Coronavirus Litigation: The Week In Review

By Celeste Bott
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Law360 (July 2, 2020, 5:09 PM EDT) -- Grocery delivery service Instacart is suing to block a Seattle ordinance requiring coronavirus hazard pay for gig delivery workers, New York police officers and Las Vegas resort workers claim they haven't been provided with adequate protections during the pandemic, and the ACLU says California courts can't block public access to trials, despite the virus. 

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 new litigation across the country.

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

Consumer Protection

A group of now-consolidated plaintiffs who say Pittsburgh-based Giant Eagle is violating the ADA by not allowing exceptions to its policy requiring shoppers to wear masks during the COVID-19 pandemic have filed a fresh motion for an injunction blocking the policy, this time attaching medical records under seal as evidence that some of the plaintiffs have medical conditions that prevent them from wearing masks. 

Giant Eagle's mask policy is stricter than Pennsylvania's statewide order, which provides exceptions for children under 2 and people with medical conditions that render them unable to wear a mask, according to the lawsuit. 

Employment

The City University of New York illegally laid off thousands of adjunct faculty members despite getting over $251 million in federal funds to protect them from economic fallout during the coronavirus pandemic, according to a lawsuit filed by a union representing the public university system's professional staff.

The Professional Staff Congress, which represents about 30,000 CUNY professional staff members, said in the complaint Wednesday that the university violated the Coronavirus Aid, Relief, and Economic Security by showing the door to 2,800 adjuncts during the pandemic.

Also in New York, the union representing more than 1,500 New York state court officers hit Chief Judge Janet DiFiore and the Office of Court Administration with a putative class action in federal court Tuesday alleging that they failed to provide sufficient protective measures against COVID-19 and threatened to discipline the union's president for raising the issue.

The New York State Court Officers Association and its president, Dennis W. Quirk, are seeking at least $2 million in punitive damages over the state court system's alleged failure to protect the union's members by properly sterilizing the courts, establishing quality safety measures and providing adequate personal protective equipment.

A similar suit was filed in Nevada federal court Monday by the Culinary Workers Union, Local 226 and Bartenders Union, Local 165 against the Bellagio, Signature and Harrah's, claiming the resorts adopted "unreasonable rules and procedures" surrounding COVID-19 that didn't protect workers or their families. At least 19 of the unions' members and their dependents have died from COVID-19 since March, according to the complaint.

In their complaint, the unions said the rules and procedures for dealing with workers who contracted the disease in particular were "wholly and dangerously inadequate." The unions' suit against Harrah's Las Vegas LLC, the Signature Condominiums LLC and Bellagio LLC seeks injunctive relief under the Labor Management Relations Act.

And in Florida, a country club in a retirement community fired one of its longtime employees after he took time off to recover from COVID-19, according to a suit filed in Florida federal court Wednesday.

Randy Constance, a maintenance supervisor at Hollybrook Golf and Tennis Club Condominium Inc. for more than 20 years, said he was also instructed not to tell any club members or co-workers he tested positive for the coronavirus to avoid "chaos." One of his co-workers later died from COVID-19, he said in his complaint.

Public Policy

Instacart and a food retailer trade group sued Seattle on Monday in Washington state court to block a new ordinance requiring coronavirus hazard pay for gig delivery workers, arguing it violates a state law that aims to keep the cost of food low by prohibiting charges for the transportation of groceries.

The organizations argue that Council Bill 119979 — which was signed into law Friday by Mayor Jenny Anne Durkan and is believed to be the first law of its kind in the country — violates the state's Keep Groceries Affordable Act of 2018 as well as the U.S. and Washington Constitutions.

The act was approved by state voters through a measure and "prohibits 'local government entities' from imposing any 'charge, or exaction of any kind on' the 'transfer' or 'transportation' of groceries,'" Instacart and the Washington Food Industry Association said in the complaint. "This lawsuit arises from just such a prohibited 'charge' or 'exaction' passed by the city on food and grocery delivery services in Seattle."

The ordinance requires grocery delivery companies like Instacart, Shipt, TaskRabbit and Amazon Fresh and restaurant delivery companies like DoorDash, UberEats, Postmates, Caviar and GrubHub to add a charge to reflect the added risk the essential workers are taking during the pandemic.

In Pennsylvania, President Donald Trump's reelection campaign and Republican lawmakers filed a lawsuit in federal court Monday claiming the state was violating election law and increasing the risk of fraud by allowing "drop boxes" for collecting absentee and mail-in ballots due to the COVID-19 pandemic.

The suit said Pennsylvania Secretary of the Commonwealth Kathy Boockvar and 20 county boards of election had gone beyond the state legislature's mandate for expanded mail-in ballots in the June 2 primary by allowing drop boxes where ballots could be consolidated for collection instead of sticking to the law's requirement that votes be sent directly to election offices.

The drop boxes could not be monitored by campaign poll watchers like regular polling stations, which were consolidated because of increased mail-in voting and concerns about staffing polling sites during the pandemic, the suit said.

And the Colorado Supreme Court on Wednesday overturned the governor's executive order suspending laws amid the novel coronavirus pandemic to allow remote signature gathering for ballot initiatives, including a graduated income tax proposal, saying the order violated the state's constitution.

In a unanimous decision reversing a district court ruling, the justices found that Democratic Gov. Jared Polis' May 15 order violates the state constitution's requirement that ballot petitions are signed "in the presence of the petition circulator." 

And in New York, a Manhattan federal judge on Monday rejected a bid by landlords to quash New York Gov. Andrew Cuomo's limits on evictions during the COVID-19 crisis, finding the restrictions do not violate landlords' rights under federal law and that the court has no jurisdiction over state law questions they may raise.

Legal Industry

A California court is violating the First Amendment by placing undue restrictions on the public for accessing judicial proceedings during the COVID-19 pandemic, the American Civil Liberties Union has alleged in California federal court.

It should not be up to members of the press or the general public to demonstrate "good cause" for accessing civil and criminal proceedings conducted by Kern County Superior Court, the American Civil Liberties Union of Southern California alleged in a complaint filed with the Eastern District of California.

The court has restricted attendance even by family members and has denied members of the public the ability to remotely observe matters being conducted through video, according to the complaint filed by the ACLU and several individuals who contend they are impacted by the policy.

Personal Injury

A Pittsburgh-area nursing home was utterly unprepared for the COVID-19 outbreak, resulting in hundreds of patients and staff getting infected and dozens dying, according to a lawsuit filed in Pennsylvania state court Wednesday by the family of a housekeeper who died of the coronavirus.

Brighton Rehabilitation and Wellness Center in Beaver County, Pennsylvania, had been cited many times before by state investigators for allegedly poor hygiene practices and lack of planning for controlling infectious disease, the lawsuit says.

As a result, it was easy for the highly contagious coronavirus to enter the facility and spread among patients and underequipped staff, including housekeeper Elizabeth Wiles, who died May 10, according to the suit.

Real Estate

WeWork's landlord at a Los Angeles office building said the coworking company owes at least $54 million in damages after it backed out of a 10-year lease agreement, according to a lawsuit filed Tuesday in California state court.

The landlord, 2221 Park Place Partners LLC, asserts in the seven-page unfiled complaint that in February 2019, it entered into a written 10-year lease agreement with WeWork to lease about 90,000 rentable square feet in a building in El Segundo in Los Angeles County.

Following the execution of the lease, the landlord said it spent millions of dollars to provide WeWork with a "first class, custom build-out," as set forth in the agreement. But when the parties were set to meet at the newly renovated building in February 2020, the landlord said WeWork's head of real estate, Aaron Ellison, informed it that WeWork would not accept possession of the premises or move forward with the lease.

And the landlord for a historic office building in downtown Pittsburgh is demanding that a restaurant pay its back rent plus other damages related to breaking its lease when it permanently closed because of the COVID-19 pandemic, according to a lawsuit filed in Pennsylvania state court.

DIV 501 Grant LLC, which runs the recently renovated Union Trust Building, says that Union Standard broke its lease when chef and owner Derek Stevens announced in early June that it would not reopen after being closed since mid-March under state orders to reduce the spread of the coronavirus. The restaurant had missed its last three rent payments and did not reopen when the state allowed in-person dining to resume, according to the suit filed Tuesday.

The landlord seeks payment of about $72,000 in back rent, plus additional damages for income lost on the lease, which was supposed to run through 2027, according to the suit.

Insurance

A Las Vegas breakfast chain on Wednesday opposed U.S. Specialty Insurance Co.'s bid to dismiss the restaurants' proposed class suit seeking coverage of losses tied to Nevada's COVID-19 shutdown order, saying the insurer is taking an overly narrow view of its policy.

Egg Works LLC of Clark County told a Nevada federal judge that U.S. Specialty is contorting the policy language to misdirect the court that its restaurant recovery insurance coverage is limited to food, alleging that the insurer's arguments are based on "a flawed foundation."

The restaurant chain argued that its policy with U.S. Specialty covers "any accidental or unintentional ... impairment of an insured product," and the policy said specifically "insured product" includes breakfast service, on-site dining and any food served at its restaurants. The chain owns eight breakfast eateries in and near Las Vegas.

Egg Works filed its proposed class action against U.S. Specialty on April 24, alleging  that the insurer had wrongfully denied its claim for losses resulting from state closure orders that limited restaurants to takeout and delivery.

And New York law firm Siegel & Siegel PC has hit Hartford Casualty Insurance Co. with a proposed class action alleging that the insurer has wrongfully denied coverage of losses incurred thanks to the coronavirus pandemic, joining the ever-growing number of businesses across the country making similar claims.

In a complaint filed Monday, the firm said its "all risks" policy contains no exclusions for viral or bacterial pandemics, and the shutdown of its operations constitutes a physical loss under the policy. Yet Hartford denied coverage, telling the firm that the virus does not constitute a physical loss.

Securities

Four legal teams are competing to represent a proposed class of investors in Manhattan federal court suit accusing health care analytics company SCWorx Corp. of securities fraud after the firm landed on a list of public companies subject to U.S. Securities and Exchange Commission trading suspensions linked to claims about combating coronavirus.

Lead plaintiff, lead counsel and consolidation bids were filed Monday in the suit, which claims an analyst's skepticism about SCWorx's plan to supply COVID-19 tests kicked off a decline in the company's stock price and ultimately led the SEC to halt trades on SCWorx, citing "questions and concerns regarding the adequacy and accuracy of publicly available information" about the company.

The proposed lead counsel teams include attorneys from eight firms. One team comprises lawyers from Glancy Prongay & Murray LLPJohnson Fistel LLP and the Law Office of Frank R. Cruz. Another has lawyers from Levi & Korsinsky LLPPomerantz LLP and the Schall Law FirmKaplan Fox & Kilsheimer LLP attorneys round out another team, and the final counsel team hails from Faruqi & Faruqi LLP.

And Nonbank lender Fountainhead Commercial Capital LLC has asked a California federal judge to end litigation alleging the company disadvantaged small-dollar applicants for federal Paycheck Protection Program loans, arguing it had been appropriately transparent with would-be borrowers against the tumultuous backdrop of the coronavirus pandemic.

In its Monday motion, the company asked U.S. District Judge Dean D. Pregerson to dismiss, with prejudice, plaintiff Elizabeth M. Byrnes Inc.'s proposed class action, which accuses the company of fast-tracking its most lucrative loan requests and ignoring small loans until the first round of federal funding for the loan program was exhausted.

Fountainhead, which comprises two entities, Fountainhead Commercial Capital LLC and Fountainhead SBF LLC, told Judge Pregerson that the suit should be tossed because there were no federal guidelines specifying an order lenders must follow for processing PPP loan requests.

Commercial Contracts

Royal Caribbean Cruises Ltd. and a nursing conference organizer have urged a Florida federal court to toss a proposed class action against them after the COVID-19 pandemic forced cancellation of a nurses' cruise, claiming that they have offered would-be passengers a refund.

NurseCon at Sea LLC and Royal Caribbean on Monday filed separate motions to dismiss lead plaintiffs Jessica Mitchell and Kenneth Combs Jr.'s suit claiming that the companies have retained unearned fees for the canceled cruise and have implemented a policy that refuses to grant refunds to participants.

Both companies say that the dispute should be decided by binding arbitration and that Mitchell had already accepted a refund while Combs refused his refund so he could pursue a class action.

Immigration

A man suing U.S. officials claiming he did not receive a stimulus check from the IRS because of his marriage to an immigrant should be required to reveal his identity, the government has told an Illinois federal court.

The anonymous man, who claimed that President Donald Trump and others violated his civil rights by withholding his COVID-19 stimulus check because of his marriage to an immigrant without a Social Security number, should be required to identify himself in his putative class action so that the government can confirm he is an eligible individual and "an adequate representative of the proposed class," the government said Monday. 

The man, referred to as John Doe in the complaint, claimed that Trump, Senate Majority Leader Mitch McConnell, R-Ky., and Treasury Secretary Steven Mnuchin deprived him of his rights of association, due process and equal protection under the law. The man said that he's married to an immigrant who files tax returns with an individual taxpayer identification number issued by the IRS, and that they file joint tax returns.

Benefits

The iconic Fontainebleau hotel in Miami Beach wants a court to back its position that it doesn't have to pay up to $5.3 million in health care contributions to workers who were laid off while the hotel has been shuttered for months due to the COVID-19 pandemic.

Fontainebleau Florida Hotel LLC, operator of the historic hotel, told a Florida federal court in its complaint that the multimillion-dollar payment claims by Unite Here, Local 355, run contrary to a collective bargaining agreement between the union and hotel management. Also, the hotel said, a trust instrument maintained by employee benefit plan the South Florida Hotel and Culinary Employees Welfare Fund prohibits such payment.

"Fontainebleau asserts that it does not owe contributions for the period in question because the former bargaining unit employees were laid off as of March 30, 2020, and, accordingly, are no longer employees for whom contributions must be paid to the fund pursuant to the CBA," according to the suit.

Native American

A D.C. federal judge has ruled that Alaska Native corporations should share in $8 billion of COVID-19 relief for tribal governments, lifting an injunction he had put in place when he thought federally recognized tribes were likely to win their bid to block funding to the corporations.

U.S. District Judge Amit P. Mehta decided Friday that the for-profit ANCs qualify as "Indian tribes" eligible for funding under the Coronavirus Aid, Relief and Economic Security, or CARES, Act, saying he had changed his mind after granting an April injunction to the Confederated Tribes of the Chehalis Reservation and others that argued Congress wanted only federally recognized tribes to receive the funds.

The CARES Act relies on definitions borrowed from the Indian Self-Determination and Education Assistance Act, a federal law governing tribal contracting, and "by incorporating wholesale ISDEAA's definition of 'Indian tribes' into the CARES Act, Congress declared ANCs to be eligible for [the CARES Act's] Title V emergency relief funds," according to Judge Mehta's opinion.

"While the court agreed with plaintiffs' argument at the preliminary injunction stage" that the ANCs don't have "recognized governing bodies" under the CARES Act, "upon further reflection the court now concludes the opposite —'recognized' standing alone, as it is used in the CARES Act's definition of 'tribal government,' does not convey federal recognition of an Indian tribe," the judge said.

--Additional reporting by Matthew Santoni, Kevin Stawicki, Craig Clough, Lauren Berg, Hailey Konnath, Daphne Zhang, Abraham Gross, Emilie Ruscoe, Joyce Hanson, Joshua Rosenberg, Mike Curley, Danielle Nichole Smith, Pete Brush, Kevin Penton and Andrew Westney.  Editing by Peter Rozovsky.

For a reprint of this article, please contact reprints@law360.com.

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