COVID-19 Litigation Roundup
Jason A. Levine, Peter E. Masaitis, Gillian H. Clow, Ryan Martin-Patterson, Giles Judd, and Stephen Tagert, Alston & Bird LLP
As pandemic-related litigation continues to work its way through pre-trial proceedings, we are increasingly seeing new rulings on dispositive motions and other significant events like class certification. Two insurance coverage cases were dismissed, upholding the virus exclusions found in the policies at issue. California courts dismissed two putative class actions seeking refunds from the Regents of the University of California, finding that the Eleventh Amendment barred those claims. And plaintiffs won class certification in a California suit against Walmart concerning its COVID-19 return policy.
New claims alleging wrongful termination for whistleblowing activities or complaints about employee protections continue to be filed. GEICO moved to dismiss a suit claiming that its policy premium “giveback” program was unfair, and in the oddball case of the week, the Congolese co-owner of a business asked a Virginia court to appoint a custodian to manage the business’s affairs after the other co-owner was arrested for misusing PPP funds.
REFUND / CANCELLATION
A federal court in California dismissed two putative class actions brought on behalf of students against the Regents of the University of California for alleged failure to refund fees for services which were unavailable due to the pandemic, holding that the Eleventh Amendment bars federal suits against a state, and that this immunity extends to the UC Regents as “agents or instrumentalities” of the state.
A California federal judge held that a proposed class could proceed with claims against Walmart for breach of contract and for violation of a California statute requiring return policies to be “conspicuously” displayed. According to the judge’s order, plaintiffs demonstrated that Walmart’s 90-day return policy, as posted on its website, conflicted with a “new COVID-19 return policy” as practiced by store managers. Further, the judge granted leave to amend with respect to plaintiffs’ allegations of various California business law violations.
Airbnb faces a proposed class action in California federal court for alleged breach of contract, breach of fiduciary duty, and unfair business practices arising from its purported failure to refund both guests and hosts for canceled bookings due to the COVID-19 pandemic. The complaint alleges that Airbnb promised to help offset canceled bookings by “establishing a $250 million fund” that would be paid out to hosts and to provide full refunds to guests, but fulfilled neither promise.
More students filed actions against their universities this week, including a proposed class action against Rider University for charging full tuition when no in-person classes took place for the second half of the Spring 2020 semester. Two students who attend Miami University sued the school for suspending them for one semester after concluding the students violated the student code of conduct by hosting a “mass gathering” during the pandemic.
A group of companies operating a minor league baseball team in Washington, Pennsylvania sued the Cincinnati Insurance Company alleging that its failure to cover their losses due to COVID-19 is a violation of their policy, which they contend was supposed to cover “all-risk.” Plaintiffs allege the policy contains an exclusion for pollutants but not one for viruses.
In Mississippi, a district court judge granted defendant Travelers Casualty Insurance Company’s motion to dismiss a complaint filed by a restaurant for business losses due to COVID-19. The court noted that even if the restaurant could demonstrate a physical impact on its establishment, it could still not overcome the policy’s virus exclusion. A New Jersey judge dismissed a similar lawsuit brought by a restaurant against Cumberland Mutual Fire Insurance Co. for the same reason.
Two suits were filed by former employees who were allegedly wrongfully terminated: an employee of a Modesto, CA construction equipment rental agency was allegedly fired after reporting violations of local, state, and federal regulations, and a photographer for the New York Post was allegedly fired after complaining about the lack of PPE available for reporters and photographers to cover protests.
In last week’s Roundup, we provided an update on the putative class action filed against auto insurer GEICO Casualty Company arising from its “GEICO Giveback program,” which insureds claim results in an “unfair windfall” to the insurer. After removing the case to federal court, GEICO now moves to dismiss the insureds’ complaint, asserting that it “provided full transparency to Plaintiffs on their discount,” and that it was under no legal duty to offer “any ‘giveback’ at all.”
CARES ACT AND PAYCHECK PROTECTION PROGRAM
A co-owner of a business who is a resident of the Democratic Republic of the Congo petitioned a Virginia court to appoint a custodian to deal with the business’s affairs after the other co-owner was arrested for misusing PPP funds.
COVID-19 SAFETY REGULATIONS
A Nebraska condominium association seeks a declaration that it can impose COVID-19 safety regulations on common areas of a building and can prevent a real estate company, which owns a ballroom in the facility, from adding buffet tables to an adjacent second-floor mezzanine.
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, Giles Judd, Ryan Martin-Patterson, and J. Stephen Tagert are litigation associates at the firm.