Court to consider challenge to health orders

N.M. justices to hear arguments as business owners seek compensation for restrictions

More than a dozen businesses across New Mexico could learn Wednesday if they will be able to proceed with lawsuits seeking compensation from the state over losses from pandemic-related restrictions and shutdowns.

The New Mexico Supreme Court will hear oral arguments on whether businesses have legal standing to claim such damages, and how the cases should proceed through the state court system. Justices are expected to issue a ruling from the bench following attorneys’ presentations.

According to court documents, 14 lawsuits were filed over the state’s public health restrictions by October. Albuquerque attorney A. Blair Dunn said the number has since grown to about 20, and he has a list of potential plaintiffs waiting for the Supreme Court’s ruling before deciding whether to file their own complaints.

Dunn is set to argue Wednesday on behalf of the businesses.

Assistant District Attorney Nicholas Sydow will present arguments on behalf of Gov. Michelle Lujan Grisham and former Health Secretary Kathy Kunkel, who initially issued the statewide emergency public health order in an effort to slow the spread of COVID-19.

The state has argued in written briefs the order doesn’t constitute a regulatory seizure of property — as the businesses claim — but instead exercises the state’s police powers and restricts the use of business property only temporarily, for a proper purpose.

If state law allowed such damage claims, Sydow wrote in a brief, “this specter of liability would hobble the State’s ability to take emergency action — whether destroying a burning building or prohibiting activity known to spread a pandemic.”

He said the state would be forced to make a choice between facing high costs from liability claims and “abandoning regulations that save lives.”

Dunn will argue each lawsuit should proceed as a separate case in state District Court because each business experienced a different toll from the pandemic-related closures and capacity limits.

“We are arguing that not every case can be decided in the early stages,” Dunn said in an interview Monday. “You have to have that factual development.”

In a brief, Dunn wrote, “Each

of these fourteen cases has vastly different damages, as some businesses were temporarily closed, while others have been closed since the onset of the public health orders.”

He also raised questions about whether the public health order was arbitrary and capricious or based on reliable data.

The U.S. Supreme Court has yet to consider a similar case, Dunn said, but he believes this case could end up there.

“Based on the way things have trended with the [New Mexico] Supreme Court giving the state a lot of leeway” in pandemic-related civil complaints, he said, “we expect we’ll be doing a petition to the United States Supreme Court as well.”

Among the businesses involved in the case are Hinkle Family Fun Center and Mauger Estates B&B in Albuquerque, and Eli’s Bistro Inc., Elite Fitness & Tanning LLC and Cowboy Café in Roswell.

Two Santa Fe companies are listed as parties to the case: the Santa Fe Oxygen and Healing Bar and Apothecary Restaurant — adjacent downtown businesses that share the same owner.

The owner has filed a motion in state District Court seeking to dismiss her complaint, but like the other cases, it has been stayed pending the state Supreme Court’s ruling.

Wednesday’s hearing is scheduled to begin at 1:30 p.m., and arguments will be broadcast on the Supreme Court’s YouTube channel, youtu. be/2MtBkEVRJak.

Each side will have 60 minutes to present their arguments, according to Barry Massey, a spokesman for the Administrative Office of the Courts. Sydow will go first.

“... we expect we’ll be doing a petition to the United States Supreme Court as well.” A. Blair Dunn, plantiffs’ attorney