Should Kansas pay businesses it shut down over COVID? Question goes to Legislature
The Kansas Attorney General’s Office and a Wichita gym that filed suit against the state over springtime COVID-19 closures are calling on the Legislature to consider law changes that would create “a consistent statewide process for considering compensation claims of private businesses and individuals economically harmed by government shutdown orders.”
In a statement released Thursday, AG Derek Schmidt said the Dec. 9 lawsuit filed by Omega Bootcamps Inc. and its owner Ryan Floyd “raises important public policy questions extending well beyond this individual case that would be better answered by the Legislature rather than courts.”
Schmidt and attorneys representing Floyd have asked a Sedgwick County judge to put further court proceedings tied to the lawsuit on hold until the Kansas Legislature adjourns its regular 2021 session to give lawmakers time to consider changes. The Legislature convenes Jan. 11.
Floyd and Omega Bootcamps argue in the suit that the statewide, government-ordered shutdown of non-essential businesses from late March to late May forced his gym to shoulder more of the economic burden of coping with the COVID-19 pandemic than was fair. They contend the forced closures amount to “government use” of his business, making him eligible to submit claims for payment under a Kansas Emergency Management Act provision that allows people to recoup losses when the government commandeers their private property to cope with a disaster during an emergency declaration.
The lawsuit is different than others challenging government-ordered business closures and operating restrictions because it seeks payment under an existing law rather than challenging the validity of the orders.
Omega Bootcamps was shut down from March 25 to May 26.
In his statement, Schmidt said he “agree(s) with the basic principle, reflected in current law, that at least some of those whose property is significantly damaged by government actions undertaken for the public good during a state of emergency should be compensated for their loss.”
But he said the law as written “was not designed to address these sorts of business shutdown orders” and it’s unclear whether it applies in Floyd’s or other cases.
“Therefore, rather than proceeding directly to litigation, we have reached agreement with the plaintiffs to jointly ask the court to put this lawsuit on hold during the 2020 legislative session so we can ask the Legislature to consider in a comprehensive manner the public policy issue of compensation for businesses for losses caused by lockdowns.”
One of Floyd’s lawyers, Ryan Kriegshauser, called the stay “a major development that has statewide and possibly national implications because other states have similar statutory provisions” in a news release Thursday.
He previously told The Eagle the state should expect to see similar lawsuits from other businesses if Floyd’s is successful.
“By asking the legislature to take up this matter, the State is acknowledging government use claims are possible in at least some circumstances under the Kansas Emergency Management Act,” Kriegshauser wrote.
“Both the State and local governments are officially on notice that they may have to compensate businesses for previously imposed restrictions,” another attorney representing Omega Bootcamps, Josh Ney, said in the news release.
“We call on policy makers to act to make small businesses whole after the economic devastation caused by the Governor’s shut-down orders. State and local governments must consider the economic costs associated with curfews, shut-downs, and business restrictions before allowing such unilateral power to be exercised in the future,” Ney said.
Kansas Gov. Laura Kelly first issued a statewide disaster proclamation related to the COVID-19 pandemic on March 12.
So far the disease has killed more than 2,700 Kansans and infected more than 222,400 others.
