Defense Digest, Vol. 26, No. 1, Spring 2020

The People v. COVID-19: Are You Ready for Some Litigation?

Undoubtedly, we will look back at 2020 as the year of COVID-19 and reflect on how the virus changed almost every aspect of our lives. While we may never think about things in quite the same way, life will—eventually—go back to normal (or assume a new “normal”). As we return to our jobs and daily lives, the reality of COVID-19 and how it brought the world to its knees may become a distant memory.

For some lawyers, however, COVID-19 may morph from an invisible threat of serious physical harm into a tangible business headache, in the form of litigation—and, make no mistake, it has already started. The first COVID-19-related lawsuits were filed weeks ago in early March, just days after the virus claimed its first life on United States soil. In the intervening weeks, scores have followed.

Much of the litigation that has been filed in the last eight weeks has focused on:

  • Who is responsible for the spread of COVID-19 (China? Cruise lines? Dishonest entrepreneurs looking to make an extra buck?);
  • How small businesses are going to deal with the economic impact of government-mandated shutdowns; and
  • When must individual liberties take a back seat to the state’s interest in “flattening the curve” and containing the virus?

The below cases give up a hint of what is to come and what we can expect in the weeks and months ahead.

Snake-Oil Salesmen, Fraudsters, and Other Bad Apples

As the fears of the novel coronavirus became more real to Americans, radio personalities, such as Alex Jones of “InfoWars” and televangelist Jim Bakker, began hawking COVID-19 “cures” containing colloidal silver (which has never been shown to be effective in viral infections but can turn your skin blue when taken in high quantities). Both have been directed by the Attorney General of New York to cease and desist from making such claims, and Bakker has also been sued by the state of Missouri for violation of the Missouri Merchandising Practices Act and unfairly targeting the elderly.

The Vermont Attorney General’s Office has sued a man for selling 42,500 “N95 respirator masks” to two local medical centers for $2.50 each. Unfortunately, what he delivered were actually surgical masks that retail for $0.10 a pop. He is being prosecuted civilly under Vermont’s Consumer Protection Act. Both Germ-X and a Target-brand hand sanitizer that claim to kill 99.9% of all germs have been the subject of class-action lawsuits in which it is alleged that the products inaccurately imply that they can prevent the spread of the virus.

Yikon Genomics was forced to cease online sales of a $39.99 at-home COVID-19 test kit that had never received FDA approval and was fined $2,500 for every violation of the California Business and Professions Code of California. Meanwhile, two pharmaceutical manufacturers have been hit with class-action lawsuits after announcing that they had developed a coronavirus vaccine. After the CEO of Inovia Pharmaceuticals appeared on a television news show and stated that it had developed a vaccine, company stock quadrupled in price. was shut down by the Department of Justice for offering a fraudulent $4.99 vaccine kit.

Manufacturers, wholesalers, distributors and retailers of any items now commonly identified as part of the COVID-19 “safety kit”—hand sanitizer, masks (surgical, N95), gloves and disinfectant—should be careful as to advertisements for and representations about such products and vis-à-vis their ability to prevent, contain or “cure” coronavirus. They should certainly anticipate, as well, lawsuits arising from any product where untested or unfounded representations are made. Even Facebook has gotten into the act, filing suit against an advertiser that used “cloaking software” to conceal deceptive news and advertisements, including scams and “information” related to COVID-19.

Price Gouging, Hoarders and Scammers

It started with toilet paper, moved on to face masks, pulled in household cleaners, pasta and then, eventually, even hair clippers. People panic-shopped for disease-prevention goods and items meant to last them during the weeks (and weeks) of quarantine. As supplies dwindled—or outright vanished—the opportunists arrived, and consumers paid the price. Now, they’re looking for justice.

One class-action suit against Amazon alleges that it raised prices on toilet paper and hand sanitizer, claiming that it charged $99.00 for a 36-roll pack of toilet paper. The state of Alaska has brought an action against Juan Lyle Aune under its Unfair Trade Practices Act, alleging that he purchased every N95 mask he could find at area home improvement stores and then sold them for almost five times their normal retail price. Texas, Ohio and Wisconsin have take similar actions. 3M, the Minnesota-based manufacturer of the N95 mask, just filed a price-gouging action against a New York supplier of its mask, claiming that it attempted to sell them for up to 600% of their list price.

While most retailers, wholesalers and distributors observe ethical pricing protocols, and state and federal regulations making it illegal to inflate the price of essential items during times of crisis, there are unscrupulous bad actors out there. Such vendors should expect to be the target of consumer lawsuits and administrative actions by consumer protection agencies.

The Blame Game, Part I: It’s All China’s Fault

There are currently two class actions pending in the Southern District of Florida against the People’s Republic of China for allegedly failing to take adequate precautions to contain the coronavirus and for underreporting the enormity of the outbreak. In the complaint, the plaintiffs aver that they “have or are virtually certain to suffer physical illness or death, as well as emotional distress, and its physical manifestations, from the effects of the [COVID-19] outbreak, and other damages.” A group of small businesses in California have also initiated a class-action suit against China seeking $8 trillion in damages for their business interruption losses. A third lawsuit brought by medical workers alleges that China has been intentionally hoarding PPE, including gloves, gowns and masks, and refusing to export them for use in the United States.

The Blame Game, Part II: That Ship Has Sailed

Many people first became aware of coronavirus when cruise ships carrying American passengers became quarantined in foreign ports due to concerns about coronavirus infection. In the intervening weeks, it became apparent that many had been exposed to the virus and become ill. Not surprisingly, many sick passengers and their survivors have initiated lawsuits. Right now, Princess Cruise Lines faces the lion’s share of those actions, with nineteen filed against it in the United States District Court for the Central District of California. Two cases asserting passenger claims were recently begun in the Southern District of Florida against Costa Cruise Lines; in one, it is alleged that the cruise line knew that some departing passengers had symptoms of the virus, failed to fully sanitize the ship before new passengers boarded, and concealed information about the virus by blacking out news stations on stateroom televisions.

Crew members aboard a Celebrity Cruises ship have just filed a class-action lawsuit, also in the Southern District of Florida, claiming that the company did little to protect workers aboard the liner from the virus. And, stockholders of Norwegian Cruise Lines have brought a federal class action in the same court alleging that the company misrepresented to shareholders its actual financial condition as concerns over coronavirus grew and impacted cruise line bookings. There are also claims that Norwegian sales agents made blatantly false representations regarding measures being taken to protect passengers from infection and the conditions under which the disease could (and could not) be spread.

The Blame Game, Part III: Nursing Homes

The first lawsuit against the Kirkland, Washington nursing home where coronavirus appears to have landed in the United States (leading to 129 confirmed cases and 37 deaths) was filed in Washington State court in mid-April. A class-action lawsuit is planned against a Tennessee nursing home (where 14 residents have died), alleging that it failed to take proper precautions after it learned that a therapist working at the facility had tested positive for COVID-19. Although only two cases against nursing homes have been located at this time, the number of infections and deaths at personal care, memory care and skilled nursing facilities have skyrocketed since the virus was first detected in Washington, and it is only a matter of time before the deluge begins.

Take this Job and Shove It: Employment Law

While many “non-essential” workers fret about how to pay the bills, those who must report to their jobs worry about staying healthy and being fairly compensated for the heightened risk associated with their duties. In some cases, employees are concerned over a lack of personal protective equipment (PPE). A Trader Joe’s employee in Kentucky was fired after complaining on social media that he was not permitted to wear gloves during his shift. A Chicago nurse who sent an email to her co-workers and supervisors expressing concerns that the surgical masks distributed to employees were not as effective as N95 masks was also terminated. Both have filed wrongful termination lawsuits. Co-workers of a Wal-Mart employee who died of COVID-19 have averred in the family’s wrongful death lawsuit that Wal-Mart was aware that some of its employees were infected but did not send them home and also refused to provide PPE.

Other workers cite financial pressure—or even the threat of losing their job—as the reason they have continued to work even when sick with coronavirus symptoms. A number of Lyft and Uber drivers have signed affidavits in lawsuits seeking injunctions against those companies, stating that they drove even when sick because their independent contractor status does not afford them sick pay. Finally, one federal employee union has filed a class-action lawsuit seeking hazard pay for workers who are exposed to the virus while on the job. As persons continue to report to work, become sick and potentially infect others, it is inevitable that employers will face lawsuits alleging that they failed to take proper measures to protect employees from harm and/or exerted financial pressure on employees who might otherwise have chosen not to report to work.

Closed for Business. Permanently?

As most states have issued orders requiring the closure of “non-essential” businesses—which has been interpreted to include restaurants, movie theatres, most retailers and many service providers—businesses large and small face mounting financial pressure, or even the threat of permanent closure, as weeks turn into months, with no clear idea when the economy will re-open. Some businesses have turned to their insurance policies, while other have pursued more unique forms of relief against the government.

Many businesses have already begun to submit claims for business interruption, which may include lost income, payroll and operating costs, utilities and rent. Most have been unsuccessful. Restauranteurs Thomas Keller (The French Laundry, Per Se) and Wolfgang Puck (Spago) have filed litigation pursuant to their “all risk” policies after claims for financial losses caused by the COVID-19 shutdown were denied. Prime Time Sports Grill in Tampa did the same thing after receiving a denial letter from its insurer and seeks $200,000 in coverage, while Oceana Grill in New Orleans has also begun a lawsuit under an “all risk” policy. Restaurants and bars in Alabama, Chicago, the District of Columbia and Texas, as well as an Ohio movie theater, a Florida dive shop, an Indiana theatre company, and an Indiana custom clothing and fabric maker have all received coverage denials and have begun litigation against their carriers.

As for the reasoning behind the denials, the carrier for Choctaw and Chickasaw Nation casinos denied coverage for COVID-19-related claims after determining that their business insurance coverage only applied to “natural disasters.” Some insurance carriers have denied claims for business interruption pursuant to the COVID-19 shutdown on the grounds that the insureds have sustained no “direct physical loss” or because access to the business was not prevented by some form of property damage. Other carriers have denied coverage on the ground that business interruption benefits are not available as the result of a virus, although one movie theatre/restaurant chain that had purchased a “pandemic event endorsement” received an “anticipatory repudiation” from its carrier, advising that COVID-19 was not covered under that endorsement because it was not a disease specifically listed therein.

As these coverage lawsuits proceed to trial, insureds and carriers can expect courts to focus on the following issues:

  • Does the policy exclude virus-related loss?
  • Do the terms “physical loss,” “direct physical loss,” or “physical damage” include the loss of use of property?
  • Is coverage afforded if the loss of use was occasioned by governmental action, i.e., a “shutdown” order?

Of further note, at least one insured has also joined its insurance agency as a defendant in its coverage case, alleging that it failed to advise as to appropriate insurance products that would have afforded coverage for COVID-19-related loss.

A few businesses have found novel methods for seeking funds to keep their doors open that do no involve business interruption insurance. Employees of a carillon maker located in Bucks County, Pennsylvania has filed suit against the Commonwealth of Pennsylvania, arguing that the governor’s “lockdown” order requiring “non-essential” businesses to close indefinitely constituted an uncompensated seizure and thus violated federal protections, including the Fifth Amendment. A carwash in Pinellas County, Florida has sued the local government, asserting that it is an “essential business.”

And finally, two “gentleman’s clubs,” one in Michigan, one in Wisconsin, have filed federal actions against the United States Small Business Administration for refusing to grant funds under the CARES Act, the March 29, 2020, stimulus bill designed to assist small businesses affected by COVID-19-related shutdowns. However, the Act prohibits loans to businesses that provide goods or services “of a prurient sexual nature.” In the Michigan lawsuit, the owner of Diamond Club argues that the entertainment provided at his clubs is not “obscene” but, rather, “appeals to healthy human interests and desires.”

Two on the Aisle: Ticket Refunds

Airline travel has come to a virtual standstill as would-be travelers cancel plans and self-quarantine. While staying home may help “flatten the curve,” getting a refund for plane tickets or other events may prove tricky. Class actions have been filed against United, Spirit, Southwest and Volaris Airlines, alleging that passengers are entitled to a full refund, as opposed to travel credits or vouchers, some of which are only good for a year. A number of gyms and sports clubs, including Boston Sports Club, New York Sports Club and 24 Hour Fitness, are being sued by thousands of members who are still being charged monthly fees even though the facilities are closed and unavailable to them.

Events and Adventures California and Adventures Northwest, which provide group outings for singles in exchange for monthly fees, face a similar lawsuit, while Education First, which runs student trips, has also been sued for retaining trip fees and deposits for tours which were cancelled due to travel restrictions imposed as a result of COVID-19. Purchasers of tickets have sued Stub Hub, which has refused to issue refunds for events cancelled due to coronavirus, as have “Lightning in a Bottle” festival and Boston Comic-Con attendees.

The one event that seems to have had its “act together”—and has, for the last seventeen years—is the All England Club. Since 2003, it has been paying roughly £1.5 million a year, or a total of £25.5 million (roughly $31,750,000), for pandemic insurance coverage in the event that the annual Wimbledon Tennis Championship would have to be cancelled, as it has this year. Originally purchased after the SARS outbreak of 2003, this coverage is expected to pay out approximately £114 million, for now, at least. No word on whether the AEC’s carrier has paid out on the policy; stay tuned.

Many hospitality, event and entertainment-based industries may find themselves facing failure-to-refund lawsuits in the coming weeks and months. As concerns rise that COVID-19 may continue to present a threat into the summer and fall, and as consumers may find themselves cancelling summer travel plans, flights, hotel reservations, excursions and other events, the demand for and refusal to grant such refunds should provide a fertile source of litigation.

We Don’t Need No Education: College Fee Refunds

Most of us with college-aged students were shocked when we got an email or a phone call in the middle of March advising us that our kids were being unceremoniously booted from the hallowed halls of higher learning, to return home for the remainder of the semester to complete their studies through online classes, recorded lectures or virtual labs. Not ideal, to be sure. But to add insult to injury, many institutions declined to offer a refund of any kind, either for tuition or for room and board, which is why schools like Purdue University, the University of Miami, Arizona State University, Drexel University, Northern Arizona University and the University of Arizona now find themselves facing class-action lawsuits seeking reimbursements in the neighborhood of hundreds of thousands of dollars.

While many colleges and universities have agreed to refund portions of students’ room and board costs, students filing these lawsuits argue, in part, that the online education they are receiving is not equivalent to the in-person instruction they would have received on campus. With some college price tags approaching or exceeding $70,000 per year, and the significant endowments possessed by some schools, it’s not hard to understand the emotional appeal of such arguments.

In a slightly different case, a student at Liberty University has filed suit seeking a refund of tuition, room and board. However, students there were not sent home for the balance of the semester. Instead, after a brief hiatus, they were permitted to return to campus but have remained essentially quarantined in their student housing, taking all classes online and receiving meals via take-out only. While a few students did return to campus, most did not; they may be eligible for a $1,000 refund.

It does not appear that this type of litigation has made its way into the boarding school/independent school universe—yet. Private, tuition-charging schools with day students can justifiably continue to charge their full rates as they continue to offer their programs online.

As the summer approaches, students planning to attend study-abroad/study-away programs, camps or other paid experiences that may be cancelled may seek refunds of deposits or partial payments. Depending upon program policies, the failure to provide refunds may also give rise to litigation.

No Good Deed: Areas of Potential COVID-19 Liability for Health Care Providers

In addition to the inevitable flood of nursing home litigation that is expected to flow from the coronavirus outbreak, the pandemic raises a number of potential issues that could lead to litigation involving doctors, hospitals and other traditional health care providers. Aware of the massive amounts of litigation that could be coming, health care workers and facilities in California, Florida, Pennsylvania and Washington have asked their state governments for immunity with respect to care rendered during the COVID-19 outbreak. In Georgia, Illinois, Iowa, Michigan, Massachusetts, New Jersey, New York and Utah, some form of immunity has already been granted.

For those states where health care providers remain potentially liable for treatment to COVID-19 patients, the following issues may be at the forefront of impending litigation.

Patient Care: Are patients being educated as to signs and symptoms of coronavirus? Are they being instructed as to best practices for prevention and containment? Has the provider implemented protocols to identify and test those who may be COVID-19 positive? How does the provider treat those who test positive? For those locations that are still conducting in-person care, does the location have adequate PPE to protect patients if they do not arrive with proper gear? Does the provider have sufficient equipment for those who are admitted on an in-patient basis? Does the facility have adequate and appropriate storage for those who do not survive? Has the facility implemented precautions for and limitations on visitors?

Employee Health: Have workers been provided with adequate PPE? Have proper precautions for workplace sanitization/sterilization been taken? Has the provider taken appropriate steps to screen workers in order to prevent infected employees from reporting to the jobsite and potentially infecting workers and/or patients? What about employee’s mental health, as long hours, caring for critically ill patients, witnessing unprecedented incidences of death of otherwise healthy individuals (including their colleagues), and worrying about their own health begins to take its toll?

Cyber Issues: As many health care providers move to telemedicine for non-COVID-19 medical care, have they assured that the technology being used is secure and HIPAA-compliant? Is the physician required to obtain the patient’s informed consent before beginning virtual treatment/telemedicine treatment? Is such treatment effective and within the standard of care?

COVID-19 and Civil Rights

The First Amendment: One church in California finds itself the subject of civil fines after ignoring state and county health department quarantine orders by holding in-person services. Another church in California, as well as churches in New Mexico, Kentucky and Mississippi have initiated litigation where bans against in-person gatherings have been enforced.

The Second Amendment: Plaintiffs in at least four lawsuits have challenged various state orders closing “non-essential businesses” due to coronavirus spread concerns on the grounds that they violate the Second Amendment. A New Jersey gun shop owner, as well as a New Jersey resident wishing to purchase a firearm, have questioned the constitutionality of an Executive Order which shuttered all “non-essential businesses,” including gun shops, arguing that consumers wish to buy firearms, particularly during the coronavirus pandemic, when citizens have a heightened concern about the need to defend themselves against others. The NRA has filed similar lawsuit in New York and New Mexico, arguing that gun shops should be allowed to remain open during the coronavirus crisis. Finally, a Virginia gun range asserts in its lawsuit that it is an “essential” business because it helps train new gun owners as well as unorganized militias.

The Eighth Amendment: Inmates in Texas and Washington, D.C. have filed class-action lawsuits, alleging that they are not being adequately protected from infection, asserting that they do not have access to hand sanitizer or free soap. Class-action filings in Ohio, New Jersey, Connecticut, Pennsylvania and Illinois seek a drastic reduction in inmate populations due to concerns over infection containment. Detainees at several ICE Detention Centers are also seeking release, concerned that they cannot practice “social distancing” and that some suffer from serious medical conditions that make them especially susceptible to severe COVID-19 infection.

In addition to these class-action filings, some celebrity convicts have enlisted their attorneys to seek an early release, but so far, only lawyer-to-the-stars, Michael Avenatti, and Presidential advisor, Michael Cohen, have been successful. Rapper, R. Kelly, was not so lucky. Paul Manafort, Bill Cosby, Bernie Madoff and Julian Assange are still waiting for disposition of their requests. Interestingly, although he tested positive for the virus while incarcerated, convicted sexual predator and film mogul, Harvey Weinstein, did not seek release.

Zoom Zoom…Zoom?

Once states began issuing shutdown orders, videoconferencing became the new way to do business, and for many, Zoom was the go-to app. In December 2019, the company estimated that it hosted approximately 10 million meetings daily. In the early weeks of March 2020, that number shot up to almost 200 million meetings per day. After only a matter of weeks, however, it was learned that the company had misrepresented the extent of its cybersecurity and that information leaks were widespread. “Zoombombing,” in which a hacker takes over the microphone or video camera of a meeting participant, or makes shocking or offensive text messages or images, became commonplace. Many Zoom-meeting participants learned that, after a meeting’s conclusion, audio and video records of their meetings were available online, their personal information had been hacked and was being sold on the dark web, and that in-meeting chats with other meeting attendees did not remain confidential.

And so, although many organizations originally rushed to implement Zoom as its videoconference platform of choice—in part, because it’s free, easy to use and can support up to 100 participants—by early April, security concerns caused many to ban Zoom meetings, including Tesla, the New York City public school system, Google, the Pentagon, the U.S. Senate, and the governments of Taiwan, Germany and Singapore. Zoom rushed to fix things, including trying to resolve various bugs on its end, clarifying the level of security and encryption provided through Zoom, and making suggestions for meeting participants, such as requiring meeting passwords and setting up meeting “waiting rooms.”

Nonetheless, lawsuits ensued. There are currently five Zoom-related actions alleging inadequate privacy and security measures and unauthorized and undisclosed data-sharing.

Let Me Check My Crystal Ball

While there are so many unknowns where COVID-19 is concerned (When will easy, reliable testing be available? How much longer will we need to quarantine? Is a vaccine on the horizon?), one thing is certain: COVID-19 litigation is only getting started, and we have only seen the tip of the iceberg. Unsurprisingly, the domain names,, and are already registered, and likely, it won’t be long before we begin to see personal injury attorney ads on television.

While casualty carriers will not likely become involved in civil rights or first-party business insurance coverage matters, they should prepare for an onslaught of cases in the following areas:

  • Healthcare Liability – Failure to diagnose, failure to prevent exposure, failure to properly treat;
  • Hospitality Industry – Disease exposure, event cancellation;
  • Motor Vehicle – Damage to vehicle by retail employee at curbside pickup location;
  • Product Liability – Ineffective/inadequate infection control/prevention (PPE such as hand sanitizer, gloves, masks, gowns);
  • Professional LiabilityInsurance agents may find themselves facing lawsuits with regard to the alleged failure to alert clients to appropriate pandemic coverage products. CPAs could face liability if audits, public reports, and SEC filings do not take into account the impact of COVID-19 upon a company’s operations and financial condition. As many courts remain all but closed with regard to most aspects of civil litigation, lawyers are subject to negligence claims if they do not rigorously remain abreast of ever-changing court orders governing whether and to what extent deadlines, including statutes of limitations, have been stayed. D & O issues may arise where a company has made misrepresentations as to COVID-19 (cruise lines, biotech companies), either as to its company’s operations or its financial outlook;
  • Property Damage – Clean-up/replacement costs from post-exposure contamination/pre-start-up sanitization/sterilization once the economy “opens up”;
  • Retailer Liability – Failure to implement effective sanitization policies; failure to enact proper social distancing protocols; failure to control/prevent infection by providing employees with proper PPE; violation of consumer protection acts for misrepresentations as to COVID-19-related goods and services;
  • Workers’ Compensation – Work-related exposures.

These are uncertain times, but at Marshall Dennehey, we have more than 50 years of experience behind us, and we’ll be ready when the first COVID-19 lawsuit hits your desk. Until then, stay safe and healthy.

*Wendy is a shareholder in our firm’s Allentown, Pennsylvania office. She can be reached at 484.895.2304 or



Defense Digest, Vol. 26, No. 1, Spring 2020 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2020 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact