By Celeste Bott

Law360 (November 12, 2020, 10:45 PM EST) -- Airbnb allegedly hasn't kept its promise to reimburse customers for canceled bookings, Walmart can't escape all claims over its temporary return policy amid the COVID-19 pandemic and the University of San Diego is the latest to be sued by students demanding refunded tuition because of campus closures.

While courts across the country are altering procedures, restricting access and postponing certain cases to stem the spread of the coronavirus, the pandemic 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

The Port Authority of Allegheny County, Pennsylvania, did not enforce its uniform code ban on employees wearing political or social slogans until workers started wearing masks with "Black Lives Matter" messages, employees and union officials testified Tuesday in federal court in a lawsuit claiming the policy was discriminatory.

In video testimony before U.S. District Judge J. Nicholas Ranjan, bus drivers, instructors and union officials for the Pittsburgh-based transit agency said the Port Authority had not enforced the policy for political and union buttons, large jewelry, religious symbols, tattoos and certain facial piercings until a revision to the policy over the summer barring political and social messaging was used to discipline employees who wore face masks saying "Black Lives Matter."

The lawsuit, brought by the ATU in late September, claimed that the Port Authority violated employees' rights to freedom of speech, freedom of association and equal protection under the First and 14th Amendments to the Constitution when it revised its uniform policy in June to ban "buttons, stickers, jewelry and clothing (including masks or other face coverings) of a political or social protest nature."

Hospitality

Airbnb Inc. has not kept its dual promises to reimburse guests for bookings canceled because of the coronavirus pandemic and to pay affected hosts a portion of the canceled bookings, and has instead pocketed the money, according to a proposed class action filed last week in California federal court.

When the pandemic hit and Airbnb guests decided to cancel their bookings, the company said it would offer full refunds to guests who booked on or before March 14, according to the complaint filed by Anthony Farmer, but in many cases, the refunds that Airbnb promised came directly out of hosts' pockets.

The guests and hosts had previously agreed on a cancellation policy and Airbnb was overriding those terms with its pandemic promise, Farmer said. When hosts complained that they were being stiffed, Airbnb apologized and said it would set aside $250 million to help pay hosts for canceled bookings, according to the suit.

Under the fund, hosts could receive up to 25% of what they would have made from a guest under the previous cancellation policy, according to Farmer. But Airbnb has not lived up to its promises, he said. Instead of issuing full refunds to guests who canceled bookings, Airbnb is giving guests travel credits, issuing partial refunds or denying guests any compensation, according to the suit.

Meanwhile, a Florida federal judge on Nov. 5 rejected an $875,000 settlement that would have ended a proposed class suit accusing Bahamas Paradise Cruise Line of effectively holding crew members hostage on board its ships without pay for months on end beginning at the start of the pandemic.

In a brief docket order after a hearing, U.S. District Judge Beth Bloom rejected a request for preliminary approval of the class settlement and ordered the plaintiffs to file a second amended complaint no later than Nov. 16.

The suit, filed by Serbian casino dealer Dragan Janicijevic, claimed that Bahamas Paradise failed to satisfy contractual requirements to pay two months of wages or basic severance pay when it terminated crew members' contracts after the pandemic forced it to halt operations in March.

Insurance

A Florida state judge ruled Tuesday that a fitness center's "purely economic loss" from COVID-19 and state shutdown orders is not covered by its property insurance with Markel Insurance Co., saying "insurance companies cannot bear the burden of this crisis."

Circuit Court Judge E. Lamar Battles said Tuesday that Dime Fitness LLC, doing business as Anytime Fitness, failed to allege property damage. The gym's loss was entirely financial, which does not satisfy the coverage precondition for direct physical loss or damage, the judge said. Insurance companies should not be left to shoulder the burden of the pandemic when their policies do not cover simple revenue loss resulting from COVID-19, Judge Battles added.

A group of companies that operate a minor league baseball team and stadium sued the Cincinnati Insurance Co. in Pennsylvania federal court Tuesday, alleging that the insurer's failure to cover them for COVID-19-related losses is a violation of their "all-risk" policy, which contains a pollutants exclusion but not a virus exclusion.

Washington Frontier League Baseball LLC, Sports/Facility LLC and other companies connected to the Washington Wild Things franchise of the Frontier League allege that Cincinnati Insurance is contractually bound to cover their losses, since government orders shut down their operations in March due to the pandemic.

In Missouri, a federal judge has dropped Hartford Financial Services Group from four dental practices' proposed class action over COVID-19 business losses, agreeing the insurer bears no legal liability as it did not issue the insurance policies.

U.S. District Judge Stephen R. Clark said it was HFSG's subsidiaries that wrote the policies, meaning it was never a party to the dentists' insurance contracts, terminating the company from the proposed class action on Tuesday.

A California federal judge Monday axed a suit from 12 Hawaiian souvenir stores seeking COVID-19 loss coverage from Allianz insurance units, ruling that the "mere threat of coronavirus" does not cause a direct physical loss of or damage to covered properties.

U.S. District Judge William H. Orrick freed a group of Allianz units from having to cover the souvenir store chain's claimed business interruption due to the pandemic and government closure orders. But he gave the policyholders 20 days to amend their complaint. Judge Orrick said he agrees with "the overwhelming majority of courts" that have addressed similar policies, siding with Allianz that "a mere threat" of virus exposure is not enough to allege physical damage to trigger coverage. 

Also on Monday, a Texas federal judge sent a dentist's COVID-19 coverage suit back to state court in a final ruling and closed the case despite protests by Allstate Insurance Co., saying a magistrate judge's earlier recommendation held up after a period of court review.

U.S. District Judge Fred Biery adopted U.S. Magistrate Judge Richard B. Farrer's October recommendation to return the case to state court, terminating the suit in federal court and holding that no parties could show the report was "erroneous or contrary to law."

The operator of the Saint Regis Mohawk Tribe's Akwesasne Mohawk Casino and Resort in Hogansburg, New York, is seeking coverage for losses stemming from a COVID-19 shutdown, saying communicable diseases are covered by its insurance policy.

In a partial summary judgment motion filed in New York federal court, Mohawk Gaming Enterprises said that Affiliated FM Insurance must cover its claim under a business interruption extension in the policy, rejecting the insurer's argument that the novel coronavirus fits into a so-called "contamination exclusion."

The northern New York tribe closed its casino on March 17 as a result of a COVID-19 outbreak at nearby St. Lawrence College in Cornwall, Ontario, it said, claiming that Affiliated's ProVision policy covers closure orders that are caused by physical damage within 5 miles of the casino.

And Geico Casualty Insurance Co. urged an Illinois federal judge to toss a proposed class action accusing it of overcharging current customers despite reduced vehicle use during the pandemic, saying it had been fully transparent about a giveback program the insurer voluntarily provided to policyholders.

Geico auto policyholders Roxanne Thomas and James Thomas sued the insurer on July 29, alleging that it was charging "grossly excessive" premiums as fewer people drive during state-mandated closures that began in spring. The case was removed to federal court on Monday, and now says that it should be dismissed, arguing it breached no terms of any of the customers' insurance policies and that it was under "no contractual, statutory, or regulatory duty to make any 'giveback' at all."

Consumer Protection 

Southwest Airlines is urging a Pennsylvania federal judge to reject fliers' argument that their putative class action accusing the airline of breaking its contract with travelers by declining to refund nonrefundable tickets that were canceled due to the pandemic has been boosted by a Texas federal court's recent refusal to toss similar claims against American Airlines. 

And in California, a federal judge ruled that Walmart can't shake all of a proposed class action over its temporary return policy amid the pandemic, saying the retail giant's managers inconsistently applied its rules about whether consumers can return goods.

U.S. District Judge Jesus G. Bernal said that Walmart Inc. offered a flawed argument in its bid to dismiss the suit brought by California customers Danielle Hubmer, Kelly Schwalbach and Angela O'Brien, finding that the temporary return policy posted on Walmart's website is not the same policy that the retailer's store managers used when refusing to give full refunds for items purchased up to seven days earlier.

Judge Bernal said Walmart had at least three return policies in place — a posted 90-day policy, an "amorphous" temporary return policy posted on the retailer's website and a policy as actually reported and enforced by store managers — which damaged its future credibility and gave the customers standing to sue.

Commercial Contracts

The University of San Diego has been hit with a putative class action from students demanding tuition refunds because of COVID-19 campus closures, making it the latest in a growing list of universities to face similar breach of contract suits this year.

USD student Catherine Holden told the California federal court that the university had refused to reimburse students for services it no longer provides during the pandemic. She's looking to represent a class of about 9,100 students.

According to the suit, USD shut down all its campus facilities, discontinued all in-classroom instruction and shifted operations online. Holden said that while those closures are attributable to the pandemic and California's shelter-in-place order, the university has continued holding students liable for full pre-shutdown tuition and fee obligations.

But also in California, a federal judge this week dismissed a pair of proposed class actions accusing the Regents of the University of California of withholding campus fee refunds in the midst of pandemic-related closures, ruling that the regents are entitled to qualified immunity under the 11th Amendment of the U.S. Constitution.

The students claim in their suits that the UC Regents should reimburse students for services that they are no longer receiving due to the pandemic and should also refund prorated portions of their campus fees. Meanwhile, the state-run university system's regents and its former president, Janet Napolitano, have argued that they are entitled to qualified immunity because they're state officials.

U.S. Magistrate Judge Sallie Kim nixed both suits with prejudice, finding that the 11th Amendment bars the students' claims, at least in federal court. The U.S. Supreme Court has held that the regents are "an instrumentality of the state of California" and the Ninth Circuit has repeatedly ruled the same, she said.

Health Care

A San Antonio law firm accused of double-crossing a Mexico-based mask provider during the pandemic is claiming that other parties lied to the firm's lawyer about the price a Texas agency paid for the masks.

Serna & Associates PLLC has filed crossclaims and a third-party complaint in a suit that accuses the law firm and its principal, Enrique Serna, of fraud, conspiracy and other claims. The firm said that Online Transport International LLC executive Joseph Lassen and Lassen's business partner, Austin Taylor, lied about the price the Texas Department of Emergency Management was paying for masks.

The case was launched in September by Mexican pharmaceutical and medical equipment supply company Happy Healthcare SA de CV, which alleged that Enrique Serna and his firm were withholding more than $3 million for more than 5 million masks the company provided for a Texas Department of Emergency Management deal.

And a Connecticut medical practice chain is seeking $9.3 million in damages from Cigna for not paying for policyholders' COVID-19 testing, alleging that the insurer falsely called it a "fraudulent" practice.

Dr. Steven A.R. Murphy of Murphy Medical Associates LLC told a Connecticut federal judge 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.

Murphy, who owns four health care practices, said he set up drive-through and walk-in COVID-19 testing sites across southwestern Connecticut and the Hudson Valley in the spring. The sites have tested more than 28,000 people, including 3,000 uninsured patients from March to October, he added.

Securities

A broker-dealer owned by a frequent critic of the Financial Industry Regulatory Authority sued the regulator Tuesday, seeking to block an order requiring that the remainder of a disciplinary hearing proceed via Zoom videoconferencing.

Alpine Securities Corp. says it was only able to present one witness at the start of its hearing in February before the pandemic made in-person FINRA hearings no longer viable, and it has repeatedly reached agreements with the regulator to resume the case in-person at some future date.

But roughly a month before the in-person hearing was scheduled to continue Nov. 30 and "without notice or an opportunity for Alpine to be heard," the firm said, a FINRA officer ordered that the remainder of the hearing be held via Zoom instead, pursuant to a temporary rule that took effect Oct. 1. Such an order is not only a breach of Alpine's right to be "heard in person," but also a violation of its right to due process, the firm told a Utah federal court.

Investors vying for the lead role in a proposed class action alleging San Francisco-headquartered biotechnology company Vaxart Inc. lied about its COVID-19 vaccine candidate are trading jabs in competing responses to each other's pleas to lead the proposed class.

Six groups of investors filed motions to consolidate their suit on Oct. 23 with another and appoint themselves lead plaintiff and their counsel as lead counsel in the case, which accuses the company of lying about its participation in the federal Operation Warp Speed initiative to develop a coronavirus vaccine.

Two groups have since withdrawn their motions, leaving four groups of investors vying for lead plaintiff status, two of which filed oppositions to the competing motions.

Vaxart shareholder Kirk Himmelberg filed the suit in August, alleging the company "exaggerated the prospects of its COVID-19 vaccine candidate, including its purported role or involvement in OWS."

Legal Industry

The Alaska Supreme Court on Tuesday denied a bid by seven law school graduates to receive licenses to practice without taking the state bar exam because of concerns about the coronavirus, ruling that the bar association has taken sufficient steps to make testing sites safe.

Alaska's high court, which initially rejected the request at the end of August, issued an opinion explaining that the Alaska Bar Association "carefully followed all public health guidelines to maximize the safety of those who planned to take the bar examination."

According to the Alaska Supreme Court's opinion, the state bar association also offered applicants the opportunity to withdraw from the exam and receive a full refund, or to take a future test. The judges noted the Alaska Bar Association also received approval from the court to create a new rule allowing law school graduates who have not passed the exam to practice law for up to a year under the supervision of a member of its association.

And a group of New York appeals court judges are suing the state court system for deciding to cut them loose as part of austerity measures in response to the state's COVID-19-induced budget deficit, arguing the move will worsen a case backlog and fail to make a serious dent in the state's budget shortfall.

Forty-six judges older than 70 will be forced to retire at the end of the year after the administrative board of the New York State Unified Court System denied their applications for recertification. The court system said the cuts would save $55 million over several years and prevent job losses for court support staff.

Five of those judges sued last week, claiming they faced age discrimination and were denied due process, and that the savings generated by the forced retirements would be closer to $1.2 million than $55 million. The judges would still receive pensions, so the cost to taxpayers would be substantially the same while the court system would be deprived of their necessary services, according to the complaint.

Banking

Bank of America on Monday asked a New Jersey federal judge to toss a lawsuit that claims the bank discriminated against minorities and women when it closed accounts holding $100 million in federal Paycheck Protection Program funds, saying it did so because of unauthorized lending out of a deposit account.

The August lawsuit alleges that Bank of America NA and Merrill Lynch & Co. Inc. were discriminatory in closing the bank account holding the $100 million approved by the Small Business Administration, and further retaliated against against the named plaintiffs, Rafael and Chelsea Martinez, and their companies by closing unrelated accounts they also had at the bank. Those closures breached the banks' contracts, the lawsuit alleges.

But Bank of America closed the accounts because of suspicious activity unrelated to the account holders' race or gender, Monday's motion to dismiss said.

Immigration

More than 240 visa applicants brought a proposed class action over federal visa restrictions Monday, alleging that President Donald Trump doesn't have the authority to restrict immigration because of high unemployment caused by COVID-19.

The foreign nationals along with their American sponsors sued Trump and the U.S. Departments of State, Justice and Homeland Security, telling a California federal court that Congress didn't intend for immigration to be allowed only during times of economic prosperity and high employment.

Congress recognized that immigrants bring innovation and economic opportunity to the U.S. and chose not to put economic restraints on immigration, according to the suit, seeking to block the ban and class certification.

Intellectual Property

Allied BioScience, whose SurfaceWise 2 surface disinfectant was the first to be approved by the EPA to continuously protect against COVID-19, filed suit in Washington federal court Monday accusing its founder and former CEO of attempting to hold the company's intellectual property hostage in exchange for unearned compensation.

Craig Grossman is a founder of ABS who previously served as its president and CEO but no longer has any official role with the company, the complaint says. The complaint accuses Grossman of misappropriation of trade secrets and a breach of fiduciary duty, among other allegations.

ABS said that Grossman helped invent some of the company's technology and that those inventions have been described or claimed in some of ABS' patents, but Grossman refuses to sign an agreement declaring the company owns the inventions unless he is paid more than he deserves.

Food & Beverage

A meat processing company has urged a New Mexico federal court to stop the state from temporarily closing one of its plants after more than four workers tested positive for COVID-19, saying a federal order should let it stay open.

Stampede Meat Inc. said in a complaint that it should not have to comply with the state's directive because of an executive order by President Donald Trump prohibiting states from closing meat processing facilities when the facilities are in compliance with Centers for Disease Control and Prevention and Occupational Safety and Health Administration guidelines.

The dispute stems from an Oct. 22 order by the New Mexico Department of Health saying the state can close businesses for 14 days if four or more employees test positive for COVID-19. On Nov. 3, the state ordered Stampede Meat, an Illinois-based food manufacturer that sells beef, pork and chicken products for Costco, Walmart, Denny's and other companies and restaurants, to temporarily close for that reason, according to the lawsuit.

--Additional reporting by Daphne Zhang, Allison Grande, Craig Clough, Hailey Konnath, Dean Seal, Matthew Santoni, Clarice Silber, Rachel O'Brien, Sarah Martinson, Max Kutner, Emma Whitford, Carolina Bolando, Joyce Hanson, Adam Lidgett, Emily Lever and Lauren Berg. Editing by Peter Rozovsky.

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