Insurers’ COVID-19 Notepad: What You Need to Know Now - Week of September 26, 2022
Client Alert | 2 min read | 09.26.22
Courts Dismiss COVID-19 Business Interruption Claims
On September 20, 2022, the U.S. Court of Appeals for the Fifth Circuit affirmed the dismissal of a jeweler’s COVID-19 business interruption lawsuit. The court held that income lost while being closed due to pandemic-related orders was not the result of “direct physical loss.” Order at 4. The court relied on its earlier decision in Q Clothier New Orleans LLC v. Twin City Fire Insurance Co., 29 F.3d 253 (5th Cir. 2022) and said loss of use from the shutdown orders did not tangibly alter the property. Id. at 4, 6. The court also affirmed the dismissal of the negligent procurement claims against the jeweler’s insurance brokers, finding that they did not have an affirmative duty to advise the company about the availability of pandemic-related insurance coverage. Id. at 8. Instead, the court said, an agent’s duty ends once the insured receives the insurance it requested; it is the policyholder’s responsibility to request the type of insurance it wants. Id. at 11-12. The case is Coleman E. Adler & Sons, L.L.C. v Axis Surplus Insurance Co.
On September 19, 2022, the district court for the Eastern District of Louisiana granted Continental Casualty Company’s motion to dismiss a hospital and healthcare facility operator’s COVID-19 business interruption claim. The court found that “the weight of jurisprudence and the law of the circuit” required it “to interpret ‘direct physical loss of or damage to property’ to cover only ‘tangible alterations of, injuries to, and deprivations of property.’” Order at 9. The case is Fairway Medical Ctr., LLC v. Continental Cas. Co.
New Business Interruption Suits Against Insurers:
A residential real estate company sued Amguard Insurance Company in California state court (Contra Costa County) for declaratory relief, breach of contract, and breach of the duty of good faith and fair dealing. The policy allegedly provides business interruption and civil authority coverage. Complaint at ¶¶ 112-17. The Complaint alleges that the presence of SARS-CoV-2 within the plaintiff’s properties “caused direct physical loss of or damage to properties (or both) by transforming the property from usable and safe into property that is unsatisfactory and prohibited for use, uninhabitable, unfit for their intended function, and extremely dangerous and potentially deadly for humans.” Id. at ¶ 5. The case is Happy Valley Road LLC v. Amguard Ins. Co.
Contacts
Insights
Client Alert | 5 min read | 12.12.25
Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality
On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument.
Client Alert | 8 min read | 12.11.25
Director Squires Revamps the Workings of the U.S. Patent Office
Client Alert | 8 min read | 12.10.25
Creativity You Can Use: CJEU Clarifies Copyright for Applied Art
Client Alert | 4 min read | 12.10.25
Federal Court Strikes Down Interior Order Suspending Wind Energy Development
