The Pandemic Special with a Side of Shut-Downs: A Note on NYC’s Restaurants in the Age of Covid-19
New York City’s globally renowned and diverse collection of restaurants makes it one of the world’s top culinary destinations. Economically, the industry contributes billions of dollars to the City’s tax revenue annually. The industry had approximately 23,650 restaurants in 2019, with 317,800 jobs, paid $10.7 billion in total wages, and generated $27 billion in taxable sales. The Covid-19 pandemic threatens to cripple, and has crippled, the once thriving NYC industry. Mandatory closures, stay-at-home orders, social distancing impositions, an impending economic recession, travel restrictions, and the inherent danger of the virus itself, all threaten an adverse economic impact for the industry.
The Covid-19 crisis in New York City eviscerated most restaurants’ capacities to conduct their ordinary business activities. Even when New York City began entering its reopening phases, the economic ramifications of Covid-19 and the Executive Orders posed unprecedented hardships for restaurants.
A major hardship on NYC restaurant owners was the large number of uncompromising landlords. Roughly 28% of respondents reported their landlords waived any portion of the rent because of Covid-19. Out of those respondents, 42.2% said their landlords waived half of the rent owed, and 31.2% said more than half was waived. Yet the overwhelming majority of respondents reported that their landlords refused to waive any portion of the rent. According to this survey, most restaurant owners have been unable to renegotiate their leases, and most reported that their landlords have not deferred any rent.
This crisis raises complicated questions of contract and property law with respect to commercial leases in the event of unforeseeable emergencies: should defendants in breach of contract lawsuits be required to pay rent when performance of the paramount contractual terms, e.g., operating a business safely, are no longer possible? Does a global pandemic constitute an “act of God” capable of triggering force majeure clauses? And in the absence of such clauses in existing leases, can the common law doctrines of impossibility of performance or frustration of purpose rise up to the defense of the small business owner? Should the State and City of New York solve this matter through legislation and ordinances? This Note explores these questions, while prescribing the need for force majeure clauses that clearly define pandemics, and perhaps other imminent natural disasters as triggering events, as the most powerful prospective solution.
Accordingly, this Note proceeds as follows: Part I discusses relevant background information concerning Covid-19’s impact on New York City from public health, economic, and administrative perspectives in. Part I also unpacks the federal CARES Act, examining some of its economic relief programs, as well New York City’s local ordinances and their efficacies. Part II analyzes the common law doctrine of force majeure and its applicability to the Covid-19 crisis. Part III examines the usefulness of the impossibility of performance doctrine, as an alternative to force majeure. Part IV proposes mandatory force majeure legislation and tests its Constitutional dimensions. Lastly, the Note will conclude by summarizing the major arguments and will reemphasize the policy considerations of protecting small restaurant owners from unjust enrichments in the Covid-19 context.
 Noah Allison, Migration & Restaurants: Mapping America’s Most Diverse Thoroughfare, Graduate Ass’n for Food Stud. (Mar. 1, 2017), https://gradfoodstudies.org/2017/03/01/mapping-migration-restaurants/.
 Rayna Katz, NYC Could Lose Nearly 12,000 Restaurants to the Pandemic, N.Y. L. J., (2020).
 Off. of the N.Y. State Comptroller, Report 4-2020, The Restaurant Industry in New York City: Tracking the Recovery (2020).
 Mihir Zaveri, The Uncertain Future of Midtown, N.Y. Times, https://www.nytimes.com/2020/07/27/nyregion/nyc-midtown-manhattan-coronavirus.html?searchResultPosition=1 (last visited Sept. 26, 2020).
 Id.; see also, Vast Majority of NYC Restaurants, Bars Did Not pay Rent in August, Globest (Sept. 21, 2020), https://www.globest.com/2020/09/21/vast-majority-of-nyc-restaurants-bars-did-not-pay-rent-in-august/ (reporting that 60% of landlords still have not waived rent during the Covid-19 pandemic, and of landlords that did waive rent, less than one-third waived more than 50%. About 90% of respondents could not renegotiate their leases, even in light of the pandemic.).