COVID-19 Litigation Roundup

October 13, 2020

Jason A. Levine, Peter E. Masaitis, Gillian H. Clow, Ryan Martin-Patterson, and Kaelyne Wietelman, Alston & Bird LLP

OVERVIEW

This past week’s big news centered around MDLs (multi-district litigation).  In Illinois, the Judicial Panel on Multidistrict Litigation centralized 34 lawsuits alleging denial of coverage by Society Insurance Co., but declined to centralize groups of cases against several other insurers.  And, two different MDLs were formed to centralize cases alleging wrongful refusal to refund canceled ski passes.

There were also a few new rulings in previously-reported cases, including a home run by Major League Baseball dismissing a purported nationwide class of fans seeking refunds for tickets purchased prior to the pandemic.  A health care products distributor scored a win when the court dismissed price-gouging claims against it, ruling that charging nearly $17 for a can of Lysol was not unconscionable. 

In a first-of-its-kind development, criminal charges have been filed against the Massachusetts veterans’ nursing home that has also been the target of multiple civil suits related to an alleged COVID-19 outbreak that killed over 70 residents.  Many noteworthy new suits were also filed, including:

EMPLOYMENT

A former bus driver in Milwaukee filed a complaint against the Milwaukee County Transit System after being fired for allegedly sharing a video on Facebook that showed a lack of social distancing and personal protective equipment on a Milwaukee bus early in the pandemic.  And the Chaminade University of Honolulu was sued for allegedly firing a whistleblower who reported failures to follow contact tracing guidelines.

Finally, Gordon Truck Centers was sued by former employees for alleged age and disability discrimination after it terminated older and disabled workers in May and June that it had initially furloughed in March and April.

CANCELLATION/REFUND

Major League Baseball won a significant victory against a purported nationwide class of fans seeking refunds for tickets purchased prior to the pandemic.  The U.S. District Court for the Central District of California ruled that all named plaintiffs had already received refunds, and dismissed the case.

A proposed class of Norwegian Air Shuttle ASA customers are now appealing to the Ninth Circuit, arguing that the district court wrongly rejected the customers’ argument that they are entitled to refunds after their flights were cancelled due to the COVID-19 pandemic.

Others have been more successful. The Judicial Panel on Multidistrict Litigation (JPML) established two different MDLs to centralize cases where plaintiffs allege that two competing insurers are refusing to refund canceled ski passes due to COVID-19.

INSURANCE COVERAGE

The Judicial Panel on Multidistrict Litigation also centralized, in Illinois, 34 lawsuits alleging Society Insurance Co. wrongfully denied coverage for business’ losses resulting from COVID-19.  The judicial panel declined to centralize similar cases against several other insurance companies (The Hartford, Travelers, Cincinnati Insurance Co. and Lloyd’s of London), however.  The panel noted that what set the Society Insurance MDL apart is that the cases implicated the state laws of only six states, whereas other proposed MDLs involved a wider geographic scope, with 15 or more states.

GOVERNMENT SUITS

The Michigan Supreme Court issued an opinion answering questions that had been certified to the court from the Western District of Michigan.  The plaintiffs are Michigan healthcare providers challenging the series of executive orders issued by Governor Whitmer in response to the coronavirus pandemic.  The court held that the Governor did not have authority to extend the duration of the state of emergency, and, as a result, her emergency measures had become void.  Governor Whitmer cited two state laws as giving her the authority to continue emergency orders past April 30: the Emergency Management Act of 1976 (“EMA”) and the Emergency Powers of the Governor Act of 1945 (“EPGA”).  The court held she lacked authority under the EMA, and that the EPGA violated the Michigan Constitution because it delegates to the executive branch legislative powers of the state government. While there is some question about whether this decision invalidates the Governor’s orders immediately or in the next few weeks, other state authorities have enacted alternative measures to maintain the status quo.

A split Ninth Circuit panel preserved California’s ban on in-person church services, denying a Pasadena church’s request for a stay of the governor’s restrictions.  The court reasoned that the church was unlikely to succeed on the merits of its claims that Newsom’s order discriminates against religious activity.

The Third Circuit granted a stay of the district court’s order declaring Pennsylvania Governor Wolf’s restrictions on crowd sizes to be unconstitutional while the court hears an appeal of that decision.  On Monday, the United States Supreme Court declined to hear an appeal of a decision by the Pennsylvania Supreme Court affirming Governor Wolf’s power to require businesses to close on an emergency basis as a result of COVID-19.

 In New York, the Eastport-South Manor teachers’ association and its president have sued its school district, superintendent, and board of education for an order nullifying the district’s reopening policy because it does not include telework accommodations for “vulnerable faculty and staff.”

CIVIL RIGHTS

The Pennsylvania Interscholastic Athletic Association is facing a lawsuit from four high school students who claim that their response to the COVID-19 pandemic – lowering the number of participants in a golf tournament – violated their equal protection rights. The students claim that the decision to reduce the number of students was arbitrary and capricious and now seek a preliminary injunction restoring the status quo.

PRICE GOUGING

In New York, a trial court granted a motion to dismiss filed by a health care products distributor, Quality King Distributors, Inc., in a price gouging case brought by the State’s Attorney General.  The AG alleged that Quality King raised prices on cans of Lysol distributed to grocery stores from $4.25 pre-pandemic to $9.15 once it began, increasing the price to nearly $17 for individual consumers.  In dismissing the AG’s suit, the trial court judge found that the price increases “were not, as a matter of law, unconscionable or overall extreme.”

FALSE ADVERTISING

The Attorney General of Arkansas brought an action against Arkansas Regenerative Medical Center in state court for false advertising related to the use of stem cells to provide pre-infection protection against the virus causing COVID-19.

MEDICAL MALPRACTICE

Nursing facilities continue to be the focus of medical malpractice filings.

We’ve previously reported on the Massachusetts veterans’ nursing home where an alleged COVID-19 outbreak killed over 70 residents. Now, criminal charges have been filed against the home’s administrators. This is the first criminal case in the country against a nursing home related to the pandemic.

CARES ACT

A six-attorney law firm in Willow Grove, Pennsylvania sued the Small Business Administration, hoping to force it to accept and process the firm’s PPP loans which were submitted prior to August 5.

 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, Ryan Martin-Patterson, and Kaelyne Wietelman are litigation associates at the firm.