Businesses continue to face uncertain liability risks from COVID-19-related lawsuits.
With the continued public health threat posed by COVID-19, many businesses that have remained open or that are planning their reopening face legal risks of civil liability relating to employees and consumers who are injured as a result of the coronavirus contracted on their premises. As part of the federal pandemic response, the federal government has included legislation and issued administrative declarations providing limited liability protections aimed specifically at health care providers and manufacturers and distributors of health care products used for the current public health crisis.
Much of the delay in a robust federal response stems from ongoing political debates in Congress. On the one hand, Republicans have been arguing for blanket liability protections for businesses that reopen. In May, Senate Majority Leader Mitch McConnell (R-Ky.) declared that the GOP would not support a new coronavirus relief bill unless it included liability protections for business owners from lawsuits related to COVID-19 exposure. In early July, McConnell outlined his intention to seek a five-year liability shield for businesses, health care providers, universities and schools that would be retroactive to December 2019 as an integral part of the next COVID-19 legislation. Democrats have reportedly been strongly opposed to such liability protections. While some Democratic senators, including Sen. Christopher Coons (D- Del.) and Sen. Doug Jones (D-Ala.), have expressed support for federal legislation to provide businesses with liability protection in exchange for businesses following national standards to protect workers, House Democrats have signaled that they would not agree to proposals limiting a worker’s right to sue. Consequently, new legal protections for COVID-19-related liabilities adopted at the federal level so far have been limited.
Despite the ongoing debate, some areas of compromise have been achieved and some federal legislation has been passed offering civil liability protections as part of the larger federal COVID-19 response packages.
THE FEDERAL RESPONSE
Coronavirus Aid, Relief, and Economic Security Act (CARES Act): One of the main pieces of federal COVID-19 legislation, the CARES Act includes several provisions limiting civil liability for health care-related industries during the public health emergency. Section 3103 of the CARES Act amends a provision of the Public Health Service Act (PHS Act) to extend federal liability protection to manufacturers of “respiratory protection devices” during the public health emergency.
With surges in new cases scattered across the country, there is increased demand for health care workers in different states. To protect health care workers looking to cross state lines to volunteer their services, the CARES Act also includes a “Good Samaritan” provision to protect from civil liability those interstate volunteer health care professionals who provide health care services within the scope of their licensing or certification in response to the COVID-19 public health emergency. This provision expands the protections already found in the Volunteer Protection Act of 1997 and explicitly preempts all state laws except those that provide even greater protection from liability. Notably, this liability protection does not extend to non-volunteer health care professionals. The protection also does not cover gross negligence or reckless conduct.
Public Readiness and Emergency Preparedness Act (PREP Act) Declaration: Similar protections are found in the administrative declaration of the Secretary of Health and Human Services (HHS) issued on March 17, 2020, under the PREP Act. Enacted on December 30, 2005, the PREP Act amended the Public Health Service Act (PHS Act), authorizing the Secretary of HHS to issue a declaration to provide liability immunity to certain individuals and entities against any claim of loss arising out of the manufacture, distribution, administration, or use of a covered “countermeasure” in response to a public health emergency.
The March 17, 2020, Declaration applied this authority to the COVID-19 pandemic. Pursuant to the Declaration, covered persons are immune from “any claim or loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure.” This includes losses for serious injury, death, to fear of future personal injury and even property damage. However, conduct exceeding mere negligence or recklessness is not immune from liability.
Individuals/Businesses covered under the Declaration include:
The Declaration further defines covered “countermeasures” as any antiviral drug, biological, diagnostic, device, or vaccine, “used to treat, diagnose, cure, prevent, or mitigate COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, or any device used in the administration of any such product, and all components and constituents materials of any such product.”
Coverage for immunity, however, is limited to:
Families First Coronavirus Response Act (FFCRA): Similar to the CARES Act, the FFCRA also amends the PHS Act. It includes a list of protective devices subject to liability immunity provisions, to include protection against liability for certain manufacturers of respiratory protective equipment.
Section 6005 of the Act provides that the protection applies to certain respiratory protective devices. Specifically, the protection applies to those devices approved by the National Institute for Occupational Safety and designated by the Secretary of HHS as a priority for use during the public health emergency.
This provision allows manufacturers to supply masks for health care workers and patients without fear of legal liability in the event the masks fail. The protection is set to remain in place until October 1, 2024. There is however no protection in cases of willful misconduct.
States have taken a variety of approaches in enacting civil liability protections for various businesses ranging from premise liability protections to industry-specific protections. The lagging federal government response in passing more comprehensive legislation providing clear protections for businesses outside of the health care context leaves businesses, particularly those operating across state lines, to disentangle a web of different state laws offering differing standards of protection—or none at all.
For more information, please reach out to your regular Pillsbury contact or the authors of this client alert.
Pillsbury’s experienced multidisciplinary COVID-19 Task Force is closely monitoring the global threat of COVID-19 and providing real-time advice across industry sectors, drawing on the firm’s capabilities in crisis management, employment law, insurance recovery, real estate, supply chain management, cybersecurity, corporate and contracts law and other areas to provide critical guidance to clients in an urgent and quickly evolving situation. For more thought leadership on this rapidly developing topic, please visit our COVID-19 (Coronavirus) Resource Center.