Despite Factory Mutual Insurance Co.'s insistence that the virus that causes COVID-19 can always be cleaned away, the NFL team argued on Friday that it should be given the chance to proceed with experts and testimony to show the dangers behind the coronavirus when there isn't a restriction imposed to slow down the spread.
"COVID-19 is a physical substance that has adhered to and altered physical surfaces and airspace within their property and rendered that property continuously unsafe, unusable and unfit for its intended purpose whenever present," the owner of the Philadelphia Eagles said in the 58-page brief.
The Philadelphia Eagles organization filed a state court suit in March, arguing Factory Mutual's policy, which is capped at $1 billion per occurrence for all risks of physical loss or damage, covers the team's losses from closing Lincoln Financial Field and NovaCare Complex during the pandemic.
The suit was removed from state court to the Eastern District of Pennsylvania. In April, Factory Mutual asked to have the suit tossed, arguing the NFL team can't show that the presence of the coronavirus caused any physical loss or damage, while also citing contamination and loss of use exclusions.
In Friday's brief, the Eagles organization hit back, arguing the policy covers all "risks of" physical loss or damage to property. Coverage is available not only where the coronavirus was present but where the imminent "risks of" or dangers posed by the virus caused physical loss, the NFL team said.
The Eagles organization added that until vaccines were available to the public, the coronavirus was present at its facilities anytime patrons entered the facilities and coughed, sneezed, spoke or cheered.
The business interruption suit should move forward so that experts and science can help decide if the COVID-19 virus is as dangerous as the release of asbestos fibers or other toxins, and how easy it was from the start of the pandemic to stop the spread of the virus throughout the facilities, the NFL team said.
The Eagles organization argued its policy specifically covers communicable diseases like the coronavirus, which spreads from one person to another "not through magic," but through respiratory droplets containing the virus. Coverage under communicable disease applies to the entire policy, the team added.
Finally, the NFL team argued the contamination exclusion only applies to costs, not losses. And the loss of use exclusion doesn't apply, the Eagles organization said, arguing the exclusion addresses situations where a loss is caused by conditions unrelated to the physical loss or damage event.
"For example, if a nearby fire fills an outdoor theater with smoke and prevents the owner from proceeding with an event due to the smoke, the exclusion does not apply," the team explained.
The sports industry was upended by the pandemic with stadiums and arenas being temporarily closed for professional games. Last week, New York and Los Angeles franchises fought bids to kick their suits.
The owners of Madison Square Garden and related entertainment entities argued that their New York suit should continue over losses from the presence of the coronavirus at their properties. They argued one of the insurers acknowledged ambiguity in the meaning of "physical loss or damage" in a prior case.
The Los Angeles Lakers, in a California federal suit, also argued that it suffered a physical loss or damage to the Staples Center. And the NBA team accused its insurer of repeatedly misstating its claims.
A representative for Factory Mutual told Law360 on Monday that the insurer values the long-term relationships with policyholders and is "proud to be leading the industry for claims service."
"It is unfortunate when legal matters arise because we strongly believe our insurance policies are clear on the coverage provided," the insurer's representative said.
Counsel for the Eagles organization declined to comment.
The Eagles organization is represented by Charles A. Fitzpatrick IV, James T. Giles, Linda Kornfeld and James R. Murray of Blank Rome LLP.
Factory Mutual is represented by Richard D. Gable Jr., Adam B. Masef and Jenaleigh Castano of Butler Weihmuller Katz Craig LLP.
The case is Philadelphia Eagles LP v. Factory Mutual Insurance Co., case number 2:21-cv-01776, in the U.S. District Court for the Eastern District of Pennsylvania.
--Additional reporting by Melissa Angell and Max Jaeger. Editing by Leah Bennett.
For a reprint of this article, please contact reprints@law360.com.