Wednesday, April 29, 2020

Shuttered by COVID-19, Restaurants, Businesses Fighting Back Against Insurance Company Claim Denials

Dallas, TX - April 29, 2020 - (The Ponder News) -- Businesses across a range of sectors are starting to fight back against insurance companies, charging that insurers are operating in bad faith by rejecting claims for damages caused by the COVID-19 pandemic and shelter-in-place orders that have shut down their businesses, according to two new federal bad-faith insurance lawsuits filed by the Fears Nachawati Law Firm.

According to lawsuits filed on behalf of Dallas-based Salum restaurant and Houston-based Frosch International Travel, Travelers Indemnity Company rejected their damages and business-interruption claims without investigating.

In defending its denial to Salum's claim, Travelers wrongly stated that language in the restaurant's policy specifically excludes losses caused by "bacteria and viruses," according to the lawsuit. However, Salum's "Deluxe Coverage" policy contains no such language. Travelers also claims that the restaurant has not suffered because restaurants are allowed to sell food to-go, even though it has never offered takeout service.

Based in Houston, Frosch has offices in 40 cities and employs more than 2,200 people. The company's policy states that it would "pay for [T]he actual loss of Business Income … sustain[ed] due to the necessary 'suspension' of your 'operations.'" The policy also promises to pay for additional coverages, including damages that occur when a business is closed by civil authorities, as happened across the United States during the pandemic. In its denial, Travelers claimed that Frosch had not suffered a "cessation of business" because it was still open and had not sustained property damage.

"This is the definition of bad faith," said Fears Nachawati trial lawyer Matthew McCarley. "Insurance companies like Travelers have systematically taken advantage of loyal policy holders, promising coverage but backing out when businesses need them the most."

Mr. McCarley says these two businesses are not unique. Across the country, businesses affected by the pandemic are finding that business interruption claims are being denied as the insurance industry's powerful lobby pressures lawmakers to change the rules after-the-fact and exempt the industry from pandemic-related liability.

The lawsuits seek declaratory judgments that Travelers must honor the policies and cover the damages claims. They also seek damages for breach of contract, violation of the Texas Insurance Code, and breach of Travelers' duty of good faith and fair dealing. Insurance statutes provide for up to triple the amount of punitive awards for insurance companies found to have operated in bad faith.

The cases are Salum Restaurant LTD v The Travelers Indemnity Company, case No. 3:20-cv-01034 in the U.S. District Court for the Northern District of Texas; and Frosch Holdco et al. v The Travelers Indemnity Company, et al., case No. 4:20-cv-0148 in the U.S. District Court for the Southern District of Texas.

Conservation Groups Challenge EPA's Gutting of Clean Water Protections in Federal Court

Charleston, SC - April 29, 2020 - (The Ponder News) -- Conservation groups challenged in federal court the administration's effort to gut clean water protections from wetlands and streams that feed drinking-water sources for 200 million Americans and 32 million people in the South, or seven out of ten Southerners. The legal challenge, filed in the U.S. District Court for the District of South Carolina, opens a major court battle over the U.S. Environmental Protection Agency's and U.S. Army Corps of Engineers' re-definition of what waters are protected under the Clean Water Act that leaves many waterways unprotected as well as the communities and wildlife that rely on them.

The Southern Environmental Law Center filed today's challenge on behalf of American Rivers, Charleston Waterkeeper, Chattahoochee Riverkeeper, Clean Water Action, Defenders of Wildlife, Environment America, Friends of the Rappahannock, James River Association, National Wildlife Federation, North Carolina Coastal Federation, North Carolina Wildlife Federation, Public Employees for Environmental Responsibility (PEER), Roanoke River Basin Association and South Carolina Coastal Conservation League.

The lawsuit contends that the agencies' wholesale stripping of protections was an unlawful departure from decades of bipartisan practice. Among other things, the agencies failed to explain or evaluate the impact of their actions on the nation's water quality or give Americans a meaningful opportunity to comment on the elimination of scientifically-based protections for streams and wetlands.

The lawsuit contends the rule is contrary to the Clean Water Act's central aim to protect the integrity of America's waterways and ignores basic science – a point underlined by EPA's own Science Advisory Board, which warned that the proposed rule flew in the face of established studies and research.

The challenged rule ignores the intent of the Clean Water Act, which a bipartisan Congress passed in 1972 because state-by-state efforts to clean the nation's waters failed.

The agencies' bid to dramatically reduce water protections was met with overwhelming opposition, with the bulk of more than 600,000 comments submitted from across the country opposed to the stripping away the Clean Water Act's reach.

Comments from the groups who filed in federal court today to protect clean water follow.

"Every family and community across America relies on clean water, but these agencies ignored all that to facilitate unlimited water pollution across the nation," said Blan Holman, senior attorney and leader of the Clean Water Defense Initiative at the Southern Environmental Law Center which is representing the conservation groups in court. "This unlawful rule puts the water used by hundreds of millions of Americans for drinking, bathing, fishing, and business at risk as well as countless communities that deal with floods and hurricanes. You don't have to be a rocket scientist to know that pollution dumped upstream flows downstream, but the agencies shut their eyes to science and common sense. That violation of the law is why we're going to court to protect clean water."

"The Trump administration's Dirty Water Rule would reverse 50 years of progress protecting clean water in our country," said Bob Irvin, president and CEO of American Rivers. "It ignores science and threatens the health and safety of hundreds of millions of people who depend on rivers and streams for clean water. We will continue standing up against this administration's reckless rollbacks to our clean water safeguards because our nation's health, security and future depend on it."

"It's hard to imagine a worse idea," said Andrew Wunderley, Charleston waterkeeper. "Aggressive growth is threatening our freshwater wetlands and there are no state or local protections to fall back on in South Carolina. Removing these protections now means more flooding and more pollution--that's not good for anyone.

"As surely as water flows downstream, the Dirty Water Rule endangers the waterways where millions of Americans swim, fish, boat, and draw our drinking water," said John Rumpler, clean water program director for Environment America. "Revoking Clean Water Act protections for streams and wetlands defies common sense, sound science, and the law."

"The administration's new rule completely undermines the core purpose of the Clean Water Act, which is to restore and maintain the integrity of our nation's waters. It will put the health of communities throughout the country at risk," said Jennifer Peters, national water programs director at Clean Water Action. "Even kids understand we all live downstream and that small streams and wetlands are vital to overall health of our drinking water sources. Instead of acting like drinking water matters, EPA is prioritizing polluter profits with this illegal and unscientific rule and standing its mission to protect human health and the environment on its head."

"The Trump administration's reversal of protections for clean water is reckless and irresponsible. Wetlands, streams and freshwater bays provide important habitat diversity to many imperiled species like the southern bog turtle, Florida manatee, Eastern hellbender, Rio Grande cutthroat trout and more. We are heading to court to fight the administration's rollback that threatens thousands of streams, wetlands, and bays in the U.S. and the wildlife that call them home," said Lindsay Dubin, staff attorney, Defenders of Wildlife.

"Clean drinking water, a fishable and swimmable James River, increased river-based tourism and economic development – all of these we owe to the protections of the federal Clean Water Act. The EPA's rule puts our local waterways at risk and threatens to erode decades of progress to restore the health of the James River," said Jameson Brunkow, riverkeeper and senior advocacy manager with the James River Association. "We are speaking up to defend protections for critical headwater streams and wetlands, which science shows support downstream water quality and healthy waterways."

"This rule effectively guts the Clean Water Act by permanently removing protections for approximately half the nation's streams and wetlands," said Jim Murphy, director of legal advocacy for the National Wildlife Federation. "It should be shocking, but it isn't, that the EPA did not examine the impacts of this rule on water quality or public health. The agency has openly admitted it did not do a substantive analysis of which streams and wetlands would lose protections and which pollution permits would be invalidated as a result. We think the courts will agree that federal rules should be based on sound science and that this one is not."

"The repeal of Clean Water Act protections would put North Carolina's water resources at risk by removing protections from smaller headwater streams and tributaries, and would undermine our state's resiliency during flooding events by eliminating protections on millions of acres of wetlands that safeguard our communities," said Tim Gestwicki, CEO of the North Carolina Wildlife Federation. "As North Carolina continues to rebuild from the past two years of hurricanes and historic flooding, the rollback repeals are especially egregious. We need restored wetlands, streams, and floodplains, not less protections.

"Wildlife need clean water and hunters and anglers know that without it, there won't be ducks to hunt or fish to catch," added Gestwicki. "Folks who love our streams, rivers, and wetlands deserve better, which is why this grievous repeal must be fought in court."

The agencies have 60 days to respond to the lawsuit.

For more than 30 years, the Southern Environmental Law Center has used the power of the law to champion the environment of the Southeast. With over 80 attorneys and nine offices across the region, SELC is widely recognized as the Southeast's foremost environmental organization and regional leader. SELC works on a full range of environmental issues to protect our natural resources and the health and well-being of all the people in our region.

Study Predicts: with Fast Re-Opening of State Economies, America's Recession Will End by Late Summer, Swift Recovery in Fall, Data Does Not Point to Great Depression Era Scenario

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Washington, D.C. - April 29, 2020 - (The Ponder News) -- Nationally-renowned economists Dr. Arthur B. Laffer and Stephen Moore, both members of President Donald J. Trump's Economic Recovery Task Force, have released a study predicting a swift economic recovery if states reopen quickly.

"We are advising the White House and many governors across the country, there is a big difference in the swiftness and size of the recovery based on the speed at which states reopen,' says Stephen Moore. "Connecticut, Michigan, New Jersey and New York would be wise to follow the leads of the states in the south and mountain states, or they could see a deep recession through the end of 2020."

Countering many predictions of economic doom, Moore and Laffer find that "with the right national policy prescriptions and most states reopening their economies next week, we will see a very sharp contraction this summer with high unemployment followed by a strong recovery will arrive within three to six months."

The authors compared the sharp economic contraction from the coronavirus with other sharp economic collapses, including the Great Depression, and found that the key market indicators, such as the stock market and the gold price, point to a fast pick-up in growth when the economy gets back on its feet.

"There is just no indication of anything like a Great Depression, says Dr. Laffer, who has advised several presidents and recently was awarded the Presidential Medal of Freedom from President Trump.

The study also predicts a "very uneven" recovery "with some states and regions of the country advancing at a much faster pace than others." Because states are taking the lead in opening up the economy, some regions of the country will do much better than others. States such as New York, Connecticut, and Illinois in the northeast and Midwest are expected to lag because the governors in those states aren't opening right away. "The recovery will be led by states in the south like Florida, Georgia and South Carolina and western states like Arizona and Colorado – all of which are starting to open immediately."