The U.S. Court of Appeals for the Sixth Circuit affirmed a district court's dismissal of a lawsuit seeking coverage for pandemic-related business losses, ruling against Walters & Mason Retail Inc. in its dispute with Hartford Fire Insurance Company. The decision, filed January 27, 2026, represents another victory for insurers in the ongoing litigation over COVID-19 business interruption claims.
Walters & Mason Retail Inc., which operates under the business name Altar'd State, had purchased a comprehensive insurance policy from Hartford Fire Insurance Company. When the company filed claims for pandemic-related business losses across multiple states, Hartford denied the claims. The retailer subsequently sued Hartford in federal court, alleging the insurer breached its policy by denying coverage for the losses.
The case began in the U.S. District Court for the Eastern District of Pennsylvania, where Walters & Mason initially filed suit. However, the company successfully moved to transfer the case to the U.S. District Court for the Eastern District of Tennessee, where the litigation proceeded.
Hartford Fire Insurance Company responded to the lawsuit by filing a motion to dismiss the complaint entirely. The district court conducted a comprehensive choice-of-law analysis to determine which state's laws should govern the insurance coverage dispute. This analysis proved crucial to the court's ultimate decision.
The district court concluded that Walters & Mason's claims would fail under both Pennsylvania and Tennessee law. This finding effectively resolved the case in Hartford's favor, leading to the dismissal of the complaint without the need for extended litigation on the merits of the coverage dispute.
On appeal, Walters & Mason argued that the district court committed legal error by limiting its choice-of-law analysis to Pennsylvania and Tennessee. The retailer contended that the court should have considered the laws of all 22 states where it experienced claimed losses. This argument suggested that some of those state laws might have been more favorable to coverage claims than the Pennsylvania and Tennessee laws the district court applied.
The Sixth Circuit panel, consisting of Circuit Judges Cole, Mathis, and Hermandorfer, rejected Walters & Mason's argument and affirmed the district court's ruling. Circuit Judge Cole authored the majority opinion, with Circuit Judges Mathis and Hermandorfer concurring. Additionally, Circuit Judge Mathis filed a separate concurring opinion, though the details of that concurrence were not included in the available portions of the decision.
The Sixth Circuit's affirmance means Hartford Fire Insurance Company successfully defended against the coverage claims without having to pay for the pandemic-related business losses claimed by Walters & Mason. The decision also validates the district court's approach to the choice-of-law analysis, confirming that courts need not necessarily consider the laws of every state where a policyholder experienced losses.
This ruling contributes to a growing body of federal appellate precedent addressing COVID-19 insurance coverage disputes. Since the pandemic began, courts across the country have grappled with numerous lawsuits filed by businesses seeking coverage for losses related to government shutdown orders and reduced customer traffic during the health crisis.
The outcome in *Walters & Mason Retail, Inc. v. Hartford Fire Insurance Company* aligns with the general trend in COVID-19 insurance litigation, where courts have frequently sided with insurers in denying coverage for pandemic-related losses. Many courts have found that standard business interruption policies were not designed to cover losses from viral pandemics or government shutdown orders.
The decision also highlights important procedural considerations in multi-state insurance disputes. When businesses operate across multiple jurisdictions and experience losses in various states, questions arise about which state's laws should govern coverage disputes. The Sixth Circuit's affirmance suggests that courts have discretion in conducting choice-of-law analyses and need not examine the laws of every potentially relevant jurisdiction.
For the insurance industry, the decision provides additional precedent supporting the position that standard commercial policies do not typically cover pandemic-related business interruption losses. This precedent may be cited in similar disputes pending in federal courts across the country.
For businesses that purchased commercial insurance policies, the decision reinforces the importance of carefully reviewing policy language regarding coverage exclusions and limitations. The ruling also demonstrates the challenges businesses face when seeking coverage for losses that insurers argue fall outside the scope of traditional business interruption coverage.
The case number is 25-5596, and the decision was marked as not recommended for publication, indicating it may have limited precedential value beyond the specific parties involved. However, the ruling still contributes to the developing body of law addressing pandemic-related insurance coverage questions that have affected businesses nationwide since 2020.