COVID-19 Litigation Round Up

August 3, 2020

Jason A. Levine, Peter E. Masaitis, Gillian H. Clow, Debolina Das, and Kaelyne Wietelman, Alston & Bird LLP

This week saw a noteworthy uptick in workplace-related litigation and suits against federal, state, and local governmental entities. 

OVERVIEW

Most prominently, the D.C. Circuit denied the AFL-CIO’s petition for en banc review of the panel decision dismissing a suit claiming that the Occupational Safety and Health Administration (“OSHA”) had improperly failed to issue COVID-19 workplace standards.

Relatedly, employees of a meatpacking plant sued to compel the Department of Labor and OSHA to require COVID-19 safeguards at the plant. Meanwhile, a California court issued an order denying a similar claim involving Amazon. And workers at several federal agencies sued to demand “hazard pay,” claiming their jobs put them at heightened risk of coronavirus.

At the local level, four municipalities were sued over ordinances requiring the wearing of masks.  And in an intra-governmental dispute, an Ohio agency sued the state’s Health Department, claiming that its blanket shutdown of sporting events is unconstitutional.

On the insurance front, business interruption claims continued to multiply. New plaintiffs this week are three colleges that assert damages resulting from the need to close their campuses due to the pandemic. A New York hospital also sued its insurer for non-payment of claims for costs associated with responding to COVID-19. 

Otherwise, new claims were filed over refunds for cancelled or postponed events and to excuse the termination of real property leases. One refund case has an interesting angle, as it claims that the date of the scheduled event was a material term of the ticket contract. There was also a new case involving an employee’s alleged misappropriation of confidential information from a closed business to start a competing business.

WORKPLACE

Workplace lawsuits heated up this week. As discussed in previous posts, we’ve been following the AFL-CIO’s case against OSHA for not promulgating COVID-19 specific workplace standards. The AFL-CIO sought en banc review after a three-judge panel of the D.C. Circuit dismissed the suit. The full D.C. Circuit now has rejected the AFL-CIO’s petition for en banc review in a one-sentence order, noting that no member of the court requested a vote.

OSHA continues to be involved in COVID-19 litigation after employees of Maid-Rite Specialty Foods, among others, filed a lawsuit seeking to compel the Secretary of Labor and OSHA to force the meatpackers to implement “the most basic COVID-19 precautions” after upward of half the employees contracted the virus. Defendants filed a motion to dismiss, claiming that OSHA’s inspection and investigation into the plant’s practices is ongoing.  They also asserted that because OSHA has made no recommendation to the Secretary, the Court has no jurisdiction to interfere with the ongoing administrative process. The motion to dismiss emphasizes that the court should “decline Plaintiffs’ extraordinary invitation to use judicial intervention to [hijack] the Secretary’s enforcement discretion.”

The federal government itself was not immune to employee disputes this week, either. Workers at the Department of Labor, Social Security Administration, Federal Grain Inspection Services, and parts of the Departments of Defense and Homeland Security claim that because their jobs allegedly put them at risk of contracting COVID-19, they should earn the 25% hazard pay differential provided for by the General Schedule pay system. These government employees join a revised class action that already included employees of the Federal Bureau of Prisons and the Departments of Agriculture and Veterans Affairs.

A California court issued an order denying a preliminary injunction in connection with a lawsuit, which we previously discussed, claiming that an Amazon grocery warehouse failed to take appropriate COVID-19 precautions. The court noted that the California Attorney General’s Office, the Division of Occupational Safety and Health of California’s Department of Industrial Relations, and the San Francisco Department of Public Health have all opened probes into the warehouse, with inspections by two of these agencies, and it held that plaintiff could not “clearly establish the existence of ongoing serious regulatory violations that pose an imminent risk of irreparable harm to Amazon employees or the public.” 

Meanwhile, wrongful termination and wrongful denial of benefits cases continue to encompass the majority of workplace-related disputes through the ongoing pandemic.

GOVERNMENT SUITS

Challenges to ordinances requiring masks continued this week, with new cases filed in Montana, Alabama, Colorado, and Springfield, Missouri.

Lawsuits related to recreational activities also continued this week.  In Ohio, the Warren County Convention and Visitors Bureau, which operates a sports park, has sued the Director of the Department of Health seeking a judgment that shutting down sporting events in Ohio was unconstitutional.  The Bureau alleges it would agree to comply with sanitation guidelines so it could host basketball tournaments and other events.

FAILURE TO PROTECT

Last week, we discussed retail stores facing negligence lawsuits for failure to protect customers from other customers.  This week, Food Lion faces claims of battery and negligence after an employee allegedly hit a customer who complained about store safety practices.  The customer alleges that the employee was permitting customers to exit through the entrance door, and that when the customer complained to the manager, the employee struck the customer on the side of the head. 

TRADE SECRETS

In Virginia state court, an eyelash salon is suing a former employee for misappropriation of confidential and proprietary customer information and client lists.  Plaintiff alleges that, when the store closed pursuant to the Governor’s COVID-19 emergency closure order, the defendant absconded with the confidential information and began to use the client lists to start her own eyelash business. 

REFUND

A plaintiff in the Central District of California unsuccessfully proposed an interesting new claim for a refund—that the date of the event was a material term of a contract. Plaintiff was denied a refund for her ticket purchased for the Country Thunder Florida music festival that was originally scheduled for March 2020 but postponed to October 2020 due to COVID-19. The judge granted the defendant’s motion to dismiss because defendant had the contractual right to reschedule the festival, and the ticket contract was not illusory since COVID-19 was out of the defendant’s control.

INSURANCE

Just as in prior weeks, cases alleging wrongful denial of insurance coverage for business interruption claims continued to sprout up across various industries.  This week, institutions of higher learning entered the fold, with class action lawsuits filed by Benedictine College (in Kansas federal court) as well as Rockhust University and Maryville University in Missouri against their insurers for failing to provide coverage due to loss of use of property, business interruption, and property damage as a result of school closures.

And in New York state, a New York hospital sued its insurer for wrongfully denying its claim for the costs associated with responding to COVID-19.  The hospital brings causes of action for breach of contract and deceptive business practices.

LEASES

In the Los Angeles Superior Court, a plaintiff is seeking declaratory relief over whether a commercial sublease can be terminated despite statewide eviction moratoriums due to COVID-19.

Jason Levine is a commercial and antitrust litigation partner in the Washington, D.C. office of Alston & Bird LLP. Peter Masaitis is a product liability and toxic tort litigation partner in the firm’s Los Angeles office.  Gillian Clow, Debolina Das, and Kaelyne Wietelman are litigation associates at the firm.

 

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