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Monday, May 20, 2024

Court Rejected Lawsuit Challenging Denial of Local Pandemic Funding

During the pandemic, a City issued the "Safer at Home Order" which prohibited people from going out except for limited “essential activities.” To help mitigate economic damage as a result of the Order, the City made emergency funds available to non-essential businesses. The available funds were limited and not all of the qualifying businesses were able to receive funding.

A married couple who owned and operated an import and gift store filed suit against the City after their application for the emergency funds grant was denied. They claimed that the City denied their application because the husband had attended a rally protesting the Safer at Home Order, and that denial violated their free speech, equal protection and due process rights. They also alleged that certain statements made by the Mayor in a press statement about why he denied their application were defamatory.

The district court ruled in favor of the City and Mayor, and the business owners appealed to the Seventh Circuit Court of Appeals, which upheld the ruling rejecting the owners' claims in Navratil v. City of Racine

The business owners first alleged that the denial was retaliation for the husband exercising his First Amendment rights in attending the rally. The Seventh Circuit rejected that claim, finding that the rally he attended violated valid time, place, and manner restrictions as (1) the Safer at Home Order temporarily banned large public gatherings; and (2) the rally’s permit to gather on state property had been denied due to health hazards. 

The business owners also alleged a violation of their equal protection rights under two theories: (1) a political animus theory (that the grant application was denied due to the Democratic Mayor’s political beliefs about the Republican business owners); and (2) a class-of-one theory (other applicants in violation of the Safer at Home Order were granted funding). The Court rejected both theories, finding a lack of evidence to support the claims.

The business owners then alleged a violation of their procedural and substantive due process rights. The Court rejected that claim as well, finding the owners had no property interest in a purely discretionary government benefit and that they were not deprived of their legal ability to operate their business. 

Finally, the Court rejected the defamation argument on the basis that the Mayor’s statements about the business owners were substantially true and conveyed the Mayor's genuine thoughts and opinions.

Post Authored by Madeline Tankersley & Julie Tappendorf, Ancel Glink


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