Plaintiff and Attorneys Who Sued Gov. Phil Murphy Testify About Devastating Loss of Her Business

(Morris Plains, NJ) Darlene Pallay, who sued Gov. Phil Murphy for his violation of the Disaster
Control Act, testified in front of a panel of legislators recently about two events that have
caused her family an unforgettable amount of “pain, anguish, fear, devastation and uncertainty,”
the first, the loss of her healthy father to a rare cancer in 2015; and the second, the death of
her successful, decade-old business in 2020, within nine months of the first back-to-back COVID-19
lockdowns.

Pallay, who testified with her pro bono 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, the
legal team who filed a lawsuit on her behalf against Murphy on Sept. 23, told the participating
Republican New Jersey State Senate and Assembly panelists – Democrat legislators declining to
attend the hearing – about the loss of her “American Dream.”

“I seek justice for what has been done to my family, I followed every rule I was supposed to follow
and have paid dearly for that, while so many have actually benefitted from these lockdowns,” Pallay
said.

“One of the themes of our lawsuit is that it is both tremendously unfair but also unlawful to ask a
small subset of private citizens to pay for these benefits that the governor believes will accrue
for the benefit of everybody,” Ferguson said. “A subset of New Jersey’s small business owners, were
asked and compelled by force of law to put their livelihoods on the line and in some cases, sadly
like in Mrs. Pallay’s, they lost their livelihoods.”

Ferguson called it both unlawful and unconstitutional under the Disaster Control Act, for Murphy to
have asked, “for those aggrieved citizens, to shoulder 100% of this immense burden.”

Instead, Ferguson and Brown, their suit facilitated by the non-profit advocacy group Rescue New
Jersey, stated under the Act, which Murphy wrote into his early executive orders, Murphy was
required to establish compensation boards in every county, but never did. With these boards,
businesses deemed “non-essential” as Pallay’s was, could petition for “reasonable compensation,”
for the taking of their property. However, they said in one of Murphy’s later executive orders, he
demonstrated this principle by mandating compensation to medical facilities that have been required
to transfer equipment to other facilities during the pandemic.

“The statute requires that the governor empanel emergency compensation boards in each county and so
what we tried to do, on behalf of Mrs. Pallay, and really for the benefit of all small business
owners who are similarly situated, was to file a petition on her behalf with the emergency
compensation board in Sussex County,” Ferguson said. “What we learned is that Gov. Murphy
has not appointed any person to any
compensation board in any county in the state.”

The case, Ferguson explained, does not challenge Murphy’s COVID-19 mitigation strategies, but asks
that these compensation boards are established, as required by statute. Ferguson and Brown
additionally asked for the Appellate Division – where the case has remained for several months
after it was transferred from the Superior Court – to expedite Pallay’s case, following the
loss of her business, which has been further exacerbated by the loss of her husband’s job,
a request the Appellate Division has denied.

Murphy’s attorneys responded to the plaintiff’s legal arguments on March 22, as part of the legal
proceedings, not giving an explanation why the governor failed to establish compensation boards,
but asserting instead the case should be dismissed, claiming the state is not obligated to provide
compensation while operating under police power during a public health emergency.

Ferguson and Brown will file their reply with the Appellate Division on April 1.

As she struggled to hold back her tears, Pallay explained that her business, JWC Fitness LLC.,
under which she operated the CKO Kickboxing Franklin franchise, enabled her to devote time to her
husband and three children, while building a cornerstone business that made a difference in the
community. CKO Kickboxing Franklin frequently fundraised for various charities; and Pallay
received Congressional recognition “for COVID-related activities that benefitted her community,”
while she was shut down.

“Thousands of women and men not only lost weight, but were able to kick drug habits,
get off life-long medication, participate in amazing physical feats that they never dreamed
possible,” Pallay said. “We were literally a fitness family. And I submit to you, we were
essential.”

Each day became one to attempt to save her business, with no income for months, but the
expectations to pay operating and general business expenses. She received few benefits from the PPP
program with only part-time employees. Pallay used what little she received to compensate her staff
and then pay 40% back rent, utilities and other expenses that she owed, for a facility the State of
New Jersey forbade her to use.

“The confusion, lack of direction, lack of planning in the entire government left me to fend for
myself,” Pallay said. “I did everything I could to save my business.”

She had difficulty drumming attendance among her former 200 regular members when she attempted
online classes; and when Murphy finally permitted businesses like Pallay’s to hold outdoor fitness
classes beginning on June 26, 2020, the sweltering summer heat made it impossible at times.

After the state allowed indoor classes with a 25% capacity and mask restriction in
September, Pallay’s landlord filed for eviction on Sept. 11; and though she attempted to salvage
her business, the restrictions and general fear, kept her former members from attending. Her
landlord told Pallay he planned to shut the water off in November, which would make it impossible
to operate, with Pallay deciding to close her doors for good on Oct. 31.

Since she has lost her business and lives with the angst of her eviction proceedings, Pallay said
she has struggled with depression, social anxieties, headaches and panic attacks, with
debt mounted more than
$50,000, the family’s home and health insurance in peril.

“Rescue New Jersey helped to facilitate this lawsuit and I’m very proud of the testimony of Mrs.
Pallay’s attorneys,” said Donald Dinsmore, Esq., Rescue New Jersey’s chairman. “They are
volunteering their expertise without compensation, to help safeguard the Constitutionally
protected rights of New Jerseyans like Mrs. Pallay, who were asked to carry a greater burden than
others during the pandemic.”

To view the hearing, visit: www.facebook.com/senatenj/videos/190003732899353. For more
information about Rescue New Jersey and this case, go to: www.rescuenewjersey.org.
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