Coronavirus Flash Update May 8, 2020

Coronavirus Flash Update: May 8, 2020

Alston & Bird’s Coronavirus Flash provides updates on policy and regulatory actions under consideration across many important industries being monitored by our teams. Links to key government and legal resources are provided throughout the report.

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UPDATED 9:00 AM ET ON FRIDAY, MAY 8, 2020

The Latest News

  • U.S. COVID-19 cases exceed 1,250,538 and 75,254 U.S. deaths. (Source: CDC) (Updated 5/8/20)
  • U.S. stock market: Thursday ended with the major U.S. benchmarks up for the day, with the Dow rising 211 points, the S&P up 32 points, and the Nasdaq gaining 125 points. (New)
  • Following yesterday’s release of the weekly unemployment report showing that 3.2 million Americans applied for unemployment benefits last week, bringing the seven-week total to over 5 million, the Bureau of Labor Statistics announced today that the US unemployment rate rose to 14.7% in April, the highest since the Great Depression. (5/8/20) (New)
  • The Bureau of Economic Analysis announced that the good and services deficit was $44.4 billion in March, up from $38.9 billion in February. (5/6/20) (New)
  • The Small Business Administration released its latest data on the Paycheck Protection Program reflecting that the agency had processed 2.5 million applications from 5,425 lenders for loans totaling $185.4 billion. The average loan size is a little greater than $74,000. The posted data also shows that 53% of the loan amount has come from banks with more than $50 billion in assets, 15% from mid-size banks, and 32% from lenders with less than $10 billion in assets. (5/7/20) (New)
  • The Urban Institute is collecting and tracking the impact of the coronavirus on state revenue reflecting the tough budget decisions ahead for state officials. (New)

COVID-19 Federal Legislation   

  • Bill 4.0: The House Democratic leadership stated they will be releasing their 4.0 proposal within days and could vote within the next two weeks. Information discussed on Democratic caucus calls this week indicate their priorities will cover a broad range of issues for assistance (New):
  • Additional state and local funds, possibly in the range of $500 billion
  • Student loan relief
  • Child care assistance, especially for essential frontline health care workers and first responders
  • Stimulus for individuals through unemployment extension, worker protections, and increase in the dependent child tax credit
  • Possible expansion of the SBA PPP loan program including extending the repayment period and clarification on loan forgiveness
  • Additional assistance for health care providers, and increase in the Federal Medicaid Assistance Program (FMAP)
  • Tax credit issues could include a retention tax credit and additional support for multiemployer pension plans
  • Extension of eviction and foreclosure bans, and ban on negative credit reporting
  • An emergency rental assistance and homeowner assistance fund
  • Expanding mental health grants
  • When released, the House Democratic proposal will more officially open negotiations on 4.0 and these relief package discussions are expected to be more challenging on both content, cost, and timing of the package. (New)
  • Bill 3.5: Paycheck Protection Program and Health Care Enhancement Act, (R. 266) enacted on April 24. Also available are a section-by-section summary and an overview of the health care provisions.
  • A&B detailed summaries are below:
    • A&B Summary – 5 Small Business Provisions
    • A&B Summary – 5 Health Care Enhancement Provisions
  • Bill 3.0: Coronavirus Aid, Relief, and Economic Security (CARES) Act, (R. 748) passed on March 27. A congressional section by section summary is available here.
  • A&B detailed summaries are below:
  • Congress has passed three coronavirus emergency response bills and the first two are below:
  • Bill 1.0: Coronavirus Preparedness and Response Supplemental (CPPRS) (R. 6074) passed on March 5.
  • Bill 2.0: Families First Coronavirus Response Act (FFCRA) (R. 6201) passed on March 18

COVID-19 State Legislation   

  • New legislative resource to track how states and localities are responding to the COVID-19 pandemic with emergency relief programs for small and medium-sized businesses. Follow our tracker here. (Updated 5/5/20)
  Transition to “Reopening”  
  • State/Other Actions
    • For the latest information on state reopening decisions, see the A&B 50-State Openings Tracker - updated in each A&B Coronavirus Flash Update. (Updated 5/7/20)
    • A&B’s Labor & Employment Group identifies issues likely to arise as workers are invited to return to their jobs and that employers may confront in developing return-to-work action plans in this advisory. (4/22/20)
  • Administration Actions
  • The CDC updated or issued new guidance regarding reopening and continued mitigation efforts for individuals, businesses, schools, health departments, and community settings. These individual guidance can be found here. (Updated 5/7/20)
  • FEMA released a new fact sheet on federal support for expanded national testing capabilities to support the reopening and testing plans of businesses and other entities. (5/5/20) (New)
  • The HHS Administration for Community Living has released guidance on the phased reopening of senior nutrition programs. (5/5/20) (New)
  • The Department of Labor is seeking ideas from the public about the challenges facing businesses in the process of reopening. A dialogue page has been created to facilitate this input. (5/1/20)
  • The President stated that his social distancing guidance, which expired on April 30, will not be extended allowing the guidance to “be fad[ed] out, because now the governors will be doing it.” The President added that the governors would be making the reopening decisions and other guidance about social distancing. (4/30/20)
  • FEMA released guidance for ‘Planning Considerations for Organizations in Reconstituting Operations’ as states begin to unveil reopening plans. (4/30/20)
  • The EPA and the CDC jointly provided new re-opening guidance for cleaning and disinfecting public spaces, workplaces, businesses, schools, and homes. (4/29/20)
  • The White House released its COVID-19 testing overview and blueprint (4/27/20) as part of its Opening Up America Again initiative. The plans describe the partnership necessary between the private sector and the federal and state governments.
  • CMS announced recommendations to re-open health care facilities to provide non-emergent non-COVID-19 care, including elective surgeries. The recommendations state that non-COVID-19 care should be offered as clinically appropriate if the state, locality, or facility has the resources to provide such care and the ability to quickly respond to a surge in COVID-19 cases if necessary. (4/19/20)

Environmental Protection Agency   

  • The Environmental Protection Agency (EPA) announced that it is making $1 million in grant funding available to states to help local environmental justice communities address COVID-19 concerns faced by low-income and minority communities. (4/30/20)

Federal Communications Commission   

  • The Federal Communication Commission (FCC) issued an order waiving its requirement that certain broadcast stations engage in broad recruitment outreach for full-time job vacancies if they re-hire employees released due to COVID-19. (5/5/20) (New)

Department of Health and Human Services   

  • The Department of Health and Human Services (HHS) Coronavirus toolkit page has been updated. (Updated 5/7/20)
  • HHS announced through HRSA it had awarded $583 million in grants to community health centers in all 50 states. (5/7/20) (New)
  • The US Surgeon General released a new video on telehealth that shares basic information with consumers about telehealth including the privacy protections and Medicare allowance of payments for visits. (5/7/20) (New)
  • HHS announced the creation of a new website on community-based testing. (5/7/20) (New)
  • The HHS Office for Civil Rights announced that it was issuing guidance reminding covered health care providers that the HIPAA Privacy Rule requires that they obtain patient consent before media is given access to PHI. (5/5/20)
  • HHS has a tracking feature that allows public viewing of all COVID-19 HHS grant and cooperative agreement awards on its website. The grants were distributed through programs in the ACF, ACL, ASPR, CDC, DHHS/OS, HRSA, IHS, NIH, and SAMHSA. (Updated 5/5/20)
  • The HHS Office of Minority Health announced a competitive funding opportunity to invest up to $40 million for the development and coordination of a strategic network of national, state, territorial, tribal, and local organizations to deliver COVID-19 information to racial and ethnic minority, rural, and socially vulnerable communities hardest hit by the pandemic. (5/1/20)
  • The Substance Abuse and Mental Health Services Administration (SAMHSA) announced $15 million in supplemental grants awards for Tribal COVID-19 behavioral response. (5/1/20)

Assistant Secretary for Preparedness and Response  

  • The Assistant Secretary of Preparedness and Response (ASPR) has posted a new telehealth tipsheet that outlines what it is, who is using it, ongoing challenges for telehealth, and trends to watch post-COVID-19. (5/7/20) (New)
  • ASPR Office of Biomedical Advanced Research and Development Agency (BARDA) announced it was expanding testing capacity by expanding its partnership with Hologic, Inc. for the development of a second high-throughput molecular assay for SARS-CoV-2. Starting later in May, the new test expects to begin producing at least one million Aptima® SARS-CoV-2 assays per week. (5/1/20)

Centers for Disease Control and Prevention  

Centers for Medicare & Medicaid Services  

  • The Centers for Medicare and Medicaid Services (CMS) latest news alerts. (Updated 5/7/20)
  • CMS issued a memo and FAQs on the new requirements for notification of confirmed and suspected COVID-19 cases among nursing home residents and staff. (5/7/20) (New)
  • CMS released their Final Payment Notice for 2021 Coverage Year. CMS also announced a one week extension of the Qualified Health Plans certification and rate review timelines. (5/7/20) (New)
  • A&B Health Care Public Policy Practice provides a detailed summary of the CMS interim final rule. The interim final rule is intended to provide additional flexibilities for individuals and entities that provide health care services to Medicare, Medicaid, Basic Health Program, and Exchange beneficiaries to assist in the response to threats associated with COVID-19. Comments are due July 7, 2020. (5/6/20) (New)

These regulatory changes impact:

  • Coverage and payment rules
  • Hospitals
  • Rural health clinics
  • Physicians
  • Post-acute care providers
  • Durable Medical Equipment
  • Clinical laboratories
  • Medicare Shared Savings Program
  • Health care coverage and insurers
  • CMS updated its COVID-19 FAQs for Medicare Fee-for-Service billing. (5/6/20) (New)
  • CMS updated its FAQ for state Medicaid and Children’s Health Insurance Program (CHIP) agencies. CMS also issued a separate document only listing the new FAQs. (Updated 5/5/20)
  • A&B’s Health Care and Litigation Groups explore how to take advantage of remote health care now and prepare for continued telehealth operations after the pandemic ends in this advisory. (4/29/20)

HHS/CMS/HRSA CARES Act Provider Relief Funds   

  • HHS announced it was disbursing another $22 billion in CARES Act Provider Relief Funds last Friday for hospitals in “hot spots” or COVID-19 high impact areas ($12 billion) and for rural providers ($10 billion). The CMS Provider Relief Fund webpage has been updated and additional portals opened: (5/2/20)
  • HHS announced an extension of the deadline for attestation and acceptance of the terms and conditions for Provider Relief Fund payments for 45 days. (5/7/20) (New)
  • HHS released the terms and conditions for high impact and rural provider The distributions to rural providers began on May 6 and to high impact providers on May 7. (5/7/20) (New)
  • HHS released provider level data for the general distribution of the Provider Relief Fund. This provider specific data is based on providers who attested as of May 4 and includes 142,419 providers and their cumulative payments. (5/6/20) (New)
  • Provider Relief Funds general distribution FAQs (5/7/20) (New)
  • Attestation Portal (https://covid19.linkhealth.com/#/step/1) provides the initial steps to be completed for distribution to be followed by requirements in the revenue portion of the portal, which is required for both:
    • Providers eligible for funds which must be applied for; and
    • Providers who received an automatic payment terms and conditions for fund recipients are available here.
  • The state-by-state congressional district distribution totals for the initial $30 billion which began on April 10 has been posted. (5/1/20)
  • The CARES Provider Relief hotline is (866) 569-3522. Entities can also try contacting the Provider Hotline at the applicable MAC.
  • HHS through the Health Resources and Services Administration began distribution of another $20 billion from the CARES Act Provider Relief Fund for the care of the uninsured, which augments the $30 billion which was released in the first tranche from the fund. (4/28/20)
    • HRSA launched the COVID Uninsured Portal allowing health care providers who have conducted COVID-19 testing or provided treatment for uninsured COVID-19 individuals on or after February 4, 2020 to request claims reimbursement.
    • HRSA released FAQs with clarifying questions related to eligibility for patients and providers, eligible claims and coding, program administration, and reimbursement/payment. (5/7/20) (New)
    • HRSA posted the FAQs from their webinars on the uninsured program. (5/7/20) (New)
  • HHS Provider Relief Fund first disbursements of $30 billion began on April 10 and the initial information outlined five allocation categories for the remaining $70 billion (the CARES Act authorized $100 billion – bill 3.5 has authorized an additional $75 billion).

Food and Drug Administration (Drugs and Devices)  

  • FDA provides a daily roundup on COVID-19 related actions. The latest update is here, (updated 5/6/20), and here is a listing of all announcements.
    • FDA maintains its COVID-19 FAQs for the general public. (Updated 5/1/20)
    • The agency also maintains a public database of drug shortages. (Updated 5/1/20)
  • The FDA has posted FAQs for consumers on Remdesivir and COVID-19. (5/7/20) (New)
  • The FDA provided an update on the agency’s efforts to combat fraudulent actions by companies and individuals. (5/7/20) (New)
  • The FDA released new guidance on reporting and mitigating animal drug shortages during the COVID-19 public health emergency. (5/7/20) (New)
  • The FDA issued final guidance on manufacturer notifications to the FDA Center of Devices and Radiological Health of a permanent discontinuance or interruption of manufacturing of a device during the COVID-19 public health emergency. (5/6/20) (New)
  • The FDA announced a new webpage on EUA authorized serology test performance. (5/5/20) (New)
  • The FDA announced that it was updating its guidance to improve antibody testing quality. The document explains FDA’s policy for laboratories and commercial manufacturers to help accelerate the use of tests they develop in order to achieve more rapid and widespread testing capacity in the United States. The FDA also updated its fact sheet on antibody tests and provided insight on its revised policy (Updated 5/4/20)
  • FDA issued guidance to clarify the scope of the public health emergency exemption and exclusion under the Drug Supply Chain Security Act to help ensure adequate distribution of finished prescription drug products throughout the supply chain to combat COVID-19. (4/30/20)
    • Review this A&B advisory for more information about the FDA’s new guidance. (5/5/20)

Food and Drug Administration and United States Department of Agriculture (Food-Related)   

  • Secretary of Agriculture Perdue issued letters to Governors directing meat processing plants to follow CDC and OSHA guidance on worker safety. (5/6/20) (New)

National Institutes of Health  

  • The National Institutes of Health (NIH) announced anew research survey to examine the impact of COVID-19 on individuals with rare diseases. (5/7/20) (New)

Health Resources and Services Administration   

  • The Health Resources and Services Administration (HRSA) announced nearly $583 million in awards to 1,385 HRSA-funded health centers. (5/7/20) (New)
  • HRSA provides COVID-19-related FAQs here. (Updated 5/7/20)

Department of Homeland Security/FEMA   

  • The Department of Homeland Security (DHS) issues a weekly roundup of its response to COVID-19. (Updated 5/4/20).
  • The DHS Transportation Security Administration announced new security measures which include requiring its employees to wear masks while at screening checkpoints. Passengers are already encouraged to wear facial protection but may be asked to pull down the mask for identification purposes. (5/7/20) (New)
  • FEMA and HHS jointly released a video on how the agencies collect critical data, analyze the data, and communicate the findings to appropriately distribute supplies. (5/7/20) (New)
  • FEMA issued a fact sheet describing the federal support being provided to expand national testing capabilities. (5/5/20)
  • FEMA announced $200 million in supplemental funding under the CARES Act for local jurisdictions to help service organizations that provide critical resources. (5/4/20)
  • President Trump signed an executive order temporarily “pausing,” for period of 60 days, certain U.S. immigration processes. The President noted he would revisit the issue after 60 days and depending on the economy may choose to extend the suspension. (4/22/20)
  • Review this A&B advisory for more information on the order, who it applies to, who is exempted, and what employment-based visas are affected. (4/28/20)
  • FEMA refines scope of medical supply export ban. The FEMA offered more details on its plans for exemptions to a temporary rule banning some medical supplies from being shipped overseas. In an April 21 Federal Register notice, FEMA codified and tailored the exemptions, which provide a path for some exporters to make sales of medical products not in high demand in the U.S. See A&B advisory about it here. (4/23/20)

Department of Justice/Federal Trade Commission/Litigation   Consumer Protection/Anti-fraud   

  • On May 7, the Federal Trade Commission (FTC) sent 45 more letters warning marketers nationwide to stop making unsubstantiated claims that their products and therapies can treat or prevent COVID-19. This fourth round of letters targeted “treatments” including Chinese herbal medications, music therapy, homeopathic treatments, and even shields claimed to boost the immune system by protecting the wearer from electromagnetic field. There is currently no scientific evidence that these or any services can treat or cure COVID-19. The letters warn that if marketers refuse to stop making false claims, the FTC may seek an injunction and an order requiring money be refunded to consumers. (New)
  • The FTC provided guidance for businesses to avoid scams while applying for loans through the SBA’s Paycheck Protection Program (PPP) or Economic Injury Disaster Loans (EIDL) program. FTC advises businesses to get information directly from the SBA’s website (sba.gov/coronavirus) and not apply for a loan before verifying the lender. If businesses identify scams, they are asked to submit a complaint at ftc.gov/complaint. (4/29/20)

Litigation Issues   

  • The Department of Justice announced the first enforcement action regarding alleged PPP fraud. The DOJ alleged that two defendants falsely claimed to have dozens of employees at several locations to get more than $500,000 in forgivable loans. (5/5/20)
  • Higher education protected students’ and employees’ health by closing their campuses and moving – virtually overnight – to online learning. Now they face high-risk class actions from students and their parents. A&B’s Colleges & Universities Team provides insight into current litigation in this advisory. (4/30/20)
  • In response to COVID-19, individual courts have often made their own rules on how to proceed, and businesses are caught in the gridlock. For a deeper understanding of how individual states are treating statutes of limitations and some key takeaways, read this A&B advisory. (4/24/20)

Department of Labor/OSHA   

  • Department of Labor (DOL) announced over $10 million in dislocated workers grant awards. (5/7/20) (New)
  • DOL announced that states and territories can use Dislocated Worker Grant funding for contact tracing. (5/5/20)
  • DOL announced that it was issuing additional guidance about the short-time compensation program under the CARES Act. (5/4/20)
  • DOL announced that it was issuing additional guidance to state unemployment insurance programs regarding reporting requirements for administrative grants and sharing commonly asked questions about unemployment insurance. (5/4/20)
  • DOL’s Employee Benefits Security Administration (EBSA) issued FAQs under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and revised COBRA model notices. Plan administrators can use these model notices to notify plan participants and beneficiaries of their rights under COBRA and qualified beneficiaries of their rights to elect COBRA. (5/1/20)

Small Business Administration   

  • Small Business Administration (SBA) – In response to the CARES Act requirements, the SBA formally launched its Paycheck Protection Program (PPP) for small businesses. (4/3/20)
  • The SBA released a Summary PPP of Round 2 data. (5/7/20) (New)
  • The SBA and Treasury updated their FAQs on the Paycheck Protection Program. The FAQs clarify that employers will not be penalized if they are unable to rehire a worker despite good faith efforts. (Updated 5/6/20)
    • The FAQs also extend the safe harbor to repay PPP loans until May 14 and confirms that foreign affiliate employees must be counted for size purposes.
  • The SBA released a list of PPP participating lenders. (5/7/20) (New)
  • Review this A&B advisory for information on relief under the CARES Act for fund managers. (5/5/20)
  • The SBA announced that agricultural businesses are now eligible for Economic Injury Disaster Loan (EDIL) and EDIL Advance programs under the Paycheck Protection Program and Healthcare Enforcement Act. (5/4/20)
  • The SBA and Treasury announced making 2.2 million loans in Round 2 of the Paycheck Protection Program totaling more than $175 billion. Summary information on Round 2 is available here. (5/3/20)
  • The SBA and Treasury announced that they would review all PPP loans over $2 million, in addition to other loans as appropriate, to ensure that applicants meet eligibility criteria. (4/28/20)
    • A&B’s White Collar, Government & Internal Investigations Team summarizes the latest stimulus addition and emerging enforcement developments related to the certification, receipt, and use of PPP funds, including for banks processing the related loans, in this advisory. (4/30/20)

Department of Treasury/IRS/Federal Reserve   

  • The Department of Treasury website for CARES Act programs, including specific sections on assistance for American workers and families, small businesses, state and local governments, and preserving jobs for American industry.
  • Treasury Secretary Steven Mnuchin has communicated to Senator Grassley his decision to revise the employee retention tax credit rules to make the tax break available to companies who have furloughed workers but are still providing health insurance. The IRS has updated its FAQs to reflect the change. (5/7/20) (New)
  • The Treasury announced plans to increase the amount of debt the Department will issue in quarterly refunding auctions to a record high of $96 billion. The announcement noted that the “Treasury’s borrowing needs have increased substantially as a result of the federal government’s response to the COVID-19 outbreak.” (5/6/20) (New)
  • Treasury and the Department of the Interior announced an agreement to begin making $4.8 billion in funds available to Tribal governments under the CARES Act. (5/5/20)
  • The Federal Reserve announced that it was modifying its liquidity coverage ratio for banks participating in the Money Market Mutual Fund and Paycheck Protection Program Liquidity Facilities. (5/5/20)
  • The Federal Reserve announced an expansion of the scope and eligibility for the Main Street Lending Program, essentially creating a third option to help credit flow to small and medium-sized businesses. (4/30/20)
    • FAQs regarding the Main Street Lending Program were released. (4/30/20)
    • For more information on how to chart a course through all three Main Street Lending Program options, read this A&B advisory. (5/6/20) (New)
  • The Internal Revenue Service (IRS) posted several FAQs on higher education financial aid relief under the CARES to clarify that emergency CARES Act aid is not taxable. (5/7/20) (New)
  • The IRS announced three new employer tax credits on employee retention, sick leave, and family leave. (5/7/20) (New)
  • The IRS provided answers to common questions on the Economic Impact Payment Program and stated that checks continue to be sent. (4/30/20)
  • IRS provided guidance clarifying that no deduction is allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered PPP loan. (4/30/20)

Other Agencies   

  • The Department of Commerce announced it was accepting applications for grants from the Economic Development Administration to help communities prevent, prepare for, and respond to COVID-19. (5/7/20) (New)
  • The Cybersecurity and Infrastructure Security Agency (CISA) and its counterpart in the United Kingdom warned that they had exposed malicious cyber campaigns targeting organizations involved in the COVID-19 response. CISA issued an advisory for health care and medical research organizations recommending staff to change passwords and implement two-factor authentication. (5/5/20)
  • The Federal Housing Finance Agency (FHFA) announced that it was extending loan processing flexibilities for Fannie Mae and Freddie Mac customers through June 30 to allow alternative appraisals, alternative methods of verifying employment, flexibility for documentation requirements to allow renovation disbursements, and expanding the use of power of attorney and online notarizations. (5/5/20)
  • FHFA announced that Fannie Mae and Freddie Mac created online property lookup tools to allow renters to see if they live in a property that is covered by the temporary eviction moratorium. (5/4/20)
  • The Department of Housing and Urban Development (HUD) on May 1 announced the allocation of $685 million in funding for public housing authorities to assist low-income Americans living in public housing. (5/1/20)
  • HUD also provided COVID-19 FAQs for Public Housing Agencies. (updated 4/22/20)
  • The US Patent and Trademark Office announced (4/28/2020) that it would further extend certain patent and trademark deadlines to June 1, 2020, given the ongoing effects of the COVID-19 pandemic. These extended deadlines apply to those situations identified in the USPTO’s March 31, 2020, guidance, such as responses to Office Actions.
    • For more detail, read Alston & Bird’s advisory explaining how and when to claim these extensions. (4/2/20)
  • The Securities and Exchange Commission (SEC) announced that it was issuing a temporary final rule providing temporary relief to certain companies to meet urgent needs through regulation crowdfunding offerings. (5/4/20)
  • The Department of Transportation (DOT) announced exemptions under the CARES Act for Spirit Airlines and JetBlue Airlines to stop providing service at certain large hubs and focus city airports. (5/5/20)
  • The Department of Veterans Affairs (VA) Board of Veterans’ Appeals announced it was expanding access to virtual hearings to all veterans awaiting their board hearing. (5/1/20)
  • The VA announced it is participating in the plasma from COVID-19 patients clinical trials aimed at finding ways to potentially prevent symptoms of the coronavirus disease. (5/1/20)
  • The VA announced it was providing supplies and clinical personnel to non-VA facilities in 38 states to care for COVID-19 patients. (5/1/20)

Trade and International Business Issues   COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle

  • ICE Working with Health care, E-Commerce Companies to Fight COVID-19 Scams. The Homeland Security Investigations unit within ICE is working with multiple health care and e-commerce companies to fight fraudsters that are trying to take advantage of the COVID-19 pandemic, ICE said in a news release. The partnership aims to prevent the sale of counterfeit pharmaceuticals and medical equipment and illicit online sales and trade importation violations of products claiming to be treatment options. (New)
  • FDA Withdraws Approvals for Some Chinese Mask Makers. The Food and Drug Administration took away approvals for more than 60 mask makers in China to export masks similar to N95 into the U.S., according to the Wall Street Journal. In a notice issued May 7, the FDA noted that certain filtering facepiece respirators from China may not provide adequate protection. An updated list of authorized respirator imports from China now only lists 14 manufacturers. (New)
  • China on U.S. tariff threats: A pandemic is not the time for a trade war. At the daily press briefing on Wednesday, a Chinese Foreign Ministry spokeswoman responded to President Trump’s threats to again impose tariffs on China —this time claiming Beijing must be punished for its role in the coronavirus outbreak —by saying that new duties on Chinese goods would only harm the U.S. when the two countries should instead be working together. (New)
  • Canada, Mexico, China, 39 Other Countries Say Trade Restrictions Should Be Temporary. Canada, Mexico, China, the United Kingdom, Japan and an assortment of other countries around the world said the World Trade Organization has an essential role to play in ensuring the continued flow of essential goods—including medical supplies—across borders. The signatory countries “pledge to not impose export restrictions and to refrain from implementing unjustified trade barriers on agricultural and food products in response to the COVID-19 pandemic.” No country in the European Union signed the statement, issued May 5, nor did the U.S. (New)
  • With everyone focused on COVID-19, this A&B advisory analyzes the implications of Brexit on cross-border litigation in Europe. (5/5/20)

Insurance Issues   

  • For a 50-state review of business interruption insurance related issues see this new COVID-19 Insurance litigation and Regulatory Issues tracker. The tracker is updated weekly. (Updated weekly - 5/3/20)
  • On April 30, the General Assembly of Pennsylvania proposed Senate Bill No. 1127 “r]elating to property and business interruption insurance coverage for COVID-19 Pandemic-related Losses.”  The Bill is structured differently than earlier proposals in that rather than simply asserting that policies will be construed to cover COVID-19 business income losses, it instead applies certain “rules of construction” to first-party insurance policy provisions in order to tie common coverage-triggering terms to COVID-19 related executive orders and the presence of the virus in a particular business. For example, the Bill provides that “[i]f a person positively identified as having been infected with COVID-19 has been present in…a building…that area of business activity shall be deemed to have experienced property damage.” Despite the different approach, the intent behind the bill appears to be the same as for earlier proposals—to retroactively define policy terms to provide for sweeping coverage of COVID-19 related business income losses. (New)
  • The National Association of Insurance Commissioners has issued a Business Interruption COVID-19 Data Call Letter to property and casualty insurers indicating that state insurance regulators in 50 states, the District of Columbia, and the U.S. territories “have agreed to participate in a data call to collect data related to business interruption insurance and COVID-19.” Insurers are “requested to complete both parts of the COVID-19 business interruption data call” and to submit a “Premiums Data Template” by May 22, and a “Claims Data Template” by June 15, with mid-monthly update filings thereafter. (New)
  • S&P Global Ratings has weighed in on state legislative efforts to retroactively alter insurance policy language to cover business income losses relating to the COVID-19 pandemic. S&P opines that any “such efforts in any state would be largely unsuccessful” and would likely come up against “a host of constitutional and legal challenges.”
  • On April 30, the Council of the District of Columbia issued a Memorandum requesting to place certain measures on the agenda for the May 5th Legislative Meeting, including changes to the law that would impose “new requirements for business interruption insurance to pay for certain business closures during the pandemic.” On May 5, the D.C. Council reportedly decided not to push the proposal forward.
  • The pace of new business income coverage claims flooding state and federal courts nationwide has continued at break-neck pace over the last few weeks.  A group of plaintiffs led by celebrity chefs have reportedly formed a non-profit group—the Business Interruption Group—for the purpose of lobbying for business interruption coverage for COVID-19 losses, and have stated that “[i]f insurers do not start paying . . . we will bring BIG legal action in every state.” And notably, Plaintiffs firm Lieff Cabraser Heimann & Bernstein LLP has joined the fray, reportedly indicating that they intend to file many lawsuits on behalf of restaurant owners going forward.  (Updated 5/7/20)
  • Other Notable case filings include:
    • On May 5, Plaintiff Royal Palm Optical filed suit in federal court against its insurers, State Farm Mutual Auto Insurance Company and State Farm Florida Insurance alleging claims for both declaratory relief and breach of contract. Plaintiff alleges that its policy’s “Fungi, Virus or Bacteria” exclusion is inapplicable to its claim because its alleged business income losses were caused not by the presence of SARS-CoV-2 on the premises, but instead by the executive orders issued by authorities in Florida. Plaintiff seeks to represent both a nationwide class and a Florida state class. The case is Royal Palm Optical, Inc. v. State Farm Mut. Auto. Ins. Co., 9:20-cv-80749-RS (S.D. Fla.).

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