Under a new settlement agreement, the state of Montana will pay nearly $95,000 in attorney fees for five Flathead County businesses that were sued by former Gov. Steve Bullock's administration for allegedly flouting a mask mandate and other COVID-19 restrictions.

Republican Gov. Greg Gianforte, who pledged to bring an end to the litigation shortly after taking office in January, called the lawsuits "outrageous" in a statement announcing the settlement on Thursday.

"These lawsuits have burdened these businesses unnecessarily for months, and that ends today," said Gianforte, who rescinded Bullock's statewide mask mandate in February over objections from public health experts.

The businesses involved in the litigation were the Remington Bar in Whitefish, Sykes Diner and Scotty's Bar in Kalispell, and the Ferndale Market and Your Turn Mercantile in Bigfork.

In exchange for having their attorney fees paid and the state's case dropped, the businesses agreed to drop all counterclaims; they had accused the state Department of Public Health and Human Services of selectively targeting them, harming their reputations and hurting them financially.

UNDER BULLOCK, a Democrat, DPHHS sent inspectors to each business and then filed suit in October, arguing large numbers of maskless customers made it clear the businesses had not undertaken "reasonable" or "good-faith" efforts to enforce the governor's mask directive, which he issued in July.

In November, during an all-day hearing in Flathead County District Court, the businesses and their attorneys argued they had tried to comply despite financial hardship, logistical challenges, resistance from customers and ambiguity in the language of the directive.

DPHHS attorneys argued the businesses had taken deliberate steps to flout the mask requirement, noting, for example, a sign at the Ferndale Market that indicated the business would presume all maskless customers 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.

After the November hearing, Judge Dan Wilson criticized the state's case and declined to grant a preliminary injunction against the businesses, saying he would be "highly inclined" to award them legal fees if DPHHS didn't return to court with stronger arguments. The businesses filed counterclaims soon afterward.

Bruce Fredrickson, one of the local attorneys who represented the businesses, said Thursday they are pleased with the settlement and thankful for Gianforte's intervention in the case.

"Without him stepping in, this case would have gone on for some time," Fredrickson said. "COVID and the accompanying restrictions placed on small businesses throughout Montana by the Bullock administration wreaked enough havoc and economic hardship on, not just these five, but all small businesses across the state."

Reporter Chad Sokol can be reached at 758-4434 or csokol@dailyinterlake.com