A look back at 2020's COVID-19 insurance coverage lawsuits
Lawsuits alleging that COVID-19 caused economic and physical harm did not reach the stratospheric proportions once predicted.
Pandemic insurance coverage and risk mitigation are just one area of many business practices that may be illegibly changed by the outcome of current and future COVID-19 lawsuits.
However, the amount of litigation alleging that COVID-19 caused harm, both economically and physically, did not reach the stratospheric proportions once predicted at the start of the pandemic.
But there were plenty of lawsuits related to the virus outbreak in 2020. Most of them targeted specific industries such as nursing homes, cruise ships, universities and insurance carriers. Additionally, cases against employers in 2020 had less to do with anticipated claims of COVID-19 exposure or unpaid wages, and more to do with wrongful termination.
Lawmakers keep a watchful eye
The debate over pandemic lawsuits reached Washington, D.C., where President Donald Trump recently signed a $900 million COVID-19 relief bill. The legislation excluded any liability protections. But for months, business groups and Senate Majority Leader Mitch McConnell, a Republican from Kentucky, pushed for them. At the same time, the American Association for Justice, the nation’s largest plaintiffs bar organization, has insisted that data show a limited number of pandemic cases in the courts.
“McConnell’s proposal is so outrageous because there are so few cases,” said Julia Duncan, senior director of government affairs at the AAJ. “However, those that have been filed raise critical issues of worker protection and nursing home safety that, but for these lawsuits, we wouldn’t be talking about at all.”
In fact, new filings of cases related to COVID-19 dipped in August and fell even further in November, to 588, one of the lowest levels since the start of the pandemic, according to the COVID-19 Impact Analyzer from Lex Machina, part of Lexis Nexis.
Heading into 2021, however, lawyers expect to see a continuation of the largest group of pandemic lawsuits: those brought against insurance carriers over business interruption claims. There also could be new employment lawsuits focused on the COVID-19 vaccine.
Here is a review of the 2020 lawsuits caused by COVID-19…
Business interruption claims
The largest category of lawsuits related to COVID-19 are those brought by restaurants, bars and other businesses against their insurance carriers after state and local governments forced them to shut down. According to Hunton Andrews Kurth’s COVID-19 Complaint Tracker, there were nearly 6,900 lawsuits in 2020 relating to the pandemic, and insurance disputes made up the largest group, with nearly 1,400 lawsuits.
Some of the cases are class actions, but most are not. Plaintiffs lawyers failed to get the insurance cases coordinated into multidistrict litigation, with some exceptions involving a few regional carriers.
So far, judges have ruled for both plaintiffs and defendants. According to the University of Pennsylvania Carey Law School’s COVID Coverage Litigation Tracker, judges in federal and state courts have dismissed 63 cases for good. They have dismissed 17 others, giving plaintiffs the chance to amend their complaints, but declined to dismiss 22 others.
“I don’t think we can draw any real patterns,” said Mark Chalos, a partner at Lieff Cabraser Heimann & Bernstein in Nashville, Tennessee. “They’ve gone in all directions at this point. It depends, in part, on the policy language and state law.”
Chalos, who represents businesses suing insurers, expected more cases in 2021.
Employment lawsuits
At the start of the pandemic, lawyers anticipated a “huge explosion” of employment class actions focused on layoffs and unpaid wages. Yet, according to the COVID-19 Employment LitWatch, compiled by Jackson Lewis, wage-and-hour cases accounted for only 78 of the 1,245 employment matters involving COVID-19, and only 6% of all employment cases overall were class actions. Data compiled by Fisher Phillips and Littler Mendelson had similar findings.
“Class actions, in general, have not come to fruition as predicted,” said Stephanie Adler-Paindiris, a principal at Jackson Lewis in Orlando, Florida.
She said many of the claims that lend themselves to class actions are not ripe yet, and employees are isolated from coworkers while working from home.
The largest group of employment disputes — 472 lawsuits, according to Jackson Lewis’ data—dealt with disability, leave and accommodation claims by employees who were unable to come back to work because they were sick or had to care for someone with COVID-19. Many address the Families First Coronavirus Relief Act, which Congress passed to provide paid sick leave and extended family leave relating to COVID-19. Interpreting the act is a “hot, hot topic” with “not a lot of precedent,” Adler-Paindiris said.
“It was such a comprehensive and complicated statute that it created a number of claims saying, ‘wait a minute, why am I not getting this additional leave, or this additional pay?’” she said. “There is a lot of litigation as to when people are entitled to additional pay or unpaid leave.”
Many cases allege wrongful termination, too. Adler-Paindiris said some employers are using COVID-19 to “clean house,” particularly if employees were not strong performers in the first place.
“This is a good opportunity to look at your organization as a whole and what you want your organization to look like in the next six months,” she said. “It creates litigation around the individual selection criteria.”
Going into the first six months of 2021, she predicted a “huge boost of class actions” dealing with systemic discrimination, as employers ask their workers to return to the office and potentially require them to take the COVID-19 vaccine, over which there could be “enormous litigation.”
“There will be class actions about religious accommodations, ADA accommodations, people who say because of the unique situations I have, I should get an accommodation and not have to get the vaccine,” she said. “There definitely could be class actions if an employer mandates it.”
COVID-19 exposure
Despite the focus on Capitol Hill on lawsuits alleging someone got COVID-19 due to exposure at work or at a place of business, those cases were limited in 2020.
“The proposal that McConnell was insisting on having as COVID immunity targeted lawsuits brought by individuals — consumers and patients — for COVID exposure, injury or death,” Duncan said. “And when you look at the database, out of 19 million infections in this country, hundreds of thousands of deaths, there are still, since the beginning of the pandemic, less than 400 cases filed relating to COVID injury or death.”
In its first Torts Litigation Report, released last month, Lex Machina tracked 173 tort lawsuits relating to COVID-19, most against cruise lines and nursing homes.
“Those cases just haven’t materialized by and large,” Chalos said. Lawyers filed them in limited circumstances, “where you have a corporation or big company controlling the entire environment where people are,” such as prisons, nursing homes, meatpacking plants or cruise ships, he said.
“But we’re not seeing really any cases of any significance in more transient environments, like stores or restaurants or bars or other local businesses,” he said.
Judges have dismissed many of those cases, such as those against Princess Cruise Lines, after concluding it was difficult to prove the plaintiff got COVID-19 because of the company’s negligence.
Chalos’ firm has filed lawsuits against Carnival Corp., owner of Princess Cruise Lines and Holland America, including a class action that a federal judge refused to certify but also did not dismiss. Chalos attributed the various rulings in the cruise ship cases on the “evolving understanding of how this virus works.”
“For passengers who have alleged, for lack of a better word, contemporaneous symptoms, or developed them during or shortly after the time they were on Carnival cruise ship, the judges have denied the motions to dismiss in our cases,” he said.
The numbers aren’t much different in the employment context. Although some have sued their employers, such as Tyson Foods, McDonald’s and Amazon, most have not. Jackson Lewis’ data found only 118 lawsuits relating to workplace safety and COVID-19.
Adler-Paindiris attributed her firm’s data to “a strong workers’ comp bar in most states” and the fact that nearly 90% of employees now work from home.
“You’re really talking about health care, manufacturing, retail, where people did come back to work,” she said. “So I don’t see that being a huge boon.”
Consumer refunds
Many of the consumer refund cases brought due to COVID-19 cancellations targeted universities, which abruptly went online in spring 2020. Judges have allowed most of the cases, which often focus on contract language, to go forward.
“What I’ve seen in the decisions is that courts are closely evaluating whether you have alleged, from all the different documents and public information from the university, that you had a reasonable expectation you’d have in-person learning,” said Sarah Hartley, a partner in the Boulder, Colorado, office of Bryan Cave Leighton Paisner. “It sounds straightforward, and in the end, whether that will constitute a promise to provide in-person learning is something way down the road, but courts are finding that’s enough to defeat a motion to dismiss.”
Her firm has tracked 255 cases against higher education over unpaid refunds.
Another group of consumer cases focused on the travel industry, particularly airlines and event booking sites like StubHub.
Lawyers do not expect refund class actions to remerge in 2021, given that consumers are now aware of the risks of paying tuition for college that might end up virtual or purchasing plane tickets for potentially canceled trips.
“The universities, from my experience with them, are doing their best to continue to provide high-quality education to their students, and these are really, really challenging circumstances,” Hartley said.
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