Small businesses vow lawsuit unless state compensates pandemic losses
A Portland lawyer has put the state on notice that it should compensate businesses for losses stemming from shutdowns that Gov. Kate Brown ordered during the coronavirus pandemic — or the businesses will press for a class-action lawsuit in court.
John DiLorenzo, who is no stranger to class-action lawsuits, sent the notice Friday to Brown and the Department of Administrative Services, the state budget and management agency. A copy was sent Monday to the Portland Tribune.
He said in his notice that he represented North Bend Lanes, Blush Salon and Spa of Albany, and Wilsonville Family Fun Center, among the 32 business categories that could fall under a class-action lawsuit. The notice itself is not a lawsuit; DiLorenzo said it was a 30-day notice of his intent to go to court, and a judge would decide whether it becomes a class-action lawsuit.
A spokesman for Brown said the governor generally does not comment on potential or pending litigation.
DiLorenzo said his notice was not intended to challenge Brown's authority to issue executive orders during the pandemic. The Oregon Supreme Court on June 12 rejected a legal challenge originating in Baker County. DiLorenzo was not involved in that lawsuit.
"We wish to make clear that we do not challenge your statutory right to have issued your executive orders, nor do we wish to second guess whether doing so was an appropriate response to the COVID-19 crisis."
But DiLorenzo said that while some businesses were allowed to stay open under Brown's March 23 order, others were not.
"Although many other types of businesses were permitted to remain open, subject to social distancing guidelines, those businesses specified categorically … were closed summarily with no opportunity to illustrate how they could safely operate under similar conditions imposed on other types of business enterprises."
The business categories DiLorenzo listed:
Amusement parks, aquariums, arcades, art galleries, barber shops and beauty salons, bowling alleys, cosmetic stores, dance studios, esthetician practices, fraternal organization facilities, furniture stores, gyms and fitness studios, hookah bars, indoor and outdoor malls, indoor party places, jewelry shops and boutiques, medical spas, facial spas, day spas.
Also non-medical massage therapy services, museums, nail and tanning salons, non-tribal card rooms, skating rinks, senior activity centers, ski resorts, social and private clubs, tattoo and piercing parlors, tennis clubs, theaters, yoga studios and youth clubs.
He said the law that authorizes the governor to declare an emergency also provides for compensation for lost real or personal property taken for public purposes.
DiLorenzo argues that while laid-off workers received unemployment benefits, and state and school district employees continued to get paid, small businesses owners did not.
"We do wish to point out that whereas you have taken care to provide some level of financial compensation to many affected Oregonians, you have failed to do so for the small business community which we consider to be the backbone of our state's economy."
DiLorenzo was the lead lawyer in a lawsuit that 13 Oregon counties, plus other local governments, filed against the state for failing to maximize timber production on forest lands that the counties yielded to the state in 1941, after the Great Depression. A Linn County jury awarded the counties $1 billion in damages, including almost $700 million for trees not cut since 2001, in a verdict in November 2019. The Board of Forestry changed the definition of "greatest permanent value" in 1998 to broaden it to other values, such as environmental protection and recreational uses.
Though Clatsop County, the largest beneficiary of state timber sales, opted out of the lawsuit, most others stayed in — including Washington County, also a big beneficiary. Davis Wright Tremaine, the Portland firm where DiLorenzo works, stand to gain 15% of any settlement if one is paid.
The state has taken that case to the Oregon Court of Appeals.
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