Skip to main content
Social Media
  • twitter
  • linkedin
Home
  • About the project
    • About the project
    • Partnerships and Collaborators
    • Coordination Unit
    • Project Management Team
    • International Network of Judges and Legal Scholars
    • Research assistants
  • Case Law Database
    • Case index
    • Database charts
  • News
    • News and announcements
    • Press newsroom
  • Resources
    • Working papers and other resources
    • Media kit
  • Contacts
Back to the previous page

United States of America, United States Court of Appeals for the Fourth Circuit, 7 March 2022, No. 21-1311‎

Case overview

Share
  • linkedin
  • twitter
  • facebook
  • envelope
  • print
Country
United States of America
Case ID
No. 21-1311‎
Decision date
7 March 2022
Deciding body (English)
United States Court of Appeals for the Fourth Circuit
Type of body
Court
Type of Court (material scope)
Civil Court
Type of jurisdiction
Single jurisdiction system
Type of Court (territorial scope)
State Court
Instance
Appellate on fact and law
Area
Freedom to conduct a business
Further areas addressed
Property
Outcome of the decision
Claim inadmissible or rejected
Link to the full text of the decision
Decision_EN available on www.law.justia.com

Case analisys

General Summary

The plaintiff, an insured company, sought coverage for its loss ‎of business income resulting from the COVID-19 pandemic and from ‎the government orders to temporarily close non-essential businesses. ‎Following a denial of coverage by the defendant, the plaintiff filed ‎a class action on behalf of itself and similarly situated plaintiffs. The ‎defendant filed a motion to dismiss, which the district court granted. ‎The Court considered that the insured did not establish that its ‎suspension of operations was caused by direct physical damage to ‎the property. The plaintiff appealed to the Court of Appeals, ‎which analyzed the arguments of the parties and affirmed the ‎District Court decision. ‎

Facts of the case

The plaintiff operated a "creative events" business at two art studio ‎locations, in Barboursville, West Virginia and in Charleston, ‎West Virginia. On March 16, 2020, the Governor of West Virginia ‎declared a state of emergency based on the Covid-19 pandemic. One ‎week later, the Governor issued an executive order requiring that ‎non-essential businesses in West Virginia "temporarily cease ‎operations" (the closure order). The closure order permitted ‎businesses to continue efforts to maintain inventory, "preserve the ‎condition of the business's physical plant and equipment," ‎ensure security, process payroll and employee benefits, and ‎facilitate employees' ability to "work remotely from their ‎residences." In compliance with the closure order, Uncork closed its ‎two art studios. These closures caused Uncork to suffer "a ‎substantial loss of business income" and other unspecified ‎financial losses. When permitted to do so, Uncork re-opened its ‎Charleston studio on June 11, 2020. However, Uncork ‎permanently closed its Barboursville studio on April 24, 2020.‎

Type of measure challenged
National government measure
Measures, actions, remedies claimed
Declaratory judgment and ‎breach of contract
Individual / collective enforcement
Action brought by a specific group of claimants in their own interest for the purpose of collective redress measures such as damages or restitutions and annulment of the administrative decision.
Nature of the parties
  • Claimant(s)
    Private individual
  • Defendant(s)
    Private individual
Type of procedure
Ordinary procedures
Reasoning of the deciding body

The Court argued that the policy used the phrase “direct physical ‎loss of or damage to property,” and that the plaintiff did not establish ‎that its suspension of operations was caused by direct physical ‎damage to the property or by direct physical loss of property. It ‎reasoned that there was no ambiguity in the insurance contract and ‎that the case law widely supported the interpretation that ‎Government orders to close non-essential businesses during the ‎pandemic did not trigger this kind of insurance policy.‎

Conclusions of the deciding body

The Court did not identify any direct physical damage to property ‎that caused it to suspend operations. Therefore the business ‎income coverage was not triggered.‎

Balancing Fundamental Rights and Fundamental Freedoms

Fundamental Right(s) involved
  • Freedom to conduct a business
  • Right to property
Rights and freedoms specifically identified as (possibly) conflicting with the right to health
  • Health v. freedom to conduct a business
  • Health v. property
General principle applied
Principles of contractual interpretation
Balancing techniques and principles (proportionality, reasonableness, others)

The Court argued that the principles of contractual interpretation ‎did not lead to a scenario where the claim of the plaintiff should ‎be upheld. The Court concluded that it was not possible to ‎interpret the insurance contract in a way that would cover the ‎damages suffered for the suspension of operations due to State ‎administrative orders during the pandemic.‎

Author of the case note
Maíra Tito, Research Assistant, NOVA School of Law, Lisbon
Published by Chiara Naddeo on 18 June 2022

More cases from United States of America

  • United States of America, United States Court of Appeals for the Eighth Circuit, 16 May 2022, Arc of Iowa et al. vs. Kimberly Reinolds et al
    Area: Use of protection devices
    Fundamentals rights involved: Right to bodily integrity; Right to education
    Outcome: Claim inadmissible or rejected
  • United States of America, United States District Court for the District of New Jersey, 18 May 2022, Open MRI and Imaging v. Cigna Health and Life Insurance Co.
    Area: Healthcare management (Covid related, excluding vaccination)
    Fundamentals rights involved: Right to health (inc. right to vaccination, right to access to reproductive health)
    Outcome: Claim upheld
  • United States of America, United States Court of Appeals of Wisconsin, 25 May 2022, Allen Gahl v. Aurora Healthcare
    Area: Healthcare management (Covid related, excluding vaccination)
    Fundamentals rights involved: Right to health (inc. right to vaccination, right to access to reproductive health)
    Outcome: Claim inadmissible or rejected
  • United States of America, United States District Court, Southern District of Ohio, 5 May 2022, Changizi et al. vs. Department of Health and Human Services
    Area: Health, right to information and freedom of expression
    Fundamentals rights involved: Freedom of expression; Freedom of information
    Outcome: Claim inadmissible or rejected
  • United States of America, United States District Court for the Northern District of California, 13 May 2022, In Re StubHub Refund Litigation
    Area: Consumer protection
    Outcome: Claim upheld
  • United States of America, Court of Appeals of California, 15 November 2021, Inns-by-the-sea v. California Mutual Ins. Co., No. D079036
    Area: Consumer protection
    Fundamentals rights involved: Right to property
    Outcome: Claim inadmissible or rejected
  • Load 6 more
List all available cases from United States of America

Breadcrumb

  1. Home
  2. Case Index
  3. United States of America, United States Court of Appeals for the Fourth Circuit, 7 March 2022, No. 21-1311‎
home

This project and its database have been made possible with the financial support from the World Health Organization

www.covid19litigation.org is run and maintained by the University of Trento
Via Calepina 14, I-38122 Trento (Italy) — P. Iva/C.F. IT-00340520220

Social Media Links

  • twitter
  • linkedin

Terms of use

www.covid19litigation.org
Site purpose

This site is for informational use only. Case law summaries are not legal advices and may not be relied on as such. Anyone seeking for legal advice should obtain appropriate legal counsel.

Site operation

This site may not be fully up-to-date (for example, cases may be reviewed, reversed, or appealed). This site may be taken down at any time without notice. The case law summaries provided on this site may be incomplete or outdated.

Copyright

Any files provided on this site were taken from a source that is, to the University of Trento and its Partners' best knowledge, from a freely available public resource, however, any further use of such files is at the user’s responsibility.

Responsibility

This site is maintained by the University of Trento, with financial support from the World Health Organization (WHO). The University of Trento will not be responsible for any use of the site.

No endorsement

Inclusion of a case on the website does not necessarily involve a view, position, or endorsement by the University of Trento or the WHO, including with respect to any legal matter. The site is not a product of WHO and does not necessarily reflect the views or positions of the WHO.

User account menu

  • Log in

Footer menu

  • Contacts
  • Terms of use
  • Privacy
  • Cookies