There's been an increase in covid lawsuits against businesses in the past few months, are more on the way? The coronavirus has upended markets, disrupted supply chains, and forced quarantines. It's all fertile ground for lawsuits.
If you, your business, or someone you know has been negatively impacted by COVID, you may be eligible for compensation. Start your claim today to learn if you have a case.
Hospitals, restaurants, daycare centers, nursing homes, and hotels may face claims that they didn't take adequate steps to protect people. Shareholders can sue if companies fail to respond effectively to the epidemic. Businesses are scrambling to see if their insurance policies cover disruptions caused by the virus. Governments are reviewing their quarantine powers.
"The impact on the global supply chain, I think, is going to be dramatic," said Paul White, a partner with Wilson Elser Moskowitz Edelman & Dicker, who represents insurers.
Some cases have already been filed: The pilots' union at American Airlines Group Inc. sued the carrier to stop it from serving China, while the city of Costa Mesa, California, sued the U.S. government to halt the transfer of quarantined cruise passengers to a state-owned facility there.
Here's a survey of the likely legal landscape and Covid lawsuits against businesses.
The fallout from business disruptions will be "very significant in a way we haven't seen before," said Joe Balice, a litigator with Brutzkus Gubner in Los Angeles who represents clients in the textile and apparel industry, many of them hit by factory shutdowns in China.
Manufacturers may sue over missed deadlines, while suppliers could sue energy companies, which have already stopped taking some shipments as transportation demand dwindles. Do Covid lawsuits over these businesses make sense or is there something else that be done?
Michael Hurst, a partner at Lynn Pinker Cox & Hurst in Dallas, expects to see a surge in disputes over whether force majeure clauses free a contract's parties from their obligations in an "act of God" applying to the outbreak.
"Someone can say they can't perform under a contract because they can't get supplies from China, or their people wouldn't come to work," Hurst said. "The other side might say you're being too cautious or just using that as an excuse." This will likely increase Covid lawsuits against businesses.
Insurers are likely to find themselves in court. Balice said businesses are poring over their policies to see if they're insured against the coronavirus fallout. "And a lot will find out they are not," he said.
Business disruption insurance claims typically deal with physical damage, like a factory that has burned down, not closures ordered to control a virus, Balice said. "This could be an area of insurance litigation for many years to come," he said. Covid lawsuits against businesses that don't have this kind of coverage will become great.
"Companies which already faced business challenges in the Chinese market could get hit hard if they have limited resources," said Philipp Senff, head of compliance at the law firm CMS in China.
If you, your business, or someone you know has been negatively impacted by COVID, you may be eligible for compensation. Start your claim today to learn if you have a case.
Some companies have already limited business travel and encouraged employees to work from home. Several industry conferences have been scrapped to prevent large gatherings from spreading the virus.
Some fear they may be liable for workers' participation in meetings or corporate events where employees are exposed. At the same time, efforts to protect staff could run afoul of privacy rules.
Didn't expect to see this one day in the EU courts.
— Stéphanie Bodoni (@StephanieBodoni) via Twitter March 3, 2020
"What can they and can't they ask their workforce about their potential exposure to the virus, travel activities, and medical history?" said David Newman, a partner at Morrison & Foerster in Washington, who is leading the firm's task force on advising clients about the outbreak.
Domenique Camacho Moran, a partner with Farrell Fritz, who represents employers, said she had been contacted by clients with these very concerns, including one who said an employee caused a brief panic after disclosing a diagnosis of coronavirus — but not the one that's raising the global alarm.
"This is a fluid situation," Camacho Moran said. "The right answer on Monday may differ by the time we get to Friday." All of this will make Covid lawsuits against businesses complex and long-lasting.
Companies "may need to be more flexible in allowing employees to take sick leave and providing sick pay to motivate them to stay home," said Sloane Ackerman, a labor and employment lawyer with O'Melveny & Myers in New York.
Covid lawsuits against businesses that have daily contact with the public or who deal with captive are also a risk, said Carl Tobias, a University of Richmond law professor who teaches mass torts. He cited nursing homes, like the one in Washington state, whose residents have accounted for many U.S. casualties.
"The claim could be they didn't move quickly enough to protect residents once it was clear the virus was a danger, or they didn't have proper contingency plans in place," Tobias said.
Airlines have spent years in European Union courts battling and shaping rules on when they should compensate passengers. The EU's Court of Justice might again have to weigh in on whether the companies could claim extraordinary circumstances beyond their control to avoid new payouts, EU Transport Commissioner Adina Valean said at a press conference Monday.
In Germany, the season for annual general meetings is about to start. These meetings — which must be held within the first eight months of the year — can be big, filling Olympic stadium halls. While it's still early to gauge what will happen, lawyers are already exploring what can be done with virtual participation and voting.
If you, your business, or someone you know has been negatively impacted by COVID, you may be eligible for compensation. Start your claim today to learn if you have a case.
Government efforts to fight the virus through mandatory quarantines and other such steps are another potential source of litigation if members of the public push back.
Henry Greenberg, president of the New York State Bar Association and a former general counsel of the state's health department, said officials have "tremendous authority" to trace and isolate virus carriers based on a "vast body of law" over communicable diseases. The trick for government officials is to weigh public health against individual rights and avoid excesses, citing "some overreaction and stigmatizations" when health workers who treated Ebola patients in Africa returned to the U.S. in 2014.
Covid lawsuits against businesses involving the government have already arrived. In addition to Costa Mesa's suit over the proposed transfer of the cruise passengers, San Antonio has sued the U.S. Health and Human Services Secretary Alex Azar and other officials over the government's quarantine of a cruise passenger in the area after she was cleared by two tests for the virus. A third test came back positive — after her release.
A dozen passengers from the ship, the Diamond Princess, have contacted Miami-based Lipcon, Margulies, Alsina & Winkleman to explore litigation against Princess Cruises' parent company Carnival Corp., and several have retained the firm, partner Michael Winkleman said.
"It's a very difficult situation for the company, but they should have been familiar from handling previous norovirus cases on board," he said, adding that the question is "whether they pursued all reasonable and proper care."
The cruise line said it did.
Governments must also protect captive populations from infection. Dan Cogdell, a veteran Texas criminal defense attorney, said he has discussed with a state judge the viral threat posed by prisoners in a Houston lockup.
"The real danger is that the jails have terrible resources, and the coronavirus will likely spread like wildfire in the jail," he said. "And they'll bring it straight to the courthouse." Whether it's the government or covid lawsuits against businesses, we can expect to see a lot of claims.
Prisoners in the Harris County system, which houses the fourth-largest U.S. inmate population, are being screened, and the facility has quarantine experience from managing previous infectious disease outbreaks, said Jason Spencer, a spokesman for the system. However, should there be deaths or serious illnesses, we expect to see Covid lawsuits against businesses and these facilities.
If you, your business, or someone you know has been negatively impacted by COVID, you may be eligible for compensation. Start your claim today to learn if you have a case.
Other lawsuits popping up around the U.S. include claims indirectly related to coronavirus.
A medical staffing agency claims U.S. Citizenship and Immigration Services dragged its feet in reviewing applications for H-1B visas for skilled foreigners and that the delays threaten the supply of medical professionals needed to deal with the outbreak. This is a huge area where we can expect covid lawsuits against businesses or the government.
A suit seeking class-action status alleges that the maker of the hand sanitizer Purell exaggerates its product's powers to prevent illness.
And then there's the Manhattan lawyer who asked a court to excuse a delay in suing Consolidated Edison Co. for a trip-and-fall over a manhole cover. He explained it was "due to the extraordinary and unforeseen circumstance" of his being stuck in China for six weeks.
If you, your business, or someone you know has been negatively impacted by COVID, you may be eligible for compensation. Start your claim today to learn if you have a case.
–With assistance from Ellen Milligan, Jef Feeley, Tom Korosec, Laurel Calkins, Christian Berthelsen, Joel Rosenblatt, Karin Matussek and Stephanie Bodoni.
© 2020 Bloomberg
