New bill could upend protections against COVID-related lawsuits

Accidents happen. Nonetheless, there is a desire to ascribe blame or fault. It has been asserted, in the absence of evidence, that the COVID-19 Pandemic will open the floodgates for COVID-19 related lawsuits against businesses. As a result, companies will hesitate to re-open. Senate Bill 4317, one of several pandemic-related proposals Senate Republicans introduced on July 27, 2020, co-sponsored by Senate Majority Leader Mitch McConnell (R-Ky.) and Sen. John Cornyn (R-Texas), provides what is tantamount to absolute immunity from COVID-19 related lawsuits under the pretense of precluding unsubstantiated COVID-19 claims and protecting health care professionals. 

Essentially, Safeguarding America’s Frontline Employees to Offer Work Opportunities Required to Kickstart the Economy Act, (Safe to Work Act) provides obstacles for bringing legitimate COVID-19 related lawsuits. This law increases the evidentiary bar and it would require plaintiffs to enumerate and provide details as to “all” locations and contacts; changes the liability standard from the negligence standard of “preponderance of the evidence” to “clear and convincing evidence,” and it proposes many other hurdles.

Sen. McConnell asserts these provisions, which provides broad immunity, is crucial to facilitate the U.S. economic re-emergence from the pandemic-induced economic recession.

By raising the bar, these provisions shift COVID-19 risks from firms to employees and consumers. This is akin to the classical moral hazard problem. Even though a business is in a better position to efficiently manage these COVID-19 related risks as would be typical under current law, the shifting of risk to employees and consumers would not necessarily be conducive to a safe and secure work environment.

In its entirety, the preponderance of provisions contained in the bill is nothing more than a business liability shield. It also conflates its business liability shield with certain health care employee protection provisions. It is an attempt to distract from the issue; it is a false equivalency — the health care professional is trying to provide care and treatment for COVID-19, and the liability shield could result in the spread of COVID-19 because of the moral hazard problem created by the shield.

One could not help but note that it could potentially expose health care professionals and other essential employees to substandard and unreasonable practices by employers, and, thus, not thwart the spread of COVID-19. One could argue, nonetheless, that firms will have an incentive to engage in reasonable practices for fear of being identified as a “hotspot” for COVID-19, but, based upon casual observation, that does not appear to be the case. The preceding all seems contrary to the Senate Bill 4317’s title: Safe to Work Act. 

Law professors Daniel Hemel and Daniel Rodriguez proposed a business relief from liability in exchange for notifying of exposure rather than raising the bar for COVID-19 linked lawsuits. In essence, their proposal provides a limitation of liability mechanism.

Their proposal is laudable; they attempt to create an incentive to foster proactive contract-tracing efforts. Ex post notification is not new for liability mitigation and may be an appropriate mechanism for addressing and alleviating COVID-19 public health issues. Hemel and Rodriguez recognize there may be limitations to their proposal; even under their standard, a party that is injured could be precluded recovery. This need not be the only arrow in the quiver. A “no-fault” type fund could be established for these purposes. Alternatively, they could have proposed punitive damages for failing to notify. But, these are not the only potential additional arrows. 

Taking a page from the assistant secretary of Health and Human Services Admiral Brett P. Giroir, M.D.’s playbook, attorneys like physicians could be part of the solution. One can infer from Admiral Giroir’s interview on Aug. 2, 2020, with Chuck Todd on the Meet the Press that it is the responsibility of physicians to use evidence-based, science-based practices when prescribing medications for purposes of COVID-19. The admiral rejected hydroxychloroquine; “[s]o, at this point, we don’t recommend that as a treatment. There’s no evidence to show that it is.” In other words, physicians should act as governors. 

Similarly, attorneys, particularly the plaintiff’s counsels, could act as governors and ensure legitimate claims are brought forth for redress. Arguably, there is cause for concern; history and causal observation seem to suggest that at least some attorneys are incapable of serving as governors. And, in today’s environment, Senate Bill 4317 asserts that unsubstantiated lawsuits “risk diverting taxpayer money provided under the CARES Act . . . from its intended purposes to the pockets of opportunistic trial lawyers.” 

This bill is misguided, misdirected, and misnamed if the objective is to provide a safe and secure environment. Businesses should be able to re-open absent fear from frivolous demand letters for “remuneration in exchange for settling, releasing, waiving, or otherwise not pursuing a claim,” while consumers and employees should feel secure that businesses have an incentive to protect the public health. The bar for determining liability and assessing damages on COVID-19 claims brought to court need not be raised to what is equivalent to blanket immunity.

As it is, success for consumers against a business for COVID-19 related claims in court is far from assured even with current negligence standards, and for employees, the same is true under applicable law, e.g., workers’ compensation.

Taking a sledgehammer to tort law’s reasonableness standard and other requirements seems inappropriate and overzealous; a balance must be achieved and maintained to protect the public health while discouraging frivolous lawsuits. Liability rules should allocate risk to the party that is in the best position to manage such risk and not raise the bar to preclude legitimate claims. It is time for attorneys to be part of the solution, another arrow in the quiver; such an arrow could take the form of a “nudge,” incentive, but not to the point of preventing legal representation.

We don’t need to sacrifice public health for economic re-engagement. Public health and safety, and economic re-engagement need not be mutually exclusive. In addition, the provisions of the bull should not be used to hold hostage, to thwart appropriate, fiscal policy relief in our current COVID-19 public health induced economic crisis. The continued delay could severely impair and prolong economic recovery. 

Brian A. Marks, J.D., Ph.D., is the executive director entrepreneurship and innovation program and senior lecturer, Department of Economics and Business Analytics, Pompea College of Business, University of New Haven.