Minor League Baseballs, Businesses Lose 9th Circuit COVID-19 Cover Calls
- Law firms
- Related documents
- Three other circuits also decided for the insurers
- The 9th circuit represents a third of these cases
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(Reuters) – Comprehensive property insurers scored three more victories on Friday against companies seeking coverage for lost income and related expenses in the wake of the COVID-19 pandemic – this time in the 9th Court of Justice appeal from the United States, where more than a third of all such federal appeals are pending.
The 9th Circuit upheld lower court rejections of proposed class actions filed by two California companies, Boudpie Inc and Selane Products Inc, and a trial filed in Arizona federal court by two dozen minor league baseball teams, stadium owners and related entities doing business in 10 states.
Circuit judges Morgan Christen and Danielle Forrest heard the appeals sequentially on Aug. 11, joined by U.S. District Judge Michael Anello from the Southern District of California, sitting by designation.
In a case law ruling applying California law, the panel stated that business income interruption coverage under Travelers Casualty Insurance Co’s Mudpie Policy, which is triggered by “physical loss or damage to property, “requires physical alteration of property and not just” useful loss. “
According to his complaint filed in federal court in San Francisco in May 2020, Mudpie was unable to operate his children’s clothing store due to “shelter in place” and “stay at home” orders state and city in March. He submitted a claim for his lost income and extra expenses at the end of April, which Travelers quickly denied.
U.S. District Judge Jon Tigar granted Travelers’ motion to dismiss in September 2020.
As a further basis for asserting this decision, the 9th Circuit noted on Friday that the policy also contained an exclusion for losses caused by viruses. He rejected Mudpie’s argument that the losses were not caused by the virus itself, but by stay-at-home orders, which Mudpie attempted to characterize as covered by a provision on the exercise of l civil authority.
Theodore Boutrous of Gibson, Dunn & Crutcher argued the appeal of Travelers, who was also represented by Robinson & Cole and Bullivant Houser Bailey. Mudpie was represented by Gibbs Law. Lawyers for both sides did not immediately respond to requests for comment.
In a separate order, the 9th Circuit rejected similar arguments from minor league teams, led by the Chattanooga Lookouts and represented by Cohen Ziffer Frenchman & McKenna and the cabinet of Mitchell Sandler. They were operated by several different companies, represented mainly by Squire Patton Boggs and Phelps Dunbar.
The teams, which also have virus exclusions in their policies, had argued their losses were attributable to causes “not implicated by the virus,” including “government responses to the pandemic and Major League Baseball (MLB) not providing players, âFriday review said. The panel disagreed, concluding that these losses were ultimately caused by the virus.
The third appeal, brought by dental supply company Selane Products, raised many of the same arguments that the 9th Circuit rejected in the Mudpie case. Selane had also argued that U.S. District Judge Mark Scarsi in Los Angeles erred in preventing the company from introducing evidence to show what the parties intended the police to cover.
The court agreed with Kannon Shanmugam of Paul, Weiss, Rifkind, Wharton & Garrison, who argued on behalf of Continental Casualty, that foreign evidence was inadmissible because the policy was unambiguous.
Shanmugam declined to comment on Friday. Selane’s lawyers in Pasich and Parker Waichman had no immediate response.
According to the COVID Coverage Litigation Tracker from the Carey Law School at the University of Pennsylvania, 196 federal appeals are pending on whether loss of earnings insurance covers losses from the pandemic – including 68 in the 9th Circuit.
The 6th, 8th and 11th Circuits also claimed substantive victories for the insurers. Last month, the 3rd Circuit ordered lower court judges to reconsider their decisions to send the coverage cases to New Jersey and Pennsylvania state courts.
The cases judged on Friday are:
Mudpie Inc v. Travelers Casualty Insurance Co of America, # 20-16858.
For Mudpie: Andre Mura and Eric Gibbs of Gibbs Law Group; and Victoria Nugent and Geoffrey Graber of Cohen Milstein Sellers & Toll
For travelers: Theodore Boutrous Jr. of Gibson, Dunn & Crutcher; Stephen Goldman and Wystan Ackerman of Robinson & Cole; and Andrew Downs from Bullivant Houser Bailey
Chattanooga Pro Baseball LLC v. National Casualty Co, # 20-17422.
For Chattanooga Pro Baseball: Orrie Levy and Robin Cohen of Cohen Ziffer Frenchman & McKenna; Mitchell Sandler’s Andy Sandler
For National Casualty et al. : Brian Cabianca and Aneca Lasley of Squire Patton Boggs; Katie Myers and Jay Sever of Phelps Dunbar
Selane Products Inc v. Continental Casualty Co, No. 21-55123. For Selane products: Kirk Pasich of Pasich; Parker Waichman’s Jay Breakstone
For Continental Casualty: Kannon Shanmugam from Paul, Weiss, Rifkind, Wharton & Garrison; Dave Godwin from Squire Patton Boggs.