The COVID-19 pandemic has foisted ten years of technological advances on the legal sector in a period of ten months. In June of 2020, when the novel Coronavirus was truly novel, we blogged (here) about whether virtual jury trials would be part of the “new normal” and discussed some of the potential pitfalls associated with remote courtroom proceedings.

What seemed revolutionary just a few short months ago, does, indeed, appear to be the “new normal,” ushered in by the pandemic. On January 7, 2021, the New Jersey Supreme Court issued an Order resuming civil jury trials in a virtual format. Noting that “[t]he pandemic required the court system to consider new ways to respond to the needs of public and administer justice” the Court’s Order directs virtual civil trials to begin on or after February 1, 2021 in eight of New Jersey’s 21 counties.

When we blogged about remote jury trials back in June, we raised several concerns—including juror access to technology, the public’s right of access to the courts and the need for a “virtual bailiff” to monitor connectivity and security and ensure that jurors are paying attention. The New Jersey Supreme Court’s Order takes these issues—as well a few additional ones that we had not considered—into account and adopts a two-phase approach for virtual civil jury trials during the pandemic.

Phase 1 begins on February 1, 2021 in the following counties: Atlantic/Cape May; Cumberland/Gloucester/Salem; Monmouth; Passaic; and Union. Participation in virtual jury trials during Phase 1 is voluntary.

Consent, however, is not required during Phase 2, which commences on or after April 5, 2021 and expands virtual civil trials to all counties in New Jersey. Virtual civil trials will continue until further order but “only as long as necessary based on the COVID-19 pandemic.”

All civil case types (all dockets and all tracks) will be eligible for virtual civil jury trials. To the extent possible, virtual civil jury trials in each county will begin with cases involving a single plaintiff, a single defendant, a limited number of issues in dispute, and a modest number of live witnesses.

Cases that are especially complex or anticipated to require more than a few weeks to complete, will be scheduled only after one or more straightforward trials have been conducted in the county. Regardless of complexity, cases involving healthcare professionals involved in responding to the COVID-19 pandemic will not proceed unless: (i) the trial or other proceeding is requested by the healthcare professional, or (ii) involves matters related to COVID-19.

I. The Nuts And Bolts Of Virtual Jury Trials in New Jersey

Jury selection will be conducted in an entirely virtual format. Judges are encouraged to be more permissive in allowing attorneys to participate during virtual voir dire. The model voir dire questions will be expanded and the trial judge and attorneys will agree on at least two open-ended questions that probe (i) juror understanding of public health precautions that will be followed during trial and (ii) juror capacity and commitment to participate in a virtual trial.  In all virtual civil jury trials, the judge will advise jurors to avoid distractions and to comply with the Policy Regulating Jurors’ Use of Electronic Devices During Juror Service.

The Judiciary will provide standard technology to summoned jurors during the selection process and to all empaneled jurors. Samsung Galaxy Pro tablets will be provided to all empaneled jurors, with Broadband activated if necessary. The judiciary will deliver the technology to jurors at their homes or an agreed upon location, or will coordinate pickup if preferred. The court may permit jurors who prefer to use their own technology and who demonstrate the capacity and reliability of that technology to use an appropriate personal device instead of the Samsung Galaxy Pro tablet. Designated staff will be available and responsible to monitor and address technical issues.

The trial judge will conduct a comprehensive pretrial conference that will cover all aspects of the virtual trial process, including whether the judge, attorneys, and parties will be present in a courtroom or whether any or all of them will participate remotely. The judge and attorneys may agree to conduct trials in a “hybrid” format with the judge, attorneys, and even witnesses participating from the courtroom. The pretrial conference will also cover the method of presenting evidence, including when and how to show evidence to the jury.

Witnesses who testify remotely will be required to swear or affirm that they will not communicate with or receive messages from attorneys or others while testifying. The judge and attorneys are to agree on a trial schedule designed to minimize the fatigue associated with online participation, by, for example, limiting morning and afternoon sessions to three hours and scheduling lunch and other breaks.

The trial judge will provide an enhanced jury charge that emphasizes jurors must give their full attention to the trial and must maintain the secrecy of jury proceedings. Among other precautions, jurors may be required to scan (360°) the room they are in to show that they are in a private location.

II. Public Access to Court Proceedings

Public access to the first virtual civil jury trials will be provided by live broadcast without showing images of or otherwise identifying the jurors. After a few virtual civil jury trials are shown live, public access will be accommodated by individual Zoom invitation to the court proceeding or by other means.

III. Conclusion

New Jersey judges, attorneys and residents have already done an incredible job adopting to the brave new world of virtual court proceedings. Since March 16, 2020, judges at all levels of the New Jersey courts have conducted more than 120,000 remote court proceedings involving more than 1.45 million participants. During the same period, more than 500 New Jersey residents have served as jurors in hybrid trials and virtual grand jury panels, using their own technology or technology provided by the courts. Despite these efforts, countless civil litigants whose trials have been indefinitely delayed have not been able to resolve important disputes. The New Jersey Supreme Court’s Order provides a path forward for those litigants and all NJ residents who seek relief from the courts.

EBG attorney William O. Stein recently obtained a complete defense verdict in one of the few jury trials to be tried during the pandemic. I recently sat down with him for a Q&A regarding his experience trying a “socially distanced” jury trial during the pandemic and how it differed from a regular jury trial.

Q: What was it like trying a “socially distanced” jury trial case during the pandemic?

Jury trials always have their own challenges, but this was unique. The jurors had to wear masks at all times. The lawyers and the witnesses had to wear face shields so the jurors could see our faces during examinations, opening, and closing. The biggest issue was the unknown: Will the jurors stay focused if they are concerned about getting COVID? How can we make sure we all stay healthy? There was always the concern that after putting so much time and effort into getting ready and being in trial for a few weeks that orders could come down from the Governor’s office, City, or County shutting down the courtroom, likely resulting in a mistrial and putting our case in limbo.

Q: How did social distancing requirements impact the trial?

I do not think it impacted the outcome; it did not change the case we presented or the evidence we put on. The judge wanted to make sure that the case finished once it started, so there was more of a sense of urgency to complete the trial. It did not affect the way we tried the case, but it did affect the way we conducted ourselves in the courtroom to the extent that we always had to be cognizant of wiping down areas in the courtroom and using hand sanitizer. The court reporting agencies would not send court reporters to the courtroom, so the court reporter was on Zoom. We had to make sure that all of the witnesses more spoke slowly, loudly, and clearly so that we could have a clear and accurate record.

Q: What was the biggest difference from a regular trial?

Adjusting to the social distancing and other COVID protocols. We had to stand at a podium when examining witnesses, and it had to be wiped down each time one of the attorneys examined a witness. Wearing a face shield when giving opening and examining witnesses was an adjustment. Having the jurors spread throughout the courtroom and wearing masks was interesting because it was difficult to see their reactions throughout the trial.

Q: How, if at all, did the jury selection process differ from a regular jury trial?

How did you contend with jurors being concerned over having to attend a trial that might expose them to the virus? We had a much smaller pool of jurors to select from. We were down to the last 12 in the pool, and stipulated to going forward without any alternates. Since the jurors wore masks the entire time, it was hard to get a read on how they were reacting during voir dire and to see their facial expressions when they were answering questions. The jurors were surprisingly dedicated. Once picked, they were all in. We had two jurors call in believing that they may have had COVID, causing a delay in the trial and only 11 jurors deliberating. The jurors were given the opportunity to ask to be excused or to have the trial delayed further each time one of the two jurors believed they may have had COVID, but they elected to continue on to verdict.

Q: What were some of the lessons learned from your experience? What worked well and what didn’t?

While there is a risk with proceeding with a jury trial during a pandemic, we were able to get it done because the courtrooms in Yolo County, California are modern and spacious. That allowed the lawyers, witnesses, client representatives and jurors sufficient space to socially distance. It would have been much more difficult to do in a smaller courtroom or more crowded courthouse. The judge took time before trial to go over the protocols, so we knew at the start how the trial would be conducted. I do not think there was anything that did not work, except that I learned it is difficult to try to put reading glasses on and off while wearing a face mask.

Q: What was the biggest challenge you encountered during the trial?

The biggest challenge was getting through the trial and staying healthy. We had a brief delay because one of the jurors felt that she had to get a COVID test in the middle of the trial. The courtroom had to be cleared so it could be disinfected. We did not know how many jurors would come back for fear of getting COVID when we resumed the trial. Luckily, the juror tested negative, and all of the jurors came back. However, on the day of closing argument, another juror called in and stated that he thought he may have COVID. The remaining jurors decided to continue with the closing and deliberations. At the end of the day, no one got the virus, so we all got out healthy and safe. But we did not know when we showed up each morning whether or not we would have enough jurors to continue with the trial.

Following up on our prior discussion of Studio 417, Inc., et al. v. The Cincinnati Ins. Comp., a different federal judge in the Western District of Missouri recently ruled in Zwillo V, Corp. v. Lexington Insurance Co. that a Kansas City restaurant could not recover for COVID-19 business interruption losses under an insurance policy and, in the process, questioned the reasoning of Studio 417, Inc. and other recent decisions.

The owner of a restaurant in Kansas City (the “Insured”), purchased a commercial property insurance policy from Lexington Insurance Company (the “Insurer”). As a result of losses stemming from COVID-19, the Insured sought business interruption, extra expense, civil or military authority, ingress and egress, and sue and loss coverages under their policies.

The complaint alleged that “COVID-19 and the resulting response by state and local governments have . . . interrupted Plaintiff’s business,” yielding an 80 percent loss of revenue. The complaint also stated the “virus can be spread by respiratory droplets when an infected person coughs, sneezes, or talks”; a person “can become infected from respiratory droplets or potentially by touching a surface or object that has the virus on it and then by touching the mouth, nose, or eyes”; the virus can live on surfaces for several days and in aerosols in the air.

The Complaint did not allege that COVID-19 was present on the premises. Notably, unlike other cases, the policy contained an exclusion for losses related to pollutants and contaminants.

After the Insurer denied their claims, the Insured brought a putative class action against the Insurer for breach of contract and declaratory judgment.

“Plain and Ordinary Meaning” of “Direct Physical Loss”

As in prior cases, the court noted that “at the heart of the question here is whether Plaintiff can meet its burden of showing it suffered a ‘direct physical loss of or damage to property’ so as to trigger the coverage provisions . . . .” The Insurer argued that “direct physical loss of or damage to property’ requires physical alteration of property, or put another way, a tangible impact that physically alters property.” The court agreed with the Insurer’s argument and found that the Insured’s allegations concerning the impact of COVID-19 and the stay at home orders “do not plausibly alleged ‘direct physical loss of or damage to’ property.”

In reaching that conclusion, the court also rejected the Insured’s argument that “physical loss”, which is not defined in the policy, should be based on the plain meaning of “loss” from the dictionary and that “loss could encompass ‘the act of losing possession’ or ‘deprivation.’” As the court framed the argument, “[Insured] argues that the loss of the ability to access property constitutes physical loss of property.” The court rejected that argument finding that “’direct physical loss of or damage to’ does not encompass simple deprivation of use” and reading the term “loss” in isolation would be contrary to Missouri law that an insurance policy must be read as a whole.

The court also recognized that Missouri state courts have not addressed whether COVID-19 or stay-at-home orders constitute “direct physical loss of or damage to” property, but that several other courts have addressed the issue and reached the same conclusion.

The court saved for last a discussion of the prior decisions in the district denying motions to dismiss: Studio 417, Inc.; K.C. Hopps, Ltd. v. The Cincinnati Ins. Co., No. 20-cv-00437 (W.D. Mo. Aug. 12, 2020); and Blue Springs Dental Care, LLC et al., v. Owners Insurance Company, No. 20-cv-00383 (W.D. Mo. Sept. 21, 2020). The Insured argued that the court should follow those cases and similarly deny the Insurer’s motion to dismiss. The court distinguished those cases from the present situation because the policy here contained a virus exclusion that would preclude coverage and, would alone mandate dismissal. But, the court did not stop there when it stated: “[t]o the extent this Court’s ruling – finding the language in the policy plainly and unambiguously does not cover the claims – conflicts with Studio 417, K.C. Hopps, and Blue Springs Dental Care, this Court respectfully disagrees with those cases.”

Key Takeaway

This decision is yet another set-back for policyholders seeking coverage for COVID-19 related losses under business interruption insurance as it calls into question some of the only decisions to date that have favored policyholders. We will have to wait to see how other courts in the district address similar issues as well as how other courts around the country address such claims that are working their way through the court system. To that end, the first trial related to a COVID-19 claim for business interruption insurance began last week in Louisiana and may provide further guidance to policyholders.

Since the enactment of the Hatch-Waxman Act in 1984, courts have held that brand companies can sue generics wherever they plan on making sales, which is everywhere in the U.S. In practice, most suits have been filed in Delaware and New Jersey, with suits against multiple generic companies over the same drug consolidated in one proceeding.

In November 2020, the Federal Circuit upended this settled practice when it issued its opinion in Valeant Pharmaceuticals v. Mylan Pharmaceuticals, No. 19-2402 (Fed. Cir. 2020), holding that venue is not established by contemplated future acts of infringement, but instead on where the submission of the ANDA occurs, reasoning that the technical act of infringement in Hatch-Waxman cases is the submission of the ANDA. On December 7, 2020 Valeant Pharmaceuticals urged the Federal Circuit to rehear its decision en banc arguing that the panel’s opinion “if left untouched, would effect a detrimental and seismic shift in Hatch-Waxman pharmaceutical litigation that will increase uncertainty, delay and costs, all at the expense of judicial economy.”

The Valeant decision is the first time since the U.S. Supreme Court’s 2017 TC Heartland decision that the Federal Circuit has addressed the issue of venue specific to Hatch-Waxman litigation. TC Heartland made it clear that a corporation may be sued “in the state in which it is incorporated and [where] it has a regular and established place of business and an act of infringement has occurred.” TC Heartland, however, was not specific to the Hatch-Waxman context.

Valeant filed its patent infringement lawsuit in the District of New Jersey against three Mylan entities: one with it principal place of business and state of incorporation in West Virginia, one with its principal place of business and state of incorporation in Pennsylvania, and one with its principal place of business and country of incorporation in India. Mylan challenged venue, and the district court granted Mylan’s motion to dismiss based on improper venue, holding that the two places where infringement might have occurred were West Virginia (from which Mylan submitted its ANDA) and Maryland (where the FDA received Mylan’s ANDA).

The Federal Circuit affirmed the district court’s holding with respect to Mylan’s two U.S. entities because neither of the two actions described above took place in New Jersey. The Court held “venue is not proper in all judicial districts where a generic product specified in an ANDA is likely to be distributed,” but rather only “in those districts that are sufficiently related to the ANDA submission—in those districts where acts occurred that would suffice to categorize those taking them as a ‘submitter’ under §271(e).”

With respect to the Mylan entity based in India, the Federal Circuit affirmed that the district court holding that venue was proper because a foreign entity is subject to venue in any judicial district.

The key takeaway from Valeant is that, for purposes of venue, “acts of infringement” cannot be rooted only in future distribution and/or sales of the generic drug. While venue is guaranteed at the generic defendant’s place of incorporation, it remains to be seen how broadly courts will interpret “actions related to the ANDA submission.”

For years, the Districts of Delaware and New Jersey have seen an outsized share of Hatch-Waxman litigation. The Valeant decision may alter this landscape significantly. For generic pharmaceutical companies that are not incorporated in Delaware or New Jersey and do not prepare their ANDAs in Delaware or New Jersey, Valeant provides a new basis for potential venue challenges. Because the Federal Circuit keyed in on Mylan’s ANDA being received by the FDA in Maryland, it also raises the possibility that the District of Maryland may see an increase in Hatch-Waxman cases. While foreign generic pharmaceutical companies may be sued in any judicial district, the decision may lead to future disputes regarding the extent of involvement by the foreign generic company.

Finally, the Federal Circuit was sympathetic to Valeant’s public policy argument based on judicial efficiency, particularly given the frequency in which Hatch-Waxman cases involving multiple defendants are consolidated in one proceeding. However, instead of departing from its strict adherence to the text of the venue statute, the Federal Circuit noted that multi-district litigation (MDL) under 28 U.S.C. §1407 while “cumbersome” was a potential solution to the legitimate efficiency concerns.

On October 21, 2020, President Trump signed into law the “Due Process Protections Act” (“DPPA”), P.L. No. 116-182, 134 Stat. Ann. 894, which was effective upon enactment. Receiving rare bi-partisan support in both houses of Congress, the new law seeks to bring balance to the power dynamic between the prosecution and the defense by requiring federal courts at the outset of a case to put the government on notice of its constitutional discovery obligations and the potential consequences for flouting those obligations.

By directly amending Federal Rule of Criminal Procedure 5, rather than waiting for the usual process of the Judicial Conference of the United States recommending a proposed amendment to Congress, this new law suggests a sense of urgency among elected officials to curtail prosecutorial misconduct and overreach by federal prosecutors. In a statement issued after the bill was signed into law, Senator Sullivan, of Alaska, cited the infamous 2008 case against the late U.S. Senator Ted Stevens (who was then the longest-serving Republican U.S. Senator in history). In that case, the U.S. Department of Justice took the virtually unprecedented step of voluntarily moving to dismiss the indictment against Senator Stevens—after he was found guilty by a federal jury—when it was discovered that federal prosecutors improperly withheld exculpatory Brady evidence. Noting the “reckless” prosecution of Senator Stevens, Senator Sullivan stated that the purpose of the DPPA is to “ensure all Americans’ due process rights are protected, and to hold prosecutors accountable when they violate a defendant’s constitutional rights.”

Under the Fifth and Fourteenth Amendments to the U.S. Constitution, criminal defendants are guaranteed the right to due process of law. The government is required to disclose exculpatory and impeachment evidence to ensure the accused’s constitutional guarantee to a fair trial. In Brady v. Maryland, the United States Supreme Court held that withholding exculpatory evidence violates due process “where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” 373 U.S. 83, 87 (1963). Thus, under Brady, prosecutors have an affirmative duty to timely disclose exculpatory information when such information is “material” to guilt or punishment. See also United States v. Bagley, 473 U.S. 667, 682 (1985) (clarifying that evidence is material to a finding of guilt where “there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different”).

A potential impediment to the enforcement of a criminal defendant’s constitutional due process rights is that the accused does not know what information is in the government’s possession; he or she is completely reliant on the government’s good faith in disclosing any information that might be helpful to the defense. As a consequence, it is entirely up to the government to police itself to ensure that its constitutional discovery obligations are met in every case.

The DPPA signals Congress’s view that courts have a role to play in ensuring the rights of defendants. It sets forth requirements for courts that are aimed at ensuring that federal prosecutors abide by their constitutional obligations to provide defendants access to favorable and potentially exculpatory evidence.

The DPPA amends Federal Rule of Criminal Procedure 5, which governs “Initial Appearance,” by adding a new subsection (f). Subsection (f)(1) of amended Rule 5 states that “[i]n all criminal proceedings, on the first scheduled court date when both prosecutor and defense counsel are present, the judge shall issue an oral and written order to prosecution and defense counsel that confirms the disclosure obligation of the prosecutor under Brady v. Maryland, 373 U.S. 83 (1963) and its progeny, and the possible consequences of violating such order under applicable law.”

Rather than mandate that each federal court recite a uniform script for advising the parties of the government’s disclosure obligation under Brady, subsection (f)(2) of amended Rule 5 gives flexibility to “[e]ach judicial council in which a district court is located” to “promulgate a model order for the purpose of paragraph (1) that the court may use as it determines is appropriate.” In keeping with this flexible approach, the DPPA also does not require each court to set a specific deadline by which the government must disclose Brady material to the defense.

Some may say that the DPPA’s flexibility and limited scope cause it to fall short of Congress’s stated goal. For example, the DPPA does not require federal prosecutors to provide Brady material in the context of plea negotiations. It does not require the government to certify in a court filing that they satisfied their Brady obligations. Nor does it require the government to follow an “open file” discovery policy that some prosecutors’ offices have adopted to ensure that Brady obligations are met.

Federal courts across the country have started to issue orders under amended Rule 5(f). Notably, the Rule 5(f) orders differ in certain Districts in terms of the potential “consequences” set forth for failures to comply with Brady. For example, the U.S. District Court for the Eastern District of Virginia’s Rule 5(f) order states that failure to comply with Brady “may result in serious consequences, up to and including vacating a conviction or disciplinary action against the prosecution.” In contrast, the Rule 5(f) order issued by the U.S. District Court for the Western District of New York enumerates additional potential consequences for Brady violations, stating that the failure to comply with Brady “may result in consequences, including, but not limited to, exclusion of evidence, adverse jury instructions, dismissal of charges, contempt proceedings, or sanctions by the Court.”

In general, we can expect these new Rule 5(f) orders to have the following overall impact on federal criminal cases nationwide:

  • They will encourage courts and parties to set early Brady disclosure deadlines well in advance of trial.
  • They will embolden defense counsel to bring concerns to the courts’ attention about whether the government has fully satisfied its disclosure obligations.
  • After courts set Brady disclosure deadlines, the government will be held accountable to such deadlines in that courts will be less sympathetic to the government’s position when the government fails to meet these deadlines or engages in conduct that amounts to a Brady violation.
  • Federal prosecutors are likely to become more facile in how they gather, manage, and handle discovery materials and further hone “best practices” for meeting their Brady disclosure obligations in a timely manner.
  • For egregious Brady violations, courts will readily impose the “consequences” for Brady violations, as articulated in the courts’ orders that are issued pursuant to the DPPA and Federal Rule of Criminal Procedure 5(f), rather than give the government an opportunity to cure the violations.

While the DPPA might be interpreted by some as signaling a loss of confidence in federal prosecutors, it should not be. Nor should it be perceived by those in government as an impediment to justice. Viewed in its proper context, the DPPA is merely a simple reminder of a truism stated in the Brady decision—and that should be taken to heart by everyone involved in the criminal justice process, especially federal prosecutors—that “[s]ociety wins not only when the guilty are convicted but when criminal trials are fair; our system of the administration of justice suffers when any accused is treated unfairly.” Brady, 373 U.S. at 87.

Richard Robinson was a truck driver who tried to sue his former employer for civil penalties pursuant to the California Private Attorney’s General Act (“PAGA”). Unfortunately for him, his employer settled another PAGA action while his case was still pending, and despite opting out of the other settlement, the Court of Appeals dismissed the case because he no longer had standing to bring his own PAGA claim once the other had settled.

Mr. Robinson worked as a truck driver for Southern Counties Oil Company. After completing the prerequisite steps for bringing a PAGA action against his former employer, Mr. Robinson brought suit against Southern Counties Oil seeking civil penalties on behalf of himself and other aggrieved employees for failure to provide meal and rest breaks, timely wages, proper wage statements, and wages upon termination. While his PAGA action was still pending, Southern County Oil settled another PAGA action in San Diego that sought PAGA penalties for the same alleged Labor Code violations. Robinson and three other employees “opted out” of the settlement in an attempt to maintain their own PAGA action.

Following the San Diego settlement, the trial court dismissed Robinson’s PAGA action, even though Robinson had opted out. The trial court found that Robinson lacked standing to bring the a PAGA claim based on the same claims that had already been settled in the San Diego action.

On appeal, the court affirmed the trial court’s decision—effectively finding that a plaintiff could not opt out of a PAGA settlement and bring his own action alleging the same Labor Code violations. Unlike a class action, a PAGA claim “functions as a substitute for an action brought by the government itself, a judgment in that action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.” Because Robinson stood in the shoes of the state when he brought his PAGA action, and the state had already settled the same issues in the San Diego settlement, Robinson was effectively precluded from pursing his PAGA claims.

This decision explains a key difference between PAGA actions and class actions. While a normal class action is brought on behalf of the plaintiffs, PAGA actions are brought on behalf of the state and so individual plaintiffs cannot “opt out” and refuse to be bound by what is effectively the “state’s” settlement. In short, this decision should offer encouragement to employers that when they do settle a PAGA claim they create a clean slate up to the point of settlement even if some employees try to “opt out.”

To constitutional scholars, the line between Alexander Hamilton and the federal judiciary will always connect through The Federalist No. 78, wherein Hamilton anticipated the doctrine of judicial review by concluding that federal courts would have the “duty…to declare all acts contrary to the manifest tenor of the constitution void.”

But surely Hamilton never anticipated that two-and-half centuries later the federal judiciary he helped create and define would parody a Broadway musical about him to discuss the resumption of jury trials during a pandemic. But, alas, we live in interesting times, and two federal judges from Texas have released their own version of Jonathan Groff’s song “You’ll Be Back” from the musical Hamilton:

You have to admit, Judge Elrod and Judge Eskridge did not throw away their shot at Broadway renown. While their singing may not blow us all away, they should be more than satisfied with the results. We know that everyone feels helpless because COVID-19 is spiking across the nation, so it’s nice to take a break with a little diversion emanating from the federal bench.

As to the serious topic, we have been closely following the issues surrounding attempts to resume jury trials across the country (here, here, and here). Surely, this won’t be the one last time this comes up.

We have previously discussed (here and here) the complex issues surrounding the resumption of jury trials during the COVID-19 pandemic. We cautioned that the various experimental efforts to resume jury trials taking place in courts around the country were likely to meet with a host of practical and jurisprudential problems. A few weeks later, it appears that our assessment was, if anything, too optimistic. Many of the states that had been taking first steps toward resuming jury trials in some form are now shutting down those experiments because of the spike in COVID-19 cases that is now occurring around the country.

On Friday, a breach of contract trial in the Eastern District of Texas was suspended after at least seven people involved in the trial tested positive for COVID-19. The Eastern District of Texas has been holding jury trials since June, and has been one of the most active federal courts for jury trials since the national shutdown earlier this year. Going forward, the court intends to reassess its safety protocols week-to-week in light of the COVID-19 spike in Texas. Also on Friday, New York court officials postponed all new jury trials and grand jury proceedings. This was in response to at least 15 individuals who work in the New York City’s court system testing positive for COVID-19 in the prior week. And on Monday, the New Jersey Supreme Court issued an Order suspending all in-person jury trials and in-person grand jury proceedings until further notice. The New Jersey Order comes barely a month after the state began experimenting with socially-distanced jury trials on a very limited basis. In fact, according to the Order, only one socially-distanced in-person jury trial is currently taking place in the state, and that trial may continue “absent a particular reason to suspend or end the trial.”

With jury trials again at a standstill for the foreseeable future, businesses currently litigating or anticipating business disputes must be prepared for the effect this shutdown will have on court systems throughout the country—potentially for years to come. Even if the COVID-19 vaccines that have made recent headlines are as successful as everyone hopes, and even if they are successfully deployed on a wide scale in the first half of 2021, jury trials will have been suspended in most jurisdictions for at least a year. When jury trials resume, there will be an unprecedented backlog of cases to be tried. In jurisdictions like the federal courts, where the same judges hear both criminal and civil cases, criminal cases will have to be given priority over civil cases due to Sixth Amendment “speedy trial” concerns. It could be years before courts are holding jury trials in complex commercial cases at pre-pandemic rates. This will likely have a dramatic effect on settlement negotiations, as litigants will have little incentive to take settlement negotiations seriously with no trial date looming.

Foreseeing this dilemma, the New Jersey Supreme Court’s latest Order promises that the “Judiciary and stakeholders will continue to explore the potential for virtual civil trials,” and other jurisdictions are sure to do the same. But virtual jury trials create a whole new set of problems that we previously explored here.

Like many other areas of life, the COVID-19 pandemic has likely changed the way courts will do business for years to come.

In what can be considered a victory for the drinking classes (see Taps & Bourbon on Terrace, LLC v. Underwriters at Lloyds London, et al.), a Philadelphia judge recently ruled that a tavern’s lawsuit for business interruption coverage for losses caused by COVID-19 will survive for another round. Taps & Bourbon on Terrace (“Taps & Bourbon”) alleged that it sustained business losses resulting from “the COVID-19 pandemic and [] state and local orders mandating that all non-essential businesses be temporarily closed.” In what has become a familiar rejoinder during this pandemic, its carrier denied coverage on the grounds that there was “no ‘direct physical loss’ to the property, the civil authority coverage provision does not apply, and the virus exclusion provision precludes coverage.”

The denial of coverage gave rise to a lawsuit in the Court of Common Pleas of Philadelphia County by Taps & Bourbon and the insurance carrier moved to dismiss. In considering the motion, the court was constrained to view as true all of the material facts and inferences set forth in the complaint. In so doing, the court held that the tavern had successfully pled enough to survive at that preliminary stage in the proceedings. Moreover, the court was loathe to dismiss the complaint since, as it expressly recognized, “the law and facts are rapidly evolving in the area of COVID-19 related to business losses.”

The court’s order does not provide much more grist for consideration. However, we can distill from the operative complaint that Taps & Bourbon had purchased a business interruption policy that provided “coverage for direct physical loss of or damage to Covered Property…resulting from any Covered Cause of Loss.” Additionally the policy offered coverage if food contamination resulted in business closure by a governmental authority.

The complaint further alleges that on March 19, 2020, Pennsylvania Governor Tom Wolf issued an Executive Order closing all non-life sustaining businesses in order to prevent and suppress COVID-19. Although it is certainly open to debate whether or not its business is life sustaining (see George Bernard Shaw’s and others’ thoughts on that very point here), Taps & Bourbon nonetheless immediately closed its doors in response to the Executive Order. Significantly, the complaint also holds forth on why the insurer’s position that there was no direct physical damage is incorrect, namely that the pandemic has been declared a “Disaster Emergency”, affecting all property located within Pennsylvania.

What is conspicuously absent from the complaint are allegations that COVID-19 was present on Taps & Bourbon’s premises – although the tavern claims it took measures to disinfect and “clean surfaces potentially infected with the disease.” Such facts have shown to be central to businesses’ success so far in COVID-19-related disputes, as well as in other communicable disease-related coverage cases.

This case marks the latest matter to join the minority ranks of COVID-19 business loss coverage cases surviving dismissal motions, as we discussed here. As the Taps & Bourbon court noted, the law related to COVID-19 business losses continues to evolve. This should be heartening to policyholders and signals that at least some courts may view these types of disputes as being incapable, at least initially, of resolution as a matter of law. As for Taps & Bourbon, we toast its early success, offering up a hearty “Slainte!”, while waiting for the case to come of age.

In September 2020, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) announced its annual healthcare-related “takedown.” The takedown, which involved enforcement actions that actually occurred over numerous months preceding the press event (and as such, the reference to a “takedown” is a misnomer”) targeted alleged schemes that related to opioid distribution, substance abuse treatment facilities (“sober homes”), and telehealth providers, the latter of which served as the focus of the enforcement activity. In all, 345 defendants, across 51 judicial districts were charged with allegedly submitting more than $6 billion in false and fraudulent claims to federal health care programs and to private payers and almost 75% of that amount involve telefraud.

As we have previously reported, opioids have been a large focus of DOJ in the past few years in an attempt to stem the opioid epidemic through increased enforcement and this takedown is a continuation of those efforts. DOJ stated that the charges involved in the opioid-related takedown involved the submission of $800 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were allegedly medically unnecessary and often never provided. DOJ also continued the trend of charging medical professionals with the illegal distribution of opioids (or operating pill mills). Providers need to be mindful of safe opioid prescribing guidelines, develop and implement rigorous compliance programs, and keep up to date on ever shifting federal and state laws in this area.

Tied into the opioid crisis has been the rise in popularity of treatment for drug and/or alcohol addiction as well as the necessary costs of testing and treatment of those patients. The “sober homes” cases announced by DOJ include charges against more than a dozen individuals in connection with more than $845 million of allegedly false and fraudulent claims for tests and treatments. The subjects of the charges include physicians, owners and operators of substance abuse treatment facilities, as well as patient recruiters. Those providers in the substance abuse treatment space should be mindful of providing appropriate utilization of therapies and tests and actively monitor their patient generation/marketing activities for fraud and abuse implications.

Over the past few years, we have been predicting that telehealth is ripe for enforcement. Although we have seen enforcement activity involving telehealth providers in the past, this is the first time that DOJ/HHS has focused so sharply on telehealth providers as the target of a major takedown. The 2020 Takedown is a warning to those in the telehealth industry to pay special attention to compliance infrastructures and efforts especially as use of telehealth to serve patients expands, and related regulations loosen in light of the COVID-19 pandemic.

For more of our analysis of the 2020 Takedown as it relates to telehealth and telefraud please see our article published in the November 4, 2020 issue of the New Jersey Law Journal, available here.