Compensation for pandemic losses sought

Lawsuits from individuals and businesses seek to recoup costs

SANTA FE — A Roswell musician. A Clovis liquor store. A floral shop with locations in the Four Corners.

Those are among the individuals and businesses that have recently filed lawsuits against Gov. Michelle Lujan Grisham’s administration in an attempt to recoup economic losses incurred during the coronavirus pandemic.

Albuquerque attorney Blair Dunn, whose law firm filed the recent round of lawsuits, said the financial losses suffered as a result of the pandemic range from tens of thousands of dollars to hundreds of thousands of dollars, depending on the business.

He also said the state’s Public Health Emergency Response Act calls for state government

to provide compensation for health facilities and other businesses it takes over during an emergency.

“When the government does this type of stuff, they have to pay for it,” Dunn said.

However, it’s unclear whether imposing business restrictions — including forcing businesses to close or operate at limited capacity — would amount to a takeover under the law.

Dunn also acknowledged that the cases were filed in state District Court in Roswell, Farmington and Truth or Consequences — and not in Albuquerque or Santa Fe — because the plaintiffs are hoping the lawsuits are assigned to more “conservative” judges when it comes to property rights issues.

A ruling by a state judge could lead to a case being appealed to the Supreme Court, though the state’s highest court could be asked to intervene even without a lower court ruling.

A Lujan Grisham spokeswoman declined to comment on the recent proliferation of lawsuits.

But the governor last week cited several recent court rulings that upheld the legality of her administration’s actions in response to the pandemic.

“New Mexicans should expect that we will not arbitrarily and capriciously make any decision, but that we will do that thoughtfully based on the powers that we have,” Lujan Grisham said during a news conference at the Roundhouse.

The Governor’s Office has successfully rebuffed all legal challenges of its handling of the pandemic to date.

That includes a recent Supreme Court ruling that upheld the governor’s ability to impose civil penalties of up to $5,000 a day for violating health orders, as well as a federal court ruling that a ban on large gatherings in houses of worship did not violate religious freedoms.

Unlike those previous lawsuits, the 10 newly filed lawsuits do not explicitly challenge the Lujan Grisham administration’s use of emergency powers under state law, but instead whether the state must compensate businesses for lost profits caused by restrictions aimed at slowing the spread of COVID-19.

The Supreme Court ultimately left the compensation issue undecided during its recent hearing on fines for those who violate the state’s public health order.

In one of the recently filed cases, Sports Adventure Inc., a store that rents boats and sells gear at Elephant Butte Reservoir, claims it was “devastated” by the Lujan Grisham administration’s closure of the reservoir for recreational activities for more than two months.

The governor has acknowledged the economic damage caused by the pandemic, including elevated unemployment figures. But she has described the business restrictions as necessary to keep the virus from spreading rapidly and overwhelming New Mexico’s health care system.

In an attempt to keep businesses afloat, the state has also launched two separate programs to provide low-interest loans from one of New Mexico’s two large permanent funds.

And the governor recently announced plans to use $50 million in federal CARES Act funding for business grants that will flow through local governments.

Dunn, who ran for attorney general as a Libertarian in 2018, said increasing public awareness about business losses is part of the lawsuits’ intent. He also said he has about 20 similar lawsuits ready to be filed.