April 13th, 2020

Lawsuits Filed in the Wake of Coronavirus

In the wake of the COVID-19 crisis, a new set of challenges is arising aside from social distancing, loss of work, and overwhelmed healthcare facilities. Coronavirus-related lawsuits are anticipated and have already taken the legal system by storm. Personal injury lawyers have seen claims related to medical staffing, product advertising, and workers’ unions, to name a few.

Businesses may be sued for not taking steps to protect workers, customers, or building occupants. These include restaurants, nursing homes, hotels, and hospitals. If a company fails to respond properly to the epidemic, shareholders can potentially sue. Even local governments must be aware of their power to quarantine people.

Many companies are also reviewing their insurance policies, which may contain ambiguous language when it comes to covering virus-related losses and disruptions.

What Is an “Act of God”

Most of us interpret an act of God as something humans can’t control, such as a natural disaster like an earthquake or hurricane. Depending on an insurance policy, an act of God may or may not be an insured peril. Insurers often use the term to create exceptions to policy terms or liability for a party in breach of a contract.

The term is often used in contract law. It’s sometimes applied as part of an impossibility defense for nonperformance of duties due to a change in circumstances. In other words, the events the terms of the contract depended on not occurring. Using the impracticability defense, an act of God can refer to a contractual duty becoming too difficult or expensive to perform.

Insurance policies often include a force majeure clause. A force majeure (higher power, superior force) may or may not be an act of God. Even an earthquake may have human origins, as can be the case with geothermal injections of water, but there are many events that can fall in between. For example, a rat infestation in a store may be considered out of human control, unless preventative measures could have been taken.

What About Coronavirus?

There are challenges in interpreting contractual language. The coronavirus can be considered an act of God, but, as a defense, is it the unknown or unexpected natural phenomenon or its economic effects to consider? The degree of preventability of an event or the circumstances of nonperformance also impacts whether obligations of a particular contract are excused.

Another challenge is that business disruption claims often arise due to physical damage. The fallout from coronavirus is reshaping this idea. Therefore, the different types of lawsuits may emerge in the coming months.

Types of Lawsuits Expected

Here are some examples of possible lawsuits to help understand liability in relation to the impacts of the virus.

Worker protections: Many companies have encouraged employees to work from home. Business travel plans have been scrapped, as have various industry conferences. While companies have worked to protect employees and others, these measures have opened the door for workers’ compensation claims if workers were exposed at a corporate event or meeting. Privacy concerns have also arisen, with employers asking workers about their travel, medical history, or if they’ve potentially been exposed to the virus.
Tort law: For businesses that serve the public, the risk of getting sued is rising in the wake of coronavirus. Nursing homes are one example. At a Seattle-area nursing home, 37 residents died and 57% were hospitalized after getting infected.¹ On April 7, it was announced a nursing home in Beaver County, PA presumed all 800 patients and staff members were infected with COVID-19.² Like any business, they could face claims that measures to protect the public and stop the virus from spreading weren’t taken.
Quarantines: Government-issued mandatory quarantines are intended to protect the public. However, they can be subject to litigation if there are claims of violations against individual rights. This has already occurred. During the quarantine of the Diamond Princess cruise ship in Japan this past February, a dispute over the proposed transfer of passengers arose. A female passenger was quarantined after being cleared by two tests, resulting in a lawsuit against U.S. Health and Human Services Secretary Alex Azar by the city of San Antonio, Tex. She then tested positive after a third test, following her release.³

A dozen other passengers have sought legal counsel. The cruise line said it pursued all reasonable and proper care, although it has faced scrutiny over how it’s handled previous cases of norovirus.

Other Lawsuits that Have Already Happened

Legal disputes are triggering coronavirus lawsuits across the U.S. Some of these claims aren’t directly related to coronavirus. Many communities are in need of medical professionals. A medical staffing agency employing skilled foreigners filed a claim against U.S. Citizenship and Immigration Services, which allegedly delayed reviewing applications for visas. In turn, this prevented medical staff from arriving to help deal with the outbreak in the U.S.

A potential class-action lawsuit could impact Purell, a hand sanitizer maker. The company has been advertising its product’s effectiveness in killing germs and preventing illness. Plaintiffs are claiming it has been exaggerating the power of its product in combating COVID-19.

Lawsuits have been prevalent in the airline industry. In the European Union, airlines have been battling over the compensation of passengers for years. In the wake of the COVID-19 pandemic, they may once again, as the EU’s Court of Justice may have to decide whether companies claiming circumstances beyond their control can allow them to avoid payouts.

In California, a COVID-19 court case involved federal government and state public health officials who collaborated to quarantine infected Americans at the Fairview Developmental Center in Costa Mesa. Local officials tried to stop it in federal court.

A temporary restraining order had even been issued until Orange County officials and state and federal agencies discussed the matter at a court-ordered meeting. The facility had been used to quarantine California residents evacuated from the Diamond Princess and transported to Travis Air Force Base. Now it is being prepared to accept an overflow of hospital patients

These are just a few examples of lawsuits that have arisen during the coronavirus crisis. Other potential litigation issues may involve businesses affected by supply chain delays, employees who caught coronavirus while performing duties in the normal scope of their employment, and how companies deal with employees unable to work due to the virus. For example, if they contract it at work, could there be workers’ compensation issues?

Businesses, therefore, must plan and take precautions to protect themselves against possible litigation.

Contact Schechter, Shaffer & Harris, L.L.P., Accident & Injury Lawyers

Our Houston personal injury lawyers are hard at work helping clients during the COVID-19 crisis. We represent clients who have sustained injuries due to car accidents, truck accidents, medical malpractice, and defective medical products.

If you’ve been injured at work or have a premises liability case, our team is experienced and equipped to represent you and fight for the compensation you deserve. We’ve recovered hundreds of millions of dollars for injury victims. Contact us for a free case evaluation today!

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