NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS NOV 25 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

WASHINGTON STATE CONVENTION No. 24-1889

CENTER PUBLIC FACILITIES DISTRICT,

D.C. No. Plaintiff-Appellant, 2:23-cv-01386-BJR

v.

MEMORANDUM*

EMPLOYERS INSURANCE COMPANY

OF WAUSAU,

Defendant-Appellee.

Appeal from the United States District Court for the Western District of Washington Barbara J. Rothstein, District Judge, Presiding

Submitted November 21, 2024** Seattle, Washington

Before: MILLER, LEE, and H.A. THOMAS, Circuit Judges.

Washington State Convention Center Public Facility District (WSCC) appeals

the district court’s dismissal of its complaint seeking insurance coverage from

Employers Insurance Company of Wausau. Our jurisdiction arises under 28 U.S.C.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). § 1291. We review de novo a district court’s order granting a motion to dismiss, and

we affirm. Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010).

Due to COVID-19 government restrictions, WSCC was not able to rent out or

otherwise use its convention center in downtown Seattle. WSCC alleges the Civil

and Military Authority provision of its insurance policy covers its business

interruption losses that resulted from COVID-19 restrictions. That provision affords

coverage, subject to several exclusions, for losses “sustained . . . during the period

of interruption if an order of civil or military authority prohibits access to a covered

location provided such order is caused by physical loss or damage of the type insured

by this Policy at a covered location.” The period of interruption begins “at the time

of such direct physical loss or damage” and “[c]ontinu[es] until the order is lifted.”

Under Washington law, the insured bears the burden of showing coverage

exists, and the insurer bears the burden of showing an exclusion applies. See Hill &

Stout, PLLC v. Mut. of Enumclaw Ins. Co., 515 P.3d 525, 531 (Wash. 2022) (en

banc). Courts applying Washington law resolve ambiguity in favor of the insured

and enforce unambiguous clauses as written. Id.

WSCC’s claim fails for two reasons. First, WSCC fails to show coverage

exists for its losses under the Civil or Military Authority provision of its policy.

Second, the policy’s contamination exclusion bars coverage for WSCC’s losses.

1. WSCC cannot establish coverage under the Civil or Military Authority

2 provision because neither COVID-19 nor Washington’s COVID-19 restrictions

caused “physical loss or damage” to WSCC’s property. In Hill & Stout, the Supreme

Court of Washington acknowledged the national consensus that “COVID-19 and

related governmental orders do not cause physical loss of or damage to a property

and do not trigger coverage under similar policy language.” 515 P.3d at 534. While

it left open the possibility of “direct physical loss under a theory of loss of

functionality” when the plaintiff alleges some physical effect on its property, this

case does not involve such a theory. Id. at 533–34. Here, the insurance policy

requires the civil or military order to be caused by physical loss or damage. But the

government’s COVID-19 proclamations purported to respond to the spread of

COVID-19 in Washington, not to physical damage at any property, let alone the

insured convention center. The lack of causation thus forecloses WSCC’s claim for

insurance coverage.

2. WSCC’s claim for coverage fails for another independent reason. The

policy excludes coverage for “any costs due to contamination including the inability

to use or occupy property.” The policy defines contaminants to include “[a]ny . . .

virus[ or] disease[-]causing or illness[-]causing agent.” Because COVID-19 is an

infectious disease caused by the SARS-CoV-2 virus, this provision precludes

coverage for COVID-19-related business losses.

3 We AFFIRM the district court’s order granting Wausau’s 12(b)(6) motion to

dismiss WSCC’s claims.

4