Insurers’ COVID-19 Notepad: What You Need to Know Now - Week of October 31, 2022
Client Alert | 2 min read | 10.31.22
Courts Dismiss COVID-19 Business Interruption Claims
On October 25, 2022, the Ninth Circuit affirmed the dismissal of a restaurant operator’s COVID-19 business interruption claims. Relying on United Talent Agency v. Vigilant Ins. Co., 77 Cal. App. 5th 821 (2022) and Musso & Frank Grill Co. v. Mitsui Sumitomo Ins. USA Inc., 77 Cal. App. 5th 753 (2022), the court concluded that the plaintiff could not recover COVID-19 related business losses because “the virus did not cause ‘direct physical loss or physical damage’ or ‘risks of physical loss’ as California courts have interpreted these phrases.” Opinion at 4-5. The case is Protégé Rest. Partners LLC v. Sentinel Ins. Co., Ltd.
On October 21, 2022, the Ninth Circuit affirmed a grant of summary judgment to Hartford Fire Insurance Company on a group of hotels’ COVID-19 business interruption claim. Relying on both Ninth Circuit and California Court of Appeal case law, the Court held that plaintiffs failed to allege physical alteration to their property and that it was not an abuse of discretion to deny plaintiff’s request for a continuance pending further discovery. Opinion at 3. The case is BA LAX, LLC v. Hartford Fire Ins. Co.
On October 21, 2022, the district court for the District of Nevada granted Security National Insurance Company’s motion to dismiss a restaurant owner and operator’s COVID-19 business interruption claim. Relying on prior district precedents, the court held the plaintiff failed to allege any plausible physical loss or damage to covered property and therefore failed to state a claim for business income or civil authority coverage. Order at 4-5. The court also held that the virus exclusion in plaintiff’s policy unambiguously barred coverage. Id. at 6-7. Finally, the court dismissed the plaintiff’s bad faith and misrepresentation claims because Security National had a reasonable basis to deny coverage and the policy was unambiguous. Id. at 7-8. The case is WFTLVO1, LLC v. AmTrust N. Am., Inc.
Contacts
Insights
Client Alert | 3 min read | 11.21.25
On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future.
Client Alert | 3 min read | 11.20.25
Client Alert | 3 min read | 11.20.25
Client Alert | 6 min read | 11.19.25
