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Coronavirus Litigation: The Week In Review

By Celeste Bott · April 22, 2021, 7:29 PM EDT

Temple University and the University of Pennsylvania are the latest colleges to escape students' claims over coronavirus-related campus closures, Cigna wants out of a $9.3 million suit claiming it won't pay for policyholders' COVID-19 testing, and the U.S. provider of tickets to the 2021 Olympics has been sued for allegedly refusing to issue full refunds.

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.

Commercial Contracts

A Pennsylvania federal judge ruled Thursday that Temple University made no promise to provide in-person learning to students who launched a would-be class action in May seeking tuition refunds after the school moved its classes online as a result of the pandemic.

U.S. District Judge John M. Gallagher granted Temple's bid to dismiss the consolidated class claims brought by students Brooke Ryan and Christina Fusca, saying the students signed contracts agreeing to pay for all tuition and that the university never made a promise that classes would be exclusively conducted in-person or that refunds would be provided if classes were moved online.

Under the so-called student financial responsibility agreement that Ryan and Fusca signed, they agreed to pay tuition for all their registered classes in exchange for uninterrupted coursework for the semester, the judge said. He said the agreement didn't contain a specific promise of exclusively in-person instruction or unqualified access to campus facilities.

Meanwhile, Rider University urged a New Jersey state court Monday to toss a student's proposed class action seeking tuition reimbursement after the pandemic forced last spring's in-person classes online, arguing a Garden State federal court dismissed the same claims against another college last week.

During an oral argument, Rider University attorney Angelo A. Stio III of Troutman Pepper pointed to U.S. District Judge Kevin McNulty's April 14 decision in Crista and Angel Dougherty v. Drew University. Judge McNulty ruled that Drew's transition to virtual education during the 2020 school year was permitted under the school's reservation of rights clause allowing it to modify its academic program. Drew did so without breaching a contract, according to Judge McNulty's decision, which retained some fee-based claims.

And the University of Pennsylvania's partial victory in a proposed class action over semesters shortened or conducted online because of the pandemic is reason to dismiss similar claims against the University of Pittsburgh, Pitt said Wednesday.

U.S. District Judge Timothy J. Savage in Philadelphia on Tuesday partly dismissed students' claims that Penn had breached contracts by continuing to charge full tuition and fees even though they were kept off-campus to avoid spreading the COVID-19 virus, despite the university promoting the on-campus experience as a reason to enroll. On Wednesday, Pitt pointed to its Ivy League cousin's case as reason to trim its students' suit as well.

Employment
An employee of Pilgrim's Pride lobbed a wrongful death suit against the food company Wednesday in Texas federal court, accusing the meatpacker of placing profits over safety after she became infected with coronavirus on the job and purportedly transmitted the infection to her now-deceased husband.

Joining Pilgrim's Pride employee Sybil Elijah, who brought the suit individually and as a representative of the estate of her husband, David Elijah, is co-plaintiff Rayford Brown, the spouse of now-deceased Pilgrim's Pride worker Elnora Brown. Both parties accuse Pilgrim's Pride, along with its parent company JBS USA Holdings Inc. and Packers Sanitation Services, of misrepresenting the COVID-19 infection risk to employees so that they would continue working.

Elijah and Brown claim that the alleged misrepresentations and failure to implement other preventive measures in a timely manner led to the deaths of their spouses.

Intellectual Property

The group behind the Rose Bowl Game has blasted the city of Pasadena for its "naked power grab" in claiming to control where the famous annual college football game is held, urging a California federal court to keep alive its suit over the right to host the game outside the city in certain situations.

The nonprofit Pasadena Tournament of Roses on Tuesday urged the court to keep alive the suit over its right to move the game under a master license agreement in a force majeure situation, and to confirm its intellectual property rights over the Rose Bowl Game marks.

The suit was sparked after the more-than-100-year-old bowl game, usually held on New Years Day at the Rose Bowl in Pasadena, was held outside of the city this January for the first time since 1942. The game was held at AT&T Stadium in Arlington, Texas, amid California's restrictions on large public gatherings due to the pandemic.

Allele Biotechnology and Pharmaceuticals Inc. has warned that letting Pfizer and BioNTech off the hook for allegedly poaching its research technology while testing their COVID-19 vaccine would "destroy established patent rights."

Allele made the argument in its opposition to Pfizer and BioNTech's motion to dismiss Allele's infringement suit under the safe harbor provision of the Hatch-Waxman Act. The defendant biotechnology companies contended that the safe harbor shields them from infringement, but Allele argued that accepting their position would turn the law "into a playground for willful infringers to eviscerate undisputed patent rights."

Allele's October suit relates to a patented fluorescent protein called "mNeonGreen," which is used in testing antibody and vaccine candidates. The company says the technology enabled Pfizer and BioNTech to save "precious time" and be the first to bring their COVID-19 vaccine to market. Allele filed a similar lawsuit against Regeneron Pharmaceuticals Inc. in New York.

Health Care

A Connecticut medical practice chain seeking $9.3 million in damages from Cigna for not paying for policyholders' COVID-19 testing is actually exploiting a national health crisis by overcharging for tests, the insurer fired back in a motion to dismiss the federal court suit.

Cigna Health and Life Insurance Co. said that Murphy Medical Associates LLC is "price gouging" insurers by demanding $1,500 for in-house tests while acknowledging that they only cost $200 to $600. It urged the court to dismiss the coverage suit, initially filed by Dr. Steven A.R. Murphy and his medical practice chain in November.

Murphy Medical told a Connecticut federal judge in November that Cigna had wrongfully refused to reimburse more than 4,400 of its patients, allegedly telling health plan holders that Murphy offers fraudulent testing sites and that the patients need to pay out of pocket if they go to his sites.

And Adventist Health System has asked a Florida federal court to award it more than $1.5 million after a California-based asset management company defaulted on their settlement to resolve the hospital system's fraud suit over a failed $57.5 million deal for personal protective equipment needed for the pandemic.

In its motion — which it said counsel for defendants Tomax Capital Management Inc. and its principal Yehoram Tom Efrati did not oppose — Florida-based AdventHealth said that under the terms of the parties' March 3 settlement agreement, it was entitled to entry of a consent final judgment because of the defendants' failure to make the first payment of $300,000, which was due April 12.

Food & Beverage

GrubHub has urged a Colorado federal judge to approve a class action deal to end false advertising claims that it steered customers to its partner restaurants by telling them that other establishments were closed or not accepting online orders, agreeing to alter its platform's wording and not to oppose paying up to $450,000 in attorney fees.

The stipulation and settlement agreement filed by GrubHub and plaintiff CO Craft LLC, which does business as Freshcraft, would certify a settlement class of any restaurant, convenience store, market, grocery store or other food service business that did not have any type of agreement with GrubHub from May 11, 2016, until final approval of the settlement.

The deal also includes a $5,000 service award for Freshcraft, while GrubHub admits no wrongdoing.

Sports & Betting

The U.S. provider of tickets to the 2021 Olympic Games in Tokyo has been slammed with a proposed class action in New Jersey federal court for allegedly refusing to provide full refunds after overseas spectators were barred due to the pandemic and forcing customers to release the business from liability in order to get a partial refund.

Plaintiff Suzanne Caruso said on April 16 that complete refunds are required under CoSport's terms and conditions, but the Garden State-based company only offered refunds of 75% if customers met a certain deadline and agreed to waive any related claims against it.

The lawsuit includes counts for breach of contract and violations of the state's Consumer Fraud Act and Truth-in-Consumer Contract, Warranty and Notice Act.

Public Policy

A temporary pay bump mandated by Burien, Washington, for grocery store workers amid the pandemic is constitutional and not preempted by federal labor law, a federal judge ruled, throwing out a suit by two grocery industry groups.

In an order Tuesday, U.S. District Judge John C. Coughenour said the dismissal was warranted after tossing a "nearly identical" lawsuit by the same groups, the Washington Food Industry Association and Northwest Grocery Association, over a hazard pay ordinance in Seattle. The judge had dismissed that case in March.

When dismissing the Seattle case, the judge had rejected the groups' arguments that the National Labor Relations Act preempted the Seattle law and the ordinance violated the equal protection and contracts clauses of the federal and state constitutions.

And a food workers' union has told the Ninth Circuit that federal labor law does not prevent the city of Long Beach, California, from requiring certain grocery stores to pay a hazard pay premium during the pandemic, defending the ordinance against a grocers association's challenge.

The filing by the United Food and Commercial Workers Union Local 324 urges the Ninth Circuit to keep in place a lower court's ruling that denied the California Grocers Association's request for an injunction against the ordinance, which temporarily requires certain grocery stores in the city to pay workers a $4-per-hour pandemic premium. The union argued the rule is not preempted by federal labor law because it is merely a background requirement against which employers and unions must negotiate, not an interference with the collective bargaining process.

Tax

The U.S. Department of the Treasury told a federal court that Ohio lacks standing to challenge a federal law prohibiting states from using coronavirus aid to offset tax cuts, arguing the state's claims are speculative and based on hypothetical harm.

The Treasury urged the court on April 16 to deny a preliminary injunction that Ohio Republican Attorney General Dave Yost is seeking against the department and its secretary, Janet Yellen, to block them from enforcing the clawback provision in the American Rescue Plan Act. Ohio's complaint, the department said, is premature because the state hasn't enacted any tax cuts that it indicated it may intend to offset with federal aid.

Ohio cannot establish standing because "its asserted injury is hypothetical and speculative," the department said.

Native American

Sixteen Native American tribes have told the U.S. Supreme Court that preserving a D.C. Circuit decision blocking Alaska Native corporations from receiving certain COVID-19 relief funding would not leave Alaska Natives short of health care and other services, after some justices showed concern on that score during oral arguments this week.

The federally recognized tribes, including the Confederated Tribes of the Chehalis Reservation, the Navajo Nation and several Alaska tribes, told the high court in a letter Tuesday that there would be "no gap in services" for Alaska Natives if the justices upheld the D.C. Circuit's September decision that ANCs don't qualify as "Indian tribes" for a share of $8 billion for tribal governments under the Coronavirus Aid, Relief and Economic Security Act.

During oral arguments Monday on petitions by the Treasury Department and ANCs challenging the ruling, the high court weighed the use of a definition of "Indian tribe" in the CARES Act that was borrowed from the Indian Self-Determination and Education Assistance Act, a federal contracting law.

Insurance

A New York state judge has refused to force the owner of the Seattle Space Needle to litigate a pandemic coverage dispute with North American Elite Insurance Co. in New York rather than Washington state.

Justice Joel M. Cohen said he couldn't see how North American can avoid the perception it was getting around Washington law by requiring Space Needle LLC to litigate business interruption losses in New York per the $160 million policy's forum selection clause. Washington law doesn't allow an insurer to insert a forum selection clause into a policy, the judge said, denying North American's bid for a preliminary injunction stopping Space Needle's pending Washington federal suit.

Novant Health Inc. is arguing that its $1.5 billion policy provision with a Zurich subsidiary should cover hundreds of millions in losses from cancellations and postponements amid the pandemic, according to a suit removed to North Carolina federal court.

The North Carolina-based health care company said Zurich subsidiary American Guarantee and Liability Insurance Co. breached their contract when the insurer purportedly refused to pay the health care company for losses and expenses Novant incurred during the pandemic.

An Illinois dental office has urged the Seventh Circuit to revive its suit seeking to force Cincinnati Insurance Co. to cover its lost revenues during the pandemic, arguing a lower court applied an overly narrow reading of a key insurance term.

Sandy Point Dental said the district court wrongly interpreted the phrase "direct physical loss or damage," a coverage requisite, to conclude that COVID-19 and the effect of government closure orders did not constitute property damage.

Also at the Seventh Circuit, Aspen Specialty Insurance Co. told the appellate court that the owner of an Illinois Quality Inn & Suites isn't covered for business income losses tied to the pandemic because there wasn't any physical loss or damage to the hotel caused by government shutdown orders.

The government orders required Bradley Hotel Corp. to cease nonessential operations at the hotel's restaurant and convention center, and caused guests to cancel reservations, Aspen said. But the policy's loss of use and ordinance exclusions bar any coverage for these losses, the insurer argued in a brief to the court.

On Monday, a New Jersey wedding venue told a federal court its insurance policy's virus exclusion doesn't allow a Liberty Mutual unit to escape class claims for denying coverage related to the COVID-19 outbreak, arguing the catering facility's losses were caused by government orders and not the novel coronavirus.

Nanina's In The Park called on the court to knock down Ohio Security Insurance Co.'s bid to defeat its proposed class action, saying the provision did not bar the banquet hall's coverage when its losses stemmed from orders issued by Gov. Phil Murphy that forced the business to close its doors in an attempt to curb the spread of COVID-19.

Also in New Jersey, a medical facility asked a federal court Wednesday to pause its lawsuit against a unit of The Hartford until the Third Circuit hands down a decision on more than a dozen consolidated appeals over similar issues surrounding insurance coverage for losses related to the pandemic.

Five days after Sentinel Insurance Co. sought to ax the complaint via a motion for judgment on the pleadings, Ambulatory Care Center PA urged the court to stay the litigation pending the Third Circuit ruling, saying the appeals "would almost assuredly resolve the underlying issues in this case." Sentinel does not oppose hitting the pause button, the center said.

In Pennsylvania, an appellate panel questioned Tuesday whether being the first to sue Erie Insurance over coverage of pandemic-related losses allowed a Pittsburgh restaurant to ask an Allegheny County court to lump together all the other cases against Erie from around the state, or if the request had to come from a common party to all the suits.

Amid an appeal of Court of Common Pleas Judge Christine Ward's order coordinating all current and future COVID-19 coverage cases against Erie in her Allegheny County courtroom, the judges of the Superior Court sought to clarify who could use the Pennsylvania Rules of Civil Procedure to coordinate similar cases and whether Joseph Tambellini Inc. could be the one to initiate it without being involved in the other lawsuits.

Also on Tuesday, a Texas federal judge tossed a local spice and tea room's business interruption suit against Continental Casualty Co., saying the shop couldn't show a physical loss was caused by government shutdown orders made to curb the pandemic.

U.S. District Judge Amos L. Mazzant III ruled a physical loss under the Continental policy meant a structural alteration had to happen at the Spice & Tea Merchants store in McKinney, Texas. But Aggie Investments LLC, the shop's owner, didn't show that the government orders had caused this type of loss, the judge said.

--Additional reporting by Shawn Rice, Daphne Zhang, Melissa Angell, Nathan Hale, Matthew Santoni, Bill Wichert, Lauren Berg, Max Kutner, Zachary Zagger, Chris Villani, Andrew Westney, Craig Clough, Tim Ryan, Sarah Jarvis, Jeannie O'Sullivan, Paul Williams, Dave Simpson and Britain Eakin. Editing by Aaron Pelc.

Correction: An earlier story referenced a case that was unrelated to the coronavirus. The error has been corrected.

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