The United States Court of Appeals for the Seventh Circuit issued a sweeping set of orders on Thursday, December 9, upholding district court decisions in favor of Aspen Insurance and other insurers relating to COVID-19 business interruption cases. The cases involved actions filed against insurance companies for their denial of policyholders’ claims for business income lost from compliance with government shutdown orders.
This is the first decision in the Seventh Circuit related to the viability of the multitude of COVID-19 business interruption cases filed by businesses in the wake of the pandemic. The ruling sends a clear signal that insurers should not be required to cover the costs of Illinois policy holders under “direct physical loss and damage” policies. The ruling is also part of the continuing success of Sidley’s coordinated defense strategy in COVID-19 business interruption cases across 22 lawsuits in state and federal court in Texas, Michigan, Kansas, Florida, Washington, New York, Pennsylvania, Connecticut, and Illinois, including 10 putative class actions. Sidley’s strategy has resulted in Aspen’s prevailing in 15 motions to dismiss to date and its securing of voluntary dismissals in two additional cases. Sidley also represents Aspen in numerous appeals involving similar issues in the Third, Fifth, Sixth, Ninth, and Eleventh Circuit Courts of Appeals.
On September 10, 2021, the Seventh Circuit heard arguments related to decisions involving four different insurers, and then issued four successive opinions on December 9, 2021. Each opinion affirmed various district court rulings in favor of the insurers.
Virginia Seitz (Washington, D.C.) argued Bradley Hotel Corp v. Aspen Specialty Insurance Company, No. 21-1173, in the Seventh Circuit and led the appellate briefing team which also included Robin Wechkin (Seattle), Mason Parham (Dallas), and Mitchell Alleluia-Feinberg (Dallas). Yvette Ostolaza and Yolanda Garcia (both Dallas) managed the case in the district court and assisted with the appellate briefing.