Daily Dicta: Coronavirus Litigation: The Good, the Bad and the Stupid
Come on really? There's a global pandemic and you're suing because you think Brazilian waxes are an essential business?
March 31, 2020 at 01:48 AM
8 minute read
One thing that's impressed me about the coronavirus response is how quick universities (well, most of them—looking at you, Liberty University) were to shut down. Stanford University, for example, switched to online learning on March 9. So did Northeastern University in Boston and the University of Washington in Seattle.
My son's college (UC Santa Cruz go banana slugs!) told students to clear out on March 10—a full nine days before California Governor Gavin Newsom put the state on lockdown.
While we're happy to have our son safe at home, we are somewhat less than thrilled to be paying full tuition for online classes that he takes in our dining room. But whatever. The university, to its credit, has been thoroughly decent about issuing refunds for room and board and charges for other on-campus services.
Which is why a new class action against the regents of the University of Arizona, Arizona State University, and Northern Arizona University caught my eye.
The complaint was filed in U.S. District Court for the District of Arizona by The Law Offices of Robert D. Ryan in Phoenix; DiCello Levitt Gutzler in Chicago and Matthew S. Miller LLC in Chicago on behalf of three Illinois parents whose kids go to the University of Arizona.
On March 18, classes at the University of Arizona moved online and students were instructed that they "should not return to campus."
The plaintiffs have no quarrel with this, writing that the "decision to transition to online classes and to request or encourage students to leave campus were responsible decisions to make."
But here's the catch—the board of regents, at least to date, "has not offered refunds to students for the unused portion of their room and board, nor has it offered refunds of fees paid to cover the cost of certain on-campus services which will no longer be available to students," according to the complaint. "To the extent refunds have been offered, the refunds have not been commensurate with the financial losses to the students and their families. [The board of regents] is, in essence, profiting from this pandemic."
Room and board for an undergrad at the 45,000-student University of Arizona is $13,350. It's about $13,510 at ASU, which has 72,000 students. There are also assorted fees that cover things like the rec center, student services and media that typically add another couple hundred dollars per semester.
Adding insult to injury, seniors have been charged a $50 commencement fee even though commencement has been cancelled.
Here's what ASU has to say about refunds: "We understand that along with the health and well-being concerns caused by the coronavirus COVID-19, an increasing worry for people is the economic disruption and financial impact of this public emergency. ASU's top priority right now is the health and well-being of our students. While we are not giving out refunds at this time, as things stabilize with COVID-19, we will be looking into potential accommodations for services that may have gone unused by students, such as meal plans. We understand your concerns and appreciate your patience as we work through these issues."
Sorry, but if my kid went to ASU, I'd be apoplectic.
The plaintiffs are suing for breach of contract, unjust enrichment and conversion. They want "disgorgement of the pro-rated, unused portion of fees, proportionate to the amount of time that remained in the Spring 2020 semester when classes moved online and campus services ceased being provided,'" along with attorneys' fees and costs.
Another recent coronavirus suit that strikes me as more of a reach comes courtesy of Eglet Adams senior partner Robert Eglet.
If you don't recognize his name, he's a big time plaintiffs lawyer—for example, he represented 2,500 victims of the Las Vegas shooting, reaching an $800 million settlement with MGM Resorts last year. And in January, Eglet won the National Law Journal's Keith Givens Visionary Award ("This award honors a member of the bar who has shown extraordinary creativity in bringing the legal industry together, developing new opportunities for business growth, and supporting the professional development of attorneys across the country.")
In other words, if he files a lawsuit, I'm going to take it seriously—but I have my doubts he can pull this one off.
He's filed a class action in the District of Nevada against the People's Republic of China and various Chinese government entities on behalf of small businesses (defined as having 500 or fewer employees), seeking hundreds of billions in damages.
According to the complaint, the PRC "knew, or should have known, that COVID-19 was a 'new' dangerous, contagious, and deadly virus" capable of causing a pandemic. Instead of disclosing this information, the complaint alleges that the defendants "engaged in a campaign of misinformation and lies."
Which may be entirely true, but how does it get you a viable class action? Eglet argues the court has jurisdiction under the Foreign Sovereign Immunities Act—in particular, the portion that covers "acts outside the territory of the United States in connection with a commercial activity of the defendants, that cause a direct effect in the United States."
He asserts that the defendants "have acted clearly contrary to the precepts of humanity, transparency, and/or their conduct is prohibited by the internal laws of the PRC and its provincial and municipal government." For example, he points to an admission by the Chinese government that the Wuhan police acted improperly when they forced a whistleblower, Dr. Li Wenliang, to sign a false statement denying there was a new and deadly virus.
Still, I wonder if it would have made a difference. Or would a virus that's so contagious have spread no matter what? For that matter, shouldn't the U.S. government have acted sooner to contain it?
I previously wrote about another lawsuit filed in Florida against the PRC on behalf of more or less every person and business in the United States. But Eglet argues that his class of small business owners is more focused and would meet the requirements of commonality and typicality. As he told the Associated Press, "This class-action is just laser-focused on small businesses."
Mmm okay … but there are 32 million putative class members. Then again, a federal judge in the Northern District of California in 2018 certified a class against Qualcomm that covered an estimated 250 million consumers, so who knows?
Which brings us to the final category of coronavirus litigation: just plain stupid. With a hat tip to a tweet by Reuters columnist Alison Frankel, it's hard to top a suit filed by Cabana Wax—which according to Yelp is the fifth-most-popular provider of Brazilian waxes in Huntsville, Alabama.
Represented by The Law Office of Garrett Dennis, the business on Friday sued the state of Alabama in federal court for deeming it non-essential, claiming violations of the Fifth Amendment and the Alabama constitution. "Plaintiff's business is in high demand with the public. Plaintiff has not seen its demand diminish due to COVID-19," Dennis wrote.
Which come on really? There's a global pandemic and people are still clamoring for wax treatments?
"Unlike some other 'non-essential' businesses," Dennis continued, "Plaintiff is unable to generate any revenue, as plaintiff is not able to sell its services 'curbside' or through a retail website."
Ew yes. That is true.
On Monday, Dennis moved to dismiss the suit. But hey—at least Cabana Wax should be covered under Eglet's suit.
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