Covid-19 Litigation Roundup

October 26, 2020

Jason A. Levine, Peter E. Masaitis, Gillian H. Clow, Ryan Martin-Patterson, Giles Judd, and J. Stephen Tagert, Alston & Bird LLP

OVERVIEW

Continuing last week’s uptick in the volume of COVID-19 related lawsuits, this week presented us with a plethora of new suits, though most fall into now-familiar categories, including employment and other workplace-related actions.  We saw a small uptick in suits brought by customers of retail businesses claiming that the stores’ rules requiring the wearing of masks discriminated against them and/or caused them injury.  The plaintiffs in suits against nursing homes where deadly outbreaks have occurred ramped up allegations beyond negligence to assert gross negligence, recklessness, and willful and wanton conduct by the homes.  And, in the same lawsuit in which we previously reported that certain claims against the Princess cruise line were dismissed, the same judge has now denied class certification of the remaining claims based on the class action waiver set forth in plaintiffs’ ticketing information.

There were many new suits challenging government health and safety restrictions, including a group of Orthodox Jewish congregations in New York challenging the governor’s identification of their communities as hot spots.  State and local health officials in New York brought their own legal action against a private Jewish school for allegedly failing to take remedial action when an outbreak occurred in its neighborhood.  And, as our one election-themed story, a 15-year-old girl sued her school district over its refusal to allow her to wear a pro-Trump mask to school.

Refund cases, negligence cases, and insurance coverage cases continue to be filed, while one previously-filed insurance coverage action brought by Benedictine College was actually voluntarily dismissed, and a plaintiff in another coverage suit won summary judgment in its favor.

EMPLOYMENT

Food workers at Los Angeles International Airport who were terminated during the pandemic filed a class action against their former employer, Host International, Inc., alleging that they were paid below Los Angeles’ minimum wage.  The terminated workers additionally allege that their employer initially called their terminations “furloughs,” thereby depriving them of not only their final checks for more than six months, but also accrued vacation and sick time.

Following last week’s uptick in wrongful termination suits for allegedly complaining about insufficient workplace COVID protections, McDonald’s Restaurants of California was sued this week by a former employee who alleges her workplace barred employees from wearing masks and did not provide them with gloves.  She further alleges she was fired after reporting her concerns to OSHA.

Finally, OSHA itself announced that since the start of the pandemic, it has issued more than $1.2 million in fines related to violations of workplace safety regulations for protection against COVID.  The majority of the fined entities appear to be nursing homes or medical facilities in the northeast United States, largely New York and New Jersey.

DISCRIMINATION AGAINST CUSTOMERS

In California, a plaintiff sued Sprouts Farmers Market alleging it discriminated against him by requiring him to wear a mask, even though he is disabled due to a medical condition that causes him to have trouble breathing.  The plaintiff alleges that Sprouts has repeatedly refused him service.

A plaintiff in New York sued Target due to a fainting incident she allegedly had while wearing a mask in the store.  The plaintiff claims that, after she fainted once and regained consciousness, Target employees tried to move her to a new location, causing her to faint a second time and to sustain serious injuries.

FAILURE TO WARN / NEGLIGENT EXPOSURE

This week brought further developments in the proposed class action against Princess Cruise Lines and its parent company Carnival Corporation.  Previously, we reported that a California federal judge had dismissed the negligence claims against the cruise line because the complaint failed to adequately allege causation.  This week, that same judge denied plaintiffs’ motion for class certification on the grounds that the passage contract contained a class action waiver, which was both conspicuous and enforceable.

CORPORATE NEGLIGENCE

In Pennsylvania, a suit was filed on behalf of fifteen nursing home facility patients, ten of whom are now deceased, alleging wrongful death and corporate negligence against the facility following an outbreak of COVID-19 infections which, to date, has allegedly resulted in at least 80 related deaths and hundreds of infected patients and staff.  Plaintiffs assert that the facility’s failure to take protective measures goes beyond mere negligence, and instead constitutes “gross negligence, recklessness, and willful and wanton conduct.”

The above suit comes days after a Pennsylvania federal judge issued an order remanding to state court a wrongful death action brought on behalf of a deceased housekeeper against the same facility.  Despite the nursing home’s assertion that it is immune from these types of claims under the federal Public Readiness and Preparedness Act, the judge ruled that the Act only protects those covered persons who have taken protective measures, not those who have failed to do so.

GOVERNMENT

Various Orthodox Jewish congregations sued the state of New York alleging that Governor Cuomo’s executive order designating their communities as hot spots subject to restrictions violates their First, Fifth, and Fourteenth Amendment rights.  Also in New York, the State Commissioner of Health and the Commissioner of Health of the Orange County Health district have filed a petition seeking a temporary restraining order closing a private Jewish school due to a recent outbreak of COVID-19 in the area, and the school’s alleged failure to implement any mitigating measures.

In Texas, a Fort Worth bar sued the Executive Director of the Texas Alcoholic Beverage Commission, alleging the enforcement of the governor’s COVID-19 orders were wrongfully issued and damaged its business.  Similarly, a group of bars in Broward County, Florida are also challenging a county emergency order requiring bars to close at 12 am, based on a stated purpose to curb the virus.  Plaintiffs there allege the county order is preempted by the governor’s order, preventing local governments from shuttering bars and restaurants. 

And in Pennsylvania, a 15-year old Trump supporter and her mother have sued the Mifflin County School District, alleging the school district’s ban on clothing “expressing any political viewpoints” infringes on her right to wear a COVID-19 mask which says “Women for Trump” and a shirt that says “Trump the Sequel Make Liberals Cry Again.”

The Trump administration finds itself named as a defendant in a Freedom of Information Act (FOIA) suit brought by nonprofit Knowledge Ecology International, which requested information about government contracts with pharmaceutical companies to fund the development of a COVID-19 vaccine.  The nonprofit alleges that the government’s responses included improper redactions and failed to respond to certain requests.  Buzzfeed also filed a FOIA suit this week against the National Institutes of Health and the U.S. Department of Health and Human Services alleging they failed to produce records of requests from news outlets for comment on lab research in connection with COVID-19.

INSURANCE

As has been the case since the inception of the pandemic, lawsuits for denial of coverage in business interruption cases continue to be filed.  This week, MGA Entertainment, Inc. filed suit against its insurer, alleging the pandemic led to closures of its manufacturing facilities in China, as well as reduced operating capacity in the U.S.

In Kansas, Benedictine College voluntarily dismissed without prejudice its suit against Zurich American Insurance Co. for a declaration that its $100 million policy should cover financial losses due to the pandemic.  Zurich had previously argued in September that the case should be dismissed, because the college’s policy bars coverage for virus loss.

And in North Carolina, a state court judge granted in part the motion for summary judgment brought by a group of restaurants, ruling they were entitled to coverage for losses they experienced as a result of COVID-19 shutdowns.

TRADEMARK

Abbott Laboratories filed a new lawsuit this week in federal court in Illinois for injunctive relief, seeking an order to stop a former employee (who was fired for falsifying records) from using Abbott’s name, trademarks, and private information to allegedly sell diagnostic tests for COVID-19 that were actually manufactured by other companies.

BREACH OF CONTRACT / FRAUDULENT MISREPRESENTATION

ImmuneCyte, Inc., a clinical-stage biopharmaceutical company, is seeking a return of its $1.5 million prepayment to SuperBio Biomedical Co., for purported breach of an agreement requiring SuperBio to manufacture fast detection kits for novel coronavirus antibodies.  According to the complaint, Superbio warranted a detection rate of over 95% accuracy, contrary to initial FDA tests which revealed 20-30% accuracy among clinical samples.  ImmuneCyte further alleges that SuperBio intentionally falsified data by utilizing preexisting laboratory results in order to manufacture “a clinical trial that never actually occurred.”

FRAUD

Another fraud action related to a company’s failure to deliver personal protective equipment was filed in Texas this week over $1.85 million worth of N95 masks that the defendants failed to deliver and that the defendants have not refunded to the plaintiff.

REFUND / DECEPTIVE BUSINESS PRACTICES

In a previous Roundup, we noted that a Florida judge held that an LA Fitness gym member lacked standing to pursue a purported class action suit against the facility on the grounds that the member had received a refund of membership fees prior to filing the suit.  In Georgia, however, fitness center Club Pilates faces potential treble damages, as well as attorneys’ fees and costs, for purported unfair business practices under the Georgia Fair Business Practices Act of 1975.  Plaintiff alleges that the gym continued to charge member fees despite being closed due to the pandemic, and refused to refund those fees upon proper demand.