Serving Clovis, Portales and the Surrounding Communities

Court rules against compensation

SANTA FE — The New Mexico Supreme Court ruled Monday the state has no constitutional or statutory requirement to compensate businesses for financial losses and expenses related to public health orders issued during the COVID-19 pandemic.

The 5-0 ruling dealt with nearly two dozen lawsuits filed in district courts across the state last year, seeking compensation from the state from its public health orders that closed businesses or limited in-person services. The plaintiffs argued the orders constituted a taking of private property that left those businesses eligible for compensation.

Instead, the court concluded the orders were a “reasonable exercise” to protect public health.

"Occupancy limits and closure of certain categories of businesses, while certainly harsh in their economic effects,” Justice C. Shannon Bacon wrote in the opinion, “are directly tied to the reasonable purpose of limiting the public's exposure to the potentially life-threatening and communicable disease, and thus can be deemed 'reasonably necessary.’”

State law does provide for compensation to the owners of "health care supplies, a health facility or any other property that is lawfully taken or appropriated" by the state during a public health emergency, but the court rejected a broad interpretation of “any other property” and said the phrase was, "legislatively intended to be a catch-all limited within the category of physical property that is directly taken or appropriated by the State and used for, or in connection with, a public health emergency."

Adopting such a broad interpretation, the option said, would lead to unlimited liability.

"Because a public health emergency can affect the entire population, anyone and everyone could be a potential claimant under the Real Parties' interpretation, even under far less restrictive measures than the PHOs. It is simply not credible that the Legislature in enacting the (Public Health Emergency Response Act) intended for such a potential raid on the public wealth while simultaneously granting broad powers to protect the public health.”

Individuals and businesses seeking compensation, the Court held, must first follow the administrative claims process outlined in the PHERA, including a determination of compensation by the attorney general’s office and appeal rounds that include hearing officers and district courts.