Another Roswell business is suing the state over public health orders, contending that the state owes it for the losses and expenses resulting from required operating restrictions or closures.
Elite Fitness and Tanning LLC at 2101 N. Atkinson Ave. filed its case Monday in the Chaves County division of the New Mexico 5th Judicial District Court. The lawsuit names the state of New Mexico, Gov. Michelle Lujan Grisham and Secretary of the Department of Health Kathyleen Kunkel as defendants.
Tripp Stelnicki, a spokesperson for the Governor’s Office, said no comment would be made about such lawsuits.
A. Blair Dunn is one of the lawyers representing Elite Fitness. His firm, Western Agriculture, Resource and Business Associates LLP of Albuquerque, is working on several similar lawsuits across the state, with plaintiffs being auctioneers, gyms, RV parks, hair dressers, bowling alleys and retailers categorized as “non-essential” by the state.
Dunn said the lawsuits cannot be grouped into a class action suit, which usually require at least 35 parties, as well as “typicality” among plaintiffs.
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“Businesses generally don’t lend themselves to typicality. They have different damages. There have different setups. They are impacted in different ways,” he said.
Another of the firm’s clients is local restaurateur and businessman Madux Hobbs, who filed a suit similar to the Elite Fitness lawsuit on July 16. Hobbs owns the Cowboy Cafe, Black Betty BBQ, vacation rentals and property occupied by tenants closed or restricted by public health orders, according to that court filing.
Dunn said the owner of Elite Fitness is Sean Schooley. New Mexico Secretary of State records also list Schooley as the company’s organizer.
Schooley did not respond by press time to a message left for him at Elite Fitness.
The lawsuit now before Judge James Hudson describes Elite Fitness as a full-service fitness center offering group classes and different types of workout equipment.
The lawsuit states that public health orders intended to slow or prevent the spread of the coronavirus instituted on March 24 required the center to close until June 1, when it could operate at 25% occupancy. Even at 25% occupancy, the business experienced revenue losses, the lawsuit indicates. Then, according to the suit, amended orders issued July 13 also required business closure.
The order did close recreational centers, and required “close contact businesses” to operate at no more than 25% occupancy. Close contact businesses, as described in the order, include those offering group fitness classes.
The lawsuit contends that the public health orders were an “inverse condemnation” and caused unspecified revenue losses, expenses and loss of the use of the property.
Dunn said that they are not arguing about the state’s right to issue the orders, but contend that the laws and Constitution of the state require compensation when the state takes such actions.
“Plaintiff seeks a declaration from this Court that Defendants have unlawfully and unconstitutionally taken property for public use without just compensation,” the lawsuit indicates.
A jury trial has been requested. A hearing has not yet been set in the case.
During the June special session of the New Mexico Legislature, intended primarily to address the state’s budget situation, a few pieces of legislation were drawn up to address business losses and impacts.
Sen. Cliff Pirtle, R-Roswell, introduced a bill providing tax credits and refunds for losses exceeding tax liabilities that did not get considered by the full body in either chamber. He said at the time that one of the intents of the Small Business Pandemic Takings Reparations Act was to create a “streamlined process” to compensate businesses, which he indicated he thought was necessary by state statute.
While Pirtle’s bill did not get heard, the Legislature did pass one relief bill during the session, which is in addition to other state and federal programs meant to help businesses survive. The Small Business Recovery Act of 2020 was signed into law July 7 and took effect immediately. That legislation creates a loan program providing three-year loans for a maximum of $75,000 to small businesses that can demonstrate losses as a result of the pandemic. Loans are expected to be available starting early August.
Dunn said that business relief and loan programs don’t address all the issues and aren’t meant to get around the “just compensation” law.
“All of my clients are doing everything they can to mitigate their damages by using those programs to the extent that they can, but that really only addresses expenses,” he said. “Lost revenues are not covered by any of those programs.”
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at email@example.com.