By Celeste Bott

Law360 (January 28, 2021, 8:17 PM EST) -- The nation's high court has thrown out decisions allowing Texas to bar abortions throughout the pandemic, Airbnb says a dispute over canceled bookings during the COVID-19 pandemic belongs in arbitration, and Clorox has escaped claims it misled consumers into thinking its Splash-Less bleach can disinfect surfaces.

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

Medical device company Vapotherm Inc. has sued Vero Biotech LLC in New Hampshire federal court alleging its rival has been using a former Vapotherm employee to lure away other workers, causing it to struggle to make life-saving equipment needed to fight COVID-19.

After Clayton Santiago left his four-year employment with Vapotherm, he then joined Vero and started to solicit at least three other Vapotherm employees to quit and join him at the rival company, the complaint said. Vapotherm said Santiago breached his confidentiality, noncompete and assignment of inventions agreement, for which he was paid "substantial sums" in exchange for commitments not to undermine Vapotherm.

By encouraging Santiago to solicit his former co-workers, Vero intentionally and improperly interfered with Vapotherm's contractual and economic relations with third parties, according to the suit. Vero caused Santiago to breach his agreement with Vapotherm and caused the other employees to leave the company, the suit said.

An arbitrator unfairly applied his version of "rough industrial judgment" when making a Hilton operator pay severance to workers laid off due to COVID-19, the company has told a New York federal court in a brief opposing a hotel union's motion to dismiss its suit.

Impartial Chairperson Elliott Shriftman's two arbitration awards in September and December favoring laid-off workers at the Hilton's Renwick Hotel in Manhattan suffers from substantive errors because it requires hotel operator MP Bedford Property LLC to make payments not authorized by an industrywide collective bargaining agreement with the New York Hotel and Motel Trades Council AFL-CIO, the operator said Friday in a bid to vacate the award and ditch the union's dismissal motion.

And a Long Beach, California, city ordinance requiring that grocery stores pay workers a premium due to COVID-19 can stay in effect while a challenge from a grocers' association moves forward in California federal court, after a judge refused to block the requirement.

In proceedings in chambers, U.S. District Judge Dolly M. Gee denied the request from the previous day by the California Grocers Association for a temporary restraining order to stop enforcement of the ordinance, saying the group had failed to show that its members would face imminent irreparable harm without the injunction.

Public Policy

The U.S. Supreme Court on Monday threw out decisions that permitted a Texas bar on abortions throughout the COVID-19 pandemic, the same day the justices tossed an order that stopped Tennessee's now-expired ban on surgical abortions during the pandemic's early days.

In one ruling, the high court vacated Fifth Circuit judgments that dissolved temporary restraining orders against Texas Gov. Greg Abbott's executive order that postponed "all surgeries and procedures that are not immediately medically necessary," telling the Fifth Circuit to toss the case as moot.

In its petition, Planned Parenthood and other health providers in Texas said that it didn't have the chance to properly challenge those Fifth Circuit decisions because just one day after the second Fifth Circuit decision came down, the challenged executive order was replaced by one saying that abortions could continue in Texas, according to the Texas health providers. 

In the Tennessee case, the Supreme Court vacated a Sixth Circuit decision that stopped the state from enforcing its own executive order — which required that nonessential or elective surgeries be put on hold while the COVID-19 pandemic was still raging — against health providers that perform abortions.  

Counsel for a bankrupt Pittsburgh-area restaurant being sued by the Allegheny County Health Department for refusing to follow Pennsylvania's mask mandates tried to raise doubts Wednesday over whether masks were effective at controlling the pandemic or if unmasked dining at restaurants posed greater risks of spreading COVID-19.

During an evidentiary hearing, James Cooney, representing The Crack'd Egg, questioned the chief epidemiologist at the health department on how conclusively the county's contact tracers had connected coronavirus cases to bars and restaurants. He also grilled LuAnn Brink, chief epidemiologist and deputy director for the health department, over whether there was a scientific consensus on the effectiveness of masks, social distancing and business closures in reducing the virus' spread.

The health department is asking the Allegheny County Court of Common Pleas to enforce its efforts to shut down The Crack'd Egg and its parent company The Cracked Egg LLC until it complies with state directives for customers and employees to wear face coverings when they aren't seated and eating, along with capacity limits between 25% and 50% of its normal occupancy. Judge John McVay had called the evidentiary hearing to weigh the county's request for an emergency injunction against the restaurant.

A Florida appeals court on Wednesday shot down several residents' bid to block a face mask mandate that Palm Beach County enacted in response to the COVID-19 pandemic, rejecting their argument that it intrudes on their constitutional right to refuse medical treatment.

The county's emergency order, which county commissioners enacted in late June and have extended seven times through at least Feb. 19, drew national attention when a number of members of the public lambasted the board at the meeting when it was approved, raising conspiracy theories and in one case accusing the commissioners of "practicing the devil's law."

And the Ninth Circuit on Monday blocked part of California's pandemic-related ban on in-person religious services, nixing certain attendance size limitations but keeping other aspects of the state's order, including restrictions on singing and chanting during indoor services.

In a unanimous published decision, the panel granted part of the injunction bid from Harvest Rock Church in Pasadena, eliminating the 100-person attendance limit on indoor places of worship under the second tier of the state's Blueprint for a Safer Economy and eliminating the 200-person attendance limit on third-tier places of worship. The four-tier system is based on the level of COVID-19 spread risk in a given county, as determined by the rate of positive tests in that county.

Retained is the state's ban on indoor worship among places of worship in a first-tier, or high-risk, county; the limits on attendance — tied to a percentage of the building's fire-code capacity — for second-, third- and fourth-tier places of worship; and the singing and chanting restrictions.

The order included little explanation of the decision, other than to note that it was made in light of South Bay United Pentecostal Church v. Newsom , in which a San Diego church had made a similar request to enjoin a state order, a bid that was largely rejected.

Hospitality

Airbnb has asked a California federal court to compel arbitration in a proposed class action challenging the home-sharing platform's purported failure to properly repay hosts and guests for canceled bookings during the COVID-19 pandemic, saying the dispute's claims must be arbitrated under an agreement the parties signed.

Airbnb Inc. and its payments arm argued in their Thursday bid to compel arbitration and dismiss Anthony Farmer's suit that the former Texas-based host signed terms of service documents that governed his contractual relationship with the company and effectively assented to the TOS arbitration provisions.

Farmer last summer had already sought a currently pending arbitration against Airbnb before the American Arbitration Association, seeking $1,000 in compensatory damages, according to Airbnb. But after Airbnb answered his arbitration demand and paid $3,200 to the AAA for filing and arbitrator compensation fees, Farmer improperly attempted to withdraw his claims from arbitration so he could pursue his lawsuit, Airbnb said.

Insurance

A Florida restaurant is heading to the U.S. Supreme Court in a bid to revive claims that its insurer wrongly denied it coverage for losses stemming from road construction near its location, saying that an answer to the question of what defines "physical loss" at the heart of the suit is critical given the hundreds of COVID-19-related suits that hinge on the same issue.

In a petition for certiorari filed two weeks ago, Mama Jo's Inc., which runs the Miami restaurant Berries in the Grove, asked the high court to overturn a decision in the Eleventh Circuit, which held that under Florida law, physical loss or damage requires that the property be rendered unusable and requires physical repairs, and therefore Sparta Insurance Co. was off the hook for coverage.

The restaurant argued that there is a split among the circuit courts, with several courts having held like the Eleventh Circuit that physical loss or damage requires structural damage, while others have held that things like dust and viruses constitute such damage. As hundreds of businesses grapple with their insurers over whether COVID-19 and the lockdowns intended to stop its spread can be considered physical loss or damage, now is the time for the Supreme Court to issue a federal ruling to settle the issue, the restaurant argued.

A Pennsylvania federal judge Thursday granted Selective Insurance Co.'s bid to ax an auto business's suit seeking COVID-19 related coverage, ruling the company failed to allege that government closure orders caused a physical loss and that a virus exclusion bars coverage.

U.S. District Judge Gene E.K. Pratter said Frank Van's Auto Tag LLC could not show a connection between its financial loss and the physical conditions of its insured property. The judge agreed with Selective that a virus exclusion and its anti-concurrent clause precluded all damages resulting from COVID-19 and state-mandated closures.

Frank Van's had asked the court to rule that the definition of a "physical loss" is not limited to tangible changes, arguing that because the shutdown orders prevented access to and use of its business, it had sustained a physical loss covered by the policy. But Judge Pratter disagreed, saying the auto business's property does not lose utility if it continues to function.

"Once the shutdown order lifted, Frank Van's could immediately resume business, without a period of restoration," so it did not incur a physical loss covered under the policy, she said.

And electronic cable maker Amphenol Corp. has sued Factory Mutual Insurance Co. seeking to compel the insurer to cover its more than $100 million pandemic-related claimed losses under its over $500 million all-risk policy.

In a suit filed in Connecticut federal court, the electronics giant alleged Factory has refused to issue a coverage position regarding its losses caused by business interruption and the actual presence of COVID-19 in its global operations. The company said its $500 million per-occurrence policy expressly covers the threat of a virus event like the pandemic and government closure orders, as well as communicable diseases such as COVID-19. Amphenol said it has paid over $7.2 million in premiums for its 40 global operations insured under the policy.

An Illinois federal judge on Wednesday freed Cincinnati Insurance Co. from having to cover a hotel company's pandemic-related losses, finding the hotel failed to allege that either COVID-19 or ensuing government shutdown orders caused physical damage to its property.

U.S. District Judge Elaine E. Bucklo said that although the policy does not have a virus exclusion, the plain language of the policy's terms is very clear that a direct physical loss or damage is a precondition to coverage. In the order, the judge said that The Bend Hotel Development Co. LLC of East Moline, Illinois, failed to show the virus physically intruded on its property and that the hotel only alleged financial losses resulting from government closure orders.

In Georgia, a federal judge ruled Tuesday that a unit of The Hartford is not obligated to cover an Atlanta-area law firm's losses due to a COVID-19 stay-at-home order, saying the firm's office has not sustained the sort of direct physical loss or damage required by its policy.

U.S. District Judge William M. Ray dismissed a putative class action complaint filed against Hartford Casualty Insurance Co. by Karmel Davis & Associates Attorneys-At-Law LLC, finding that the firm failed to meet the prerequisites for coverage in any of the sections of its "all risk" policy with the insurer.

And two companies running Goddard School daycare centers in Pennsylvania filed separate lawsuits against Philadelphia Indemnity Insurance Co., seeking to compel the insurer to pay for their business losses resulting from COVID-19 and government closure orders.

In a pair of suits filed in state court on Monday, Investment Group LLC and Tiny Happy People Inc. said that their all-risk policies cover all catastrophes, including the ongoing pandemic, and that the policy's virus exclusion was "fraudulently adopted."

Consumer Protection

A Pittsburgh man's proposed class action over sales tax applied to protective masks by Amazon should be resolved through arbitration, the e-commerce giant told a Pennsylvania federal court Monday.

By purchasing a mask through Amazon's website, plaintiff Vince Ranalli agreed to the retailer's conditions of use, the motion says. Those conditions say a customer will resolve any dispute regarding the company or a product purchased through Amazon through arbitration on an individual basis, not through a class action. The protective masks are used mostly for protection against COVID-19.

Amazon asked the U.S. District Court for the Western District of Pennsylvania to compel the suit to arbitration and stay or dismiss the complaint. The conditions of use have been about the same since 2011, and Ranalli has made more than 200 purchases from the website, the motion says. By clicking the "Place Order" button, he accepts the conditions, including the arbitration process for disputes.

And a California federal judge has handed The Clorox Co. a win in a suit alleging it misleads consumers into thinking its Splash-Less bleach can disinfect surfaces, finding that there's nothing on the label indicating the product is capable of doing so.

In an order filed Thursday, U.S. District Judge Phyllis J. Hamilton dismissed Shana Gudgel's complaint, saying despite her arguments that Clorox Splash-Less Bleach is advertised as having the same capabilities as the regular bleach brand, the company hasn't made any affirmative representations backing up her claims.

In her complaint, Gudgel pointed to a number of label and marketing aspects she said were designed to imply that the Splash-Less bleach could disinfect — or hide that it couldn't — but the judge wrote that even with these elements taken together, a reasonable consumer wouldn't be fooled.

Gudgel sued in August, alleging that by omitting the quantity of its active ingredients on the label, Clorox conceals the Splash-Less bleach's inability to actually disinfect surfaces. According to the complaint, Clorox added ingredients to create higher viscosity, which alters the concentration of sodium hypochlorite from between 5% and 6.5% to between 1% and 5%.

Retail & E-Commerce

Nike has agreed to outfit its California workers with see-through masks as part of a proposed settlement to end class allegations that the shoe company's pandemic-era policy mandating masks prevents deaf and hard-of-hearing customers from reading employees' lips.

The unopposed motion filed Wednesday in California federal court outlines a deal where Nike will provide transparent masks to all California employees if they need to assist hearing-impaired customers, as well as clean pens and paper at its stores for such transactions. The company will also post signage outside its stores alerting customers about their right to access accommodations.

The customer who brought the suit, Cali Bunn, also asked the judge to grant attorney fees and costs of $85,000 and certify a settlement class likely to include thousands of deaf or hard-of-hearing customers who have entered Nike stores in the state since June 18 through the approval of the settlement. The deal would last as long as masks are required in stores to help stop the spread of COVID-19.

--Additional reporting by Matthew Santoni, Craig Clough, Daphne Zhang, Nathan Hale, Mike Curley, Jeff Sistrunk, Max Kutner, James Boyle, Joyce Hanson, Dave Simpson, Adam Lidgett and Lauren Berg. Editing by Michael Watanabe.

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