Flathead businesses sue state over COVID claims

Five Flathead County businesses accused of flouting Gov. Steve Bullock's masking and social-distancing mandates have filed counterclaims against the Montana Department of Public Health and Human Services, alleging the agency selectively targeted them and hurt them financially.

The businesses are seeking damages, attorney fees and a judgment saying DPHHS has "no authority" to enforce the governor's July 15 directive. As daily cases of COVID-19 continue to reach record highs, Bullock this week announced a new directive scheduled to take effect Friday, expanding a statewide mask requirement and tightening restrictions on businesses. That includes requiring businesses to operate at no more than 50% capacity.

"The department’s decision to file this action against my client was a clear abuse of the legal process, especially as they did not even bother to contact my client about any purported violations prior to filing suit," Connor Walker, an attorney for the Remington Bar in Whitefish, said in an email.

The department "did not have sufficient evidence to file the suit, and it intentionally ignored evidence of compliance by all defendants," Walker said. "The only purpose of filing suit against Flathead County small businesses, rather than against the big-box stores, was for the purpose of intimidation."

The department in late October sent inspectors to the Remington Bar, as well as Sykes Diner and Scotty's Bar in Kalispell, and the Ferndale Market and Your Turn Mercantile-Your Lucky Turn Casino near Bigfork, and then sued each business in Flathead County District Court.

Department attorneys argued the businesses had not undertaken "reasonable" or "good-faith" efforts to enforce the mask mandate. That, they said, was clear from the number of maskless customers the inspectors observed while visiting the businesses on three consecutive days in October.

The Flathead City-County Health Department had conducted previous inspections, issued warnings and referred Sykes Diner and the Ferndale Market to the county attorney's office, which took no enforcement action.

Last week, District Judge Dan Wilson declined the state's requests for preliminary injunctions against the businesses. He also warned DPHHS attorneys he would be "highly inclined" to award the businesses legal fees if the state continues pushing for restraining orders and does not present a stronger case.

DPHHS spokesman Jon Ebelt provided a statement in response to the businesses' counterclaims Wednesday, noting many local hospital employees have been unable to work due to COVID-19 diagnoses and exposures.

“While we are still reviewing these claims, it is our hope that the defendants are working in good faith to protect the health of their staff and customers," the statement said. "As the defendants seek to expand the lawsuit, we are working to find additional health-care workers to assist the local hospital in the Flathead because so much of its current workforce is in quarantine or isolation. Cases continue to skyrocket, hospital bed space is running low and health-care workers are exhausted. With rampant community spread, the situation needs to be taken seriously.”

During last week's hearing, several owners and employees of those businesses contended they have exceeded the requirements of Bullock's directive by offering masks to customers and implementing stringent cleaning regimens. They also said they would lose employees, alienate customers and risk going out of business if they crack down on the mask requirement. Doug White, owner of Your Turn Mercantile and Your Lucky Turn Casino, testified that one customer threatened an employee with a gun after being asked to don a face covering.

The state attorneys noted the Ferndale Market placed a sign at its entrance notifying people of the mask requirement. The sign, however, also gave customers tacit approval to flout the requirement. It claimed a federal privacy law prohibits employees from asking about customers' health, and so the store would assume all maskless patrons have valid medical exemptions.

Bruce Fredrickson, an attorney representing four of the businesses, last week argued the state's inspectors could not verify customers or businesses were violating the order because they did not ask whether anyone claimed an exemption.

"They photographed Ferndale Market’s sign on the door, as well as its employees, and members of the public who were present without masks, without their permission, without speaking with them, without verifying their identity, and without making any attempt to determine whether those individuals had any personal reason to be present without masks," the market's counterclaim states. "They then relied on those photographs and on their personal observations to make unfounded, arbitrary and speculative accusations of noncompliance … "

Walker, the attorney for the Remington Bar, said DPHHS should have implemented the mask requirement through its emergency rulemaking process instead of relying solely on the governor's directive.

"The state can’t be governed by directive indefinitely," Walker said. "The people have a right to notice and comment on proposed rules, and that process would also make those rules more effective. If the department isn’t clear on what 'reasonable compliance' means, how can Montana citizens and small businesses?"