For the week of April 20, 2020
Written By Keely Cameron, Tim Heneghan and Michael Smith
As businesses and consumers begin to assess the wide-ranging damage wrought by the global coronavirus pandemic, the pace of new COVID-related class action claims has begun to increase rapidly. Claims for unpaid refunds continue to emerge, as do actions against businesses that are relevant to the unique circumstances brought on by the pandemic, including videoconferencing providers and food-delivery services.
Negligence and Breach of Contract Actions
- In Québec, a class action has been filed against owners and operators of the Residence Herron, a long-term care facility in which at least 31 residents have died of various causes in the past month. The claim alleges that the Residence Herron acted with a "wanton disregard for the life, safety and dignity of its residents", leaving many abandoned, uncared for, and found lying in excrement as the virus bore down on the residence. The proposed class action seeks compensation and punitive damages for residents, their family members, and the estates of deceased residents.
- In California, users of the online trading platform Robinhood have filed a class action after the platform experienced several outages in early March 2020, at a time when volatility in the New York Stock Exchange was high and the equity market and trading levels soared. The plaintiffs allege that the platform's failures evidence a system that was "not properly designed to handle peak market activity". The plaintiffs claim breach of contract, gross negligence, and several violations of California state law.
- In New York, JetBlue ticketholders have brought a class action against the airline alleging breach of contract after mass flight cancellations. The plaintiffs assert that JetBlue's contract with passengers requires the airline to either rebook passengers on later flights or provide a full refund after cancelling a flight. But after widespread cancellations in the wake of the pandemic, JetBlue offered "credits" for future travel instead of the promised refund.
- In California, season pass-holders of ski resorts managed by Alterra Mountain Company have started a class action after the defendant announced indefinite closure of its resorts and offered a discount for renewal in the 2020-21 ski season, rather than a prorated refund due to the shortening of the 2019-20 season. Season pass-holders for Six Flags theme parks have brought a similar class action after parks were closed in mid-March. That claim, on behalf of all season pass-holders in the United States, was also launched in the courts of California.
- In Virginia, a Liberty University student has brought a class action against the school. The plaintiff states that the university "purports to remain open" despite moving most of its classes online and ending on-campus services. The plaintiff argues that in offering students the option of returning to campus after spring break, instead of a complete shutdown, the school is staying "open" as a pretext for denying refunds.
- In California, users of the popular video chat software Zoom have filed a class action for privacy breaches surfaced after the surge in Zoom's user base after the start of the pandemic. The plaintiffs allege breach of contract, negligence, and violation of statutory privacy laws in connection with Zoom's failure to take security precautions to protect users' personal data from being released to third parties, and for Zoom's failure to prevent "Zoombombing", in which unauthorized participants enter meetings to disrupt them with offensive behaviour.
Actions Against Employers
- In British Columbia, employees of Steve Nash Fitness World, Steve Nash Sports Club and UFC Gym BC have filed a class action alleging breach of their employment contract for failure to provide reasonable notice or payment in lieu of notice. The defendants allegedly terminated all of their employees without appropriate severance in late March, following closure of the gym in response to COVID-19.
- In Florida, Hooters employees have filed a class action against the restaurant chain for alleged violation of the Worker Adjustment and Retraining Notification Act. Hooters dismissed the employees in late March after government-mandated closure of dine-in restaurants. The plaintiffs allege that Hooters' failure to provide any advance written notice of termination without cause, let alone the 60 days’ notice required by law, violates federal law.
Actions Regarding Prisons
- In Massachusetts, a federal judge has provisionally certified a class of immigrant detainees seeking release from a county jail that allegedly lacks adequate protections against COVID-19. The claim was filed in late March and has progressed rapidly since then, with the court already having ordered the release of eight individuals and expedited review of bail applications. Similar claims have been launched across the United States.
Actions Relating to Government Relief Program
- In Texas, a class action has been brought against Wells Fargo Bank for its implementation of the small business emergency loan program funded by the American federal government. The plaintiffs claim that the bank unlawfully prioritized existing business clients at the expense of other small businesses applying for funds from the program. The plaintiffs seek, among other things, an injunction removing Wells Fargo's requirement that applicants for loans have a business or lending relationship with Wells Fargo before their emergency loan applications. Last week we noted a similar claim against the Bank of America.
Competition Actions
- In New York, a class action has been filed against several major online food delivery providers (UberEats, Postmates, GrubHub, and Doordash), alleging that the defendants have used their monopoly power to impose unlawful price restraints on restaurants. In particular, the claim is focused on a "No Price Competition Clause" within the defendants' standard-form contracts with restaurants. The clause prevents restaurants from charging different prices to meal delivery customers than they charge to dine-in customers for the same menu items. The claim alleges that the onset of the COVID-19 pandemic has "annihilated the dine-in market", underscoring the danger in allowing the defendants' considerable monopoly power to remain unchecked.
Bennett Jones is committed to protecting the rights of its clients during these unprecedented times. If you have any questions about the information in this article, please contact a member of the Bennett Jones Class Action Litigation group. In addition, please visit our COVID-19 Resource Centre for other COVID-19-related materials.
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