After secret discussion, Laura Kelly rejects Kris Kobach's settlement of COVID lockdown lawsuit
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A group of top Kansas politicians secretly discussed and then rejected a legal settlement with a business suing the state over COVID-19 mitigation efforts.
Wichita fitness business Omega Bootcamps Inc. had sued the state in 2020, seeking damages for government-ordered closures during the early days of the coronavirus pandemic.
The settlement was reportedly for $4,305.46.
Omega received $24,599.12 in a pair of federal Paycheck Protection Program loans that were later forgiven.
The debate was held entirely in secret, despite the objections of a Topeka legislator beforehand who attempt to have at least some discussion in public. Afterward, a rural western Kansas lawmaker tried to get the governor to explain why she vetoed the agreement.
In both cases, Gov. Laura Kelly shut down public discussion.
More: Does Kansas owe businesses for mandating they close? A new lawsuit says yes.
Debate over Omega Bootcamps settlement was held in secret
Omega Bootcamps and owner Ryan Floyd had argued that the pandemic closure entitled the business to compensation under state emergency management law. It has been disputed whether COVID-19 shutdowns met the law's criteria.
In a virtual meeting on Thursday, attorneys from Attorney General Kris Kobach's office brought the settlement agreement to the State Finance Council, needing approval from the group of top Republican and Democratic legislators, plus the governor.
Rep. Troy Waymaster, R-Bunker Hill, made the motion to meet secretly, citing attorney-client privilege.
As Kelly asked for a vote, she was interrupted by House Minority Leader Vic Miller, D-Topeka.
Miller said he supported having the substantive discussion in executive session but suggested they should have some basic discussion in public.
"It's a matter of public record and if we could just have an outline of what the basic facts are without jeopardizing any attorney-client privilege, I think it would be beneficial to the public," he said.
"I appreciate your sentiments," Kelly said, "but I am going to go ahead and call for the voice vote to go into executive session."
Miller appeared to be the only one to vote against it. The Associated Press also petitioned politicians prior to the meeting to hold discussion in public, but the email was ignored.
The settlement agreement would have become a public record had it been approved.
But after a series of technical difficulties with the livestream, which didn't show the committee reconvening as scheduled to extend the executive session past its initial end time, the committee held a public vote.
The six Republicans voted yes, the two Democrats voted no, then Kelly vetoed it. Kelly then immediately moved to adjourn. She was interrupted by Sen. Rick Billinger, R-Goodland.
"We had this meeting here today and you voted no," Billinger said to Kelly. "I mean, I don't understand that."
"We can have a discussion after the vote is finished," Kelly said, referring to a private discussion after the meeting adjourned.
More: Kansas faces pressure to compensate COVID-hurt businesses — or battle a wave of lawsuits
Kansas lawmakers ask: Why was the settlement proposed, then rejected?
Kelly spokesperson Brianna Johnson pointed to the $24,000 in relief aid that Omega has already received.
"Governor Kelly has set up programs to support small business post-pandemic and will continue to do everything possible to help small business owners get back on their feet," Johnson said. "However, in this specific case it's clear that this settlement is not in the best interest of the state or Kansas taxpayers."
A Kobach spokesperson didn't respond to a request for comment.
Senate President Ty Masterson, R-Andover, and House Speaker Dan Hawkins, R-Wichita, said Kelly's veto was "a purely partisan punishment" of "a small business owner who had direct harm as a result of their lockdowns."
"This case has been a three-year saga waiting for the State to acknowledge that the small businesses that were targeted by state and local shutdown orders should be compensated," Josh Ney, an attorney for Floyd and Omega, said in a statement. "Three years later, the state is still holding on to Kansans' money."
Ney argued that the compensation would have been equivalent to what the business would have gotten from a fund the state established to compensate other businesses. The gym didn't meet the qualifications, which Ney said were "draconian."
Miller told reporters after the meeting that he doesn't think Omega's situation meets the criteria of the state's emergency law it was citing in its lawsuit.
He said he expect the judge to dismiss the case on a pending summary judgment motion.
The proposed settlement amount was $4,305.46, Miller said.
"You're talking about taxpayers' money," Miller said. "And that's just one case."
He suggested settling in this case could put the state at risk of facing an influx of meritless lawsuits.
"In my opinion, I don't pay people for what I consider to be meritless cases," Miller said. "I think once we start doing that ... when you have a reputation of settling anytime somebody files anything, you just breed more lawsuits.
"I think we should only pay someone — me as the person who's here to protect our public coffers — we should only pay lawsuits when they are meritorious. Otherwise we invite, encourage others to bring meritless suits just for the purpose of collecting some money."
This article originally appeared on Topeka Capital-Journal: Kansas won't settle COVID lockdown lawsuit with Wichita gym Omega
