Juneau judge refuses to block changes to the state’s CARES Act funded small business relief grants

Superior Court Judge Philip Pallenberg closely watches an attorney during opening arguments in a recent civil trial.
Superior Court Judge Philip Pallenberg closely watches an attorney during opening arguments in a recent civil trial. (Photo by Matt Miller/KTOO)

A Juneau Superior Court judge denied a request to temporarily block changes to the state’s small business relief grants.

Judge Philip Pallenberg found that Juneau resident Eric Forrer failed to meet the standard required for the judge to issue an injunction. 

The state’s $290 million program is called AK CARES and is funded by the federal CARES Act.  The original state plan for the program said businesses that received other federal aid weren’t eligible – the Legislature approved that plan.  

Then the state expanded eligibility for that program by allowing businesses that had received less than $5,000 from two other federal relief programs to receive grants. 

Forrer is pursuing a lawsuit against the state, arguing that the process it’s using to spend CARES Act money isn’t constitutional. 

Forrer said in court filings that there should be an injunction because the change in grant eligibility hadn’t been approved by the Legislature. 

But Pallenberg found that Forrer hadn’t met two standards to get an injunction — One, that Forrer hadn’t shown that he would be harmed by having the program change remain in place. Two, that Forrer hadn’t shown a clear probability that he would win the lawsuit.  

And, Pallenberg found that the state Department of Commerce, Community and Economic Development had a reasonable basis for expanding program eligibility. 

The program provides grants between $5,000 and $100,000. The restriction on receiving other federal aid was designed to prevent “double dipping,” or receiving similar benefits twice. Pallenberg found that allowing grant recipients to receive less than the minimum grant in other federal aid was reasonable.  

 

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