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Insurers’ COVID-19 Notepad: What You Need to Know Now - Week of November 7, 2022

Client Alert | 2 min read | 11.07.22

Courts Dismiss COVID-19 Business Interruption Claims

On October 31, 2022, the district court for the District of New Jersey granted American Guarantee and Liability Insurance Company’s motion to dismiss a healthcare provider network’s COVID-19 business interruption claim. The court concluded that the plaintiff failed to state a claim for business interruption by communicable disease coverage because the relevant COVID-19 related executive order “restricted certain activities on the Insured Location but did not prohibit access to the Insured Location as is required to trigger coverage under the [business interruption by communicable disease coverage].” Order at 10. The case is Inspira Health Network v. Am. Guar. & Liab. Ins. Co.

On October 31, 2022, the district court for the Central District of California granted Federal Insurance Company’s motion to dismiss a deli owner and operator’s COVID-19 business interruption claims. The court found that “binding appellate authority” held that COVID-19 pandemic losses did not constitute physical loss or damage. Order at 5-7. The case is Roy Kavin, Inc. v. Fed. Ins. Co.

On October 27, 2022, the district court for the Eastern District of California granted Illinois Union Insurance Company’s motion to dismiss an eye care company’s COVID-19 business interruption claims. The court found the plaintiff’s proposed reading of its “pollution condition” coverage would lead to “absurd results.” Order at 6. The court therefore held the plaintiff failed to demonstrate its claim was covered and dismissed all causes of action. Id. at 7. The case is Vision Serv. Plan v. Ill. Union Ins. Co.

New Business Interruption Suits by Insurers:

Several insurers sued a resort management company in New Jersey state court (Cape May County) for declaratory relief in a COVID-19 business interruption dispute. The policy allegedly contains business income, extra expense, and ingress or egress coverage and excludes loss or damage caused by “indirect or consequential loss of any kind” or by pollution or contaminants. Complaint ¶ 28. The insurers seek a declaratory judgment the policyholder is not entitled to coverage because the coronavirus and the corresponding stay-at-home orders did not cause “direct physical loss or damage.” Id. ¶ 53. The case is Swiss Re Corp. Solutions Capacity Insurance Co. v. Cape Resorts Management Co.

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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....

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