COVID-19 Litigation Roundup

September 9, 2020

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

OVERVIEW

The pace of new COVID-19-related filings slowed a bit leading up to Labor Day weekend, but there were still many noteworthy new cases.

Once again, the largest category of suits involved challenges to mask ordinances, restrictions on certain business operations due to the pandemic, and school reopening plans.  Our favorite involves an alleged constitutional right to video gaming.  Plaintiffs also filed more class actions raising now-familiar claims, including privacy infringement stemming from a data breach and violations of the Americans with Disabilities Act (“ADA”) relating to website accessibility. 

In more novel COVID-19 litigation, a plaintiff asserted violations of the Telephone Consumer Protection Act (“TCPA”), alleging that he received unsolicited faxes that promoted COVID-19 testing kits.  (Just curious: when is the last time you received a fax of any kind?)  Somewhat counter-intuitively, another plaintiff alleged that a bank manipulated the COVID-19 mortgage forbearance program— by automatically putting loans into forbearance.  In a twist on the usual insurance coverage claims, McDonald’s seeks insurance coverage for attorney’s fees and costs relating to the COVID-19 workplace safety litigation it is facing in Illinois.    

SUITS AGAINST THE GOVERNMENT

Mask Ordinances

As in prior weeks, constitutional challenges to state and local mask ordinances continue to be filed, with new lawsuits this week against Arizona’s Attorney General and the Mayor of Glendale, Arizona; St. Lucie County, Florida; and the Governor of Colorado.

Recreational and Entertainment Restrictions

Lawsuits challenging restrictions on business operations proliferated as well. A wedding venue sued the Governor of New York, seeking to enjoin enforcement of a 50-person limit on wedding ceremonies. Also in New York, a musician sued Governor Cuomo and the Chairman of the State Liquor Authority, claiming that he has been forced to cancel live music events to comply with the State’s restrictions on entertainment venues.

Meanwhile, in Kentucky, various bars have sued the Governor in a putative class action seeking a ruling that executive orders restricting bar and restaurant operations during the pandemic are unconstitutional. In Iowa, bars and pubs have also sued the Governor, alleging that her executive order closing bars and restaurants that do not derive 50% of revenue from food is unconstitutional. And in Massachusetts, a video game arcade has sued the Governor under a new theory: that his refusal to allow the arcade to remain open – despite allowing casinos to reopen – is a content-based discrimination on speech favoring gambling over arcade games, giving casinos the advantage of “the house always winning.”

Education

Lawsuits relating to school reopenings continued this week as well. In Des Moines, a school district and parents sued the Governor after she denied a waiver of the Iowa requirement that 50 percent of instruction be conducted in person. Plaintiffs seek an injunction and an order reversing the denial of their waiver request, and allowing instruction to begin online. Conversely, in New Mexico, parents sued the Governor on behalf of their children, alleging that the restrictions on attendance in-person at private schools impermissibly limit and impede their education.

Enforcement Actions

The City of Culver City in Los Angeles County has sued a gymnastics studio for continuing to operate indoors in defiance of COVID-19 regulations. Similarly, in Tennessee, the Hamilton County Health Department filed a petition against a heating and air conditioning supply business that refused to comply with a Tennessee directive that mandated the wearing of masks to slow the spread of COVID-19. The business owners told inspectors that they believed masks were ineffective and that the installation and use of ultraviolet light systems assisted sufficiently with disinfecting against the virus. 

In Colorado, the Boulder County Health Department sought a temporary restraining order against a candle store for posting a sign that stated, “wearing a mask does not align with our spiritual beliefs. If you are opposed to this, please order online.”  The State requires all people to wear masks while at indoor retail establishments. The agency seeks injunctive relief to restrain the store from violating public health laws, as well as to authorize agency staff to inspect the store during business hours to ensure compliance. 

PRIVACY

Deloitte has been sued in another class action in Illinois federal court alleging the same facts that we covered last week: that the company purportedly built web-based portals for individuals to apply for the Pandemic Unemployment Assistance program, but failed to properly secure users’ personally identifiable information, with the result that a data breach occurred.

ADA COMPLIANCE

As we discussed several weeks ago, plaintiffs are bringing ADA lawsuits on behalf of blind and visually-impaired consumers against companies whose websites are allegedly incompatible with screen reader programs. Plaintiffs assert that this is particularly harmful during the pandemic because of the increased need to access online retail. This week, such a lawsuit was filed against L’Oreal USA in federal court in Chicago.

CONSUMER PROTECTION

In a novel consumer protection action, a putative class action was filed against a Wisconsin toxicology lab for alleged violations of the Telephone Consumer Protection Act when the lab sent unsolicited faxes to promote its COVID-19 testing kits.

CARES ACT/PPP

After a short lull, cases against financial institutions for failure to pay agent fees associated with PPP loans came back this past week.

A new case presents an interesting dispute between a plaintiff and Wells Fargo based on mortgage forbearance provisions under the CARES Act. Plaintiff alleges that participation in such forbearance programs is voluntary, based on a request from the borrower, and claims that Wells Fargo has been unilaterally opting mortgage holders into its COVID-19 mortgage forbearance program. As a result, plaintiff contends that homeowners suffered damages, including the inability to access credit and refinance to lower interest rates.

REFUND

In a New York case, plaintiffs planning a wedding with over 200 guests sued Rosebud Stables for allegedly assuring them, falsely, that state laws did not apply to its wedding venue because the owners are friends with the local sheriff. Plaintiffs nonetheless cancelled the event, in view of the pertinent state law prohibitions, and they seek a compensatory refund and punitive damages totaling $500,000.

INSURANCE COVERAGE CLAIMS

McDonald’s and two of its franchise owners sued their insurer in Illinois federal court, seeking coverage of attorney’s fees and costs for an underlying putative class action filed by employees who alleged that they were subjected to dangerous working conditions during the pandemic. Other lawsuits for wrongful denial of business interruption coverage also continued this week.

WORKPLACE

Apropos of Labor Day, the wave of lawsuits over wrongful termination and wrongful denial of benefits continued to hold strong this week as well.

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.