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New Mexico seeks court’s protection from business lawsuits

Morgan Lee
Associated Press

SANTA FE – New Mexico’s governor and top health officials are trying to fend off a flurry of lawsuits by businesses owners who say financial losses caused by the state’s pandemic health orders amount to a regulatory taking and should be compensated.

In a Monday night court filing, the administration of Democratic Gov. Michelle Lujan Grisham urged the state Supreme Court to intervene and defuse the lawsuits.

“Under well-established law, harms caused by the exercise of the state’s police power to protect public health are not compensable,” attorneys for the governor’s office and the state attorney general’s office wrote.

Arguments are scheduled in January as the Supreme Court weighs the fate of at least 14 lawsuits that describe the pandemic-related health orders as a regulatory “taking” that merits just compensation to businesses under provisions of the state Constitution and health-emergency statutes.

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The original lawsuits were filed by businesses running the gamut from an oxygen healing bar in downtown Santa Fe to a florist in Farmington and an auction house in rural Portales claiming they were adversely affected by the state’s pandemic response.

“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 governor’s office stated.

A reply brief from businesses is due in late December. Attorney A. Blair Dunn, who represents multiple businesses in the litigation, on Tuesday accused the governor of “cherry picking” judges by moving the litigation to the state Supreme Court, though all current justices have won or retained seats by election.

The Shed Restaurant is pictured temporarily closed due to COVID-19 awareness in Las Cruces on Friday, Sept. 4, 2020.

“Our New Mexico Legislature made it clear that even in a public health crisis the use of police powers to combat a pandemic requires just compensation” said Dunn, citing provisions of the state’s public health emergency response act.

In an August ruling, the state Supreme Court has upheld the authority of the state health secretary to restrict or close businesses because of the coronavirus pandemic.

In that decision, the high court rejected assertions by the restaurant industry that a ban on indoor dining service was arbitrary and capricious.

It invoked recent statements by U.S Chief Justice John Roberts that the judiciary should not normally second-guess decisions regarding health emergencies.

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The state’s public health orders have evolved dramatically in recent months amid a major surge in New Mexico COVID-19 infections and deaths since October.

A $320 million aid package was approved by lawmakers in November that provides grants to small businesses, underwritten by federal relief funds.

That comes on top of more than $75 million in federally sponsored small-business aid that is being funneled through local governments this year.

On Dec. 2, the state shifted to a county-by-county system for reopening the businesses and relaxing restrictions on public gatherings.

Lujan Grisham has said that color-coded rating system provides incentives for local businesses and communities to limit their exposure to the disease.