As the COVID-19 pandemic continues to wreak havoc on businesses across the country, several companies have thrived during the pandemic in areas such as the gig economy, work from home and e-commerce, entertainment, and social media. Litigation has also increased, in some cases linked to newfound success. The following is a representative sample of strong-performing companies that have experienced increased federal litigation during the pandemic in each of the aforementioned categories, built using Docket Alarm analytics.
The “gig economy,” according to Investopedia, “is based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform.” Examples include Uber and Uber Eats, Lyft, DoorDash, GrubHub, and Postmates. During the COVID-19 pandemic, these companies have faced COVID-19 related litigation, such as cases over driver misclassification and employment benefits. These companies have grown as people sought private rides over public transportation and food deliveries expanded as indoor dining shut down.
The companies, predominantly Uber and Lyft, have faced various driver misclassification lawsuits, particularly relating to California’s Proposition 22, which was approved by California voters in the November election. The proposal ensured that gig economy workers would remain independent contractors in that state. Meanwhile, the D.C. Attorney General asked DoorDash to vacate its high commission rate plan during the pandemic and DoorDash filed for its initial public offering after its revenue skyrocketed from the pandemic. Delivery app Postmates has faced driver misclassification lawsuits, seeking various employment benefits including health insurance. In March 2020, the New York Court of Appeals reinstated a 2015 decision that found that Postmates’ couriers are employees and thus eligible for unemployment benefits during the COVID-19 pandemic. Following this, a judge ordered New York to pay Uber and Lyft drivers unemployment benefits. Additionally, GrubHub, Uber and Postmates were sued for antitrust violations and supra-competitive pricing.
Uber experienced a continuous stream of filings in each month of 2020, with October being the highest filing month. Uber was the defendant in 95 percent of its 2020 litigation. In 2020, Uber was represented by a variety of law firms, including Wilson Elser Moskowitz Edelman & Dicker; Littler Mendelson; Gibson, Dunn & Crutcher; Coughlin & Betke; Goldberg Segalla; and Wood Smith Henning & Berman.
Meanwhile, Lyft’s 2020 filings were relatively steady during the year with peaks in March and December 2020. The filings primarily related to labor, civil rights, and motor vehicles, but also included securities and other types of filings. The pandemic appears to have affected Lyft’s litigation volume relatively minimally. Lyft is the defendant in 99 percent of its litigation.
Lyft is represented by a variety of law firms in 2020, including Cruser, Mitchell & Sanchez; Baker Botts; Cassiday Schade; Calloway, Johnson, Tompkins, Burr & Smith; Mayer Brown; Selman Breitman; Sayfarth Shaw; Copeland, Stair, Kingma & Lovell.
DoorDash’s litigation has been more sporadic than others, with no cases in the early summer, but a spike through the rest of the year. Suits against DoorDash include personal injury and motor vehicle-related litigation, trademark, labor, antitrust, patent, and other areas. DoorDash is the defendant in all 14 federal filings in 2020. DoorDash is represented by an array of law firms, such as Gibson, Dunn & Crutcher; Benesch Friedlander Coplan & Aronoff; Doyle & Seelbach; Fish & Richardson; Johnson & Bell; Tachau Meek; and Winston & Strawn.
The Changing Workplace
As the COVID-19 pandemic affected every part of life, people shifted to work from home and businesses shifted or enhanced their e-commerce capabilities, as a result, companies like Zoom, Slack, Shopify, PayPal, and Amazon profited from these paradigm shifts. However, this did not come without litigation.
In the spring of 2020, Zoom faced a litany of litigation relating to various security concerns ranging from lack of end-to-end encryption, failure to safeguard users’ personal information, data collection, and “zoombombing,” whereby uninvited participants join and disrupt Zoom calls. As the above graph demonstrates, Zoom experienced a large influx in litigation in April 2020 after Zoom was in the news in March detailing the concerns on the platform. After the initial wave, litigation dramatically dropped and returned to pre-pandemic levels. Zoom was the defendant in all of its federal litigation in 2020. Zoom is represented by a variety of firms, including Cooley; Von Briesen & Roper; Durie Tangri; Armond Wilson; Marshall Gerstein & Bourn; Morrison & Foerster; and Stroock & Stroock & Lavan.
Meanwhile, workplace instant messaging platform Slack has faced minimal litigation. Some of these six filings include shareholder suits, particularly in relation to Salesforce.com’s acquisition of Slack, as well as other securities and patent infringement suits. Slack is represented by Desmarais.
According to the Wall Street Journal, Shopify’s revenue nearly doubled to $714.3 million during Q2 2020, compared to $362 million in Q2 2019, as a result of the COVID-19 pandemic as shopping migrated almost exclusively online. Despite this success, Docket Alarm analytics show federal litigation levels remain low. Shopify has only been involved in six cases since March 2020. The suits ranged from contract to patent, among others. Shopify is represented by a variety of law firms, including Gibson, Dunn & Crutcher; Durie Tangri; Goebel Anderson; King & Spalding; McCarter & English; Orrick, Herrington & Sutcliffe.
As the pandemic continues, Americans are increasingly using e-commerce platforms like PayPal, which according to MarketWatch, increased the company’s revenue, share value, and number of active users. PayPal’s litigation peaks earlier in the year in January and April, declining by the end of 2020. PayPal is the defendant in 83 percent of its 2020 litigation. The lawsuits include patent, contract, consumer credit, and personal injury. PayPal is represented by a variety of law firms, such as Fish & Richardson; Adams & Reese; Ballard Spahr; Denton; Husch Blackwell; Kuta Rock; and Pierce Atwood.
The already massive Amazon has continued to grow during the pandemic as reported by Forbes and it continues to face its fair share of lawsuits. Some of the COVID-19 related lawsuits include warehouse worker deaths, as well as alleged price gouging of eggs and other products like hand sanitizer and toilet paper. Amazon and its various entities faced an influx of litigation in March 2020, with litigation relatively consistent for the other months of 2020. Some of the law firms representing Amazon include Davis Wright Tremaine; Gibson, Dunn & Crutcher; Greenberg Traurig; Morgan, Lewis & Bockius; Perkins Coie; Fenwick & West; and Littler Mendelson, among others.
As the pandemic directed people to observe social distancing guidance, it also directed entertainment indoors, driving usage of streaming services and video games during the COVID-19 pandemic as sources of entertainment.
Forbes stated that from January to March 2020, Netflix added 15.7 million subscribers and from April to June 2020 it added 10.09 million subscribers, bolstered by the pandemic as people sought ways to entertain themselves while home. Netflix litigation was seemingly not overly impacted by the increase in users as the trend was consistent throughout the year. Netflix litigation was filed in many categories, including patent; copyright; assault, libel, and slander; civil rights; among other types of suits. Netflix is represented by Latham & Watkins; Haltom & Doan; Keker & Van Nest; Ulmer & Berne; Carinal Law; Crowe & Dunlevy; Davis Wright Tremaine; and Dentons.
Like Netflix, people have also turned to Hulu for television and movies during the pandemic. According to The Wrap News, people are doubling their time watching both of these streaming platforms compared to 2019. Hulu litigation peaked in September, but was busiest from August to October. Hulu is represented by Wilson Sonsini Goodrich & Rosati; O’Melveny & Myers; Beard Kultgen Brophy & Dickson; Brouse McDowell; Davis & Gilbert; Delk McNally; Gillam & Smith; Guild, Gallagher & Fuller. Like Netflix, the influx of users and the amount of time people are watching content on Hulu does not seem to have impacted the company’s litigation in 2020.
Disney, particularly its relatively recently launched Disney+ streaming platform has had similar gains to Netflix and Hulu. CNBC noted that during the first year of Disney+, which launched in November 2019, it gained 73.7 million subscribers. The Walt Disney Company, which owns Disney+, has faced a few lawsuits during 2020, including copyright, personal injury, and antitrust, among others. Disney is represented by Cravath, Swaine & Moore; Locke Lord; Mitchell Silberberg and Knupp; Munger Tolles and Olson; and Willenken.
Google-owned YouTube has also been a source of entertainment for people during the pandemic. YouTube’s litigation was relatively consistent in the first half of 2020, had a small peak in July and a much larger peak in December, but no filings in August. Some of December’s filings were antitrust-related, including the Department of Justice and others’ various suits against Google for antitrust violations. Litigation categories have also included copyright, trademark, personal injury, and others. YouTube is represented by Wilson Sonsini Goodrich & Rosati; Mayer Brown; Williams & Connolly; Munger Tolles & Olson; Ballard Spahr; Herrick Feinstein; Hogan Lovells; Lovett O’Brien.
Computer and gaming hardware manufacturer NVIDIA has faced only a small number of lawsuits during the pandemic, despite a growth in sales. In its litigation, NVIDIA is the defendant in every lawsuit; the suits range from patent and trademark to civil rights and ERISA lawsuits.
Facebook has faced a vast amount of litigation, from a large federal antitrust suit, a lawsuit over a COVID-19 party account, and facial recognition. In general, Facebook’s litigation was mostly consistent during the year and dramatically increased in December after the Federal Trade Commission and many Attorneys General filed an antitrust lawsuit against Facebook, and users also filed several antitrust lawsuits against Facebook. Facebook has mostly had litigation not related to COVID-19. Additionally, Facebook has been represented by law firms, such as Hunton Andrews Kurth; Keker & Van Nest; Wilmer Cutler Pickering Hale and Dorr; Cooley; Covington & Burling; Pincus Law; Potter Minton; and Mayer Brown.
Twitter had a variety of lawsuits in 2020 that were not directly related to the pandemic, such as privacy violations, patent claims, and along with Facebook it brought a suit to the Supreme Court. In comparison to the number of Facebook’s filings, Twitter’s is relatively small. Twitter is represented by a variety of law firms, including Wilson Sonsini Goodrich & Rosati; Gibbons; Perkins Coie; Bird Marella Boxer Wolpert Nessim Drooks Lincenberg and Rhow; Cooley; Jackson Kelly; Mayer Brown; and Orrick Herrington & Sutcliffe.
TikTok faced its share of difficulty in 2020, from lawsuits for data privacy and biometrics concerns to the ongoing saga with the U.S. government over its ban; nevertheless, TikTok usage during the pandemic has soared. According to Forbes, TikTok usage is up by 75% from the start of 2020 as of September 14, 2020, and it was the number 1 top grossing app on Apple’s App Store during Q2 2020, directly benefiting from people increasingly turning to their mobile apps during the COVID-19 pandemic. The increased usage may have also raised concerns. In May, TikTok’s litigation dramatically increased, all privacy lawsuits involving minors who use TikTok suing over concerns about its use of biometrics; the lawsuits came after various news reports about the app’s use of this information. TikTok is represented by Wilson Sonsini Goodrich & Rosati; Fish & Richardson; Covington & Burling; Gillam and Smith; Paul Hastings; Sheppard Mullin Richter & Hampton; and The Dacus Firm.
According to the Wall Street Journal, “During the pandemic, Pinterest has seen user traffic and engagement grow to record highs and also change because of lockdown(s) and social distancing measures…‘We were seeing people doing lots of interesting searches,’” Jeremy King, senior vice president of technology at Pinterest, told the Wall Street Journal. “(R)anging from ideas for work-from-home setups and kids’ activities to meal-planning and stress relief.” Pinterest noted that by June 2020 there were more than 367 million global monthly active users compared to 300 million in September 2019.
However, this increased popularity does not seem to have translated to a large amount of litigation in 2020. Pinterest has been involved in a handful of copyright, stockholder and securities, civil rights, patent, and other lawsuits in 2020. Pinterest is represented by Freshfields Bruckhaus Deringer as well as Wilson Sonsini Goodrich & Rosati.
Does News Drive Litigation or Does Litigation Drive News?
Overall, news, especially if COVID-19 related, appears to play a role in driving litigation surges in 2020. Zoom, Amazon, and TikTok are prime examples; the first two in terms of the number of filings and COVID-19 related issues and the latter for the number of filings generally. Because the court system slowed down, especially in the earlier days of the pandemic, it may have caused trends or gaps in filings as the court system slowed and filings were pushed to later dates.
In March, the American Bar Association highlighted the different ways the COVID-19 pandemic was affecting the justice system and in July, US Courts issued an update that courts were slowing down reopening plans as cases continued to rise. Docket Alarm analytics shows that litigation can be driven by the news, including and beyond the pandemic; 2020 also showed litigation significantly making the news, with widespread coverage of some of the biggest legal issues.
The analytics in this article are powered by One-Click Analytics from Docket Alarm. To learn more, schedule a demo with the Docket Alarm team.