By Celeste Bott

Law360 (October 1, 2020, 9:57 PM EDT) -- With the U.S. presidential election on the horizon, legal battles continue over states' mail-in voting procedures, 100 Outback Steakhouse locations say their insurer owes them coverage for coronavirus-related losses and small businesses that claim Wells Fargo stiffed applicants for the Paycheck Protection Program are fighting the bank's arbitration bid.

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 new litigation across the country.

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

Employment

A union representing employees at the Port Authority of Allegheny County, Pennsylvania, filed a federal lawsuit Wednesday claiming that a uniform policy banning workers from wearing masks that say "Black Lives Matter" violated the workers' freedom of speech.

The Port Authority — which operates buses, light rail and the celebrated funicular railways known as inclines in and around Pittsburgh — had previously spread messages showing support for LGBTQ Pride, Black History Month, women's rights, the victims of the October 2018 Tree of Life Synagogue shooting, and Pittsburgh police after three officers were killed by a white supremacist in 2009, the complaint said, but the agency barred workers from wearing face masks with messages supporting the Black Lives Matter movement.

In Florida, a former glass installation company employee filed a lawsuit in federal court on Saturday claiming he was fired after taking time off from work with potential COVID-19 symptoms that turned out to be due to pneumonia.

Hector Hernandez, described in the complaint as an "outstanding" employee at United Glass Systems Corp., said that in April he was required to sign a release stating that if he contracted the virus he would not hold the company liable. After leaving work on July 2 with potential COVID-19 symptoms that turned out to be due to pneumonia, Hernandez returned to work on July 19 and was fired, according to the lawsuit.

And a former in-house counsel has pushed back against his ex-employer's bid to duck a lawsuit over his firing after he contracted COVID-19, telling a Pennsylvania federal court that the metals company took issue with his lack of work while he was sick.

Daniel Burbach Jr. alleges that Arconic Corp. violated the Family and Medical Leave Act by asking him to craft a "to-do list" for others to follow during his absence, then firing him, in part because he did not complete the task, according to the opposition brief he filed Friday with the Western District of Pennsylvania. His former employer contends that Burbach was fired because he wanted to work remotely in Slovenia although company officials had told him that he would not be allowed to do so, a matter unrelated to the FMLA.

Consumer Protection

New York's attorney general on Wednesday sued New York Sports Club and Lucille Roberts gyms in New York state court alleging that they have ripped off customers during the COVID-19 pandemic by continuing to charge fees and ignore cancellations even though the facilities have been largely closed since March.

Attorney General Letitia James filed suit claiming the parent company's chain of nearly 100 gyms had "violated multiple New York State laws" by charging for services not rendered, not delivering promised refunds, tacking on fees and other barriers to cancel memberships and "refusing to honor cancellation requests."

The attorney general is seeking a restraining order to force the company to halt its alleged illegal conduct as well as restitution for customers affected, plus $5,000 for every practice or act of deception and $2,500 for each violation of the Health Club Law's provision that allows customers to cancel their gym memberships when the services are no longer available.

Sports & Betting

Four Western Pennsylvania high school students have sued the Pennsylvania Interscholastic Athletic Association over restrictions it put in place due to the COVID-19 pandemic, claiming the association's decision to reduce the number of participants in a golf tournament violated their equal-protection rights.

The students, identified by their initials because they are minors, said the PIAA and its local district committee "arbitrarily and capriciously" reduced the number of students who could qualify for the Oct. 2 tournament by about half, so golfers like themselves who had previously qualified no longer made the cut.

The students sought a preliminary injunction to restore the "status quo" and allow them to participate in the tournament. The PIAA filed to remove the lawsuit from state court Thursday, arguing that because the claims were for violations of federal constitutional rights, it belonged in federal court, and filed a brief in opposition to the requested injunction.

Public Policy

A Third Circuit panel agreed Thursday to reinstate Pennsylvania's pandemic-related restrictions on crowd sizes while the court hears an appeal from Democratic Gov. Tom Wolf challenging a district judge's decision last month declaring the emergency measures unconstitutional.

In an order signed by Chief Judge D. Brooks Smith, a three-judge panel granted a motion from the Wolf administration asking that the lower court's decision striking down the restrictions be stayed while the appeals process plays out before the Third Circuit. Wolf asked for the stay last week after U.S. District Judge William Stickman IV ruled in mid-September that emergency business closure orders and crowd-size limitations imposed as a result of the ongoing COVID-19 pandemic violated freedom of assembly and due process guarantees under the First Amendment and Fourteenth Amendment.

Dillon McCandless King Coulter & Graham LLP, which represented the Pennsylvania counties, businesses and lawmakers suing over those restrictions, is now asking the federal court to make the state pay their $136,000 in legal fees. The firm is seeking to be paid for nearly 777 hours of work on the case. 

Also in Pennsylvania, the state Senate's GOP majority leadership asked the U.S. Supreme Court on Monday to stay the state high court's recent ruling extending the deadline for receipt of mail-in ballots as a result of the coronavirus pandemic and reported postal service delays.

Majority Leader Jake Corman and President Pro Tempore Joseph Scarnati argued that the Pennsylvania Supreme Court's decision to extend the deadline improperly usurped the legislative branch's power under the U.S. Constitution to set the time for elections.

And in New Jersey, the union representing Atlantic City firefighters has filed a state court lawsuit alleging that 65 members have been exposed to COVID-19 due to faulty pandemic safety precautions, leading to six positive cases among the department's ranks. 

Firefighters who had contact with other department members who tested positive were directed to return to work as long as they tested negative, instead of being ordered to undergo a 14-day quarantine, according to the complaint filed Friday by the International Association of Fire Fighters, AFL-CIO, Local 198. The union claims that system violates the guidance handed down by state and federal health authorities.

Also in New Jersey, a Republican group has launched a state court lawsuit alleging that Democratic Gov. Phil Murphy's vote-by-mail mandate lacks security measures, the Garden State's latest legal battle sparked by the COVID-19 pandemic's stretch into a contentious election cycle.

Like a federal lawsuit filed in August by President Donald Trump's reelection campaign, the Monmouth County Republican Committee's  Sept. 24 lawsuit challenges the legality of Murphy's Executive Order 177, formalizing a primarily mail-in voting system for the general election.

And a group of Indiana voters told the Seventh Circuit on Wednesday that a lower court incorrectly rejected their request for the state to allow all eligible voters, not just those 65 and older, to cast mail-in ballots for the November general election.

The same COVID-19 safety concerns that prompted Indiana to allow voters of all ages to cast no-excuse absentee ballots during its June primary election are still present in the state, so that same group should be allowed to cast mail-in ballots for the Nov. 3 general election, the voters and nonprofit organization Indiana Vote By Mail Inc. told a three-judge panel during oral arguments.

Legal Industry

A California federal magistrate judge refused Wednesday to grant a preliminary injunction that would force the state bar to provide certain disability accommodations in test takers' homes, concluding that test takers must either abide by the state bar's remote testing restrictions or travel during a pandemic to receive accommodations at an official test site.

U.S. District Magistrate Judge Laurel Beeler said during a remote hearing Wednesday morning that while she was "enormously sympathetic" to the individual plaintiffs who wish to be among the 10,000-plus people in California who will take the October exam remotely because of the coronavirus pandemic, she struggled to see how the state bar violated the Americans with Disabilities Act, given that it is already providing accommodations for people with disabilities.

Citing security and technological limitations of the remotely administered exam, the state bar is requiring people in need of certain accommodations to take the exam in person this year.

Also in California, law school graduates are asking the California Supreme Court to drop its plans for a remote bar exam due to concerns over technical glitches and are pushing for provisional licenses to be issued instead. 

On Tuesday, two law school graduates filed an emergency petition asking the state high court to cancel the remote bar exam and grant those signed up to take it provisional licenses. The request comes after California last week shot down an effort to do away with its bar exam altogether and institute diploma privilege, through which law school graduates c be granted admission to the bar without taking the test.

Tuesday's petition cites the technical problems experienced by ExamSoft, the company administering the exam. It also argues that if the exam does move forward, ExamSoft should make the test open-book and drop the video and artificial intelligence monitoring, which many have pointed to as a potential source of technical problems as an estimated 30,000 to 40,000 test-takers attempt to upload both exam and video files on the day of the exam.

Insurance

The operators of 100 Outback Steakhouse locations in California, Arizona, Colorado, Nevada and New Mexico are taking Affiliated FM Insurance Co. to California federal court, saying the insurer has denied claims for COVID-19 related losses on a $100 million policy despite several provisions granting coverage.

In a complaint filed Tuesday, Out West Restaurant Group Inc. said Affiliated FM distributed "talking points" to its insurance adjusters in a scheme to blanket deny all coverage for losses stemming from the COVID-19 pandemic before it even issued its policy to the steakhouses in February. Affiliated FM also misled Out West into believing it would be covered, according to the complaint.

Also in California, a Los Angeles nightclub is asking a federal court not to throw out its proposed class action alleging that its insurer wrongly denied it coverage for losses stemming from the COVID-19 pandemic, saying the virus caused a physical loss by curtailing its business.

In a response filed Monday, Caribe Restaurant & Nightclub Inc. took aim at Topa Insurance Co.'s bid to dismiss the suit, saying the insurer is misinterpreting the "physical loss of or damage" clause in the policy to require a structural alteration when no such requirement is in its language.

And underwriters at Lloyd's of London urged a Georgia state court to declare that a Texas restaurant chain's COVID-19-related losses are only covered by a $1 million pandemic endorsement instead of the $50 million policy, and the insurer has already fulfilled its duty in paying that amount.

Lloyd's on Tuesday said Pappas Restaurants Inc. is wrongfully asking for the policy's full aggregated limit of $50 million after receiving the $1 million pandemic sublimit Lloyd's paid in August. The restaurant company has agreed and understood since 2016 that the coverage to the policy's "pandemic event endorsement" is limited to $1 million per period of insurance, the carrier said.

Mergers & Acquisitions

A group of Tiffany & Co. shareholders say they lost millions after LVMH's "illegal renunciation" of the pair's crumbling $16.2 billion merger, claiming in a complaint filed Tuesday in New York federal court that they were misled into investing based on bogus assurances by the French luxury goods conglomerate that the deal would go through.

The investors in the American jewelry retailer, which include Lucien Selce, Drexel, Morgan & Co. Inc. and Fairmont Capital Ltd., are accusing LVMH Moet Hennessy Louis Vuitton SA of securities fraud and violations of the Securities Exchange Act of 1934.

LVMH's numerous statements expressing enthusiasm for the deal before it was signed, and its desire to close it quickly, caused the investors to dump millions into Tiffany, the suit says. Now, LVMH is trying everything in its power to escape its obligations under the merger agreement, including falsely claiming that the COVID-19 pandemic gives it a right to leave the deal and delaying the antitrust clearance process, the suit contends.

Intellectual Property

Chemical company PureShield Inc. claimed in a lawsuit filed Monday in Texas federal court that Allied BioScience Inc.'s SurfaceWise 2 surface disinfectant, which advertises protection against COVID-19 for up to seven days, infringes on 10 of PureShield's patents.

PureShield claims Allied BioScience's SurfaceWise 2, which is being used by American Airlines Inc. and a Texas orthopedics business, was created when Allied BioScience copied PureShield's chemical formulas and put them in its own products. The lawsuit also says Allied BioScience's SurfaceWise and Germmax products infringe its patents. 

PureShield also accuses Allied BioScience of false advertisement, tortious interference with prospective business and unfair competition under state law.

Banking

A North Carolina insurance agency executive and apparent "Game of Thrones" enthusiast on Tuesday was hit with fraud charges for what prosecutors say was a scheme to unlawfully obtain over $6 million in COVID-19 relief funds for multiple entities.

Tristan Bishop Pan, 38, of the Raleigh suburb of Garner, North Carolina, is accused of fraudulently seeking Paycheck Protection Program loans, which are guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security, or CARES Act.

Prosecutors say Pan submitted several bogus PPP loan applications, not only on behalf of Pan Insurance Agency, but also other entities, including a trio of "Game of Thrones"-themed entities called White Walker LLC, Khaleesi LLC and The Night's Watch LLC, which appear to be named for the books/TV series' ice zombie-like creatures, dragon-wielding queen and the garrison of a giant ice-wall, respectively.

And a California pet groomer behind a proposed class action alleging that Wells Fargo stiffed applicants for the Paycheck Protection Program has urged a San Diego federal judge to reject the bank's bid to compel arbitration in the case, arguing that the customer agreements cited by the bank don't apply.

In a brief, plaintiff Karen's Custom Grooming LLC told U.S. District Judge Larry Alan Burns that Wells Fargo's agreements supposedly requiring arbitration are invalid for several reasons, including  alleged evidentiary shortcomings and conflicts with California precedents on arbitration enforceability.

KCG is one of a number of small businesses that have accused Wells Fargo and other lenders of misconduct in their roles as gatekeepers for the $660 billion relief loan program, one of several initiatives rolled out by the federal government this spring to blunt economic damage from the coronavirus pandemic.

Native American

A Florida federal judge will send the Miccosukee Tribe of Indians' suit claiming it was denied a fair portion of CARES Act relief funds to the judge in Washington, D.C., who has handled six related suits and dismissed a nearly identical one earlier this month.

In a phone hearing Tuesday, U.S. District Judge Kathleen Williams said she would transfer the Miccosukee Tribes' suit against the U.S. Department of the Treasury to U.S. District Judge Amit Mehta in Washington, D.C., who has already presided over several suits challenging the disbursement of the $8 billion in direct aid to tribes under Title V of the Coronavirus Aid, Relief and Economic Security Act.

The Miccosukee Tribe is challenging the federal government's population-based formula that was used to distribute 60%, or $4.8 billion, of the CARES Act Title V funds to tribal governments. The formula — which relied on Indian Housing Block Grant population data from the U.S. Department of Housing and Urban Development — set the tribe's population at zero, even though its members numbered 605 at the time, according to the complaint.

And the D.C. Circuit has ruled that Alaska Native corporations can't share in $8 billion in tribal government funding to deal with the COVID-19 pandemic, overturning a D.C. federal judge's ruling that ANCs were eligible for the CARES Act money.

A unanimous D.C. Circuit panel interpreted language Congress borrowed from a 1975 contracting law for the $2 trillion Coronavirus Aid, Relief and Economic Security Act as referring only to sovereign tribes that have been formally recognized by the federal government, and not to ANCs, which are state-chartered companies led by boards of directors.

The ruling reversed a D.C. federal judge's June decision that an "eligibility clause" taken from the 1975 Indian Self-Determination and Education Assistance Act — which targets tribes "recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians" — was not intended to apply to ANCs, and that they otherwise met the CARES Act's requirements to qualify for funding.

Real Estate

A New York City landlord's efforts to terminate the lease of Club Monaco on Broadway during the pandemic "is not only cruel considering the current environment, but illegal," the Ralph Lauren-owned retailer said in a lawsuit filed in New York state court.

The breach of contract suit seeks to enjoin the landlord, BSD Broadway Propco LLC, from its efforts to "terminate" the lease, which could leave the retailer on the hook for millions in rent while depriving it of its possessions. It also asks the court for a "rescission" of the lease and a declaration that the lease is unenforceable as a result of the COVID-19 pandemic and the subsequent government-mandated shutdowns.

BSD told Club Monaco earlier this month that it was in default after failing to pay $166,547.79 in late fees associated with its rent payment for the months of May, June, July and August, the suit alleges. Club Monaco said it paid the rent in full for those months on about Sept. 1, after months of negotiations over a rent abatement and lease modification agreement fell through.

--Additional reporting by Mike LaSusa, Matthew Santoni, Matt Fair, Hannah Albarazi, Daphne Zhang, Frank Runyeon, Lauraann Wood, Mike Curley, Emma Cueto, Dave Simpson, Craig Clough, Stewart Bishop, Carolina Bolando, Matt Fair, Jeannie O'Sullivan, Kevin Penton and Jon Hill. Editing by Peter Rozovsky.

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