Class Action Lawsuits Mount in Response to COVID-19

As the fallout from the COVID-19 pandemic continues across the nation, consumers and businesses alike are resorting to class action litigation to air their grievances. Since the onset of the pandemic, a wide range of class action cases have been filed arising out of everything from government loan programs, price gouging, anti-competitive conduct, canceled events, college campus closings, and more.

A link to additional analysis on the recent increase in COVID-19 related litigation can be found here.

Class action lawsuits are a popular choice for such claims of widespread harm as they aggregate numerous claims of similarly situated plaintiffs against one or more defendants in a single case.

We summarize below some of the more noteworthy cases thus far. We anticipate filings will steadily increase over the coming months in a variety of industries as the pandemic continues to impact business operations across all sectors of the economy.

Paycheck Protection Program (PPP) Loan Cases

Under the Paycheck Protection Program (PPP) established by the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act), over one million businesses received forgivable loans in the first round of program funding to pay employees and other operating expenses during the pandemic. On the first day banks began accepting loan applications, certain applicants filed a putative class action against Bank of America in Maryland federal court alleging the bank denied them access to the program, in violation of the eligibility requirements under the CARES Act, because they lacked a pre-existing lending or depository relationship with the bank. Two copycat class actions soon followed against other lenders in Texas federal court. The theory of liability was quickly rejected, however.

In an April 13, 2020 decision denying the plaintiffs’ motion for a preliminary injunction in the Bank of America case, Judge Stephanie Gallagher held that the CARES Act does not include an express or implied private right of action. In the absence of such a right of action, companies cannot sue for alleged violations of the CARES Act.

Within a week of the decision, new class actions were filed in California, New York, and Texas alleging PPP lenders violated state consumer protection and unfair competition laws. Such laws, unlike the CARES Act, generally have private rights of action. As grounds for the state law claims, the plaintiffs claim lenders failed to administer the program on a “first-come, first-served” basis, as allegedly required by regulations governing the program, by prioritizing customers eligible for larger loans (which resulted in more lucrative origination fees). The plaintiffs claim they would have applied for loans with other institutions had they known the lenders were not processing their applications on a first-come, first-served basis. Lenders may argue that the applicable regulations do not require lenders to process applications in any particular order.

Additional class action cases are likely to follow as lenders implement the second round of PPP funding.

Price Gouging and Antitrust Cases

As discussed in our previous alert, many state laws prohibit excessive price increases for certain goods and services during and immediately after a declared state of emergency. When the pandemic began, class action cases were filed in Florida and Alaska alleging retailers illegally raised the price of cleaning, sanitation, and personal protective products. More recently, consumers in California filed a putative class action in federal court alleging producers of eggs, wholesalers, and supermarkets violated the state’s Unfair Competition Law by increasing the price of eggs by more than 180% since the onset of the pandemic.

In another food industry case, meal delivery apps, including GrubHub and DoorDash, were sued in a proposed class action in New York federal court alleging the apps have a monopoly over the meal delivery market and impose unlawful price restraints in violation of the Sherman Act. Specifically, in their contracts with restaurants, the delivery apps impose provisions requiring uniform prices for menu items across all platforms (dine-in, take-out, and delivery). The cost of meals sold through delivery apps is higher, however, due to the apps’ service fees. Those fees, in turn, are priced into all menu items due to the uniform price provisions, causing restaurants to charge higher prices to consumers who order directly from the restaurant.

Consumer Refund Cases

Consumers across a wide range of industries have filed class action lawsuits seeking refunds for purchases of services, events, and trips that could not proceed as scheduled due to COVID-19. Many of these cases have received widespread coverage by mainstream media.


Numerous airlines, including Southwest, JetBlue, Delta, and United, are facing class actions for failing to refund customers for canceled trips. In most of these cases, plaintiffs claim that instead of providing refunds, as allegedly required by government regulations and/or the companies’ refund policies, customers were given the option to rebook their trip for future dates or accept travel vouchers (which would expire in a year). While all of the cases assert claims for breach of contract, several claim the airlines violate consumer protection laws by misrepresenting customer refund options.

Ticketing companies, including Ticketmaster and StubHub, are facing class actions for failure to provide refunds for canceled concerts and events. Consumers allege Ticketmaster retroactively changed its refund policy in reliance on an “unconscionable” provision in its terms of service allowing Ticketmaster to update or change its terms of service at any time. Similarly, StubHub has been accused of breaching the terms of its “FanProtect” guarantee. In a March 12, 2020 statement about COVD-19, the company had said this guarantee would still allow customers to receive a refund for any canceled event. Class claims also have been brought against operators of canceled music festivals, conventions, and even Major League Baseball, which is accused of refusing to provide refunds to season ticket holders under the “pretext” that games have merely been postponed.

Colleges and Universities

After switching to online classes and requiring students to leave campus, universities across the country are now faced with class action suits alleging the schools failed to provide proper refunds or credits for unused room and board, tuition, and other student activities and campus fees. Students argue that online-only instruction is not what they paid for and should cost less. At some schools where students were not formally mandated to move out of on-campus housing, class members allege that the offer of continued housing was “illusory” given state and federal social distancing restrictions coupled with the cancellation of live classes.

Gyms, Ski Resorts, and Other Membership Venues

Venues such as gyms and ski resorts that offer memberships or season passes are facing class actions for either preventing members from canceling memberships timely or failing to provide pro-rated refunds after the venues had to close due to shelter in place orders. In Massachusetts, members of Boston Sports Club claim the chain violated state consumer protection laws by making “it nearly (if not) impossible for consumers to cancel their memberships or avoid charges” before the gym automatically processed their monthly dues. Similarly, Vail Resorts, Alterra Mountain Company, and Ikon Pass, which offer season passes to a collective of ski resorts, face claims that they breached their contract with pass holders and an express warranty in which they promised “unlimited access” throughout the ski season.

Business Interruption Insurance Cases

Numerous class actions have been brought involving business interruption insurance and those are covered here.


Businesses in a wide array of industries are falling victim to class actions filed as a result of the COVID-19 pandemic. As the pandemic continues, we expect that companies across all sectors of the economy will be susceptible to class action claims arising from COVID-19 disruptions. The ultimate test for these cases will be whether the plaintiffs can obtain class certification. Once a case becomes certified, its value increases exponentially, potentially causing substantial business, economic, and reputational risks for the defendant. It is critical to engage experienced class action counsel to navigate the thorny issues involved in these complex matters and to develop strategies early on to mitigate the potential scope of exposure.


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