State may be liable for shut downs of business

The Minnesota Supreme Court left open a narrow door for potential claims against the State for economic losses suffered by businesses from COVID related shutdowns.

In Buzzell v. Walz, the plaintiff sued for damages over the shutdown of his wedding venue and restaurant.  The court addressed a remedial provision of the emergency powers law, Minn. Stat. Ch. 12, which provides that an “owner of commandeered property must be promptly paid just compensation for its use and all damages done to the property while so used for emergency management purposes.”  The court held that, for property to be “commandeered” so as to qualify for compensation, “the government must exercise exclusive control over or obtain exclusive possession of the property such that the government could physically use it for an emergency management purpose. The government exercises exclusive physical control or exclusive possession of private property when only the government may exercise control or possession of the property and the owner is denied all control over or possession of the property.”

The supreme court declined to decide whether the shutdown of Buzzell’s businesses met this criteria and instead sent the case back to the trial court for consideration of the issue.  Based on the supreme court’s decisions, business who were unable to operate out of their properties and suffered resulting economic losses may have a claim for compensation.