Coronavirus Litigation: The Week In Evaluation
Email Celeste Bott
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Law360 (April 29, 2021, 7:47 PM EDT) —
Google has been hit with a lawsuit over an alleged security flaw in its COVID-19 contact tracing tool, UPS wants out of a suit claiming it endangered workers’ health and safety during the pandemic, and the European Union says it will take AstraZeneca to court over deliveries of its coronavirus vaccine.
While courts across the country are altering procedures, restricting access and postponing certain cases to stem the spread of the coronavirus, the outbreak has also prompted a wave of litigation across the country.
Here’s a breakdown of some of the COVID-19-related cases from the past week.
The former director of nursing at a Georgia health care facility hit the facility’s owner Thursday with a federal lawsuit claiming she was wrongly fired for taking medical leave while sick with COVID-19.
Melissa Francis, a Georgia resident, said CorrectLife Bostick LLC fired her in early June after she had been hospitalized and quarantined at home for several weeks with the virus. She said the company first alleged her termination was over a patient injury that occurred while she was on medical leave, but then pivoted to say she was fired for poor performance.
Francis says CorrectLife had never communicated concerns about her performance and that its stated reasons for her termination were a pretext for retaliation over her exercising her rights under the Family and Medical Leave Act.
UPS, meanwhile, urged a California federal judge Thursday to toss a former employee’s proposed class action accusing it of systematically endangering workers’ health and safety by leaving them vulnerable to exposure to COVID-19, arguing that the ex-employee’s claims belong before regulators, not a judge.
United Parcel Service Inc. told U.S. District Judge William Alsup during a remote hearing Thursday that former employee Desdnie Hess’ claims should be nixed, arguing that the dispute is really a workers’ compensation issue that should be referred to the state regulator.
Two former employees of a Pennsylvania food company said they were wrongfully denied leave to care for their children during the early days of the COVID-19 pandemic and then terminated in retaliation for taking time off, according to lawsuits filed in federal court.
In separate complaints filed Monday, Warren Rivera-Nigaglioni and Matthew Shepardson both alleged Lancaster County, Pennsylvania-based John F. Martin & Sons falsely claimed it had more than 500 employees in order to duck certain requirements of the Family and Medical Leave Act and the Families First Coronavirus Response Act, including the parts that required the company to provide leave for workers who had to provide child care because schools or other child care options were unavailable during the pandemic. After both men took time off anyway to care for their families, they were terminated, the suits said.
And a D.C. federal judge said Lyft’s arbitration agreement dooms a driver’s lawsuit seeking sick leave benefits amid the COVID-19 pandemic, finding that ride-hail drivers aren’t workers engaged in interstate commerce who’d otherwise be exempt from arbitration.
U.S. District Judge Ketanji Brown Jackson issued a 35-page opinion agreeing with Lyft Inc. that it had a binding and enforceable arbitration agreement with plaintiff Cassandra Osvatics and that Osvatics didn’t fit the definition of an interstate transportation worker to qualify for the Federal Arbitration Act’s Section 1 exemption, which could keep her dispute in court.
The future of Northeastern University students’ putative class action seeking a partial tuition refund for the school’s shift to remote classes amid the pandemic could come down to whether a force majeure clause wins out over the argument that its terms was buried in a document that described itself as not a contract.
In arguments Thursday morning before U.S. District Judge Richard G. Stearns over Northeastern’s request for a quick, pretrial win in the case, the judge focused his questioning on whether the school gave clear enough notice to students of the agreement’s terms.
Northeastern told Judge Stearns that students should have been paying “close attention” to the agreement they clicked on during a mandatory screen that appeared before they could access university websites for class registration and grading. The university said it never promised in-person classes.
The students told the court that the way the school buried the delivery of services terms at the back of the handbook that wasn’t linked directly from the portal screen means it didn’t incorporate it into the agreement.
And a Pennsylvania federal judge ruled Tuesday that the University of Pittsburgh made no promise to provide in-person learning to students who launched a proposed class action last May seeking tuition refunds after the school moved its classes online due to the coronavirus pandemic.
U.S. District Judge William S. Stickman IV granted Pitt’s bid to dismiss the class claims brought by students Claire Hickey, Akira Kirkpatrick, Valeri Natoli, Candace N. Graham, Nicholas Bowes and Carly Swartz, saying the students haven’t shown the university broke any promise related to in-person instruction or tuition.
In their suit filed May 8, the undergraduate students said Pitt collected tens of thousands of dollars in tuition, housing and meal costs, but closed the campus, canceled in-person classes and switched to an allegedly inferior online instruction model for the spring 2020 semester.
A former New York Post photographer claims the tabloid newspaper illegally fired him after he complained about its refusal to provide staff photographers and reporters with protective gear amid the coronavirus pandemic, according to a lawsuit filed Monday in Manhattan.
Photojournalist Taidgh Barron said the Post put its reporters and photographers in danger when it sent them on newsgathering assignments during the pandemic without providing proper personal protective equipment. When he complained, the tabloid unlawfully fired him, according to the complaint.
In failing to provide protective equipment to reporters and photographers covering both the pandemic and civil unrest during Black Lives Matter protests, the Post violated the federal Occupational Safety and Health Act, Barron alleged.
The European Union said Monday it has taken the decision to start legal action against AstraZeneca PLC over deliveries of its COVID-19 vaccine, alleging that the U.K.-headquartered pharma giant has failed to honor contractual obligations.
The European Commission — the EU’s executive arm — has been criticized as slow to organize supplies of doses for vaccination programs. It alleges that AstraZeneca has failed to deliver doses of of the vaccine according to the prearranged schedule under delivery agreements.
“Our priority is to ensure COVID-19 vaccine deliveries take place to protect the health of the EU,” the EU’s commissioner for health, Stella Kyriakides, tweeted on Monday. “This is why the EU Commission has decided jointly with all Member States to bring legal proceedings against AstraZeneca. Every vaccine dose counts. Every vaccine dose saves lives.”
Kyriakides has expressed serious concerns since January regarding AstraZeneca’s intention to supply considerably fewer doses in the coming weeks than agreed and announced.
A COVID-19 contact tracing tool co-created by Google is exposing unwitting Android users’ sensitive personal information to dozens of third parties due to a “security flaw” that enables diagnoses to be linked to specific individuals, according to a proposed class action filed in California federal court Tuesday.
Plaintiffs Jonathan Diaz and Lewis Bornmann claim that Google LLC has violated the California Confidentiality of Medical Information Act as well as their common law and constitutional privacy rights through its implementation of the COVID-19 exposure notification system, which the tech giant developed along with Apple Inc.
The Google-Apple Exposure Notification System, which the companies rolled out last May, is designed to assist governments across the globe with tracking the spread of COVID-19 through smartphone apps that alert users who come in close contact with someone who tested positive.
Personal Injury and Medical Malpractice
A jurisdictional issue to be decided by the Eighth Circuit in a suit alleging Tyson Foods Inc. mishandled a COVID-19 outbreak at an Iowa plant could set a legal precedent streamlining injury litigation over coronavirus exposures and deaths, attorneys say.
In the closely watched case, the Eighth Circuit said Tuesday that it will hear oral arguments before deciding whether a federal or state court will adjudicate a suit accusing the meat processing giant of repeatedly lying to its Waterloo, Iowa, plant employees and knowingly risking their health during the early stages of the pandemic, resulting in more than 1,000 worker infections and at least five deaths.
At issue is whether the company can invoke the Federal Officer Removal Statute, which allows certain cases to be removed from state to federal court if a federal officer or agency, or an entity working under a federal officer, is involved. Tyson claims that because it was acting in accordance with then-President Donald Trump’s April 2020 executive order under the federal Defense Production Act, which declared meatpacking plants critical infrastructure amid the pandemic, it was effectively made a federal officer.
Missouri lacks standing to challenge a federal law’s prohibition against using federal coronavirus aid to offset tax cuts, the U.S. Department of the Treasury said, arguing that the state hasn’t shown any concrete injury that may result from the law.
Treasury has asked a federal court to deny a preliminary injunction that Missouri is seeking against the department and its secretary, Janet Yellen, from enforcing a clawback provision in the American Rescue Plan Act. Treasury said Missouri’s challenge to the act isn’t ripe because the state hasn’t passed any tax cuts that may be offset by federal aid.
Missouri’s “complaint and preliminary-injunction motion are silent as to how it intends to use Rescue Plan funds, nowhere even suggesting that it plans to use them in a manner inconsistent with the offset provision,” Treasury said in a brief, filed in the U.S. District Court for the Eastern District of Missouri.
An Ohio city is authorized by a state law to tax employees working remotely outside the city during the coronavirus pandemic, a state court ruled, dismissing a lawsuit asserting that the law violated employees’ due process rights.
The Franklin County Court of Common Pleas, in a decision Tuesday, rejected a challenge by the Buckeye Institute claiming that Ohio’s temporary law, H.B. 197, deeming remote work performed during the pandemic to occur at an employee’s principal place of business, violated the state and U.S. Constitutions.
Judge Carl Aveni sided with Columbus Auditor Megan Kilgore and state Attorney General Dave Yost, finding that the General Assembly did not infringe upon due process rights when regulating taxes within the state. Judge Aveni noted that Ohio courts have interpreted the state constitution to authorize the Legislature’s regulation of municipal taxation, including coordinating limitations between municipalities.
And a proposed class of Missourians asked a state circuit court to undo St. Louis’ rules on non-city resident tax refunds for days worked outside the city, saying they would suffer irreparable harm absent a temporary restraining order.
In two filings, the nonresidents asked the court for a temporary restraining order and preliminary injunction against the city and its revenue collector, Gregory Daly, to undo the limits on nonresident refunds of the city’s 1% earnings tax that the residents argue are unlawful and unconstitutional.
Mark Boles, Nicholas Oar, Kos Semonski and Christian Edward Stein III said Daly’s guidance and additional documentation requirements for refund requests effectively limited tax refunds to nonresidents traveling for work and excluded individuals teleworking outside the city, violating the state and U.S. Constitutions.
The U.S. Department of the Treasury won’t have to dole out interim payments to tribes that are suing the agency over the amount of virus relief funds they were allocated, but it will have to set aside an additional $9.6 million to “ensure that the disputed funds are not dissipated.”
U.S. District Judge Amit P. Mehta dropped the order Monday, three days after he spent an hour and a half hearing the tribes out on why they needed the relief sooner rather than later and how they were in danger of losing their money if he didn’t order the funds set aside.
But because the government promised it was days away from unveiling the new methodology it planned to use to recalculate which tribes were owed what, Judge Mehta said Thursday that he was leaning toward just waiting. That sentiment was echoed in the D.C. federal judge’s order.
Factory Mutual Insurance Co. has urged a Pennsylvania federal judge to throw out the Philadelphia Eagles organization’s suit seeking coverage for its losses due to COVID-19 shutdown orders, saying the NFL team has failed to show any physical loss or damage to property, while also citing multiple exclusions.
In a 24-page bid vying to dismiss the suit, the insurer argued that the presence of coronavirus itself does not cause physical loss or damage.
On Monday, a Louisiana federal judge refused to toss a New Orleans restaurant’s COVID-19 insurance coverage suit against State Farm, finding that although the eatery hasn’t shown that its loss should be covered by the policy, it is permitted to fix the deficiencies in its complaint.
The restaurant, Muriel’s Jackson Square, is claiming that State Farm Fire and Casualty Co. has wrongly refused to cover its business income losses stemming from the pandemic and resulting closures. According to the June 2020 suit, Muriel’s purchased an “all-risk” policy that included a civil authority provision that should’ve applied to those losses. But Chief U.S. District Judge Nannette Jolivette Brown on Monday agreed with State Farm that Muriel’s has not sufficiently alleged direct physical loss to the covered property and that the policy’s virus exclusion precludes the restaurant’s claim for coverage.
Also on Monday, an Illinois federal judge allowed Zurich American Insurance Co. to transfer the Freebirds World Burrito chain’s $100 million pandemic-related loss coverage suit to Florida, saying it would save judicial resources as Zurich has filed a “mirror-image” suit against the chain owner there.
U.S. District Judge John Fitzgerald Kness rejected the Tavistock Restaurant Group’s bid to remand the case to state court and granted Zurich’s request to move the case to Florida, saying that the policy in question had been obtained in the Sunshine State and suit dealing with the same issue was pending there.
And a Florida restaurant chain has urged the Eleventh Circuit to revive its suit seeking to force Zurich to cover its pandemic-related losses, saying a lower court erred by following the appellate court’s previous unpublished ruling to deny coverage.
First Watch Restaurants, which has some 400 brunch locations spread across 29 states, said the district court wrongly relied on the Eleventh Circuit’s unpublished opinion in Mama Jo’s Inc. v. Sparta Insurance Co. to conclude that its COVID-19-related business interruptions are only economic losses not covered by property insurance policies.
LA Fitness has urged a California federal court to throw out a U.K. insurer’s suit seeking to avoid coverage for pandemic-related losses, saying the dispute should instead be folded into the gym chain’s pending action against other insurers in Washington state court.
And a Third Circuit panel on Wednesday wanted to know what unique and unanswered questions of state law led federal judges in Pennsylvania and New Jersey to decline jurisdiction over three lawsuits brought by businesses seeking insurance coverage for their losses stemming from the COVID-19 pandemic.
In Washington, Evanston Insurance Co. urged a federal court to toss a cryotherapy clinic’s putative class action over pandemic-related losses, arguing that a growing number of courts this past year have held that the coronavirus doesn’t cause direct physical loss or damage to property.
Glacial Cryotherapy LLC doesn’t allege that the coronavirus was detected at its Seattle-area cryotherapy clinic or that it repaired or replaced any of its property, Evanston told U.S. District Judge Barbara Jacobs Rothstein on Monday, asking for the business interruption suit to be dismissed.
Cincinnati Insurance Co. has urged the Seventh Circuit not to revive a steakhouse and brewery’s COVID-19 business interruption suit, saying a majority of decisions in Illinois and across the country have held government orders don’t cause a physical loss or damage to property.
U.S. District Judge David W. Dugan got it right when he found that there wasn’t any physical alteration to 4204 Main Street Brewing Co.’s property caused by government shutdown orders to curb the spread of the coronavirus, Cincinnati argued in its Wednesday appellate brief. These orders only restricted the congregation of people but didn’t cause any physical loss or damage triggering coverage, the insurer said.
And nonprofit group United Policyholders threw its support behind a dental office and the owner of furniture stores in their appeals over business interruption coverage for COVID-19-related losses, saying insurers are expected to cover the pandemic the same way they cover natural disasters.
United Policyholders told the Eleventh Circuit on Tuesday and the Seventh Circuit on Monday that businesses like R.T.G. Furniture Corp. — better known as Rooms To Go — and Sandy Point Dental PC are covered for government shutdown orders issued to thwart COVID-19. The inability to use the property is a physical loss covered under all-risk policies, the group said.
Other coronavirus insurance disputes were dismissed this week: Hartford Fire Insurance Co. has escaped a suit from famed California eatery The French Laundry seeking coverage for pandemic-related government shutdown orders, and a federal judge ruled that the owners of Pennsylvania restaurants Stove and Tap and Al Pastor can’t force the Hartford to pay for business losses. In Ohio, a federal judge on Thursday granted Steak ‘N Shake and a Zurich North America unit’s joint bid to end a suit accusing the insurance unit of illegally withholding coverage for COVID-19-related losses.
–Additional reporting by Melissa Angell, Daphne Zhang, Shawn Rice, Hailey Konnath, Matthew Santoni, Rosie Manins, Hannah Albarazi, Brian Dowling, Allison Grande, Abraham Gross, Nadia Dreid, Lauren Berg, Paul Williams, Lucia Osborne-Crowley, Y. Peter Kang and Linda Chiem. Editing by Alanna Weissman.
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