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Insurers’ COVID-19 Notepad: What You Need to Know Now - Week of August 22, 2022

Client Alert | 2 min read | 08.22.22

Courts Dismiss COVID-19 Business Interruption Claims

On August 17, 2022, the Seventh Circuit affirmed the dismissal of a hotel operator’s COVID-19 business interruption claim. The court concluded that under Indiana law “a temporary denial of a plaintiff’s preferred use of its property, absent some physical alteration, does not fall within the plain meaning of ‘direct physical loss or damage.’” Opinion at 7. The case is Circle Block Partners, LLC, et al. v. Fireman’s Fund Ins. Co.

New Business Interruption Suits Against Insurers:

Commercial property and hotel operators sued Continental Insurance Company, Continental Casualty Company, Inc. and CNA Financial Corporation in Illinois state court (Cook County) for declaratory relief and breach of contract. The “all risk” policy allegedly provides business interruption, extra expense, and civil authority coverage. Complaint at ¶ 48. The Complaint alleges that COVID-19 closure orders required the plaintiffs to “make physical, detrimental alterations that materially impaired the functionality of their premises,” id. at ¶ 55, and “dispossessed [plaintiffs] of their tangible spaces and forced very real, material detrimental physical changes and alterations to [the plaintiffs’] premises.” Id. at ¶ 56. The case is SFM Realty, Corp., et al. v. Continental Ins. Co., et al.

Hotel owners and operators sued Continental Insurance Company, Continental Casualty Company, Inc. and CNA Financial Corporation in Illinois state court (Cook County) for declaratory relief and breach of contract. The “all risk” policy allegedly provides business interruption, civil authority, and extra expense coverage. Complaint at ¶ 121. The Complaint alleges that “[t]he presence of coronavirus droplets or nuclei on solid surfaces and in the air at the insured Locations, has caused and will continue to cause direct physical damage to physical property and ambient air at the premises” and by adhering to the surfaces of the plaintiffs’ properties, the virus “altered those properties.” Id. at ¶ 145. The case is Desai Hotel Group, LLC, et al. v. Continental Ins. Co., et al.

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Client Alert | 5 min read | 12.12.25

Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument....

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