Enchantment State News

New Mexico Gov. Michelle Lujan Grisham has put in place stricter rules accompanied with fines – some exceeding $50,000 – on businesses violating Public Health Act orders instituted since the COVID-19 crisis caused lockdowns. 

The New Mexico Business Coalition (NMBC), believing that the governor's actions are too severe, has filed an amicus brief for a lawsuit challenging the fines. 

The Supreme Court of New Mexico has agreed to hear the case, including NMBC’s amicus brief, on August 4. New Mexico Attorney General, Hector Balderas, recently issued a formal opinion stating that the governor does have the authority to issue fines, but those fines should not exceed $100. 

Carla J. Sonntag | NMBC

Carla J. Sonntag, president and founder of NMBC, said her organization represents businesses of all sizes, from small mom-and-pop businesses to international companies. 

"We work on policy that is good for all businesses and the governor’s action of fining business exorbitant amounts is not good policy," Sonntag said. "Local New Mexico businesses have been tragically hurt by the governor’s shutdown orders and the arbitrary, capricious enforcement of those orders. Hundreds of businesses have closed permanently and many others are in jeopardy of closing."

According to a recent report released by the National Restaurant Association, at least 100,000 restaurants have closed permanently in the last month due to state, local and federal mandates on the dining industry designed to combat the coronavirus pandemic.

The stricter rules enacted by Grisham follow those lines, but Sonntag believes the heavy fines will help sink an industry already under siege.

"While the governor has the authority to levy fines, we believe they can only be $100 per day, not the $5,000 per day that she’s currently using," Sonntag said. "She fined a disabled veteran-owned business in Grants, New Mexico $60,000 for being open just to feed his family. That fine, which is being challenged, would put him out of business." 

Sonntag says that someone needed to stand up and be the voice for New Mexico businesses and challenge what she believes are heavy-handed mandates by the governor.

"NMBC had an opportunity to challenge those fines by filing an amicus brief, so we did," she said  "The New Mexico attorney general recently issued an opinion that the governor can, based on public health/safety state laws, levy $100 fines for failing to wear a face mask. While not directly related to our amicus brief on other business fines, the AG was reviewing the same statutes we did to challenge the $5,000 per day fines, which is outlined in the brief."

Sonntag added that business owners put employee and customer safety first and are conscientious in monitoring employee health, keeping their businesses clean, adhering to social distancing policies, erecting Plexiglas barriers and wearing masks. 

But many are extremely concerned that  any misstep will result in fines they cannot afford. 

"Having our governor set up and widely advertise ‘snitch hotlines,’ encouraging employees and New Mexicans to report any hint of non-compliance has not helped. These snitch lines have resulted in false reports by disgruntled  employees/customers/activists and unnecessary ‘visits’ by state police or other state enforcement officials," Sonntag said. "Employers are doing all they can to stay afloat and taking time to fend off false allegations only exacerbates the problem."

Since March, the state has imposed closure of dine-in options twice, with the most recent being July 1. In the latest order, few restaurants stayed open. 

"Many did this mainly out of concern for their employees’ ability to care for their families. Secondly, they were, once again, fully stocked with food products that would go bad with such limited service," Sonntag said. "This is the second time in a few months the governor has provided minimal notice of shut down orders which have cost restaurants thousands of dollars in lost revenue and wasted product. After the state police were sent to the premises of those who remained open, most headed the warning and shut down. A few, who decided to allow employees to keep working and use existing food/beverage inventory, defied the warning and have had their food permits revoked by the state."

The biggest obstacles for businesses during the coronavirus, according to Sonntag, have been the shutdowns and the sporadic nature of the governor’s orders.  

"Often new decrees impacting thousands of jobs and tens of thousands of dollars in perishable inventory are discussed late on a Thursday afternoon and take effect within 12 to 72 hours. NMBC has repeatedly communicated with the governor our desire to help, to be a part of shutdown and reopen discussions," Sonntag said. "We even presented her a detailed reopen plan that focused on a safe and incremental plan to restart our economy."

Sonntag said that NMBC's plan was received well by state politicians and offered a way to help restaurants stay in business.

"The plan we proposed, while adopted by several mayors around the state as a model to reopen their towns and cities, was ignored by the governor," she said. "And each time a new health order comes out there is no warning and no time to prepare for the change. We frequently hear heartbreaking stories about employers’ stress of not being able to provide the jobs and/or hours their employees need to take care of their families. We hear about businesses shutting down or barely hanging on while never knowing if they’ll make it another day."

Tom Hutchinson owns two Las Cruces-area restaurants: La Posta de Mesilla and Hacienda de Mesilla. 

La Posta de Mesilla opened its doors in 1939 and offers a variety of Mexican food and steaks. 

"My wife and I are only the second owners and we acquired the business back in 1996. Pre-coronavirus we employed about 120 people part time and full-time," Hutchinson said. "The Hacienda de Mesilla we acquired three years ago and it is a restaurant and boutique hotel. Pre-coronavirus we had about 45 people in that establishment serving higher-end seafood and steaks with about a 14 room boutique hotel."

He recalls on March 16 when Gov. Grisham first restricted dine-in services, then three days later the governor completely shutdown dine-in services, but made an exception for curbside service.

"At that point we either laid-off or terminated about 85% of our staff. We retained some staff to handle our curbside business," Hutchinson explained. "I converted both restaurants at that time to curbside only service per the governor’s request. We operated like that until June 1 when dine-in was opened back up. I was part of the leadership of the state working with our governor wondering when we can open back up and to her credit she was very available to talk and meet with us and understand what our concerns were. We shared with her what we thought things needed to look like when we opened back up on June 1. When we were operating before that our sales were probably 85 to 90% for both establishments. So we opened back up on June 1 at 50% capacity adhering to very strict COVID-19 safe practices, protocols and processes."

Hutchinson serves on the Mexican Restaurant Association's Board of Directors, and says that many people know the industry already operates under strict guidelines and a tightened health and safety environment. 

"We re-engineered our restaurants inside to accommodate six-foot spacing between customers and that worked out pretty well," he said. "I saw my business pick up his customers became more comfortable and confident of dining indoors. We saw our business come back roughly to 70% of what it was in a year to year comparison even though we were at 50% capacity so that was good news. We operated like that for roughly six weeks until the governor decided that she needed to roll back some of her thinking on re-opening the state to include dine-in services and it was around July 6 that she did that to restaurants and at that time she brought us back to outside dining and curbside only and we’ve been in that environment for a little over two weeks."

Hutchinson said that his restaurants have been operating at 40 to 50 percent of sales revenue compared to last year, but the most tragic issue is the effect on staffing.

"Prior to when we reopened on June 1, I had about 150 folks that worked for me at both facilities," he said. "On June 1, I was about  at 100 employees and I didn’t need everybody back obviously because I’m only operating at 50% capacity and then with this latest health order modification I’ve gone from 150 to 50 in the last four months."

Hutchinson said that it has been a struggle for both restaurants to return employees to work for a variety of reasons. 

"Obviously, the unemployment situation as some people are getting the federal money and that is tough to get some of them back," he said. "While others may have started employment somewhere else and there are some that may not feel safe, secure and healthy coming back to work so there a variety of factors."

Hutchinson says the future of the small business restaurant owner will be tough, especially as federal aid and stimulus relief for business owners dries up.

"If we as restaurant owners felt like we were causing the spike in coronavirus cases then we would not be giving any pushback to the governor's orders," he said. "We know much more about the pandemic than we did 16 weeks ago. We are not trying to marginalize the data or the pandemic."