18th Annual Workplace Class Action Report - 2022 Edition

530 Annual Workplace Class Action Litigation Report: 2022 Edition regarding the efficacy and safety of the vaccinations, as well as the tension between “private equities and public equities, which have both been prominently raised in this case.” Id . at 17. Relying on Jacobson v. Massachusetts , 197 U.S. 11, 26 (1905), a Supreme Court decision that upheld a state-imposed vaccination and the penalty of imprisonment, the Court reasoned that “being substantially less restrictive than the Jacobson mandate, and being enacted by a private actor, Defendants’ policy is well within the confines of the law, and it appropriately balances the public interests with individual liberties.” Id . As a result, the Court held that Plaintiffs failed to state a viable legal theory in support of injunctive relief because each of the required factors, individually and collectively, weighed against the denial of injunctive relief. Big Tyme Investments, LLC, et al. v. Edwards, 2021 U.S. App. LEXIS 928 (5th Cir. Jan. 13, 2021). Plaintiffs, a group of 21 bar owners in Louisiana, filed two class actions seeking to enjoin the Louisiana Governor and Fire Marshal (“Defendants”) from enforcing the state’s bar closure order imposed in response to the COVID-19 pandemic. The order at issue prohibited on-premises consumption at bars, but also allowed restaurants to continue dine-in service at 50% capacity. Id. at *7. According to Plaintiffs, Defendants’ bar closure order improperly distinguished between bars and restaurants in violation of the equal protection clause of the Fourteenth Amendment. Plaintiffs filed a motion for preliminary injunctive relief enjoining Defendants from enforcing the bar closure order, and the District Court denied the motion. On appeal, the Fifth Circuit affirmed the District Court’s order. Defendants contended that Plaintiffs’ appeal was moot because the bar closure order at issue was superseded by Defendants’ revised “Phase 3” COVID-19 proclamations. Id. at *13. The Fifth Circuit rejected this argument because it found that Plaintiffs’ equal protection claim was not rendered moot because Defendants’ revised COVID-19 proclamations still allowed restaurants to operate a higher capacity than bars. As to the substance of the appeal, Plaintiffs argued that the District Court erred in applying Jackson v. Commonwealth of Massachusetts , 197 U.S. 11 (1905), which was pertinent case law on the issue of public health crises. Under Jackson , judicial review is limited to considering whether the law at issue “has no real or substantial relation to its objects, or is, beyond all question, a plain, palpable invasion of rights secured by the fundamental law.” Id. at *16. Plaintiffs asserted that Jackson compelled a lower level of constitutional scrutiny than rational basis review, which maintains that “a classification does not ‘run afoul of the Equal Protection Clause if there is a rational relationship between the disparity of treatment and some legitimate governmental purpose.’” Id. at *22. The Fifth Circuit rejected this position. It held that Jackson (and rational basis review) applied to this situation in light of the present public health crisis, and that the District Court properly applied the test in Jackson to this case. With respect to Plaintiffs’ equal protection claim, the Fifth Circuit recognized that Defendants offered a legitimate government interest supporting the bar closure order, i.e. , reducing the spread of COVID-19. Plaintiffs argued that the order’s distinction between bars and restaurants was not rationally related to this legitimate interest, but the Fifth Circuit reasoned that the distinction was sufficiently related to slowing the spread of COVID-19 in higher-risk environments. Id. at *25. The Fifth Circuit also noted that the bar closure order allowed certain bars to operate under conditional restaurant permits, thereby supporting the order’s constitutionality. Accordingly, the Fifth Circuit affirmed the District Court’s order denying injunctive relief. Bluegrass, LLC, et al. v. State Automotive Mutual Insurance Co, 2021 U.S. Dist. LEXIS 3088 (S.D. W.Va. Jan. 5, 2021). Plaintiff, a restaurant, filed a class action alleging that Defendant’s insurance policy under which it had a “direct physical loss of or damage” to a property, should apply to it closure pursuant to the state shut- down of in-person dining due to the COVID-19 pandemic. Defendant filed a motion to dismiss, which the Court granted. Following the restaurant closure from March to May of 2020, Plaintiff filed a claim with Defendant for the loss of business income during the period of modified operations. Defendant denied the claim on the grounds that the health and safety restrictions that closed non-essential businesses did not constitute a "direct physical loss or damage" and that certain exclusions for governmental ordered loss of use and viral outbreaks barred coverage. Id . at *5. Plaintiff had sought a declaration that the policy covered the business losses sustained and damages for breach of contract. The Court determined that Plaintiff did not include any allegations in the complaint to support granting class certification pursuant to Rule 23. As to the merits of Plaintiff’s individual claims against Defendant, the Court noted that in light of COVID-19, many case law authorities had held that a direct physical loss or harm, in a commercial casualty policy, requires some type of tangible damage to the covered property. Id . at *10. The Court reasoned that the words "direct" and "physical," which modified the word "loss," ordinarily connote actual, demonstrable harm of some form to the premises itself, rather than forced closure of the premises for reasons extraneous to the premises themselves, or adverse