High court weighs compensation for business restrictions

Santa Fe, NM (AP) –The New Mexico Supreme Court heard oral arguments Wednesday as it weighs whether the state must compensate businesses for losses due to temporary closures and other pandemic-related restrictions.

An attorney for the governor and state health officials urged justices to intervene and uphold the state’s pandemic-related public health orders from a spate of lawsuits by businesses that equate the restrictions with a “regulatory taking” and are demanding financial compensation.

Attorney Nicholas Sydow, representing state health officials, told the court that the temporary public health restrictions are justified based on the pandemic’s increasingly deadly trajectory and police powers provisions of the state Constitution and statutes. He said there are limits on private property rights when it comes to dire matters of public health and safety.

“When the state regulates public health and safety, it’s not taking away existing property rights, it is exercising the inherent authority to ensure that property is not used in a fashion that endangers the public,” Sydow said.

More than 2,800 people have died from the coronavirus statewide amid tight restrictions on public gatherings and nonessential business activities across most of the state.

Businesses in the case say pandemic restrictions have effectively seized private property from businesses that might otherwise have taken their own precautions against the spread of COVID-19. Their lawsuit characterizes the state’s public health emergency orders as regulatory taking that merits compensation to businesses.

Blair Dunn, an attorney for a coalition of small businesses ranging from an amusement park to a rural auction house, said it’s important to allow district courts to review public health orders and decide whether they effectively seize private property without good reason.

“The government is getting an ace card,” he said. “You’re being asked to take it on faith, just like we are at some point. There needs to be an adjudication of the science in order to get to the point where you can say whether or not it is rational.”

Justices peppered the attorneys with questions for over an hour and adjourned to deliberate. A decision was delayed until a later date with no specific deadline.

Attorneys for Gov. Michelle Lujan Grisham say multiple compensation claims could derail the state’s ability to enforce public health orders and blunt the spread of COVID-19 as vaccinations are deployed.

Several businesses that sued the state for compensation separately have been provided with grants and forgivable loans by the state and federal authorities in efforts to prop up employment and the economy.

State legislators are considering proposals for further economic relief to ailing small businesses and low-wage workers that have labored through the pandemic. A 60-day legislative session is scheduled to begin Tuesday.

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