The teams, led by JetHawks Baseball LP, said in a reply brief that the lower court disregarded their allegations regarding the causes of their losses and instead resolved the "highly fact-specific question of causation" in favor of the three Nationwide Insurance units rather than accepting the teams' allegations as true.
The teams appealed in February after U.S. District Judge Douglas L. Rayes in November granted a bid by National Casualty Co., Scottsdale Indemnity Co. and Scottsdale Insurance Co. to dismiss the case, saying that while the teams tried to argue there were other causes for their losses, those causes all stem from the virus.
In their March opposition to the teams' appeal, the insurers said the minor leaguers admitted that their revenue losses were caused by COVID-19, meaning the virus exclusion should be enforced to preclude coverage.
The teams argued Wednesday, however, that their losses were also caused by government closure orders and Major League Baseball's decision to not send players down to the minors after the 2020 season was canceled.
Those causes would not implicate the virus exclusion in their policies, the teams said.
The teams argued that the insurers "cherry-picked allegations" from the complaint to paint a misleading picture and to ignore the multiple causes of loss the teams actually suffered.
"These causes are distinct from COVID-19 and, thus, the exclusion cannot bar coverage -- particularly at the motion to dismiss stage," the teams said. "Instead of grappling with these allegations and recognizing that they present a question of fact regarding causation and the applicability of the exclusion, Insurers effectively ask this court to simply resolve this fact question in their favor, just as the district court erroneously did."
The teams also argued that the virus exclusion doesn't contain an anti-concurrent clause, which bars coverage when there are both covered and excluded causes of loss. Without that clause, the teams said, the virus exclusion doesn't apply to all loss or damage that may indirectly relate to a virus.
"Insurers argue that even in the absence of an ACC clause, the exclusion still applies here because the virus was the efficient proximate cause of the loss," the teams said. "However, as stated, whether the virus was the efficient or predominant cause of the loss is a quintessential question of fact based on the allegations in the complaint."
The baseball teams' suit stems from a case originally filed in Pennsylvania federal court in June, which targeted several insurance companies. The teams later dropped that suit and refiled in Arizona, Pennsylvania and New Jersey, with each suit focused on individual insurers.
The complaints in Arizona and New Jersey came days after MLB announced it would not be providing players to minor league teams and would be canceling the 2020 season, citing the "unprecedented" times the U.S. is currently experiencing due to the pandemic.
Representatives for the parties did not immediately respond to requests for comment Thursday.
The teams are represented by Robin Cohen and Orrie Levy of Cohen Ziffer Frenchman & McKenna and Andrew L. Sandler of Mitchell Sandler LLC.
The insurers are represented by Brian A. Cabianca, Gregory T. Saetrum and Aneca E. Lasley of Squire Patton Boggs LLP, Jay R. Sever of Phelps Dunbar LLP and Michael H. Carpenter of Carpenter Lipps & Leland LLP.
The case is Chattanooga Professional Baseball LLC et al. v. National Casualty Co. et al., case number 20-17422, in the U.S. Court of Appeals for the Ninth Circuit.
--Additional reporting by Daphne Zhang and Mike Curley. Editing by Ellen Johnson.
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