Coronavirus Litigation: The Week In Review

By Celeste Bott
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Law360 (March 18, 2021, 5:07 PM EDT) -- New York University has escaped a suit from students seeking tuition refunds after shifting to online instruction, Apple wants a different venue for an antitrust suit accusing it of keeping other coronavirus tracking applications out of its App Store, and the Los Angeles Lakers are among several professional sports teams who filed suit this week seeking insurance coverage for pandemic-related losses.

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 nationwide.

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

Consumer Protection

A New York federal judge on Wednesday tossed a proposed class action against New York University launched by students hoping for tuition refunds after the school moved instruction online during the pandemic, finding that the school never promised in-person education.

In a 12-page order, U.S. District Judge George B. Daniels determined that NYU student Daniel Zagoria did not adequately plead a breach of contract claim against the school because NYU did not promise to provide in-person educational services. The judge granted Zagoria an opportunity to amend his complaint by April 1.

Zagoria, a master's student at NYU's Schack Institute of Real Estate, sued the university last May on behalf of a proposed class of NYU students, alleging the university breached its promise to students by continuing to charge more than $2,000 per credit hour, despite offering an inferior academic experience when classes went virtual as a result of the state's pandemic-related closure orders.

And a California man suing CVS Health with allegations that its hand sanitizer fails to live up to its promise of killing 99.99% of germs is asking a federal court for class certification, saying his claims are ideal for class treatment because they rest on questions common to the item's thousands of buyers.

Joseph Mier told the California federal court Monday the central questions in the case — whether the label on the products is misleading and whether reasonable consumers would rely on that labeling — are subject to classwide evidence, which he proffered in the form of his expert witnesses. The motion seeks to certify a class consisting of all California residents who bought the hand sanitizer between four years before Mier filed his suit and the date of class certification. It also seeks to name attorneys from Wilshire Law Firm PLC as class counsel.


A California tennis company hasn't been paying its workers all the wages they're owed, including for time spent undergoing mandatory temperature checks as a precaution during the coronavirus pandemic, according to a proposed collective and class action filed in California federal court.

Workers at the San Bernardino, California, facility of The Merchant of Tennis Inc., which operates retail tennis stores in the U.S., say it has been underpaying them the overtime wages to which they're entitled and made them undergo temperature checks while they were off the clock, according to the complaint filed Monday by José Hernandez Solis.

Solis, who worked at the facility from April to June, alleges he worked overtime but wasn't paid at the proper overtime rate, according to the suit. When Solis and his coworkers were required to undergo COVID-19 temperature checks at the beginning of the workday, they did so off-the-clock, and so The Merchant of Tennis failed to pay them for their time undergoing monitoring, according to the suit.

And pork producer Smithfield Packaged Meats Corp. agreed to pay $7.75 million to more than 30,000 workers who claimed the company stiffed them on overtime pay while they toiled in dangerous conditions during the COVID-19 pandemic.

In an unopposed settlement motion, named plaintiffs Douglas Canas and Vanessa Meschino asked an Illinois federal court to preliminarily approve both a collective and class action of workers who said Smithfield should have calculated overtime pay based on pandemic hazard bonuses the company handed out instead of on their regular base rates.

Illinois workers, numbering just over 2,400, can recover wages under the Illinois Minimum Wage Law, as well as under the Fair Labor Standards Act collective action, according to the proposed agreement. The Illinois class will get over $589,000, with an average individual payment of $244, according to the motion.


Two online retailers facing a proposed class action claiming they improperly charged sales tax on protective face masks urged a Pennsylvania federal court to toss or stay the case so the Pennsylvania Department of Revenue can review the issue.

In respective motions to dismiss filed Thursday, Zazzle and Outdoor Research argued plaintiff Vince Ranalli failed to follow the proper administrative process under the Pennsylvania Tax Code and said the state Department of Revenue is better suited than the court to clarify the state's position on taxing face coverings.

But if the court allows the case to move forward, it should still be dismissed for a number of reasons, Zazzle and OR argued.

Both companies asserted in their briefs that Ranalli's claims are barred by the voluntary payment doctrine, which they said the Pennsylvania Supreme Court has said follows common law doctrine holding that "one who voluntarily pays money with full knowledge of the facts, without any fraud having been practiced upon him, cannot recover it back."

Legal Ethics

A New Jersey state judge on Tuesday refused to toss claims that an attorney pressured his then-client to accept an unfavorable medical malpractice settlement when her case was on the verge of a mistrial at the beginning of the COVID-19 pandemic, citing the early stage of the present action.

A year after the $600,000 deal was put on the record in the underlying matter, Superior Court Judge Lisa M. Adubato denied attorney Anthony Pope's bid to escape Barbara Bok's legal malpractice suit over how he allegedly threatened to withdraw as her counsel if she opted for a new trial and told her she would have to shoulder expert fees for a retrial.

At the current stage of the case, such allegations must be taken as true and Bok must receive every inference that Pope's alleged conduct was "coercive" and "put the plaintiff in a situation of being under duress," Judge Adubato said during a Zoom hearing, stressing that she is not "making the determination that a fact-finder would at trial."

And a fired paralegal filed suit in Michigan federal court accusing a law firm of giving him the ax after he was exposed to COVID-19 and spent one morning working from home, then threatening him with criminal prosecution to silence him.

Public Policy

A Massachusetts federal judge threw out a suit challenging capacity limits on Salem ghost tours during the COVID-19 pandemic, ruling Wednesday that the restrictions are aimed at curbing the spread of the virus, not curbing free speech.

U.S. District Judge Leo T. Sorokin dismissed the case against Gov. Charlie Baker's administration filed by Colonial Ghosts LLC, doing business as Salem Ghosts, and a related entity called Zaal Ventures Corp.

The tour operators claimed the state was singling them out by limiting their tours to 12 people, including the guide, while outdoor political gatherings like protests were not limited at all. But Judge Sorokin wrote in a 10-page order Wednesday that the argument misses the mark, though he also recognized the plight of the tour operators and many other small business owners during the crisis, and acknowledged the mitigation efforts the tours have employed.

And a Travis County, Texas, district judge has declined to grant the state's request to immediately stop Austin and Travis County from enforcing a mask mandate that the state's attorney general has claimed in a lawsuit runs afoul of an order from the governor lifting the statewide masking requirement.

Travis County District Judge Lora Livingston decided after a hearing not to enjoin the mask mandate, giving the parties two weeks to prepare for a hearing on the matter that will begin March 26, according to the docket.

Attorney General Ken Paxton sued the city mayor, county executive and their health director for failing to lift the mask mandate after he sent a letter March 10 telling them to rescind it. Paxton said in a tweet last week that he sued Austin and Travis County after they "blew me off" in response to the demand a day earlier that they lift the mask mandate, which he argues conflicts with Gov. Greg Abbott's executive order that lifted the statewide masking requirement.


The First Circuit on Wednesday refused to disturb a Massachusetts federal court's decision denying bail to several immigration detainees convicted of violent crimes, finding it was reasonable to decide the detainees still belonged behind bars in the midst of the COVID-19 pandemic.

The detainees are immigrants being held in the Bristol County House of Correction in Massachusetts and class members in a certified class action against Immigration and Customs Enforcement and state corrections officials. The detainees sued over crowded and unsafe conditions during the pandemic, telling the court they were "literally trapped" and feared for their lives. Last year, a Massachusetts federal judge granted bail to dozens of detainees but denied bail to a small number without elaborating on his decision.

In November, the class asked the court to reconsider, and it refused. The dispute then landed in the First Circuit, where the five detainees still fighting their denials have argued the court had erred in its decisions. But the First Circuit agreed with U.S. District Judge William G. Young on Wednesday, noting that although the judge didn't explicitly state reasons for denying their bail, all of them have been convicted of violent crimes. The three-judge panel rejected their petition, saying that remedying overcrowding at the jail doesn't necessarily require the release of every single detainee.

Commercial Contracts

A Florida company has accused New Jersey-based Apex Distribution LLC, attorneys in Texas and Michigan, and others of conspiring to defraud it of $2 million through a bogus joint venture agreement to procure personal protective equipment for Apex's government clients during the COVID-19 pandemic.

In a complaint filed in Florida federal court, MBI Services LLC, which says it is dedicated to procuring PPE for resale in the U.S. market, accused Apex of misrepresenting its ability to deliver on their agreement to import millions of protective gloves. MBI said the defendants repeatedly lied about how close the order was to being delivered and then repeatedly asked for extensions to return the funds after MBI declared a default, but have yet to do so.

The 45-page complaint brings a long list of claims, including for breach of contract, breach of fiduciary duty, violation of civil Racketeer Influenced and Corrupt Organizations statute, conversion, unjust enrichment, fraud and fraudulent inducement. MBI is seeking an accounting of its funds and monetary damages, including recovery of its $2 million, punitive damages and treble damages on its RICO claim, as well as attorney fees and costs.


Antitrust allegations that Apple used trumped-up excuses to keep coronavirus tracking applications out of the App Store to prevent competition with its own COVID-19 tracker belong in California, not New Hampshire where they were filed, according to the tech giant.

In a motion to transfer venue, Apple said Coronavirus Reporter's $800 million lawsuit has nothing to anchor the allegations to the District of New Hampshire and nothing to stop "the mandatory forum-selection clause" in a developer program license agreement, or DPLA, from placing the claims where they belong in the Northern District of California.

Even without the forum selection clause, Apple said the case still belongs in the Cupertino, California, company's home district.


Vaxart Inc. has asked a California federal judge to dismiss allegations that it misled investors about the prospects of its COVID-19 vaccine candidate, saying the securities suit is "premised on statements Vaxart never made."

The biotechnology company told U.S. District Judge Vince Chhabria that the putative investor class is resting its entire suit on a press release issued in late June titled "Vaxart's COVID-19 Vaccine Selected for the U.S. Government's Operation Warp Speed," and arguing the announcement suggests Vaxart would receive federal funding through the initiative.

But Vaxart claims the release tells the whole truth — that it had been selected to participate in a nonhuman primate study, funded by Operation Warp Speed, of its oral COVID-19 vaccine.

Investors filed suit against Vaxart in August following media reports that allegedly revealed the company had falsely claimed to be receiving support from Operation Warp Speed.


A series of professional sports teams, including the Philadelphia Eagles, the Sacramento Kings and the Los Angeles Lakers, have filed suit against their respective insurers seeking millions in coverage for pandemic-related losses.

Pyrex maker Corelle Brands has told an Illinois state court that Zurich American Insurance Co. wrongfully denied it coverage for losses stemming from the "necessary suspension of its business operations" during the coronavirus pandemic.

The owner of Seattle's iconic Space Needle has alleged in a federal lawsuit that North American Elite Insurance Co. must cover business interruption losses tied to the coronavirus pandemic and related government shutdown orders under the tourist attraction's $160 million policy.

In Rhode Island state court, mall owner Taubman Co. LLC has sued Factory Mutual Insurance Co., alleging the insurer denied it coverage for losses stemming from the COVID-19 pandemic in an act of bad faith that was part of a companywide policy to deny coverage for similar claims.

And Great Divide Insurance Co. has countersued ViacomCBS in California federal court, alleging the media conglomerate "prematurely" brought a COVID-19 business interruption lawsuit against it after ViacomCBS failed to cooperate in its claim investigation.

Courts have also dismissed other COVID-19-related insurance suits this week, including one brought by an Atlanta restaurant management group against Zurich American Insurance Co., a pair of Charleston restaurants that had sued Hartford Financial Services Group Inc. and Indiana's largest nonprofit professional theater, which sought coverage from Cincinnati Insurance Co.

The owners of hotel and restaurant franchises including Wendy's, T.G.I. Friday's, Marriott and Hilton can't tap American Guarantee and Liability Insurance Co. for $40 million in losses from pandemic-related issues, a New Jersey federal judge has ruled.

And the owner of an Illinois Quality Inn & Suites urged the Seventh Circuit on Tuesday to revive its proposed class action alleging Aspen Specialty Insurance Co. is responsible for its pandemic-related losses.

--Additional reporting by Lauren Berg, Hailey Konnath, Alexis Shanes, Melissa Angell, Shawn Rice, Mike Curley, Christopher Cole, Chris Villani, Daphne Zhang, Bill Wichert, Dean Seal, Daniela Porat, Dave Simpson, Michelle Casady, Nathan Hale and Bryan Koenig. Editing by Marygrace Murphy.

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