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Kansas officials to consider legal settlement with business over COVID-19 restrictions

Kansas’ governor and top state lawmakers were to meet Thursday to consider a proposed legal settlement between the state and the owner of a Wichita fitness studio forced to shut down during the first months of the coronavirus pandemic and then operate under restrictions.

Approval of the settlement by Democratic Gov. Laura Kelly, six Republican leaders of the GOP-controlled Legislature and its two top Democrats would end a state court lawsuit filed in December 2020 by Ryan Floyd and his business, Omega Bootcamps Inc. The lawsuit has yet to go to trial in Sedgwick County District Court in Wichita, and a judge is considering the state’s request in 2021 to dismiss it. Kansas law requires the governor’s and top lawmakers’ approval of the settlement.

The lawsuit argued that the state used Floyd’s and his business’ private property “for the benefit of the general public” when it and local officials imposed restrictions to check the spread of COVID-19. Statewide restrictions started with Kelly’s order shutting down most businesses for five weeks, starting in late March 2020.

The lawsuit cited part of the state’s emergency management law that says people can seek compensation in court if their property is “commandeered or otherwise used” by state or local officials. There’s been no ruling on whether shutting down or restricting a business represents a use of its property.

According to the U.S. Small Business Administration, Omega Bootcamps received two pandemic relief loans totaling about $24,000 in 2020 and 2021. Regarding his lawsuit, Floyd has said he wants an appraiser to be appointed to set the amount of damages.

State officials did not disclose details of the settlement ahead of Kelly’s meeting with top lawmakers, and state Attorney General Kris Kobach’s office did not immediately respond to an email requesting details. Ryan Kriegshauser, an attorney representing Floyd and his business, said he couldn’t discuss details of the settlement before the meeting.

Kobach, a Republican, was elected attorney general last year but served as secretary of state, Kansas’ top elections official, from 2011 to 2019, and Kriegshauser worked for him as an attorney and policy deputy in 2011-12. Lawyers outside the attorney general’s office have handled the state’s defense in the lawsuit.

The Kansas meeting came the same day as the formal end of the U.S. national public health emergency for COVID-19. In Kansas, Republican legislative leaders forced an end to a state of emergency in June 2021, about three months earlier than Kelly wanted. The Legislature also whittled away at the power of the governor and local officials to close or restrict businesses or impose mask mandates during pandemics.

The state health department reported 485 new cases and 18 new deaths in the seven days ending Wednesday, an average of 69 new cases a day. The state has reported nearly 946,000 cases and more than 10,200 deaths since its first reported case in early March 2020 — one case for every three residents and one death for every 287 residents.

The lawsuit was put on hold by the judge in 2021 so that Kriegshauser could urge Kansas lawmakers to use federal COVID-19 relief funds to compensate small businesses for their financial losses during the pandemic. Republican lawmakers approved a plan that could have set aside tens of millions of dollars, but Kelly vetoed it, arguing that the “well-intentioned” measure violated a national coronavirus relief law.

In 2022, Kelly and lawmakers agreed on providing up to $50 million worth of refunds on the local property taxes paid by retail “storefront” businesses shut down or restricted during the pandemic. But critics have said the process of getting the aid is difficult and a $5,000 cap discourages businesses from applying.