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Law360 (October 15, 2020, 4:53 PM EDT) -- Arch Insurance Co. urged a New Jersey federal court Wednesday to toss a suit by Minor League Baseball teams seeking coverage after the COVID-19 pandemic canceled their season, arguing that business interruption coverage must be triggered by property loss or damage.
The owners of Washington's Everett AquaSox and North Carolina's Asheville Tourists never actually claimed their properties were contaminated by the virus or a person infected with it, Arch argued in its dismissal brief. Nor did the teams allege that they took any efforts to decontaminate their properties, the brief said.
"The reality here is that the public health response to COVID-19 as a contagious and easily spread virus is social distancing, and social distancing is not good for spectator sports," according to Arch's brief.
The teams also sought civil authority coverage, pointing to the shutdown orders of the governors Washington and North Carolina, but they don't allege that the orders came in response to "direct physical loss of or damage to property," the brief noted.
The insurer further argued that the virus exclusion in the teams' policies precluded coverage. The policies won't cover "loss, cost, or expense caused by, resulting from, or relating to any virus ... that causes disease, illness or physical distress or that is capable of causing disease, illness or physical distress," the brief said, quoting policy language.
The exclusion is "clear and unambiguous on its face" and therefore must be enforced, the insurer said.
The suit came amid a wave of litigation concerning Major League Baseball's decision not to send any players to the Minor League due to the pandemic. Minor League Baseball teams have claimed that their canceled season harmed their income and their ability to pay fixed costs, such as stadium leases and administrative employee salaries.
The parties in the present complaint, filed in July, also include the owner of the West Michigan Whitecaps as a plaintiff and that team's insurer, Federal Insurance Co., as a defendant.
Representatives for the parties didn't immediately respond to requests for comment.
The teams are represented by Andrew L. Sandler, Stephen M. LeBlanc and Rebecca Guiterman of Mitchell Sandler LLC and Robin Cohen, Orrie A. Levy, John Briody and Patrick Pijls of McKool Smith PC.
Arch is represented by Eric S. Aronson, Laura Besvinick and Julie Nevins of Stroock & Stroock & Lavan LLP.
The case is 7th Inning Stretch LLC dba Everett AquaSox et al. v. Arch Insurance Co. et al., case number 2:20-cv-08161, in the U.S. District Court for the District of New Jersey.
--Additional reporting by Mike Curley. Editing by Daniel King.
Update: This article has been updated to include Laura Besvinick and Julie Nevins as counsel for Arch.
For a reprint of this article, please contact reprints@law360.com.
