The coronavirus pandemic caused the cancellation of the 2020 minor league baseball season.
But what role did the government play in “causing” the pandemic?
This question is crucial to a federal lawsuit brought by the Chattanooga Lookouts and 18 other minor league baseball clubs against a group of insurers affiliated with Nationwide Mutual Insurance Company. The teams, which are from 10 states, contend that the insurers have unlawfully refused to pay business interruption insurance policies. The clubs cite numerous ways in which the cancellation of games has harmed them, including expected sales of tickets, parking, concessions, merchandise and advertising.
The insurers insist they have no obligation to pay, citing a virus exclusion provision which explicitly extinguishes responsibility “for loss or damage caused by or resulting from any virus, bacterium or other microorganism.” All of the clubs contractually consented to that provision.
The clubs maintain the situation requires more nuance than simply chalking up a lost season to the SARS-CoV-2 virus. To that point, their complaint contends that the season’s cessation was triggered by a bevy of factors: (1) virus-related health concerns for players, employees and fans; (2) MLB teams refusing to supply players to their minor league affiliates; and (3) “action and inaction by federal and state governments related to controlling the spread of the virus”.
These factors all connect to the virus. They are also different from the virus itself and may have been avoidable with alternative policy choices.
There’s no shortage of evidence suggesting that a more robust government response to the virus would have mitigated the pandemic and enabled the playing of more sports. As the complaint cites, a Columbia University study finds that the number of confirmed cases and deaths in the United States would have been more than halved had the government imposed social-distancing measures a week earlier in March. The study also posits a more than 80% reduction in cases and deaths if lockdowns had begun two weeks earlier.
A weaker pandemic would have still caused many deaths and much economic hardship. However, the scheduling of more sports, perhaps with some fans present, would have been possible, considering that such countries as Taiwan, South Korea and Japan, which more swiftly and aggressively curtailed the virus’s spread, all featured lengthy pro baseball seasons this year. Japan’s Pacific League, for example, played a 120-game season—a modest reduction from its standard 143-game season—while Taiwan’s Chinese Professional Baseball League played a complete 120-game season.
Unfortunately for the 19 minor clubs, their attempt to distinguish the virus from political decisions surrounding the virus failed to persuade Judge Douglas Rayes of the federal district court in Arizona. The 68-year-old judge dismissed the clubs’ lawsuit in November. His basic reasoning: The virus was the root cause of the cancellations. Even if federal, state and local governments had selected different paths, the virus triggered the crisis.
To that point, Judge Rayes opined there is no evidence that, absent the pandemic, the government would have issued stay-at-home orders and similar measures to protect persons and property. He also quoted Judge Jacqueline Scott Corley, who rejected a comparable argument in a virus exclusion insurance case. It was “nonsense,” Judge Corley wrote in her opinion, for the plaintiffs to argue “the loss is created by the closure orders rather than the virus, and therefore the virus exclusion does not apply.”
The clubs can appeal Judge Rayes’ ruling to the U.S. Court of Appeals for the Ninth Circuit.