A federal court may have just turned Missouri into a hotbed for COVID-19 litigation

For years, the state of Missouri has been a preferred venue for civil litigators pursuing far-flung legal theories. Whether they're allowing "junk science" to be admitted as expert testimony or permitting "phantom" damages to provide windfall gains for plaintiffs, Missouri courts have consistently proven themselves an outlier in their interpretation of statutes and policy. And now, much to the delight of trial attorneys everywhere, Missouri has done it again.

In September, Missouri federal judge Stephen R. Bough declared that Blue Springs Dental Care LLC could proceed with allegations that its insurance company had wrongfully denied business interruption claims resulting from the COVID-19 pandemic. However, Judge Bough's decision is an outlier, completely out of step with the essential function of business interruption insurance and outside the scope of policy coverage. According to the National Association of Insurance Commissioners (NAIC), business interruption policies do not typically cover losses caused by a pandemic because they do not involve actual physical injury.

In rejecting the defendants' motion to dismiss, the judge cited a similar Missouri federal court decision from August -- Studio 417 Inc. et al. v. The Cincinnati Insurance Co. The Studio 417 case likewise permitted plaintiffs to move forward with their suit. It held that the mere reduction in services resulting from the pandemic was sufficient to warrant a business interruption liability claim. This is despite the fact that business interruption insurance is generally meant to cover losses caused by actual physical damage to property, not a reduction in services or viral contamination. As a result, courts have typically dismissed COVID-related liability claims. But the Missouri court is once again proving itself to be the exception -- for all the wrong reasons.

So, who, you might ask, was the judge that ruled in the first Missouri business interruption case -- the one which Judge Bough cited as precedent for his September decision? It turns out that it was none other than Stephen R. Bough himself. Most people can readily see the problem here: the judge not only disregarded the plain reading of the policy to embrace his novel legal theory, he then cited a previous decision that he himself had written as justification for the later ruling. This is judicial activism at its worst. And given Bough's status as a federal judge, his interpretation of Missouri law and insurance agreements can serve as a precedent for other Missouri judges to follow.

Unfortunately, the situation gets worse. Not only did the court reinterpret an insurance policy to fit its own narrative, but it also created an opportunity for unscrupulous trial attorneys to flood the state's civil court system with countless meritless lawsuits. Now, that's precisely what appears to be happening. Following the Missouri ruling, reports indicate that the amount of business interruption litigation is expected to grow substantially throughout the fourth quarter of 2020. Judge Bough, it would seem, played right into trial lawyers' hands.

Typically, profit-seeking trial attorneys will advance novel legal theories into civil courts throughout the country and wait for a particularly activist judge to take the bait. Once their arguments gain traction in one location, the lawyers then use the "newly established precedent" to encourage even more litigation, flooding the civil courts in a sea of lawsuits. That is the trial attorneys' playbook for extracting maximum profit from legally-unfounded litigation claims. And Missouri's legal system, it seems, has once again fallen into that trap.

Judge Bough's recent decisions have given trial attorneys the green light to turn the state into a hotbed for meritless COVID-19 liability claims -- a judicial hellhole, to put it bluntly. And sadly, this isn't the first time Missouri has earned that designation, either. The city of St. Louis, in fact, has remained a perennial judicial hellhole for nearly two decades, ranking as fifth worst in the entire nation just last year. Now, the rest of the state may soon be following suit.

Ultimately, judicial hellholes are disastrous for all parties involved -- except, of course, the trial lawyers themselves. Lawsuit abuse wastes tax dollars, harms businesses, weakens the economy, and impedes justice. And the costs and burdens are ultimately passed on to consumers. For those reasons, the Missouri legal system must move to correct its previous mistakes and reject judicial activism. To be sure, that's a tall order, but ruling against trial lawyers' attempts to rewrite insurance law is certainly a good place to start.

Sherman "Tiger" Joyce is the president of the American Tort Reform Association (ATRA).