Alert 07.13.20
The Economic Recovery: States Offer Varied Liability Protections for Businesses
Businesses continue to face uncertain liability risks from COVID-19-related lawsuits.
Alert
Alert
By Shani Rivaux,
08.20.20
Tennessee joins the growing list of states that have enacted state laws to protect businesses from liability in the COVID-19 era. On August 17, 2020, Tennessee Governor Bill Lee signed into law the Tennessee COVID-19 Recovery Act (the Act) to provide liability protections for the next two years for businesses, healthcare providers, schools, nursing homes, and other individuals in actions arising from COVID-19 related injury or loss. It covers individuals and legal entities may not be held liable for any damage, injury, or death “arising from COVID-19” in the absence of “gross negligence” or “willful misconduct,” which must be proven by clear and convincing evidence. The law broadly provides this protection to any “individual, healthcare provider, sole proprietorship, corporation, limited liability company, partnership, trust, religious organization, association, nonprofit organization . . . or any other legal entity whether formed as a for-profit or not-for-profit entity.” It has been hailed as a “sweeping” and “historic” liability shield. According to Governor Lee, the law is meant to protect businesses by preventing further economic damage to businesses hard-hit by the pandemic while still holding bad actors accountable.
To protect business from “frivolous” lawsuits, the Act also places significant prerequisites to filing a claim for injury or loss arising from COVID-19. Specifically, any complaint filed must be verified (signed under oath), detailing with specificity the defendant’s misconduct. Any complaint must also be accompanied by a certificate stating that the claimant or claimant’s counsel has obtained a signed, written medical opinion from a qualified physician, in Tennessee or from a neighboring state, opining that the defendant’s misconduct was the cause of the injury or loss. Without this certification, the court must dismiss with the complaint with prejudice.
The Act includes a broad definition of “Arising from COVID-19,” encompassing“actions in response to COVID-19,” which include: (1) Policies to prevent the spread of COVID-19; (2) testing; (3) monitoring, reporting, tracking, tracing, disclosing or investigating COVID-19 exposure; (4) using, designing, manufacturing, donating diagnostic or other health equipment or supplies; (5) closing to prevent the spread of COVID-19; (6) delaying or modifying schedules or performance of medical procedures; and (7) providing services or products in response to government use of personal protective equipment or other products necessary to protect the public.
The new law also extends immunity provided under the Tennessee Governmental Tort Liability Act for governmental entities, including institutions of higher education in connection with injuries arising from COVID-19, unless the claimant establishes by clear and convincing evidence that the injury was caused by an act or omission of the governmental entity or the entity’s employee constituting gross negligence or willful misconduct.
The Act does not affect an employee’s right to file complaints about workplace safety with the Tennessee Occupational Safety and Health Administration (TOSHA) or OSHA and employees may still bring worker’s compensation claims. The Act also does not amend, repeal, alter or affect any immunity or limitation of liability available under current law or contract.
The Act became effective on August 17, 2020 and applies to all claims arising from COVID-19 unless the complaint had already been filed and notice of claim given to the defendant on or before August 3, 2020.
A series of limited federal legislation has been passed to protect those in the health care field, but still outstanding is a federal proposal to limit Covid-19 liability nationwide. The pending federal legislation goes beyond liability claims to also give employers safe harbor from pandemic-related claims under a number of employment laws. Several states, including now Tennessee, have taken action independently while waiting for Congress to pass federal legislation.
Pillsbury is closely monitoring and analyzing the global legal, economic, policy and industry impacts of COVID-19. For our latest insights, visit our COVID-19 and Economic Impact Resource Center.