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Since the lawsuit was filed in the Superior Court, Morris County Law Division, Judge Stuart A Minkowitz of the Morris/Sussex Vicinage, ordered on Sept. 30 – without prior notice or hearing – for the case’s dismissal from the Law Division, justifying it could only be refiled as a new complaint within the Appellate Division of the Superior Court. Ferguson and Brown filed a Motion for Reconsideration on Oct. 2 to reinstate the case, arguing that the Judge should have heard from the parties before acting and, in any event, should have followed Court Rule 1: 13-4, that when a case ought to be in the Appellate Division initially, it should be transferred for reason, not dismissed.

“The court and the parties are currently debating whether the plaintiff’s case should be heard initially in the Law Division, where most cases start, or in the Appellate Division,” said Ferguson. “The case was filed in the Law Division. The Law Division Judge thought it should be heard in the Appellate Division instead. He decided this on his own and without any prior notice to or input from the parties; and dismissed the complaint. A reconsideration motion is a procedure allowed by the Court Rules.”
Assistant Attorney General Kevin R. Jesperson and Deputy Attorney General Amy E. Stevens representing Murphy with New Jersey’s Attorney General’s Office, filed a pleading on Oct. 15, requesting that Minkowitz deny Pallay’s Motion for Reconsideration.

The reply brief addresses the Superior Court’s responsibility to hear Pallay’s case.

“While the wheels of justice grind exceedingly fine in even the best of circumstances, it is respectfully submitted the justice system owes her the courtesy of having her bona fide complaint handled fully in accord with regular process due and with dispatch,” the brief reads.

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