PHILADELPHIA – As the coronavirus pandemic creates an ever-evolving landscape of litigation, two defense attorneys from the Cozen O’Connor law firm in Philadelphia say the plaintiffs’ bar is using the situation to its advantage in its crafting of new class action suits.
Michael W. McTigue Jr. and Meredith C. Slawe say COVID-19 has presented new challenges in their service as co-chairs of Cozen O’Connor’s class actions department.
“Our hope at the beginning of the pandemic was that the plaintiffs’ class action bar would stand down a bit, with respect to a lot of the lawyer-driven, contrived, gotcha-type claims that they file and style as punitive class action lawsuits against businesses,” Slawe said.
“Obviously, everyone has been focused on the business side, with the safety of employees and safety of customers, as well as trying to figure out the continuation of business operations during these unprecedented times, and how to navigate this challenging environment.”
However, Slawe added the trends she and her colleagues have observed in the last few months proved to be very much the opposite, from an “entrepreneurial and coordinated” plaintiffs’ class action bar.
“We’ve seen the usual, run-of-the-mill, gotcha-type litigation against businesses across a number of consumer-facing industries that leverage statutory damages and a relatively low bar for pleading requirements. We’ve seen those cases persist, and it’s incredibly frustrating for us in the class action defense bar and for our clients, to be seeing pre-suit demand letters threatening litigation where there’s no basis for the claims, to see manufactured class actions continue,” Slawe stated.
Slawe explained such cases are predicated upon claims ranging from advertising and pricing, to the Telephone Consumer Protection Act, Fair Credit Reporting Act and other statutes usually associated with such litigation. One lawyer in western Pennsylvania has filed dozens of lawsuits against a grocery store chain for not letting in customers who refuse to wear masks.
Slawe added a new layer of “lawyer-driven” class actions connected to COVID-19 is also being seen, which she feels exploits businesses that find themselves in the challenging situation of attempting to comply with a patchwork of state and local regulations related to the virus.
“We’ve seen a real push of the plaintiffs’ bar to try to find creative-type claims to bring in courts across the country. We’ve seen them do that with public nuisance claims, challenging businesses’ safety protocols and procedures, particularly in the employment context,” Slawe said.
“A lot of these cases take advantage of the fact that the guidance from the Center for Disease Control and the best practices at a given point in time, may no longer be the best practices and the guidance weeks later or months later, and that companies are doing the best they can to address what is essentially a moving target.”
McTigue noted that businesses are already struggling with financial losses during the pandemic and an uncertainty over whether their insurance will cover them. Adding a lawsuit is akin to kicking someone while they're down.
"Not only businesses, but institutions like educational institutions, and they’re doing the best they can under circumstances where it’s not clear what the science is. Having these gotcha lawsuits out there, hitting them left and right when they’re trying to stay afloat, is very, very challenging,” McTigue said.
Colleges and universities around the country have been popular targets. Lawsuits like this one against Penn State University say parts of tuition should be refunded because students can't take advantage of facilities like libraries and they've been deprived of the campus experience they thought they were paying for.
Companies like TicketMaster and places that sell season passes like amusement parks have also been popular targets for class action lawyers.
In the absence of liability protections for schools and businesses - and with plaintiffs lawyers taking millions of dollars in taxpayer money to fund their advertisements - Slawe mentioned that where some businesses would once “hold their nose and write a check” to settle claims brought by plaintiffs’ attorneys, the businesses are now pushing back against claims they see as meritless, as they work hard to comply with a list of various statutes and consumer protection laws.
A key point, according to both Slawe and McTigue, is judicial recognition of the class action’s landscape current dynamic.
“The idea that gotcha litigation, that these lawyer-driven claims that are meritless, are clogging the dockets of our courts at this particular point in time is bad enough in ordinary circumstances. Right now, to be diverting judicial resources as well as the parties’ resources to address meritless claims is problematic,” Slawe stated.
McTigue added another factor to Slawe’s point about the importance of legal resource attention, that being most of the judiciary is still working remotely and facing a full slate of hearings, depositions and other proceedings at this time.
“In some cases, the courts are not permitting oral arguments on matters, which I think are important in cases. There are aspects of this that are challenging for defense, to get your story out effectively,” McTigue said.
Slawe and McTigue elaborated on what businesses should know before coming in to court, if they find themselves named in a class action lawsuit.
“Many of these complaints are drafted a certain way to assert claims by an individual, on behalf of a national class. In many cases, these are not meaningful class action complaints. They’re attempts by plaintiffs’ lawyers to leverage the class action to try to shake down a company, for an individual settlement at a premium,” Slawe said.
“When a company sees a class action complaint filed against them, it’s really important to not panic, to understand what the allegations are, [to understand] the idea that some of these plaintiffs’ lawyers are filing dozens of class actions complaints a week in a ‘throw everything against the wall and see what sticks’ approach, and to really understand whether or not there is meaningful exposure, before determining what the best course of a defense may be.”
Slawe emphasized that prior to a court appearance, businesses should take the time to nail down facts and understand the story behind a complaint.
“It’s challenging to always figure out where documents may live to address active litigation defense, and parties should work together amicably to figure out the best approach. That’s what judges want. They don’t want unnecessary discovery disputes, they don’t want contentious proceedings,” Slawe stated.
“Parties should work together with a high degree of professionalism always, and a heightened form of professional now, appreciating that we’re all going through a challenging time in general.”
McTigue added that he’s seeing a common-sense approach being taken by judges in their handling of class action cases filed against businesses during the pandemic.
“It’s been refreshing from our standpoint that judges get it, and are ensuring that businesses are protected. They are trying to do the best they can,” McTigue said.
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com