Novel Virus Leads to Novel Tsunami of Litigation
COVID-related losses have spawned a wave of litigation as consumers and injured parties seek compensation for their damages. Among the most frequent claims are consumer class actions against:
1. Gyms and sporting clubs that continue charging monthly dues and membership fees even though their doors are closed, and
2. Ski and other resorts that retain passholder fees while closed.
The allegations include breach of contract and consumer protection violations, fraud, unfair competition, false advertising, and unjust enrichment.
Failure to Warn or Protect from Virus Exposure
Employees and patrons of various businesses are claiming that the business failed to:
1. Provide protective equipment, 2. Adequately clean and sanitize the premises, 3. Enforce social distancing and follow other CDC directives, 4. Warn of employees who tested positive for COVID-19, 5. Screen workers for the virus, 6. Warn of the risks of infection based on circumstances known only to the business owner.
Cruiselines
Grand Princess was sued in a class action demanding $5 million in damages. The passengers claim that when the Grand Princess left for Hawaii on February 21 the defendants were already aware of the escalating health crises on other ships. Nevertheless, the ship left port. The plaintiffs allege spread of disease because of delayed quarantine, failure to cancel large social events, and failure to increase sanitation procedures.
Lawsuits and More Lawsuits
Other defendants include:
1. A maker of hand sanitizer accused of making false statements about the sanitizer’s effectiveness against COVID-19. 2. Uber and Lyft who drivers sued, seeking a declaration that they were eligible for sick pay. They claim they are employees, not independent contractors. 3. Retailers for price gouging high-demand items such as hand sanitizer and toilet paper. 4. Ticket resellers, Ticketmaster and StubHub, for refusing to refund money for cancelled events.
Lawsuits have been filed over prison conditions, alleged failure to properly monitor nursing homes and other long-term care facilities, banned group Bible studies. Other lawsuits target defendants such as hospitals, airlines, and the entertainment industry. Several lawsuits have been filed alleging that banks are discriminating in various ways, including prioritizing current accountholders for extensions of loans. Finally, securities and financial services litigation is on the uptick.
Because the pandemic is “novel”, the legal fallout is hard to predict. Businesses must try to anticipate the types of litigation they may face. Planning for a tsunami of litigation may be a business’s most potent weapon in avoiding legal and financial catastrophe.
