FOR PUBLICATION

UNITED STATES COURT OF APPEALS

 FOR THE NINTH CIRCUIT

ANOTHER PLANET

ENTERTAINMENT, LLC,

Plaintiff-Appellant,

 v.

VIGILANT INSURANCE

COMPANY,

Defendant-Appellee.

No. 21-16093

D.C. No. 3:20-cv07476-VC

ORDER CERTIFYING

QUESTION TO THE

CALIFORNIA

SUPREME COURT

Filed December 28, 2022

Before: Carlos T. Bea, Sandra S. Ikuta, and Morgan

Christen, Circuit Judges.
2 ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO.

SUMMARY*

California Law

The panel certified the following question to the

California Supreme Court: 

Can the actual or potential presence of the

COVID-19 virus on an insured’s premises

constitute “direct physical loss or damage to

property” for purposes of coverage under a

commercial property insurance policy?

COUNSEL

Kirk Pasich (argued), Nathan M. Davis, and Arianna M.

Young, Pasich LLP, Los Angeles, California, for PlaintiffAppellant.

Jonathan D. Hacker (argued), Jenya Godina, and Jeremy R.

Girton, O’Melveny & Myers LLP, Washington, D.C.; Susan

Koehler Sullivan, Douglas J. Collodel, Gretchen S. Carner,

and Brett C. Safford, Clyde & Co US LLP, Los Angeles,

California; for Defendant-Appellee.

* This summary constitutes no part of the opinion of the court. It has been

prepared by court staff for the convenience of the reader.
ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO. 3

ORDER

We respectfully ask the California Supreme Court to

answer the certified question presented below, pursuant to

California Rule of Court 8.548, because we have concluded

that resolution of this question of California law “could

determine the outcome of a matter pending in [this] court,”

and “[t]here is no controlling precedent” in the decisions of

the California Supreme Court. Cal. R. Ct. 8.548(a).

This case involves an insured who sued for breach of

contract, bad faith, and fraud when its insurer denied

coverage for business income losses that the insured incurred

following government closure orders issued during the

COVID-19 pandemic. The insured alleged that the COVID19 virus was present on its premises before the orders were

issued, or would have been present had the insured not closed

its venues in compliance with the orders, and it sought

coverage under several provisions of its commercial property

insurance policy that require “direct physical loss or damage

to property” to trigger coverage. The district court dismissed

the insured’s suit for failure to state a claim. 

The issue here is whether the insured’s allegations, if

taken as true, were sufficient to show “direct physical loss or

damage to property” as defined by California law.

I

We summarize the material facts. See Cal. R. Ct.

8.548(b)(3). Another Planet is an event promoter and venue

operator that owns event venues in California and Nevada. In

2019, Vigilant Insurance Company issued a commercial
4 ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO.

property insurance policy to Another Planet for the period

from May 1, 2019 to May 1, 2020. After the COVID-19

pandemic began in early 2020, government closure orders

forced Another Planet to suspend its operations, close its

venues, and cancel events, resulting in “substantial financial

losses.” Another Planet sought and was denied coverage

from Vigilant. In response, Another Planet filed an action in

the Northern District of California, alleging breach of

contract, bad faith, and fraud.

Another Planet seeks coverage under several provisions

of its policy that require actual or imminent “direct physical

loss or damage to property”: (1) a set of four “Business

Income” provisions stating that Vigilant will cover certain

business income losses if they are caused by “direct physical

loss or damage” to property; (2) a “Civil Authority” provision

stating that Vigilant will cover losses caused by a civil

authority’s prohibition of access to covered or dependent

business premises as “the direct result of direct physical loss

or damage to property” within one mile of the premises; and

(3) a “Loss Prevention Expenses” provision stating that

Vigilant will cover costs incurred to protect a building or

personal property from “imminent direct physical loss or

damage” caused by a covered peril if the insured provides

notice of “any loss prevention action” within 48 hours. 

In its First Amended Complaint, Another Planet alleged

that the COVID-19 virus “was present at various times on and

in its insured properties, or would have been present had it

not been for the closures of its properties directed to curb the

spread of SARS-CoV-2.” It further alleged that aerosolized

droplets of the COVID-19 virus can “stay suspended in air

and infective for at least 16 hours” and can remain active on
ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO. 5

inert surfaces for at least 28 days, meaning the droplets

“physically alter the air and airspace in which they are present

and the surfaces of both the real and personal property to

which they attach, constituting physical loss or damage.” 

Another Planet claimed that the presence of COVID-19

droplets “can render both real and personal property unusable

for its intended purpose and function, constituting physical

loss or damage.” The complaint also noted that minimizing

the spread of COVID-19 “requires steps to be taken,”

including “physical distancing, regular disinfection, air

filtration, and further physical alterations, such as installation

of physical barriers restricting the movement of the

aerosolized droplets.”

Vigilant filed a motion to dismiss under Federal Rule of

Civil Procedure 12(b)(6), arguing that Another Planet had not

sufficiently alleged direct physical loss or damage to

property. The district court agreed and dismissed the case

with prejudice after giving Another Planet one opportunity to

amend its complaint. As relevant to this request for

certification, the district court concluded that it “seem[ed]

unknowable” whether the COVID-19 virus was actually

present on Another Planet’s premises. 

II

Because California law governs interpretation of the

policy and the California Supreme Court has not yet

considered the issue, we “must determine what result [that]

court would reach based on state appellate court opinions,

statutes and treatises.” Mudpie, Inc. v. Travelers Cas. Ins.

Co. of Am., 15 F.4th 885, 889 (9th Cir. 2021) (quoting Diaz

v. Kubler Corp., 785 F.3d 1326, 1329 (9th Cir. 2015)). “We
6 ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO.

will ordinarily accept the decision of an intermediate

appellate court as the controlling interpretation of state law.” 

Id. (quoting Tomlin v. Boeing Co., 650 F.2d 1065, 1069 n.7

(9th Cir. 1981)). Here, however, two different divisions of

the Second District of the California Courts of Appeal have

issued conflicting decisions regarding whether allegations

like Another Planet’s suffice to state a viable claim for “direct

physical loss or damage to property.”

Two months after the district court dismissed Another

Planet’s suit, Division 4 of the Second District of the

California Courts of Appeal decided United Talent Agency v.

Vigilant Insurance Co., which involved claims for coverage

under insurance provisions identical to those in Another

Planet’s policy. 293 Cal. Rptr. 3d 65, 68 (Ct. App. 2022). In

United Talent Agency, the insured alleged that the COVID-19

virus had been present on its insured premises or would have

been present but for the government closure orders and the

insured’s efforts to reduce and prevent the virus’s presence;

that several of the insured’s employees, their spouses, and

their dependents had tested positive for COVID-19; and that

COVID-19 droplets “land on and adhere to surfaces and

objects” and thus “physically change the property by

becoming part of its surface.” Id. at 69. The insured in

United Talent Agency compared COVID-19 to “mold,

asbestos, mudslides, smoke, oil spills, and other similar

elements that cause property damage, although they later

might be removed, cleaned, or remediated.” Id.

The Court of Appeal in United Talent Agency held that

the superior court properly sustained the insurer’s demurrer,

concluding that the insured did “not establish[] that the

presence of the virus constitutes physical damage to insured
ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO. 7

property.” Id. at 76–80. The court acknowledged the

existence of cases concluding that the presence of a “physical

force” like “smoke, ammonia, odor, or asbestos” can

constitute direct physical damage by “render[ing] real

property uninhabitable or unsuitable for its intended use.” Id.

at 77 (quoting Inns-by-the-Sea v. Cal. Mut. Ins. Co., 286 Cal.

Rptr. 3d 576, 589 (Ct. App. 2021)). But the court reasoned

that the presence of COVID-19 is only “‘short lived’

contamination that can be addressed by simple cleaning” and

thus does not constitute direct physical loss or damage. Id. at

76–77 (quoting Inns-by-the-Sea, 286 Cal. Rptr. 3d at 588

n.17).

Three months after United Talent Agency, Division 7 of

the Second District of the California Courts of Appeal came

to a different conclusion in Marina Pacific Hotel & Suites,

LLC v. Fireman’s Fund Insurance Co., a case involving the

denial of coverage under a policy that also contained the same

“direct physical loss or damage” language at issue here. 296

Cal. Rptr. 3d 777, 780 (Ct. App. 2022). In Marina Pacific,

the insureds alleged that the COVID-19 virus causes a

“distinct, demonstrable or physical alteration to property”

because it “actually bonds and/or adheres to . . . objects

through physico-chemical reactions involving, inter alia,

cells and surface proteins.” Id. at 781. The insureds claimed

that the COVID-19 virus had been present “on a variety of

physical objects in [their] insured properties, including

furniture, countertops, walls, bedding, appliances and food

and other packaged items, as well as in the air,” and that they

had disposed of property damaged by the virus. Id. at

781–82. Further, they alleged that “public health authorities

ha[d] ordered that Hotel Erwin be evacuated, decontaminated,
8 ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO.

or disinfected” after several employees of the hotel tested

positive for COVID-19. Id. at 782.

The Court of Appeal held in Marina Pacific that

“[a]ssuming . . . the truth of those allegations, even if

improbable, absent judicially noticed facts irrefutably

contradicting them, the insureds ha[d] unquestionably

pleaded direct physical loss or damage to covered property

within the definition articulated in MRI Healthcare—a

distinct, demonstrable, physical alteration of the property.” 

Id. at 787–90 (citing MRI Healthcare Ctr. of Glendale v.

State Farm Gen. Ins. Co., 115 Cal. Rptr. 27, 37–38 (Ct. App.

2010)). The court acknowledged that United Talent Agency

was “[n]ot distinguishable” but maintained that the court

there improperly disregarded the insured’s factual allegations

as improbable when evaluating the insurer’s demurrer. Id. at

790.

On appeal, Another Planet highlights this split in

authority and urges us to adopt Marina Pacific’s holding

because United Talent Agency “misapplied California law by

making factual conclusions contrary to those alleged in the

operative complaint.” Vigilant disagrees, arguing that we

should follow United Talent Agency because Marina Pacific

“is an outlier decision at odds with an overwhelming body of

precedent.” Vigilant contends that Marina Pacific “gave

short shrift” to the court’s ability to “consider common-sense

realities at the demurrer stage.” 

The answer to this question “could determine the outcome

of [this] matter,” Cal. R. Ct. 8.548(b)(4), because if the

allegation of the presence or potential presence of the

COVID-19 virus is sufficient to show “direct physical loss or
ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO. 9

damage to property,” the district court erred in dismissing

Another Planet’s complaint for failure to state a claim, and

we would remand to the district court for further proceedings. 

Alternatively, if the allegation is not sufficient, we would

affirm the district court.

III

In light of the foregoing discussion, and because the

answer to this question “could determine the outcome of a

matter pending in [this] court,” Cal. R. Ct. 8.548(a), we

respectfully certify to the California Supreme Court the

following question:

Can the actual or potential presence of the

COVID-19 virus on an insured’s premises

constitute “direct physical loss or damage to

property” for purposes of coverage under a

commercial property insurance policy?

We do not intend our framing of this question to restrict

the California Supreme Court’s consideration of any issues

that it determines are relevant. If the California Supreme

Court decides to consider the certified question, it may in its

discretion reformulate the question. Broad v. Mannesmann

Anlagenbau AG, 196 F.3d 1075, 1076 (9th Cir. 1999). We

will accept the California Supreme Court’s decision on this

question. See Cal. R. Ct. 8.548(b)(2).

If the California Supreme Court accepts review of the

certified question, we designate Appellant Another Planet

Entertainment, LLC as the petitioner pursuant to California

Rule of Court 8.548(b)(1).
10 ANOTHER PLANET ENTERTAINMENT, LLC V. VIGILANT INS. CO.

The clerk of our court is hereby ordered to transmit

forthwith to the California Supreme Court, under official seal

of the United States Court of Appeals for the Ninth Circuit,

a copy of this order and all relevant briefs and excerpts of

record, along with a certificate of service on the parties. Cal.

R. Ct. 8.548(c), (d).

Further proceedings in our court are stayed pending the

California Supreme Court’s decision on whether it will accept

review, and if so, receipt of the answer to the certified

question. This case is withdrawn from submission until

further order from this court. The Clerk is directed to

administratively close this docket, pending further order.

The panel will resume control and jurisdiction on the

certified question upon receiving an answer to the certified

question or upon the California Supreme Court’s decision to

decline to answer the certified question. Within 10 days after

the California Supreme Court decides whether or not to

accept the certified question, the parties shall file a joint

report informing this court of the decision. If the California

Supreme Court accepts the certified question, the parties shall

file a joint status report every six months after the date of the

acceptance, or more frequently if circumstances warrant. 

It is so ORDERED.