As the COVID-19 pandemic continues to ripple across the globe, greatly affecting the global economy, there are numerous class actions relating to the pandemic proposed in the United States and Canada. Despite unprecedented court closures and changing procedural rules, COVID-19 class actions have steadily increased and are expected to expand across industries, jurisdictions, and areas of law.
BLG is committed to keeping our clients informed and updated on class action developments in these uncertain times. This update summarizes class actions across North America relating to COVID-19 known to date, including and forecasts future potential filings.
- Consumer Protection
- Alleged Negligent Response
- Privacy & Data Sharing
- Insurance & Coverage
- Labour & Employment
- Protecting the Vulnerable Against COVID-19
- Potential Future Class Actions
Misrepresenting hand sanitizer
A consumer claims in California against Target Corporation alleges that Target misrepresented its store brand hand sanitizer, which says it “kills 99.99% of germs.” This was not backed up by any reliable scientific studies.1 This class action echoes recent lawsuits filed against other hand sanitizer manufacturers, such as Germ-X and Purell, which arose pursuant to a letter sent by the U.S. Food & Drug Administration (FDA) to Purell regarding its marketing representations.
The FDA notes in its letter that it was not aware of “any adequate and well-controlled studies demonstrating that killing or decreasing the number of bacteria or viruses on the skin by a certain magnitude produces a corresponding clinical reduction in infection or disease caused by such bacteria or virus.” As a result, the lawsuit reads: “Target uses indirect statements to give an unfair, deceptive, untrue or misleading impression to the consumer that the Hand Sanitizer can prevent the flu and other viruses.” Vi-Jon, Inc. and SafeHands Solutions, LLC have also recently faced comparable class actions regarding the allegedly false statement that their sanitizers can “kill 99.99% of germs,”2 as well as Wet Ones hand wipes.3 Similarly, Clorox is facing a class action alleging that its Splash-Less Bleach does not contain enough of its active ingredient to effectively disinfect surfaces.4
Toxicity of hand sanitizer
A class action was filed against 4E Brand North America, alleging that it manufactured and sold hand sanitizer containing methanol, a substance that is toxic and harmful to humans. The lawsuit claims that 15 varieties of hand sanitizer made and sold by 4E were mislabeled as containing ethanol as their active ingredient, despite the fact that they were contaminated with methanol. Exposure to methanol can cause nausea, vomiting, headache, blurred vision, permanent blindness, seizures, coma, permanent damage to the nervous system, or death. The defendants eventually recalled these products. However, the lawsuit claims that this recall was “woefully insufficient,” requiring consumers to bring the product back to the place of purchase for a refund. The lawsuit seeks to represent consumers across the United States, as well as a New York-only subclass, who bought any of the 15 varieties of 4E hand sanitizers.5
Several airlines currently face class actions in in Canada by consumers who entered a contract of carriage with these companies prior to the COVID-19 pandemic declaration and whose flights were cancelled as a result. The claimants claim a full monetary refund (as opposed to credits toward future flights) in connection with their cancelled flights.6
Similarly, airline passengers in the United States claim their airline is refusing to honor ticket refund requests for cancelled flights. The plaintiffs allege that the airline is only offering a voucher that expires in a year or the opportunity to rebook on another flight. Plaintiffs seek full refunds and punitive damages.7
A Canada-wide class action has also been filed against Royal Bank of Canada (RBC), on behalf of RBC Rewards program members who redeemed RBC Rewards points to purchase travel tickets, which were cancelled due to COVID-19. Upon flight cancellation the plaintiff was allegedly awarded an Air Canada travel credit instead of being reimbursed the points utilized to purchase the initial ticket, which unfairly bars the plaintiff from using the rewards points for any other type of future purchase.8
Class actions have been filed against insurance companies, seeking refunds for travel insurance premiums and other purchased travel services that went unused due to COVID-19-related travel restrictions. The defendant companies have instead issued vouchers for future travel, often subject to limitations and arbitrary deadlines, or have simply refused to issue any type of refund at all, claiming that pandemic-related travel interruptions were not covered by the insurance policy.9
Off-campus student housing
Class actions have been filed against off-campus student housing corporations for their refusal to issue refunds to students who were forced to evacuate the premises and move home amid the COVID-19 pandemic during the spring 2020 semester. In the Ciccone v. Preferred Apartment Communities, Inc. class action, the plaintiff alleged that the defendant continued to demand money from students who paid monthto-month for room, board and other services that it could no longer safely provide, such as onsite resident life programs, a clubhouse with social events, a fitness centre, etc.10 See also the Longo et al. v. Campus Advantage, Inc. class action.11
School trip cancellations
Suits have been launched against EF Institute for Cultural Exchange, Inc. (EF) (and other class trip providers including Education First Class) in California for refusing to provide a full monetary refund for trips cancelled due to COVID-19.12 A similar class action has been filed in Ontario against travel company Explorica and travel insurers Arch and Old Republic, following cancelled student trips and refunds not being issued. 13
EF’s contract contained a clause which allowed it to issue travel vouchers instead of cash refunds, excluding certain fees, when tours were cancelled “for public health issues or quarantine or threats of public health issues.” The plaintiffs allege that EF instituted an unfair cancellation policy in their contract, imposing unreasonable limitation on cash refunds, which resulted in students losing some of their investment following the tour cancellations.
Summer camps have also faced breach of contract class actions following their cancellations without issuing refunds. Digital Media Academy Corp. informed parents that it would not be offering summer camps at most of its 11 locations for summer 2020 due to the COVID-19 pandemic. Upon requests for refunds, the summer camp refused to reimburse tuition and fees already paid for. Instead, they only offered credits to attend another camp the following year “irrespective of whether members are able to attend the camp during 2021.” The case claims that the terms and conditions of the camp contracts were revised on June 15, 2020 to exclude camps that were canceled due to “An Act of God,” including “flu pandemic and government legislation” from any available refunds.14
Festival organizers have been sued for refusing to issue refunds of festival tickets, after government orders prohibiting public gatherings resulted in event cancellations.15
As alleged, the terms and conditions of the tickets provide that “all sales are final” and that “no refunds will be granted for any reason.” The terms go on to state that in the event of a cancellation, “the holder shall not be entitled to a refund except as otherwise required by law.” The plaintiffs allege that the contract is unenforceable as illusory because the defendant retained “complete and unfettered control to modify or terminate the agreement without assuming any obligations towards Plaintiff and the Class.” Similar suits have been filed for other festival cancellations with no refund policies, such as the 2020 South by Southwest festival in Austin, Texas, Lightning in a Bottle festivals and the Ultra Music Festival.16
Similarly, online event ticket exchange and resale platforms such as StubHub and Vivid Seats have been challenged in Wisconsin for failing to refund tickets for postponed events due to the COVID-19 pandemic. The plaintiffs are asking the court to prohibit StubHub from issuing coupons instead of offering full refunds.17 Similar litigation has now been issued in Canada against online event ticket platforms.18
Sport leagues also face similar challenges while fans claim full refunds for cancelled games. Major League Baseball claims that it merely postponed the games and has refused to refund ticket holders.
Delivery apps high fees
Some food delivery apps were sued by restaurant owners and operators arguing that the rates being charged were unfair. The plaintiffs allege that the “No Price Competition Clauses” that force restaurants to charge uniform prices for menu items, even for food orders that are not generated through their digital platforms, prevents restaurants from offering discounts to customers who would otherwise order directly or dine in, and ultimately leads to customers being ripped off.19
Cancellation of short-term vacation rentals
TurnKey customers allege they are owed refunds for deposits made for rental properties now unavailable due to COVID-19.20 After stay-at-home orders took effect, TurnKey allegedly sent customers an email stating that it would no longer be offering refunds, but guests could use their deposits toward a future rental.
Similarly, Merlin Entertainment Group is facing a class action over their alleged refusal to issue refunds despite shutting down their facilities due to COVID-19. The plaintiff claims that they paid close to C$1,900 for a two-night stay at Legoland. Despite immediately contacting Legoland to cancel their reservation and request a refund following the government issued stay-at-home order, Legoland denied this request, and only allowed the plaintiff to reschedule for a later date.21
Overpriced toilet paper and hand sanitizer
Online purchasers in Florida are claiming that the seller charged unconscionable prices for goods such as toilet paper and hand sanitizer following the state’s COVID-19 pandemic state of emergency declaration.22
Similar price gouging claims have been filed against individuals allegedly purchasing N95 masks and selling them at a very high price for a profit; and against producers, wholesalers and retailers for unfair business practices following marked up egg (or other groceries) prices during the pandemic.23
University closing and refunds
The Arizona Board of Regents is challenged for profiting from the COVID-19 pandemic by refusing to refund costs and fees to students ordered out of Arizona universities and transitioned to online classes. The claimants are seeking refunds for unused portions of student room, board and service costs.24
Class actions against universities have escalated, with students requesting tuition and fee refunds for the shortened spring 2020 semester due to COVID-19 closures.25
In Canada, parents are seeking reimbursement for private school fees paid following the closure of schools in Québec on March 13, 2020, until the end of the 2019-2020 school year due to the COVID-19 pandemic. A class action was filed against numerous Québec private schools on behalf of all parents who enrolled their children at these schools and paid tuition for full-time teaching services for the 2019-2020 school year.26
Monthly membership fees
Town Sports International’s (TSI) gym users in New York are alleging that while all the gyms are currently closed and non-operational due to the COVID-19 pandemic, TSI is “outrageously continuing to charge members their monthly membership dues,” which are paid to access the gyms. The plaintiffs also allege that TSI engaged in fraudulent consumer conduct by misrepresenting to customers that it would provide gym services in exchange for membership dues, but then retained membership dues while not providing gym access; and “by misrepresenting to customers that they could cancel their memberships at any time, but then refusing to honor customer cancellation requests.”27
Other gyms and fitness centres are facing similar lawsuits.28
ClubCorp, the operator of 200 golf clubs, continued to charge members despite being closed and also faces similar claims by its users.29
Season pass holders at Six Flags attraction parks also claim that they should not be charged until locations reopen.30
Events and adventures
California and Adventures Northwest’s customers pay $170 per month to attend group outings and meet other singles in their area, according to the plaintiffs. Now, with all the planned events canceled, members say they are owed a refund.31
Ski resorts closing and refunds
Some ski resorts are facing class-action lawsuits filed by pass holders seeking refunds after both companies shut down North American operations a month early due to the COVID-19 pandemic.32
A Canada-wide class action was filed against Canada Post for the reimbursement of fees paid for express delivery services that arrived past the guaranteed date of arrival due to COVID-19 related delays.33
Cruise line inflated securities prices
A cruise line was sued in Florida for making false and misleading statements under the US Securities Exchange Act. The class action was brought on behalf of individuals who purchased securities at allegedly artificially inflated prices between Feb. 20, 2020, and March 12, 2020, and were thereby economically damaged. The cruise line had issued a press release, claiming inter alia that (i) it had a positive forecast for the company despite COVID-19, and (ii) it had procedures in place to protect guests and crew. Emails were leaked to news channels suggesting that the cruise line had made false and misleading statements, which resulted in drops in the share price.34
Pharma company allegedly makes false claims
Similarly, Inovio Pharmaceuticals, Inc. faces a class action in Pennsylvania for allegedly making false and misleading statements under the U.S. Securities Exchange Act. The claimants allege that Inovio and its CEO capitalized on widespread COVID-19 fears when the CEO falsely claimed Inovio had developed a vaccine for COVID-19. This statement caused Inovio’s stock price to jump more than 10 per cent in the ensuing trading days. Citron research exposed the fact that Inovio had not developed a vaccine by calling for a Securities Exchange Commission investigation. Stock then experienced a 71 per cent decline, resulting in losses to shareholders.35
Similarly, Co-Diagnostics, Inc. is facing a class action due to the misrepresentation of the accuracy of their COVID-19 test. The claim alleges that Co-Diagnostics made unequivocal statements to the market that its COVID-19 tests were 100 per cent accurate, setting the company apart from other competitors developing COVID-19 tests. As a result of this representation, the company’s stock soared to $29.72 per share. However, it was later revealed that the tests were materially less than 100 per cent accurate. As public reports casting doubt on Co-Diagnostics’ claims of 100 per cent accuracy began to circulate, the stock crashed to $15.80 per share. As a result, investors who believed Co-Diagnostics’ claims lost hundreds of millions of dollars. The class action therefore seeks to hold Co-Diagnostics accountable, on behalf of defrauded investors, for its misrepresentations.36
Zoom misleading investors in relation to encryption capabilities
Zoom Video Communications Inc. is facing a securities challenge, alleging investors were misled about its encryption capabilities from the date of Zoom’s IPO in April 2019 to April 2020. Investors claim the COVID19 pandemic exposed privacy issues that resulted in a series of corrective disclosures, which caused its stock to plummet.37
iAnthus Capital Holdings Inc. faces multiple securities class actions, alleging that it failed to disclose it had the ability to withhold use of the interest payment escrow until the interest escrow payment was exhausted, diminished, or otherwise unavailable to satisfy the company’s interest payment obligations. On April 6, 2020, iAnthus disclosed that it had failed to make certain interest payments, citing the “decline in the overall public equity cannabis markets, coupled with the extraordinary market conditions that began in Q1 2020 due to the novel coronavirus.”38
SCWorx Corp.’s investors claim they were tricked into investing by false statements announcing that the company had received a committed purchase order of two million COVID-19 rapid testing kits, “with provision for additional weekly orders of two million units for 23 weeks, valued at $35M per week.” When a research firm called the deal “completely bogus,” stocks dropped, causing investors to suffer significant losses and damages.39
Alleged Negligent Response
COVID-19 on cruise ships
Passengers on a cruise line allege that the cruise line negligently failed to have proper screening protocols for COVID-19 prior to boarding them on its cruise ship and failed to warn them that passengers from a prior voyage had symptoms of COVID-19.
Another suit alleges that a cruise line accepted passengers despite knowing that some exhibited symptoms of COVID-19. The plaintiffs allege that the ship was not fully sanitized and that passengers were told they would not be refunded if they cancel.40
Chinese government alleged to have covered up COVID-19
People’s Government of the City of Wuhan, China, is being blamed by a number of small businesses in Nevada for damages caused by the COVID-19 pandemic. The claimants allege that the Chinese government acted improperly by initially covering up the COVID-19 pandemic and that the government’s lack of transparency affected the global response to the pandemic.41
Under the same umbrella, a group of Florida residents filed a federal class action against the Chinese government and other Chinese governmental entities for damages suffered as a result of the COVID-19 pandemic. According to the claimants, “[t]he PRC and the other Defendants knew that COVID-19 was dangerous and capable of causing a pandemic, yet slowly acted, proverbially put their head in the sand, and/or covered it up for their own economic self-interest.”42
Another class action against China alleges China has been hoarding personal protective equipment and refusing to send COVID-19 supplies to the U.S.43
Forced closing of business
Pennsylvania business owners are claiming against the Governor of Pennsylvania that “non-life sustaining” businesses and their employees have been unlawfully forced to bear the cost of the state’s response to COVID-19. The claimants allege that executive orders by the governor amount to unlawful seizure of property without due compensation, a practice prohibited by the Fifth Amendment. It also claims that businesses were provided with no notice before being forced to close their doors for an indefinite period of time.44 A similar class action was filed out of Pennsylvania on behalf of small business operators who challenged several executive orders issued by the governor. The lawsuit claims that “the Business Shutdown Order, and the April Guidelines issued by Defendants, constitute arbitrary, capricious, irrational and abusive conduct that interferes with Plaintiff’s liberty and property interests.” It also alleged that after the mandated closure of businesses, non-life-sustaining businesses were permitted to apply for waivers to remain open, thousands of which were denied, whereas some were granted on seemingly arbitrary factors.45
California small businesses are also suing government authorities to expand the essential business classifications. The plaintiffs allege that more businesses should be allowed to open and that the measures are overboard.46
A class action was launched in New York by two restaurant and event space operators against New York Governor Andrew Cuomo, State Attorney General Letitia James, New York Liquor Authority Commissioner Greeley T. Ford and the New York State Liquor Authority. The lawsuit claims that the executive order enforcing a 50-person cap on weddings amid the COVID-19 pandemic was issued in an unconstitutional and arbitrary manner, particularly given that greater numbers of people are allowed to gather in other similar settings.47
The Detroit Public Schools Community District and Superintendent face a class action to halt the reopening of 16 public schools for in-person summer school that began on July 13, 2020. The reopening is allegedly in violation of Michigan Governor Whitmer’s school-shut down executive Order 2020-142, as well as CDC guidelines. The lawsuit is seeking a writ of mandamus and/or declaratory and injunctive relief to halt the reopening.48
Travel Bans – Special Travel Order Mobility Class Action
In Newfoundland, a class action was filed on behalf of Canadian citizens and permanent residents who ordinarily live elsewhere in Canada and have freehold and/or leasehold interest in property in the province of Newfoundland and Labrador and who intended to enter the province, but were unable to do so due to the implementation of the Special Measures Order (Travel) on May 15, 2020. The Plaintiffs plead that the Order was made without proper jurisdiction (Ultra Vires), stating that inter-provincial transportation falls under federal jurisdiction, under s. 92(10)(a) of the Constitution Act, 1867. The lawsuit also claims that the Order is contrary to Section 6, 7, 15 and 2(c) of the Charter of Rights and Freedoms. 49
Temporarily stopping foreclosure sales
In a claim against a U.S.-based bank, plaintiffs are seeking to stop foreclosures in West Virginia during the national emergency caused by the spread of the COVID-19 virus. The plaintiffs claim that they were victimized by a predatory lending scheme perpetrated in concert by a manufactured housing retail dealer and Countrywide Home Loans, Inc., whereby the dealer and lender arranged for fraudulent home loans far exceeding the actual value of the properties. The plaintiffs allege that Countrywide’s successor, the U.S.- based bank, increased indebtedness to more than double the value of the property and seeks to enforce a fraudulently originated lien. The bank also allegedly rejected and refused the plaintiffs’ payments and seeks to foreclose on homes in violation of the contract and law.50
Illegal short-term rentals
Fairbnb Canada has published an unissued claim alleging that condominium corporations exposed residents to COVID-19 by allowing illegal short-term rentals in their buildings. However, in response, the condominiums released a notice to owners prohibiting such short-term rentals until the end of the pandemic state of emergency period. Thus, this class action will not proceed.
Austrian ski resort alleged a virus hotspot
Five thousand people who tested positive after returning home from the Austrian resort of Ischgl have registered for a class-action lawsuit that claims Ischgl and the Tyrol region prioritized private gain over public health. The plaintiffs allege that the defendants made a “commercial decision” not to end the season early, opening the door to three charges: creating a public danger; spreading a reportable illness; and abuse of authority through lack of action.51
A series of class-action lawsuits allege banks prioritized larger loans instead of handling applications on a first come, first serve basis as required. The small businesses that did not receive the loans allege that this “dishonest and deplorable behavior” left small businesses with nothing. Many small businesses that would qualify for a Paycheck Protection Program loan under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) also claim that some banks prioritize current customers when it comes to offering loans.52
Furthermore, some strip clubs claim they are being discriminated against by banks despite being fully qualified to receive government assistance.53
Federally, a class action has been filed on behalf of all deferral student loan borrowers who allegedly remain subject to unlawful debt collection by the United States Department of Education and Secretary of Education Elisabeth DeVos. The lawsuit claims that on March 25, 2020 the Department of Education announced it would utilize its administrative authority to stop involuntary collection activity, including wage garnishments, for certain borrowers of federal student loans. It also announced that it would issue refunds of amounts collected since March 13, 2020, when the National Emergency was declared. On March 27, 2020, the CARES Act was enacted, which unambiguously acknowledged that administrative wage garnishment was unsustainable for student loan borrowers during the COVID-19 crisis. The CARES Act directed the Secretary of Education to stop garnishing wages of federal student loan borrowers. On April 9, 2020, the Department of Education sent a notice to student loan borrowers informing them that all collection activity was stopped until Sept. 30, 2020. However, despite this notice, the Department of Education continues to seize wages from federal student loan borrowers.54
A company is also facing a class action for its reporting of nonpayment of mortgages as a negative remark on consumers’ credit reports, despite the fact that the consumers had entered into agreements with their lenders such as forbearance, deferral or suspension of payments on account of the economic crisis caused by the COVID-19 pandemic. The lawsuit is claiming that the company failed to adopt reasonable procedures to ensure the accuracy of consumer credit reports.55
A class action lawsuit claims that requiring Georgia voters to pay for mailing in their ballots during the COVID-19 pandemic is essentially charging a “poll tax,” and those who cannot afford it may not be able to vote.56
The League of Women Voters of Ohio as well as several Ohio residents claim that the new state law that prohibits in-person voting due to the COVID-19 pandemic is unfair and may stop a lot of citizens from casting their ballots.57
The World Health Organization (WHO) faces class action claims for allegedly not acting quickly enough to warn countries about the COVID-19 pandemic. Plaintiffs claim the WHO knew about the virus since November 2019, but waited until March 11, 2020, to announce it was a global pandemic.58
Privacy & Data Sharing
Privacy concerns around Zoom data sharing
Zoom Video Communications, Inc. (Zoom) users in California are claiming Zoom shares their data with Facebook and other third parties without adequate notice. Its use by consumers and businesses has exploded in the face of the current COVID-19 virus pandemic. The plaintiffs allege that upon installing the Zoom App, Zoom collects the personal information of its users and discloses, without adequate notice or authorization, this personal information to third parties, including Facebook, allegedly invading the privacy of millions of users. The plaintiffs seek damages and equitable relief to remedy the violations.59
A similar action has been filed against the group video chat app Houseparty, alleging that it discloses users’ personal information to third parties, including Facebook, without their permission.60
In Canada, a class action has also been filed against the federal government on behalf of Canadians who applied online for COVID-19 emergency aid and had their personal and financial information stolen by hackers. The lawsuit alleges that a series of failings by the government and the CRA allowed at least three cyberattacks between mid-March and mid-August. The number of potential victims is thought to be at least 14,500.61
Insurance and Coverage
Denied insurance coverage for business losses and mandatory business closures
Claims against insurance companies for denial of coverage for business and operating losses arising from the COVID-19 pandemic have been made by numerous American and Canadian businesses and have escalated in the past months for both property damage claims due to business interruptions arising from mandatory business closures, as well as “business loss” and “operating loss” claims.62 In those claims, plaintiffs claim that the insurers engaged in breached of contract and in anti-competitive behaviour by denying claims occasioned by COVID-19. The plaintiffs allege that insurance companies cannot claim that these events were unforeseen under the force majeure clause. Many of these lawsuits allege that the defendant insurance companies implemented “widescale and uniform” refusals to pay insureds for losses sustained as a result of the COVID-19 pandemic, despite the plaintiffs holding “all-risk” policies that included business income, civil authority, extra expense coverage, and did not include any specific exclusions for pandemic- or virus-related losses.63 They seek compensatory damages for being denied coverage after being forced to close their businesses. Comparable class actions have been filed by dentist offices, denturist company.64
Similarly, Oceana Grill and the Choctaw Nation of Oklahoma and Chickasaw Nation Department of Commerce have commenced actions in the United States against their insurance provider, claiming that their “all risk” commercial general liability policies should cover losses incurred because of business closures resulting from the COVID-19 pandemic.65
Labour & Employment
Rideshare drivers as independent contractors
Rideshare drivers in California allege that the company misclassified them as independent contractors and thus owed the workers paid sick leave, which is particularly harmful given the COVID-19 pandemic. The plaintiffs allege that the company’s failure to comply with California’s labour law puts the lives of the drivers and the general public in danger, because the drivers feel forced to keep working to maintain their income.66
Drivers of another rideshare company are also claiming sick leave. Furthermore, a federal judge ruled that the company could not force its drivers in Massachusetts to arbitrate claims as they are being misclassified as independent contractors rather than employees, and workers are exempt from the Federal Arbitration Act.67
Cruise ship crew members file class action
Filipino crewmembers of the Celebrity Cruise vessels have filed a class action against Celebrity Cruises Inc., for its allegedly inhumane business decision to keep crew members from specific countries on board its passenger-less ships, without pay. The plaintiff claims that on Feb. 19, 2020, after disembarking its passengers in Vietnam and Singapore, the Millennium cruise ship arrived in Manila, but only crew members who had concluded their contracts and had a suitable replacement onboard were allowed to disembark. The ship’s remaining Filipino crew members were prevented from leaving and the ship set sail again, towards the United States. Subsequently, on March 14, 2020, the CDC issued its first No Sail Order. Despite this order confirming that passenger cruises would be suspended indefinitely, 64 days after the order was issued, the Millennium was holding on board nearly 1,700 Filipino crewmembers against their will, disregarding multiple requests to disembark.68
Workers claim company worsened COVID-19 spread
Employees at Central Valley Meat’s Hanford facility filed a class action against the company, alleging that the company exacerbated the spread of COVID-19 at the facility by actively pressuring sick employees to come to work, and hiding information about the first cases of an outbreak from its employees. The lawsuit claims that nearly 200 employees contracted COVID-19 due to the negligent decisions made by the company.69
Unions allege failure to protect workers
The Alaska State Employees Association has filed a class action against the State of Alaska seeking injunctive relief based on the state’s failure to protect union members from the health and safety risks posed by COVID-19. The lawsuit alleges that nonessential workers were denied the right to telework and that their work environment was not well adapted for social distancing. The plaintiffs have asked the court to require the state to enforce safety policies and health mandates and provide a safe work environment.70
Similarly, federal employees, assisted by the American Federation of Government Employees labour union claim against the United States of America that federal workers have risked exposure to COVID-19 without receiving proper hazard pay.71
Furthermore, a class action on behalf of public transit employees was filed by the Transport Workers Union of America, against the director of Miami-Dade County’s Department of Transportation and Public Works. The lawsuit claims that the department failed to enact and enforce sufficient safety measures and provide proper protective equipment and supplies to employees.72
Velodyne Lidar Inc.’s employees allege that they were unlawfully terminated with one day’s written notice and that the company’s representation that layoffs were due to COVID-19 was inconsistent with the defendant’s recent business activities.73
Hooters III Inc. and Enterprise Holdings, Inc. also face similar allegations for allegedly terminating employees upon closing restaurants and offices because of the COVID-19 pandemic, without providing required advance written notice.74
Similarly, hair salon employees claim that the owners refused to pay them earned wages for the pay period leading up to the salons’ COVID-19 closures.75
Protecting the Vulnerable Against Covid-19
Protecting the elderly in residential and long-term care facilities
Elderly residents, long-term care facilities and related corporations are being sued by residents exposed to COVID-19 or the estates of those who passed away due to the corporations’ negligent and careless responses. The plaintiffs in Québec allege that their facility had been completely deserted, that the vast majority of staff members had abandoned the residence due to a lack of resources and that residents were found in completely inhumane conditions. Plaintiffs are seeking moral and punitive damages.76
A similar class action has also been filed against a Soldier’s Home that suffered a COVID-19 outbreak due to the home’s alleged negligence and indifference to the risks posed by the virus, which allegedly resulted in the spread of the virus.77
In Ontario, plaintiffs are claiming $50 million in damages and $10 million in punitive damages against the long-term care provider, Revera. The plaintiffs allege that the facilities lacked proper sanitation protocols, adequate testing and that measures to keep residents safe were not properly disseminated to residents and their families. It will be interesting to see how these Ontario COVID claims manage in light of Ontario's immunity legislation.
In Nova Scotia, a class action was filed against the Northwood Halifax long-term care facility. The plaintiffs claim that as global alarm grew over COVID-19, Northwood Halifax continued to operate a crowded longterm care facility in a manner involving close contact between approximately 600 Residents and 400 staffmembers, which would ultimately facilitate the spread of COVID-19. The lawsuit alleges that Northwood Halifax did not adequately prepare for, or provide means of, physical distancing. The action claims that while it was known in February 2020 that the only reliable means of preventing the spread of COVID-19 was to enforce physical distancing, Northwood Halifax only implemented control measures in March 2020, which were “ineffective, inadequate, and too late,” leading to a death count of 53 as of May 30, 2020.78
The Department of Health in Pennsylvania is also facing similar lawsuits for, plaintiffs claim, not regularly inspecting the long-term care facilities and allegedly not stopping the facilities from using an experimental treatment on residents without their consent.79
Protecting populations in prison and other institutions
The governor of Illinois and the director of the Illinois Department of Corrections might face an order directing state officials “to drastically reduce Illinois’s prison population,” as inmates are vulnerable to catching COVID-19. The lawsuit seeks to represent older prisoners and those with health problems because the poor protective measures in prisons can make the COVID-19 effects deadly for them.80
Similarly, the prison wardens and the Federal Bureau of Prisons are being sued in Colorado and Louisiana for allegedly failing to protect prisoners and corrections staff from COVID-19. The plaintiffs allege that the prisons “are knowingly risking the lives of every prisoner.”81
Furthermore, the American Civil Liberties Union (ACLU) asked the California Supreme Court to order the release of immigrant detainees from two California border facilities amid the COVID-19 pandemic.82
The Transgender Law Center also filed a similar suit against the Secretary of the U.S. Department of Homeland Security and the Attorney General of the United States to protect transgender people in civil immigration detention.83
Class actions against prisons have escalated in the last month.84
Similar class actions have also been filed against psychiatric hospitals.85 A class action was launched against a separate psychiatric hospital, alleging that at least 112 patients and 147 staff at the hospital have tested positive for COVID-19, and at least two patients have died from complications stemming from the virus. The lawsuit further alleges that social distancing and other COVID-19 prevention measures are impossible in the hospital. Therefore, the class action was filed on behalf of all individuals confined at the hospital during the COVID-19 pandemic who, pursuant to CDC guidelines, are at high risk for becoming severely ill or dying from COVID-19, and seeks immediate action to protect the health of these individuals, including through discharge or transfer to safer, non-congregate settings86
A similar action commenced in Québec against the Attorney General of Canada for Correctional Service Canada’s failure to assure the safety and security of the detainees. The claim alleges that inadequate measures were implemented to stop the spread of COVID-19 within the Joliette Institution and seeks additional damages for class members that tested positive for COVID-19.
A class action has also been filed against Steven Mnuchin in his capacity as United States Secretary of the Treasury, on behalf of incarcerated individuals, contending that they are not exempt from the $1,200 tax credit created by the CARES Act. The lawsuit alleges that the IRS initially stated that incarcerated people fit within the CARES Act definition of “eligible individuals,” and thus are entitled to receive the payments. However, the IRS subsequently changed its position, and decided not to send Economic Impact Payments to incarcerated people despite the unambiguous statutory language. The lawsuit claims that the CARES Act only excludes four categories of people from receiving payments: individuals without a social security number, non-resident aliens, dependents claimed on the tax return of another taxpayer, and estates or trusts, and that “there are no other carve outs or exceptions.” The plaintiffs in this action seek declaratory and injunctive relief, requiring the defendants to issue the Economic Impact Payments to plaintiffs and the class as rapidly as possible.87
By Donald Trump
A class action was filed against Donald Trump and other high-ranking government officials over a provision of the coronavirus relief package that could deny funds to U.S. citizens married to immigrants without Social Security numbers. The plaintiffs’ claim they were discriminated against based solely on whom they chose to marry.88
A class action was filed against Nike for its requirement for retail employees to wear face masks during the COVID-19 pandemic. The lawsuit alleges that this policy is discriminatory against deaf and hard-of-hearing consumers, in that the policy hampers the ability to communicate for those who rely on lip reading and the visualization of facial expressions. The class action was brought on behalf of deaf and hard-of-hearing Californians who are current or future customers of Nike at its retail stores in California, and seeks injunctive relief and statutory damages.89
Potential Future Class Actions
As the impact of COVID-19 spreads, class action lawsuits are likely to rise. Given the similarities between the legal systems in Canada and the U.S., class actions commenced in one country are often filed across the border. Following recent trends, below is a list of potential future class actions that might be expected:
Consumer protection claims are popular with consumers seeking compensation for their financial or personal loss. Claims are likely to arise mainly in three categories: refund policies (including memberships and subscriptions), misleading advertising, or price gouging.
Securities claims may be issued against public companies for failing to abide by securities disclosure obligations. Public companies should consider whether there are company-specific implications of the crisis that constitute material non-public information, whether that information requires immediate disclosure, and whether the company should restrict trading by insiders.
Super-spreader claims are expected for allegedly negligent responses to COVID-19. These claims may allege a failure to protect from or a failure to warn of the potential exposure to COVID-19. These types of claims have already been commenced against cruise lines and governments. A claim in negligence could be brought in respect of companies in the hospitality industry and elsewhere, e.g. sporting event spectators in large arenas, conference attendees, hotel patrons, religious congregations, and government bodies, all of whom may have been exposed to the virus.
Breach of contract claims may be filed for breach of warranty, issues with the supply chain or delays. As companies scramble to keep supplying products, in some cases, those companies are using alternative suppliers or back-up manufacturing lines to maintain operations. Companies are already challenging the right to exercise force majeure clauses. There are also disputes surrounding termination in cases where buyers exercise a contractual right to terminate a contract if the force majeure event goes on for too long. Once manufacturing ramps up again, there could also be disputes regarding which party is responsible for expedited freight related to shipping delays caused by COVID-19.
Privacy and data security claims for failure to adequately protect confidential information or dissemination of confidential information are likely to rise. There are increased opportunities for malicious actors to gain access to an organization’s electronic information systems, whether through phishing or other social engineering, or through a hack at a time when the organization is digitally overstretched. These risks are likely to be exacerbated by the increased number of employees working from home and outside of normal supervisory regimes.
Insurance claims are on the rise against insurance companies for declining coverage under their policies for company losses occurred in relation to COVID-19. Insurance companies assert the benefit of the force majeure clause to deny coverage, stating that the closure events were unforeseen. Insureds are challenging this interpretation in the courts.
Banking and debt collection claims against financial institutions from their commercial clients raising concerns in relation to foreclosures, debt collection suspensions and the administration of loans and the bank’s role in providing access to government relief programs during the COVID-19 pandemic.
Employment claims are increasing against employers for failing to take steps to safeguard the health and safety of employees or to follow employment standards legislation. Concerns have already arisen from unionized meat inspectors at a meat processing plant in Alberta, where one individual had tested positive for COVID-19.
Corporate governance claims might arise as many companies face financial challenges and even bankruptcy. Companies and their directors and officers may face class actions for breach of fiduciary and other duties to creditors and other stakeholders upon filing for insolvency.
Government entities also face increasing challenges for allegedly “causing harm” or “increasing the risk of harm” from COVID-19. Other claims might arise for failure to safeguard the health and safety of citizens whether in relation to elderly residents, prisons or homeless shelters among others. There have also been actions by companies forced to close for inadequate responses or notices from the government leading them to hardship.
COVID-19 exposes companies to class actions. The above examples show that it is crucial for companies to carefully inform their investors, customers and the public about the impacts of COVID-19 on their business.