The Michigan Supreme Court recently affirmed previous lower court rulings, denying compensation to businesses and college students.
According to Newsweek, the ruling refused financial claims against the state for closures and educational disruptions.
In 2020, to stem the spread of the coronavirus, Michigan enforced strict public health measures under Governor Gretchen Whitmer. These measures included the closure of various businesses such as gyms, restaurants, and cinemas, purportedly causing significant economic distress. Business owners contended that these enforced closures amounted to unlawful taking of their property without due compensation. This legal stance hinged on the argument that the state’s actions during the pandemic emergency were tantamount to property seizure.
A court of appeals in 2022 sided with the stance that the state had not permanently acquired any property, suggesting instead that any loss in property value experienced was temporary and likely recuperated after restrictions were lifted.
For college students, the shift from in-person to online education during the pandemic also spurred legal challenges. Students sought financial redress claiming breach of contract for not receiving the in-person educational services they paid for.
The appeals court noted that students did not convincingly demonstrate that their educational institutions explicitly guaranteed face-to-face instruction within contractual agreements. This legal interpretation led to the dismissal of claims seeking tuition rebates or adjustments based on the delivery mode of instructions.
Justice David Viviano of the Michigan Supreme Court offered a dissenting opinion. He argued for a full hearing on these appeals, citing unresolved significant legal inquiries concerning the role of government actions under emergency conditions.
Justice Viviano expressed his concerns:
The lack of consideration for these appeals diminishes public confidence in the judiciary to act as a guardian of constitutional freedoms and to ensure the government doesn’t infringe on private property rights without proper compensation, even during emergencies. The claimants presented reasonable allegations that their properties were effectively taken without just compensation, raising substantial factual disputes that warrant further examination.
Despite his strong dissent, the majority of the court concluded that the posed legal questions did not merit further review. This stance effectively upheld the lower courts’ decisions.
The decision of whether government-induced emergency shutdowns constitute compensable property takings has been contentious across various jurisdictions in the United States. The argument often pivots on the interpretation of public health mandates as temporary and reversible measures rather than permanent occupations or uses of private property.
The business community, particularly, had hoped for a different outcome. They argued for recognition of their financial losses during state-mandated closures as unjust deprivation of property use. However, the court maintained that property retains its value despite its non-productive or non-profitable status temporarily during such public health actions.
On the academic front, the transition to online classes during the pandemic was an unprecedented situation. While students and parents might have felt short-changed, legal standards required clearer proof of guaranteed in-person instructions to sustain claims of contractual breaches.
The rejection of these appeals by Michigan's highest court underscores the judiciary's interpretation of state powers during public health crises. It also sets a significant precedent on the limits of claimable damages under such emergency governmental measures, aligning with similar decisions in various other states.
This case highlights the complex dynamics between public health-driven state mandates and individual property and contractual rights during a crisis. Both business owners and students will likely continue to challenge these issues in other venues, although the Michigan Supreme Court’s ruling has set a formidable precedent.
