It is difficult to follow the news without learning about another large swath of business closures. Yelp reports that 60% of restaurant closures are permanent. J.Crew, Gold’s Gym, Pier 1 Imports, Hertz, Brooks Brothers, and Cirque du Soleil have all filed for bankruptcy. In the second installment of our series on how the pandemic has impacted the legal landscape, we have surveyed the types of COVID-19 related cases that are being filed in the San Francisco Bay Area federal and state courts. Not surprisingly, the dockets are full of disputes that have arisen as a result of the pandemic, which fall into the below general categories:
Claims Against Insurance Companies
In separate lawsuits, Chez Panisse Restaurant, Protégé Restaurant Partners, and Atelier Crenn have filed suits against their insurance provides for failing to cover business losses caused by the Covid-19 outbreak.
Claims for Unpaid Services
A number of academic institutions and event hosts have been sued for failing to refund amounts paid for cancelled programs or events. Suits of this nature have been brought against Santa Clara, the Academy of Art University, San Francisco University, StubHub, Eventbrite, and Digital Media Academy.
Lease Disputes
Not surprisingly, landlords and tenants have filed a number of lease-related claims. Old Navy sued its landlords for failing to reduce its rent after the chain closed as a result of Covid-19 restrictions on retail. Property owners have sued Sportsman’s Warehouse and Southwest, Inc. for failing to pay rent during the pandemic. And an apartment rental startup filed suit when its lessor rejected its right to invoke the early termination provision of its lease as a result of city ordinances enacted due to Covid-19 that prevented the startup from collecting any rent from its tenants.
Claims Brought by Investors
U.S. Oil Fund LP and other defendants found themselves in the cross-hairs of a securities class action after they pushed through a public offering on March 19, 2020, allegedly without fully disclosing risks related to declining oil prices due to the Covid-19 pandemic and a Russia-Saudi Arabia oil price war, leading the share price to drop 60% between March 19 and April 28, 2020.
Public Nuisance
In an effort to move outside the jurisdiction of OSHA, employees have filed public nuisance suits against their employers related to Covid-19. Employees brought claims for public nuisance and unfair business practice against a McDonald franchise in Oakland that allegedly did not provide adequate training and sanitization or policies and practices that public health experts urged restaurants and other public facilities to implement to protect workers from Covid-19. Similarly, employees have sued AmazonFresh, Prime Now LLC, and Amazon.com Inc. (collectively “Amazon”) for failing to take adequate precautions to protect fulfillment center workers called “Pickers” against Covid-19. Specifically, employees allege that Amazon does not sanitize the full-body suits used by multiple workers each day while working in food freezers.
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The above list is likely the tip of the iceberg, and the economic and thus legal fallout will continue. Alto Litigation’s lawyers can provide advice about the above topics as well as others that might arise as a result of the pandemic. For more information regarding strategy involving litigation or negotiations, please contact one of Alto Litigation’s partners: Ellen London, Bahram Seyedin-Noor, Bryan Ketroser
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