Nonessential Businesses Seek Compensation for Losses During Shutdown — Or Else!

Salem, OR (WorkersCompensation.com) – Many Oregon individuals and businesses have been entitled to some sort of financial compensation since the governor’s shutdown order in March due to the coronavirus pandemic. Displaced workers have access to unemployment compensation; schools have been required to maintain paychecks for their public employees, and state workers have continued to receive their pay despite not being able to work. However, such is not the case for many small businesses that were required to close, according to an attorney.

"These small business persons were left to fend for themselves,” wrote John DiLorenzo, a Portland-based attorney with David Wright Tremaine LLP. “Although some were able to avail themselves of temporary federal assistance, many lost business goodwill and value of their enterprises. For them, the effect of the Stay at Home Order deprived them of their property for a public purpose.”

In a letter to Gov. Kate Brown and State Chief Operating Officer Katy Coba, DiLorenzo says many nonessential businesses forced to close are on the verge of economic collapse. He says the businesses must be compensated.

“As potential class representatives, my clients hereby provide 30 days’ notice of their intent to file a class action against you and the State of Oregon for compensation due them (and all others similarly situated) pursuant to ORS 401.192(3),” the letter continues.

While DeLorenzo’s letter is written on behalf of a bowling alley, salon and spa and a family fun center, the list of the types of businesses forced to closed is extensive.

“The Order required social distancing when frequenting other types of businesses like grocery stores, healthcare, pharmacies, and businesses not referenced in Section 2,” he wrote. “Although many other types of businesses were permitted to remain open, subject to social distancing guidelines, those businesses specified categorically in Section 2 were closed summarily with no opportunity to illustrate how they could safely operate under similar conditions imposed on other types of business enterprises.”

The action of closing the businesses constituted the taking of “real or personal property” under the power granted by the law and “the owner of the property shall be entitled to reasonable compensation from the state,” the letter reads. “It is therefore apparent that ORS 401.192(3) requires the state to establish a system of compensation for my clients and the proposed class members they represent.”

DiLorenzo, who made headlines in March for winning a $1.1 billion jury verdict against the state for failing to maximize timber harvests on state forests, says he is not challenging the governor’s statutory right to have issued the executive orders, nor second guessing whether it was an appropriate response to the COVID-19 pandemic.

“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,” he wrote. “We invite you to contact us concerning your plans to provide my clients (and the class of claimants they represent) with the relief to which they are entitled and are willing to constructively collaborate if you are of a mind to attempt to address this issue without resort to litigation.”

DiLorenzo sent the letter last Friday. As of last night, there has been “radio silence from the Governor so far,” he told WorkersCompensation.com. “We would like to give the political process some time to work and should have a decent idea of whether it might respond within the next two months or so.”

The governor's office has told media outlets it won't comment during potential litigation.

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