The global coronavirus pandemic and the accompanying nationwide and statewide government shutdowns have caused unprecedented disruptions to businesses around the world. The impact "of the coronavirus on small business owners is staggering and likely to be substantial." Kerry Hannon, How The Coronavirus Is Impacting Small Business Owners, Forbes (March 23, 2020). Larger, multinational companies, too, have had to rethink and reorganize their employment, business, and operating policies in response to the worldwide pandemic. Riley de Leon & Jen Geller, Here's what every major company is doing about the coronavirus pandemic, CNBC (March 13, 2020). In its wake, the coronavirus pandemic will give rise to a myriad of claims and lawsuits, including some that are likely to transcend state and national borders.

In this article, we outline some of the claims that companies have begun to see, as well as potential actions on the horizon. We also examine existing aggregate and class litigation frameworks around the world that may gain renewed attention as claimants and companies look to resolve their disputes and move forward after the pandemic.

Existing & Potential Coronavirus-Related Claims

Litigation stemming from the coronavirus pandemic has already begun to percolate across several industries.

• Insurance Litigation. The insurance industry has already begun to see litigation related to the coronavirus. In Oceana Grill v. Certain Underwriters at Lloyd's, London, for example, a New Orleans restaurant filed a state court declaratory judgment action against its insurance carrier, alleging that the insurer must cover the restaurant's coronavirus-related losses pursuant to an "all risks" property insurance policy. See Cajun Conti LLC, Cajun Cuisine 1 LLC, and Cajun Cuisine LLC d/b/a Oceana Grill v. Certain Underwriters at Lloyd's, London, et al. (Filed Civ. Dist. Ct. Orleans La. Parish March 13, 2020). Likewise, famed Chef Thomas Keller of The French Laundry has filed a lawsuit against his insurance company, claiming that he is entitled to recover for business that has been interrupted by the coronavirus pandemic. See Heather Lalley, Chef Thomas Keller files suit against his insurer in business interruption dispute, Restaurant Insider (March 26, 2020).
• Consumer Litigation. Manufacturers of cleaning products and hand sanitizers may also find themselves the target of consumer litigation. In California, for example, consumers have filed a putative class action in the Southern District of California, alleging that the Germ-X hand sanitizer is falsely "advertised, marketed and sold as a Product that will prevent or reduce infection from the flu and other viruses, including the coronavirus." David v. Vi-Jon, Inc. D/B/A/ Germ-X, No. 3:20-cv-00424, Docket No. 1 (Filed S.D. Cal. March 5, 2020). Similar consumer class actions have been filed against the manufacturer of the Purell hand sanitizer. See Alicia Victoria Lozano, Maker of Purell accused of 'misleading' customers in class-action lawsuit, NBC News (March 2020).
• Securities/Shareholder Litigation. Actions by shareholders, including securities claims, are likely to follow too, as investors scrutinize the responses and representations of companies during and after the coronavirus outbreak. For instance, a group of investors have filed an action in the Southern District of Florida against Norwegian Cruise Line, alleging that the company "was employing sales tactics of providing customers with unproven and/or blatantly false statements about COVID-19 to entice customers to purchase cruises." See Douglas v. Norwegian Cruise Lines et al, No. 1:20-cv-21107-RNS, Docket No. 1 at 7 (Filed S.D. Fla. March 12, 2020). A federal securities action has also been filed against a pharmaceutical company whose "stock value skyrocketed after its CEO claimed it was ready to test a COVID-19 vaccine, but a single skeptical tweet caused shares to plummet over two days." Matthew Santoni, Inovio Investors Sue After COVID-19 Vaccine Claims Busted, Law 360 (Mar.13, 2020); McDermid v. Inovio Pharmaceuticals, Inc. et al., No. 2:20-cv-01402, Docket No. 1 (Filed E.D. Pa. March 12, 2020).

These early lawsuits are likely to be just the tip of the iceberg. Many more are likely to come:

• Data Privacy Litigation. Data privacy has become a "hot" issue in recent years, one that may give rise to unexpected governmental enforcement actions or liability for companies who may be collecting or using data in coronavirus-related efforts. See Sara Morrison, Is slowing the spread of coronavirus worth compromising your privacy?, Vox (March 26, 2020) (observing that some companies are "offering their data analysis services to try to track or stop the spread of the virus").

Amid the coronavirus outbreak, the California Attorney General has declined the request of business groups to delay the enforcement of the California Consumer Privacy Act ("CCPA"), and further modified the regulations implementing the CCPA. Joe Duball, California attorney general's office: No delay on CCPA enforcement amid COVID-19, IAPP (March 24, 2020); Glenn A. Brown & Elliot Golding, California Attorney General Proposes Further Modifications to Proposed CCPA Regulations, National Law Review (March 14, 2020). The CCPA (which will begin to be enforced by the California Attorney General in July) secures "the right of Californians to": (1) "know what personal information is being collected about them"; (2) "know whether their personal information is sold or disclosed and to whom"; (3) "say no to the sale of personal information"; (4) "access their personal information"; (5) "equal service and price, even if they exercise their privacy rights." Cal. Assem. Bill No. 375 (2017-2018 reg. sess.) (as chaptered June 28, 2018).

The CCPA provides a private right of action to a "consumer whose nonencrypted or nonredacted personal information . . . is subject to an unauthorized access and exfiltration, theft, or disclosure as a result of the business' violation of the duty to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the personal information." It also provides for stiff civil penalties of $7,500 for each intentional violation, which a consumer (on an individual or class basis) may prosecute if the California Attorney General does not. Id.

Data privacy litigation is also likely to increase in Europe, which has data-privacy protection laws that resemble the CCPA. See Erdem Buyuksagis, Towards a Transatlantic Concept of Data Privacy, 30 Fordham Intell. Prop. Media & Ent. L.J. 139, 176 (2019). For example, "under the European Union's General Data Protection Regulation (GDPR), an entity is only able to collect personal information about a 'data subject' if it has a legal basis to do so, for example by obtaining the data subject's consent." Joseph V. DeMarco & Brian A. Fox, Data Rights and Data Wrongs: Civil Litigation and the New Privacy Norms, 128 Yale L.J. F. 1016, 1022–23 (2018-2019). The GDPR has "provisions governing how data is processed, stored, and transferred and gives data subjects the right to request information about what data is collected and how it is used, to correct information, and even to request the deletion of the data." Id. Further, the GDPR, like the California Consumer Privacy Act, may also be enforced through a private right of action. Id.

Canadian laws may also give rise to data privacy litigation, including class actions. See McLean v. Cathay Pacific Airways Limited, BCSC, Vancouver Registry, VLC-S-S-199228 (involving a worldwide privacy breach class action where the alleged data breach did not occur in Canada and most of the claimants are not from Canada). Data protection in Canada falls within both the Federal and Provincial jurisdictions. The Canadian Government has enacted the Personal Information Protection and Electronic Documents Act to govern how private companies collect, use, and disclose personal information. See Tina Piper, The Personal Information Protection and Electronic Documents Act – A Lost Opportunity to Democratize Canada's Technological Society, 23 Dalhousie L.J. 253, 266–69 (2000). Personal information about an individual (other than an employee's name, title, business address and telephone number) may not be disclosed. Id.

• Suits to Enjoin Governmental Action. Many businesses have been hit particularly hard by quarantine and other governmental orders that require them to close during the indefinite time it takes to contain or mitigate the spread of the coronavirus. Challenges to these orders may soon arise, particularly if competing businesses face varying levels of restrictions depending on governmentally determined "red" or "hot" zones (as opposed to "green" zones) for the coronavirus. Governmental efforts to contain the spread of infectious diseases, while generally accorded deference by courts, are subject to judicial review and may be enjoined. See, e.g., Jew Ho v. Williamson, 103 F. 10, 22–24 (C.C.D. Cal. 1900). In Jew Ho, for example, a Federal Circuit Court struck down a quarantine order that had been imposed on a neighborhood in San Francisco, concluding that the order was (1) not "a reasonable regulation to accomplish" the goal of preventing the spread of an infectious disease, and (2) driven by discriminatory animus against Chinese residents. Id.
• Commercial Business Litigation. Countless business disputes are likely to arise as well. For instance, many commercial tenants are already refusing to pay rent while their businesses are closed due to governmental restrictions. See, e.g., Matthew Kang, The Cheesecake Factory Tells Landlords Across the Country It Won't Be Able to Pay Rent on April 1, Eater LA (March 25, 2020). Many businesses are also invoking "force majeure" clauses in their contracts due to the impact of the coronavirus; litigation concerning the scope and application of force majeure clauses is likely to follow. See, e.g., Alaric Nightingale & Alex Longley, When God Appears in Contracts, That's 'Force Majeure': QuickTake, Bloomberg (Feb. 6, 2020).
• Litigation Related to the Coronavirus Aid, Relief and Economic Security ("CARES") Act. The newly enacted CARES Act is likely to give rise to increased litigation as well. For instance, "small businesses across the country" are already "scrambling to figure out" whether they will be required to comply with new rules expanding paid sick and family leave obligations that are scheduled to go into effect as early as next week; businesses who fail to comply with their new obligations may face new lawsuits. See Charity L. Scott, How the Coronavirus Paid Leave Rules Apply to You, The Wall Street Journal (March 27, 2020).

Aggregate & Class Action Procedures Around the World

Existing and potential coronavirus-related cases (such as consumer or data privacy claims) may well involve claimants from multiple states or countries. Procedures for "collective actions or aggregate litigation in some form have existed … for some time in both common law and civil law countries." Spencer Weber Waller & Olivia Popal, Fall and Rise of the Antitrust Class Action Fall and Rise of the Antitrust Class Action, 39 World Competition 1, 37 (March 2016). The Netherlands, for example, has a class procedure that allows the settlement of claims arising from anywhere in the world, not just The Netherlands. Here are some of the class and aggregate litigation procedures outside of the United States that may gain renewed attention following the coronavirus pandemic:

• Canada has "well-established class action regimes at [the] federal level and in most of its provinces." Id. at 147. Canada's class action procedure allows both individuals and corporations to bring class actions for a wide variety of claims where the representative plaintiff can establish the certification or authorization criteria. These certification criteria include a class of two or more persons, issues that are common to the class, and that the class action is the preferable procedure. Most jurisdictions in Canada have low certification thresholds.
• Australia likewise has an established collective action procedure, "particularly at [the] federal level and in some states." Id. at 148. The Australian collective action procedure "is widely used for product liability and securities litigation," although there have also been some "competition damages class actions." Id.
• The United Kingdom. The UK has enacted the Consumer Rights Act, which "permits private-enforcement actions for violations of competition law, and authorizes the Competition Appeals Tribunal to bless opt-out suits." Zachary D. Clopton, The Global Class Action and Its Alternatives, 19 Theoretical Inq. L. 125, 132–33 (2018). This "U.K. innovation was one of many responses to the European Commission's recommendation for collective actions in Europe." Id.
• The Netherlands. The Netherlands has adopted a class procedure known as the "Wet Collectieve Afwikkeling Massaschade (WCAM)." Id. at 133–34. The WCAM permits global class settlements, irrespective of the country where the plaintiff-claimant is domiciled. For instance, "one of the earliest settlements to use the WCAM process involved approximately 11,000 insurance policy holders from across Europe, the United States, and Thailand." Id.
• Germany has established procedures "for bringing collective or representative claims in certain fields of law," including a "mechanism for collective actions, certain trade associations and consumer protection organisations to seek injunctions on behalf of their members to prevent unfair competition." David Scott, et al., Global Trends in Private Damages: The Future of Collective Actions, 13 Competition L. Int'l 137, 142 (2017).
• France has introduced a class action regime for specific types of claims, including "competition, health, discrimination, environment, privacy and data protection law." Id. at 144. France's system allows claims to be brought only "by licensed consumer associations on behalf of consumers who opt-in to the claim"; the claims must "rely on a previous regulatory finding of infringement." Id.

In some of these jurisdictions, class or collective action "procedures modify ordinary disclosure rules" and have limited or no discovery.  See Rebecca Money-Kyrle & Christopher Hodges, European Collective Action: Towards Coherence, 19 Maastricht J. Eur. & Comp. L. 477, 493-94 (2012). "Canadian class proceedings," for instance, "require leave of the court before discovery is sought against any class members other than the representative litigant." Id.

Conclusion

The global coronavirus pandemic has begun a new wave of litigation, some of which will be global. Preparing now for this new influx of lawsuits may position both small and large companies to be on stronger footing after the dust from the coronavirus pandemic settles.

Mary-Christine ("M.C.") Sungaila anchors the California appellate department in the Orange County office of Haynes and Boone. Marco A. Pulido is an appellate associate at the firm.