Skip to content
The COVID Project

The interconnected economy and the broken leg

This industry sells presence to a public that was ordered to stay home, in venues that were ordered closed, with a workforce that was ordered to quarantine, at events that were ordered cancelled, to audiences and performers who were ordered not to travel, in buildings owned by park districts, school boards and convention authorities that were ordered shut. An order on any of those is an order limiting commerce, travel or group meetings, and an operation of this industry delayed, interrupted or terminated because of it is suspended due to it. The orders of 2020 and the first half of 2021 compelled this industry to dismantle its operation; the orders' own reopening steps show that the restoration ran into and through the third quarter of 2021; and the clause's grammar, Tri-State's definition and the Notice's own words make the continuing suspension a suspension "during the calendar quarter."

The mechanisms

Six mechanisms carried orders addressed to others into this industry's operation. Supply chain and borders: the entry proclamations, land-border notices, Title 42 order, Conditional Sailing Order and pre-departure testing order closed the movement of foreign artists, athletes, tours, cruise passengers and cross-border audiences from March 2020 to November 8, 2021, and the reciprocal orders of Canada, the European Union, China and Japan closed the routes on which touring and international sport run; the plant closures of Michigan, Pennsylvania, New York and New Jersey and the foreign plant and port orders stopped the fitness equipment, projection systems, rides and sporting goods on which reopening depended; and the film studios' release calendars were withdrawn as theaters closed by order in every State.220 Workforce, schools and child care: the school closures of 2020, the remote and hybrid orders of 2020-21, the FFCRA leave mandate through December 31, 2020, the local paid-leave ordinances, the quarantine and isolation orders of every State and county and the vaccinate-or-test mandates of 2021 on school, health-care, State and municipal employees removed the industry's part-time workforce from its floors by law, and the gym child-care rooms that let members attend were closed by the gym orders themselves.221 Travel, tourism and gatherings: the interstate traveler quarantines of New York, Connecticut, New Jersey, Hawaii, Alaska, Chicago, New Mexico, Maine, Vermont, Rhode Island, Massachusetts, Kentucky, Kansas and Santa Clara County made every touring company, visiting team and destination patron a fourteen-day absence, the gathering caps of every State ended the festival, tournament and fan-event calendar, and the destination markets of Las Vegas, Orlando, Honolulu and New Orleans lost their customer base to the orders of the States their customers came from.222 Courts and public offices: the permit, licensing and special-event offices closed to walk-in service; the courts that enforce leases, artist contracts and ticketing disputes suspended calendars through 2020 and re-imposed face-covering and screening requirements in 2021 Q3; the State fair boards and park authorities cancelled seasons.223 Transit: the CDC conveyance order, the TSA directives and the transit agencies' service cuts, rear-door boarding, fare suspensions and face-covering enforcement conditioned every commute and every road trip from February 1, 2021, and the agencies' 2020 cuts conditioned them before that.224 Health care as counterparty: the elective-procedure orders of 2020 governed the athletic trainers, team physicians and sports-medicine clinics of every league, the OSHA standard governed on-site clinics from June 21, 2021, and the health-care-worker vaccination orders of fourteen jurisdictions from July 26, 2021 conditioned the medical staff of every venue and the part-time staff who also worked in a clinic.225

Counterparty orders as orders

The statute's object is "commerce, travel, or group meetings," not the employer's premises. The Notice's Q&A-12 applies the clause exactly so, making an employer eligible "because its operations have been suspended due to the governmental order that suspended operations of its supplier," and the United States told the Ninth Circuit the same:

a business may be suspended "due to" a government order addressing a third party.

Br. for Appellees at 41

The supplier of a youth league is the school district whose gymnasium it rents and the park district whose fields it uses; the supplier of a touring company is the venue in the next State, the airline that carries it and the consulate that admits its artists; the supplier of a fitness studio is the child-care center that lets its instructors work and the school that lets its members leave the house; the supplier of a fair is the State fair board; the supplier of a cinema is the distributor whose slate was withdrawn; the supplier of a destination attraction is the cruise line under the Conditional Sailing Order and the airline under the entry proclamations; the supplier of a convention show is the convention authority that converted its hall to a field hospital.226 Each was closed or conditioned by order, and the operations that depended on it were suspended in part because of the order in the only sense the statute uses. A stay-at-home order on the member, patron, fan and family base is itself an order "limiting commerce, travel, or group meetings" in terms, and the Notice lists it as one; the commerce it limited was this industry's.227

The textual point

The clause reads "is fully or partially suspended during the calendar quarter due to orders." The phrase "during the calendar quarter" modifies "suspended"; it asks whether the suspension existed at any time in the quarter, not whether an order was issued in or addressed to the quarter. Congress did not write "orders in effect during the calendar quarter."228 Tri-State holds that a suspension includes a "delay" and that causation is but-for.229 The Notice recognizes both propositions: Q&A-22 makes an employer whose suspension ends in the middle of a quarter eligible for the whole quarter, and Q&A-16 treats a "significant delay" in moving between modes of operation as itself "a partial suspension during that transition period," offering its two-week figure only "for example."230 An operation ordered to zero on March 16, 2020, permitted twenty-five percent in June, cut to zero again in December, permitted ten percent in March 2021, fifty percent in May and one hundred percent only in June 2021 was delayed by those orders on every day between, and the delay did not end on the day the last cap lifted. The Chief Counsel memorandum that asks whether a lifted order "constitute[s] a governmental order in subsequent calendar quarters" asks the wrong question, and it "may not be used or cited as precedent."231

The restoration arithmetic for this industry

What the orders compelled this industry to dismantle is recorded in the orders themselves, and the time the orders' own reopening steps took to permit its restoration is recorded in their dates. Gyms and studios: closed by name between March 16 and April 3, 2020 in every jurisdiction; permitted twenty-five to fifty percent between April 24 and June 26, 2020 with locker rooms, saunas, showers and child care closed; closed again in twelve jurisdictions and re-capped at ten to fifty percent in a dozen more between November 13 and December 26, 2020; in Los Angeles County closed from July 13, 2020 to March 14, 2021 and then permitted ten percent (March 15), twenty-five percent (April 5), fifty percent (May 6) and one hundred percent (June 15, 2021); in New York closed to August 24, 2020, then thirty-three percent to May 19, 2021, with indoor classes prohibited to March 22, 2021; in Michigan closed to September 9, 2020, closed again for group fitness November 18, 2020 to January 16, 2021, then twenty percent or one hundred to June 22, 2021; in Massachusetts forty percent from July 6, 2020, twenty-five percent from December 13, 2020, and released May 29, 2021; in Washington closed to June 2020, closed again November 17, 2020 to January 11, 2021, and under phase requirements to June 30, 2021.232 A gym's membership roll, class schedule, instructor roster and January enrollment are built over months on a floor that can be used; on June 15, 2021 in Los Angeles, May 19 in New York, June 22 in Michigan, May 29 in Massachusetts and June 30 in Washington the floor became usable and the rebuilding began, and on July 1, 2021 it was days or weeks old. Theaters and venues: dark in every State from March 2020; movie theaters permitted twenty-five to fifty percent between April 27 and October 23, 2020 and, in New York City, March 5, 2021; live-performance venues permitted fifteen to fifty percent of fixed seating from August 25, 2020 (Ohio), September 4, 2020 (New Jersey), October 5, 2020 (Massachusetts, lower-transmission communities only), March 1, 2021 (Massachusetts statewide; Boston March 22), April 2, 2021 (New York, thirty-three percent) and June 2021 (Washington); closed again in twenty jurisdictions in the winter; released between May 19 (New York) and July 6, 2021 (Rhode Island), with Washington's over-10,000 rule, California's mega-event rule and, from August, Nevada's, Los Angeles County's, King County's and O'ahu's rules following.233 A performing-arts season is sold in the spring for the following autumn, a film slate is booked months ahead and a touring show is routed a year ahead; a venue released in May or June 2021 had no season to sell for the third quarter, and the shows it could book were the ones the orders of the preceding fifteen months had let promoters route. Leagues and sports: every season stopped in March 2020; professional sports resumed without spectators or at ten to fifty percent; youth sports resumed practice-only, non-contact or under directives from June 2020; suspended again in North Dakota, New Jersey, Minnesota, Michigan, Delaware, Utah and the District in the winter; arenas admitted ten to twelve percent from February and March 2021 and thirty-three percent from April 2; spectator caps lifted between March 10 (Texas) and June 30, 2021; and the school masking and quarantine orders of August and September 2021 governed every youth program in a school building.234 A league registers its players, hires its referees and books its fields a season ahead; the summer season of 2021 was registered under the winter orders, and the autumn season was governed by the school orders from its first day. Amusement and attractions: California's parks closed from August 28, 2020 to April 1, 2021 and released June 15, 2021; West Virginia's fairs and festivals barred from July 14, 2020 and again March 25, 2021; the State fairs of 2020 cancelled; the cruise trade stopped from March 14, 2020 to late June 2021; the foreign visitor barred to November 8, 2021.235 A park hires its seasonal staff in March for a May opening; the 2021 season was hired under a fifteen to thirty-five percent cap and opened under a mega-event rule. An employer whose operation was ordered suspended through June 30 was not walking normally on July 1, and the orders' own step dates fix the arithmetic.

What was still in force when the general restrictions ended

When the last statewide caps lifted between May 19 and July 6, 2021, the following remained in force and are treated as the orders they are: the federal conveyance order and TSA directives; the entry proclamations, land-border notices, Title 42 order, testing order and Conditional Sailing Order; the OSHA standard and, from July 28, the federal workplace face-covering reinstatement; the State emergencies of twenty-five States on September 21, 2021 and the new emergencies of Alabama, Arkansas, New York and the metros; Washington's over-10,000 rule and California's mega-event rule from June 30 and June 15; Delaware's tournament rule to July 12; Hawaii's tiers and, from August 10, its statewide caps; the unvaccinated-patron face-covering rules of seven States, exposure-control conditions the reopening orders kept in force; New York's HERO Act plans and their activation on September 6, 2021; the school masking and quarantine orders of the 2021-22 year; the quarantine and isolation orders of every State and county; the vaccination-or-test mandates of nineteen States and a dozen cities; the sector regulators' instruments in Louisiana, Nevada and New Mexico; and, from July 16 onward, the face-covering, vaccination-proof, mega-event and event-closure orders of eight jurisdictions and more than twenty metros catalogued in the third-quarter-2021 section.236 They are not the residue of a suspension; they are orders limiting commerce, travel and group meetings in force during the calendar quarter, and the operation they reached was the one the orders of the preceding fifteen months had left for this industry to rebuild.

  1. Ex. FED-200, Ex. FED-207, Ex. FED-208 and Ex. FED-209; Ex. FED-216, Ex. FED-232 through Ex. FED-235 and Ex. FED-255 through Ex. FED-258; Ex. FED-034 and Ex. FED-038; Ex. FED-027, Ex. FED-031 and Ex. ECO-C-140; Ex. FED-042; Ex. FOR-001 and Ex. FOR-004; Ex. FOR-012 and Ex. FOR-014; Ex. FOR-022; Ex. FOR-027; Ex. MI-005 (Michigan's closure of non-essential manufacturing); the Manufacturing page; Ex. ECO-A-101 and Ex. ECO-A-107 (supply-chain findings of June and September 2021, as facts and circumstances). ↩
  2. Ex. ECO-B-016 and the school orders cited in the note to the schools paragraph of the layers section; Ex. FED-170 and Ex. FED-171; Ex. MET-PIT-055; Ex. MET-SAN-023 and Ex. MET-SAN-024; Ex. MET-SAC-016 and Ex. MET-SAC-017; Ex. MET-PIT-014; the Kansas travel and exposure quarantine mandate; the vaccinate-or-test mandates cited in the note to B-20 of the third-quarter-2021 section; Ex. NV-017, § 21 and Texas Executive Order GA-21 (gym child-care rooms closed). ↩
  3. Ex. ECO-C-001; Ex. ECO-C-005 and Ex. ECO-C-006; Ex. ECO-C-010 and Ex. ECO-C-011; Ex. ECO-C-031; Ex. ME-053; Ex. MET-SFO-073; the Kansas travel and exposure quarantine mandate; Ex. LAW-235; the gathering caps cited in the layers section; Ex. MET-LAS-032 and Ex. MET-LAS-033; Ex. MET-ORL-004; Ex. MET-HNL-004; Ex. MET-MSY-002. ↩
  4. The note to the courts, transit and public offices paragraph of the layers section; Ex. MET-DFW-004; Ex. MET-SDF-025; Ex. FED-324; Ex. AGY-FED-LANDS-SCIENCE-COURTS-012 (press release; context), Ex. AGY-FED-LANDS-SCIENCE-COURTS-005 and Ex. AGY-FED-LANDS-SCIENCE-COURTS-007; Ex. OH-099 and Ex. OH-103; Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-071 and Ex. AGY-ST-AGRICULTURE-PARKS-WILDLIFE-074 (announcements; context); Ex. MET-SDF-029. ↩
  5. Ex. FED-020; Ex. FED-050, Ex. FED-051 and Ex. FED-052; Ex. FED-053, Ex. FED-054 and Ex. FED-055; Ex. FED-061; Ex. MET-NYC-046; Ex. MET-BOS-095; Ex. MET-DET-039; Ex. MET-CIN-015; Ex. MET-BAL-107; the transit agencies' own rules. ↩
  6. The elective-procedure orders are catalogued on the Physician Practices and Outpatient Care and Dental Practices pages; Ex. FED-080; the health-care-worker vaccination orders cited in the note to the health-care paragraph of the layers section. ↩
  7. Notice 2021-20, Q&A-12 and Example, at 928-29; Br. for Appellees at 41 & n.5; Doc. 44 at 13 n.3, 15. ↩
  8. Notice 2021-20, Q&A-10, at 927-28 ("A State's emergency proclamation that residents must shelter in place for a specified period"); CARES Act § 2301(c)(2)(A)(ii)(I), 134 Stat. at 347-48 (Ex. LAW-001); Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 189-90 (1824) (Ex. LAW-022) (commerce "is intercourse"). ↩
  9. CARES Act § 2301(c)(2)(A)(ii)(I), 134 Stat. at 347-48 (Ex. LAW-001); I.R.C. § 3134(c)(2)(A)(ii)(I) (Ex. LAW-006); Russello v. United States, 464 U.S. 16, 23 (1983) (Ex. LAW-014); EEOC v. Abercrombie & Fitch Stores, Inc., 575 U.S. 768, 774 (2015) (Ex. LAW-013). ↩
  10. Tri-State at 9, 17-19. ↩
  11. Notice 2021-20, Q&A-22, at 932; Q&A-16(4), at 930. ↩
  12. Office of Chief Counsel Memorandum AM 2023-005 (June 30, 2023), at 1, 7; Tri-State at 11-12. ↩
  13. The note to the facilities function in the operations section (closures); the notes to the second-quarter-2020, fourth-quarter-2020 and first-quarter-2021 sections; Ex. MET-LA-001, Ex. MET-LA-009, Ex. MET-LA-013, Ex. MET-LA-071, Ex. MET-LA-014, Ex. MET-LA-015, Ex. MET-LA-016 and Ex. MET-LA-017; Ex. NY-010, Ex. NY-110, Ex. MET-NYC-010, Ex. NY-043 and New York Executive Order 202.108; Ex. MI-005, Ex. MI-044, Michigan's Pause to Save Lives, Ex. MI-064 and the Rescission of Emergency Orders of June 17, 2021; Ex. MA-008, Ex. MA-023, Ex. MA-039 and Ex. MA-048; Ex. WA-009, Ex. WA-034, Ex. WA-047, Ex. WA-056, Ex. WA-106 and Ex. WA-101. ↩
  14. Georgia Executive Order 04.23.20.02; Ex. NY-036 and Ex. NY-118; Ex. NY-042 and Ex. NY-043; Ex. OH-034; Ex. SEC-17-015; Ex. MA-031, Ex. MA-040, Ex. MA-044 and Ex. MA-045; Ex. MET-BOS-010, Ex. MET-BOS-017 and Ex. MET-BOS-018; Ex. WA-107; the note to the fourth-quarter-2020 section (winter closures); New York Executive Order 202.108; Ex. RI-047; Ex. WA-101; California's Beyond the Blueprint order; Ex. NV-043 and Ex. NV-044; Ex. MET-LA-019, Ex. MET-LA-054 (Pasadena) and Ex. MET-LA-056 (Pasadena); Ex. MET-SEA-001; Ex. MET-HNL-037. ↩
  15. Texas Executive Orders GA-23 and GA-28; Ex. SEC-17-024; Ex. MET-STL-070; Tennessee Executive Order 38; Ex. OH-033; Ex. ND-065; Ex. SEC-17-014; Ex. MN-032; Michigan's Pause to Save Lives; Ex. DE-033 and Ex. DE-034; Utah Executive Order 2020-73; Ex. DC-080; Ex. SEC-17-026; Ex. MA-045; Ex. NY-043; Texas Executive Order GA-34; Ex. WA-101; the school orders cited in the note to the schools paragraph of the layers section. ↩
  16. Ex. SEC-17-016, Ex. CA-055 and California's Beyond the Blueprint order; Ex. WV-042 and Ex. WV-061; the State fair exhibits cited in the note to the parks, fairs and wildlife paragraph of the layers section; Ex. FED-027, Ex. FED-031 and Ex. ECO-C-140; Ex. FED-207, Ex. FED-208 and Ex. FED-209. ↩
  17. The third-quarter-2021 section, subpart (B), and the exhibits cited there; Ex. LAW-246 and Ex. LAW-247; Ex. ECO-B-120; Ex. WA-101; California's Beyond the Blueprint order; Delaware's Twenty-Ninth Modification, § K; Ex. HI-025; Ex. MET-HNL-030 and Ex. MET-HNL-032; Ex. FED-080; Ex. FED-272; Ex. AGY-ST-GAMING-RACING-076; Ex. NV-051; Ex. NM-068. ↩