Two days after the cancellation of the 2020 season due to the coronavirus pandemic, 22 minor league baseball teams filed lawsuits Thursday against insurance companies over rejections of business interruption claims.
Fourteen of the 22 teams withdrew the federal suit filed last week in Pennsylvania in favor of the new cases.
A 15th team in that June 23 suit, the Binghamton Rumble Ponies, also withdrew it Thursday. Binghamton, however, did not file a new suit against its insurer as the others did.
Andy Sandler of Mitchell Sandler, co-counsel with McKool Smith for the plaintiffs and other ballclubs, declined to comment about specific teams but told ESPN additional lawsuits are planned.
Thursday's filings were in three jurisdictions.
One is in the U.S. District Court of Arizona, with 16 teams as complainants: the Amarillo Sod Poodles, Augusta GreenJackets, Boise Hawks, Chattanooga Lookouts, Columbia Fireflies, Eugene Emeralds, Fort Wayne TinCaps, Fredericksburg Nationals, Frisco RoughRiders, Idaho Falls Chukars, Inland Empire 66ers, Lancaster JetHawks, Myrtle Beach Pelicans, San Antonio Missions, Stockton Ports and West Virginia Power.
The other two filings were in the U.S. District Court of New Jersey, with the Asheville Tourists, Everett AquaSox and West Michigan Whitecaps as plaintiffs, and in the Philadelphia County Court of Common Pleas, for the Delmarva Shorebirds, Greenville Drive and Staten Island Yankees.
The teams say they incur more than $2 million in expenses to operate "without regard to whether they suffer interruption of their operations."
The majority of the teams have policies with subsidiaries of Nationwide Insurance, which said in a statement last week that business interruption coverage due to a virus outbreak has been excluded from standard policies, such as these, for quite some time -- and that including it would "make such coverage unaffordable or even unavailable."
The complaints assert that such exclusions are "void, unenforceable and inapplicable." The teams also contend that insurers are failing to recognize that being unable to use ballparks due to restrictions on gatherings and lack of access to players (players are normally provided by Major League Baseball, which pays their salaries) constitutes direct physical loss -- and should be covered under the policies.
As ESPN first reported, the teams place some of the blame for their "catastrophic losses" on the U.S. and state governments, alleging that in the first few months of the year the federal government "failed to recognize the severity of the pandemic and did not contain the virus." And they note a "failure of the federal government to build an effective wall preventing the continued migration of the virus from states that were hit early to the rest of the country."