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Archive for April, 2020

Georgia’s first taste of COVID-19 lawsuits in long term care facilities

Posted on: April 27th, 2020

By: Shaun Daugherty

It has been highly publicized that long-term care facilities were devastated by the effects of COVID-19 on its residents and the filing of negligence suits against long-term care facilities in its wake was inevitable. Four such cases were filed in Fulton State Court on April 23, 2020. All of the cases involve the same facility, the same plaintiffs’ firm, and similar fact patterns and allegations. 

Each complaint alleges that the facility negligently failed to follow precautionary restrictions that were put in place at the facility starting on March 11, 2020. Coincidentally, that is the same date that the WHO declared a global pandemic and two days before President Trump declared a national emergency. In fact, if the allegations in the complaints are accurate, then these restrictions were implemented by the facility ten days before the CDC issued guidance to nursing homes and long-term care facilities. 

However, the claims appear to be centered on whether the restrictions were followed rather than their timely implementation. Plaintiffs claim that despite the imposition of the restrictions, employees failed to wear personal protective equipment and asymptomatic staff that were exposed to COVID-19 were permitted to continue to work. In each of these four cases, it is alleged that the residents tested positive for COVID-19 and died as a result. 

These appear to be the first cases in Georgia of their kind. However, earlier this month, a negligence and fraud case was filed in Washington state related to the well-publicized issues that occurred at the Life Care Center at Kirkland and the subsequent death of one of the residents. These Georgia cases will likely be the first to test Governor Kemp’s Executive Order that extended civil liability immunity. There are also a host of additional defenses that will likely be asserted related to timeliness, reasonableness, and, significantly, proximate cause. There is a recognized difference in dying with a diagnosis of COVID-19 and dying because of the disease.  Residents in these facilities were likely already suffering from a number of co-morbidities that placed them in the high-risk category to begin with.  Expert testimony in the many fields of medicine will likely become involved on both sides. 

There are also a host of additional defenses that will likely be asserted related to timeliness, reasonableness, and, significantly, proximate cause. There is a recognized difference in dying with a diagnosis of COVID-19 and dying because of the disease.  Residents in these facilities were likely already suffering from a number of co-morbidities that placed them in the high-risk category to begin with.  Expert testimony in the many fields of medicine will likely become involved on both sides. 

These cases will be watched closely by the legal community and will likely be the measuring sticks on causes of action and defenses for the expected onslaught of new claims that are on the way. 

If you have any questions or would like more information, please contact Shaun Daugherty at [email protected].

Insurer seeks declaration that COVID-19 claims for closure-related losses are not covered

Posted on: April 27th, 2020

By Barry Miller

Travelers Insurance Company wants a federal court to declare it has no duty to pay business income loss to a California law firm which claims that COVID-19 closures have caused it to lose revenue.

The ABA Journal reports that Travelers is seeking a declaratory judgment in the Central District of California. The lawsuit addresses claims from the Geragos & Geragos firm in Los Angeles, which says it has lost revenue from its law practice and rent from a tenant because of the closure of its own office, and California courts.

Travelers alleges that attorney Mark Geragos told a claims representative that the COVID-19 virus causes physical damages because other countries affected by the virus have fumigated public spaces. He also stated that scientists have detected the virus in aerosols and on lingering surfaces for some time.

Travelers seeks a declaration the claim does not fall within the policy’s grants of coverage for either “Business Income and Extra Expense” or “Civil Authority.”  Travelers alleges that Geragos’ claims do not trigger the policy’s Business Income and Extra Expense that requires that a loss was “caused by direct physical loss of or damage to property at the described premises.” Likewise, Travelers contends that the Civil Authority coverage requires that any government closure order result from “direct physical loss of or damage to property at locations, other than described premises, that are within 100 miles of the described premises.”

Even if COVID-19 claims triggered either coverage, Travelers says that the Virus and Bacteria Exclusion would apply. It also relies on exclusions for damage caused by Ordinance or Law, Pollution, and acts of a group, organization, or governmental body as bases for the declaratory relief.

FMG has been reporting on lawsuits filed by restaurants, retail outlets, and other businesses making claims for business interruption coverage due to COVID-19 closures. The Travelers action appears to be the first one filed by an insurer.

If you have any questions or would like more information, please contact Barry Miller at [email protected].

Federal District Court Slashes Attorney’s Fees Claim

Posted on: April 24th, 2020

By: Nancy Reimer and Adrianna Michalska

Finding “pervasive shortcomings” in its billing entries, the U.S. District Court for the District of Massachusetts recently slashed a law firm’s fee request by seventy percent.  In Covidien LP and Covidien Holding Inc. v. Brady Esch, C.A. No. 16-12410-NMG (D. Mass. April 17, 2020) Covidien’s counsel sought $2.7 million dollars for representing Covidien in an employment contract dispute.  Criticizing the firm for block billing, excessive hours and unwarranted and duplicative fees, the District Court Judge slashed the fees sought to $798,500.

In the case, Covidien sued its former Director of Global Strategic Marketing for breach of confidentiality, breach of obligation to disclose “inventions” and breach of the covenant of good faith and fair dealing. After a nine-day trial, the jury returned a verdict for Covidien on its breach of confidentiality claims but found for the defendant on the other two claims. The Court entered judgment in favor of Covidien in the amount of $794,892.24, and allowed its request for costs, attorneys’ fees and expenses. Pursuant to the Court’s order, Covidien was entitled to pre- and post-judgment interest at 12% annual rate, reasonable attorneys’ fees and costs as the prevailing party. Covidien moved to alter or amend that judgment to include calculation of interest, fees and costs. The defendant opposed the motion and cross-moved to strike evidence submitted by Covidien, or in the alternative to amend judgment, reduce damages or order a new trial on some issues.

Covidien sought attorneys’ fees in the amount of $2,661,774.35, which Covidien claimed reflected the true value of the necessary work of a “limited core group of attorneys and paralegals.” The Court disagreed finding the request to be excessive. First, approximately $50,000 of the requested fees related to separate litigation pending in Delaware and California – those were not recoverable in this action. Second, more than half of the time entries billed by Covidien’s attorneys reflected a significant pattern of block billing in increments of one hour or more. The Court found the block billing represented “such a pervasive shortcoming”, it warranted an “across-the-board” global 25% reduction of all fees. Third, the Court found the billing records reflected overstaffing of both local and out of town attorneys, duplicative entries, inefficient use of junior attorneys, vague work descriptions and unreasonable hourly rates of support staff. Applying the “bedrock principle” adopted in the First Circuit that an award of attorneys’ fees should reflect the prevailing parties’ degree of success the Court further reduced the fees awarded. Although Covidien was the prevailing party for purposes of awarding costs, it attained only a part of what it sought in instituting the litigation. Thus, the Court reduced Covidien’s fees award by half of the already discounted request.

Lastly, the Court recognized that Covidien’s sought attorneys’ fees in the amount of over $2.6 million were “nowhere near commensurate with the damages awarded by the jury, warranting a further substantial reduction” Killeen v. Westban Hotel Venture, LP, 872 N.E.2d 731, 738 (Mass. App. Ct. 2007). Accordingly, the Court reduced Covidien’s fees request by an overall 70% and awarded it $798,500 in legal fees, less than a third of what Covidien originally requested.

Covidien also asked for $531,008.76 in costs. The Court found that despite yielded mixed results, Covidien reasonably “carried the day” and was entitled to costs, but the request was cut in half to exclude the costs Covidien unreasonably and unnecessarily expended on travel and lodging for out-of-state attorneys, as well as on copying and printing its own deposition transcripts. Then the Court reduced the costs by 50% to account for Covidien’s partial success.

Most jurisdictions employ the loadstar method to calculate reasonable attorneys’ fees. The method begins with the calculation of total hours worked, which is derived from authenticated billing records, reduced by any hours that are duplicative, unproductive or excessive. The total hours worked is then multiplied by a reasonable hourly rate. To determine a reasonable hourly rate, Courts consider such factors as prevailing rates in the community, the qualifications, experience and specialized competence of the attorneys involved and the “quantum of success achieved in the litigation.” Coutin v. Young & Rubicam Puerto Rico, Inc., 124 F.3d 331, 338–39 (1st Cir. 1997).

Covidien’s attorneys learned a hard lesson.  First and foremost invoices must be carefully reviewed to ensure time is charged to the correct client and it is not excessive or duplicative. While litigation is costly, it does not justify the expenditure of attorneys’ fees, which are more than triple the amount recovered in a jury award.  If you have any questions or would like more information, please contact our Lawyers Professional Liability Practice Group, a list of which can be found at www.fmglaw.com.

Governor Kemp Issues Executive Order Reopening Certain Businesses in Georgia

Posted on: April 22nd, 2020

By: Andrew Kim

On April 20, 2020, Governor Kemp signed an Executive Order that will impact certain businesses in Georgia. The new Executive Order reopens some businesses previously closed due to the Coronavirus pandemic and removes certain restrictions for other types of businesses as well.

Here are some key provisions:

Health-Related Practices and Services Not Subject to Minimum Basic Operations Restrictions:

The following practices and services are not subject to the Minimum Basic Operations restrictions. Instead, these practices and services “should consider implementing the operational guidelines provided in Executive Order 04.02.20.01 for Critical Infrastructure:”

  • Medical practices
  • Dental practices
  • Orthodontics practices
  • Optometry practices
  • Physical therapists
  • Ambulatory Surgical Centers
  • Physicians performing elective surgeries
  • Healthcare Institutions
  • Medical Facilities
  • Any and all other healthcare-related practices and services that have elected to cease operations because of the spread of COVID-19.

The Executive Order urges these practices and services begin treating patients as soon as possible in accordance with the Centers for Disease Control and Prevention guidelines, Centers for Medicare and Medicaid Services guidelines, and the provisions of his April 20, 2020 Executive Order to prevent the spread of COVID-19.

Reopening of Certain Businesses Effective April 24, 2020:

The Executive Order reopens the following businesses on Friday, April 24, 2020:

  • Gyms
  • Fitness Centers
  • Bowling Alleys
  • Body Art Studios
  • Businesses registered pursuant to Code Sections 43-10-11 and 43-10-18
    • Beauty Shops
    • Beauty Salons
    • Barber Shops
    • Schools of Cosmetology
    • Schools of Hair Design
    • Schools of Esthetics
    • Schools of Nail Care
    • Schools of Barbering
  • Individuals who, for compensation, engage in the practice of esthetics (massages, trims, dyeing, etc.), or cosmetic skincare.
  • Hair Designers
  • Persons who practice Massage Therapy

However, these businesses must implement the following in-person Minimum Basic Operations in order to reopen:

  1. Screening and evaluating workers who exhibit signs of illness, such as a fever over 100.4 degrees Fahrenheit, cough, or shortness of breath;
  2. Requiring workers who exhibit signs of illness to not report to work or to seek medical attention;
  3. Enhancing sanitation of the workplace as appropriate;
  4. Requiring hand washing or sanitation by workers at appropriate places within the business location;
  5. Providing personal protective equipment as available and appropriate to the function and location of the worker within the business location;
  6. Prohibiting gatherings of workers during working hours;
  7. Permitting workers to take breaks and lunch outside, in their office or personal workspace, or in such other areas where proper social distancing is attainable;
  8. Implementing teleworking for all possible workers;
  9. Implementing staggered shifts for all possible workers;
  10. Holding all meetings and conferences virtually, wherever possible;
  11. Delivering intangible services remotely wherever possible;
  12. Discouraging workers from using other workers’ phones, desks, offices, or other work tools and equipment;
  13. Prohibiting handshaking and other unnecessary person-to-person contact in the workplace;
  14. Placing notices that encourage hand hygiene at the entrance to the workplace and in other workplace areas where they are likely to be seen;
  15. Suspending the use of Personal Identification Number (PIN) pads, PIN entry devices, electronic signature capture, and any other credit card receipt signature requirements to the extent such suspension is permitted by agreements with credit card companies and credit agencies;
  16. Enforcing social distancing for non-cohabitating persons on their property;
  17. For retailers and service providers, providing for alternative points of sale outside of buildings, including curbside pickup or delivery of products and/or services if an alternative point of sale is permitted under Georgia law;
  18. Increasing physical space between workers and customers;
  19. Providing disinfectant and sanitation products for workers to clean their workspace, equipment, and tools; and
  20. Increasing physical space between workers’ worksites to at least six (6) feet.

The April 20, 2020 Executive Order includes the same language and restrictions from the previous April 2, 2020 Executive Order. This language and restriction states that all businesses, non-profits, and county and municipal governments, other than those defined as “Critical Infrastructure,” shall restrict gatherings to ten (10) individuals at a single location if “such gathering requires persons to stand or be seated within six (6) feet of any other person.”

Reopening of Other Businesses Effective April 27, 2020:

Governor Kemp’s April 20, 2020 Executive Order does not include any provisions that reopen or lift restrictions for:

  • Restaurant dine-in services;
  • Private Social Clubs; and
  • Theaters

However, during his press conference on April 20, 2020, Governor Kemp announced that the above businesses will be allowed to reopen on Monday, April 27, 2020, should those businesses comply with specific social distancing and sanitation mandates. The Governor’s Office will be issuing these additional mandates for these businesses in the next few days.

Governor Kemp stated in his press conference that the following businesses will remain closed:

  • Bars
  • Nightclubs
  • Operators of Amusement Park Rides
  • Live Performance Venues

So What Next?

Employers that are planning on reopening their business based on Governor Kemp’s April 20, 2020 Order should immediately begin assessing the health and safety protocols they have in place now for employees and what additional steps they need to take to implement the protocols identified by the April 20 Order.  Further, we recommend that employers consult with their counsel to evaluate any industry or location-specific measures that should be taken to reduce any concerns by customers of contracting COVID-19 when visiting the employer’s establishment. 

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include returning to the workplace, business interruption coverage and more. Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

Stay at Home Orders Under Attack – What are the Limits and Rights of State Governments?

Posted on: April 22nd, 2020

By: Marc Finkel

Faced with the uncertainty of navigating through a global pandemic, governors throughout the United States have issued a series of executive orders aimed at slowing the spread of the novel coronavirus.  Many of these executive orders have placed restrictions on our daily lives from the closure of schools to the closure of restaurants, movie theaters, and barbershops.  Since the beginning of March, as the number of positive cases of the novel coronavirus began to increase in different parts of the United States, the frequency of additionally restrictive executive orders aimed at “flattening the curve” of the novel coronavirus has increased as well.  Due to the varying degrees of restrictions that have been placed on some of our freedoms, there has been a recent uptick in court challenges to several of these executive orders. 

A recent illustration of this has started playing out in the State of Kansas, where Governor Laura Kelly issued Executive Orders 20-18 and 20-25 that modified prior executive orders placing certain restrictions on public activities and mass gatherings to include a prohibition against in-person religious gatherings of more than 10 people.  On April 11, 2020, the Kansas Supreme Court upheld Governor Kelly’s limitations on such in-person religious gatherings on state law grounds.  However, recently, United States District Court Judge for the District of Kansas, Hon. John W. Broomes, granted a temporary injunction on behalf of the First Baptist Church and Calvary Baptist Church that enjoins Executive Orders 20-18 and 20-25 from being further implemented on U.S. Constitutional grounds. 

In First Baptist Church, et al. v. Governor Laura Kelly, No. 20-1102-JWB, (April 18, 2020), Judge Broomes determined that the Plaintiffs met the standard for the issuance of a temporary restraining order by finding that Executive Orders 20-18 and 20-25 were not facially neutral in the restrictions it placed upon in-person religious assemblies.  The Court primarily based its decision on the fact that religious assembly was previously considered an essential public activity under the first wave of executive orders issued by Governor Kelly to combat the novel coronavirus pandemic in the State of Kansas, and that Executive Orders 20-18 and 20-25 were issued specifically to place restrictions on the right of in-person religious assembly.  The Court also found that the restrictions on the right of in-person religious assembly were likely not narrowly tailored, because the safety concerns that serve the basis of Executive Orders 20-18 and 20-25 are not dissimilar to safety concerns with respect to other secular mass gathering activities deemed essential under prior executive orders issued by Governor Kelly (e.g., mass gatherings at airports).  The Court noted, however, that those other secular mass gatherings are subjected to less restrictive conditions under Executive Orders 20-18 and 20-25.  Furthermore, as this is a matter that concerns a limitation on a person’s First Amendment rights, even if only for a minimal period of time, the Court found that the Plaintiffs risk irreparable injury for the purpose of obtaining a temporary restraining order.

Hearing on a permanent injunction as to Executive Orders 20-18 and 20-25 is scheduled for April 23, 2020.  The Court recognized the novel coronavirus presents an “unprecedented health crisis” that places on Governor Kelly an “immense and sobering responsibility” to protect the lives of Kansans.  Therefore, the Court in granting the temporary restraining order, expressly stated that it would “not issue any restraint, temporary or otherwise, if the evidence showed such action would substantially interfere with that responsibility.”  Accordingly, it is unclear whether the Plaintiffs will ultimately obtain a permanent injunction as to the implementation of Executive Orders 20-18 and 20-25.  In fact, a reading of the Court’s decision granting the temporary restraining order suggests that a more facially neutral limitation on the right to in-person religious assembly may pass constitutional muster.  This is a critical matter worth following, as the Court’s decision on whether to issue a permanent injunction will likely serve as a roadmap for deciding constitutional challenges to similar executive orders throughout the United States.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include returning to the workplace, business interruption coverage and more. Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**