A federal lawsuit filed Tuesday by 15 minor league baseball teams against five insurance companies alleges that “the action and inaction of the federal and state governments” contributed to “catastrophic financial losses” for ball clubs.
The lawsuit in the United States District Court in the Eastern District of Pennsylvania is for rejections and anticipated rejections by insurers of business interruption claims related to equipment coronavirus. It establishes that the teams incur more than $ 2 million in expenses to operate, “regardless of whether they suffer the interruption of their operations.”
“In the first months of 2020,” the lawsuit says, “the federal government did not recognize the severity of the pandemic and did not contain the virus.” And he points out that “the federal government failed to build an effective wall to prevent the continued migration of the virus from the states that were affected early to the rest of the country.”
The complaint accuses insurance companies of breach of contract and states that teams are not prevented from collecting business interruption claims, despite policy provisions that exclude losses “caused or resulting from any viruses” and ” acts or decisions, including lack of action or decision, of any person, group, organization or government agency. “
When ESPN contacted him, Andy Sandler, an attorney for one of the two law firms representing the plaintiffs, said: “We are going to demonstrate in a court of law why the exclusions do not apply.” He said he would not explain how they will do it right now.
ESPN left messages Tuesday for contacts with each of the insurers, seeking comment on the lawsuit.
The 30 Major League Baseball teams provide and pay players for their 160 minor league affiliates, which in turn handle most of the operating expenses. It is widely assumed that the minor leagues will not be able to launch a season this year, and the lawsuit says, “It is now clear that MLB teams will not be supplying players to MiLB teams throughout the 2020 season.”
The 15 teams in the lawsuit represent levels from short-season rookies to Triple-A, in towns and cities from coast to coast with populations ranging from Binghamton, New York’s 45,000 to San Antonio’s 1.5 million. Three teams, Binghamton Rumble Ponies, Chattanooga Lookouts and Idaho Falls Chukars, were among the 42 teams designated by MLB for elimination, in a proposal made last year at the start of negotiations with Minor League Baseball over their operating agreement expiring in the End of this season.
Sources close to those negotiations said Sandler, the owner of a team in North Carolina that is not a party to Tuesday’s lawsuit, is the lead member of the MiLB seven-person committee for talks with MLB. Sandler declined to comment on the committee, MLB’s controversial contraction proposal, or negotiations, but others have told ESPN that there have been no substantive discussions during the pandemic, as MLB has focused on a possible 2020 major league season. and its contentious deals with MLB player association.
The lawsuit against the insurers contains this characterization of the losses of the 15 teams: “As a result of the virus, the government response, and the failure of Major League Baseball to provide baseball players, the teams have been deprived of their main source of income. : Fans who come to the stadium and pay for game tickets, merchandise, food and drink, and participate in other amenities. “