The question of whether businesses should be allowed to pursue claims against the state for losses connected to COVID-19 restrictions and shutdowns was the among the first confronted by the Michigan Supreme Court in its first set of arguments this year.
The two cases were filed by restaurants and fitness centers that argue the state’s COVID-19 shutdowns and restrictions robbed them of income that they deserve to recover. These issues are being debated before Michigan’s highest court more than two years after COVID restrictions on businesses expired.
“Nearly every court nationwide has rejected the novel theory of a taking in the context of COVID-19,” argued Michigan Solicitor General Ann Sherman, using the legal term for a government seizure or prevention of use of private property. “Michigan’s departure from this wisdom would make it a national outlier.”
The crux of the state’s defense of COVID rules ordered by the Michigan Department of Health and Human Services and the Liquor Control Commission is they were necessary during a public health crisis and they were applied equally to businesses with differences based only on the level of risk. Sherman said those factors were more than enough for lower courts to dismiss the cases without a need for further hearings or fact-finding.
Sherman also argued the COVID orders ultimately helped service-sector businesses rebound – including the fitness centers that are the focus of one of the lawsuits.
“Maybe there’s a rebuilding of the clientele,” she said. “But you can have no clientele if those clientele are sick or they are too afraid to go back in to any public building and especially to a fitness center.”
But attorney Philip Ellison, representing a group of gyms and fitness centers, said those businesses are calling on courts to at least consider their claims.
“We don’t accept the decree of the king unquestioned -- and I’m being a little facetious on that,” he said, “but what we do as part of our jurisprudence is that our political and governmental leaders can be questioned in a court as to what they’re doing and their reasonings for why they did what they did.”
The Supreme Court, with one member absent, considered the questions in a session often called “mini-orals” with abbreviated arguments focused on why the justices should accept the case. But these sessions often wind up with final opinions on the substantive issues.
A Supreme Court ruling would affect the ability of potentially thousands of Michigan businesses to file claims against the state. In a separate but similar high-stakes case, the court heard arguments in October on whether public universities owe students tuition and fee refunds for cancelling in-person classes due to COVID.
