A bonanza of C-19 challenges
23 September 2020
With Baroness Hale’s recent criticism of the emergency measures taken by the government ringing in our ears, the following information from across the Atlantic might be of interest. The New England firm Pierce Atwood LLP has compiled a list of class actions related to COVID-19 in the United States, including all filed and anticipated cases up to 9 September 2020. Although their survey only covers litigation in the US, a similar trend may be predicted in this country, albeit on a smaller scale, even as the pandemic continues to unfold: indeed Alethea Redfern has made reference to such a likelihood in this week’s Round-Up. The authors of the US report observe that, despite “unprecedented court closures and changing procedural rules”,
class actions have steadily increased and are expected to expand across industries, jurisdictions, and areas of law. The impact of COVID-19 on business operations, consumer activity, and economic forecasts has made clear that the filings to date are only an early indication of what is to come.
The report provides a categorised summary of coronavirus-related class action litigation filed to date, highlighting the core allegations of each complaint. You will find the individual case citations in their post on Lexology.
Foreign Government and NGO Actions
There are five class action claims against China for negligence, fraud, and failure to contain the virus. I will quote this list in full as I have posted on this possibility before: C-19 Damage: Does International Law Hold Any Answers?
The US cases are interesting not just because they are taken in domestic courts but because they are pertinent to an application to the Strasbourg Court to challenge the environmental practices of all 33 member states of the Council of Europe. David Hart has posted on the Portuguese climate change claim here. So this kind of action, taken by individuals at a regional or even national level, is not unknown. The Pierce-Atwood report quotes the following claims filed:
Patella v. People’s Republic of China, No. 20-cv-00433 (M.D.N.C. May 15, 2020); Edwards v. People’s Republic of China, No. 20-cv-01393 (E.D. La. May 8, 2020): asserts claims of negligence and fraud for failure to contain the virus);
Benitez-White v. People’s Republic of China, No. 20-cv-01562 (S.D. Tex. May 3, 2020): asserts claims for wrongful death, personal injury, gross negligence, and unjust enrichment based on allegations the COVID-19 virus originated from the Wuhan Biosafety Level 4 lab;
Smith v. People’s Republic of China, No. 20-cv-01958 (E.D. Pa. Apr. 20, 2020): asserts claims of negligence and reckless indifference for failure to contain the virus
Aharon v. Chinese Communist Party, No. 9:20-cv-80604 (S.D. Fla. Apr. 7, 2020): alleging that China has been stockpiling personal protective equipment during the COVID-19 crisis;
Bella Vista LLC et al. v. People’s Republic of China et al., No. 2:20-cv-00574 (D. Nev. Mar. 23 2020); Alters et al. v. People’s Republic of China et al., No. 1:20-cv-21108-UU (S.D. Fla. Mar. 12, 2020): assert claims by small businesses for negligence, strict liability, and public nuisance against Chinese government entities and ministries for failing to take appropriate actions to stem the spread of the coronavirus.
It is possible, in theory anyway, for an individual or NGO or any other legal personality to file a claim against a sovereign state within the jurisdiction of another sovereign state if it can be established that the alleged damage had affected the latter. There are serious obstacles to be overcome before such an action can proceed, and in the US the main hurdle is the Foreign Sovereign Immunities Act, 28 USC no. 1602. This sets a very high bar to actions against foreign countries except where a few exceptions obtain:
- the defendants’ misconduct has caused a direct effect on “commercial activity” in the US
- the defendants’ agents (officials or employees) committed non-discretionary tortious acts whilst acting within the scope of their employment.
So the stochastic spread of the virus to the US would not come under either of these exceptions were it not possible to establish that the contagion was directly the result of the PRC’s officials/employees. “Direct effect” has proved a stumbling block before; mere policy decisions by foreign governments are not enough to create the basis for direct effect actions.
The “non discretionary tort” rule filters out any claims regarding incidents or accidents that only have effects in the US. Sovereign immunity will not be waived unless the entire tort has occurred in America. Obviously the alleged outbreak of the virus from Wuhan, from the wet market and/or via the virology labs, takes part of the tortious action out of the jurisdiction of the US. Furthermore the tortious activity has to be “non-discretionary” which will be near impossible to prove. A detailed and interesting analysis of attempted claims to liability and relief against China was posted in July by US firm Bryan Cave Leighton Paisner here.
As the authors of that analysis point out, what if China simply fails to respond to the claim? The Foreign Sovereign Immunity Act does not countenance the service of judgment in default “unless the claimant establishes his claim or right to relief by evidence satisfactory to the court”. There have been attempts before to obtain judgment in default against the PRC, which were subsequently vacated (Jackson v. People’s Republic of China, 796 F.2d 1490 (11th Cir. 1986); Walters v. People’s Republic of China, 672 F. Supp. 2d 573, 574 (S.D.N.Y. 2009).
An interesting NGO claim against the WHO is included in the list, Kling v. World Health Org., No. 7:20-cv-03124 (S.D.N.Y. Apr. 20, 2020). This involves claims of negligence for the WHO’s alleged failure in containing the COVID-19 virus and in failing to timely declare the crisis a public health emergency.
Here are the remaining categories where claims have been filed; some will have been dismissed on a preliminary point by the time this post has been published, but new claims will replace them as state lockdowns continue over the autumn and winter.
Education (195 claims)
Educational programs and institutions, in particular colleges and universities, are facing class action claims by students related to campus closures, access to resources, and future operations. Cases filed to date against educational institutions seeking the refund of university tuition, room, board, and other fees paid by students based on breach of contract and other
Employment (50 claims)
Employers are facing claims regarding pay, working hours, paid leave, workplace safety, privacy, disability and discrimination claims.
Service cancellation (67 travel cancellation claims against insurance companies, travel booking companies and airlines; 21 against events companies)
Consumer claims based on the cancellation or disruption of events and services are likely to dominate court dockets in coming months. These arise out of cancellation of travel bookings, claims against non-airline travel companies seeking the refund of payments for cancelled itineraries, actions against event and ticketing companies seeking the refund of payments for sporting, music, theatre, and other cultural events, all of these based on breach of contract, consumer protection. Similar claims have been filed against fitness clubs, ski resorts, amusement parks, and other organizations seeking the refund of season passes and membership fees.
US public authorities and human rights (80 claims)
Governments and public officials may face a higher risk of class action litigation based on their response to COVID-19 and handling of prison inmates and detainees. The authors list 43 claims in this subcategory alone.
A broader category includes claims filed to date against federal and state governments asserting civil rights and constitutional claims based on executive orders and other actions in response to COVID-19, such as number and movement restrictions, the subjection of certain ethnic groups to compulsory Covid-19 testing, the shutting down of schools, businesses and religious gatherings, the state moratorium on evictions and foreclosures during the pandemic; the requirement by states of protective face covering; travel restrictions and state orders causing business closures. There are a number of claims challenging the constitutionality of state and county treatment of mail-in-ballots and voting procedures during the pandemic.
Healthcare Providers and Nursing Facilities (3 claims)
Hospitals, healthcare providers and nursing and residential care facilities may face class action litigation based in contract or tort relating to their response to the COVID-19 pandemic. Unless states have laws or orders limiting civil liability, these entities are potentially at risk of class action litigation. Arguably suing such entities during or in the aftermath of a pandemic causing such economic hardship is something of an own goal; it is difficult to imagine any court in the UK allowing such a claim to proceed. Equally, a few years down the line and with the benefit of hindsight, claims for delayed or no diagnosis/treatment of lethal or seriously debilitating medical conditions may well form a cause of action for which COVID-19 justifications are no longer acceptable.
Although separately categorised in the Pierce Atwood report, there are a number of cases that could come under this heading involving disabled people who have been prevented from accessing support by new health and safety standards governing brick-and-mortar establishments and the transfer of their goods and services to electronic platforms.
Unsurprisingly, the authors of the report present copious evidence of a groundswell of claims against insurance companies in the COVID-19 crisis,
as insured businesses encounter disruptions and look to their policies for relief and healthcare providers and health insurance subscribers seek coverage for COVID-19 treatments. Cases filed to date asserting breach of contract and declaratory judgment claims against insurers for failure to cover losses from forced business closures as a result of the COVID-19 pandemic and state executive orders
Unfortunately there are too many cases in this list to count, but they look as if they run into the hundreds.
Privacy and Data Protection (20 claims)
We have already covered concerns on this blog and on Law Pod UK about the possible data breaches of tracking and tracing, and requirements for COVID-19 testing. In the US, Pierce Atwood reports that companies
are facing privacy and cybersecurity claims by employers and consumers based on the collection, use, and disclosure of personal information and the unauthorized access by third parties in data security incidents.
Transmission and exacerbation of COVID-19
There are of course multifold class actions alleging that businesses negligently promoted the spread of COVID-19 or hid information about the risks of COVID-19 transmission or complications, including claims against the cruise ship giant Carnival Corporation for negligence and gross negligence based on an outbreak of COVID-10 on the Diamond Princess cruise ship and other of their cruise ships. (12 claims filed).
As of yesterday the UK was warned of further measures restricting movement and services over the next six months to combat the apparent surge in cases of Covid-19. The courts should expect further claims in response to these latest measures and their consequences.