The Pandemic of Litigation Sure to Follow the Coronavirus

Mar 27, 2020 Published Article

As the Coronavirus crisis persists, America’s richly diverse private business sector finds itself increasingly subject to unprecedented governmental orders and restrictions that were unheard of only a few weeks ago.  While the various “shutdown,” “shelter in place,” and “non-essential business” orders all aim to protect the public health, there is no doubt that the wave of litigation to follow is already swelling.

Business interruption, civil authority, and cyber insurance coverages have already been widely discussed as issues certain to be litigated over the coming months and beyond.  Additionally, breach of contract litigation is likely to spike as parties attempt to recoup their losses from canceled events, unfulfilled purchase commitments and other unmet obligations.

Moreover, regional and national businesses are now in the difficult position of managing their respective affairs to comply with a patchwork of executive orders that are inconsistent from state to state.  And, as the pandemic wears on, many are questioning the authority under which some of these executive orders and emergency regulations are being issued in the first place.  Indeed, constitutional challenges are almost certain to follow as the business community reframes the characterization of their losses into notions of unconstitutional takings of private property and governmental impairment of private contract rights.

Finally, on the edge of the envelope, at least two class action lawsuits have now been filed on behalf of small businesses in the United States, naming the People’s Republic of China and its various political subdivisions and agencies, alleging conspiracies and tort liability stemming from its handling of the coronavirus outbreak.

Newmeyer Dillion is tracking these trends and issues to counsel our clients whose businesses are at stake during these unprecedented circumstances. Please reach out to our COVID- 19 Task Force, for any questions, or contact our office directly at 949-854-7000.