18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 433 Ungarean v. CNA, 2021 Penn. Dist. & Cnty. Dec. LEXIS 2 (Penn. Com. Pleas March 22, 2021). Plaintiff, a dentist, brought a class action seeking declaratory relief that he was entitled to coverage under his insurance contract with Defendants for losses that he sustained in relation to the spread of COVID-19 and the Governor of Pennsylvania’s orders. In March and April of 2020, in order to prevent and mitigate the spread of the coronavirus disease, the Governor of Pennsylvania issued a series of mandates restricting the operations of certain types of businesses throughout Pennsylvania. The Governor issued an order requiring all non-life sustaining businesses in Pennsylvania to cease operations and close physical locations. As a result of the spread of COVID-19 and the Governor’s orders, Plaintiff shutdown the majority of his business operations. For a time, Plaintiff’s dental practice remained open only to perform emergency dental procedures. Plaintiff subsequently experienced a dramatic decrease in business income and furloughed some of his employees. Plaintiff thereafter submitted a claim for coverage under its business insurance policy ("the insurance contract") with Defendants. Subsequently, Defendants denied Plaintiff’s claim. Plaintiff then filed a complaint in the Court of Common Pleas asserting claims in one count for a declaratory judgment. The parties cross-moved for summary judgment, and the Court granted Plaintiff’s motion and denied Defendant’s motion for summary judgment. The parties’ dispute involved certain provisions regarding coverage under the insurance contract. In interpreting the contract, the Court pointed out that in Pennsylvania, where there is doubt or uncertainty about the meaning of ambiguous language used in a policy of insurance, the policy must be construed in favor of the insured in order to not defeat the protection that the insured reasonably expected from the policy that the insured purchased. The Court determined that Plaintiff had provided a reasonable interpretation that the provisions in question showed that he was entitled to coverage for losses sustained in his dental practice in relation to the spread of COVID-19 and the Governor’s orders. The Court opined that Plaintiff established a right to coverage under the civil authority provision of the contract because Plaintiff’s interpretations of the business income, extra expense, and civil authority provisions of the insurance contract were, at the very least, reasonable. Additionally, the Court concluded that Defendants failed to demonstrate that any of the insurance contract’s exclusions clearly and unambiguously prevented coverage. For these reasons, the Court granted Plaintiff’s motion for summary judgment and denied Defendant’s motion. (xviii) South Carolina Brannon, et al. v. McMaster , 2021 S.C. LEXIS 141 (S.C. Oct. 13, 2021). After Governor Henry McMaster instructed the South Carolina Department of Employment and Workforce (“DEW”), to end the state’s participation in federal unemployment insurance programs created under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, Plaintiffs filed a class action challenging legality of the Governor’s decision and moved for a preliminary injunction requiring the State to reenroll in the programs. Defendants filed a motion to dismiss pursuant to Local Rule 12(b)(6). The trial court granted Defendants’ motion. On Plaintiffs’ appeal, the South Carolina Supreme Court affirmed the trial court’s ruling. Under the CARES Act, Congress created temporary unemployment insurance programs. Participation in the programs was discretionary, and states could withdraw from the Programs with at least 30 days’ advanced notice to the U.S. Department of Labor. Id . at *3. After participating in the programs for over a year, Governor McMaster ordered the director of the DEW to withdraw from the programs effective June 30, 2021. Plaintiffs argued that Governor McMaster did not have the authority to end the programs pursuant to § 41-29-230(1) of the South Carolina Code, which provides that the DEW “must cooperate with the United States Secretary of Labor to the fullest extent consistent with the provisions of these chapters, and act, through the promulgation of appropriate rules, regulations, administrative methods and standards, as necessary to secure to this State and its citizens all advantages available under the provisions of the Social Security Act that relate to unemployment compensation, the Federal Unemployment Tax Act, the Wagner-Peyser Act, and the Federal-State Extended Unemployment Compensation Act of 1970.” Id . at *3-4. Plaintiffs asserted that the benefits paid under the programs were "advantages available under" the Social Security Act (“SSA”).and therefore the DEW must continue to participate until the programs expired. Defendants argued that the program benefits were not "advantages available under" the SSA. The trial court had found that the benefits provided were new benefits provided by legislation separate and apart from the SAA. The Supreme Court agreed. It found that simply because the program funds were distributed through bank accounts of the SAA, that did not make the funds "advantages available under” the SAA. Id . at *6. For these reasons, the Supreme Court affirmed the trial court’s ruling.