By Celeste Bott

Law360 (March 25, 2021, 6:24 PM EDT) -- Walmart employees say they haven't been compensated for arriving for their shifts early to undergo coronavirus screenings, New York City has been accused of imposing excessive COVID-19 price-gouging fines and George Washington University is the latest to escape a suit seeking tuition refunds after classes went online during the 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.

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

Employment

Walmart workers hit the retail giant with a $5 million proposed class action Monday, alleging Walmart required employees to arrive for their shifts early to undergo COVID-19 screenings but flouted the law by failing to fully compensate them for their time.

Tristan Smith and Kathy Arrison, a current and a former Walmart retail associate, respectively, filed the putative class action in Arizona federal court, claiming the Arkansas-based retail behemoth required them to arrive for their shifts 10 to 15 minutes early to undergo mandatory COVID-19 screening but didn't compensate them for all that time.

As a result of Walmart's failure to pay, the company enjoyed unjust enrichment at the expense of its workers, Smith and Arrison allege.

And a New Jersey federal judge on Monday tossed a False Claims Act suit from an ex-nursing home company employee alleging she was fired for refusing to take part in a fraudulent scheme to reel in more Medicare dollars during the COVID-19 pandemic, saying she failed to show she engaged in so-called "protected conduct."

U.S. District Judge Robert B. Kugler found that Christine Petre has not alleged she indicated she might report the alleged fraud to the government or took other actions that would support her FCA claim against Atlas Healthcare and related defendants over a purported scheme to disenroll prospective patients from private insurance plans and enroll them in Medicare.

The former clinical liaison — who coordinated the placement of patients at Atlas facilities — has claimed she told management she believed the defendants' conduct to be "'fraudulent' and a form of 'fraud,'" but the judge said Petre "merely uses the word 'fraud,' which is not enough."

Consumer Protection

New York City authorities have unconstitutionally imposed excessive COVID-19 price-gouging fines without due process on "potentially tens of thousands of individuals and businesses" that sell face masks and other pandemic supplies, according to a proposed $50 million class action filed in federal court.

Hardware store Union Square Supply Inc. said in a complaint that New York's Office of Administrative Trials and Hearings, under a declaration of emergency, has approved price-gouging fines often running into the tens of thousands of dollars based on an undisclosed list of acceptable rates. Some targets were denied a chance to defend themselves after being issued summons to a closed building, according to the complaint.

Enforcement targets, according to the complaint filed in the Southern District of New York, have no way of knowing exactly what prices are acceptable for goods used to combat the COVID-19 epidemic — including masks, hand sanitizer and cleaning supplies — because the Department of Consumer and Worker Protection won't disclose the "secret list" that its inspectors have said they refer to when going inside a store.

And the city can continue handing out pandemic-related price-gouging penalties as it sees fit while battling the lawsuit, a federal court said Tuesday. U.S. District Judge Denise Cote refused to grant the temporary restraining order requested by Union Square Supply in a brief, one-paragraph order Tuesday that didn't include any of the court's reasoning.

Public Policy

A lower court wrongly denied grocers' attempt to stop the city of Long Beach, California, from carrying out an allegedly unconstitutional ordinance granting a pandemic pay bump to supermarket workers, an association argued in the opening salvo of its Ninth Circuit appeal.

In a brief, the California Grocers Association argued that the city's ordinance is preempted by the National Labor Relations Act and violates the equal protection clauses of the federal and state constitutions by singling out only certain businesses for restrictions, contrary to a district court ruling in February.

That filing is the latest development in the ongoing dispute between CGA and Long Beach over the "hero pay" ordinance. The association first sued the city in January to block the mandate, claiming it was unconstitutional.

Immigration

A Miami federal judge on Wednesday rejected the government's attempt to dissolve a previously imposed injunction that has been forcing immigration officials in South Florida to comply with federal COVID-19 guidance at three detention facilities.

U.S. District Judge Marcia G. Cooke said that an intervening case cited by the government in its July motion to reconsider her preliminary injunction did not, as officials had argued, change the standard for deliberate indifference claims.

The case was brought by a collection of immigrants detained inside the Krome Detention Center in Miami, the Broward Transitional Center in Pompano Beach and the Glades County Detention Center in Moore Haven. They accused the government of failing to take necessary precautions to protect against the spread of COVID-19.

Commercial Contracts

United Airlines asked an Illinois federal judge Monday to snuff "extraordinarily broad" discovery requests in a proposed consolidated class action over refunds for COVID-19-related flight cancellations, saying two consumers leading the case shouldn't be allowed to advance their claims anyway since they've already received their refunds.

The Chicago-based carrier told U.S. District Judge Thomas Durkin that lead plaintiffs Mark Hansen and Jason Buffer have saddled United with sweeping discovery requests that are unusually burdensome and costly. Moreover, United has separately moved to have the class allegations stricken from the case — on grounds that Hansen and Buffer have already received refunds for certain legs of the canceled flights that prompted them to sue in the first place — so discovery should be paused in the meantime, United contended in Monday's motion.

And a Florida federal judge on Tuesday denied Lynn University's bid to dismiss putative class allegations from a student's suit over the school's decision not to issue partial tuition and fee refunds after classes moved online due to the COVID-19 pandemic.

In a 13-page order, U.S. District Judge Rodolfo A. Ruiz II ruled that lead plaintiff Raymond Gibson's suit met the pleading requirements needed to maintain class claims at this stage in the litigation. The judge added that he was unpersuaded by the university's argument that the potential for "individualized damages issues makes class certification impossible in this case."

But a D.C. federal judge on Wednesday dismissed a similar consolidated proposed class action demanding tuition refunds from George Washington University for transitioning to online learning during the pandemic, ruling the institution never promised students in-person classes.

In an eight-page order, U.S. District Judge Richard J. Leon agreed with the university that the students who brought the cases last May did not adequately plead their breach of contract claim.

And Northeastern University students seeking refunds for the virtual spring 2020 semester told a federal judge Wednesday that a purported force majeure disclaimer buried in the school's online portal is too inconspicuous and one-sided in its terms to be enforceable. 

Students in Northeastern's graduate and undergraduate programs during the school's state-ordered pandemic shutdown and transition to online classes say the university can't rely on a disclaimer that protects the school in the event it is required to adapt its instruction on an emergency basis.

To get to that disclaimer, the students said they must click on an agreement to access the school's online portal for class registration and grading, then click through multiple links before they are greeted with explicit statements that the terms are not a contract.

Securities

Three investor companies have sued Decision Diagnostics Inc. and its CEO in California federal court, alleging he falsely told them the biotechnology company was developing an at-home coronavirus test and denied them the right to convert shares in the company worth tens of millions of dollars at the time.

The lawsuit brought by Licgo Partners LLC, Sovereign Partners LLC and Paradigm Capital Holdings LLC against Decision Diagnostics, its CEO Keith Berman and Decision's subsidiary PharmaTech Solutions Inc. points to information in a criminal indictment filed against Berman in December, as well as a parallel civil suit brought by the U.S. Securities and Exchange Commission.

According to the companies, with Decision Diagnostics facing severe financial difficulties in early winter and spring 2020, Berman concocted a scheme to dupe investors into believing his company was close to gaining U.S. Food and Drug Administration approval of an at-home COVID-19 test.

Competition

The developer of a COVID-19 tracking application has urged a New Hampshire federal court not to transfer its suit accusing Apple of using trumped-up excuses to keep its apps out of the App Store to prevent competition with its own tracker. 

Apple argued earlier this month that 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 from placing the claims where they belong in the Northern District of California.

Coronavirus Reporter first filed suit in January, arguing there was "no good reason" for Apple to block its app from being made available in the App Store in March 2020, just as the virus was beginning its deadly march across the country — except that Apple knew it had its own application in the pipeline.

Intellectual Property

A Seattle federal judge has declined to ax Allied BioScience's lawsuit accusing its former CEO of trying to hold the company's intellectual property hostage, finding the executive's conduct may reflect efforts to claim an ownership stake in the inventions in question.

In a five-page order Tuesday, U.S. District Judge Barbara J. Rothstein determined that ABS satisfied the "case or controversy" requirement in laying out its claims against former CEO Craig Grossman, who's alleged to have attempted to claim ownership over various inventions referred to in the complaint as the "Grossman inventions."

Tuesday's decision marks the latest development in the ownership spat first launched last November by ABS, whose SurfaceWise 2 surface disinfectant was the first to be approved by the EPA to continuously protect against COVID-19.

Insurance

Gambling industry giant Caesars Entertainment Inc. has brought more than 36 property insurers to Nevada state court, alleging the carriers should pay for its more than $2 billion in pandemic-related losses after it gave COVID-19 sick pay to more than 15,000 employees and had more than 2 million cancellations.

In its complaint, the entertainment company said it has paid more than $25 million in annual premiums under its $3.4 billion all-risk policies, which do not exclude virus or pandemic losses, but none of its insurers has met their obligations to provide benefits after its insurance claims were filed last year.

Society Insurance Co. asked an Illinois federal judge Tuesday to allow it to immediately appeal his February refusal to dismiss policyholders' claims for COVID-19 business interruption losses, saying the question of whether a loss of use of property constitutes a "direct physical loss" is a pressing legal question that warrants quick appellate review.

Ruling in three bellwether cases in multidistrict litigation over the insurer's widespread denial of pandemic-related coverage, U.S. District Judge Edmond E. Chang last month allowed a slew of restaurants, bars and theaters to pursue claims that Society wrongfully denied them coverage, but his decision on "direct physical loss" is a minority position, increasing the likelihood that it won't stand on appeal, the insurer argues.

Also in Illinois, Owners Insurance Co. asked an Illinois federal judge to throw out a suit brought by two banquet halls seeking coverage for coronavirus-related losses, saying the governor's orders in response to the pandemic didn't cause damage to their premises.

Owners says it rightfully denied the business interruption claims made by Carlisle Banquets Inc. and New Meridian Banquets Inc. based on the lack of any "direct physical loss" and argues their theories of liability have been "flatly rejected repeatedly" in a series of cases in Illinois state and federal courts.

In Florida, a Chubb Ltd. unit has urged a federal court to toss a restaurant's proposed class action accusing the insurer of wrongly denying business interruption claims arising from COVID-19 closures, arguing that the pandemic did not cause direct physical loss or damage to the restaurant as required to trigger coverage.

Westchester Surplus Lines Insurance Co. asked for judgment on the pleadings in the suit brought by Cafe International Holding Co. LLC, which owns IT! Italy Ristorante Cafe & Bar in downtown Fort Lauderdale, because the restaurant was not physically altered or damaged because of the coronavirus. Under Eleventh Circuit precedent, there must be an actual, tangible change to a property in order to trigger coverage for physical loss or damage, according to the motion.

And Carilion Clinic and a slew of affiliated hospitals in Virginia, West Virginia, Tennessee and North Carolina have sued a Zurich unit, saying the insurer should pay for their more than $150 million in pandemic losses under their $1.3 billion policy after more than 1,300 of its employees were diagnosed with COVID-19.

The health system told a Virginia federal court that it paid almost $1 million in premiums for its $1.3 billion property damage and business interruption coverage, but American Guarantee & Liability Insurance Co. refused to honor its obligation to provide coverage after more than 10% of its employees contracted the virus.

Several lawsuits seeking coverage for coronavirus-related losses from insurers were dismissed this week, including those brought by the franchisee of 100 Outback Steakhouse restaurants against Affiliated FM Insurance Co., a Michigan winery against Cincinnati Insurance Co., a West Virginia bridal shop against insurance broker AssuredPartners Capital, a San Francisco cafe against Oregon Mutual Insurance Co. and two Massachusetts restaurants suing Fireman's Fund Insurance Co.

--Additional reporting by Bryan Koenig, Lauren Berg, Daphne Zhang, Craig Clough, Carolina Bolado, Shawn Rice, Linda Chiem, Max Kutner, Bill Wichert, Hannah Albarazi, Melissa Angell, Nadia Dreid, Asher Stockler, Khorri Atkinson and Brian Dowling. Editing by Kelly Duncan.

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