We have previously held, in the context of COVID-19 commercial-insurance coverage disputes, that "[w]hile COVID-19 has wrought great physical harm to people, it does not physically damage property within the plain meaning of 'physical.' " Ferrer & Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022) (per curiam); PS Bus. Mgmt., L.L.C. v. Fireman's Fund Ins. Co., No. 21-30723, 2022 WL 2462065, at *3 (5th Cir. July 6, 2022) (per curiam) ("COVID-19 is 'a virus that injures people, not property.' " (quoting Santo's Italian Café LLC v. Acuity Ins. Co., 15 F.4th 398, 403 (6th Cir. 2021))); see, e.g., S. Orthopaedic Specialists, L.L.C. v. State Farm Fire & Cas. Co., 64 F.4th 657 (5th Cir. 2023) (per curiam);PHI Grp., 58 F.4th at 838; Coleman E. Adler & Sons, L.L.C. v. Axis Surplus Ins. Co., 49 F.4th 894 (5th Cir. 2022); Q Clothier New Orleans, L.L.C. v. Twin City Fire Ins. Co., 29 F.4th 252 (5th Cir. 2022); Terry Black's, 22 F.4th at 456. Sister circuits which have considered this issue unanimously agree.
We note that every circuit to have addressed this question has found COVID-19 does not cause physical loss or damage under similar policy language. See, e.g. , SAS Int'l, Ltd. v. Gen. Star Indem. Co. , 36 F.4th 23 (1st Cir. 2022) (Massachusetts law); 10012 Holdings, Inc. v. Sentinel Ins. Co. , 21 F.4th 216 (2d Cir. 2021) (New York law); Uncork and Create LLC v. Cincinnati Ins. Co. , 27 F.4th 926 (4th Cir. 2022) (West Virginia law); Ferrer & Poirot, GP v. Cincinnati Ins. Co. , 36 F.4th 656 (5th Cir. 2022) (per curiam) (Texas law); Santo's Italian Café, LLC v. Acuity Ins. Co. , 15 F.4th 398 (6th Cir. 2021) (Ohio law); Sandy Point Dental, P.C. v. Cincinnati Ins. Co. , 20 F.4th 327 (7th Cir. 2021) (Illinois law); Oral Surgeons, P.C. v. Cincinnati Ins. Co. , 2 F.4th 1141 (8th Cir. 2021) (Iowa law); Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am. , 15 F.4th 885 (9th Cir. 2021) (California law); Goodwill Indus. of Cent. Okla., Inc. v. Phila. Indem. Ins. Co. , 21 F.4th 704 (10th Cir. 2021) (Oklahoma law), cert. denied , ––– U.S. ––––, 142 S. Ct. 2779, 213 L.Ed.2d 1017 (2022) ; Henry's La. Grill, Inc. v. Allied Ins. Co. of Am. , 35 F.4th 1318 (11th Cir. 2022) (Georgia law). We review a Rule 12(b)(6) dismissal de novo and apply the same standards as the district court.
We review de novo a district court's grant of a Rule 12(b)(6) motion to dismiss, viewing all facts in the light most favorable to the plaintiff. Ferrer & Poirot, GP v. Cincinnati Ins., 36 F.4th 656, 658 (5th Cir. 2022). To survive the motion, "a plaintiff must plead 'enough facts to state a claim to relief that is plausible on its face.' "
Id. at *3 (internal marks and citation omitted). In Ferrer &Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022), we stated that COVID-19 did not cause "physical loss or damage to insured property" because "[w]hile COVID-19 has wrought great physical harm to people, it does not physically damage property within the plain meaning of 'physical.'" (citations omitted). Significantly, Fertitta "was not deprived of its property nor was there a tangible alteration to its property," so there was no direct loss to trigger coverage.
Texas law applies in this diversity case. Ferrer & Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022) (per curiam); Tex. Com. Bank Nat'l Ass'n v. Cap. Bancshares, Inc., 907 F.2d 1571, 1575 (5th Cir. 1990).
"The district court's interpretation of an insurance policy is a question of law that we [] review de novo." Ferrer &Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022) (per curiam).
Our review is de novo. Ferrer &Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022) (per curiam).
"[T]his court accepts all 'well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'"Ferrer & Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022) (per curiam). Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Id. at 257-58; cf. La. Bone &Joint Clinic, L.L.C. v. Transp. Ins. Co., No. 2130300, 2022 WL 910345, at *2 (5th Cir. Mar. 29, 2022) (unpublished); Terry Black's Barbecue, L.L.C. v. State Auto. Mut. Ins. Co., 22 F.4th 450, 458 (5th Cir. 2022) (applying Texas law); Ferrer &Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022) (per curiam) (same).
“In Texas, insurance contracts are interpreted by the same principles as contract construction.” Ferrer & Poirot, GP v. Cincinnati Ins. Co., 36 F.4th 656, 658 (5th Cir. 2022). The parties do not dispute the first two elements.