Top 3 COVID-19 Litigation Developments

December 21, 2020

Jason A. Levine, Peter E. Masaitis, Gillian H. Clow, and Giles Judd, Alston & Bird LLP

We have been monitoring the proposed “Bipartisan State and Local Support and Small Business Protections Act,” which, if enacted, would dramatically limit businesses’ pandemic-related legal liability and would be critical in shaping the COVID-19 litigation landscape in 2021 and beyond. 

In the meantime, here are the top three litigation developments from this past week:

1.            Federal Judge Compels Arbitration in Ticketmaster Consumer Dispute

Overview: A California federal judge held that a purported class action filed by consumers against Ticketmaster and its parent company, Live Nation, for their purported failure to provide refunds for events postponed due to the pandemic must be submitted to arbitration.

Background:  Defendants argued that Ticketmaster’s website requires consumers to agree to its terms of use, which contains an arbitration agreement, at three unique points:

(i)  when creating the user account;

(ii)  when signing into the user account; and

(iii)  when purchasing tickets.

Further, nearly every page on Ticketmaster’s site contains a notice at the bottom of the page advising consumers that, by using the site, they agree to be bound by the terms of use.

The named plaintiff contends that he never reviewed these terms and, therefore, was unaware of the existence of the arbitration agreement. 

Decision:  The district court granted defendants’ motion to compel arbitration.  The judge rejected plaintiff’s contention that he was unaware of the arbitration argument, reasoning that the sign-in page was uncluttered and that the notice that signing in constituted agreement to the terms of use was conspicuous, including a hyperlink to the actual terms of the terms of use.

What It Means/Our Take:  Ticketmaster has faced many COVID-19 related lawsuits pertaining to its refund policy.  We recently reported about an agreement the ticket retailer reached with the Arizona Attorney General’s Office to refund over $71 million to consumers who purchased tickets to events that were canceled due to the pandemic.  This latest decision compelling arbitration, however, may signal the procedural route that other proposed class actions will take – including actions against not only the ticket giant, but other defendants as well.

2.            Judicial Panel on Multidistrict Litigation Combines Suits Against Insurers

Decisions:  On December 15, the Judicial Panel on Multidistrict Litigation created an MDL centralizing 12 lawsuits against Assicurazioni Generali Group.  The lawsuits allege that the insurer failed to pay policyholders for trips cancelled due to COVID-19.  The cases were centralized in the Southern District of New York, where the company’s American unit is headquartered.  The panel found that an MDL was warranted because the cases involve common factual issues and because centralization will eliminate duplicative discovery, avoid the risk of inconsistent rulings, and conserve the resources of the parties, their counsel, and the judiciary.

Similarly, a judicial panel in Pennsylvania centralized over a dozen cases brought against the Erie Insurance Group, alleging that the insurer wrongly denied coverage for businesses’ lost income as a result of pandemic stay-at-home orders.  This is the second instance of an insurer facing multidistrict litigation over claims of wrongful denial of business interruption claims. 

What It Means/Our Take: Although the JPML previously declined to create a nationwide MDL to address issues related to business interruption losses, the creation of some more limited MDLs suggests that some centralization will continue as these cases progress due to the similarity of the allegations across some cases.  Among other things, centralization may result in more wide-ranging decisions on merits issues.

3.            U.S. Supreme Court Sets Aside Colorado Capacity Limits for Houses of Worship

Decision:  In an unsigned Order issued on December 15, the U.S. Supreme Court vacated a Colorado district court decision upholding capacity limits placed on worship services due to the COVID-19 pandemic.  The case was remanded to the U.S. Court of Appeals for the Tenth Circuit with instructions to consider the Supreme Court’s recent decision striking down similar capacity limits instituted by Governor Cuomo in New York, as we previously reported

Dissenting Opinion:  In dissent, Justice Kagan, joined by Justices Breyer and Sotomayor, observed that the case was rendered moot by Colorado’s recent action lifting capacity limits in light of the Court’s decision in the New York case, Roman Catholic Diocese of Brooklyn v. Cuomo.  The dissent noted that, “[a]bsent [the Supreme Court’s] issuing different guidance, there is no reason to think Colorado will reverse course – and so no reason to think Harvest Church will again face capacity limits.”

What It Means/Our Take:  This ruling solidifies the holding of Roman Catholic Diocese of Brooklyn.  The Court has clearly signaled its willingness to review state orders setting capacity limits on worship services that are at least arguably stricter than those imposed on other public establishments. 

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 and Giles Judd are litigation associates at the firm.