Jason A. Levine, Peter E. Masaitis, Gillian H. Clow, Ryan Martin-Patterson, Giles Judd, and J. Stephen Tagert, Alston & Bird LLP
We hope our readers all enjoyed the Thanksgiving holiday. During our brief break from our weekly posts, we decided to introduce a new format for the Litigation Roundup. Now that COVID-19 litigation has generally settled into clear patterns, we felt that it would be more useful for us to provide in-depth discussion of only the most important handful of litigation developments over the past week. So our posts now will be shorter, but they will provide focused discussion of a handful of “big picture” or high-impact cases. We hope our readers will value the change.
This week, we bring you the Top 4 COVID-19 Litigation Developments:
1. U.S. Supreme Court Enjoins New York COVID-19 Restriction
In its most important COVID-19-related ruling to date, which could have significant implications for other pandemic restrictions nationwide, the U.S. Supreme Court granted New York religious institutions’ request for a preliminary injunction against Governor Andrew Cuomo’s Executive Order limiting occupancy in certain houses of worship. In a 5-4 decision, with Chief Justice Roberts joining the dissenters, the Court applied strict scrutiny under the Free Exercise Clause of the First Amendment, noting that the regulations “cannot be viewed as neutral because they single out houses of worship for especially harsh treatment.”
Despite the State’s compelling interest in stemming the spread of COVID-19, the Court held that the Executive Order was not “narrowly tailored” to serve that end. The Court reasoned that there was no evidence that any COVID-19 outbreak had occurred in connection with services performed at the religious institutions, and that there were other, less restrictive means of minimizing the risk of spreading the virus at religious services.
Among other concurring and dissenting opinions, Justice Gorsuch wrote a concurrence highlighting that the capacity restrictions discriminatorily disfavored religious institutions because they did not apply to businesses the Governor had deemed “essential.” Chief Justice Roberts wrote in dissent that he thought the case was moot because the Governor had revised the designations before the Court ruled. The dissenters in general urged that the Court should give considerable leeway to public health officials concerning what is necessary for public safety during the COVID-19 pandemic. This ruling may signal a new willingness by the Court to invalidate (or at least preliminarily enjoin) pandemic-related restrictions, particularly where they involve individuals’ fundamental constitutional rights.
2. Takings Claims Against Georgia Colleges
In state court in Georgia, students at the University of Georgia and Georgia Technical Institute filed two class actions against the Board of Regents of the University System of Georgia (the “Regents”). In both cases, plaintiffs allege that the Regents breached contracts with the students and violated the takings clauses of the United States and Georgia constitutions, by refusing to refund tuition after moving from classroom instruction to remote instruction in March 2020. This is the first time we have seen takings claims asserted in “refund” suits against colleges or universities. Plaintiffs seek certification of classes comprising all students who paid tuition to the respective universities for in-person learning, but who received only online learning.
Although there are a substantial number of lawsuits pending against universities that allege contractual claims for tuition refunds, the takings aspect of these lawsuits makes them worth following. Success by plaintiffs on the merits could have implications for other state universities, and potentially for other state-sponsored entities, that have acted in response to the pandemic in ways that may have “taken” property from individuals without compensation.
3. Crowell & Moring LLP Sues For Rent Abatement
The law firm Crowell & Moring LLP has sued Three Embarcadero Center, where it maintains its offices in San Francisco. The firm claims it is entitled to rent abatement as a result of state and city COVID-19 orders limiting its use of the office space and the building’s common areas. Given the strict limitations, Crowell & Moring contends it is entitled to a 97% abatement of rent under its lease. This is one of many rent abatement suits across the country. But how the court may treat the precision of the abatement request, which is correlated to the percentage of space still available for plaintiff’s use, is of particular interest. So is the timing of this lawsuit, coming as it does very far into the pandemic, yet when San Francisco’s (and California’s) restrictions on businesses continue to evolve.
4. Businesses Lobby For Florida Liability Shield
A coalition of more than 60 Florida business associations, referring to itself as the “Restore Economic Strength through Employment & Tourism” task force, or RESET, has issued a 74-page report that urges state lawmakers to – among other things – provide a liability shield against litigation arising from the COVID-19 pandemic. The report raises specific issues brought by agricultural, healthcare, hospitality and tourism, large and small employer, retail, manufacturing, and transportation groups within the state of Florida.
Key among these issues is proposed legislation that would limit liability for COVID-19 related claims by imposing: (1) a heightened culpability standard, to require a showing of either gross negligence or reckless misconduct; (2) a heightened evidentiary standard that would require clear and convincing evidence; and (3) a shortened statute of limitations. Further, the proposed legislation would exempt “essential” businesses entirely from liability arising from COVID-19 related claims. The RESET report asserts that Florida businesses, which are already struggling and working diligently to restore the economy, “need assurances that they will not face even more financial hardships from opportunistic lawsuits.”
Jason Levine is a commercial and antitrust litigation partner in the Washington, D.C. office of Alston & Bird LLP. Peter Masaitis is a product liability and toxic tort litigation partner in the firm’s Los Angeles office. Gillian Clow, Giles Judd, Ryan Martin-Patterson, and J. Stephen Tagert are litigation associates at the firm.
