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A Los Angeles state court has refused to dismiss pandemic-related event cancellation litigation filed by heavy-metal band Metallica despite a virus exclusion in its coverage.
The California Superior Court held in Frantic Inc. v. Certain Underwriters at Lloyd’s et. al. that it could not dismiss a lawsuit over a canceled South American tour at this preliminary stage of the litigation because a “proximate cause” has not been established as to what caused the loss involved.
Metallica began an eight-show tour starting with two performances in San Francisco in September 2019. Those were to be followed by six shows in South America, the first of which was scheduled for April 15, 2020, in Santiago, Chile. The South American shows were postponed because of the pandemic shutdown.
The band sued Lloyd’s underwriters after they refused to provide coverage for the postponements, charging breach of contract and tortious breach of the implied covenant of good faith and fair dealing.
While Lloyd’s contended the pandemic caused the cancellations and therefore it should prevail because of the policy’s virus exclusion, Metallic argued that Lloyd’s “cannot conclusively say that the Pandemic is the efficient proximate cause of the cancellations because there are other adequately alleged causes that are covered under the Policy,” the ruling said.
The complaint alleges “that travel restrictions, the duty to mitigate damages, the need to ‘flatten the curve’ and stay-at-home orders all caused the Shows’ cancellations,” the ruling said.
The plaintiff argued that COVID-19 and SARS-CoV-2 “still exist but that travel restrictions and restrictions on social gatherings have lifted and eased, suggesting that it was something more than just the virus/disease that caused the cancellations,” it said.
The complaint “has adequately alleged that the coronavirus disease/virus is not the efficient proximate cause of the Shows’ cancellations,” it said in permitting the litigation to proceed.
Metallica attorney Jeffrey Schulman, a partner with Pasich LLP in New York, said the fact that concerts and professional sports are being played with fans in the seats, while “the virus is still pretty much here,” undercuts the argument it caused the cancellations.
Lloyd’s attorneys did not respond to a request for comment.