Top Developments in COVID-19 Litigation
Jason A. Levine, Gillian H. Clow, and Giles Judd, Alston & Bird LLP
This week’s top COVID-19 litigation developments include: an insurer’s declaratory judgment action against The Walt Disney Company concerning the scope of its business interruption coverage; a Washington federal court’s denial of class certification in a COVID-19 exposure suit against a global cruise line company; and Google’s motion to dismiss a proposed class action over its contact-tracing app.
1. Insurer Sued Walt Disney Company in Coverage Dispute
Overview: Fireman’s Fund Insurance Company filed suit last week against The Walt Disney Company in Los Angeles Superior Court, seeking declaratory relief over coverage for COVID-19-related claims arising out of television and film production during the pandemic.
Allegations: Fireman’s Fund agrees with Disney that claims related to government-ordered shutdowns are covered under the relevant policy’s “Civil Authority” coverage, but disagrees as to whether the policy covers claims for delays after the civil authorities allowed Disney to begin work again. For example, Fireman’s Fund disputes that there is any coverage when a television or film production was shut down due to a director’s potential COVID-19 exposure (but not actual illness) and subsequent quarantine. Disney had claimed around $10 million in coverage for claims of this nature. Fireman’s Fund also disputes Disney’s claims related to extended holiday production hiatuses.
Our Take: Litigation relating to insurance coverage for COVID-19-related business interruption claims is nothing new. Indeed, among the headlines this week were a California judge dismissing claims against Liberty Mutual, finding that restaurants had failed to show they were physically damaged by the virus, as well as a Washington judge dismissing a salon’s coverage case on the ground that it had failed to show “direct physical loss or damage” to a property. This new Disney lawsuit, however, marks a different path for insurance cases: an insurer is affirmatively seeking declaratory relief.
2. Class Certification Denied in COVID-19 Exposure Suit Against Carnival Corporation
Overview: A federal judge in the Western District of Washington denied plaintiffs’ motion to certify a class of over 1,000 passengers who allege that they had been exposed to COVID-19 while aboard a Carnival cruise ship that departed from Argentina in March 2020.
Decision: In his decision denying the motion for class certification, U.S. District Judge Thomas S. Zilly stressed that the motion was “barred by the Cruise Contract’s class action waiver.” Despite plaintiffs’ argument that the face of the ticket did not reference either the Cruise Contract or the class action waiver, the judge noted that the booking confirmation email specifically stated that all guests “travel under the terms and conditions of the Cruise Contract,” and a link to those terms and conditions was provided. Further, the Cruise Contract allowed plaintiffs to cancel their trips for a full refund up to 90 days before the date of the cruise. Accordingly, the court concluded that both the Cruise Contract and the class action waiver were “reasonably communicated” to passengers.
Our Take: The decision stands for the proposition that a class action waiver within a company’s terms and conditions will be upheld, provided that the waiver was reasonably communicated to the consumer, even in cases involving the pandemic.
3. Google Moves to Dismiss Class Action Complaint Alleging That its Contact-Tracing App Exposed Users’ Personal Information
Overview: Google LLC moved to dismiss a class action suit filed in the Northern District of California, in which mobile device users who downloaded a COVID-19 tracing app incorporating the Google-Apple Exposure Notification System (“GAEN”) alleged that Google had failed to protect their personal and medical information from third parties.
Background/Motion: We previously reported on this case, noting plaintiffs’ allegations that apps utilizing the GAEN stored users’ personal and medical information within the system logs of their mobile devices, which could theoretically be accessed by third parties such as device manufacturers. Google moves to dismiss the complaint for lack of standing because plaintiffs cannot establish that any “bad actor has accessed, viewed, disclosed, or used their information.” According to Google, the entire complaint is “highly theoretical,” and supports the adage that “no good deed goes unpunished.” Google also argues that, for numerous reasons, plaintiffs cannot state a claim for privacy violations under California law.
Our Take: Although the factual allegations in this case are unique, claims rooted in purported data breaches are not. Developers of similar contract-tracing apps will undoubtedly keep a close eye on how the court situates this theoretical exposure case within the broader case law – as will we.