Coronavirus Litigation: The Week In Review


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” href=”https://www.law360.com/articles/1361321/coronavirus-litigation-the-week-in-review#”>Celeste Bott

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Law360 (March 4, 2021, 8:02 PM EST) —
The nation’s top court has ordered a California county to allow indoor church gatherings, a Pittsburgh judge has been sued over an alleged lack of virtual court access and the Centers for Disease Control and Prevention can’t enforce a nationwide freeze on evictions amid the pandemic.

While courts across the country are altering procedures, restricting access and postponing certain cases to stem the spread of the coronavirus, the outbreak has also prompted a wave of litigation across the country.

Here’s a breakdown of some of the COVID-19-related cases from the past week.

Commercial Contracts

Northeastern University wants a pretrial win in a proposed class action by students seeking tuition dollars back because COVID-19 forced classes online, telling a judge Wednesday that its agreement with students bars claims for events out of its control.

The school is one of several nationwide facing claims that money spent during the ill-fated spring 2020 semester should be refunded because students were denied in-person instruction due to the health crisis.

Northeastern lost its bid to have the charges dismissed in December, but argued in a Wednesday evening filing that the students suing agreed to abide by the student handbook. That document includes a so-called delivery of services clause that affords the school wide latitude for how it renders services to students during extraordinary situations, the filing said.

And a New York federal judge has whittled down a pair of proposed class actions demanding tuition and fee reimbursements from Columbia University and Pace University in the wake of coronavirus-spurred closures, ruling Friday the students can only pursue claims that identify specific contractual promises their schools allegedly broke.

The New York schools closed their campuses, constructively evicted students and transitioned all classes online at the beginning of the pandemic, the students claim, and they then refused to provide adequate reimbursement for tuition, fees and other costs for services they stopped providing as the world battles the pandemic.

Both private universities have argued that the cases should be tossed entirely, with Columbia moving to dismiss and Pace requesting judgment on the pleadings. U.S. District Judge Jesse M. Furman granted in part and denied in part their requests Friday, pointing to New York law governing the relationship between educational institutions and their students as well as the decision of other courts in similar cases.

Legal Industry

A civil rights watchdog group filed a federal lawsuit Tuesday against an Allegheny County, Pennsylvania, judge, claiming he has violated the Constitution by not allowing it virtual access to observe proceedings in his Pittsburgh courtroom despite directives from court administration to do as much as possible via phone and videoconference.

The Abolitionist Law Center, a nonprofit law firm that operates a court-watching project, claimed that Court of Common Pleas Judge Anthony Mariani had repeatedly denied their requests to remotely observe proceedings in his courtroom, despite other parties such as attorneys and witnesses participating virtually.

The Fifth Judicial District, which covers Allegheny County, has suspended jury trials and most in-person proceedings since COVID-19 cases spiked last fall, most recently extending the closure until April. But according to the suit, Judge Mariani’s staff is still meeting and working in-person at the Allegheny County Courthouse and the judge is requiring that members of the public who wish to observe proceedings do so from within his courtroom, even when other parties are participating remotely.

Employment

Pollock Cohen LLP and three firm partners are trying to toss a fired attorney’s suit over bonus pay for a second time, telling a Pennsylvania federal court that he is not entitled to portions of settlements reached after he was let go.

Partners Steve Cohen, Christopher Leung and Adam Pollock told U.S. District Judge Robert Colville in a motion filed Wednesday that Darth Newman is attempting to rewrite his employment contract by broadly interpreting an annual bonus clause that Newman says entitles him to contingency fees from suits he worked on while employed by the firm.

The firm fired Newman in March 2020, citing financial stress related to the coronavirus pandemic. Newman filed the breach of contract suit with the Allegheny County Court of Common Pleas in November, claiming that Pollock Cohen owes him between $50,000 and $60,000 in contingency fees from a multimillion-dollar suit it settled not long after he was fired. The firm removed the suit in federal court in December.

And New York Attorney General Letitia James wants her lawsuit accusing Amazon of failing to adequately protect city workers from the coronavirus sent back to state court, arguing Wednesday that the claims have no federal ties.

James told a New York federal judge that the e-commerce giant had no good reason to remove the suit, which alleges unsafe pandemic conditions at Amazon’s fulfillment center on Staten Island and distribution center in Queens, just one day after it was filed in New York state court.

Amazon said in its Feb. 17 notice of removal that the dispute belongs in federal court because James is unlawfully attempting to undermine federal laws and regulations and because employees at the two centers are the real parties in interest in the case, rather than the state of New York. But James said Wednesday the action is purely based on state law and that it’s clearly within her authority as attorney general to go after Amazon for allegedly ignoring sanitation and social distancing guidelines and improperly handling coronavirus diagnoses among its New York City workforce.

In Pennsylvania, a subsidiary of pot giant Harvest Health & Recreation Inc. has been sued by a former worker who claims she’s the victim of age, disability and racial discrimination after losing her job at a cannabis production facility in the early days of the coronavirus pandemic.

In the suit, filed in an Allentown federal court, 58-year-old Pottstown resident Tracy Williams, who is Black, claimed her managers at Franklin Labs LLC terminated her after three months of harsh and unequal treatment compared to that of her younger coworkers.

Williams described herself as suffering from long-term disabilities, including colitis and other gastrointestinal complications, and she noted that she suffered at least one bout of symptoms during her three months at the company, which included vomiting in the bathroom at work. Williams said that her employer told her that she had to get tested for COVID-19 on the heels of the episode, despite the fact that other employees who had recently come to work with symptoms such as coughing and sneezing were not required to take a COVID-19 test.

And Trader Joe’s has rehired a worker at a New York City store who says he was fired for raising concerns to management about safety conditions during the COVID-19 pandemic, the worker’s attorney confirmed, though the worker will not drop his unfair labor practice charge against the company.

Benjamin Dictor, a partner at Eisner Dictor & Lamadrid PC, said Thursday that Trader Joe’s gave an unconditional offer to rehire his client Ben Bonnema, a New York City worker who made headlines last month after tweeting that he was fired for sending a letter to Trader Joe’s CEO Dan Bane demanding the store take action to limit the spread of COVID-19. Dictor said the company has agreed to compensate Bonnema for the time he was out of work.

Dictor said Bonnema accepted the offer and will be able to return to the job next week, but he will not be withdrawing an unfair labor practice charge he filed with the National Labor Relations Board last month over his firing.

In Nebraska, a federal judge has dismissed a suit lodged by ACLU-backed meatpacking workers who claimed the plant where they formerly worked didn’t take proper safety precautions to stop the spread of the coronavirus, finding they lack standing because they no longer work at the plant.

U.S. District Judge John M. Gerrard said Monday that the three ex-workers, who are represented by the American Civil Liberties Union, can’t show injuries because they no longer work at Noah’s Ark Processors LLC in Hastings, Nebraska, and so they no longer face a threat any greater than a member of the public.

Real Estate

The Centers for Disease Control and Prevention can’t enforce a nationwide eviction freeze amid the coronavirus pandemic, a Texas federal judge has ruled, holding that the agency lacks the constitutional authority to regulate private property rights.

In his order, U.S. District Judge J. Campbell Barker sided with a group of Texas landlords who argued that the CDC’s September eviction moratorium extends “far beyond the legitimate scope of federal power.” The landlords — one individual and six companies — say they’re owed thousands of dollars in unpaid rent.

The CDC has maintained that a nationwide eviction ban is within its federal authority to regulate commerce among the states. The regulated activity in dispute, however, is not the production or use of a commodity that is traded in an interstate market, Judge Barker said Thursday, adding that real estate “is inherently local.” The judge granted summary judgment in favor of the property owners, ruling that the order exceeded the CDC’s constitutional authority.

Health Care

Adventist Health System has settled its claims against a California lawyer it accused of conspiring with an asset management company to defraud it of $2 million through a failed $57.5 million deal to buy personal protective equipment during the COVID-19 pandemic.

A Florida federal court dismissed the claims against Michael H. Weiss and his firm on Tuesday, a day after the parties filed a joint stipulation saying they had agreed to resolve the claims against him. The agreement does not extend to defendants Tomax Capital Management Inc. and its principal Yehoram Tom Efrati, according to the filings.

Details of the agreement between AdventHealth and Weiss were not immediately available Tuesday. It comes a week after U.S. District Judge Paul G. Byron denied motions to dismiss filed by all of the defendants.

AdventHealth, which has hospitals in nine states, claimed in its May 28 complaint that when Tomax failed to deliver on an April 8 contract to provide 10 million 3M N95 ventilator masks to protect its workers from the coronavirus, the health care system asked for the money in escrow to be returned. According to the suit, Weiss sent just $55.5 million and told AdventHealth the remaining $2 million was in Tomax’s possession, but Tomax allegedly never returned the rest despite assurance from Efrati that it would.

Public Policy

The U.S. Supreme Court has ordered Santa Clara County to allow indoor church gatherings after a group of churches said the California county was acting as an “island of tyranny” by flouting the court’s earlier ruling lifting the state’s ban on indoor religious services.

In a late-night order last Friday, the court paved the way for weekend church services in Santa Clara County, one of the largest counties in California, which had continued to enforce a ban on all religious gatherings despite a Supreme Court ruling earlier in February lifting the governor’s prohibition of indoor church services.

Native American

An Alaska Native corporation urged the U.S. Supreme Court on Monday to overturn a D.C. Circuit decision that ANCs can’t have a share of $8 billion in COVID-19 relief meant for Native American tribal governments, saying the ruling could upend health services for Alaska Natives amid the pandemic.

Cook Inlet Region Inc., one of 12 regional Alaska Native corporations created under the Alaska Native Claims Settlement Act, backed bids by the federal government and ANC groups to reverse the D.C. Circuit’s September decision that ANCs aren’t “Indian tribes” that qualify for relief under the Coronavirus Aid, Relief and Economic Security Act.

Cook Inlet told the justices in its amicus brief that “the vast majority” of Alaska Natives in its region, which includes Anchorage, don’t belong to federally recognized tribes and could lose access to COVID-19 vaccinations and other health services they get from ANCs.

Sports & Betting

The New York attorney general announced Wednesday that she’s reached a deal that could be worth $250,000 to end a suit accusing the former parent company of New York Sports Clubs and Lucille Roberts gyms of ripping off customers during the COVID-19 pandemic.

The deal, if approved by the New York state court, would make available a $250,000 bond from Town Sports International, with the possibility of that cash being used as restitution for alleged victims, Attorney General Letitia James said in the announcement.

The September suit alleges that TSI continued to charge fees and ignore cancellations even though the gym facilities have been largely closed since March 2020.

And a California federal judge on Tuesday refused to toss or send to arbitration a suit claiming that ClubCorp USA Inc. wrongly forced thousands of private club members to continue paying membership fees during the pandemic, saying there was a factual dispute over whether the members were notified about any arbitration agreements.

California residents Jeffrey Cuenco and Linda Hong alleged in their proposed class action that the club operator closed all its clubs last year in the midst of COVID-19. But ClubCorp still charged its monthly membership fees at full price during that time, they said.

ClubCorp had argued that the case should be arbitrated, paused or thrown out. The company argued that the bylaws of its individual clubs — bylaws that include arbitration clauses — were incorporated by reference in Cuenco’s and Hong’s membership applications.

But U.S. District Judge Dana M. Sabraw said there was a factual dispute about whether the bylaws were readily available to Cuenco and Hong and, therefore, whether the bylaws were incorporated by reference into the applications. The plaintiffs have argued that the bylaws were neither known nor easily available to them when they applied for membership at the clubs, according to the decision.

Personal Injury & Medical Malpractice

A federal judge in Washington State has authorized a March 2022 trial date for a proposed class action against Holland America and parent company Carnival by cruise passengers claiming the companies are liable for their exposure to COVID-19 aboard a vessel that set sail a year ago.

U.S. District Judge Thomas S. Zilly on Thursday approved a jury trial lasting two to four weeks, set to begin on March 7 next year. For the early stages of the trial proceedings, Judge Zilly has set an April 12 due date for joinder of additional parties, amended pleadings and motions related to class certification.

The dates were set after the court reviewed a joint status report and discovery plan filed Monday by the lead plaintiffs, passengers Leonard C. Lindsay and Carl E.W. Zehner, and by defendants Carnival Corp. and Holland America Line, which owns the MS Zaandam vessel at issue. The report noted that the cruise companies are dealing with multiple cases regarding the MS Zaandam and reserve the right to consolidate the Lindsay case with other actions “to avoid undue burden and expense.”

And a New Jersey nursing home operator urged a federal court to toss a proposed class action over alleged poor treatment of residents before and during the COVID-19 pandemic, arguing Wednesday that state and federal law insulates the operator from the claims.

In a dismissal motion, Andover Subacute Rehabilitation Center I and Andover Subacute Rehabilitation Center II said the claims by an Andover II resident and relatives of two deceased residents are precluded by the Public Readiness and Emergency Preparedness Act and the New Jersey COVID-19 immunity law. The defendants pointed out that while litigants can pursue PREP Act remedies for willful misconduct, those claims must be filed in Washington, D.C., federal court after filing a claim with PREP’s Countermeasure Injury Compensation Program.

Insurance

An AIG unit and more than a dozen other insurers were the latest to be hit with a suit claiming they wrongly denied coverage for some $500 million in losses to the Resorts World Casino New York City and a Miami Hilton after COVID-19 prompted shutdowns.

The insurers are all on the hook for losses caused by the shutdown orders in response to the coronavirus outbreak, according to Genting Americas Inc., which operates both the casino and the Hilton Miami Downtown, in Monday’s New York state court complaint.

Lloyd’s underwriters are on the hook to the tune of $6.6 million over The Chicks’ canceled tour for their “Gaslighter” album, the band’s touring company argued Wednesday in California state court, claiming there isn’t any way for concert venues to reopen in light of the coronavirus pandemic.

The Chicks were expected to tour in 2020 for the first time in 14 years, according to Tunashoe Tours Inc. However, the COVID-19 outbreak forced the cancellation of their three-month, 48 indoor-arena swing. Despite efforts to reschedule, the 13-time Grammy Award-winning band, formerly known as the Dixie Chicks, was unable to perform for fans, who had been encouraged to stay home by government orders.

The Chicks’ touring company, which sued in Los Angeles Superior Court, says it has been fighting a 10-month campaign with Lloyd’s for its cancellation insurance. The underwriters have repeatedly asked irrelevant questions and stalled in their responses, according to the complaint.

Also in California, a federal judge ruled that Endurance American Specialty Insurance Co. cannot escape a $40 million suit brought by a Boston hotel’s investor group seeking COVID-19 loss coverage, finding that the investors were not required to meet a $100,000 deductible for cleanup costs before tapping into business interruption coverage.

In a seven-page order, U.S. District Judge Cormac Joseph Carney ruled in favor of Sunstone Hotel Investors by preserving the suit, and he underlined that the circumstances that trigger coverage under the policy’s business interruption section are “at best ambiguous.”

And an Ohio federal judge has tossed a COVID-19 coverage suit from a real estate management company, freeing Westfield Insurance Co. from having to pay for the insured’s alleged losses and holding that the policy does not cover any economic losses related to the pandemic.

U.S. District Judge Pamela A. Barker said Equity Planning Corp. failed to allege its properties sustained direct physical loss or damage, a precondition for coverage. The policy unambiguously excludes virus-related losses and does not cover the company’s financial losses caused by government closure orders issued to curb the spread of COVID-19, the judge said.

In New Jersey, Federal Insurance Co. has urged a federal judge to strike out the remaining allegation in a lawsuit by minor league baseball teams seeking coverage for income lost due to COVID-19, arguing that the public health crisis didn’t lead to the type of loss that would trigger the policy’s protections.

In a motion for judgment on the pleadings, the insurer asked the court to drop the claim by Whitecaps Professional Baseball Corp., owner of the West Michigan Whitecaps, for the same reason it tossed the Everett AquaSox and Asheville Tourists’ allegations against Arch Insurance Co. — because the coronavirus didn’t harm actual property.

Resort chain Great Wolf Lodge claims in Illinois state court that Zurich American Insurance Co. wrongfully denied it coverage for business losses its 17 nationwide resorts have sustained during the coronavirus pandemic.

Great Wolf was forced to close its resorts in March 2020, and reopened some in the following summer and fall, though four were shuttered again due to government orders, the resort company said in its complaint, filed Friday in Cook County Circuit Court. Those closures, and the need to operate at a reduced occupancy to prevent the spread of COVID-19, have led to “substantial, multimillion-dollar losses,” the resort company said, but Zurich denied coverage for that lost income in July.

The coronavirus pandemic and the government shutdown orders that arrived in its wake caused direct physical loss and direct physical damage, Great Wolf argued, as its insured resorts were rendered “physically nonfunctional and inaccessible for the conduct of Great Wolf’s ordinary business operations.”

In Michigan, the owner of Motor City Casino Hotel has gone all in with a lawsuit in state court alleging its Zurich affiliate insurer owes it $270 million for COVID-19-related losses after the casino had to shut down and change its cleaning operations.

Detroit Entertainment LLC, in a complaint in Wayne County Circuit Court on Thursday, said the coronavirus has caused a direct physical loss of or damage to property to its casino business, triggering the potential limits of $750 million under a commercial property insurance policy issued by American Guarantee and Liability Insurance Co.

And a Florida federal judge threw out a Miami restaurant’s lawsuit seeking business interruption coverage for financial losses during the pandemic from its underwriters at Lloyd’s and other insurers, saying the restaurant didn’t suffer any physical losses.

In his order, U.S. District Judge Federico A. Moreno said the “weight of federal court rulings is against” Town Kitchen LLC’s argument that its inability to operate because of the effects of the coronavirus and various government responses constitute physical losses under the restaurant’s commercial property insurance policy.

–Additional reporting by Jimmy Hoover, Daphne Zhang, Emilie Ruscoe, Hailey Konnath, Joyce Hanson, Tim Ryan, Jeannie O’Sullivan, Grace Dixon, Chris Villani, Rachel Scharf, Jennifer Doherty, Matthew Santoni, Dave Simpson, Shawn Rice, Melissa Angell, Nathan Hale, Andrew Westney and Lauren Berg. Editing by Alanna Weissman.

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