By Celeste Bott

Law360 (December 17, 2020, 8:46 PM EST) -- A groundbreaking COVID-19 insurance trial began this week in Louisiana, American Airlines has settled litigation with customers seeking refunds for flights canceled amid the pandemic, and California's attorney general has launched a lawsuit against Amazon claiming it has refused to hand over information about its coronavirus safety protocols and potential outbreaks. 

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.

Food & Beverage

New York Gov. Andrew Cuomo said Wednesday that a suit challenging his "food curfew" halting dine-in service at midnight should be thrown out in light of his new COVID-19 safety regulations banning all indoor dining at any time, rules that he said render a restaurant's claims moot.

In its September suit, the Graham, a bar and eatery near New York City's Bushwick and Williamsburg neighborhoods in Brooklyn, alleged that Cuomo's cutoff is "arbitrary and unsupported by anything except speculation "that kicking diners out at a certain time combats the spread of COVID-19. Cuomo's office has responded by saying that the rule exists because late-night service can encourage individuals to gather and mingle, increasing transmission risk.

A New York federal judge upheld the policy in October, and the case has since landed in the Second Circuit.

This week, Cuomo issued a new executive order that prohibits indoor food service and dining in the city at any hour, day or night, the governor said in Wednesday's motion to dismiss. That means the rule that the Graham is challenging is no longer in effect, he said. And there's no exception to the mootness doctrine that applies to this case, Cuomo said. The governor hadn't signed the new rules to avoid a decision in this litigation — rather, the new regulations are in response to the "ongoing surge of COVID-19 cases and related hospitalizations," he said.

And a Pennsylvania federal judge should not let a Pittsburgh-area restaurant that flouted the statewide COVID-19 mask mandate continue with its suit over being shut down, Allegheny County and its health department urged the court.

The Crack'd Egg sued the county and the Allegheny County Health Department in September, claiming the rule had no "rational or scientific basis" for preventing the spread of COVID-19 and cited due process and equal protection violations. But Allegheny County and the ACHD shot back, saying that all the restaurant had to do for its permit to be reinstated was comply with the facial covering mandate.

Consumer Protection

American Airlines and the lead plaintiff in a proposed class action in Texas federal court have agreed to end litigation against the U.S. airline over its refusal to refund customers for flights that were canceled amid the COVID-19 pandemic.

Lead plaintiff Lee Ward and American Airlines Inc. have filed a single-paragraph notice saying the joint stipulation calls for dismissal of the action without prejudice. The joint agreement followed U.S. District Judge Reed O'Connor's mixed ruling Nov. 2, which found that American Airlines must face the proposed breach of contract class action over its refusal to refund customers for canceled flights, but ordered arbitration for two individual customers who bought their tickets through online travel agencies.

Two small businesses brought a putative class action against a mask maker in Illinois federal court Monday, alleging that shortly after the coronavirus pandemic began they received unsolicited advertisements via fax for its personal protective equipment in violation of the Telephone Consumer Protection Act.

A small pizza chain in Illinois and a chiropractic clinic in Florida allege in their complaint that they received faxed advertisements for different types of face masks from MP Business Doctors LLC, which does business as MP Face Mask LLC, beginning around April. The small businesses say the unsolicited faxes not only wasted their paper and ink toner supply but also wasted their time and invaded their right to privacy and seclusion.

Public Policy

New Jersey Gov. Phil Murphy and members of his Cabinet were hit with a lawsuit Tuesday by a group of landlords challenging his executive order allowing tenants to use their security deposits to cover back rent during the COVID-19 crisis. The lawsuit contends the governor does not have the right to meddle in private contracts.

In a state court complaint filed in Cumberland County, the landlords said Executive Order 128, signed in April, illegitimately waived laws governing the security deposits that protect rental owners against the risk of damage and was unveiled without the consent of the contracting parties or Legislature. Murphy abused his power, the complaint says, by interfering with contractual rights and obligations of private citizens.

The landlords made clear the issue is not one of agreement or disagreement about the effectiveness of Murphy's pandemic policies but rather one of the Constitution and separation of powers.

And a pair of Pennsylvania indoor water parks can't tie their federal lawsuit challenging Gov. Tom Wolf's latest coronavirus restrictions to another suit that temporarily tossed the earlier version of those mandates, the judge on the first case said Tuesday.

U.S. District Judge William S. Stickman IV, who ruled against the state's COVID-19 crowd limits in September before the case was appealed to the Third Circuit, said Sunday's lawsuit by Kalahari Resorts and Conley Resort & Golf wasn't "related" to the earlier suit since it involved different plaintiffs and a new set of restrictions, so it should be passed to the next judge in the Pittsburgh court's rotation instead of automatically to Judge Stickman.

Judge Stickman ordered the removal of the "related to" designation connecting the resorts' case to the Butler County v. Wolf case from earlier in the year, and for it to be assigned like any other case. The docket showed it was assigned to Chief U.S. District Judge Mark R. Hornak later Tuesday.

Legal Industry

Lawyers for Florida Gov. Ron DeSantis have urged a state appeals court to sanction an attorney who asked the courts to impose beach closures and a statewide stay-at-home order amid the COVID-19 pandemic, calling his arguments in a failed appeal "frivolous" and "baseless."

The attorneys said in a filing that the court should sanction Santa Rosa Beach attorney Daniel W. Uhlfelder for his appeal after a circuit judge initially ruled against him in the lawsuit. The appeals court said in an order last month that Uhlfelder could face sanctions when it shot down his appeal.

The governor's attorneys argued the hours spent by the court and lawyers who worked for DeSantis on the appeal could have been used on other pressing matters related to the health, welfare and safety of Floridians. Uhlfelder, who made waves appearing as the Grim Reaper across the state during the COVID-19 pandemic, argued in his July appeal that the trial court erred by dismissing his case based on findings that it lacked authority to question the governor's decisions and that his request for emergency injunctions are barred by the separation of powers doctrine.

Employment

California Attorney General Xavier Becerra hit Amazon.com with a lawsuit in state court Monday, accusing the e-commerce giant of refusing to hand over information about its COVID-19 safety protocols and potential outbreaks at its facilities in the Golden State.

In a 13-page petition that the California Attorney General's Office posted online, Becerra claims that Amazon.com Inc. has refused to comply with investigative subpoenas requesting information on how many of its workers have contracted or died from COVID-19 and what efforts the company is taking to try to prevent the spread of the coronavirus, such as implementing COVID-19-related sick leave policies and cleaning procedures.

The petition comes nearly six months after Becerra began investigating Amazon's workplace safety practices and whether the company is complying with California labor laws in light of the coronavirus outbreak.

A U.S. Department of Defense contractor allegedly fired a disabled Navy veteran and experienced technician after she requested accommodations to keep her safe during the COVID-19 pandemic, according to a suit lodged in Nevada federal court Wednesday.

After beginning active duty with the Navy in 1991, Diana Franklin held many roles, including one as a manager at the Naval Air Station Fallon in Nevada, she says in her complaint. At the base, she was relied on for working with, fixing and maintaining the software and hardware for complex aircraft systems, according to the suit.

Franklin had developed bronchitis and sinusitis as a result of deployments in the Middle East, conditions that put her at an elevated risk for complications stemming from COVID-19, she says. When she asked her bosses at Engineering Support Personnel Inc. — a private company that had taken over a DOD contract at the base — to implement safety measures or allow her to work from home, they refused, she claims. Franklin says she repeatedly offered to take an unpaid leave of absence to stay safe during the pandemic, telling her direct supervisor at one point that she could die if exposed to the virus. A day later, she was fired.

A technician at a Sanofi Pasteur Inc. plant in northeastern Pennsylvania has launched a class action in state court alleging that her employer failed to make good on pledges to give workers a 15% bump to their wages as hazard pay for the duration of the COVID-19 pandemic.

Courtland Davis says in a complaint filed in the Philadelphia County Court of Common Pleas that Sanofi and Yoh Services LLC, a staffing firm that provides technicians for the plant, had cost her some $5,000 in wages by reneging on an April promise of hazard pay for their continued work during the public health emergency.

And the U.S. government has failed to escape a suit filed by 115 Kentucky federal prison employees who claim they deserved hazard pay because of COVID-19, after the U.S. Court of Federal Claims rejected the government's bid to dismiss the case.

In a memorandum opinion and order Monday, Judge David A. Tapp denied a motion by the government to dismiss for failure to state a claim, saying the prison employees had sufficiently alleged the government owed them hazardous duty pay and other pay because of the unusual dangers they faced during the pandemic.

Correctional officers and other current and former employees at the Federal Medical Center in Lexington, Kentucky, part of the Federal Bureau of Prisons, filed the suit in July. They claim the government owes them hazard pay, environmental differential pay and additional overtime pay based on the two other adjustments.

Media and Entertainment

Attorneys for a Walt Disney Co. subsidiary said a group of theme park ticket holders lack standing in their complaint over how the company handled its annual passes amid the COVID-19 pandemic, claiming its contract does not guarantee access to the parks.

Filed in the U.S. District Court for the Middle District of Florida, Disney's motion to dismiss claims that a group of annual ticket holders failed to state an injury or means for redress from an alleged breach of contract that occurred when reopening its parks.

The putative class alleges that, after a suspension of monthly charges for annual passes starting in April after Disney closed its parks, customers were later improperly charged several months of payments all at once when it began reopening in July, which Disney says was a "one-time billing error" that was quickly reversed. They also say privileges afforded to annual pass holders no longer exist as part of Disney's more limited reopening strategy, which requires guests reserve a spot ahead of time.

Insurance

A groundbreaking COVID-19 insurance trial began Monday in Louisiana, where a large restaurant told a judge that a group of underwriters at Lloyd's of London needs to cover losses from diminished dining capacity and the underwriters insisting the virus isn't property damage.

In the trial, which follows a first-of-its-kind lawsuit filed in mid-March, the 500-seat Oceana Grill sued its underwriters at Lloyd's of London. The suit came just after New Orleans' mayor had implemented a lockdown order as the virus was embarking on its first major U.S. spike.

The grill says its "all risk" policy ought to cover the virus' presence on physical surfaces as property damage and trigger business interruption coverage.

Clothing store chain America's Kids LLC is asking an Illinois federal court to reject a bid by Zurich American Insurance Co. to throw out its suit seeking coverage of business interruption losses stemming from the COVID-19 pandemic, saying its policy considers microorganisms — like the virus — as able to cause "physical loss or damage."

In an opposition brief, the children's clothing store told the court that Zurich's argument that they can't allege any physical loss or damage as required by the policy is misplaced, as there are several clauses where the policy language explicitly contemplates and accepts that microorganisms cause physical loss. While Zurich has argued that the term refers only to visible, structural damage, America's Kids said no such qualifier is in the policy and that dictionary definitions of "damage" include losses of "value" or "usefulness."

A New York federal judge ruled Tuesday that a unit of The Hartford isn't obligated to cover a Manhattan art gallery and dealer's financial losses due to a government-mandated closure amid the COVID-19 pandemic, finding that the gallery's woes didn't result from a "direct physical loss" of its property as required by its policy.

U.S. District Judge Lorna G. Schofield granted Hartford unit Sentinel Insurance Co. Ltd.'s motion to dismiss the suit filed by policyholder 10012 Holdings Inc., which operates the Guy Hepner art gallery in Manhattan's Chelsea neighborhood.

The Judicial Panel on Multidistrict Litigation created an MDL on Tuesday to centralize 12 lawsuits accusing the Assicurazioni Generali Group of failing to pay policyholders for trips canceled because of COVID-19, sending the cases to the Southern District of New York where the Italian company's American unit is headquartered.

Also Tuesday, the JPML centralized in Pennsylvania more than a dozen cases alleging Erie Insurance Group has wrongfully refused to cover businesses' lost income due to COVID-19 stay-at-home orders, making Erie the second insurer to face multidistrict litigation over its rejection of policyholders' claims for pandemic-related losses.

In California, a magistrate judge has thrown out a hair salon's suit for coverage of business interruption losses stemming from the COVID-19 shutdown, saying a clear and unambiguous exclusion for losses resulting from a virus bars any recovery.

U.S. Magistrate Judge Jacqueline Scott Corley dismissed with prejudice the complaint by Franklin EWC Inc. against Hartford Financial Services Group Inc. and Sentinel Insurance Co. Ltd., saying the latest complaint alleges that the company's losses are a result of the virus, and the exclusion applies.

And a Georgia restaurant on Monday asked the Eleventh Circuit to force Nationwide to cover the losses from its pandemic-induced temporary closure, arguing that a lower court wrongly decided the closure wasn't a "physical loss" of the restaurant space.

Cajun restaurant Henry's Louisiana Grill Inc. and its event space Henry's Uptown LLC — located in Acworth, Georgia — asked the appellate court to reverse U.S. District Judge Thomas W. Thrash Jr.'s ruling dismissing their suit seeking coverage under a business owners property policy issued by Nationwide unit Allied Insurance Co. of America.

In a 44-page brief, Henry's argued that the district court had gone against Georgia law by not taking the insurance policy's ambiguity about what "loss of property" means in the most favorable light for Henry's when considering the insurer's dismissal bid. The district court emphasized that the property was not physically altered or damaged, but Henry's countered that the policy should cover loss of access to their property.

Immigration

The federal government told a D.C. federal judge that 34 children were expelled from the United States under a public health order, despite the judge's recent ruling prohibiting the immigration officials from applying a COVID-19 expulsion policy to the certified class of migrant children.

In a three-page notice, the government admitted that immigration officials have expelled the children, who are between 12 and 17 years old, under an expulsion policy issued by the Centers for Disease Control and Prevention through a rarely used public health law known as Title 42.

The expulsions run afoul of U.S. District Judge Emmet Sullivan's November injunction blocking the policy, but the government noted that since their expulsions, nine of the 34 children have returned to the U.S. and their asylum requests have been processed.

And a D.C. federal judge has trimmed a suit brought by a group of immigrant detainees seeking to be released over COVID-19 health risks, while greenlighting certain claims by detained minors as well as allegations that the facilities' conditions violate due process rights.

In a 13-page opinion, U.S. District Judge James E. Boasberg declined to grant the petitioners' request to order the government to immediately improve conditions at the facilities or, alternatively, for the migrants to be released, finding protocols previously implemented to curb the spread of the coronavirus are sufficient.

Native American

The Shawnee Tribe of Oklahoma has filed an emergency motion urging the D.C. Circuit to bar the U.S. Department of the Treasury from disbursing certain remaining CARES Act funds while it fights for a larger share on appeal, shortly after another tribe argued all remaining funds should be released now.

The federal government should not be able to spend down at least $12 million of what was $8 billion set aside for tribes under the Coronavirus Aid, Relief and Economic Security, or CARES, Act, the Shawnee said. Rather, the funds should be left untouched in the short term while it continues its appeal.

The motion is urgent, the tribe said, because the Ute Indian Tribe of the Uintah and Ouray Reservation in Utah sought in a Dec. 7 motion to have all remaining funds released immediately.

The Indian Health Service has agreed to provide funding to a Navajo Nation hospital for at least three months and promptly consider the hospital's latest federal contract proposal, according to a stipulation filed in New Mexico federal court.

The agreement follows negotiations between Navajo Health Foundation-Sage Memorial Hospital in northern Arizona and the IHS. It comes nearly two months after the hospital filed suit demanding that the IHS immediately renew its tribal self-determination contract to avoid compromising patient care during the coronavirus pandemic.

As part of the agreement, Sage Memorial has agreed to drop its November preliminary injunction motion seeking either automatic renewal of its lapsed contract or month-to-month funding while the case proceeds. 

Sports & Betting

New Jersey asked a state court to impose nearly $124,000 in fines against a Camden County gym for disobeying Gov. Phil Murphy's statewide COVID-19 business restrictions, blasting the gym's ongoing documentation of "outrageous" defiance stunts on social media.

In a letter brief Thursday, Deputy New Jersey Attorney General Stephen Slocum detailed 13 videos and one photo posted online by Atilis Gym co-owner Ian Smith throughout November in which he and patrons appeared to be eschewing masks, social distancing and other safety protocols. Smith frequently stated his intention to defy the orders in the videos, one of which was titled "Freedom Doesn't Require Permission" in all capital letters.

The postings came in the wake of an October court order to adhere to modified business operations, such as outfitting the Bellmawr gym with plastic dividers and 6-foot demarcations to facilitate social distancing. The state wants to enforce the roughly $15,500-a-day fine provision of the order for each of the eight days it claims the gym defied the order in November.

Personal Injury & Medical Malpractice

A woman alleging she caught the coronavirus at a Los Angeles assisted living facility sued Tuesday, claiming corporate greed and negligence led to an outbreak of COVID-19, joining two others who recovered and the families of three deceased residents and one deceased staff member who also recently filed suit against Silverado Senior Living.

Resident Joe Ann Clack, along with her guardian ad litem Zoanne Clack, filed the suit in Los Angeles Superior Court. The Clacks share counsel with the others who filed similar suits last week. The suits over the outbreak at Silverado Senior Living — Beverly Place name the facility's site administrator, its corporate parent Silverado Senior Living and CEO Loren Shook as defendants, and focuses on the decision to allow a new patient to enter the facility in March after families of the current residents were barred from entry due to COVID-19 safety precautions.

Joe Ann Clack has dementia and relied on the facility's staff to care for her, according to the complaint, which said she "did not get infected with the coronavirus due to some unforeseen act-of-God. Rather, she became infected because the corporate decision-makers chose to skirt safety and infection control standards."

--Additional reporting by Hannah Albarazi, Joyce Hanson, Dorothy Atkins, Matt Perez, Clarice Silber, Cara Salvatore, Mike Curley, Emma Whitford, Melissa Angell, Jeannie O'Sullivan, Diamond Naga Siu, Andrew Westney, Michael Angell, Hailey Konnath, Craig Clough, Jeff Sistrunk, Matt Fair, Max Kutner, Emily Slides and Matthew Santoni. Editing by Orlando Lorenzo.

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