By Celeste Bott

Law360 (January 14, 2021, 8:41 PM EST) -- California restaurant owners say they shouldn't face fees for liquor licenses and health permits when state and county officials won't allow them to operate, the federal government can continue requiring in-person clinic visits to obtain abortion-inducing medication, and a cannabis farm is the latest to be hit with claims it fired workers who complained about workplace conditions amid 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 across the country.

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

Public Policy

Despite the coronavirus pandemic, the U.S. Food and Drug Administration can resume enforcing a one-of-a-kind requirement that women visit clinics to obtain abortion-inducing medication, the U.S. Supreme Court's conservatives ruled Tuesday night.

The majority gave little explanation for granting the FDA's request to reinstate the requirement, which a Maryland federal judge temporarily blocked in July after doctors argued in a suit that in-person visits posed unreasonable risks of contracting COVID-19.

The Commonwealth Court of Pennsylvania ruled Thursday that a group of parents and an advocacy group lacked standing to challenge the state's shift to online schooling amid the COVID-19 pandemic and dismissed their suit seeking a declaration that state law required students to have in-person instruction.

Open PA Schools and the 10 parents who signed on to the lawsuit against the Pennsylvania Department of Education, Education Secretary Pedro Rivera and six school districts had not alleged a sufficient, direct harm from their school districts' decision to count online instruction toward the 180 days of school required by state law, the court ruled in dismissing the case.

The court dismissed the suit — which sought a declaration that schools had to have at least 180 days of in-person instruction — without prejudice, noting that it could theoretically be amended in a way that could show standing.

Employment

Three marijuana farm workers sued their former employer Monday in California federal court, accusing the company of unlawfully firing them after they voiced complaints about working conditions amid the pandemic.

Sisters Rachel, Alejandra and Andrea Montelongo claim Valley Harvest LLC and Nug Farms retaliated against them after they raised concerns about a number of working conditions to a company executive during their brief tenure at the cannabis farm. The women were fired the day after Rachel Montelongo needed to leave work one day due to mental health reasons and was accompanied by her two sisters.

The women were hired by farm labor contractor Valley Harvest LLC and started their employment at Nug Farms in June. Throughout the course of their employment, the three sisters say they raised concerns to a company executive that they were not being compensated for time spent waiting in temperature check lines prior to their shifts. They also shared concerns about a lack of social distancing in their workplace, in which dozens of people worked in cramped conditions, the complaint says.

Nursing home operator Alaris Health LLC has been hit with a lawsuit by a former marketing director who claims he wasn't allowed to return to work after his bout with COVID-19 despite having medical clearance to do so.

Shakespeare Domenech alleges his termination was either retaliation for using disability leave while he battled the virus or discrimination based on the perception that he was still infected, according to his New Jersey state court complaint.

A former clinical community physician marketing director for the New Jersey-based company, Domenech also claims Alaris didn't provide workers with personal protective equipment at certain facilities and asked him to do nursing work even though his license had expired.

A Houston state court judge has thrown out a private preschool's $1 million lawsuit alleging that a former manager violated a nondisclosure agreement by informing a parent she had tested positive for COVID-19. 

Harris County District Judge Tanya Garrison dismissed the lawsuit, brought by Language Immersion Private Preschool against former manager Sheila Riestra, under the Texas Citizens Participation Act, an anti-SLAPP law. The preschool had maintained that its firing of Riestra had nothing to do with her positive diagnosis and that she was fired in July for violating the agreement by "unilaterally" accessing a parent's contact information.

In Florida, a federal judge signed off on a settlement that will provide up to two months' severance pay for former employees of a Bahamas cruise ship operator who were terminated when the cruise industry shut down because of the pandemic.

U.S. District Judge Beth Bloom granted a request for preliminary approval of a deal in which Bahamas Paradise Cruise Line agreed to pay about $612,000 to 276 class members who were not paid the two months' severance required under their employment agreements after the U.S. Centers for Disease Control and Prevention issued a No Sail Order on March 14.

The deal includes up to $262,500 in fees and expenses for the two firms representing the class: Lipcon Margulies Alsina & Winkleman PA and The Moskowitz Law Firm PLLC. In addition, the cruise line agreed to change its policy to ensure that should another catastrophe happen, there will be a mechanism in place so crew can work out these issues, according to the settlement.

Insurance

An Illinois-based Ford dealership has hit Pennsylvania-based Erie Insurance Exchange with a proposed class action, alleging Wednesday that the carrier wrongfully denied coverage after the dealership suffered revenue loss from being forced to cut 75% of its capacity amid the pandemic.

In a suit filed in Pennsylvania federal court, Highland Park Ford Lincoln Inc. said it had to cease normal sales operations and shut down its showroom in March due to state-mandated closures and the ongoing pandemic.

Highland, which operates a Ford dealership in Cook County, Illinois, said it was allowed to reopen at 50% capacity in May, only to be ordered to reduce occupancy to a maximum of 25% in November. In the complaint, Highland said its "all-risk" commercial property policy broadly provides coverage to loss of business income.

And a metal manufacturer told a California federal judge that COVID-19 is not an "act of God" in a suit seeking to compel its debtor, a green-tech company, to pay more than $4 million in debt and damages after the company allegedly tried to invoke a force majeure provision in the parties' contract to avoid payment.

G&H Diversified Manufacturing LP said Tuesday that Regreen Technologies Inc has repeatedly broken its promise to pay G&H since 2018, and Regreen most recently attempted to plead force majeure to escape payment obligations after the pandemic started. According to the suit, Regreen is a "green technology" firm that sells machines that turn municipal wastes into reusable materials. The machines were previously manufactured in Turkey, but in 2018 Regreen decided to make them in the U.S. to get more customers and chose G&H to produce the machines.

Endurance American Specialty Insurance Co. urged a California federal court to toss a $40 million suit seeking COVID-19 loss coverage from a Boston hotel's investor group, arguing that coverage is not triggered because the insured never satisfied the policy's $100,000 retention.

Endurance says Sunstone Hotel Investors had specifically agreed to a $100,000 "self-insured retention," a coverage precondition for cleanup costs resulting from environmental risks due to fungi and viruses. Though the investor group primarily seeks coverage for business interruption resulting from the pandemic, the policy expressly stated that business interruption coverage is only granted if the alleged situation resulted in cleanup costs covered under the policy, according to the insurer.

In Texas, a federal judge shot down a dentist's suit seeking coverage for losses she claims to have sustained as a result of COVID-19 shutdown orders, saying that while the "physical loss" required to trigger the policy doesn't need to be structural damage, she still would need to allege the virus was actually present in the office.

In an order filed Tuesday, U.S. District Judge Sidney A. Fitzwater granted a bid by Aspen American Insurance Co. to dismiss Christie Jo Berkseth-Rojas' suit over coverage, saying that without alleging that her office was actually contaminated, the policy isn't triggered. 

American Guarantee and Liability Insurance Co. has asked a New Jersey federal court to toss a hospitality and restaurant management group's suit seeking coverage for $40 million in losses linked to the pandemic, joining a string of insurers that deny the coronavirus causes direct physical loss or property damage.

The insurance company argued in its motion to dismiss the suit leveled by the companies known collectively as the Briad Group — which own more than 120 Wendy's, TGI Friday's, Marriott and Hilton franchises — that the group's business-interruption losses due to the virus can't be covered under its property commercial insurance policy.

And a San Francisco retailer has urged the Ninth Circuit to seek the California high court's input to resolve its appeal of a federal judge's decision that Travelers is not obligated to cover its financial losses due to COVID-19 shutdown orders, arguing that the case involves a novel question under the Golden State's law.

Children's clothing and toy boutique Mudpie Inc. is aiming to upend U.S. District Judge Jon S. Tigar's September ruling dismissing its putative class action complaint, which accused Travelers Casualty Insurance Co. of America of wrongfully denying its claim for pandemic-related business interruption losses, as well as those of other policyholders.

In an opening appellate brief, Mudpie encouraged the Ninth Circuit to enlist the California Supreme Court's help to determine the core question in its appeal: whether business interruption coverage dependent on the existence of "direct physical loss of or damage" to a policyholder's property can be "reasonably construed to insure against the loss of business property to generate income as a direct result of state and local orders suspending, or severely curtailing, operations of non-essential businesses amid the COVID-19 pandemic."

Food and Beverage

Restaurant owners in Orange County, California, have hit county and state authorities with a COVID-19-related suit claiming they're slapped unfairly with fees for liquor licenses and health permits at the same time that civil orders threaten their businesses by forcing them to reduce operations.

Costa Mesa, California-based Pizzeria Ortica LLC, the lead plaintiff in the proposed class action filed Tuesday in state court, says the Orange County restaurants seek refunds and have joined forces with eateries that have launched similar suits in four other counties. All across California, restaurants face unprecedented challenges to stay open and maintain cash reserves while dealing with a slew of new operating restrictions during the pandemic, the suits say.

The pizzeria stressed that it doesn't dispute government closure orders based on concerns about public health and safety, but it does object to being ceaselessly charged with business permit and licensing fees, taxes, and lateness penalties levied by county and state entities as it struggles to stay afloat.

And Marriott is being sued by the owner and operator of a Manhattan restaurant and bar located in a W Hotel for allegedly breaching the restaurant's lease by attempting to evict it after closing the hotel and converting it to an NYU dormitory.

The parent company of the Irvington restaurant said landlord Marriott is trying to evict it in retaliation for a previously filed lawsuit over insurance coverage and without paying the termination fee required by their lease agreement, which the restaurant entered with a previous landlord in 2015 and won't expire until 2024.

Marriott, which acquired the W Hotel on Union Square in 2019, informed GG Union Square of its plans to close the hotel following Gov. Andrew Cuomo's March 16 executive order requiring New York state bars and restaurants to close due to COVID-19. It then converted the building into a residential dormitory for New York University students. Gerber Group subsidiary and Irvington owner GG Union Square LLC said in its Monday filing that as part of the conversion, Marriott put up barriers separating the hotel's former lobby from the restaurant and bar and banned room service for the students in the rooms, while also ordering Irvington to stop offering food service for employees of the W Hotel.

Banking

The owner of a Hilton hotel franchise in Rochester, New York, filed suit in state court accusing Deutsche Bank and others of leveraging the coronavirus pandemic and subsequent revenue shortcomings experienced by the hospitality industry to try to "wrest control" of the hotel.

In a 25-page complaint, hotel owner AFP 108 Corp. accuses the bank and others of depriving it of necessary operating funds so that its contractual relationships would deteriorate, along with its ability to obtain credit for future services.

AFP 108 claims that Deutsche Bank, Rialto Mortgage Finance and others are failing to carry out their obligations under a 2014 loan agreement it has, to the detriment of the hotel's operations.

--Additional reporting by Matthew Santoni, Daphne Zhang, Joyce Hanson, Mike Curley, Meghan Kelly, Jeff Overley, Melissa Angell, Jeannie O'Sullivan, Michelle Casady, Jeff Sistrunk, Carolina Bolado and Paige Long. Editing by Alanna Weissman.

Correction: An earlier version of this story misspelled the name of an insurer. The error has been corrected.

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