A group of three Oregon business owners says Gov. Kate Brown snatched money from them when she closed the state’s economy in March. Now, they’re citing a little-known Oregon law to suggest Brown either needs to pay them back or face a lawsuit.
On Friday, Portland attorney John DiLorenzo sent a letter to the governor’s office on behalf of a North Bend bowling alley, an Albany hair salon, and a Wilsonville family entertainment center. All three of the businesses were forced to shutter in March after Brown issued an executive order requiring a wide range of business types — from art galleries to yoga studios — to temporarily close.
Tables at Portofino restaurant sit empty Monday, April 13, 2020, in Portland, Ore. Restaurants and bars closed March 16 due to the COVID-19 pandemic.
Bradley W. Parks / OPB
The business owners aren’t quibbling with Brown’s ability to issue that order. As DiLorenzo noted Monday, the Oregon Supreme Court has already said the governor has broad authority to address emergencies like the pandemic.
But DiLorenzo says he and his legal team have found a provision of law that has gone little-noticed as Brown has issued emergency order after emergency order in recent months. Under a law passed during the Cold War, people are “entitled to reasonable compensation from the state” if their property is “taken” under the very emergency powers Brown used to shut down the economy.
“What’s happened here is the governor has basically destroyed property for the purpose of furthering the policy behind the executive order,” DiLorenzo said. “Property doesn’t have to be tangible.”
Whether revenue lost during the stay-home order qualifies as having been “taken” would likely be the central question of a court battle. The law DiLorenzo cites has not been the subject of past court opinions, he says, but he believes his clients — and thousands of other businesses that were shuttered — qualify for recompense.
“There’s a whole constituency that hasn’t been helped at all,” he said. “That’s the small business people.”
In fact, if DiLorenzo’s legal argument were successful, it would benefit far more than just small business owners. Companies of all sizes were impacted by the stay home orders, and would theoretically be eligible for payments.
The governor’s office declined to comment on the matter Monday, saying it won’t talk about pending litigation.
DiLorenzo, meanwhile, says the class-action lawsuit he plans to pursue isn’t a foregone conclusion. If Brown is open to discussing payments to businesses — and therefore potentially spend millions in public dollars at a time Oregon’s budget is already troubled — DiLorenzo says he will hold off. Likewise, he said, if lawmakers appear ready to help his cause.
The attorney likens this case to a recent lawsuit he brought on behalf of 13 Oregon counties, who argued that the state had shortchanged them in required timber payments. Jurors ultimately sided with the counties, ordering the state to pay more than $1 billion. The matter is under appeal.
“Like our timber case, when the governor takes certain actions, there are economic costs that are attendant to those,” DiLorenzo said.
DiLorenzo’s clients are North Bend Lanes, Blush Salon & Spa, and Wilsonville Family Fun Center, LLP (better known as Bullwinkle’s). Two of the businesses, Blush and North Bend Lanes, reopened as the governor’s emergency order became less restrictive, DiLorenzo said. The businesses could file suit as early as October 19.