These are tough times. That is not news. However, as a business owner, you have to think not only about yourself and your family, but also your business, its workers, and its future.
However, the government’s decisions are why I am writing you. As we all know, Michigan Governor Gretchen Whitmer issued Executive Order No. 2020-09 and 2020-21 which prohibited "non-essential" businesses and others like restaurants, food courts, cafes, coffeehouses, and other businesses from being open. These executive orders essentially shut down many businesses, but left others open.
Of course, small business owners like ourselves are always the first in line to offer help and support to our communities when in need but are often ignored by our government when post-crisis recovery begins. And that is why you must take immediate action to preserve your legal rights.
Under the US and Michigan Constitutions, the government generally has a right to seize property for the use and benefit of the public, especially in a time of emergency. However, our constitutions also require that those from whom the government has taken “property” must provide “just compensation.” Your business is “property.” The courts have interpreted that provision to mean that property owners who have had the government take their property reimburse the “fair market value” of what was taken. As the US Supreme Court explained, the Fifth Amendment’s guarantee “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”
Take, for example, a fire is raging in a modern Michigan city. The mayor of that town orders that a handful of buildings be burnt down to create a fire-break and halt the spread and reach of the fire to other parts of the city. In that case, the mayor has “taken” the buildings and put them into public use. After the fire is put out, the City must compensate those building owners for the losses they were forced to suffer to protect the remaining buildings in the city. We see exact parallels for the businesses, like yours.
The Governor essentially “seized” your businesses, customers, and dining rooms to create an attempted virus barrier. And undoubtedly, you suffered substantial losses. Some may never be able to return. By sacrificing your business for the greater good, the “takings” clauses of the US and Michigan Constitutions seemingly provide the right to seek reimbursement when the crisis ends. Major companies will see “bailouts.”Small business owners may not, absent court action, be provided similar compensation.
We will be the first to admit that this “legal theory” has never been precisely tested in the courts. We cannot promise you, with any level certainty, that the courts will, post-crisis, recognize that such a right exists for the acts undertaken by the Executive branch in the amidst of a pandemic. But your chances will be zero unless you have filed the right paper work before the legally required deadline.
Under Michigan law (known as the Court of Claims Act), the ability to bring such a lawsuit has been made exceedingly complicated (surprise, surprise) with the need to formally pre-file what is known as a “Notice of Intent” or “NOI.” This is a legal document, with highly technical legal requirements, which must be provided to a specialized court in Lansing known as the Court of Claims within a relatively narrow window of time. It has to be filed, meeting all the specialized requirements, within six months of when the “injury” occurred. We have seen suing businesses screw up this and the government uses that to throw out cases.
The state government has used different arguments to try to avoid responsibility by messing with what constitutes the date of “injury” and if notice was provided within six-months thereafter. In the current crisis, was it the date of the Governor’s order? Was it March 16th at 3:00p.m.? Was it when your customers could not reach the inside of your business? Do not just take my word for it, see the recent Michigan Supreme Court case involving the unemployment fraud cases. The goverment takes full advantage if allowed.
Filing the proper legal document preserves your rights. On the other hand, if you or business properly files before that deadline, the ability to file a lawsuit (if you even decide to do so) is legally extended three years (or sometimes up to six years). If you do not file the NOI (with all its particularities) within the six-month window, your lawsuit is forever barred—meaning you can never seek compensation via the courts even if your business suffered losses (loss profits, reduced sales, etc) that the courts may recognize as reimbursable.
You were asked (no, you were ordered) to shoulder a major cost. You were ordered to sacrifice the business you have spent countless hours working and building to protect the public from this insidious COVID-19 virus. You heeded the call. What remains to be seen is whether or not the State of Michigan will voluntary compensate you for “burning to the ground” your business. While I sincerely hope that it will, properly filing an NOI will ensure you—at minimum—have the option to go to court later on if the government do not. If you do not file it, you will essentially have no access to the Court of Claims whatsoever.
To that end, my law firm stands ready to assist you in filing the proper NOI. But time is limited. The safest bet would be file it now—long before any deadline is surpassed. My office has brought a number of lawsuits in the Court of Claims and is well-versed in meeting all the filing requirements. If you wish to file such a NOI, I invite you to contact my office to begin arrangements to do so.
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