COVID 19 Litigation Round Up

August 10, 2020

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

It’s been a busy week for coronavirus-related litigation.  We’re all familiar with suits arguing either that masks should be required or that they should not be required.  Here’s a new one: a suit complaining about other people wearing masks.  Store customers are arguing that employees violated the law by wearing masks because the masks prevented lip reading.  In the meantime, employees continue to pursue failure-to-protect suits against their employers for not doing more to implement and enforce mask mandates.  This legal chaos continues to strengthen the case for liability protection

Beyond masks, this past week saw considerable litigation challenging government health measures, government actions against businesses and others to enforce those measures, an increase in Americans With Disabilities Act suits, and much more.

OVERVIEW

Suits by and against the government saw an uptick last week with claims filed in Louisiana, Oregon, Florida, Missouri, New York, Texas and California challenging governmental actions aimed at controlling the pandemic.  Highlights include a plaintiff in Oregon alleging that the statewide face mask requirement interferes with her ability to speak clearly and is causing her oxygen deprivation.  Not to be outdone, prisoners brought an action against the Department of Treasury and the IRS alleging that they are entitled to $100 million in CARES Act stimulus payments.

Governments also brought plenty of their own suits.  The Mayor of Los Angeles sued Los Angeles Apparel, Inc., where there have been more than 300 confirmed COVID-19 cases.  In the consumer protection realm, governmental entities brought several lawsuits challenging false advertising claims about dietary supplements and protein powders that sellers had touted as COVID-19 treatments, and multiple actions against companies that took orders for PPE or hand sanitizer but never delivered.

New this week are a number of suits asserting that the pandemic has worsened the harm caused by retail websites that are not ADA compliant, because the blind are more reliant on online shopping while so many brick and mortar stores are closed.  Nike was also sued over its enforcement of facemask rules in stores by a deaf plaintiff alleging that facemasks made it impossible for him to read lips.

GOVERNMENT SUITS

State and local governments continue to face lawsuits brought by various businesses as a result of stay-at-home orders requiring their closure, including a case filed this week by a group of bars and restaurants in Louisiana

Mask ordinances continue to be the source of new lawsuits, with new cases filed this week in several states.  In Oregon, a plaintiff alleges the statewide ordinance mandating face masks in public interfered with her ability to speak clearly and potentially affected her health by reducing oxygen intake.  Plaintiffs also brought challenges to mask ordinances in the State of Minnesota, Manatee County, Florida, and the City of St. Louis, Missouri.

In New York State, the operator of two summer camps for Jewish children sued the departments of health for the State and one county.  In light of COVID-19, the camps pivoted to host family weekend retreats in lieu of the summer camps, but the county health department closed the family retreats, citing alleged violations of interim guidance promulgated by the State.  Plaintiff alleges the county health department exceeded its authority in enforcing the interim guidance, and also infringed upon plaintiff’s right to the free exercise of religion.

In Texas, members of the Texas Congress seek to invalidate a $295 million dollar contract for a contact tracking program between the State of Texas and MTX Group, Inc., because the State allegedly did not follow competitive bidding requirements in awarding the contract.  The contact tracing program was intended to mitigate the effects of COVID-19 by monitoring individuals who have come in contact with patients who have tested positive for the virus.  Plaintiffs also allege the Texas governor violated separation of powers in awarding the contract.

Finally, in California, local governments have filed several new lawsuits this past week. The mayor of Los Angeles sued Los Angeles Apparel, Inc., seeking to enforce a subpoena requesting information regarding the garment manufacturer’s sick leave policies during the pandemic.  Los Angeles Apparel has made headlines because there have been more than 300 confirmed COVID-19 cases there, and four deaths.  And in Ventura County, the county and its health officer sued a church for conducting indoor services in violation of the stay at home order, and for the church’s failure to enforce the mandate requiring masks and physical distancing.  The church has indicated it intends to continue to violate the state and local orders.

FAILURE-TO-PROTECT

Businesses continue being named in lawsuits for allegedly not following county ordinances that require patrons to wear masks.

ADA COMPLIANCE

A new category of cases has emerged this week, with several suits alleging companies failed to comply with ADA regulations during the pandemic.  In the Superior Court of California, customers who are deaf or hard of hearing sued Nike, claiming that its policy of requiring retail employees to wear masks in stores is discriminatory because Nike’s opaque masks prevent plaintiffs from being able to read lips. Accordingly, plaintiffs claim the policy violates state and federal law by preventing deaf customers from obtaining equal access to Nike.

Blind plaintiffs filed class action lawsuits against Wonderful Pistachios and children’s clothier Cub Coats, alleging that they are unable to access the companies’ websites.  COVID-19 brings a new twist to this common claim:  Plaintiffs claim the lack of access is especially problematic during the pandemic, when access to physical stores is limited.  Additionally, the National Association of the Deaf filed suit against the President, alleging the White House failed to provide live, in-frame ASL interpretation during briefings about the federal response to COVID-19.

WORKPLACE

In New York, a federal judge struck down various parts of the Department of Labor’s rule regarding eligibility for paid leave benefits under the Families First Coronavirus Response Act. The court found that the Labor Department exceeded its authority by:  denying  paid leave to workers whose employers do not have work for them; limiting the definition of “health care provider;” requiring employers to consent to intermittent leave; and requiring employees to provide documentation justifying their absence before taking leave. 

After four months, the Equal Employment Opportunity Commission announced that it is ending its freeze on sending out “right to sue” notices.  These notices inform workers that the agency’s investigation into charges is completed, starting the clock for the worker’s time to sue the employer for violating federal anti-discrimination laws.

Meanwhile, lawsuits continue to pour in regarding wrongful termination and wrongful denial of benefits.

PPP/CARES ACT 

The Department of Treasury and Internal Revenue Service were sued in a putative class action by plaintiffs who are incarcerated, claiming that they have been unlawfully denied CARES Act stimulus payments despite qualifying under the Act as “eligible individuals.”  Plaintiffs allege that the IRS initially began sending out payments to incarcerated individuals, but within weeks, changed its position and halted payments, even going so far as to have correctional facility employees intercept checks it had already sent out. This has allegedly deprived plaintiffs and their families of over $100 million worth of funds, with a disparate impact on low-income and minority communities.

CONSUMER PROTECTION 

The government has been cracking down on companies taking advantage of the pandemic to perpetrate fraud among consumers, with numerous lawsuits this week alleging that companies lied about the efficacy of COVID-19 preventative products or failed to deliver PPE and cleaning products to purchasers.

In the Eastern District of California, the FTC claims that a company falsely advertised that its dietary supplement could treat COVID-19, cancer, and 27 other serious health conditions.  In Florida, the Consumer Protection Branch of DOJ alleges that a website purporting to sell hand sanitizer and wipes fails to deliver any of the products. In the Central District of California, the FTC asserts that a company allegedly capitalized on the demand for hand sanitizer by advertising products as being “in stock,” but refused to deliver the products for weeks or months and refused to let customers cancel their orders or obtain a refund.  The FTC further alleges that defendants claim their protein powder can prevent transmission of COVID-19.  In Missouri, the FTC claims that a company advertised that it could ship PPE within 24-48 hours, but then never shipped at all.

REFUND 

Universities have faced a flood of nationwide litigation by students demanding refunds for tuition and board from Spring 2020.  Arizona universities were the first to win a refund suit.  The District of Arizona determined that plaintiffs failed to properly file a notice of claim, which is a prerequisite to filing a lawsuit against an Arizona public entity.  Although plaintiffs sought declaratory and injunctive relief, which is not subject to the notice-of-claim requirement, the court concluded that plaintiffs were essentially “camouflag[ing] a legal remedy” and were in fact seeking monetary damages in a breach of contract claim.

INSURANCE

Just as in prior weeks, new business interruption suits were filed across various industries.  Dental offices, salons, and restaurants continue to sue for denial of coverage.

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 ClowDebolina Das, and Kaelyne Wietelman are litigation associates at the firm.

 

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