COVID-19

New Mexico Supreme Court: State not required to compensate businesses for public health closures

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Businesses that were ordered to close during the early months of the COVID-19 pandemic do not have a claim for government compensation, the New Mexico Supreme Court ruled.  

The unanimous opinion, written by Justice Shannon Bacon, states that public health orders from Gov. Michelle Lujan Grisham and the state Department of Health did not constitute either a physical or regulatory “taking” of property that would warrant compensation from the state. 

“Occupancy limits and closure of certain categories of businesses, while certainly harsh in their economic effects, are directly tied to the reasonable purpose of limiting the public’s exposure to the potentially life-threatening and communicable disease, and thus can be deemed ‘reasonably necessary,”’ Bacon wrote. 

Before Lujan Grisham’s office asked the high court to take the case, business owners who sought compensation after emergency public health orders forced them to close their doors to the public filed a number of suits around the state in lower courts. Lujan Grisham’s office asked the state supreme court to decide whether a public health order to close businesses constitutes a regulatory taking. 

Another question posed to the court was whether a portion of state law that specifically mentions compensation in public health emergencies applied to all types of businesses or just medical companies. The group of businesses seeking compensation argued that the state Public Health Emergency Response Act’s provision on compensation includes non-medical businesses with the words “any other property.” But the state supreme court seemed to agree with the governor’s office argument that ejusdem generis, or a Latin term meaning of the same kind, applied to the words “any other property,” essentially meaning any other medical or medically related company  taken by the state to help fight a public health emergency. 

“Because a public health emergency can affect the entire population, anyone and everyone could be a potential claimant under the Real Parties’ interpretation, even under far less restrictive measures than the [public health orders],” Bacon wrote. “It is simply not credible that the Legislature in enacting the PHERA intended for such a potential raid on the public wealth while simultaneously granting broad powers to protect the public health.” Further, the high court also ruled that anyone seeking compensation under PHERA has to first follow the law’s procedure for a claim, which means the claim has to first go through the state Attorney General’s Office.

COVID-19

NM Supreme Court issues official opinion on validity of state emergency health orders

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The New Mexico Supreme Court on Monday issued a written opinion that explained its reasoning behind a bench ruling regarding state emergency public health orders. The high court ruled last summer that the state and the governor are legally allowed to issue emergency health orders without a formal rulemaking process. 

The court unanimously ruled that the state Department of Health and Gov. Michelle Lujan Grisham are granted, by the Legislature, the ability to issue orders limiting certain business activities. In this case, businesses were ordered to cease indoor dining during the COVID-19 pandemic. 

Last year a group of business owners challenged those orders, arguing that they were arbitrary and capricious and that the normal rulemaking process should be followed to implement such emergency orders. 

In her, likely final, written opinion, former Chief Justice Judith Nakamura said the emergency public health orders like the ones that were issued last year and have been updated since, provide the state with the ability to respond to “the swiftly changing dynamics of a novel, dangerous, and highly communicable disease.”

Justice David Thomson issued a special concurring opinion with a caveat to the unanimous decision. Thomson said he agreed that the state’s executive branch should have the flexibility to issue emergency orders, but that the governor’s office is not above scrutiny and questions regarding those decisions. 

“The majority’s holding should not communicate that executive or legislative responses to the pandemic will always receive the same level of judicial deference as when the crisis first emerged,” Thomson wrote. “In addition, I believe we must be wary of the precedent we set beyond the scope of the COVID-19 crisis.”

Monday’s written opinion is the latest in a series of decisions from the court that validated Lujan Grisham’s response to the COVID-19 pandemic. 

The state Supreme Court has yet to issue an opinion on whether ordering businesses close to the public is the same as the state taking property, which would require the state to compensate those businesses.

COVID-19

Lawyer for businesses ordered to close amid pandemic responds to state

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A lawyer representing a group of businesses looking for compensation from the state after being ordered to shut down amid the COVID-19 pandemic, filed on Tuesday a response to a brief from the New Mexico Attorney General’s Office, filed earlier this month. 

The brief, filed by Albuquerque-based attorney Blair Dunn, is just one piece of a pending New Mexico Supreme Court Case filed by state Attorney General Hector Balderas on behalf of the state. The question facing the high court is whether businesses that were forced to close under emergency public health orders are due compensation by the state for lost business. 

COVID-19 recap

NM argues against compensating businesses impacted by emergency public health orders

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The state of New Mexico, through the state Attorney General’s Office, filed a brief on Monday with the New Mexico Supreme Court that argued the emergency public health orders do not warrant compensation to business owners. 

The brief is the latest in a pending state Supreme Court case spurred by a request from state Attorney General Hector Balderas’ office in October. Balderas’ office asked the high court to answer the question of whether ordering a business to shut down as part of an emergency public health order constitutes taking that business, or eminent domain. 

Since this past summer, there have been a dozen state district court cases filed by local business owners, arguing that those owners are due compensation from the state. Balderas’ office asked the state Supreme Court to weigh-in on the matter to save time and resources in those district court cases. 

The high court agreed to take on the case and asked for briefs and responses from both the state and the group of business owners who are currently suing the state. 

In the brief filed on Monday, Balderas’ office argued that the state’s Public Health Emergency Response Act only allows for compensation of medical supply companies or medical providers that would be hypothetically taken over by the state during a public health emergency. Even if the law allowed for compensation, Balderas’ office argued, it would make it nearly impossible for the state to take action during an emergency. “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 — that is necessary to protect health and safety,” the brief read. 

The brief also argued that ordering businesses to close temporarily should not be hindered by second thoughts or concerns that the state may be liable for lost revenue.  

“The State should not be hamstrung in its efforts to respond to emergencies and stop activities that endanger the public by the prospect of liability,” the Attorney General’s office wrote.