COVID-19 Litigation Round Up

August 17, 2020

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

New cases related to COVID-19 surged last week, driven primarily by new filings against governments over pandemic-related restrictions and school reopening plans.  Workplace litigation also continues to grow.  And there were important developments in workplace and refund cases we’ve previously covered.

OVERVIEW

An influx of suits against governments included challenges to mask ordinances and COVID-19 testing requirements, efforts to reverse the closures of businesses and recreational outlets, cases involving school reopening plans, and an attempt to compel further federal regulation of meatpackers.  Businesses suing over closures and restrictions included bowling alleys, bars, beaches, and billiard halls.

New workplace suits included a claim against Soulcycle for allegedly using the pandemic as a pretext to terminate an executive for taking maternity leave, and suits by university employees claiming that in-person reopening plans unreasonably expose them to the risk of contracting COVID-19.

Workplace suits we previously covered were also resolved last week.  MGM Resorts and its employees settled their suit over COVID-19 precautions, and a court denied injunctive relief to prevent the City University of New York from firing adjunct faculty.  

On the consumer-protection front, New York sued an egg producer for price-gouging, and a class action was filed against REI for allegedly making false advertising claims about a hand sanitizer it has been selling.

Another lawsuit was filed this week against Zoom Communications, this one by a consumer advocacy group claiming violation of a Washington, D.C. consumer-protection law.

There was a major development in the litigation over refunds for event cancellations.  The U.S. Judicial Panel on Multidistrict Litigation (“JPML”) consolidated all federal lawsuits against StubHub, but not against other ticket-sellers such as Vivid Seats LLC. 

Finally, another lawsuit was filed against the People’s Republic of China for mismanaging the spread of COVID-19.  This lawsuit has a unique twist, however: it seeks damages based on the pandemic preventing the plaintiffs from attending football games as Las Vegas Raiders season ticketholders.  The “foreseeability” analysis should be interesting.     

SUITS AGAINSTS THE GOVERNMENT (Bookmark)

Mask Ordinances and Testing

Lawsuits challenging the constitutionality of mask ordinances continue, with new cases filed in Fort Myers, Florida, New Mexico, and Nevada.  Among plaintiffs’ grievances in these cases are that the mask ordinances infringe their First Amendment rights by physically muffling their speech, and violate due process by requiring that masks be worn while exercising in a gym.  And in Grants, New Mexico, a petition has been filed to recall the mayor, who has allegedly defied COVID-19 restrictions, encouraged business owners to do the same, and behaved inappropriately in public meetings.

The Governor of Michigan was sued this week by a group of plaintiffs who allege that she singled out the Latino community (and specifically agricultural workers) for mandatory COVID-19 testing.  The complaint asserts that her order was based on her mistaken notion that the Latino population poses a disproportionate risk for spreading the disease, with the result that they are purportedly subject to a stricter set of rules than people of other ethnicities.

Recreation and Leisure

COVID-19’s impact on recreational and leisure activities has also spurred new lawsuits against government authorities this week.  In Grand Rapids, Michigan, a group of bowling allies sued the Governor, alleging that broad COVID-19 restrictions prevent them from operating despite their wiliness to follow certain safety restrictions.  Similar lawsuits were filed in New York by various bars and billiards clubs, and in Arizona alleging that the Governor’s executive order closing water parks violates due process. 

The Governor of Texas has been sued by a bar and restaurant after it was closed pursuant to his Executive Order mandating the closure of all bars.  51% of the plaintiff’s gross receipts come from alcohol sales, meaning it qualifies as a bar.  Plaintiff alleges that the Executive Order lacks a rational basis, because the distinction between bars and restaurants “does not flow logically from the intended disease contamination purposes.”

Finally, a lawsuit filed against the town of Wrightsville Beach, North Carolina alleges that a new ordinance, which allows authorities to impose $500 fines on individuals violating emergency orders requiring people to stay off the beach, is void, unenforceable, and an improper attempt to profit from the pandemic. 

Education

The rapidly approaching 2020-2021 academic year has brought with it several new lawsuits this week.  In Miami Dade County and Orange County, Florida, and in McKinley, New Mexico, educational associations and teachers’ unions seeking emergency relief have sued to prevent the in-person reopening of schools.  Lawsuits going the other way – alleging that state orders preventing in-person teaching violate plaintiffs’ civil rights – have also been filed, including one in Oregon brought by various Christian schools against the Governor.

As the pandemic continues, people have turned to online courses to earn their desired certificates.  However, in Colorado, “Guns for Everyone” filed suit against the Larimer County Sheriff for refusing to honor certificates that were earned through online instruction. Plaintiff claims that the law does not forbid online instruction and actually allows Hunter Safety education certificates to be earned online.

Workplace Safety

The Physicians Committee for Responsible Medicine sued the United States Department of Agriculture this week.  The committee seeks an order requiring the Department to respond to a petition that would require meat and poultry processing plants to test their products for COVID-19, and to revise their labeling regulations so that all meat and poultry products carry disclosures regarding the virus.

WORKPLACE (Bookmark

As schools and universities begin to open nationwide, a new type of employment litigation emerged this week.  Employees of the University of North Carolina school system sued the schools and the Governor, claiming the decision to open campuses has unreasonably exposed employees to COVID-19.

The influx of suits over wrongful termination of benefits and wrongful termination also continued this week.  Notably, a former executive of SoulCycle sued the company, alleging that it used the pandemic as pretext to fire her after she told her boss she would be taking maternity leave.

Meanwhile, there have been important developments in workplace cases we covered previously.  In Nevada, a lawsuit by the employees of MGM Resorts regarding unreasonable COVID-19 precautions has been resolved, as announced in a joint statement by the plaintiffs and MGM.  In New York, a federal judge denied a preliminary injunction against the City University of New York, holding that CUNY did not need to reinstate faculty members recently laid off.  As covered previously, thousands of adjunct faculty and staff had sued CUNY for terminating them after the school received federal funding under the CARES Act.  The court held that the employees failed to show a likelihood of success on the merits.

CONSUMER PROTECTION (Bookmark)

The New York Attorney General filed a lawsuit against Hillandale Farms, one of the largest egg suppliers in the country, alleging that the company has been a bad egg the last few months by taking advantage of the coronavirus pandemic through price-gouging, including doubling, tripling, and even quadrupling the prices it charged for eggs in January 2020.

A company found itself accused of dirty business when a putative class action was filed against REI in Massachusetts.  The complaint alleges that REI has been marketing an alcohol-free hand sanitizer throughout the pandemic as killing 99.99% of all germs and as a proven alternative to alcohol-based sanitizers.  Plaintiffs claim this was false and misleading because there is supposedly no support for the claim that the “SafeHands” sanitizer is a proven alternative to alcohol-based sanitizers, or that it could kill or protect against germs like the flu, the common cold, or COVID-19.

PRIVACY

In Washington D.C., a consumer advocacy group filed a lawsuit against Zoom alleging violations of the D.C. Consumer Protection Procedures Act.  The complaint claims that Zoom falsely promised it was using end-to-end encryption to maintain the privacy of its users’ communications, in an effort to appeal to customers during the COVID-19 pandemic and lure them into a supposedly false sense of security.  In actuality, the complaint asserts, Zoom is capable of accessing any and all data transmitted on its platform.

DEFAMATION​ (Bookmark)

In Las Vegas, the Sahara resort and casino says that reports of its demise were fabricated.  The casino filed a defamation action against a website called Vitalvegas.com alleging that it falsely claimed that the Sahara was closing permanently as a result of COVID-19, without contacting the resort to confirm the truth of its reporting.  The Sahara alleges this false report caused some vendors to withhold their business.

REFUND

This past week, the U.S. Judicial Panel on Multidistrict Litigation (“JPML”) consolidated all federal suits against StubHub alleging that it wrongfully changed its refund policies for events cancelled because of the COVID-19 pandemic.  The consolidation excludes suits filed against Vivid Seats LLC and SeatGeek, Inc. due to the JPML finding that “few efficiencies” would be gained by combining those proceedings.  Each business issued different terms of use, arbitration agreements, marketing, and choice of law provisions, making consolidation of suits against different companies too complex for an efficient proceeding.

MEDICAL MALPRACTICE (Bookmark)

Medical malpractice continues to crop up on dockets nationwide.  In Texas, a plaintiff filed suit against a nursing home for not informing a family that its decedent had been diagnosed with COVID-19 even after the plaintiff went to identify the remains.  Moreover, the plaintiff was not given any protective equipment when he entered the nursing home despite being in the COVID-19 wing.

PROCEDURE

In the Northern District of Illinois, a plaintiff is contesting FINRA’s order to make all arbitration hearings virtual despite plaintiff’s objection that the complexity of issues, large number of witnesses, hundreds of exhibits, and need for a translator make virtual hearings unworkable in his matter.  Plaintiff seeks to enjoin FINRA from conducting a virtual hearing in his case. 

NEGLIGENCE (Bookmark)

Las Vegas Raiders fans sued China for allegedly mismanaging the spread of COVID-19 and, as a result, preventing plaintiffs from attending football games as season ticket holders.  The complaint details the ten home games that the plaintiffs were scheduled to see this season.  The next two seasons will not feature high-demand teams playing in Las Vegas, which assertedly injures the Las Vegas Raiders’ season ticket holders.  Plaintiffs seek monetary damages from China. 

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.