Should Michigan have to repay businesses forced to close during the COVID-19 pandemic? – MLive.com

January 11, 2024

E. LANSING, MI -- The Gym 24/7 Fitness in Alma closed in March of 2020 as the coronavirus pandemic swept through Michigan.

Despite an executive order from Gov. Gretchen Whitmer that required gyms, fitness centers and many other public-facing businesses to close, The Gym reopened in early May.

We have the ability to open up, so were going to open up, owner Randy Clark said in a video posted to Facebook.

Alma police were there before the morning was out, telling them they would need to close. The Gyms owners filed a lawsuit, setting up a GoFundMe request titled Help Us Fight Government Tyranny.

The Gyms case was one of two heard Wednesday by the Michigan Supreme Court concerning whether businesses forced to close or restrict operations in the first months of the pandemic deserved to be compensated.

We have said over and over at every stage of this litigation that the government can take, said Philip Ellison, an attorney representing The Gym, but if theyre going to take, they have to pay.

The second case was filed by Mount Clemens Recreational Bowl, Inc., KMI Inc. and Mirage Catering, Inc., which operate bars, restaurants and catering businesses in Macomb County.

The court wont decide whether the state is liable for damages, but whether the plaintiffs will have the opportunity to present evidence of their losses and scrutinize the states rationales for the shut down.

The Court of Claims found that The Gyms case could go forward, but the state Court of Appeals overturned that decision, finding that there is no allegation or evidence that the Gym suffered a total loss or the complete elimination or obliteration of value because of the executive orders, that the relatively short duration of the closures pushed against a ruling that they had been an unjust taking of The Gyms property and that the governments interest in preventing the spread of COVID was a compelling one.

The appellate court also noted that to the best of our knowledge, every federal court and state appellate court that has addressed a takings claim stemming from the governments closure of a business as a safeguard against the spread of COVID-19 has rejected the claim.

The case of the Macomb County businesses was summarily dismissed on the basis of the decision in The Gym case.

Arguing in front of the state Supreme Court on Wednesday, Michigan Solicitor General Ann Sherman emphasized the powers granted to the state in a situation like the COVID pandemic.

When the state acts out of necessity to protect against a grave threat to public health, its not a taking, and it removes these inquiries from the takings analysis, she said. Its not surprising that nearly every court nationwide has rejected the novel theory of taking in the context of COVID-19. Michigans departure from this wisdom would make it a national outlier.

But Justice David Viviano pressed Sherman on why the governments determination that the closures were necessary shouldnt be subject to review by a court.

What if the government said it was an emergency, but it wasnt? he asked. Or maybe it was initially but then it stopped but then the regulations continued for years and years and years? Does the government just get to show up and say it was an emergency, and therefore youre out of luck?

Justin Majewski, an attorney representing the three Macomb County businesses, argued that, under federal law, the determination of what constitutes an unjust taking relies heavily on the specific facts of a case and the specific burdens placed on a private property rights.

Rejecting his clients case based on the ruling in The Gyms lawsuit goes against that, he said.

But Sherman reiterated the argument that there is no right for a business to continue operating when the state has acted and exercised its police power in a grave emergency,

No amount of discovery would change that conclusion as a matter of law, she said.

The Court will rule on both cases prior to the end of its term on July 31.

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