More Covid Conundrums

The novel coronavirus has profoundly altered the legal landscape over the past 12 months.  Courts have been forced to change their operating procedures, restrict access, amend scheduling orders (often more than once), postpone trials, and conduct almost all hearings and other routine court business via Zoom.  For example, “Since the start of the pandemic, Texas courts have held more than 1 million virtual hearings, leaving [judges] often in charge of guiding others through technical difficulties.”  In addition, the widespread and varied impacts of COVID-19 on business operations has generated a wave of litigation.  Here are two examples of the kinds of cases that are popping up all over the country and whose numbers will undoubtedly be increasing.

Government-mandated changes in business operational protocols have negatively impacted workers in a wide variety of industries, but you might not have thought marijuana farming was one of them.  In Montelongo v. Valley Harvest LLC, docket #5:21-cv-00235 (U.S. District Court, N.D. California), marijuana farmworkers allege failure of their employer to compensate them for time spent on line waiting to be temperature checked each day when they arrived for work, failure to mandate social distancing in the workplace, and retaliatory termination of their employment when they complained about these issues.  The complaint sets forth claims under the Americans with Disabilities Act and California state labor law.  The plaintiffs seek damages to compensate for lost wages, including back pay, front pay and other lost benefits.;,_LLC_et_al.  

The Covid Coverage Litigation Tracker (CCLT), developed by Insurance Law Analytics and sponsored by the University of Pennsylvania Law School, “contains data on insurance coverage cases related to the Covid 19 pandemic.  The data collected for each coverage case include policyholder name and industry code; insurer name and AM Best number; policyholder and insurer law firms; the court in which the case is litigated; the coverage sought; the type of insurance policy and state of issue; the relevant insurance policy forms; whether class action status is sought and, if so, the alleged class or classes; and information regarding key litigation events.”  The current count is 1468 cases (you read that right).  Here is one example:

In Highland Park Ford Lincoln v. Erie Insurance Exchange, docket #1:21-cv-00038 (U.S. District Court, W.D. Pennsylvania), the plaintiff, operator of an auto dealership in Illinois, had to cease sales operations and shut down its showroom in March 2020 due to state-mandated efforts to contain the COVID-19 pandemic.  It was allowed to reopen at 50% capacity in May, only to be ordered to reduce occupancy to a maximum of 25% in November.

In the complaint, Highland claims that its “all-risk” commercial property policy broadly provides coverage to loss of business income.  The dealership is seeking to represent a nationwide class of all Erie commercial policyholders who have been denied coverage regarding their COVID-19 related losses.  Most states have issued similar compulsory shut-down orders, and small businesses across the country have experienced property damage and revenue loss covered by commercial property policies similar to its own, Highland says.  It further alleges that it has incurred significant revenue loss due to COVID-19 and government closure orders.  The car seller says its property suffered direct physical loss or damage because its covered facilities were rendered unusable and lost their intended function after being forced to operate on a limited basis.  The issue is whether Highland’s business interruption losses are covered by its policy with Erie, which Erie of course denies.,_INC_v_ERIE_INSURANCE_EXCHANGE.

Erie is one of two insurance carriers currently facing multidistrict litigation over their denial of commercial policyholders’ claims for pandemic-related losses.  Highland’s suit could be bound for the MDL – particularly since it was filed in the court in which the U.S. Judicial Panel on Multidistrict Litigation has already transferred 13 similar cases against Erie.



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