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First Look: Business Liability Protection in Senate Republican’s COVID-19 Relief Bill
Wednesday, July 29, 2020

On Monday, Senate Republicans unveiled legislation, the “HEALS Act,” to provide additional coronavirus relief aid as a follow up to the CARES Act passed in March. One of the main focuses of the bill is liability protection for businesses, which has been a debated issue since the passage of the first relief bill.

The legislation, if enacted, would provide a monumental challenge for plaintiffs alleging coronavirus-related injury. In short, it provides businesses, schools and other institutions with favorable presumptions of good faith compliance with safety standards and guidance, and requires plaintiffs to prove gross negligence or willful misconduct  (that a defendant acted or failed to act with a “conscious, voluntary [and] reckless disregard” of its legal duties) to establish liability. Some of the details of the bill specifics include:

A Shot At Plaintiffs’ Bar

The bill finds that “one of the chief impediments to the continued flow of interstate commerce as this public health crisis has unfolded is the risk of litigation,” where businesses, schools and other institutions “confront the risk of a tidal wave of lawsuits.”  In an all-too-clear shot to plaintiffs’ lawyers, a stated purpose of the legislation is to “prevent litigation brought to extract settlement and enrich trial lawyers…”, and to prevent “[lining] the pockets of the trial bar.” The bill is not only bark, it also has bite – plaintiffs (and their attorneys) deemed to assert meritless claims may be subject to punitive damages and civil penalties up to $50,000.

Included Actions and Tough Legal Standards

The bill defines a “coronavirus exposure action” as a civil action brought by a person who has suffered or is at risk of suffering personal injury against a person or entity engaged in “business, services, activities or accommodations,” whether for profit or not, alleging an “actual, alleged, feared, or potential for exposure to coronavirus” occurring in the course of business or provision of services. The bill also includes protection for “medical liability actions” brought against health care providers, including volunteers, which allege harm arising out of the provision or omission of coronavirus-related health care services. The legislation establishes exclusive jurisdiction in the U.S. District Court and sets a one year statute of limitations for bringing applicable civil actions.

Plaintiffs bringing coronavirus exposure actions must prove each of the following three elements, by clear and convincing evidence:

  1. In engaging in the businesses, services, activities, or accommodations, the individual or entity was not making reasonable efforts in light of all the circumstances to comply with the applicable government standards and guidance in effect at the time of the actual, alleged, feared, or potential for exposure to coronavirus;
  2. the individual or entity engaged in gross negligence or willful misconduct that caused an actual exposure to coronavirus; and
  3. the actual exposure to coronavirus caused the personal injury of the plaintiff.

Compliance with Conflicting Standards

Other than compliance with mandatory standards or regulations issued by governing bodies with jurisdiction over the individual or entity, the bill makes clear that reasonable efforts to comply with any set of governmental standards or guidance is sufficient, even where other such standards conflict. Individuals and entities are presumed to have made reasonable efforts to comply with applicable government standards if they “maintained a written or published policy on the mitigation of transmission of coronavirus” that complied with such standards. To overcome this presumption, plaintiffs must establish that the individual or entity did not, in fact, comply with any such written policy and that exposure was caused by a “conscious, voluntary act or omission” by the individual or entity. For medical liability actions, only proof of gross negligence or willful misconduct causing personal injury is required, with no provision requiring compliance with applicable government standards. Resource or staff shortages will not constitute gross negligence or willful misconduct.

Stringent Pleading Requirements

Plaintiffs bringing coronavirus-exposure lawsuits must specifically include all people and places that the plaintiff visited or had contact with in the 14 days prior to the onset of symptoms. The pleading must specifically state the factual basis for why the listed persons and places were not the cause of the alleged injury. Additionally, plaintiffs must include supporting medical records and an affidavit from an independent, non-treating expert physician supporting the plaintiff’s claims. While not specifically stated, the required expert affidavit would presumably include specific causation opinions resulting from the alleged exposure and would need to rule out alternative causes of exposure. Further, the bill provides defendants with a right to pursue punitive damages against plaintiffs who file meritless claims.

Limited Damages

The bill establishes several liability for any judgment against a defendant proportionate to their responsibility, unless a jury finds that a defendant acted with specific intent to injure or knowingly committed fraud. The determination of proportionate liability includes a plaintiff’s own contributory negligence. Damages are limited to only economic damages. However, where a defendant is found to have caused the injury through willful misconduct, both non-economic and punitive damages may be awarded, although such damages are capped by the amount of compensatory damages.

Employer Protections

Employers are provided with liability protection from alleged violations of federal employment law including OSHA, labor law, age discrimination, civil rights and ADA, if the employer was “relying on and generally following applicable government standards and guidance” and attempted to satisfy such standards or guidance. The bill also provides protection to property owners from claims under the Americans with Disabilities Act for failure to comply with public accommodation law where the risk of harm necessitates modification of policies, practices or procedures required by the ADA.

Long-Term Protection

The legislation preempts and supersedes state law relating to coronavirus-related personal injuries affording any lesser protection that that stated in the bill, excluding workers compensation laws. While the bill provides for the establishment of class-actions and multidistrict litigation, the legislation prohibits trials from taking place unless all parties consent. The liability protections would remain in effect until October 1, 2024 or upon a declaration that the coronavirus no longer constitutes a public health emergency, whichever comes first.

The bill clearly seeks to provide comfort to businesses, schools, employers, medical service providers and other institutions that might otherwise fear the possibility of civil liability for coronavirus exposure claims. It is anticipated that Congressional Democrats will not approve the bill as proposed, and what, if any, liability protections will be included in any final bill remains to be seen.

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