Author: Kent Schmidt

As a Partner in the Southern California office, Kent practices in virtually all types of general business litigation, with an emphasis in unfair business practices, First Amendment litigation, defamation, trade secret litigation, class actions, product liability, securities litigation and enforcement, commercial disputes, employment law, intellectual property and Prop 65 (environmental) claims. He is an aggressive and creative courtroom advocate, representing both plaintiffs and defendants. Having spent his entire legal career at Dorsey, Kent is adept at finding the right lawyers in the firm to collaborate with in order to provide the best representation for his clients.

[UPDATED 5/26] Almost 400 Coronavirus Class Actions Filed Nationwide

Plaintiff lawyers around the country continue to file a variety of COVID-19 class actions making it a challenge to timely update this list that I started last month. Each day brings several copycat claims (setting up some battles for lead counsel) along with a few novel theories. I am hoping to write about a few of the more creative claims and theories when time allows.

As stated at the outset of the pandemic, the three primary categories of plaintiffs are and will continue to be: consumers, employees and shareholders. There are also claims that are not represented by these three categories including insurer coverage cases, new claims arising from the CARES Act and a peculiar and growing list of cases against China. Those are also discussed below.

If you know of additional cases not on this list, please email me at schmidt.kent@dorsey.com. I do not have a copy of all of these complaints but will link more when available.

Thanks for visiting LeftCoastLaw and . . . stay home and stay well.

CONSUMER CLASS ACTIONS (210)

Event Cancelation Cases (20)

The majority of consumer class actions have related to claims that tickets and fees for upcoming events have not been fully refunded. This was expected to be a major area of activity as events were being shutdown across the nation.

Here is the recurring fact pattern: the event is cancelled but the defendant believes it is sufficient to give a credit for future events rather than provide a cash refund or it retains a administrative fees–something less than a full cash refund. The defendant promoter likely justifies this by pointing to the expenses already incurred in connection with the event and the inequity of being caught in the middle. In many instances, providing a complete refund would be ruinous.

For example, I have read that StubHub would have to file for bankruptcy protection if it was forced to provide a complete refund for all ticketholders as the losses are $4 billion a month. The plaintiffs’ theory is, in short, not our problem; consumers come first. These and other cases may have a short life as ordinary class actions since the plaintiffs may be relegated to asserting their claims in bankruptcy. More on this topic and some thoughts I provided to the ABA Journal here.

(3/11/2020) Douglas v. EF Institute for Cultural Exchange, Inc., California Superior Court, San Diego County. In the first event cancellation case, Plaintiff alleges that California consumer protection statutes were violated in connection with “thousands of tours to various places all over the world sold by EF Defendants to various educational groups, specifically including, but not limited to, educational groups consisting of high school classes traveling with high school teachers who rely on EF Defendants to arrange for air travel, ground transport, hotels, food, sightseeing etc.” This lawsuit was then followed by another case, Grabovsky v. EF Institute for Cultural Exchange (3/17/2020) in which another class plaintiff makes similar allegations against the same parties in the U.S. District Court for the Southern District of California. (This illustrates why class action lawyers sometimes race to the courthouse as there will be a battle for lead case and lead counsel rights in these competing related cases.)
(3/24/2020) Rutledge v. Do Lab Inc, California Superior Court, Los Angeles County. In another consumer fraud ticket case has been brought in by the colorful Mark Geragos relating to the cancelation of a music festival. In plaintiff alleges that his ticket for the Lightning in a Bottle music festival included a refund provision that only allows for a credit in the event of a cancellation and does not allow a refund. He contends that this renders the contract illusory and subject to rescission. He also alleges that the failure to issue a refund violates the Consumer Legal Remedies Act (Cal. Civ. Code Sec. 1750) and Unfair Competition Law (Cal. Bus. & Prof. Code Sec. 17200).
(4/2/2020) Carisi v. Events and Adventures California, (3:20cv2260) U.S. District Court for the Northern District of California. Plaintiff seeks reimbursement for membership fees relating to an outdoor wildlife guide service.
(4/2/2020) McMillan v StubHub, U.S. District Court for the Western District of Wisconsin. The class is seeking contract and tort remedies as well as asserting claims for false advertising. The allegations related to StubHub’s “Fan Protect” guarantee and offering credits rather than cash refunds. In reviewing the Complaint, it was striking to me how these cases are being drafted in “real time” with references to communications between the consumers and StubHub employees on March 30 and the filing on April 2. I was also intrigued to see allegations of violations of California consumer protection statutes in a case venued in Wisconsin.
(4/8/2020) Mitchell v. Nursecon at Sea LLC; Royal Caribbean International, (1:20cv21503) U.S. District Court for the Southern District of Florida. In this action, plaintiff claims that the cruise line will not refund payments for a cruise and will only provide a credit for future trips.
(4/14/2020) Jimenez v. Do Lab Inc. (2:20cv3462) U.S. District Court for the Central District of California. Another lawsuit relating to the cancellation of the Lightning in a Bottle Festival and failing to provide refunds (See discussion above regarding Rutledge.)
(4/14/2020) Alcaraz v. Stubhub Inc. (4:20cv2595) U.S. District Court for the Northern District of California. (same claims against Stubhub relating to ticket sales). (See discussion above regarding McMillan.)
(4/17/2020) Hansen v. Ticketmaster Entertainment Inc. (3:20cv2685) U.S. District Court for the Northern District of California
(4/23/2020) Nellis v. Vivid Seats LLC (1:20cv2486) U.S. District Court for the Northern District of Illinois
(4/24/2020) Trader v. SeatGeek Inc. (1:20cv3248) U.S. District Court for the Southern District of New York
(4/24/2020) Bromley v. SXSW, LLC (1:20cv439) U.S. District Court for the Western District of Texas
(4/30/2020) Tirozzi v. Lakeland Tours LLC (3:20cv30065) U.S. District Court for the District of Massachusetts
(5/1/2020) Kopfmann v. Stubhub Inc. (3:20cv3025) U.S. District Court for the Northern District of California
(5/5/2020) Reynolds v. StubHub Inc. (1:20cv3508) U.S. District Court for the Southern District of New York
(5/7/2020) Saperstein v. Thomas P. Gohagan & Company (3:20cv3143) U.S. District Court for the Northern District of California
(5/7/2020) Tucker v. Goldman Empire Inc. (200903169) Salt Lake County District Court, Utah
(5/8/2020) Menzel v. StubHub Inc. (CGC-20-584382) San Francisco County Superior Court, California
(5/15/2020) Landcare USA LLC v. Marquee Event Group Inc. (CC-20-02257-C) Dallas County Law Court, Texas
(5/20/2020) Hussein v. SQ Consultancy LLC fka Lion and Lamb Events Services LLC dba Sobi Qazi (002-01153-2020) Collin County Law Court, Texas

College Tuition and Fees Cases (103)

Colleges and other institutions of higher education are facing class action claims by students contending that they should not be charged for room and board in light of the closures. These claims will be brought against both public and private institutions. I would anticipate that, in many states, legislation providing for these types of refunds will be passed, which may make these claims moot. I provided further thoughts on this subcategory of claims to Higher Education in an interview that related to a story available here.

(3/27/2020) Rosenkrantz v. Arizona Board of Regents. U.S. District Court for the District of Arizona. The first such class action breach for contract, conversion and unjust enrichment.
(4/7/2020) Corinti v. Asset Plus Corporation, U.S. District Court for the Northern District of Florida. In this case, plaintiff is suing a real estate company that managed colleges dormitories seeking refund of housing fees.
(4/9/2020) Church v. Purdue University (4:20cv25) U.S. District Court for the Northern District of Indiana. Another claim relating to the alleged failure to provide refunds for tuition, housing, meals and fees.
(4/15/2020) Doe v. Liberty University Inc. (6:20cv23) U.S. District Court for the Western District of Virginia. Alleges that Liberty Univeristy attempts to maintain an appearance of remaining open for political purposes even though it is substantially shut down and nonetheless forces students to pay for certain fees.
(4/16/2020) Raftopoulous-Johnson v. Arizona Board of Regents (2:20cv4399) U.S. District Court for the District of New Jersey
(4/17/2020) Perna v. American Campus Communities Inc. (3:20cv391) U.S. District Court for the Middle District of Florida
(4/20/2020) Burgos v. The Pennsylvania State University (1:20cv3143) U.S. District Court for the Southern District of New York
(4/21/2020) Irizarry v. Long Island University (7:20cv3160) U.S. District Court for the Southern District of New York
(4/21/2020) Patel v. University of Vermont and State Agricultural College (2:20cv61) U.S. District Court for the District of Vermont
(4/23/2020) Student A v. Board of Trustees of Columbia University (1:20cv3208) U.S. District Court for the Southern District of New York
(4/23/2020) Marbury v. Pace University (1:20cv3210) U.S. District Court for the Southern District of New York
(4/23/2020) Haynie v. Cornell University (3:20cv467) U.S. District Court for the Northern District of New York
(4/23/2020) Bennett v. Columbia University (1:20cv3227) U.S. District Court for the Southern District of New York
(4/24/2020) Rynasko v. New York University (1:20cv3250) U.S. District Court for the Southern District of New York
(4/24/2020) Little v. Grand Canyon University (2:20cv795) U.S. District Court for the District of Arizona
(4/25/2020) Hassan v. Fordham University (1:20cv3265) U.S. District Court for the Southern District of New York
(4/25/2020) Faber v. Cornell University (3:20cv471) U.S. District Court for the Northern District of New York
(4/25/2020) Ford v. Rensselaer Polytechnic Institute (1:20cv470) U.S. District Court for the Northern District of New York
(4/26/2020) Dimitryuk v. University of Miami (0:20cv60851) U.S. District Court for the Southern District of Florida
(4/27/2020) Friedman v. Drexel University (3:20cv5147) U.S. District Court for the District of New Jersey
(4/27/2020) McAllister v. University of North Carolina System (7:20cv78) U.S. District Court for the Eastern District of North Carolina
(4/27/2020) Brandmeyer v. The Regents of the University of California (4:20cv2886) U.S. District Court for the Northern District of California
(4/27/2020) Miller v. Board of Trustees of the California State University (2:20cv3833) U.S. District Court for the Central District of California
(4/27/2020) Dieckhaus v. University of North Carolina System (4:20cv69) U.S. District Court for the Eastern District of North Carolina
(4/28/2020) Ritter v. The Regents of the University of California (3:20cv2925) U.S. District Court for the Northern District of California
(4/28/2020) Shak v. Adelphi University (1:20cv1951) U.S. District Court for the Eastern District of New York
(4/29/2020) Keyes v. Montclair State University (ESX-L-2947-20) Essex County Superior Court – Law Division, New Jersey
(4/29/2020) Dutra v. Trustees of Boston University (1:20cv10827) U.S. District Court for the District of Massachusetts
(4/30/2020) Smith v. University of Pennsylvania (2:20cv2086) U.S. District Court for the Eastern District of Pennsylvania
(4/30/2020) Doe v. Brown University (1:20cv191) U.S. District Court for the District of Rhode Island
(4/30/2020) Thomson v. The Pennsylvania State University (4:20cv725) U.S. District Court for the Middle District of Pennsylvania
(4/30/2020) Cox v. Trustees of Boston University (1:20cv10834) U.S. District Court for the District of Massachusetts
(4/30/2020) Rocchio v. Rutgers, The State University of New Jersey (2:20cv5390) U.S. District Court for the District of New Jersey
(5/1/2020) Rosado v. Barry University Inc. (1:20cv21813) U.S. District Court for the Southern District of Florida
(5/1/2020) Mellowitz v. Ball State University (49D14-2005-PL-015026) Marion County, Indiana
(5/1/2020) Bergeron v. Rochester Institute of Technology (6:20cv6283) U.S. District Court for the Western District of New York
(5/1/2020) Stellato v. Hofstra University (1:20cv1999) U.S. District Court for the Eastern District of New York
(5/1/2020) Hewitt v. Pratt Institute (1:20cv2007) U.S. District Court for the Eastern District of New York
(5/1/2020) Yin v. Syracuse University (5:20cv494) U.S. District Court for the Northern District of New York
(5/1/2020) Mebrahtu v. Manchester University (3:20cv5457) U.S. District Court for the District of New Jersey
(5/1/2020) Chong v. Northeastern University (1:20cv10844) U.S. District Court for the District of Massachusetts
(5/4/2020) Rojas v. Florida Board of Governors Foundation Inc. (2020CA000846) Leon County Circuit Court, Florida
(5/4/2020) Paris v. University of Connecticut (2:20cv2018) U.S. District Court for the Eastern District of New York
(5/4/2020) Deecher v. Rensselaer Polytechnic Institute (1:20cv498) U.S. District Court for the Northern District of New York
(5/4/2020) Diaz v. University Of Southern California (2:20cv4066) U.S. District Court for the Central District of California
(5/4/2020) Fittipaldi v. Monmouth University (3:20cv5526) U.S. District Court for the District of New Jersey
(5/5/2020) Watson v. The University of Southern California (2:20cv4107) U.S. District Court for the Central District of California
(5/5/2020) Ryan v. Temple University (5:20cv2164) U.S. District Court for the Eastern District of Pennsylvania
(5/5/2020) Tran v. Boston University (5:20cv3088) U.S. District Court for the Northern District of California
(5/5/2020) Lawson Jr. v. Pennsylvania College of Technology (1:20cv736) U.S. District Court for the Middle District of Pennsylvania
(5/5/2020) Pinkney v. The State University of New York (2:20cv2048) U.S. District Court for the Eastern District of New York
(5/5/2020) Schoening v. Seton Hall University (2:20cv5566) U.S. District Court for the District of New Jersey
(5/5/2020) Tran v. Boston University (4:20cv3088) U.S. District Court for the Northern District of California
(5/6/2020) Spiegel v. The Trustees of Indiana University (53C06-2005-CT-000771) Monroe County, Indiana
(5/6/2020) Hotter v. Quinnipiac University (3:20cv5592) U.S. District Court for the District of New Jersey
(5/6/2020) Moore v. George Mason University (SSX-L-188-20) Sussex County Superior Court – Law Division, New Jersey
(5/6/2020) Quiroz v. Rider University (3:20cv5620) U.S. District Court for the District of New Jersey
(5/6/2020) Mueller v. The Regents of the University of California (20-CIV-01942) San Mateo County Superior Court, California
(5/7/2020) Fedele v. Marist College (7:20cv3559) U.S. District Court for the Southern District of New York
(5/7/2020) Doe v. University of Southern California (2:20cv4172) U.S. District Court for the Central District of California
(5/7/2020) Thomas v. Mercy College (7:20cv3584) U.S. District Court for the Southern District of New York
(5/8/2020) Zagoria v. New York University (1:20cv3610) U.S. District Court for the Southern District of New York
(5/8/2020) Patel v. St. John’s University (1:20cv2114) U.S. District Court for the Eastern District of New York
(5/8/2020) Mitelberg v. Stevens Institute of Technology (2:20cv5748) U.S. District Court for the District of New Jersey
(5/8/2020) Demasi v. Emory University (1:20cv2002) U.S. District Court for the Northern District of Georgia
(5/8/2020) Hickey v. University of Pittsburgh (2:20cv690) U.S. District Court for the Western District of Pennsylvania
(5/9/2020) Bernal Mueller v. Kean University (UNN-L-1538-20) Union County Superior Court, New Jersey
(5/10/2020) Saroya v. University of the Pacific (5:20cv3196) U.S. District Court for the Northern District of California
(5/11/2020) Alexander v. Johnson & Wales University (8:20cv1092) U.S. District Court for the Middle District of Florida
(5/12/2020) Goldberg v. Pace University (1:20cv3665) U.S. District Court for the Southern District of New York
(5/12/2020) Raimo v. Washington University in St. Louis (4:20cv634) U.S. District Court for the Eastern District of Missouri
(5/12/2020) Lee v. The Regents of the University of California (3:20cv3241) U.S. District Court for the Northern District of California
(5/12/2020) Muller v. Durham School Services LP dba Murphy Transportation dba Durham School Services dba Vogel Bus Company (3:20cv5813) U.S. District Court for the District of New Jersey
(5/12/2020) Chavez v. DePaul University (1:20cv2865) U.S. District Court for the Northern District of Illinois
(5/12/2020) Funkhouser v. The Resents of the University of California (RG20061076) Alameda County Superior Court, California
(5/13/2020) Goldstein v. University System of Maryland (MRS-L-1046-20) Morris County Superior Court, New Jersey
(5/13/2020) Bunch v. University of South Carolina (2020CP4002330) Richland County Court of Common Pleas, South Carolina
(5/13/2020) Student A v. Wagner College (1:20cv2170) U.S. District Court for the Eastern District of New York
(5/13/2020) Fagundez v. Florida Board of Governors Foundation Inc. (2020CA000910) Leon County Circuit Court, Florida
(5/13/2020) Soriano v. University of New Haven (3:20cv662) U.S. District Court for the District of Connecticut
(5/13/2020) Shoham v. Loyola Marymount University (2:20cv4329) U.S. District Court for the Central District of California
(5/13/2020) Satam v. Northeastern University (1:20cv10915) U.S. District Court for the District of Massachusetts
(5/13/2020) Silulu v. Trustees of Boston University (1:20cv10914) U.S. District Court for the District of Massachusetts
(5/13/2020) Brock-Murray v. Kean University (UNN-L-1568-20) Union County Superior Court, New Jersey
(5/13/2020) P. v. Educational Testing Services (ETS) (2:20cv4502) U.S. District Court for the Central District of California
(5/14/2020) Fiore v. The University of Tampa (7:20cv3744) U.S. District Court for the Southern District of New York
(5/14/2020) Gibson v. Lynn University Inc. (2020ca005378) Palm Beach County Circuit Court, Florida
(5/15/2020) Doe v. Georgetown University (2:20cv5937) U.S. District Court for the District of New Jersey
(5/15/2020) Jones v. Carrington College Inc. (2:20at477) U.S. District Court for the Eastern District of California
(5/15/2020) Rifat v. Board of Trustees of the California State University (2:20cv4421) U.S. District Court for the Central District of California
(5/15/2020) Amable v. The New School (7:20cv3811) U.S. District Court for the Southern District of New York
(5/15/2020) Pfingsten v. Carnegie Mellon University (2:20cv716) U.S. District Court for the Western District of Pennsylvania
(5/15/2020) Student A v. The Curators of the University of Missouri (20BA-CV01729) Boone County Circuit Court, Missouri
(5/16/2020) Bolland v. Seattle Pacific University (2:20cv741) U.S. District Court for the Western District of Washington
(5/18/2020) Doval v. Fairleigh Dickinson University (2:20cv6010) U.S. District Court for the District of New Jersey
(5/18/2020) Bahrani v. Northeastern University (1:20cv10946) U.S. District Court for the District of Massachusetts
(5/19/2020) Mycek v. Rochester Institute of Technology (6:20cv6324) U.S. District Court for the Western District of New York
(5/19/2020) Awlia v. Southern New Hampshire University (1:20cv609) U.S. District Court for the District of New Hampshire
(5/19/2020) Legge v. University of San Francisco (3:20cv3406) U.S. District Court for the Northern District of California
(5/20/2020) Yi v. Indiana University (49D14-2005-PL-016595) Marion County, Indiana
(5/20/2020) Seslar v. The Trustees of Purdue University (79C01-2005-PL-000059) Tippecanoe County, Indiana
(5/20/2020) Hernandez v. Illinois Institute of Technology (1:20cv3010) U.S. District Court for the Northern District of Illinois
(5/20/2020) Student A v. Harvard University (1:20cv10968) U.S. District Court for the District of Massachusetts

Sports and Fitness Facility and Recreation Membership Fee Cases (32)

A number of class actions have been filed against a sports and fitness clubs relating to the refusal to suspend membership dues during the pandemic.

(3/26/2020) Namorato v Town Sports International, (1:20-cv-02580) U.S. District Court for the Southern District of New York. Plaintiff claims that Defendants violated New York consumer protection laws and breached membership contracts by continuing to charge monthly fees when the facilities are not open. The Complaint quotes from SEC filings showing that Defendants have 605,000 members who pay monthly membership dues of $30 to $120 a month. Plaintiff estimates that monthly revenue wrongfully obtained by the Defendants is $30,250,000. The Complaint incudes references to other health and fitness clubs that have voluntarily suspended membership dues during the pandemic as well has several screen shots of social media reactions to Defendants’ practices. This lawsuit illustrates how companies’ responses to these types of consumer issues will be compared and contrasted with others in the industry.
(3/27/2020) Labib v. 24 Hour Fitness USA, Inc. (4:20cv2134) U.S. District Court for the Northern District of California (same).
(4/2/2020) Jampol v. Blink Holdings, Inc. (1:20cv2760) U.S. District Court for the Southern District of New York (same).
(4/9/2020) Nancy Radford v. Town Sports International LLC, (1:20cv2938) U.S. District Court for the Southern District of New York. Gym membership.
(4/9/2020) Jason Blank v. Youfit Health Clubs LLC (CACE20006161) Broward County Circuit Court, Florida. The defendant gym continued to charge plaintiff and other members their monthly gym fees despite its facilities being closed due to the novel coronavirus outbreak
(4/10/2020) Hunt v. Vail Corporation (3:20cv2463) U.S. District Court for the Northern District of California. A variation on the same scenario and theories in the sports and fitness club cases, this lawsuit alleges that Defendant continues to charge a recurring passholder fees notwithstanding the fact that the ski resorts are closed.
(4/10/2020) Hunt v. Fitness Evolution Inc. U.S. District Court for the Northern District of California (4:20cv2461). Gym membership.
(4/13/2020) Ruiz v. Magic Mountain LLC, (2:20cv3436) U.S. District Court for the Central District of California, California. Charging membership dues while parks are shut down.
(4/9/2020) Blank v. Youfit Health Clubs LLC, (CACE20006161) Broward County Circuit Court. Gym membership.
(4/10/2020) Shahriyar Rezai-Hariri v. Magic Mountain LLC, (8:20cv716) Central District of California. Charging membership dues while parks are shut down.
(4/15/2020) Weiler v. Corepower Yoga LLC (2:20cv3496) Central District of California. (yoga studio).
(4/14/2020) Kramer v. Alterra Mountain Company (1:20cv1057) U.S. District Court for the District of Colorado. Claims against ski resort relating to refund of season pass.
4/16/20) Steijn v. Alterra Mountain Company U.S. Inc. (8:20cv755) U.S. District Court for the Central District of California
(4/21/2020) Hani v. Vail Resorts Inc. (1:20cv1121) U.S. District Court for the District of Colorado
(4/22/2020) Danforth v. Town Sports International LLC (7:20cv3195) U.S. District Court for the Southern District of New York
(4/22/2020) Reingold v. Elements Therapeutic Massage LLC (8:20cv785) U.S. District Court for the Central District of California
(4/23/2020) Cuenco v. ClubCorp USA Inc. (3:20cv774) U.S. District Court for the Southern District of California
(4/24/2020) Clarke v. Vail Corporation dba Vail Resorts Management Company (1:20cv1163) U.S. District Court for the District of Colorado
(4/24/2020) Eckert v. Alterra Mountain Company (1:20cv1158) U.S. District Court for the District of Colorado
(4/24/2020) Cahill v. TurnKey Vacation Rentals, Inc. (1:20cv441) U.S. District Court for the Western District of Texas
(4/27/2020) McAuliffe v. The Vail Corporation dba Vail Resorts Management Company (1:20cv1176) U.S. District Court for the District of Colorado
(4/27/2020) Farmer v. Alterra Mountain Company U.S. Inc. (1:20cv1175) U.S. District Court for the District of Colorado
(4/28/2020) Cleaver v. Ikon Pass Inc. (1:20cv1186) U.S. District Court for the District of Colorado
(4/28/2020) Valentine v. Cedar Fair Amusement Company (2020 CV 0172) Erie County Court of Common Pleas, Ohio
(4/30/2020) Holloway v. Planet Fitness Franchising Llc (1:20cv1868) U.S. District Court for the Northern District of Georgia
(5/5/2020) Werner v. Alterra Mountain Company (1:20cv1254) U.S. District Court for the District of Colorado
(5/5/2020) Williams v. 24 Hour Fitness Usa Inc. (3:20cv3096) U.S. District Court for the Northern District of California
(5/6/2020) Williams v. PF Logan Square LLC (2020-CH-4099) Cook County Circuit Court, Illinois
(5/8/2020) Kouball v. SeaWorld Parks & Entertainment Inc. (3:20cv870) U.S. District Court for the Southern District of California
(5/13/2020) Rarick v. The Vail Corporation dba Vail Resorts Management Company (1:20cv1364) U.S. District Court for the District of Colorado
(5/18/2020) Vodden v. WW International Inc., a Virginia corporation (1:20cv3856) U.S. District Court for the Southern District of New York
(5/20/2020) Ruiz v. 8 Count Dance Studio (2020-30648) Harris County District Court, Texas

Cases Alleging Injuries from Exposures to the Virus (12)

Another category of claims relates to businesses that allegedly exposed customers or their employees to the virus. (These cases present inherent challenges for class certification given the fact that the types and scope of injuries will inevitably vary among the class members.)

(4/7/2020) Paul Turner v. Costa Crociere S.P.A., (1:20cv21481) U.S. District Court for Southern District of Florida. Plaintiff alleges that defendants failed to warn passengers that they had been exposed to the virus. (Same).
(4/8/2020) Archer v. Carnival Corporation, (3:20cv2381) U.S. District Court for the Northern District of California. (Same).
(4/14/2020) Nedeltcheva v. Celebrity Cruises Inc., (1:20cv21569) U.S. District Court for the Southern District of Florida. Claims against a cruise ship that allegedly did not follow necessary precautions including giving crewmembers masks and enforcing social distancing.
(4/27/2020) Estate of Joseph Maglioli v. Andover Subacute Rehabilitation Center I (SSX-L-176-20) Sussex County Superior Court, New Jersey
(5/4/2020) Schoengood v. Hofgur LLC dba Queens Adult Care Center (1:20cv2022) U.S. District Court for the Eastern District of New York
(5/13/2020) Kantrow v. Celebrity Cruises Inc. (1:20cv21997) U.S. District Court for the Southern District of Florida
(5/15/2020) Rovirosa v. Costa Crociere S.P.A. Co. (20-10457CA01) Miami-Dade County Circuit Court, Florida
(5/15/2020) Maiava v. Princess Cruise Lines Ltd. (2:20cv4393) U.S. District Court for the Central District of California
(5/15/2020) Lay v. Tyson Foods Inc. (2:20cv125) U.S. District Court for the Northern District Texas
(5/15/2020) Jones v. St. Jude Operating Company LLC dba Healthcare at Foster Creek (218) Multnomah County Circuit Court, Oregon
(5/18/2020) Grohmann v. HCP Prairie Village KS OPCO LLC dba Brighton Gardens of Prairie Village (20CV02086) Johnson County District Court, Kansas
(5/20/2020) Parker v. St. Jude Operating Company LLC dba Healthcare at Foster Creek (20CV18539) Multnomah County Circuit Court, Oregon

Airline Ticket Cases (33)

Notwithstanding unprecedented efforts to accommodate customers and waive fees, the first of the major airlines have been sued in a series of class actions. Each of the five cases below alleges that the airline refused to refund customers for canceled flights.

(4/6/2020) Utley v. United Airlines Holdings, Inc., U.S. District Court for the Northern District of Ohio.
(4/6/2020) Rudolph v. United Airlines Holdings, Inc. U.S. District Court for the Northern District of Illinois.
(4/6/2020) Compo v. United Airlines Inc., U.S. District Court for the Northern District of Illinois.
(4/8/2020) Levey v. Concesionaria Vuela Compania de Aviacion, U.S. District Court for the Northern District of Illinois.
(4/10/2020) Hill v. Spirit Airlines Inc. U.S. District Court for the Southern District of Florida (0:20cv60746)
(4/13/2020) Bombin v. Southwest Airlines Co., (5:20cv1883) U.S. District Court for the Eastern District of Pennsylvania, Pennsylvania.
(4/13/2020) Daversa-Evdyriadis v. Norwegian Air Shuttle dba Kiwi.com USA Inc. (5:20cv767) U.S. District Court for the Central District of California.
(4/15/2020) Herr v. Allegiant Air LLC (2:20cv10938) U.S. District Court for the Eastern District of Michigan
(4/16/2020) Roman v. Jetblue Airways Corp. (1:20cv1829) U.S. District Court for the Eastern District of New York
(4/21/2020) Manchur v. Spirit Airlines Inc. (1:20cv10771) U.S. District Court for the District of Massachusetts
(4/21/2020) Obertman v. Frontier Airlines Inc. (2:20cv820) U.S. District Court for the Eastern District of California
(4/22/2020) Boucher v. Spirit Airlines Inc. (0:20cv60829) U.S. District Court for the Southern District of Florida
(4/22/2020) Ward v. American Airlines Inc. (4:20cv371) U.S. District Court for the Northern District Texas
(4/23/2020) Levu v. Air Canada (6:20cv703) U.S. District Court for the Middle District of Florida
(4/27/2020) Sholopa v. Turkish Airlines Inc. (1:20cv3294) U.S. District Court for the Southern District of New York
(4/28/2020) Milosevic v. Turk Hava Yollari A.O Inc. (1:20cv3328) U.S. District Court for the Southern District of New York
(4/29/2020) Martinez-Sanchez v. Concesionaria Vuela Compania De Aviacion S.A.P.I. De C.V. (1:20cv1966) U.S. District Court for the Eastern District of New York
(4/30/2020) Plummer v. Transportes Aereos Portugueses Sa Corp. dba Tap Air Portugal(1:20cv10836) U.S. District Court for the District of Massachusetts
(5/5/2020) Vozzolo v. Air Canada, a Canadian corporation (7:20cv3503) U.S. District Court for the Southern District of New York
(5/6/2020) Ide v. British Airways PLC, a United Kingdom corporation (1:20cv3542) U.S. District Court for the Southern District of New York
(5/7/2020) Chaves v. Transportes Aereos Portugueses, S.A. dba Tap Air Portugal (1:20cv2086) U.S. District Court for the Eastern District of New York
(5/8/2020) Suarez v. Emirates, a United Arab Emirates company (1:20cv3623) U.S. District Court for the Southern District of New York
(5/8/2020) Diaz v. Spirit Airlines Inc., a Delaware Corp. (0:20cv60933) U.S. District Court for the Southern District of Florida
(5/10/2020) Dumitrescu v. Compania Panamena De Aviacion, S.A. (1:20cv2125) U.S. District Court for the Eastern District of New York
(5/11/2020) Castanares v. Deutsche Lufthansa AG (2:20cv4261) U.S. District Court for the Central District of California
(5/12/2020) Maree v. Deutsche Lufthansa AG (8:20cv885) U.S. District Court for the Central District of California
(5/12/2020) Zawacki v. Swoop Inc. (8:20cv1100) U.S. District Court for the Middle District of Florida
(5/12/2020) Sweet v. Frontier Airlines (1:20cv1340) U.S. District Court for the District of Colorado
(5/13/2020) England v. United Airlines Inc. (1:20cv2877) U.S. District Court for the Northern District of Illinois
(5/15/2020) Bugarin v. All Nippon Airways Co. Ltd. (5:20cv3341) U.S. District Court for the Northern District of California
(5/15/2020) Williams v. Air China Limited (4:20cv1883) U.S. District Court for the District of South Carolina
(5/20/2020) Melnyk v. Polskie Linie Lotnicze Lot S.A. aka Lot Polish Airlines (2:20cv6119) U.S. District Court for the District of New Jersey
(5/20/2020) Jauregui v. China Eastern Airlines Corporation Limited (2:20cv4552) U.S. District Court for the Central District of California

Product Cases (5)

In David v. Vi-Jon, Inc. dba Germ-X, filed in the U.S. District Court for the Southern District of California, plaintiffs allege that defendants made false and misleading advertising statements regarding the medicinal and virus preventative benefits of their hand sanitizers.
(4/3/2020) Ohlweiler v. Zoom Video Communications Inc., a Delaware corp. (2:20cv3165) U.S. District Court for the Central District of California
(5/4/2020) Narain v. George Harms Construction Co. Inc. (HUD-L-1702-20) Hudson County Superior Court, New Jersey
(5/5/2020) Pearson v. Vi-Jon Inc. dba Germ-X (20SL-CC02431) St. Louis County Circuit Court, Missouri
(5/11/2020) Winegard v. Johnson & Johnson (1:20cv2132) U.S. District Court for the Eastern District of New York

Price Gouging Cases (5)

In what is certainly a harbinger of things to come, one of the first class actions alleging violations of price gouging statutes was filed in State Court in Florida in Armas v. Amazoncom Inc. This case will present an interesting question of whether Amazon can be liable under these statutes given that the prices for these products are set by the e-commerce entity that uses Amazon as its portal. I am doubtful whether liability can be imputed to Amazon for price gouging if it’s not the party setting the prices.
(4/20/2020) Fraser v. Cal-Maine Foods, Inc. (3:20cv2733) U.S. District Court for the Northern District of California
(4/21/2020) McQueen v. Amazon.Com Inc. (4:20cv2782) U.S. District Court for the Northern District of California
(4/30/2020) Bell v. Cal-Maine Foods Inc. (1:20cv461) U.S. District Court for the Western District of Texas
(5/4/2020) Mercado v. Ebay Inc. (5:20cv3053) U.S. District Court for the Northern District of California

SHAREHOLDER CLASS ACTIONS (8)

Douglas v. Norwegian Cruise Lines, filed in the U.S. District Court for the Southern District of Florida, is a federal securities class action brought on behalf of shareholders who purchased or otherwise acquired securities of Norwegian. The Complaint alleges that the company violated its Code of Ethical Business Conduct with respect to its SEC filings and press release relating to its positive outlook in spite of the COVID-19 outbreak.
In McDermid v. Inovio Pharmaceuticals, Inc., filed in U.S. District Court of the Eastern District of Pennsylvania, plaintiff alleges that a biotechnology company “capitalized on widespread COVID-19 fears by falsely claiming that Inovio had developed a vaccine for COVID-19” which was materially false and deceived investors.
(4/15/2020) Riback v. iAnthus Capital Holdings Inc. (1:20cv3044) U.S. District Court for the Southern District of New York
(4/20/2020) Finch v. iAnthus Capital Holdings Inc. (1:20cv3135) U.S. District Court for the Southern District of New York
(4/22/2020) Banuelos v. Norwegian Cruise Lines (1:20cv21685) U.S. District Court for the Southern District of Florida
(4/29/2020) Yannes v. SCWorx Corp. (1:20cv3349) U.S. District Court for the Southern District of New York
(5/5/2020) Cedeno v. iAnthus Capital Holdings Inc. (1:20cv3513) U.S. District Court for the Southern District of New York
(5/19/2020) Hi-Med LLC v. iAnthus Capital Holdings Inc. (1:20cv3898) U.S. District Court for the Southern District of New York

EMPLOYEE CLASS ACTIONS (17)

The fact that there are only a handful of employee claims filed should not be read as indicative of a lack of future claims from employees. Conferring with my L&E and employee benefit partners, there is a general consensus that there will be many employee class actions.

In Verhines v. Uber Technology, Inc., filed San Francisco Superior Court, Plaintiff seeks unemployment benefits on behalf of drivers. An identical case was filed by the same firm against Lyft.
In Alaska State Employees v State of Alaska, filed in State Court in Alaska, a union of public employees have brought claims for injunctive relief relating to the State’s alleged (a) refusing to allow employees to enter into tele-commuting agreements, (b) failing to make changes to shift schedules to allow adequate social distancing, (c) not permitting teleconferencing and modification of work spaces; (d) failing to provide appropriate personal protective equipment to shield employees who have to interact with the public; (d) declining to follow CDC guidelines by allowing more than ten people to work together in small spaces.
Olsen v. Ratner Companies, (1:20cv3760) U.S. District Court for the District of New Jersey. Alleges violation of FLSA for alleged failure to pay for employees after the shutdown from the COVID-19 pandemic.
(4/16/2020) Scott v. Hooters III Inc. (8:20cv882) U.S. District Court for the Middle District of Florida
(4/20/2020) Fernandez v. Mike Bloomberg 2020 Inc. (1:20cv3132) U.S. District Court for the Southern District of New York
(4/24/2020) Ferrante v. Ratner Companies LC (CACE20007011) Broward County Circuit Court, Florida
(5/5/2020) McGhee v. Postmates Inc. (CGC-20-584341) San Francisco County Superior Court, California
(5/5/2020) Corbin v. DoorDash (CGC-20-584342) San Francisco County Superior Court, California
(5/13/2020) Shuttleworth v. Eriez Manufacturing Co. (2020-10999) Erie County Court of Common Pleas, Pennsylvania
(5/14/2020) Benedetto v. Action Rentals of FLL LLC (1:20cv22029) U.S. District Court for the Southern District of Florida
(5/15/2020) Evans v. Kast Construction Company LLC (0:20cv60965) U.S. District Court for the Southern District of Florida
(5/18/2020) Gasper v. Mack Industries (20CIV0359) Medina County Court of Common Pleas, Ohio
(5/19/2020) Burbach v. Arconic Corp. (2:20cv723) U.S. District Court for the Western District of Pennsylvania
(5/19/2020) Carnival v. Jim’s Towing Service Inc. (BCV-20-101206) Kern County Superior Court, California
(5/19/2020) Almeida v. Heated Details, Inc. (20-2-09002-6) King County Superior Court, Washington
(5/20/2020) Tyler v. Angi Homeservices Inc. dba Angie’s List Inc. (1:20cv1459) U.S. District Court for the Southern District of Indiana
(5/20/2020) Bryant v. Gray Construction Inc. (20CV18587) Multnomah County Circuit Court, Oregon

As explained in this blog post, there is a lag time for these cases and I expect there will be a tsunami of employee claims in the coming weeks. Here is my current list of potential claims against employers.

WARN Act Claims: The announcement of layoffs will likely result in a number of claims relating to compliance with the WARN Act and similar state laws, including questions of whether certain exemptions apply.
Wage & Hour Claims: As a result of employees working remotely, standard operating procedures and controls relating to meal and rest breaks have been disrupted. A lack of adequate recordkeeping and oversight increases the risk of wage and hour claims, including overtime pay. The use of personal equipment for business purposes triggers questions and claims relating to companies’ reimbursement policies.
Employee Safety and Claims: Companies have been required to balance urgent business needs with employee health and safety during the crisis. There will likely be class actions relating to exposures to the virus in the workplace. In addition, the stress of the pandemic and resulting mental health needs will increase the likelihood of individual as well as class claims.
Whistleblower Retaliation Claims: Employees claiming to be subject to retaliation for raising concerns about health and safety or compliance with laws, including COVID-19-related directives. Issues relating to these types of claims are addressed at length here.
ERISA Claims: As the bottom falls out of 401ks and pension plans, there will likely be ERISA claims. Any down market prompts greater scrutiny of past fiduciary decisions. This is a risk even after Retirement Plans Committee of IBM v. Jander, (No. 18-1165)
Employee Medical Privacy Claims: Employee privacy claims are likely to follow as the manner in which companies handle sensitive information concerning employees’ medical diagnoses is questioned. This includes internal as well as external reporting. If employee records, normally maintained on a secured server, are accessed and stored outside the normal environment, there are risks relating to unauthorized access to private information and resulting privacy claims.
Disparate Impact Layoffs: As companies address the need for layoffs and furloughs, the disparate impact of decisions on who is retained and who is terminated will face scrutiny, opening the door to possible claims for age discrimination.

INSURANCE COVERAGE (131)

(3/31/2020) Billy Goat Tavern I Inc. v. Society Insurance, (1:20cv2068) Northern U.S. District Court for the Northern District of Illinois. In what appears to be the first commercial class action (class is comprised of businesses, not individuals), a group of pubs and bars in Chicago has sued an insurer which has already denied their claims for coverage for business interruption.
(4/9/2020) El Novillo Restaurant dba DJJ Restaurant Corp. v. Certain Underwriters at Lloyd’s London, (1:20cv21525) U.S. District Court for the Southern District of Florida (same).
(4/15/2020) Torre Rossa LLC v. Liberty Mutual Insurance (CV-20-931885) Cuyahoga County Court of Common Pleas. Alleges insurer denied plaintiff’s claim for lost business income for business interruption.
(4/15/2020) PTG Live Events LLC dba Pabst Riverside Theater Group v. The Cincinnati Insurance Company (2020CV002596) Milwaukee County Circuit Court, Wisconsin
(4/16/2020) Colectivo Coffee Roasters Inc. v. Society Insurance (2020CV002597) Milwaukee County Circuit Court, Wisconsin
(4/17/2020) Bridal Expressions LLC v. Owners Insurance Company (1:20cv833) U.S. District Court for the Northern District of Ohio
(4/17/2020) Caribe Restaurant & Nightclub Inc. v. TOPA Insurance Company (2:20cv3570) U.S. District Court for the Central District of California
(4/17/2020) GIO Pizzeria & Bar Hospitality LLC v. Certain Underwriters at Lloyds, London (1:20cv3107) U.S. District Court for the Southern District of New York, New York
(4/17/2020) Rising Dough Inc. dba Madison Sourdough v. Society Insurance (2:20cv623) U.S. District Court for the Eastern District of Wisconsin
(4/17/2020) Berkseth-Rojas v. Aspen American Insurance Company (3:20cv948) U.S. District Court for the Northern District Texas
(4/17/2020) HTR Restaurants Inc. dba Seibs Pub v. Erie Insurance Exchange (GD-20-005138) Allegheny County Court of Common Pleas, Pennsylvania
(4/19/2020) PGB Restaurant Inc. v. Erie Insurance Company (1:20cv2403) U.S. District Court for the Northern District of Illinois
(4/19/2020) Troy Stacy Enterprises Inc. v. The Cincinnati Insurance Company (1:20cv312) U.S. District Court for the Southern District of Ohio
(4/20/2020) Cafe International Holding Company LLC v. Chubb Limited (1:20cv21641) U.S. District Court for the Southern District of Florida
(4/20/2020) Truhaven Enterprises Inc. dba Fiorino Restorante v. Chubb Ltd. (2:20cv4586) U.S. District Court for the District of New Jersey
(4/20/2020) Mikkelson v. Aspen American Insurance Company (3:20cv5378) U.S. District Court for the Western District of Washington
(4/21/2020) Town Kitchen LLC v. Certain Underwriters at Lloyd’s (20-8801CA01) Miami-Dade County Circuit Court, Florida
(4/22/2020) Stan’s Bar-B-Q Llc v. The Charter Oak Fire Insurance Company (2:20cv613) U.S. District Court for the Western District of Washington
(4/22/2020) The K’s Inc. v. Westchester Surplus Lines Insurance Company (1:20cv1724) U.S. District Court for the Northern District of Georgia
(4/22/2020) Marler v. Aspen American Insurance Company (2:20cv616) U.S. District Court for the Western District of Washington
(4/23/2020) Hair Perfect International Inc. v. Sentinel Insurance Company Limited, dba The Hartford(2:20cv3729) U.S. District Court for the Central District of California
(4/23/2020) Grand Street Dining LLC v. The Cincinnati Insurance Co. (4:20cv330) U.S. District Court for the Western District of Missouri
(4/23/2020) Windber Hospital dba Chan Soon Shiong Medical Center v. Travelers Property Casualty Company of America (3:20cv80) U.S. District Court for the Western District of Pennsylvania
(4/23/2020) Nighttown Inc. v. The Cincinnati Insurance Company (CV-20-932070) Cuyahoga County Court of Common Pleas, Ohio
(4/23/2020) Pacific Endodontics P.S. v. Ohio Casualty Insurance Company (2:20cv620) U.S. District Court for the Western District of Washington
(4/23/2020) Biscuit Cafe Inc. dba Buttermilk Geneva v. Society Insurance Inc. (1:20cv2514) U.S. District Court for the Northern District of Illinois
(4/24/2020) JDS 1455 Inc. dba West on North v. Society Insurance (1:20cv2546) U.S. District Court for the Northern District of Illinois
(4/24/2020) Biltrite Furniture Inc. v. Liberty Mutual Insurance Company (2:20cv656) U.S. District Court for the Eastern District of Wisconsin
(4/24/2020) SA Hospitality Group LLC v. The Hartford Financial Group Inc. (1:20cv3258) U.S. District Court for the Southern District of New York
(4/24/2020) Chorak v. Hartford Casualty Insurance Company (2:20cv627) U.S. District Court for the Western District of Washington
(4/24/2020) Egg and I LLC v. U.S. Specialty Insurance Company (2:20cv747) U.S. District Court for the District of Nevada
(4/25/2020) Egg Works Holding Company LLC v. Acuity (2:20cv748) U.S. District Court for the District of Nevada
(4/26/2020) Dino Palmieri Salons Inc. v. State Automobile Mutual Insurance Company dba State Auto Insurance Companies (CV-20-932117) Cuyahoga County Court of Common Pleas, Ohio
(4/27/2020) Equity Planning Corporation v. Westfield Insurance Company (CV-20-932122) Cuyahoga County Court of Common Pleas, Ohio
(4/27/2020) Zwillo V. Corp. dba Westport Flea Market Bar & Grill v. Lexington Insurance Co. (4:20cv339) U.S. District Court for the Western District of Missouri
(4/27/2020) Atma Beauty Inc. v. HDI Global Specialty SE (1:20cv21745) U.S. District Court for the Southern District of Florida
(4/27/2020) Milkboy Center City v. The Cincinnati Insurance Company (2:20cv2036) U.S. District Court for the Eastern District of Pennsylvania
(4/27/2020) Studio 417 Inc. v. The Cincinnati Insurance Company (6:20cv3127) U.S. District Court for the Western District of Missouri
(4/27/2020) AK Studios v. Millers Capital Insurance Company (2020-CV-04082-CV) Dauphin County Court of Common Pleas, Pennsylvania
(4/28/2020) Pigment Inc. v. The Hartford Financial Services Group Inc. (3:20cv794) U.S. District Court for the Southern District of California
(4/28/2020) Project Lion LLC dba Crush dba Greek Sneek v. Badger Mutual Insurance Company (2:20cv768) U.S. District Court for the District of Nevada
(4/28/2020) Badger Crossing Inc. dba Badger Crossing Pub & Eatery v. Society Insurance Inc. (2020CV000957) Dane County Circuit Court, Wisconsin
(4/29/2020) Buffalo Xerographix Inc. v. Sentinel Insurance Co. Ltd. (1:20cv520) U.S. District Court for the Western District of New York
(4/29/2020) N&S Restaurant LLC v. Cumberland Mutual Fire Insurance Company (1:20cv5289) U.S. District Court for the District of New Jersey
(4/29/2020) Arnell M. Prato, D.D.S. Pllc v. Sentinel Insurance Company Ltd. (3:20cv5402) U.S. District Court for the Western District of Washington
(4/29/2020) Alliance Radiology PA v. CNA Financial Corporation (2:20cv2218) U.S. District Court for the District of Kansas
(4/29/2020) O’Brien Sales and Marketing Inc. v. Transportation Insurance Company (4:20cv2951) U.S. District Court for the Northern District of California
(4/29/2020) Geneva Foreign & Sports Inc. v. Erie Insurance Co. of New York (1:20cv93) U.S. District Court for the Western District of Pennsylvania
(4/30/2020) Roscoe Same LLC v. Society Insurance (1:20cv2641) U.S. District Court for the Northern District of Illinois
(4/30/2020) Kim v. Sentinel Insurance Company Limited (2:20cv657) U.S. District Court for the Western District of Washington
(4/30/2020) Germack v. Dentists Insurance Company (2:20cv661) U.S. District Court for the Western District of Washington
(5/1/2020) Food for Thought Caterers Corp. v. The Hartford Financial Services Group Inc. (1:20cv3418) U.S. District Court for the Southern District of New York
(5/1/2020) BBMS LLC dba All A’Bloom v. Continental Casualty Company (4:20cv353) U.S. District Court for the Western District of Missouri
(5/1/2020) Sun Cuisine LLC dba Zest Restaurant and Market v. Certain Underwriters at Lloyd’s London (1:20cv21827) U.S. District Court for the Southern District of Florida
(5/1/2020) Queen’s Tower Restaurant Inc. dba Primavista v. Cincinnati Financial Corp. (A2001747) Hamilton County Court of Common Pleas, Ohio
(5/1/2020) RSV Enterprises Inc. dba Drake Diner v. Society Insurance (05771 CVCV060150) Polk County District Court, Iowa
(5/1/2020) Pexe Nori II LLC ta Learning Express of Wexford v. Donegal Mutual Insurance Co. (GD-20-005423) Allegheny County Court of Common Pleas, Pennsylvania
(5/1/2020) Sea Land Air Travel Inc. dba Sea Land Air Travel v. Auto Owners Insurance Company (20-005872-CZ) Wayne County Circuit Court, Michigan
(5/2/2020) Nixon v. Generali U.S. Branch (1:20cv2670) U.S. District Court for the Northern District of Illinois
(5/4/2020) JDL Inc. dba Vegas Image v. Valley Forge Insurance Company (1:20cv2681) U.S. District Court for the Northern District of Illinois
(5/4/2020) 3 Squares LLC dba Squares Diner v. The Cincinnati Insurance Company (1:20cv2690) U.S. District Court for the Northern District of Illinois
(5/4/2020) Kingray Inc. dba La Quinta Beer Hunter v. Farmers Group Inc. (5:20cv963) U.S. District Court for the Central District of California
(5/4/2020) Yound Blood Coffee Roasters LLC v. State Auto Property & Casualty Insurance Co. (0:20cv1076) U.S. District Court for the District of Minnesota
(5/4/2020) Lee v. Sentinel Insurance Company Limited (3:20cv5422) U.S. District Court for the Western District of Washington
(5/4/2020) New Orleans Hamburger & Seafood Company v. Starr Surplus Lines Insurance Company (2:20cv1370) U.S. District Court for the Eastern District of Louisiana
(5/4/2020) Nari Suda LLC dba Nari and Pakin Corporation v. Oregon Mutual Insurance Company, an Oregon corp. (4:20cv3057) U.S. District Court for the Northern District of California
(5/5/2020) Taste of Belgium LLC v. The Cincinnati Insurance Company (1:20cv357) U.S. District Court for the Southern District of Ohio
(5/5/2020) Beniak Enterprises Inc. dba Benito Ristorante v. Chubb Ltd. (2:20cv5536) U.S. District Court for the District of New Jersey
(5/5/2020) Royal Palm Optical Inc. v. State Farm Mutual Automobile Insurance Company (9:20cv80749) U.S. District Court for the Southern District of Florida
(5/5/2020) T&J’s 5th Down Inc. v. Society Insurance (02D02-2005-CT-000246) Allen County, Indiana
(5/5/2020) Hair Studio 1208 LLC v. Hartford Underwriters Insurance Co. (2:20cv2171) U.S. District Court for the Eastern District of Pennsylvania
(5/5/2020) Nue Llc dba Nue Seattle v. Oregon Mutual Insurance Company (2:20cv676) U.S. District Court for the Western District of Washington
(5/6/2020) Image Dental LLC v. Citizens Insurance Company of America (1:20cv2759) U.S. District Court for the Northern District of Illinois
(5/6/2020) Upmerch v. Continental Casualty Comp. (2020-CH-4093) Cook County Circuit Court, Illinois
(5/6/2020) MMMMM DP LLC dba Sugo’s Spaghetteria v. The Cincinnati Insurance Company (20SL-CC02603) St. Louis County Circuit Court, Missouri
(5/7/2020) Rinnigade Art Works v. The Hartford Financial Services Group Inc. (1:20cv10867) U.S. District Court for the District of Massachusetts
(5/8/2020) Johnson v. Hartford Fire Insurance Company (1:20cv2000) U.S. District Court for the Northern District of Georgia
(5/8/2020) The Eye Care Center of New Jersey PA v. The Hartford Financial Services Group Inc. (2:20cv5743) U.S. District Court for the District of New Jersey
(5/8/2020) Derrick Scott Williams PLLC v. The Cincinnati Insurance Company (1:20cv2806) U.S. District Court for the Northern District of Illinois
(5/8/2020) Big Tomato LLC dba Tabella v. State Auto Property and Casualty Insurance Co. (2:20cv86) U.S. District Court for the Southern District of Mississippi
(5/8/2020) Homestate Seafood LLC dba Automatic Seafood & Oysters v. The Cincinnati Insurance Company (2:20cv649) U.S. District Court for the Northern District of Alabama
(5/8/2020) Drama Camp Productions Inc. v. Mt. Hawley Insurance Co. (1:20cv266) U.S. District Court for the Southern District of Alabama
(5/8/2020) Carlos O. Caballero Dds, Ms, Ps dba Master Orthodontics v. Massachusetts Bay Insurance Company (3:20cv5437) U.S. District Court for the Western District of Washington
(5/11/2020) Spring House Tavern Inc v. American Fire And Casualty Company (2020-06069) Montgomery County Court of Common Pleas, Pennsylvania
(5/11/2020) Cheryl Simon v. Erie Insurance Exchange (2020-02100) Lackawanna County Court of Common Pleas, Pennsylvania
(5/12/2020) Paradigm Care & Enrichment Center LLC v. West Bend Mutual Insurance Company (2:20cv720) U.S. District Court for the Eastern District of Wisconsin
(5/12/2020) Starjem Restaurant Corp. dba Fresco v. Liberty Mutual Insurance (1:20cv3672) U.S. District Court for the Southern District of New York
(5/12/2020) Saucy Brew Works LLC v. The Cincinnati Insurance Company (CV-20-932532) Cuyahoga County Court of Common Pleas, Ohio
(5/12/2020) Glow Medispa Llc v. Sentinel Insurance Company Limited (2:20cv712) U.S. District Court for the Western District of Washington
(5/12/2020) Kahn v. Pennsylvania National Mutual Insurance Co. (1:20cv781) U.S. District Court for the Middle District of Pennsylvania
(5/13/2020) Blue Springs Dental Care LLC v. Owners Insurance Company (4:20cv383) U.S. District Court for the Western District of Missouri
(5/13/2020) Sero Inc. dba Beast v. Berkley North Pacific Group LLC (3:20cv776) U.S. District Court for the District of Oregon
(5/13/2020) Karla Aylen, DDS Pllc v. Aspen American Insurance Company (2:20cv717) U.S. District Court for the Western District of Washington
(5/13/2020) Raven and the Bow LLLC dba Ivy Room v. First Mercury Insurance Company (3:20cv3264) U.S. District Court for the Northern District of California
(5/13/2020) Seoul Taco Holdsing LLC v. The Cincinnati Insurance Company (2022-CC00943) St. Louis City Circuit Court, Missouri
(5/14/2020) MIKMAR Inc. v. Westfield Insurance Company (20CV000646) Lake County Court of Common Pleas, Ohio
(5/14/2020) Menns Inc. dba The Tavern on Clark v. Erie Insurance Exchange (1:20cv2895) U.S. District Court for the Northern District of Illinois
(5/14/2020) Rowshan v. Ohio Security Insurance Company (2:20cv730) U.S. District Court for the Western District of Washington
(5/14/2020) Deoleo v. United States Liability Insurance Company (2:20cv2301) U.S. District Court for the Eastern District of Pennsylvania
(5/14/2020) Terry Black’s Barbecue, LLC v. State Automobile Mutual Insurance Company (D-1-GN-20-002659) Travis County District Court, Texas
(5/14/2020) Pappy’s Barber Shops Inc. v. Farmer’s Group Inc. (3:20cv907) U.S. District Court for the Southern District of California
(5/14/2020) Robert Levy DMD LLC v. Hartford Casualty Insurance Company (4:20cv643) U.S. District Court for the Eastern District of Missouri
(5/14/2020) Cascadia Dental Specialists Inc. v. American Fire And Casualty Company (2:20cv732) U.S. District Court for the Western District of Washington
(5/15/2020) Nicholas Addiego Endodontist DMD LLC v. Hartford Financial Services Group Inc. dba The Hartford (3:20cv5932) U.S. District Court for the District of New Jersey
(5/15/2020) Colby Restaurant Group Inc. v. Utica National Insurance Group (1:20cv5927) U.S. District Court for the District of New Jersey
(5/15/2020) Fire Island Retreat v. Brit Global Specialty USA, Inc. (2:20cv2312) U.S. District Court for the Eastern District of Pennsylvania
(5/15/2020) 4-Up Corp. dba Miami Lakes Perfumes v. Westchester Surplus Lines Insurance Co. dba Chubb (1:20cv22049) U.S. District Court for the Southern District of Florida
(5/15/2020) Jada Restaurant Group LLC dba Tre Trattoria v. Acadia Insurance Group (2020CI08884) Bexar County District Court, Texas
(5/15/2020) Hillcrest Optical Inc. v. Continental Casualty Company (1:20cv275) U.S. District Court for the Southern District of Alabama
(5/15/2020) Boca J.P. Inc. v. Farmers Group Inc. (20PSCV00325) Los Angeles County Superior Court Branches, California
(5/15/2020) Ital Uomo of New York Inc. v. Starr Indemnity & Liability Company (1:20cv2209) U.S. District Court for the Eastern District of New York
(5/15/2020) Broadway 104 LLC dba Cafe Du Soleil v. AXA Financial Inc. (1:20cv3813) U.S. District Court for the Southern District of New York
(5/18/2020) Q Clothier New Orleans LLC v. Twin City Fire Insurance Company (2:20cv1470) U.S. District Court for the Eastern District of Louisiana
(5/18/2020) Bradley v. United Specialty Insurance Company (4:20cv520) U.S. District Court for the Eastern District of Arkansas
(5/18/2020) Bauer Family Enterprises, Inc. v. Ohio Security Insurance Co. (3:20cv500) U.S. District Court for the Middle District of Florida
(5/18/2020) Club 31 Sports Bar & Lounge LLC v. Mesa Underwriters Specialty Insurance Company (4:20cv397) U.S. District Court for the Western District of Missouri
(5/18/2020) Twelve Twelve Nashville LLC dba Pemrose v. The Cincinnati Insurance Company (3:20cv423) U.S. District Court for the Middle District of Tennessee
(5/18/2020) Lexington Pain & Wellness Center PSC v. Erie Insurance Exchange (20ci01494) Fayette County Circuit Court, Kentucky
(5/18/2020) Heidarpour v. Arch Insurance Group Inc. (2:20cv968) U.S. District Court for the District of Arizona
(5/19/2020) iAthlete & Fitness LLC dba Results Fitness v. The Cincinnati Insurance Company (CV-20-932683) Cuyahoga County Court of Common Pleas, Ohio
(5/19/2020) Home Solutions v. AVS Insurance Agency Inc. (2:20cv2349) U.S. District Court for the Eastern District of Pennsylvania
(5/19/2020) Gammon and Associates Inc. v. National Fire Insurance Company of Hartford (7:20cv3882) U.S. District Court for the Southern District of New York
(5/19/2020) Pizza Loves Emily Holdings LLC v. The Cincinnati Insurance Company (3:20cv429) U.S. District Court for the Middle District of Tennessee
(5/19/2020) 632 Metacom Inc. dba Hometown Tavern v. Certain Underwriters at Lloyd’s (1:20cv3905) USDC Southern District of New York
(5/19/2020) Havest Moon Distributors LLC v. Southern Owners Insurance Co. (2020CA005292) Orange County Circuit Court, Florida
(5/19/2020) Ridley Park Fitness LLC v. Philadelphia Insurance Companies (200501093) Philadelphia County Court of Common Pleas, Pennsylvania
(5/20/2020) Bulldog Yoga Holdings v. Cincinatti Insurance Co. (2:20cv2358) U.S. District Court for the Eastern District of Pennsylvania
(5/20/2020) Dotexamdr PLLC v. Hartford Fire Ins Co. (3:20cv698) U.S. District Court for the District of Connecticut
(5/20/2020) K D Unlimited, Inc. db The Artisan Gathering Salon v. Owners Insurance Company (1:20cv2163) U.S. District Court for the Northern District of Georgia
(5/20/2020) Pats v. The Hartford Fire Insurance Company (3:00cv697) U.S. District Court for the District of Connecticut
(5/20/2020) Guerra v. First Community Insurance Co. dba Bankers Insurance Group (20-10826CA01) Miami-Dade County Circuit Court, Florida

CARES ACT CLASS ACTIONS (15)

The first of the class action lawsuits relating to the CARES Act have been filed.

(4/12/2020) Scherer v. Frost Bank (4:20cv1297) U.S. District Court for the Southern District of Texas. One of the first CARES Act class actions relates to whether a bank may refuse to accept loan applications from companies if the applicant did not previously have a banking relationship with the bank.
(4/20/2020) Kennard Law PC v. Frost Bank (2020-24432) Harris County District Court, Texas
(4/20/2020) Outlet Tile Center v. JPMorgan Chase & Co. (2:20cv3603) U.S. District Court for the Central District of California
(4/22/2020) Hyde-Edwards Salon & Spa v. JPMorgan Chase & Co. (3:20cv762) U.S. District Court for the Southern District of California
(4/24/2020) Sha-Poppin Gourmet Popcorn LLC v. JPMorgan Chase Bank N.A (1:20cv2523) U.S. District Court for the Northern District of Illinois
(4/26/2020) Sport & Wheat CPA PA v. Servisfirst Bank Inc. (3:20cv5425) U.S. District Court for the Northern District of Florida
(4/27/2020) Shiny Strands Inc. v. JPMorgan Chase & Co. (1:20cv2547) U.S. District Court for the Northern District of Illinois
(4/27/2020) American Video Duplicating Inc v. CitiGroup Inc (2:20cv3815) U.S. District Court for the Central District of California
(4/28/2020) King Norton v. Regions Financial Corporation (2:20cv591) U.S. District Court for the Northern District of Alabama
(4/30/2020) D. Sims LLC v. Wintrust Financial Corporation (1:20cv2644) U.S. District Court for the Northern District of Illinois
(5/6/2020) Elizabeth M. Byrnes Inc. v. Fountainhead Commercial Capital LLC (2:20cv4149) U.S. District Court for the Central District of California
(5/8/2020) Brunner Accounting Group v. SVB Financial Group (2:20cv4235) U.S. District Court for the Central District of California
(5/12/2020) Impacct LLC v. Jpmorgan Chase & Co. (1:20cv1344) U.S. District Court for the District of Colorado
(5/19/2020) Decca Consulting LLC v. JPMorgan Chase Bank NA (20-dcv-273502) Fort Bend County District Court, Texas
(5/20/2020) Panda Accounting LLC v. Academy Bank NA (2:20cv985) U.S. District Court for the District of Arizona

There are a few other class action from the pandemic that bear mentioning even though not particularly relevant to corporate risks assessment.

FOREIGN SOVEREIGN CASES (AGAINST CHINA)

Perhaps the most ambitious of all the coronavirus class actions are those that have named the People’s Republic of China as a defendants.

Alters v. People’s Republic of China, filed in the U.S. District Court for the Southern District of Florida. Plaintiffs seek “damages suffered as a result of the Coronavirus pandemic, against Defendants, the People’s Republic of China and its various government entities overseeing the response to the Coronavirus pandemic in China generally and within Hubei Province and the City of Wuhan.”
Bella Vista LLC v. Peoples Republic of China U.S. District Court for the District of Nevada
Bourque CPA’s and Advisors v. The People’s Republic of China. U.S. District Court for the Central District of California
(4/8/2020) Aharon v. Chinese Communist Party (9:20cv80604) U.S. District Court for the Southern District of Florida
(4/8/2020) Cardiff Prestige Property Inc. v. People’s Republic of China (8:20cv683) U.S. District Court for the Central District of California
(4/13/2020) Azelea Woods of Ouachita v. The People’s Republic of China (3:20cv457) U.S. District Court for the Western District of Louisiana
(5/8/2020) Edwards v. People’s Republic Of China (2:20cv1393) U.S. District Court for the Eastern District of Louisiana
(5/15/2020) Patella v. Peoples Republic of China (1:20cv433) U.S. District Court for the Middle District of North Carolina

One reader tipped me off to the flipside of these claims, a report of lawyers in China suing U.S. over a coronavirus cover up. I don’t have those documents and could not read them if I did, but a report is available at Radio Free Asia. I do not view these claims as having a strong probability of success on the merits or getting past class certification.

It’s a creative idea and theory, but I am not aware of any precedent allowing for claims like this. Apart from the sovereign immunities issues and comity principles (the substantive law), a plaintiff in a class action must present a theory of how the class could be properly managed (procedural law). I’m doubtful that a class could ever be certified given the varied and atypical types of economic injuries to the class members. That’s my initial reaction, but I’ll sure be watching this unfold with a great deal of interest.

There are a few others copycat lawsuits, but updating this list of lawsuits against China has not been a priority for me. More on these lawsuits, including some further thoughts I and others provided for a Newsweek article, here.

First Coronavirus Consumer Class Action Filed on the Left Coast

About the only thing certain in these uncertain times is consumer class action litigators’ ability to cobble together a lawsuit based on the Coronavirus. Just as with the Ebola crisis a few years ago, it appears that the Left Coast also has the first Coronavirus consumer class action lawsuit.

Filed just last week, the lawsuit alleges that a manufacturer of hand sanitizers is marketing its product in a deceptive manner, suggesting that it is effective in killing the coronavirus. Plaintiff points to the fact that the FDA issued a warning letter raising these types of concerns in January. The lawsuit is a reminder that advertising statements that conceivably influence a consumer’s buying decision–such as a product’s efficacy–can be the basis of a consumer protection lawsuit. The lawsuit is styled David v. Vi-Jon, Inc. (S.D. Cal. Case No. 3:20-cv-99999)

Coronavirus and Contractual Performance Disputes—Does a Pandemic Excuse Performance of Contractual Obligations?

The daily headlines are reminders of the far-reaching economic ripple effects of the 2019 Novel Coronavirus (COVID-19) outbreak. The pandemic is forcing companies to abruptly alter strategies and business plans that seemed certain even at the beginning of the year. These types of changes prompt a question relating to whether this unprecedented health crisis alters existing contractual obligations. Can a company suspend performance of a contract or even terminate the agreement altogether because of the impacts of the coronavirus?

In many instances, the answer to this question is in the affirmative, and unequivocally so. A party to a contract may argue that, as a result of the outbreak, performance of its contractual duties is now impossible, impractical or at least economically infeasible. But applicable law, contractual provisions and the parties’ course of dealing before and since the outbreak will in some cases make the answer far from clear, in which case the dispute may escalate to litigation. With the possibility of litigating these sensitive issues on the horizon, it is useful to examine the legal principles that govern contract disputes stemming from the current health crisis.

Impossibility and Impracticability of Performance

American contract law has long recognized and accommodated situations in which one party’s contractual performance is made impossible or impractical by intervening and unforeseeable events such as the outbreak of a war or a similar catastrophic event.[1] The law recognizes that it would be unfair and inequitable to hold a contracting party to their contractual duties when the circumstances interfering with their performance are extraordinary and beyond their control.

Reflected in both the Uniform Commercial Code (governing sale of goods)[2] as well as the Restatement (Second) of Contracts, the rule is generally referred to as the doctrine of impossibility of performance.[3] Every state recognizes some form of the law of impossibility, either in the common law of contracts or by code. California has codified the law as follows: “The want of performance of an obligation, or of an offer of performance, in whole or in part, or any delay therein, is excused by the following causes, to the extent to which they operate: (2) When it is prevented or delayed by an irresistible, superhuman cause, or by the act of public enemies of this state or of the United States, unless the parties have expressly agreed to the contrary.”[4] Even if not entirely impossible to perform, if it is utterly impractical to perform, the same result obtains—performance of contractual duties may be excused.

Mere Delay in Performance

One of the threshold questions in these cases is whether the circumstances merit only a delay in performance rather than a complete termination of all contractual obligations. As is common in California jurisprudence, one of the seminal cases that addresses this issue involved a dispute between an actor and movie studio. In Autry v. Republic Productions, Inc.,[5] the court held that Gene Autry was released from his contractual obligation to a movie studio because of the outbreak of World War II and the actor’s enlistment in the military. The parties disputed whether a provision in the contract merely suspended Mr. Autry’s obligation during wartime or effectively terminated his performance obligations thereafter. The court agreed with the Singing Cowboy who had served his country well, concluding that time was of the essence in the contract. It held that, by the time the war was over, the economic conditions had changed to such a degree that he was excused from performance entirely.[6]

Lack of Foreseeability is Key

The bar for proving impossibility is high and requires that the condition purportedly interfering with performance be entirely unforeseeable. In Mitchell v. Ceazan Tires, Ltd.[7] (another case triggered by the outbreak of war), a tenant which had leased commercial space for an auto parts and tire store contended that the war triggered governmental regulations on the sale of new tires making performance impossible. The California Supreme Court rejected this argument, not only because the contract was entered into when the country was debating entry into the war, making this not entirely an unforeseeable or remote possibility, but also because the contract still retained value notwithstanding the limitation.[8]

Assuming that the contractual obligations were assumed before December 2019 (when the first cases were reported in mainland China), the foreseeability should not be a bar to this argument as the nature and spread of the epidemic is unprecedented. For contracts that have been negotiated in more recent weeks, the widespread reports of the outbreak will make the foreseeability argument a contested issue.

Contract Terms are Key

These principles of contract law operate as an exception to the principle that courts will enforce the parties’ expectations. Instead, of focusing on the contractual intent, these cases are resolved based on the equity or fairness of the situation. Notwithstanding this principal focus, it would be a mistake to conclude that the terms of the parties’ written contract are immaterial to the question.

Several types of contract provisions become paramount in these cases. First, where the parties’ written agreement manifests an intent to address these types of contingencies, those terms will control. One such provision is a force majeure clause.

A force majeure provision seeks to identify the types of circumstances which will suspend a performance obligation.[9] But such clauses may be a double-edged sword for the party seeking to avoid the contractual obligation. If the force majeure clause lists a variety of events excusing performance—e.g., war, terrorists attacks, labor disputes—but does not contain language suggesting that this list is non-exclusive, the party seeking to enforce the contract may point to its omission as a reason to enforce the parties’ obligations. Other contract provisions that are of paramount importance in these types of contract disputes are termination clauses, choice of law provisions and liquidated damages provisions.

Frustration of Purpose

A closely-related legal doctrine that may be invoked by a party whose business plans are impacted by the pandemic is frustration of purpose. “Where, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or circumstances [of the contract] indicate the contrary.”[10] This doctrine may be invoked where performance is not impossible but, due to the significant change in circumstances, a basic assumption in the parties’ agreement has not materialized.

Suppose, for example, a company has a contract obligating it to provide ancillary services at a major trade show that is now canceled due to the coronavirus outbreak. The vendor can still perform the services (hence, not impossible), but the entire point of the transaction was that there would be thousands of attendees at the event. In this instance, frustration of purpose, not impossibility of performance is a better argument.

How these Legal Issues Play Out in Litigation

Typically, the party seeking to avoid the contract will be a defendant in a claim for damages brought by the party seeking to enforce the contractual obligations. But it may be prudent or procedurally advantageous for the party seeking to be excused to be the plaintiff by affirmatively seeking an adjudication of the issue through a declaratory judgment action rather than waiting for a lawsuit to be filed.

Regardless of which party arrives first at the courthouse steps, the burden remains the same—the party seeking to avoid the contract through these legal principles and doctrines will bear the burden of proof.[11] It should also be understood that, under California law, impossibility of performance is a question of law for the court to decide, not a factual question that goes to the jury.[12]

Five Questions to Ask

Whether a party should be excused from a contractual obligation involves an intensely factual inquiry with the law offering relatively few guideposts. This leaves courts with a wide degree of latitude to achieve an equitable result. Every case will turn on its own unique contract provisions and the evidence of the parties’ course of dealings.

Notwithstanding these vagaries, those contemplating these issues and wishing to obtain an early assessment of how the matter might be sorted out in litigation should consider five questions:

What law controls? Although each U.S. jurisdiction has adopted some form of these doctrines, there are nuances in the law that may prove critical in the dispute. It is important to assess what law will control by considering a choice of law provision in the contract or determining where the contract was created. Choice of law is an even more important preliminary question for contracts involving international parties.
Is there a force majeure clause in a contract? In many contractual relationships, a review of the terms and conditions will reveal that a force majeure clause is broad enough to cover the situation or may otherwise be dispositive of these issues. In addition, termination provisions may also control as well as liquidated damages clauses.
How close is the nexus between the claimed performance and the pandemic? The more direct the impact, the stronger the argument will be that these principles apply to excuse non-performance. But even contracts that are impacted by intermediate causes that trace back to the pandemic may be subject to an excused performance.
Does the pandemic merely make the contract more difficult to perform, rather than rising to the level of impossibility? Performance of a contract may be more challenging and the profits may be less than what was initially expected, but this does not necessarily render performance impossible or impracticable.
Is a delay in performance rather than a suspension of the entire contract merited? From an objective standpoint, a delay in performance is far less drastic than a termination of all contractual rights. It may be more plausible to take that position, at least at the outset as events unfold, reserving the right to seek to be excused from the entire obligation.

We all hope that the pandemic will be a temporary crisis and that cures and preventive measures will be effective. But litigation relating to these contractual disputes will likely drag on long after the world has returned to business as usual.

Additional information related to the legal challenges companies are facing due to the coronavirus is available at Dorsey’s Coronavirus Resource Center.

My partners, Dan Brown and Shevon Rockett gave a webinar last week on these topics which is available here.

[1] The roots of this doctrine are in English common law and Taylor v. Caldwell, 3 B. & S. 826, 122 Eng. Rep. 309. One of the earliest cases to recognize the rule was Stewart v. Stone, 127 N.Y. 500, 28 N.E. 595 (1891).

[2] Uniform Commercial Contract § 2-615 provides in part: “Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance: (a) Delay in delivery or non-delivery in whole or in part by a seller who complies with paragraphs (b) and (c) is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.”

[3] Restatement (Second) Contracts § 261. See also 2 Matthew Bender Practice Guide: California Contract Litigation § 22.65 (2020).

[4] Cal. Civ. Code § 1511.

[5] 30 Cal. 2d 144 (1947).

[6] Id. at 156.

[7] 25 Cal. 2d 45 (1944).

[8] Id. at 48.

[9] Horsemen’s Benevolent & Protective Ass’n v. Valley Racing Ass’n, 4 Cal. App. 4th 1538, 1564-65 (1992), citing Pacific Vegetable Oil Corp. v. C. S. T., Ltd. 29 Cal. 2d 228, 238 (1946).

[10] Restatement (Second) of Contract 265. See also Lloyd v. Murphy, 25 Cal. 2d 48, 54, 153 P.2d 47, 50 (1944).

[11] Oosten v. Hay Haulers Dairy Emps. & Helpers Union, 45 Cal. 2d 784, 788 (1955).

[12] Id. at 48.

Court’s $179 Million Award Underscores Importance of Confidentiality Agreements

Blogger’s Note: My colleagues, Aaron Goldstein and Jasmine Hui report on a key decision from the California Superior Court this past week relating to confidentiality agreements.

In an important lesson for both employers and employees, on Wednesday, March 4, 2020, a California superior court judge affirmed a $179 million arbitration award against a former Uber executive, Anthony Levandowski, for stealing Google’s trade secret information and soliciting its employees to benefit Uber. See Google LLC v. Levandowski et al., Case No. CPF-20-516982. Levandowski, who also faces criminal charges from the U.S. Attorney’s office for theft and attempted theft of trade secrets, filed for bankruptcy following the judge’s order.

The court’s ruling underscores the importance of well-crafted confidentiality, non-compete, and non-solicit agreements. Over the course of Levandowski’s employment with Google, he signed at least four separate agreements which included either non-compete, non-solicit, confidentiality, and nondisclosure provisions, or a combination thereof. The panel of arbitrators in the underlying case held, among other things, that Levandowski breached these employment contracts with Google by misusing Google’s confidential information and attempting to solicit Google employees.

Google hired Levandowski in 2007, where he co-founded the company’s autonomous vehicle project, which later became Waymo, LLC.¹ In 2015, Levandowski left Google and formed a new self-driving company, Ottomotto, Inc. In 2016, Uber acquired Ottomotto, Inc. and hired Levandowski to head its autonomous vehicle department. Shortly thereafter, Google filed two arbitration demands against Levandowski and another former Google employee who moved to Uber.

According to the related criminal indictment by the U.S. Attorney’s Office, before he left Google, Levandowski downloaded more than 14,000 files containing Google’s autonomous-vehicle research. The indictment also states, among other actions, Levandowski made unauthorized transfers of files to his personal laptop, which included proprietary circuit boards, designs for light sensor technology on self-driving vehicles, and instructions on how to calibrate and tune Google’s custom light sensor system. While the criminal case is still ongoing, the panel of three arbitrators held in December 2019 that Levandowski’s actions violated his obligations to Google, issuing the $179 million award.

This judgment is a reminder for employers with confidential trade secret and proprietary information to take deliberate steps to protect their confidential information. This includes drafting strong, but narrowly tailored non-compete and non-solicit agreements. In Washington, while a new non-compete law limits the enforceability of non-compete provisions, non-solicitation and nondisclosure agreements do not face the same scrutiny. Employers should review their agreements and ensure appropriate practices are in place to secure employee signatures.

Companies can also take additional steps to ensure their confidential information is secured, including:

Monitoring computer access for unusual activity
Conducting exit interviews and equipment checks before an employee’s last day of work
Issuing reminders of continuing confidentiality obligations or certificates of termination
Immediately shutting off access to company equipment and systems on an employee’s last day of work

While non-compete agreements become increasingly more difficult to enforce across the U.S., employers who take meaningful steps to protect their confidential information will fare better should a dispute with a former employee ever arise.

¹ Waymo, LLC also brought claims against Uber, which settled for $245 million in pre-IPO stock valuations.

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