July 1, 2020, Nashville, Tennessee—Lieff Cabraser, The Higgins Firm, and the Law Office of Alexandra Foote have filed a federal nationwide class action lawsuit against Erie Insurance Exchange on behalf of six Nashville-area restaurants and bars accusing the insurance carrier of breach of contract in its failure to pay valid business interruption insurance claims. This is the first such federal class action filed in Nashville.

The plaintiffs are six popular restaurants and bars in the Nashville area: Crow’s Nest, Hillwood Pub, Joe’s Place, Plaintiff Plantation Pub, Inc., Sidelines Grill Pleasant View, and Sidelines Grill Ashland City. Several, like Sidelines Grill, are family-owned and host live music. Others, like Hillwood Pub and Plantation Pub, are nightlife-oriented but also serve “pub style” food popular in local communities. In 2014, Hillwood Pub participated in and won the “Music City Hot Wings Festival.” The plaintiffs are bringing claims on behalf of a proposed nationwide class of restaurants and bars.

As set forth in the complaint, several months ago all six plaintiff establishments were forced to shut down at the order of both state and local governments who required the restaurants, their workers, and their customers to “shelter in place” and abide by strict “social distancing” guidelines. These compulsory shutdowns forced the restaurants to lay off employees and to lose income for several months while continuing to pay many regular expenses, causing severe financial losses, which the plaintiffs’ restaurants and bars were unable to recoup even after they were permitted to re-open with limitations.

As the complaint details, to protect their business from catastrophic situations like this one, the plaintiffs purchased insurance from Erie Insurance Exchange that included coverage for business interruption. The policies expressly provide coverage for “Lost Income” and the consequences of actions by “Civil Authority.” Accordingly, the restaurants expected that their policies would help protect their businesses in the event that the government ever ordered them to stop or severely restrict operations in connection with a pandemic or any other covered cause of loss.

When plaintiffs submitted their claims to Erie Insurance Exchange, the claims were summarily denied.  The complaint alleges that these denials were part of a premeditated strategy by Erie to deny all claims related to the “shelter in place” orders and COVID-19.  The complaint alleges these denials were untethered to the facts of the claims, which Erie did not adequately investigate, or to the specific coverage provided by the plaintiffs’ business insurance policies.

“These small businesses bought insurance to protect against business interruption,” notes Lieff Cabraser partner Mark P. Chalos, who represents the plaintiffs in the lawsuit. “The last thing that small businesses need right now is their billionaire insurance company wrongfully denying claims”

“We’re proud to represent this group of locally-owned Nashville bars and restaurants, businesses that serve our community,” notes the Higgins Firm’s Jim Higgins, who also represents the plaintiffs in the suit. “Erie’s systematic, blanket denial of their insurance claims is just wrong, and this lawsuit seeks to correct that wrong.”

“It has been a difficult time for many small businesses in Tennessee, especially restaurants and bars,” said Doug Crow, owner and operator of the plaintiff businesses. “We are standing up to these insurance companies that are refusing to do what they promised to do.”

The class in the lawsuit is defined as “All persons or entities in the United States who own an interest in a business that served food or drink on the premises and was insured by Erie Insurance Exchange in March 2020, made (or attempted to make) a claim with Erie arising from loss of income (or extra expense or other losses related to business interruption) at that business related to COVID-19, and did not receive coverage for that claim.”

The lawsuit states claims for breach of contract and breach of the covenant of good faith and fair dealing, and seeks injunctive relief as well as damages.


Mark P. Chalos
Lieff Cabraser Heimann & Bernstein, LLP
222 2nd Avenue South
Nashville, TN 37201
Telephone:  315.313.9000


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