Iowa Bar Ownes’ first day in court, fighting the smoking ban

A few minutes after 9 o’clock on Friday, August 1, two lawyers emerged from their private meeting with Judge Douglas Staskal and walked into his third-floor courtroom in the Polk County Courthouse.  There was a definite chill in the air courtesy of a cranked-to-the-hilt air conditioning system and I noticed a woman sitting in front of me wearing her bar jacket from the "Two of a Kind" bar in Fort Madison.  Bill Duncan, the owner of that bar, is among the plaintiffs in a lawsuit which challenges Iowa’s new statewide smoking ban and he was sitting beside that woman to listen as the judge heard testimony and legal arguments from the lawyers involved in the case.

I was sitting in the third row between reporters Richard Lee from WHO Radio and Rod Boshart of The Cedar Rapids Gazette.  Most of the other 56 people in the courtroom were bar owners.  Bonnie Mapes from the Iowa Department of Public Health was there, as was Chuck Reed of the American Cancer Society and a couple of bill drafters from the Legislative Services Agency.  As we all sat waiting for the proceedings to begin, Boshart and I noticed Donn Stanley sitting at the table for attorneys representing the state’s side in this case.  Stanley worked in the Secretary of State’s office when Elaine Baxter was Iowa’s Secretary of State.  He’s now working in the Iowa Attorney General’s office.  He will feature later in this post, as he was the state’s lawyer who cross-examined the three bar owners who testified. 

What follows is a sort of recap of the three hours of courtroom drama, based on my notes.  There were no cameras or microphones allowed in the courtroom.

The hearing no Friday was about the bar owners’ motion for a preliminary restraining order to suspend enforcement of the smoking ban until the case is settled.  There was a bit of legal housekeeping at the onset as the judge and lawyers discussed what motions would be filed and when certain issues would be addressed in their legal briefs. 

The lawyer for the bar owners is George Eichhorn.  Eichhorn, a Republican from Stratford, Iowa, was a state legislator who lost his re-election campaign for a seat in the Iowa House in 2006.  During his stint in the legislature, Eichhorn served on the Rules Review Committee — a panel of legislators who review the rules state agencies propose as a means of carrying out the laws legislators pass.  You may also recognize his name from the 2008 Republican primary ballot.  Eichhorn ran for the U.S. Senate.  Republicans narrowly chose Christopher Reed over Eichhorn in that race.

Brian Froehlich, owner of Fro’s Pub and Grub in Wilton, was the first bar owner called to testify.  Eichhorn opened his line of questioning by walking Froehlich through his decision to buy the bar three and a half years ago.  Froehlich is the founder and president of the Iowa Bar Owners Coalition, one of two groups involved in ths lawsuit.  Froehlich recounted some of the conversations he’s had with bar owners throughtout the state both before and after the smoking ban went into effect.  "You’ve got a lot of people who are upset," he said on the stand.  Next, Eichhorn asked Froehlich about the complaint that’s been lodged about his bar – that he is still allowing his customers and bartenders to smoke on the premises, and there are still ash trays on the bar.  Eichhorn entered into evidence a letter Froehlich received from the Iowa Department of Public Health about the complaint, a "notice of non-compliance" is how Eichhorn first referred to the letter.

Froehlich, in his capactiy as president of the Iowa Bar Owners Coalition, said he is "on the phone every day" and from his conversations concludes that most bars have seen at least a 25 percent drop in customers, and in some instances a drop of up to 50 percent.  Froehlich related that a bar had closed on Thursday night and he said the closure of the Silver Dollar in Blairsburg was due to declining profits in the month of July.  "That’s terrible.  That’s a catastrophe," Froehlich said of the bar’s closing. 

"We’re not huge chains, you know," Froehlich said of the bar owners who are suing the state.  "We’re mom and pops."  Froehlich testified that if he loses 10 percent of his business, he’ll have to let employees go.  A second option if things get worse is to reduce his hours of operation and if the bottom falls out, he testified that "myself and my wife" would have to go.  In other words, the business would fold.

At this point, Stanley began cross-examination of Froehlich, asking how much sales had declined.  Froehlich said "15 percent right now."  Next, Stanley asked Froehlich if other factors could be contributing to the business decline — such as high gasoline prices, the state’s flooding problems and the housing crunch.  Froehlich conceeded that those economic factors may be reducing sales, patronage at his bar.  A few bar owners sitting behind me started grumbling about Froehlich’s answer.  "He’s making their case," one of them whispered to a seat mate.

Next, Stanley produced a picture of the Fro’s Pub and Grub website which features a "now hiring!" link in the middle of the home page.  "I know where you’re going with this," Froehlich said from the stand, then told the court that the bar business has a high level of turn-over among staff. "We have revolving doors," he said. Froehlich employs 10 and Stanley had him list how long his employees have been working at the bar.  "It’s not like I’m adding staff," Froehlich said.  Stanley kept up this line of questioning, and Froehlich revealed he had reduced his staff size in January, before the smoking ban went into effect.

The next line of questioning was about Froehlich’s efforts to comply with the smoking ban.  "At first I did, now I don’t," Froehlich said, explaining that "in business, we all take risks."  When Stanley asked Froehlich his next question about complying with the law, Froehlich’s frustration became evident.  "You tell me," he said to Stanley.  "You wrote the law."

Stanley next asked Froehlich about his conversation with a Beverly Wallsmith on July 21st.  She apparently is part of an anti-smoking coalition and volunteered to go to Fro’s Pub and Grub and discuss with Froehlich the steps he is to take to comply with the smoking ban.  "I told her to stay out of my business.  She’d be trespassing," Froehlich recounted.  "She’s not an official from Iowa."

During Stanley’s line of questioning, it was revealed that at least three complaints had been made about smoking in Fro’s Pub and Grub.  Froehlich dismissed the July 3 and July 8 complaints as "false."  The complaint on July 15, as my notes indicate, seemed to revolve around a sign on the pub’s door.  At various times during the testimony and Stanley’s questioning the verbage was presented in different ways, but the jist of it is that Froehlich has a sign on the door of his pub that tells customers they are entering a "smoking establishment."

"I put that sign on my door," Froehlich said, indicating it went up in January.  "…That’s my way of beig rebellious." 

Next, a discussion about another complaint about Fro’s Pub and Grub lodged on July 23.  Froehlich told Stanley his bar was "complying with the law."  Stanley continued questioning Froehlich about what the law requires, and Froehlich said he had read the law, and listed its requirements — that he inform people who are smoking that they are in violation of the law, that he as the bar’s owner may discontinue service to that customer and finally that he may call the authorities.  Froehlich again became angry during this exchange with Stanley and the judge spoke:  "This isn’t an argument, OK," the judge said.  "He asks the questions.  You answer."

Next, Stanley produced pictures which show the "no-smoking" sign the state requires to be posted at the entrance is inside the front door.  "You’d read that as you were leaving?" Stanley asked Froehlich, later revealing through his questioning that the sign was also upside down.  "Do you think that complies with the statute?" Stanley asked. 

"Yes, it does," Froehlich replied.

The next set of questions Stanley asked were centered on the Iowa Bar Owners Coalition paperwork filed with the Secretary of State’s office.  During this portion of the questioning, Froehlich indicated there are about 300 members in the group and "all have some kind of liquor license."  Froehlich indicated the group has hired a PR firm.

"We have put together a plan to combat this law," Froehlich said.

Stanley’s next question cited studies which indicate that in other jurisdictions where anti-smoking ordinances or laws have been in effect, there has been mostly no negative impact on businesses and in many cases business improves.  "I’ve found just the opposite," Froehlich said.

Finally, Stanley asked about how Froehlich was informing his employees and his customers about the law.  "It made me become a police force," Froehlich said. 

The next witness Eichhorn called to the stand was Jonathan Van Roekel of Clinton, president of Clinton’s Organized Bar and Retaurant Owners — about 40 business with 1250 employees.  Van Roekel said he owned two bars in Clinton, along with other business interests in the area.  In the businesses that are members of COBRO, Van Roekel testified that business was down 40 percent and 12 employees had been let go in July because the impact of the smoking ban had been felt "instantaneously."

Van Roekel said bar owners feel a lot of "animosity" about the smoking ban.  "The are scared they’re going to lose their business," Van Roekel said, adding he estimates half the state’s bars will close in the coming year because of the ban.      

I had to leave the courtroom at this point to file a story for Radio Iowa’s midday newscasts.  When I re-entered, Van Roekel was finishing up. 

The next witness Eichhorn called the stand was Amanda Albrecht of Hazelton, owner of Hoss’s Saloon in Fairbank.  "As of Monday, it will probably be closed," Albrecht testified.  Albrecht bought the bar when she was 23 — to pursue the "American dream" of owning a business, she said — and she’s owned it 10 years.  She said her Monday through Thursday daily take at the bar had been between $200 and $300 a night.  On Friday and Saturday nights she generally took in $700 to $1500.  All of that was before July 1, when the smoking ban took effect, she said. On Monday, July 28, Albrecht said she took in $11.  She put the bar up for sale the day before, on Sunday.  Albrecht testified that her bar income in July, 2007 was $11,000 and in July, 2008 it was $3000.

Albrecht said most people go out to a bar to be around others, and if there’s no one in her bar — no one will come.  In Stanley’s cross-examination, she talked about her beer garden which has picnic tables and a stage — where under the new law smoking is allowed.  But Albrecht said no one was leaving their air conditioned homes to go to her bar and go outside in the heat to smoke.

Mid-way through Albrecht’s testimony, the court reporter had to stop the proceedings and ask either the witnes or the lawyer to repeat what they’d said because she’d been unable to hear the words over a loud cough.  The court reporter had to do this on three different occasions.  At one point, Richard Lee whispered "smoker’s cough" in my ear as someone in the courtroom coughed loudly and deeply. 

After Albrecht’s testimony the judge ordered a break.  When proceedings resumed shortly after 11 o’clock, it was time for the lawyers representing the two sides to make their legal arguments.  The court reporter was excused, since both sides presented their legal arguments in lengthy documents printed out and handed to the judge.  But the attorneys chose to stand up and review their arguments in front of the judge and the gallery of folks sitting in the courtroom.  I’ll just quickly summarize their statements.

Jeff Thompson, a deputy state attorney general, began speaking first, addressing the documents submitted to the judge.  Thompson dismissed the bar owners’ testimony as primarily anecdotal, adding that self-reported data is "unreliable" and "unverifiable."

"There’s certainly some bias," he added.

Thompson cited research data showing "smoke-free restaurants operate at a higher profit margin" and he added that the value fo the business goes up, not down, after smoking is no longer permitted.  He also cited an Iowa City study (Iowa City had a city ordinance banning smoking in bars & restaurants, but it was overturned because state law used to have a preemptive clause which prevented local ordinances which were more restrictive than state law).  In that study, he said there was no net loss of restaurant businesses in the city.

Next, Thompson said 82,000 Iowa businesses are subject to the smoking ban and "only 572 complaints" had been filed with the Department of Public Health about businesses which were not complying with the smoking ban. Thompson argued that if the judge issued a stay, it would "upset the apple cart" and backtrack at a time when most businesses are complying with the law.

I had to leave the courtroom at this point to file for another midday newscast.

When i returned, the judge was about to turn the floor over to Eichhorn to begin his arguments.  Eichhorn started by calling the law "bizarre" and strange.  He talked extensively about the way the law is written –it’s "strange format" — hinting without saying so that it was written by lobbyists rather than the professional staff who draft the bills for the Iowa Legtislature.  He said the law "does much more than ban smoking…a lot of conduct is being affected."

Eichhorn said the burden of policing the law was falling on the backs of bar owners, adding legislators had passed a "feel good" law.

Eichhorn indicated the lawsuit hinged on five items. 

!.  He argued the law violates the right against improper search and seizure.

2.  He said part of their case will hinge on that "notice of non-compliance" letter Froehlich received, charging it was vague and the department lacked the authority to send it based on the rules it adopted.  "People ahve a right to know what the charges are and how they can contest it," Eichhorn said.

3.  Eichhorn said the case will revolved around property rights and the rights of association.

4.  Eichhorn will object to the "enforcement pattern" set out in the law — the "privileges and immunities" granted to fairs and casinoes.

5.  Eichhorn will argue the law delegates legislative authority.

At this point, the judge asked a question that seems to indicate he’s interested in an argument based on the unfairness of allowing smoking in the gambling floors of casinos, but barring it in bars & restaurants.  "I never heard you say the words equal protection," the judge said to Eichhorn.  Eichhorn indicated that was not part of his intial argument over the stay, but may be included in his subsequent briefs when the case is heard.

Eichhorn offered some quotations — one from a northwest Iowa judge — and then concluded by dismissing the idea that very few legal challenges of smoking bans in other jurisdictions had successed.  He joked that "they didn’t have George" — meaning those other plaintiffs didn’t have him for a lawyer.

The floor was then Thompson’s — the attorney for the state.  He began by saying bizareness or strangeness is not enough of a reason for the judge to issue a stay that would temporarily suspend the law until the case is settled.  "They’ve got to show you they’re likely to win," Thompson told the judge. 

Thompson said there is an "overwhelming presumption of validity" to a legislative action, suggesting the burden of proof is high to prove legislators acted wrongly in enacting the law. 

"They’ve got to show irreparable injury," Thompson continued, addressing the economic issues raised by the bar owners.  Thompson said studies show business goes up in bars & restaurants when smoking is banned.  "Overtime businesses are OK and in time, good businesses thrive," Thompson said.

Next, Thompson returned to his previous argument tha tthe "vast majority" of Iowa businesses covered by the law are complying with it.

Then, Thompson questioned the timing of the lawsuit, which was filed on July 1 — the day the law went in effect.  "You would have had to be somebody who was in Moscow" not to know the law was going into effect, according to Thompson. Thompson suggested since the bill was signed into law April 15, the lawsuit should have been filed long before the law went into effect, "rather than waiting until everybody was complying and then saying ‘Let’s stop.’"

Thompson went on to say the purposes of an injunction are generally to "maintain the status quo" and he added that "to try to go back in time" upsets the status quo.

As Thompson talked about that "equal protection" argument — regarding the legislature’s decision to allow smoking in casinos — Thompson indicated the reason legislators did that was becasue of the gambling taxes casinos pay to the state and studies which indicate casino patronage has dropped significantly in casinos where smoking has been banned.  "That revenue stream is significant to the state," Thompson said.  At several times as Thompson was offering legal arguments for the exception for casinos, bar owners in the crowd audibly reacted.  As the laughs and exclamations became more frequent as Thompson’s explanation went on, the judge interjected: "Keep your reactions to yourself, please."

Thompson finished up and Eichhorn was given a chance to offer a brief rebuttal (the judge had interrupted the proceedings at about 11:20 and said it was his hope that the hearing would conclude at noon).  Eichhorn addressed the issue of waiting to file the lawsuit until July 1.  Eichhorn said there aren’t that many attorneys in Iowa who argue constittional cases, and Eichhorn said he had been engaged to work for the bar owners just 10 days before July 1.  Finally, Eichhorn pointed out that the Department of Public Health’s rules were quite delayed, too.

"The agency waited until the Friday before to implement the rules," Eichhorn said. "…We moved with all due haste."

The hearing concluded just after noon.

The bar owners held a news conference in the first floor rotunda of the courthouse. Listen to it here (scroll to the bottom to find the mp3).  The attorneys for the state declined to be interviewed.