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Coronavirus lawsuits begin hitting states as businesses reel from lockdown closures

closed sign - coronavirus lawsuits
Photo via Alan Levine/Flickr (CC BY 2.0)

When COVID-19 first began its spread through the United States in March, many cities and states opted to enforce a lockdown to curb the virus’ spread. These lockdowns required non-essential businesses to close their doors, resulting in thousands of employees out of work and hundreds of business closures nationwide.

With some cities and states continuing to impose restrictions on businesses because of the pandemic, hundreds of companies say it’s not just unfair—it’s unconstitutional. Now they’re suing their states to prove it. Several coronavirus lawsuits have cropped up in the months since the pandemic began.

According to Ballotpedia, there are at least 910 lawsuits concerning state actions and policies regarding the coronavirus pandemic. Each lawsuit’s claims vary widely, from enforcement action to regulatory taking. 

Many of these lawsuits rest their claim on the Fifth Amendment to the U.S. Constitution, which says, “nor shall private property be taken for public use, without just compensation.” 

It’s up to the courts to decide whether closing businesses to protect Americans from a public health crisis is considered taking private property. In the past, the courts have sided with the government when choosing to close a business for health reasons. 

For example, in Mugler v. Kansas in 1887, the Court ruled against a liquor manufacturer who said their livelihood was destroyed when the state banned the sale and manufacturing of alcohol. 

“A prohibition simply upon the use of property for purposes that are declared, by valid legislation, to be injurious to the health, morals, or safety of the community, cannot, in any just sense, be deemed a taking or an appropriation of property for the public benefit,” the Court ruled. 

In other words, the Court ruled that the state was not responsible for lost income because the business owner was using its property to do something that would harm the public welfare. Theoretically, this liquor manufacturer could have pivoted to a business that didn’t manufacture or sell illegal goods. 

Most recently, three Oregon businesses sued the state in September. According to the Oregonian, they argue that officials should compensate small business owners for financial hardship caused by pandemic restrictions. 

“As a result of your orders, my clients and many other businesses like theirs closed as ordered and thousands of workers found themselves without employment,” attorney John DiLorenzo wrote in a tort claim letter to the state of Oregon on Friday.

In August, groups of businesses in New Mexico and New York sued their states for similar reasons. Nine New Mexican companies claim the government owes them financial reparations, their lawyer Blair Dunn told the Carlsbad Current-Argus

“It’s an avenue to provide relief to these businesses for having the government take control of them and require they close with these orders,” Dunn said. “It’s to provide their just compensation for the government doing that. Your mother always said that if you break, you bought it. We’re not arguing if the government should or shouldn’t have broken these businesses, but they have to pay for it.”

Dunn said some of his clients also stipulate that a blanket closure of all non-essential businesses was a governmental overreach, and they could have protected their clients on their own. 

“Most of the businesses don’t believe this is the right way to do this,” Dunn said. “There’s a cost of taking control of people’s lives and their businesses. The government doesn’t seem to have considered that.”

In Buffalo, New York, nine businesses have sued Gov. Andrew Cuomo, the New York State Assembly and Senate, and the state Attorney General Letitia James over their COVID-19 response, according to the Buffalo Biz Journal. They seek compensation for damages caused by governmental orders. 

“(State officials) in a disturbing and gross abuse of their power have, in the name of the COVID-19 pandemic, attempted to expand their authority by unprecedented lengths, without any proper constitutional, statutory, or common law bases therefore,” their lawyers said in the complaint.

States have been hit with coronavirus lawsuits for statewide shutdowns since the beginning of the pandemic. According to Reason, a Pennsylvania business sued the state—challenging the shutdown order’s constitutionality—as early as March. 

Sources: Ballotpedia, U.S. Archives, Supreme Justia, Oregonian, Carlsbad Current-Argus, Buffalo Biz Journal, Reason


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