Insights

On June 27, 2025, the Supreme Court upheld the constitutionality of the USPSTF and its role in identifying preventive services for coverage under the ACA in Kennedy v. Braidwood Management.[1]In the case, the Supreme Court considered whether the Secretary of HHS’s appointment of USPSTF members without the advice and consent of the Senate complied with the Appointments Clause in Article II of the United States Constitution. The Supreme Court found that USPSTF members were “inferior Officers” under the Appointments Clause who did not require Senate confirmation because the Secretary of HHS had the authority to remove USPSTF members at will and “to directly review and block Task Force recommendations before they take effect.” The Supreme Court therefore affirmed that the USPSTF as currently structured may legally recommend preventive services for coverage without cost-sharing requirements under the ACA.

On Friday, June 28, 2024, the U.S. Supreme Court overruled Chevron U.S.A. v. Natural Resources Defense Council (“Chevron”)[1] in Loper Bright Enterprises v. Raimondo (No. 22-451) and Relentless v. Dep’t of Commerce (No. 22–1219)[2] (the two cases collectively referred to as “Loper Bright”), bringing an official end to the decades-old and eponymously named “Chevron deference” doctrine. Not content to stop there, the Court returned fresh to work Monday, July 1, to, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System (No. 22-451)[3] (“Corner Post”), effectively extend the limitations period to challenge final agency actions under the Administrative Procedure Act (“APA”).

On July 25, 2023, the U.S. Departments of Labor, Treasury, and Health and Human Services (the “Tri-Agencies”) released long awaited proposed regulations (the “Proposed Rule”) and a Technical Release, which together propose new requirements for comparative analyses of nonquantitative treatment limitations (“NQTL”) under the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”).  On the same day, the Tri-Agencies released their annual report to Congress on implementation of MHPAEA, as required under the Consolidated Appropriations Act, 2021 (“CAA 2021”). 

On July 25, 2022, the Fourth Circuit affirmed the dismissal of several Florida restaurants’ COVID-19 business interruption complaints. According to the court, there was “no reversible error.” Order at 3. The case is Skillets, LLC v. Colony Insurance Co.

On March 16, 2022, the Ninth Circuit affirmed the dismissal of a café’s COVID-19 business interruption claim. The court concluded that the California Court of Appeals’ holding in Inns by the Sea v. Cal. Mut. Ins. Co., 286 Cal. Rptr. 3d 576 (Cal. Ct. App. 2021) controlled and, therefore, that the policy did not cover COVID-19 related business losses. Order at 3. The case is Steven Baker, et al. v. Ore. Mut. Ins. Co.

On March 4, 2022, the district court for the Middle District of Florida granted Westchester Surplus Lines Insurance Company’s motion for judgment on the pleadings in a COVID-19 business interruption claim filed by a bakery operator. The court concluded that the policy’s “plain and unambiguous provisions of coverage do not extend to purely economic harms without accompanying physical property damage.” Order at 1. The court further found that the plaintiff failed to plausibly allege that it suffered a covered cause of loss because its losses were not physical, and “[n]o matter how dangerous coronavirus may be to human health, virus particles do not and cannot cause direct physical loss or damage to property.” Id. at 6. The case is Walsh Haupt & Assocs., Inc. v. Westchester Surplus Lines Ins. Co.

On March 7, 2022, the Fourth Circuit affirmed the dismissal of a creative events business’ COVID-19 business interruption claim. The court held that, under West Virginia law, “the policy language requiring a ‘physical loss’ or ‘physical damage’ unambiguously covers only losses caused by, or relating to, material destruction or material harm to the covered property.” Opinion at 1. Moreover, “[a]ny alternative meaning of the terms ‘physical loss’ or ‘physical damage’ that does not require a material alteration to the property would render meaningless this pre-condition to coverage for business income loss.” Id. at 10-11. Thus, dismissal was appropriate because “neither the closure order nor the Covid-19 virus caused present or impending material destruction or material harm that physically altered the covered property requiring repairs or replacement so that they could be used as intended.” Id. at 12-13. The case is Uncork & Create LLC v. The Cincinnati Ins. Co., et al.

On January 13, 2022, the U.S. Court of Appeals for the Second Circuit affirmed the district court’s order dismissing several delicatessens’ COVID-19 business interruption complaint against Cincinnati Insurance Company. Finding the parties’ arguments are foreclosed by the Second Circuit’s recent decision in 10012 Holdings, Inc. v. Sentinel Insurance Co. because the policy terms “are not materially different from” the policyholder’s in 10012 Holdings, the court held the delis did not plead any physical damage to their insured property. Order at 3. The case is Rye Ridge Corp. v. Cincinnati Insurance Co.

On October 14, 2021, the Supreme Court of New York, New York County, granted Lexington Insurance Company’s, Arch Specialty Insurance Company’s, Aspen Specialty Insurance Company’s, Ategrity Specialty Insurance Company’s, Allied World National Assurance Company’s, Evanston Insurance Company’s, Starr Specialty Lines Insurance Agency’s, and Interstate Fire & Casualty Company’s motion to dismiss a furniture company’s COVID-19 business interruption claim. The court concluded that there was no “direct physical loss, damage or destruction” to property caused by COVID-19, and that “Covid-19 and any of the essential hygiene procedures necessary to facilitate the operation of [the business] simply does not constitute anything covered by the policies.” Order at 1. The court further found that it was “clear that were this not to be the case, the pollution and contamination exclusion would still apply.” Id. at 2. The case is Raymours Furniture Co. Inc. v. Lexington Ins. Co., et al.

On September 30, 2021, the Departments of Health and Human Services (“HHS”), Labor, and Treasury, as well as the Office of Personnel Management (collectively, “the Departments”), issued a second interim final rulemaking implementing provisions of the No Surprises Act passed by Congress earlier this year. 

On July 7, 2021, the Circuit Court of Cook County, Illinois granted with prejudice State Farm Fire and Casualty Company’s motion to dismiss Unique Concepts, LLC’s COVID-19 business interruption class action complaint. The court found that the policy’s virus exclusion barred coverage, as the exclusion applies, not only when a virus causes loss, but “also applies when the [COVID-19] closure orders caused the loss.” Transcript at 14. The court determined that the closure orders would not have occurred absent the virus and that it made “no difference that the virus exclusion doesn’t use the word pandemic.” Id. at 15.

On June 3, 2021, the district court for the District of Connecticut granted Hartford Fire Insurance Company’s motion to dismiss a hospitality group’s putative nationwide class action complaint for COVID-19 related damages. The court held that the losses sustained from government closure orders do not trigger civil authority coverage because the group failed to plead how the orders caused property damage, “a condition precedent to triggering Business Income and Extra Expense coverage under the Policy.” Order at 9. Showing no specific lost or damaged property or prohibited access by the orders, the group could not meet its burden of showing “demonstrable physical harm,” which was unambiguously required under the policy. Id. at 9-10. Because the orders were issued to limit the spread of the coronavirus and promote social distancing rather than because of physical damage in the immediate area, the orders did not trigger the civil authority provision. Id. at 20.