Alaska judge declines to pause pandemic aid program for small businesses during lawsuit

An Alaska Superior Court judge will not pause Alaska’s $290 million pandemic aid program for small businesses.

In an order published Friday, Judge Philip Pallenberg declined to issue a preliminary injunction in favor of Eric Forrer, a Juneau man who is challenging the legality of the way the state implemented the AK CARES program.

“The current situation is too grave, and the needs of Alaskans too great in the present emergency, for this court to stand in the way of the distribution of these federal funds to those who need them,” Pallenberg said.

In a written statement, the Alaska Department of Law said it was pleased by the decision.

That program is issuing grants of up to $100,000 for small businesses based in Alaska, but the state recently relaxed the program’s entry requirements. Forrer, who had sued over the way the program was authorized by the governor and Legislature, said the change needed to be approved by the Legislature.

He asked Pallenberg to put the program on pause until the Legislature did so, but Pallenberg said small businesses would be harmed by a pause, and Forrer did not prove he would suffer from harm without a pause.

“It is obvious to every Alaskan that businesses across the state are suffering in the present downturn, and it is obvious that any delay in providing relief to those businesses will cause some to fail,” Pallenberg wrote.

“In summary,” he said, “plaintiff alleges no irreparable harm, and the balance of hardships strongly favors the defendants. These factors militate against granting an injunction.”

His decision came about 24 hours after he heard oral arguments in a Juneau courtroom.

Joe Geldhof, the attorney representing Forrer in the case, said he will not petition the Alaska Supreme Court for a pause but that the lawsuit will continue.

“This is part of a long process now where we will litigate whether an odd process ... is consistent with the Constitution,” he said.

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