Coronavirus Litigation: The Week In Review

By Celeste Bott
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our daily newsletters. Signing up for any of our section newsletters will opt you in to the daily Coronavirus briefing.

Sign up for our Banking newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!



Law360 (July 23, 2020, 8:30 PM EDT) -- Geico is facing a lawsuit from drivers over allegedly excessive COVID-19 premiums, Florida's largest teachers union is suing state officials to block the "reckless and unsafe" reopening of schools next month and Celebrity Cruises has settled a class action alleging it failed to protect its workers during the coronavirus 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.

Employment

Workers for Celebrity Cruises Inc. told a Florida federal judge Tuesday that they are dropping their proposed class action alleging the cruise line failed to protect thousands of crew members on its ships during the COVID-19 pandemic.

The decision to dismiss the suit without prejudice was not made due to a settlement, Alexandra Nedeltcheva and two other crew members said in the two-page notice that didn't provide any additional details.

And two businesses formed from a metals company have denied a former in-house counsel's claim that he was fired for taking time off to recover from the novel coronavirus, saying he was axed for abruptly moving to Europe, not taking sick leave. 

Attorney Daniel Burbach Jr.'s "unilateral and unapproved international relocation" to Slovenia with his family was the basis for his termination, not sick leave he took in the days before the move to recover from COVID-19, Pittsburgh-based Arconic Corp. and Howmet Aerospace Inc. told a Pennsylvania federal court on Monday in a bid to dismiss the complaint. 

In New York, a federal judge said Tuesday he is "not entirely comfortable" with assessing health and safety conditions at an Amazon warehouse in Staten Island, telling counsel for the workers seeking COVID-19 protections that they may have to turn to the Occupational Safety and Health Administration.

The comments came from U.S. District Judge Brian M. Cogan during a teleconference to discuss the e-commerce giant's plan to seek dismissal of claims brought by six plaintiffs including workers Derrick Palmer and Barbara Chandler. Judge Cogan set a briefing schedule to last though August.

And the Washington, D.C., attorney general's office has weighed in on a Lyft driver's suit challenging the ride-hailing company's failure to provide paid sick leave, saying in a Tuesday court filing that D.C. public policy discourages companies from trapping workers and consumers behind mandatory arbitration clauses.

D.C. Attorney General Karl Racine's office filed an amicus brief to clarify where D.C. public policy lands on the issue of contracts of adhesion or other unconscionable mandatory arbitration agreements. The brief was filed in plaintiff Cassandra Osvatics' proposed class action accusing Lyft Inc. of flouting the D.C. Accrued Sick and Safe Leave Act by failing to offer paid sick leave to thousands of drivers amid the COVID-19 pandemic. Osvatics is trying to fend off Lyft's motion to compel arbitration.

And in Nevada, Las Vegas casino unions are dropping claims against two subsidiaries of MGM Resorts International in their suit alleging the resorts' "unreasonable" COVID-19 rules don't protect employees, telling a Nevada federal judge Monday that the resorts have agreed to expedited arbitration of their grievances.

Banking

Accounting firm M&M Consulting Group LLC on Wednesday accused JPMorgan Chase Bank NA and First Republic Bank of stiffing it and other firms on fees owed for their work assisting with Paycheck Protection Program lending, the latest in a wave of similar class action litigation against banks.

California-based M&M said in its complaint that it worked to help small businesses apply for the federal coronavirus relief loans. Federal regulations require financial institutions to pay agent fees, which the government has said are supposed to come out of the loan processing fees that it pays to PPP lenders, according to M&M's proposed class action.

"Instead, defendants have kept the agent fees for themselves," M&M said Wednesday.

Insurance

Lawsuits from across Pennsylvania accusing Erie Insurance Exchange of improperly denying businesses coverage for losses due to the COVID-19 pandemic will be coordinated in Allegheny County, a state court judge ordered Thursday.

Allegheny County Court of Common Pleas Judge Christine A. Ward ordered that ongoing cases from her county, Philadelphia, Lancaster County and any future state-court suits against Erie be brought to her courtroom and coordinated.

The order will create a common forum for all the Pennsylvania COVID-19 insurance cases against Erie, one of many insurers being sued across many courts over denials of coverage for losses caused by the coronavirus and the state-mandated closures in response to it.

In Connecticut, a hospitality group has hit Hartford Fire Insurance Co. with a proposed class action in federal court, saying the company has failed to issue coverage for catastrophic COVID-19 losses that threaten the survival of the group's dine-in restaurants, wine bars and cafes.

New York-based SA Hospitality Group LLC said in its suit filed Wednesday that the group and its 17 subsidiaries have regularly paid premiums for all-risk commercial property insurance with business interruption coverage, but Hartford Fire is now refusing to pay for their lost income even though their policies promise to cover physical loss and damage to property due to measures put in place by civil authorities.

And a proposed class action filed in Illinois federal court Wednesday accuses Geico of unfairly profiting off of the COVID-19 pandemic by continuing to charge "unconscionably excessive" premiums at a time when people are driving — and getting into auto accidents — far less.

Since states began adopting strict social-distancing measures in March, school and business closures and stay-at-home orders have prevented most individuals from leaving their homes for extended periods of time, Geico driver Briana Siegal said in her complaint. Unsurprisingly, this means people are getting behind the wheel a lot less frequently and file far fewer claims, Siegal added, but Geico has continued to charge and collect excessive premiums and failed to issue adequate refunds. 

Commercial Contracts

Two New York City landlords asked a Manhattan federal court late Wednesday to enter an injunction against a set of laws in that city passed to help protect tenants from the economic fallout of the deadly COVID-19 pandemic, saying the measures unconstitutionally interfere with their free speech and leases.

Marcia Melendez, Ling Yang and their associated companies asked U.S. District Judge Ronnie Abrams to enjoin the three laws passed in May. Among other things, the property owners argue the city is infringing on their free speech ability to seek rent payments and wrongly changes the terms of their contracts with their tenants, both in violation of the U.S. Constitution.

And in Illinois, several retail companies have asked a state court to find that they don't owe a Chicago property manager any more rent under the leases they signed, saying neither side anticipated a pandemic would prevent the retailers from using the shopping spaces they rented.

Retail shops including The Gap and Old Navy claimed Thursday that their various landlords, who are controlled by Brookfield Properties Retail Inc., are wrongfully demanding rent payments for shopping centers they leased without ever considering a public crisis like the novel coronavirus would force them to suspend operations and preserve finances from revenues that "dropped to zero overnight."

The retailers' landlords have also disputed their right to keep their shops closed or modify their leases given the "radical change in circumstances," according to the lawsuit. They're asking a judge to declare that they haven't owed their landlords rent since state government orders required them to close their doors in mid-March, and that they should be able to reform their leases.

Food & Beverage

Whole Foods Market Inc. has been violating workers' civil rights by selectively enforcing its dress code and disciplining employees who wear face masks emblazoned with "Black Lives Matter," according to a proposed class action filed Monday in Massachusetts federal court.

The lawsuit — filed by 14 grocery workers on behalf of all Whole Foods employees subject to the alleged policy — claims the chain and its parent company Amazon.com Inc. are offering only lip service to the nationwide protest movement against anti-Black racism and police brutality by posting supportive statements on their websites.

But when workers began wearing "Black Lives Matter" face masks during the COVID-19 pandemic, Whole Foods started enforcing its oft-ignored dress code, the suit says. The company sent workers home early, issued disciplinary "points" and even fired one worker who organized the mask-wearing, according to the complaint.

Public Policy

The Fifth Circuit has stayed a Texas federal judge's order requiring Houston to hold the Texas Republican Party's canceled in-person biennial convention at a rescheduled date as the city experiences a surge of COVID-19 cases.

Over the weekend, the appellate court granted Houston Mayor Sylvester Turner and convention center operator Houston First Corp.'s stay request as they appeal U.S. District Judge Lynn N. Hughes' July 17 order requiring the city to hold the convention on new dates. The convention was scheduled to start July 16, but Houston First canceled at the last minute, invoking the force majeure clause in its contract with the party.

And Florida's largest teachers union sued the governor, state education officials and Miami-Dade County's mayor on Monday in a bid to prevent the "reckless and unsafe" reopening of schools next month with COVID-19 spreading out of control in the state.

The Florida Education Association, which represents more than 140,000 school employees, including teachers, psychologists, nurses, custodians, food service workers and others, was joined by several individual educators and parents in filing the suit in state court in Miami.

The plaintiffs contend that the Florida Constitution requires public schools' on-site operations be conducted in a safe and secure manner, but the defendants — Gov. Ron DeSantis, the Florida Department of Education under the leadership of Education Commissioner Richard Corcoran and the state Board of Education, and County Mayor Carlos Gimenez — have infringed on this mandate in their handling of the health crisis.

Also in Florida, Walton County has urged a federal court to toss a suit brought by a group of property owners — including former Arkansas Gov. Mike Huckabee — over an ordinance that barred the use of private beaches because of the COVID-19 pandemic, saying the since-rescinded restrictions were constitutional and reasonable.

The county argues in its motion to dismiss, which was filed late Tuesday, that the property owners' requests for declaratory judgments that the county overstepped its authority or was preempted by the state emergency orders should be thrown out as moot since it lifted the restrictions as of May 1.

In New Jersey, a state court judge declined to hold a gym in contempt for defying health officials' orders to close to prevent the spread of COVID-19 but did order the gym to comply with the rules, the Office of the New Jersey Attorney General said Monday.

New Jersey Superior Court Judge Robert Lougy also declined to allow the state to physically bar the entrance to the Atilis Gym of Bellmawr, according to his two-page order Monday.

And Idaho's governor and secretary of state said in a reply brief to the U.S. Supreme Court on Wednesday that a lower court's decision allowing more time to gather signatures for a tax increase ballot measure should be stayed because it fundamentally altered the state's election laws.

Immigration

The Trump administration has not yet followed through on its promise to drop a policy barring foreign students from the U.S. if their colleges go fully online during the COVID-19 pandemic, states suing to block the directive told a federal judge Tuesday.

As recently as Tuesday — a week after the government pledged to rescind the directive — the federal government was denying or putting on hold student visa applications that lacked evidence of in-person instruction, according to a status report filed by Massachusetts Attorney General Maura Healey. 

The Trump administration said July 14 it would revert to the March guidance, which allowed international students to remain in the U.S. even if their college or university opts for online-only instruction during the pandemic. However, the states said Tuesday that some schools have reported that students are being told by "consular officers at the State Department or other government officials or websites" that they still need paperwork showing they have in-person classes if they want a visa. 

--Additional reporting by Matthew Santoni, Abraham Gross, Joyce Hanson, McCord Pagan, Hailey Konnath, Kevin Stawicki, Nathan Hale, Linda Chiem, Brian Dowling, Lauren Berg, Dave Simpson, Katie Pohlman, Pete Brush, Craig Clough and Lauraann Wood. Editing by Kelly Duncan.

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

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Beta
Ask a question!