Gianforte seeks to drop state lawsuit against Flathead businesses

Montana Gov. Greg Gianforte said Thursday he was directing staff at the Department of Public Health and Human Services to "seek dismissal" of lawsuits filed by the previous administration against five Flathead County businesses.

The state health department sued the businesses in late October, saying they had failed to abide by a COVID-19 mask mandate ordered by former Gov. Steve Bullock. After a judge declined to grant a preliminary injunction in November, the businesses sued back, alleging the department had selectively targeted them and hurt them financially.

Gianforte announced he would seek to drop the litigation during his State of the State address on Thursday.

"A pandemic with severe economic fallout is bad enough," he said. "We don’t need government piling on as well."

The businesses involved are the Remington Bar in Whitefish, Sykes Diner and Scotty's Bar in Kalispell, and the Ferndale Market and Your Turn Mercantile in Bigfork. The Remington is represented by Whitefish attorney Connor Walker, and the other four businesses are represented by Kalispell attorneys Bruce Fredrickson and Angela LeDuc.

A DPHHS spokesman declined Friday to elaborate on steps the administration would take to drop the litigation. A financial settlement appears to be the most likely outcome; the businesses' counterclaims seek legal fees and damages for lost customers and harmed reputations.

"We greatly appreciate the governor’s personal reach-out to resolve these disputes," the businesses' attorneys said in a joint statement Friday. "We all agree the prior administration should not have filed these frivolous lawsuits, which resulted in significant hardship to our clients. We will continue to work with the administration to address all issues."

DPHHS FILED suit in late October after sending inspectors to the five businesses on three consecutive days earlier that month. Department attorneys argued the number of maskless customers the inspectors observed made it clear the businesses had not undertaken "reasonable" or "good-faith" efforts to enforce Bullock's July 15 mask directive.

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.

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.

In his announcement Thursday, Gianforte referred to a Nov. 12 hearing in Flathead County District Court, in which Judge Dan Wilson declined the state's request for a preliminary injunction that would have required the businesses to show compliance with Bullock's directive.

"The first judge to hear the case ruled against the state, saying it didn’t have enough evidence and that the businesses made reasonable efforts," Gianforte said.

During the hearing, Wilson criticized the state's case and warned he would be "highly inclined" to award the businesses legal fees if DPHHS attorneys continued pushing for a permanent injunction without more evidence. But the judge made no legal determination the businesses had made "reasonable efforts" to comply with the directive. Rather, Wilson questioned what "reasonable efforts" would look like, given the many exemptions built in to the directive.

THE CASE is now in the discovery phase. Walker, the attorney for the Remington Bar, and DPHHS recently filed motions to dismiss one another's claims, and the department has beefed up its legal team by hiring attorneys from the Missoula firm Boone Karlberg. District Judge Robert Allison, who took over the case in November, pushed the deadline to respond to those motions to March 1.

While a statewide mask mandate remains in effect to slow the spread of COVID-19, Gianforte recently rescinded other restrictions on businesses, including occupancy limits and mandatory closing times. He also has pushed for legislation that would shield businesses from lawsuits related to coronavirus exposure as long as they comply with local, state and federal health requirements. He said he will rescind the mask mandate once that liability shield becomes law and COVID-19 vaccines are more widely available.

"I look forward to – and I know many of you do as well – to the day when we can take off our masks, throw them in the trash and go about our lives in a safe manner," Gianforte said. "In the meantime, I’ll continue wearing one, and I encourage you to do so as well."