The coronavirus pandemic is imperiling more than lives and livelihoods. It’s also leading to lawsuits.
Workers are suing companies. Businesses are suing insurers. Prison inmates and migrants in detention, abortion providers and gun shop owners are suing federal and state governments.
Colleges, cruise lines and even China have been among the targets of lawsuits seeking damages for the COVID-19 calamity. And the nation’s notoriously litigious society is just getting started.
“This early litigation is really, from our vantage point, the tip of the iceberg,” says Harold Kim, president of the U.S. Chamber Institute for Legal Reform. “The level of litigation could really go into so many different directions.”
It’s a topic trial lawyers don’t want to harp on in the midst of the pandemic, when the U.S. death toll is mounting by more than 1,000 every 48 hours. But their list of real and potential victims is long, from front-line doctors and nurses, patients and victims, to employees and customers of businesses that must be open or should be closed.
Then there are businesses that are losing millions of dollars, only to discover their insurance policies likely exclude pandemics. And there are insurers facing the likelihood of monumental claims that they may not be able to pay, leading to calls for a government bailout or Sept. 11-style victims’ compensation fund.
“You’ve got the pandemic, and then you’ve got the government response to the pandemic” with business closures and social lockdowns, says Jimi Grande, senior vice president of government affairs at the National Association of Mutual Insurance Companies.
“The challenge is, how much of it needs to be litigated, and how much of it is because we have a new, massive problem facing the globe that government’s got to deal with.”
Among the most obvious targets for lawsuits will be the nation’s hardest-hit nursing homes, many of which were caught by surprise as patients swiftly succumbed to the coronavirus.
Another industry at huge risk: cruise lines on which passengers were trapped for days at sea, unable to disembark as the virus spread.
Securities lawsuits are likely to be filed by shareholders claiming actions or omissions by Wall Street CEOs depressed their stocks’ value. Contract disputes over canceled events are inevitable, leading to battles over the fine print of “force majeure” clauses intended to define unforeseeable circumstances.
Even when the crisis lessens and businesses reopen, their protocols – from cleaning to social distancing – may be fodder for legal action.
“We’re seeing a collision of old laws and frameworks for justice that will be colliding with all new facts,” says Barb Dawson, a senior partner at Snell & Wilmer who chairs the American Bar Association’s section of litigation. “We’re in an entirely new world.”
False claims, price gouging
Type “coronavirus lawsuit” into Google and watch the numbers explode. A recent attempt turned up nearly 3 billion hits in one-third of a second.
There’s a class action lawsuit filed last week by the American Federation of Government Employees, charging that workers were denied hazardous duty pay after being exposed to the coronavirus at the Bureau of Prisons, Department of Veterans Affairs and Agriculture Department.
“Our folks are getting sick,” says David Borer, the union’s general counsel. “We’re prepared to carry it through. We’re in it for the long haul.”
There are lawsuits filed by restaurateurs seeking insurance coverage for “business interruption.” Several of the most famous, including Thomas Keller and Wolfgang Puck, have created an organization under the heading “We Are BIG,” for Business Interruption Group.
“We need insurance companies to do the right thing and save millions of jobs,” its website says. “If Insurers do not start paying insurance business claims, we will bring BIG legal action in every state.”
False advertising claims have been leveled at manufacturers of hand sanitizers and a drug company claiming quick action on a coronavirus vaccine. Price gouging claims have been raised following examples of exorbitant prices on Amazon and other online shopping sites.
The list of lawsuits goes on and on. Students and parents are suing the Arizona Board of Regents, seeking refunds on room and board fees paid to the state’s three shuttered universities. Immigration and prisoners’ rights groups have sued the federal and state governments, claiming inhumane conditions and demanding early release.
Lawsuits blocking states from eliminating access to abortions during the pandemic have been filed in Texas, Alabama, Mississippi, Iowa, Ohio and Oklahoma, and abortion rights groups have won early court victories. Equally widespread have been lawsuits by gun rights activists in California, New Jersey, North Carolina and Pennsylvania seeking to remain open as essential businesses.
‘You may be entitled…’
There will be more to come. Much, much more.
Click on “Top Class Actions” and you’ll get this advice: “If you believe that your rights were violated by a company as a result of the coronavirus pandemic, you may be entitled to compensation. Fill out the form on this page for more information.”
Some of the nation’s biggest law firms are bringing together attorneys specializing in different areas to create new coronavirus practice groups, task forces and resource centers.
Business and insurance companies are preparing for an onslaught. “I worry the plaintiffs’ bar will bring opportunistic class action lawsuits down the road,” says Steven Lehotsky, chief counsel for the U.S. Chamber Litigation Center.
Winning those lawsuits may not be easy. Already, Congress has shielded manufacturers and distributors of respiratory devices, as well as volunteer health care providers who are not reckless or grossly negligent.
Beyond confined populations, such as patients in nursing homes and passengers aboard cruise ships, it may be difficult for those injured by the virus – as well as those surviving its victims – to prove how or where it was contracted.
Some of the toughest lawsuits to win will be those against governments and public officials, from China to President Donald Trump and the nation’s governors. One novel approach has been raised in Bucks County, Pa., where a handbell production company and others contend that shutting down businesses represents an uncompensated seizure.
For now, though, the leader of a government union representing thousands of health care workers is more focused on the crisis than the court fights to follow.
“Legal action is going to take a long, long time,” says Lee Saunders, president of the American Federation of State, County and Municipal Employees. “We’ve got an immediate problem that we’ve got to deal with.”