Publication

April 27, 2020

As the number of cases and deaths related to the novel coronavirus rise, so too do the number of lawsuits filed related to the virus. Claims for breach of contract based on consumer protection laws are already underway against sports/health clubs, as are cases against Walmart, cruise lines and nursing homes for negligence and/or wrongful death. We can expect lawsuits against residential property owners and managers, restaurant owners and operators, grocery store chains, and potentially even against delivery service providers.  Below is a brief summary of recently filed COVID-19 lawsuits and some commentary about how to minimize exposure to future litigation.

Service Disruption Claims Against Sports Clubs

Several health club chains are already in litigation over COVID-19 related consumer protection and breach of contract claims.[1] Plaintiffs claim that these sports clubs improperly continued to withdraw monthly dues (or portions thereof) despite the fact that the clubs are closed.  It is likely that similar claims will arise nationwide.

Several defenses to these claims derive from the language contained in the membership agreements of the plaintiffs.  Many agreements contain class action waivers, and most contain a requirement to arbitrate any dispute. These waivers and provisions may be used to defeat these claims on early motion practice, and plaintiffs would then be forced to individually pursue their claims either in court or before an arbitrator. Courts across the country generally favor the enforcement of these contractual provisions if voluntarily entered into by both parties.[2]   In addition to these provisions, sports clubs also have the ability to assert defenses ordinarily available to all other contract claims, based on acts of god, force majeure, and/or impracticability. The availability of these defenses is contingent on the language of each agreement as well as the other circumstances presented, including whether the sports clubs have any discretion as to whether to close their doors.

Another set of defenses to these claims stems from the timing of the claim and the response by the sports clubs.  These claims may be subject to dismissal for ripeness if they are made against the sports clubs before the fees become due. The claims also may be dismissed if they are moot, or if the sports clubs take certain actions to render them moot.  For example, if the sports club elects to remit a pro-rata refund of fees or a credit for future months, the claims made against it may become moot.

Finally, defenses may arise depending on how the claim is framed by plaintiffs.  Any claim for a violation of a consumer fraud act, an unfair trade practice, bad faith, or the like must be plead with specificity.  Without the required specificity and factual basis, the claim will be subject to dismissal.  If a class action is filed by a plaintiff in one state, and seeks to represent the interests of class members across different states, it is possible that the claim can be narrowed based on standing principles.[3]  The language used by the plaintiffs in their complaints is critical.

In sum, the defense of cases such as these against sports clubs, and others targeted as a result of COVID-19, depends on the situation presented.  The law will often differ from state to state, and also depends on whether the claims are brought under certain federal or state laws, so a case-by-case analysis is required.  Therefore, it is especially important to evaluate defense options at the very outset of the litigation.

Class Action Claims  – Cruise Ship Companies

Although class action lawsuits involving cruise lines are rare due to waiver language, on April 7, 2020, one class action lawsuit was filed against Costa Cruise Lines Inc. (“Costa”).[4]  In that lawsuit, plaintiff Paul Turner alleges that Costa negligently allowed more than 2,000 passengers on a transatlantic voyage, placing them at risk of catching the coronavirus.  The suit makes the claim that despite knowing before departure that a passenger from the most recent cruise tested positive for the virus and died, Costa still set sail.  Mr. Turner alleges, among other things, that the cruise line allowed new customers to board the ship without adequate sanitation measures.  Plaintiff alleges that Costa told passengers that its vessel was not impacted by the coronavirus, and that they would not be reimbursed if they canceled their voyage.

In general, claims against cruise lines are often difficult due to restrictive terms of service contained in each passenger’s paperwork and due to maritime law.  Despite this, we can expect to see more filings considering the number of cruise line passengers nationwide (and worldwide) that contracted the virus.   

Potential Negligence Claims -  Property Owners/Managers

Residential property owners should be wary of potential lawsuits from tenants, guests and invitees claiming exposure to the virus at their properties.  These individuals might claim that the building was unclean or allowed exposure to other tenants with COVID-19, leading to coronavirus transmission.  Negligence claims could involve whether the owner or manager took appropriate and reasonable steps to minimize the risk of virus transmission to a given individual. 

For instance, as of April 20, 2020, seven states— Connecticut, Hawaii, Maryland, New Jersey, New York, Pennsylvania, and Rhode Island—made masks mandatory for employees of essential businesses (those that are now open but we would assume these requirements will continue as other businesses open).  Although there are certain variations, states like Pennsylvania require businesses to provide masks to their employees. It is likely that additional states will implement mask requirements or other similar mandates.

Property owners and similarly situated entities should engage in an internal review of their precautionary measures and procedures.  Based on the given facts many questions loom. For example, did the owner/manager take reasonable steps to restrict access to places where tenants may come into close contact with each other, such as playgrounds, laundry rooms, elevators, mailboxes or other commonly shared areas?   Do all of the owner/manager’s employees wear masks and/or gloves while working?  Is there a procedure in place that requires a virus stricken tenant to notify the owner/manager so that appropriate steps can be put in place to reasonably ensure the safety of all other tenants? Does he need to provide notice to others without violating privacy laws?  If an owner/manager is aware that a tenant tested positive for COVID-19, what obligation does that owner/manager then have to that tenant?  May the owner mandate isolation of a tenant?  What are the owner/manager’s obligations to the other tenants at the property under these circumstances?   Should the owner/manager advise only the tenants of the building where the infected tenant resides, or beyond?  What information is the owner/manager able to disclose to other tenants, and how should communication be done?   These are all critical questions that need to be considered and assessed based on the facts at issue in a given instance.

In most jurisdictions, a business owner has a duty to take reasonable measures to limit a customer’s exposure to dangerous conditions. A business must take reasonable care to provide a safe environment for its customers. The duty of care generally requires a business owner to assess whether a dangerous condition exists at the business and to take reasonable efforts to eliminate that danger, and/or warn others of its existence.  In other words, the business owner must maintain the premises in a reasonably safe condition and safely operate the business. 

Potential Negligence Claims -- Commercial Stores and Delivery Services

Grocery stores and other “essential” businesses remain open to the public and many have already implemented requirements that employees wear masks, keep social distance measures and have their temperature checked before starting shifts.  Most stores have signs posted at the entrance to remind customers to follow social distancing and to stay six feet apart inside the store.  Many stores installed Plexiglas at check-out lines to prevent direct contact/breathing between the customer and store employee.  Stores also placed lines of tape near the check-out stands, six feet apart, to visually remind customers to stay 6 feet apart.  In California, some business are posting signs that require customers to wear a mask or else they are not allowed to enter the store.  Most employees in essential businesses are already wearing masks and gloves.  Many of these types of “essential” businesses clean shopping carts and other areas of constant customer contact.  To be safe, health experts recommend that a customer not be allowed to use a cart returned by a prior customer until it has been thoroughly cleaned and disinfected. 

Unfortunately, despite the above safety measures, they may not be enough.  An article posted on CNN Business on April 19, 2020 references the fact that dozens of grocery store workers have died from COVID-19 despite the use of some of the safety measures intended to keep them safe; temperature checks and capacity restrictions.[5]  The CNN article points out that workplace experts, union leaders, and small grocery store owners believe the time has come to completely ban customers from the stores because it has become too dangerous to let customers browse aisles, regularly coming in close range with workers.  The same experts feel that the time has come for large chain grocery stores to “go dark” to the public and convert to curbside pickup only, or home delivery mode. This might sound extreme.  Nevertheless, businesses should be prepared to defend claims from plaintiffs that will pursue these extreme theories to obtain a favorable result.

One store owner in Pennsylvania went so far as to discard $35,000 worth of food after a customer coughed on fresh produce, a seemingly extraordinary precaution that the owner believed to be a reasonable measure that would minimize the rest of his customers’ risk of contracting COVID-19.[6]  The owner decided that the loss of inventory was less of a concern than the potential harm to the store’s customers. These are the judgment calls businesses need to make, based on guidance from our governmental officials, in a world fraught with inconsistent messaging at this time.  Against that backdrop, these claims will be defended.

Restaurants and stores not limited to providing take out and/or delivery orders remain exposed to future claims if a customer comes down with the virus. Other claims could involve issues related to how food is distributed.  To the extent that cardboard and plastic surfaces can retain the coronavirus, businesses need to determine if they should disinfect those surfaces prior to placement on a delivery truck.[7]  Businesses need to decide if those products should be disinfected again before being left at a homeowner’s front door, and if so, how? Need a business clean the entire exterior of all boxes being delivered? What guarantee would this even provide? Should all drivers at least wear masks and gloves during the delivery process? These are judgment calls these companies need to make based on the best information available to them.

Recently, Walmart was sued over a COVID-19 related death of a store employee.[8]  The plaintiffs filed a wrongful death lawsuit alleging that the Walmart Superstore at issue failed to take steps to protect its employees.  More specifically, the plaintiffs’ complaint alleges that the Walmart Superstore in Evergreen Park, Illinois, failed to warn the decedent and other employees that co-workers had COVID-19 symptoms. Wando Evans, 51, died March 25, 2020.  A second store employee, Phillip Thomas, 48, died from COVID-19 complications four days later.

The Evans complaint alleges that Walmart failed to close the store even though it knew or should have known that employees and others at the store had COVID-19 symptoms.  The complaint further alleges that Walmart failed to prevent employees with COVID-19 symptoms from working at the store.  Also, plaintiffs allege that Walmart hired people over the phone or by other remote means without evaluating whether the prospective employees had symptoms of the virus. Finally, the Evans complaint alleges that Walmart failed to clean and sterilize the store, failed to provide employees with personal protective equipment, and failed to promote and enforce social distancing.

Walmart released a statement advising that neither of the employees had been at the store for more than a week and that it had taken action to reinforce cleaning and sanitizing measures, including deep cleaning of key areas.[9]  The statement also advised that Walmart passed a third-party safety and environmental compliance assessment, as well as a health department inspection. As an extra precaution, Walmart brought in an outside company to further clean and sanitize all high-touch surfaces in the store, which included the decontamination of front entrances, carts, registers and bathrooms, as well as food areas, including the produce and meat sections.  The statement also advised that Walmart then took steps across the country to protect associates and customers, including implementing additional cleaning measures, installing sneeze guards at registers, placing social distancing decals on the floors and limiting the number of customers in a store at a given time. Nevertheless, the lawsuit alleges that these preventative measures were taken only after the deaths.

The timing of any precautionary measures implemented in any given case will be critical evidence. Deciding which actions to take, and when, is no simple task in this constantly changing environment. Businesses need to implement reasonable measures, based on what is known at the time, to prevent the transmission of the coronavirus. Plaintiff firms will latch onto any action or inaction when formulating their claims.  To be clear, this is a very uncertain time with information evolving by the day, if not the hour.  Businesses need to make reasonable efforts to remain informed, take reasonable precautions and provide reasonable notice under the given circumstances.  The more effort they make toward providing for the safety of those potentially exposed, the stronger the defenses will be.

Potential Negligence Claims – Nursing Homes and Elderly Care Facilities

Negligence claims against nursing home facilities alleging inadequate infection control, lack of personal protective equipment, inadequate staffing, insufficient warnings, or the like are nothing new.  In fact, these types of claims persisted prior to the COVID-19 outbreak, and likely will continue after the virus is controlled. These claims are ripe for the filing based on the remarkably contagious nature of this virus and potentially deadly effect of COVID-19.  One thing all news outlets agree upon is that elderly nursing home populations have more difficulty with COVID-19.

Early statistics show that COVID-19 deaths at nursing homes and elderly care facilities represent a high percentage of all deaths, meaning that the exposure to these types of claims is high. In a widely publicized example, a nursing home in New Jersey recently made national news when it was discovered that it was housing 17 deceased bodies in the facility.[10] The nursing home is reportedly understaffed, namely because 41 of its staff are infected with COVID-19.

Claims against these facilities can and will be made by the patients themselves, the patients’ families, workers at the facility, delivery personnel, contractors, and others.  Indeed, a wrongful death claim was already filed in Washington against a nursing home, Life Care Center. In that case, the daughter of a deceased resident claims that her mother died of COVID-19 because the nursing home lacked “a clear plan of action leading to a systemic failure.” Particularly, the nursing home is alleged to have permitted residents and visitors to have a Mardi Gras party, failed to quarantine residents, and delayed reporting of positive cases for 17 days.

To avoid or curtail these impending claims, nursing homes should consider taking all practical measures geared toward the safety of the individuals in their facilities. The recommendations made by the government and related agencies should serve as guidance and a failure to comport with them will be relied upon by plaintiffs.  Again, with conflicting messaging, this is no simple process.  For example, states like Connecticut are imposing their own safety requirements on nursing homes to segregate COVID-19 residents on separate floors.[11] These facilities should be reasonably forthcoming with facts they learn regarding COVID-19, but should proceed cautiously due to privacy laws.  Spending the time to keep abreast of the moving target of available information, and documenting concentrated efforts geared toward the safety of all involved, should help defend these claims.  None of this is simple in the face of this pandemic, and the many complications we hear about daily in the news.  Health care workers are no doubt among the heroes of the day.  However, their employers and these facilities will still be the targets of litigation.  In the face of a negligence claim, making informed decisions based on state of the art information will be valuable evidence to rely upon for the proposition that the facility was doing its best to protect its patients and the population at large, under these extreme circumstances.

Conclusion 

The legal-framework for claims against sports clubs, property owners, stores, delivery service providers, nursing homes and cruise ships generally remains the same.  However, the circumstances presented by COVID-19 related claims are novel, during these unprecedented times. Businesses should rely on the language of their agreements and traditional legal principles to defeat claims for breach of contract, breach of consumer laws, and class actions.  The question at the heart of many negligence based COVID-19 lawsuits is likely to revolve around whether these entities took reasonable measures, based on then existing state of the art knowledge, to do their best prevent the spread of the coronavirus. Plaintiffs may have difficulty proving a causal connection between alleged exposure and a given plaintiff’s illness (whether a defendant’s failure to take precautions actually caused the infection in that person). However, the better the facts are to defeat the negligence claim, the more likely the jury will care about the lack of causation defense.  Rest assured, the converse is equally true.

Visit our COVID-19 Hub for ongoing updates.