Coronavirus Litigation: The Week In Review

By Celeste Bott
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Law360 (July 16, 2020, 8:04 PM EDT) -- This week saw developments in several lawsuits challenging governors' orders closing businesses in the coronavirus pandemic, while Uber and Lyft drivers continued to push for paid sick leave, and Princess Cruise Lines escaped suits brought by passengers who alleged they were put in danger of contracting 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.

Public Policy 

The Massachusetts Supreme Judicial Court has agreed to hear a challenge to Gov. Charlie Baker's orders shuttering businesses in the wake of COVID-19, citing the need to tackle issues that have spawned multiple cases at the state and federal level.

In New Jersey, a federal judge on Tuesday rejected a bid from movie theater owners and their trade associations to immediately block state officials from enforcing orders keeping theater doors closed due to the COVID-19 pandemic, saying they didn't meet "the stringent standard for granting this extraordinary relief." Another New Jersey judge also granted Gov. Phil Murphy's motion to halt Asbury Park's plan to defy his COVID-19 ban on indoor restaurant dining while the state and the town continue to resolve the matter.

A lawsuit challenging the legality of Gov. Jay Inslee's emergency response to the COVID-19 pandemic was thrown out in the Eastern District of Washington on Tuesday, with the court determining the governor's emergency power granted by the Legislature "clearly encompasses an outbreak of a pandemic disease."

And a Florida attorney who has made waves appearing as the Grim Reaper across the state during the COVID-19 pandemic blasted Gov. Ron DeSantis for his inaction as he urged a state appeals court to revive his case asking the courts to impose beach closures and a statewide stay-at-home order.

In his initial brief before the First District Court of Appeal, Santa Rosa Beach attorney Daniel W. Uhlfelder argued that the trial court erred by dismissing his case based on findings that it lacked authority to question the governor's decisions and that Uhlfelder's request for emergency injunctions are barred by the separation of powers doctrine. 

In Texas, meanwhile, the Texas Supreme Court said Monday that the Texas Republican Party can't "simply commandeer" Houston's convention center to host its biennial convention, which the city canceled due to the rise of COVID-19 cases.

In a per curiam order released the morning of the convention's planned start date, the court held 7-1 that it can't compel the city of Houston and convention center operator Houston First Corp. to hold the in-person convention because Houston's duty to hold the conference was one under contract, not law. The majority's three-page opinion explained that while the party had the constitutional right to hold its convention, in which it planned to pick presidential electors, it didn't have a constitutional right to use the convention center.

And Idaho's governor and secretary of state has urged the U.S. Supreme Court to stay a lower court's decision that allowed supporters of a proposed ballot measure for an income tax increase extra time to gather signatures amid the COVID-19 pandemic.

Republican Gov. Brad Little and Secretary of State Lawerence Denney argued in an emergency application Tuesday that the state will suffer irreparable harm if the Reclaim Idaho campaign continues to collect electronic signatures, which are not permitted under Idaho law, after the April 30 petition circulation deadline.

Legal Industry

The Legal Aid Society and a handful of New York public defender organizations on Tuesday sued the New York State Office of Court Administration, slamming the office's plan to reconvene in-person, nonemergency criminal court hearings in New York City this week as "rushed" and "dangerous."

The suit comes on the eve of a scheduled July 15 reopening of criminal courts in the city. The OCA announced its plans in an administrative order last week, according to the complaint, which was filed in New York federal court.

Legal Aid and the other groups — which include Brooklyn Defender Services, the Bronx Defenders, New York County Defender Services, Neighborhood Service of Harlem and Queens Defenders — said the OCA's hasty decision comes as the city is still in the throes of battling COVID-19. The move violates the Americans with Disabilities Act by depriving thousands of people who have medical conditions or other disabilities the opportunity to seek and help develop necessary accommodations from the court, they said.

Immigration

The Trump administration pushed back Monday against Harvard University and the Massachusetts Institute of Technology's challenge to its directive barring foreign students from the U.S. if institutions offer online-only instruction during the coronavirus pandemic, arguing that the policy is backed by black-letter law.

A little more than 24 hours before a hearing scheduled to argue the schools' preliminary injunction bid and amid a flurry of briefs supporting the suit and a separate suit filed in Massachusetts federal court by 18 state attorneys general, the federal government said it is simply enforcing the law on the books, which does not permit students to study online and stay in the U.S. on a F-1 or M-1 visa.

The July 6 directive was not a sudden, arbitrary decision, the government's brief argues, but instead a return to the law as written and a departure from the "leniency" exercised by U.S. Customs and Immigration Enforcement in March when it temporarily allowed foreign students to pursue their studies online during the crisis.

Massachusetts Attorney General Maura Healey and 17 other attorneys general filed their own suit Monday seeking to block a Trump administration policy barring foreign students from the U.S. if their colleges go online during the COVID-19 pandemic. Healey was joined by 16 other states and the District of Columbia in her suit, which was announced just moments before a scheduled rally with international students on the steps of the Massachusetts State House. 

Consumer Protection

Pittsburgh-based grocer Giant Eagle defended its mandatory mask policy against a customer's demand for an injunction in federal court, arguing that the Americans with Disabilities Act did not require the company to put shoppers and staff at risk of contracting COVID-19 if customers who can't or won't wear masks were merely inconvenienced.

The grocery chain pointed to a Facebook post made by plaintiff Josiah Kostek in which he allegedly admitted that he was "in excellent health," despite his claim that he could not wear a mask without developing panic attacks and difficulty breathing, as evidence that he was unlikely to succeed in his ADA suit and that the court should not overturn a policy that all shoppers and staff wear masks inside Giant Eagle's stores.

Giant Eagle asked the court Wednesday to deny Kostek's request for an injunction, arguing his case was unlikely to succeed on the merits, that he had other options for shopping without running afoul of the mask requirement, and that the balance of equities and public policy surrounding the pandemic were in Giant Eagle's favor.

Insurance

The NBA's Houston Rockets and their home arena are suing their insurance company, alleging it denied them coverage for losses stemming from the COVID-19 pandemic in an act of bad faith as part of a companywide policy to deny coverage for similar claims.

In a complaint filed in Rhode Island state court Wednesday, Clutch City Sports & Entertainment LP, which owns the Toyota Center, and Rocket Ball Ltd., which owns the Rockets, say Affiliated FM Insurance Co. owes them coverage under the team's $412 million property insurance policy.

According to the Rockets, the arena was forced to shut down after the COVID-19 pandemic hit Houston and the NBA suspended the remainder of its season, saying the presence of the virus in Houston and the arena constitutes physical loss and damage under the policy.

And a Pennsylvania federal judge said Tuesday it would be premature to declare that a hospital's "loss of use" of buildings and facilities resulting from state-mandated COVID-19 closures is a physical loss covered under its policy with Travelers Property Casualty Co., noting that he will wait until he's considered certification of the putative class.

U.S. District Judge Kim R. Gibson declined the summary judgment bid from the 54-bed Chan Soon-Shiong Medical Center at Windber, which had argued that the court should read the policy in favor of the policyholder because there is ambiguity in its policy terms with Travelers and it has offered the court a reasonable interpretation.

Benefits

A former Lyft driver told a D.C. federal court Tuesday that the ride-hailing company can't hide behind its arbitration agreement to dodge proposed class claims it's flouting D.C. law by failing to provide paid sick leave to drivers.

Plaintiff Cassandra Osvatics asked U.S. District Judge Ketanji Brown Jackson to reject Lyft Inc.'s motion to compel arbitration, saying in a Tuesday filing that the company can't escape judicial scrutiny of its systemic failure to provide sick leave to thousands of its drivers, as required by the D.C. Accrued Safe and Sick Leave Act.

The suit, filed in May, claims Lyft's refusal to offer paid sick leave to drivers during the global COVID-19 pandemic is jeopardizing public health and safety and leaving drivers vulnerable to exposure to the novel coronavirus.

In a similar case against Uber in Massachusetts, drivers told the Ninth Circuit that Uber's practice of classifying drivers as independent contractors and denying them paid sick leave amid the coronavirus pandemic has damaging consequences for the workforce, which justifies granting the drivers employee status through an injunction.

John Capriole, Martin El Koussa and Vladimir Leonidas, whose Massachusetts lawsuit was transferred to the Northern District of California in late March, filed an opening brief Monday seeking to reverse U.S. District Judge Edward Chen's May 14 decision denying their emergency motion for a preliminary injunction that would've immediately forced Uber Technologies Inc. to reclassify its drivers as employees and grant them paid sick leave.

They maintain that for far too long, the ride-hailing giant has gotten away with labeling its drivers as independent contractors to deprive them of proper wages and benefits, which is all the more egregious during a global public health crisis.

Commercial Contracts

Temple University told a Pennsylvania federal judge on Wednesday that it had made no promise to provide in-person learning to a student who launched a would-be class action in May seeking tuition refunds after the school moved its classes online as a result of the COVID-19 pandemic.

The Philadelphia-based university urged the judge to throw out the case because there was no contractual provision between students and the school requiring that it provide in-classroom instruction as opposed to the online-only classes that were ordered as the coronavirus first took hold in the region in March.

Undergraduate student Brooke Ryan filed suit in May seeking a prorated refund of tuition and other fees that she and other undergraduate and graduate students at Temple paid before the school shifted to an online-only model thanks to the COVID-19 pandemic.

And in Louisiana, a California attorney is accused of breaching a contract that sought to acquire KN95 face masks by sending $1.25 million to an unrelated party.

Share Holders trusted attorney Thomas Gruenbeck to hold nearly $1.9 million as part of a deal in which the company would have acquired the masks from supplier BAFF Consultants Inc. amid the COVID-19 pandemic, but the lawyer instead sent about two-thirds of the money to King Consulting Group LLC, according to the complaint filed Monday in the Western District of Louisiana.

Share Holders, which does business as Advantage Testing, hired Gruenbeck to serve as the trust attorney for the deal, in which BAFF was set to supply the masks, according to the complaint.

Employment

Fourteen unions representing about 70,000 Stop & Shop workers have said they will file National Labor Relations Board charges accusing the employer of violating federal labor law by discontinuing heightened pandemic pay without negotiations. 

According to a news release Tuesday, the grocery store chain formally ended the additional pay it had been giving workers during the coronavirus pandemic at midnight on July 4 after having walked away from the United Food and Commercial Workers International Union locals at the negotiating table.

The unions argued that the additional pay the workers received during the coronavirus outbreak wasn't "appreciation" as Stop and Shop suggests" but rather "critical pay to ensure their families were safe amid the crisis we're facing — a crisis that is far from over." According to the locals, Stop & Shop rejected all of the solutions they offered and unilaterally made the cuts, violating the union members' rights under their respective collective bargaining agreements.

And in New York, Amazon warehouse workers suing for better COVID-19 protections at its Staten Island distribution center dropped their effort to get immediate changes though their motion to change course drew an admonishment from the judge overseeing their case who said it looked like a press release instead of a legal argument.

In their Tuesday motion, the workers cited a Monday disclosure by the company saying they would not be penalized for taking time off at work to attend to personal hygiene. Amazon communicated to workers by email and with signs posted at the distribution center that it "temporarily suspended" worker productivity metrics, according to a declaration signed by the warehouse workplace health and safety manager.

Hospitality

A California federal judge on Tuesday tossed two suits alleging Princess Cruise Lines put passengers in danger of contracting COVID-19, finding the passengers can't recover damages for negligent infliction of emotional distress just because they were afraid of contracting the virus.

U.S. District Judge R. Gary Klausner granted with prejudice a motion to dismiss brought by the Carnival Corp. subsidiary, saying that allowing the Grand Princess passengers leave to amend their suits would be futile. The plaintiffs, formerly quarantined passengers Ronald and Eva Weissberger in one suit and Michael and Wyonnie Austin and Kenneth and Lucille Nickens in the other, did not test positive for the virus or have COVID-19 symptoms.

The court said that under federal maritime law, plaintiffs seeking to recover for negligent infliction of emotional distress must satisfy the "zone of danger" test set forth in Consolidated Rail Corp. v. Gottshall , meaning plaintiffs can recover only if they suffered a physical impact from the defendant's negligent conduct or if they were placed in immediate risk of physical harm by the conduct. The passengers had argued that they fell into the second category. But the court agreed with Princess' argument that the 1997 U.S. Supreme Court ruling in Metro-North Commuter R. Co. v. Buckley blocked the passengers' claims because they did not manifest symptoms of a disease.

--Additional reporting by Chris Villani, Adam Lidgett, Matthew Santoni, Mike Curley, Paul Williams, Matt Fair, Danielle Nichole Smith, Jon Steingart, Linda Chiem, Hailey Konnath, Dave Simpson, Kevin Penton, Sarah Jarvis, Bill Wichert, Jeannie O'Sullivan, Katie Pohlman and Nathan Hale. Editing by Bruce Goldman.

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

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