COVID-19

In an unusual ruling that quoted from Taylor Swift’s “All Too Well,” a California appeals court has rejected Metallica’s lawsuit demanding that its insurance company pay for more than $3 million in losses stemming from concerts that were canceled due to the COVID-19 pandemic.
The decision, issued Monday (March 18) by California’s Court of Appeal, said that six COVID-cancelled 2020 shows in South America were not covered by Metallica’s insurance policy with Lloyd’s of London, thanks to a clear exclusion in the contract for any losses stemming from “communicable diseases.”

The legendary rock band had argued the case should have gone to trial, since a jury could have decided that non-COVID reasons led to the cancellations. But Justice Maria Stratton, improbably citing Swift, said it was “absurd to think that government closures were not the result of Covid-19.”

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“To paraphrase Taylor Swift: ‘We were there. We remember it all too well,’” the justice wrote. “There was no vaccine against Covid-19 in March 2020 and no drugs to treat it. Ventilators were in short supply. N-95 masks were all but non-existent. Patients were being treated in tents in hospital parking lots. The mortality rate of Covid-19 was unknown, but to give just one example of the potential fatality rate, by late March, 2020, New York City was using refrigerated trucks as temporary morgues. People were terrified.”

Metallica’s case is one of many that have been filed by musicians, venues, bars and other businesses seeking insurance coverage for harm caused by the outbreak of COVID-19, which led to months of severe travel restrictions, forced closures and bans on large gatherings.

But like Metallica’s case, the majority of those lawsuits have thus far been won by insurers. Many policies included express carveouts for problems caused by diseases, like the one in the band’s contract; other policies, like many for brick-and-mortar businesses, often required “physical damage” that’s tricky to show with a pandemic shutdown.

The biggest such case in the music industry is a sweeping lawsuit filed by Live Nation, seeking coverage from Factory Mutual Insurance Co. for more than 10,000 shows (encompassing a whopping 15 million tickets) that were canceled or postponed during the pandemic. After a judge refused to dismiss Live Nation’s allegations in 2022, the case remains pending.

Metallica sued Lloyd’s of London in June 2021 after the insurer refused to cover their losses stemming from the South American tour, which had been set to kick off on April 15, 2020, but was postponed when the governments of Argentina, Chile and Brazil imposed strict restrictions amid the worsening pandemic.

Court documents show that in May 2020, the band submitted a loss of $3,234,569 stemming from the cancelled shows, covering things like $184,996 in payroll for retained crew members. But citing the disease exclusion, the insurer quickly denied the claim: “Unfortunately we have to advise that no coverage is afforded for this matter under this Policy,” the company wrote in a June 2020 response letter.

In December 2022, a Los Angeles judge rejected Metallica’s case and the various arguments for why Lloyds should have paid for the concerts — including ruling that the cancellations were caused by travel restrictions that were “a direct response to the burgeoning COVID-19 pandemic.”

Appealing that decision, Metallica argued that a jury might have found a different cause for the concert cancellations. The band’s attorneys pointed to the fact that venues later reopened and the shows were performed in 2022, “despite the ongoing presence of COVID.”

But in her ruling Monday, Justice Stratton said that argument missed the mark. With the advent of vaccines and more information, “much had changed” by the spring of 2022.

“People were in a position to make a more accurate cost-benefit analysis of restrictions versus potential illness,” the justice wrote. “The fact that governments chose to lift restrictions at that point, two years after COVID-19 was first discovered, does not in any way call into question their reasons for imposing travel restrictions early in the pandemic.”

The judge also rejected various other arguments from Metallica, like the claim that the policy did not cover COVID cancellations because it did not specifically use the term “virus”: “The insurance policy definition of communicable disease does not refer to any pathogens nor does it limit the exclusion to only those communicable diseases caused by specific pathogens.”

Attorneys for both sides did not immediately return requests for comment.