Keeping Tabs on the Ninth Circuit
August 04, 2023 - This Week at the Ninth

This Week At The Ninth: Insurance Coverage for COVID and In-Person Informed Consent for Abortion

Person getting a vaccine

This week, the Court considers insurance coverage for business losses sustained as a result of COVID-19 and the constitutionality of Guam’s in-person informed consent requirement for abortion.


The Court affirms dismissal of Oregon Clinic’s claims that Fireman’s Fund improperly denied insurance coverage for business losses sustained as a result of the COVID-19 pandemic.

The panel: Chief Judge Murguia and Judges Forest and Sung, with Chief Judge Murguia writing the opinion.

Key highlight:  “The Parties dispute whether Oregon Clinic adequately alleged a ‘direct physical loss or damage’ to property under the Policy, and they offer competing interpretations of that phrase. Fireman’s Fund contends that ‘[t]o establish direct physical loss or damage to property, an insured must have suffered a distinct, demonstrable physical alteration to property that requires repair or replacement.’ Oregon Clinic, on the other hand, argues ‘loss’ and ‘damage’ mean different things, and that ‘loss’ can mean ‘the impairment and loss of the functional use of insured property for its intended purpose (as medical clinics) due to the Coronavirus and/or the governmental orders.’ In other words, Oregon Clinic argues that it need not allege ‘physical alteration to property’ to adequately allege a ‘direct physical loss or damage’ to property under the Policy. A plain reading of the Policy as a whole, Oregon caselaw, and a plethora of state and federal appellate decisions in COVID-19 insurance cases, including our decision in Mudpie, support Fireman’s Fund’s position.”

Background: Plaintiff Oregon Clinic held a commercial property insurance policy purchased from defendant Fireman’s Fund. In March 2020, Oregon Clinic sought coverage under the policy for business losses sustained as a result of the COVID-19 pandemic and ensuing governmental orders. Fireman’s Fund denied coverage because it concluded that Oregon Clinic’s losses were not the result of “direct physical loss or damage” to its properties, as required by the policy. 

Oregon Clinic sued, seeking a declaratory judgment of coverage and asserting assorted Oregon state law claims. The district court dismissed Oregon Clinic’s complaint with prejudice. The Ninth Circuit granted Oregon Clinic’s request to certify questions to the Oregon Supreme Court regarding the meaning of the phrase “direct physical loss or damage.” The Oregon Supreme Court declined the Ninth Circuit’s request.

Result: The Ninth Circuit affirmed. 

The Court concluded that the Oregon Supreme Court would interpret the phrase “direct physical loss or damage” to property to require physical alteration of the property. This holding followed from Oregon Supreme Court and Court of Appeals decisions interpreting the word “physical” to exclude insurance coverage for consequential or intangible damages. It was also supported by over 800 decisions nationwide, including by multiple federal courts of appeal and state supreme courts, construing the phrase “direct physical loss or damage” to exclude business losses from the COVID-19 pandemic. Indeed, the Ninth Circuit itself had reached the same conclusion in a case applying California law. Mudpie, Inc. v. Travelers Casualty Insurance Co. of America, 15 F.4th 885, 893 (9th Cir. 2021). The result in that case was additionally supported by other policy provisions, also present here, making reference to repair or replacement of the affected commercial property. 

Applying this definition of “direct physical loss or damage,” the Court held that Oregon Clinic failed to adequately allege that its property had suffered such loss or damage. It had not alleged that it needed to repair or replace its property to rectify the harm caused by COVID-19. Expenses and losses incurred to mitigate the spread of the virus were consequential damages excluded from coverage. And Oregon Clinic’s conclusory allegations that COVID-19 had caused physical damage were too conclusory to defeat a motion to dismiss. Because Oregon Clinic’s allegations depended on its incorrect interpretation of the phrase “direct physical loss or damage,” the Court concluded that any amendment would be futile and that the district court had not abused its discretion by dismissing with prejudice.


The Court upholds the constitutionality of Guam’s law requiring women to have an in-person consultation with a physician or qualified agent before having an abortion.

The panel: Judges Bea, Collins, and Lee, with Judge Lee writing the opinion.

Key highlight: “Guam has legitimate interests in requiring an in-person consultation: the consultation can underscore the medical and moral gravity of an abortion and encourage a robust exchange of information.”

Background: In 2012, Guam enacted the Women’s Reproductive Health Information Act, which requires in-person informed consent before a woman can obtain an abortion. Among other things, the Act requires a physician or “qualified person” to provide in-person disclosures of certain information. This information includes, inter alia, medical information about the risks of an abortion, the risks of carrying the child to term, and the gestational age of the fetus, as well as information about social services and other assistance available to the mother and child. Under the Act, a “qualified person” is defined as “an agent of a physician who is a psychologist, licensed social worker, licensed professional counselor, registered nurse, or physician.” 

As of 2018, there has been no physician known to provide abortions on the island of Guam. Guam, however, permits Guam-licensed physicians located elsewhere to provide medication abortions to patients in Guam using telemedicine. Plaintiffs are two Guam-licensed physicians located in Hawaii who wish to provide medication abortions to patients in Guam. In 2021, plaintiffs filed a lawsuit claiming that the in-person informed consent requirement violates patients’ right to an abortion under Roe v. Wade, 410 U.S. 113 (1973), and Planned Parenthood of Southeastern Pennsylvania v. Casey, 505 U.S. 833 (1992), as well as the Equal Protection Clause of the Fourteenth Amendment. On plaintiffs’ motion, the district court granted a preliminary injunction enjoining enforcement of the provision on the ground that it placed an undue burden on the right to abortion in violation of Casey.

Result: The Ninth Circuit reversed. 

After the district court issued the preliminary injunction in 2021, the U.S. Supreme Court overruled Roe and Casey in Dobbs v. Jackson Women’s Health Organization, 142 S. Ct. 2228 (2022). The Court held that the Constitution does not guarantee a right to abortion, so abortion-related laws are subject only to rational basis review. Under that standard, a law must be upheld as long as it is rationally related to some conceivable legitimate government purpose. The Ninth Circuit emphasized that this is a deferential standard and held that it was satisfied here. The court recognized, following the Supreme Court’s guidance in Dobbs, that states have legitimate government interests in “respect for and preservation of prenatal life at all stages of development, the protection of maternal health and safety; . . . [and] the preservation of the integrity of the medical profession.” Id. at 2284. The court held that Guam’s in-person informed consent requirement is rationally related to these interests because Guam could reasonably conclude that face-to-face disclosure facilitates clearer communication and more frank discussion than virtual conversations. For example, the court reasoned that a woman may ask more follow-up questions or feel less rushed in an in-person consultation. The court also considered that telemedicine may implicate greater ethical issues, such as privacy concerns, than in-person meetings. Thus, the Ninth Circuit held that Guam’s law survived rational basis review.

Additionally, the Ninth Circuit specifically addressed and rejected plaintiffs’ argument that the in-person consultation requirement actually undermines informed consent by increasing the likelihood that non-medical personnel would provide the required medical disclosures. Plaintiffs argued that the in-person disclosures would have to be provided by non-medical personnel because there are currently no physicians in Guam willing to provide abortions. They argued that this undermines the law’s purpose of providing women “complete and accurate information material to [their] decision to undergo an abortion.” Guam Pub. L. 31-235 (2012). The Ninth Circuit disagreed. It noted that Guam’s law does not prevent the treating physician from providing the same or additional medical information via teleconference that the in-person consultation would also provide. Guam’s statute sets a floor for the minimum disclosures required, not a ceiling. 

Finally, the Ninth Circuit rejected plaintiffs’ equal protection challenge. Plaintiffs argued that Guam’s law irrationally treats abortion providers differently from similarly situated physicians using telemedicine for other services. The Ninth Circuit again applied rational basis review because no fundamental right or suspect class was implicated. The court concluded that it was rational for Guam to treat abortion providers differently because “abortion presents different considerations than other medical procedures”—specifically, unlike other medical procedures, it “implicates fetal life in addition to the patient’s health.” Thus, the court held, the law did not violate plaintiffs’ right to equal protection under the Fourteenth Amendment.