Apr 30 2020

Lawsuits Await Defendants Who Try to Capitalize on COVID-19

Throughout the country, life as we previously knew it has been put on hold. All of the activities that previously made up our daily lives have stopped, and most of our time is spent at home. Since most civil litigation arises out of our daily occupational and recreational activities beyond the safe confines of our homes, there will certainly be a drop in claims arising out of this period of time.

Litigation Arising out of COVID-19

At the same time, there will be a host of new claims that specifically arise out of the COVID-19 pandemic. As is always the case, some of these claims will be legitimate, and some will be factually or legally without merit. Regardless of how careful businesses and individuals may be, it is inevitable that claims will be brought as a result of some of the consequences of COVID-19.

Class Action Lawsuits

Although nothing can be done to prevent some of the COVID-19 related claims that are likely to be brought, individuals and companies must make sure they avoid actions that actually invite these claims. Two recent class action lawsuits provide an important warning of what is likely to happen to parties whose conduct in the wake of COVID-19 has given plaintiffs no choice but to litigate.

One of the class action lawsuits was brought against Arizona University, Northern Arizona and Arizona State for failing to provide students with a refund for room and board for the unused portion of the semester after students were required to leave campus. Most colleges have provided pro rata refunds for students for the period of time that either housing or meal plans could not be used, yet not all schools have followed suit. Those that do not offer refunds are likely to find themselves in the same predicament as the Arizona universities, as it is hard to imagine that those who do not get a refund will accept this result. A second class action was brought in the Northern District of California by Brenda Labib and other members of a health club. In this lawsuit, Labib et. al v. 24 Hour Fitness U.S.A., the members filed suit against a chain of clubs because their monthly membership fees had been taken out notwithstanding the fact that the clubs were closed. Not surprisingly, club members found it objectionable that they were being charged even though they literally could not use the facilities, and they filed a class action lawsuit against the chain of clubs.

Exposure to Multiple Damages

The conduct in these two cases presents a stark contrast to the selfless actions of so many individuals and businesses trying to make the best out of the struggles that so many are experiencing. Even under "normal" circumstances, the actions of the defendants in these examples would be viewed unfavorably by a judge or jury. However, at a time when everyone is trying to rally together to defeat a common enemy, the actions of these defendants are likely to be seen as that much more egregious. In each of these cases, the defendants have exposed themselves to far greater damages than simply refunding amounts that were improperly charged; of far greater potential consequence, they face multiple damages and/or attorney fees for engaging in conduct that may have violated applicable consumer protection statutes.

Do the Right Thing

There will be a great deal of litigation arising out of COVID-19. Although the pandemic has taken a massive toll on all of us, there is no reason to assume that lawsuits will end badly for defendants just because they arise out of COVID-19. Judges and juries are able to set aside their sympathies and focus on the evidence before them, and defendants whose conduct during COVID-19 is defensible will be judged fairly.

However, individuals or companies who are perceived as taking advantage of people who have been impacted by the pandemic should expect the worst. The defendants in these two class action lawsuits are likely to face the wrath of judges and/or jurors who have seen our country ravaged by the pandemic. Defendants who are perceived as engaging in opportunistic conduct can expect even harsher treatment than they otherwise would have faced, as the judges/juries deciding their fate may view them as the perfect target to direct all of their pent up frustrations. Now more than ever, individuals and businesses who fail to do the “right thing” do so at their peril.

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