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The REAL Trending Litigation Topics Regarding COVID-19: Issue 1 

by Niall A. Paul

Published: March, 2020

Submission: May, 2020

 



A trend is emerging with recently filed litigation involving the COVID-19 pandemic. Spilman attorneys are committed to providing information that allows businesses to react as quickly as possible to avert civil litigation threats or to protect your interests through litigation. Monitoring these litigation trends will allow organizations to prepare to defend against such threats in the future or to identify and pursue civil remedies when needed.
 
The case summaries below are short and highlight the bottom line implication of each matter.
 
Please feel free to contact our COVID-19 Task Force if you have any questions or concerns. We are here for you.
 

BUSINESS INTERRUPTION INSURANCE


 
Interruptions Caused by Viruses May be Excluded

A French Quarter restaurant is suing to enforce the business interruption policy under the novel theory that a virus in or on the building has caused harm and damage to the building resulting in business interruption covered by insurance policy.
 
Many business interruption policies require damage to physical property or business to be considered a business interruption, and this is an effort to claim such. Some policies specifically excluded viruses after the prior SARS outbreak. Read more here.
 

SHAREHOLDER SUITS ARE NOT TAKING A TIME OUT


 
Inovio CEO's Vaccine Statements
 
There are many stories about a recent shareholder lawsuit filed over Inovio's CEO making public claims of developing a COVID-19 vaccine. The complaint alleges the price of the company’s shares rose more than 10 percent in the next few days after this televised statement. It would seem an activist short seller had a hand in the stock's fall. There was a demand the SEC stop the trading of the stock, and once that occurred the price plummeted. Read more here.
 
Cruise Lines Over-Promised
 
In addition to lawsuits from cruise lines' passengers suing for "personal injury" type damages, Norwegian Cruise Lines also is being hit with a shareholder suit. The lawsuit claims Norwegian Cruise Lines over-promised on its ability to weather the economic impact of a COVID-19 pandemic. The complaint also tries to capitalize on generalized and typical commitments to passenger and crew safety. Read more here.
 

PATENT TROLLS ARE STILL HIDING UNDER BRIDGES


 
Limited Use of Patented Technology
 
The next two links relate to a patent suit targeting businesses supposedly using "Theronos" patented technology. An entity sued to stop the use of the patented technology - including suing an entity allegedly using some of the technology to try to develop a COVID-19 test. The plaintiff, Labrador Diagnostics LLC, said it would allow third parties to use its patented technology to develop COVID-19 tests, but the company now insists it is seeking protection against other uses of the technology for which it claims to hold a patent. Click here and here to read more.
 

FORECLOSURES AND DEBT COLLECTION LAWSUITS STILL COMING DESPITE LOOMING MANDATORY AND EVEN VOLUNTARY RELIEF


 
Borrowers Sue to Stop Foreclosures in WV
 
A couple sued Bank of America seeking a class action to stop all foreclosures in West Virginia. Plaintiffs had not been able to make payments, and the process to collect the debt began long before the emergence of the COVID-19 pandemic. Meanwhile, Bank of America has announced it also will implement a series of actions aimed at creating financial ease for its customers struggling during the unprecedented challenges the novel coronavirus has presented. The Bank is allowing most customers economically impacted by the virus' spread to request some sort of temporary relief. The company is requesting all requests be made through Bank of America’s Client Resources website. Click here to read more.
 

ACTIVISTS ARE STAYING ACTIVE


 
Lawsuit to Stop MA from Limiting Gatherings
 
Activists in Massachusetts sued to stop the state from limiting the size of gatherings. Plaintiff sought an injunction against a ban on gatherings of more than 50 people. The court denied the motion. In Massachusetts, gatherings are restricted to 25 people. Read more here.
 

COUNTRIES HELD RESPONSIBLE FOR CIVIL DAMAGES CAUSED BY A VIRUS?


 
Florida Residents Sue China
 
China is the target of this lawsuit seeking to hold it liable for damages incurred as a result of the COVID-19 pandemic. Not by a business or even by another government - instead, by two Miami-Dade County residents and two Palm Beach County residents. According to the lawsuit, "named plaintiffs have been in close proximity to the negligent conduct causing their injuries." The lawsuit seeks billions of dollars in compensatory damages for those who have suffered personal injuries, wrongful deaths, property damage, and other damages as a result of China's failure to contain the coronavirus. While this is a long shot by any stretch, is there some way to seek recovery for business losses in some Court if a government is found lacking in its disclosures or response involving COVID-19? Click here to read more.
 

BLAMING THE GOVERNMENT - SIGN OF THINGS TO COME?


 
Governments are being challenged on doing too much or not enough. Businesses may have to consider civil litigation to obtain governmental relief. Here are a series of cases taking early action in that regard.
 
Inmates Sue for Release
 
The plaintiff, under the auspices of seeking to help at-risk inmates, casts blame on governmental authorities for its response to the COVID-19 pandemic. This suit seeks the release of inmates considered at serious health risk from COVID-19. The Legal Aid Society sued the Department of Corrections to obtain the release of 116 inmates in city jails. The group targeted for release either have conditions such as asthma, heart disease, and diabetes, or are age 50 or older. The inmates are behind bars while they await trial or returned after violating their parole conditions. Click here to read more.
 
Suing to Close Florida Beaches
 
A lawsuit seeks the mandatory closure of Florida Beaches after the Government delayed doing so. Click here to read more.
 
Human Rights Group Sues L.A. for Lack of Services
 
A lawsuit was filed last week in Los Angeles federal court by the L.A. Alliance for Human Rights, a coalition of skid row-area business owners, formerly homeless, and disabled city dwellers who contend the apparent lack of services and alleged negligence on the part of city and county officials has resulted in a multitude of dangers in the area. Click here to read more.
 

FAMILIAR QUESTION OF INDEPENDENT CONTRACTOR VERSUS EMPLOYEE COMES INTO FOCUS


 
Ride Share Drivers Sue for Paid Sick Leave
 
The federal government has mandated limited paid sick leave for employees,( Link to Spilman blurb here ) but will employees and non-employees demand more? Drivers for Uber and Lyft are asking a judge to order the ride-hailing companies to pay them sick leave — as employees, not contractors — to protect both their customers and the public from possible exposure to the coronavirus. "At the core of the lawsuits against Uber and Lyft is the broader, high-stakes legal dispute over whether the two San Francisco-based ride-hailing firms can continue to treat their drivers as independent contractors rather than employees. The suits argue Uber and Lyft drivers are employees, so the companies must abide by state law that mandates sick days be accrued at the rate of at least one hour for every 30 hours worked. But California’s paid sick leave law does not apply to independent contractors." Click here and here to read more.
 

ANTICIPATING FORCE MAJEURE LAWSUITS


 
So far there are no known lawsuits invoking the force majeure language or clauses in contracts, but it is likely a flood of litigation involving that legal concept is coming. Contracts and any specific force majeure language should be reviewed and analyzed for any possible creative relief whether you are currently facing contractual demands that cannot be met, are not being met, or might not be met in the future as supply chains continue to be stressed. Click here to read more.
 

HAND SANITIZERS' HEALTH AND SAFETY CLAIMS ARE CHALLENGED IN MULTIPLE SUITS


 
Purell and Germ-X Manufacturers Face Class Actions
 
Class-action lawsuits have been filed against manufacturers of Purell and Germ-X hand sanitizers. In both cases, plaintiffs' counsel cite a recent warning from the FDA as a basis for some of their claims. The plaintiffs in the Purell suit claim they falsely advertised the products as being protective against diseases such as the flu, MRSA and Ebola. The Plaintiffs in the Germ-X suit claim Germ-X falsely advertised it could reduce the chance of infection from the flu and other viruses – including Coronavirus. The suits are recent, but the claims predate the COVID-19 pandemic. Click here, here and here to read more.
 

ALLEGED PRICE GOUGING IS ALREADY A TARGET OF LITIGATION


 
Florida Lawyer Files Class Action Against Amazon
 
In this Florida suit, a consumer, who is a lawyer, filed a class action suit on her own behalf and all those similarly situated alleging Amazon dramatically increased its prices for personal hygiene products in light of the COVID-19 pandemic. The Complaint acknowledges the increased demand and market forces but alleges that the significantly increased prices for certain goods violates Florida's Unfair Trade Practices Act. It has been reported that Amazon has taken action to identify unscrupulous vendors on its site, but this suit was filed early in the crisis and involves purchases already made. We will continue to follow the case for further developments. Click here and here to read more.
 

 



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