An Alma fitness center closed for months during the pandemic plans to appeal to the Michigan Supreme Court in a bid to be repaid by the state for time the facility spent closed under Gov. Gretchen Whitmer’s executive orders.
The gym’s lawyer, Philip Ellison, said the fitness center will file a speedy appeal after a three-judge panel on Thursday dismissed the case in the state’s favor.
“While we’re very appreciative of the three-judge panel making a very thorough decision, they reached the wrong result,” Ellison said.
The appellate panel granted the state’s request for summary disposition or a dismissal of the case, ruling that The Gym 24/7 Fitness LLC could prove neither a permanent taking of its property nor evidence that the executive orders were an abuse of power. The decision overturned a prior Court of Claims decision that had denied the state’s request for dismissal.
“…The gym was not deprived of all economically productive or beneficial use of its property as a result of the governor’s (executive orders); there was no regulatory categorical taking of the gym’s property,” said the decision by Judges Jane Markey, first elected to the court in 1994; Mark Cavanagh, first elected to the court in 1988; and Deborah Servitto, a 2006 appointee of Democratic former Gov. Jennifer Granholm.
The fitness center’s case is one of four pending appeals from Michigan businesses invoking the takings clause in order to be reimbursed for the time they were ordered closed during the pandemic.
The Alma fitness center sued the state of Michigan in the summer of 2020 on behalf of gyms grouped together in a region under a state plan that looked at regional COVID-19 case and death prevalence when determining the safety of reopening facilities such as fitness centers, restaurants and event centers.
The lawsuit — filed a few months before the Michigan Supreme Court overturned the governor’s executive orders on Oct. 2, 2020 — did not challenge the authority of the governor to close the facilities, Ellison said. Instead, the gym argued any locations shuttered in the name of the state’s fight against COVID-19 should be reimbursed for losses resulting from the closure.
“Even though we didn’t agree with her actions, for the purposes of the case, we acknowledged that she acted as she did for a public purpose,” Ellison said. But even when a resource is used or restrained for a public purpose such as fighting COVID-19, he argued, “you have to pay the just compensation for what you took.”
The appellate decision summarized the gym’s position as such: “The gym contended that fitness centers should not have been forced to bear the public burden that in all fairness should have been borne by the public as a whole through the government’s payment of just compensation.”
The Court of Appeals panel dismissed the case in favor of the state, opining that the taking clauses of the state and U.S. constitutions do not apply when there is a proper exercise of “police power” in the name of public health.
Since the gym isn’t alleging the state’s use of emergency powers was improper, neither the taking clauses nor inverse condemnation claims are triggered, the panel wrote. Additionally, there’s no allegation that the gym suffered a total loss of value because of the orders, the opinion said.
“Indeed, the gym asserted in the complaint that the (executive orders) had ‘very nearly’ destroyed the property as a whole,” the judges wrote. “The property clearly still had value, even if no revenue or profit was generated during the closure.”
Further, the appellate panel noted that “to the best of our knowledge, every federal court and state appellate court that has addressed a takings claims stemming from the government’s closure of a business as a safeguard against the spread of COVID-19 has rejected the claim.”
Besides the fitness center’s case, there are three other Michigan businesses seeking reimbursement for financial losses endured while closed under Whitmer’s executive orders, according to Attorney General Dana Nessel’s office.
A Flint roller rink called Skatemore is scheduled for oral arguments in front of the Sixth Circuit Court of Appeals on April 27th in an appeal of a district court dismissal of the facility’s case.
Mount Clemens Rec Bowl, which brought a suit on behalf of other food service establishments, is awaiting oral arguments in the Michigan Court of Appeals.
The Macomb County Restaurant, Bar and Banquet Association also is awaiting a decision or oral arguments in the Court of Appeals. Unlike other taking cases in Michigan, the association’s case was dismissed for lack of standing because the court concluded the association couldn’t invoke a taking claim on behalf of its members.