Congress needs to pass tort reform to protect CARES Act funding

Predators are lining up to pillage the trillions of dollars provided in the Coronavirus Aid, Relief, and Economic Security (CARES) Act from American workers, families and small businesses.

The Department of the Treasury reports that over $2 trillion have been distributed under The CARES Act to provide “fast and direct economic assistance for American workers and families, small businesses, and preserves jobs for American industries.” Under the CARES Act Provider Relief Fund, The Department of Health and Human Services is distributing $175 billion to health care providers and hospitals on the front lines of the COVID-19 outbreak.

But with this much money available and distributed so rapidly across the nation, it is inevitable that deceitful characters are setting their sights on these funds for their own coffers. They can do this through outright frauds, or they can distort the civil tort system to their benefit.

The Merriam Webster Dictionary defines a tort as “a wrongful act other than a breach of contract for which relief may be obtained in the form of damages or an injunction.” The Cornell Law School tells us “The primary aims of tort law are to provide relief to injured parties for harms caused by others, to impose liability on parties responsible for the harm, and to deter others from committing harmful acts.”

Kelly Tyko reported the gross abuse of the legal system in “Want free money? Sign up for class-action lawsuit settlements.” She describes how easy it is for people to join and profit from class action lawsuits — 99 percent of the people who join such suits never submit any proof justifying their qualification. The website for “Top Class Actions,” founded by Scott Hardy, states: “If you believe that your rights were violated by a company as a result of the coronavirus pandemic, you may be entitled to compensation.” The site then lists some of the current “Coronavirus lawsuit investigations” as examples.  

In “Uses And Abuses Of Tort Law In The COVID-19 Era” for Forbes, Michael Krauss writes “Tort lawyers, both plaintiff-side and defense attorneys, predict an onslaught of cases.” He then continues to list potential abuses of tort law spawned by the COVID-19 pandemic. Reuters reported that Christina Paxson, the president of Brown University stated “We’re in uncharted territory… I think many institutions are very nervous that even if they play by the rules scrupulously they will still be subject to class action lawsuits.”

From “Know your Facts About Tort Reform” we learn that “In a general sense, tort reform advocates believe that an excess of the 15+ million lawsuits filed annually in the United States of America are ‘frivolous’ and superfluous.”

The American Tort Reform Association (ATRA) reflects that the tort system is a $429 billion industry in America today, and “Aggressive personal injury lawyers target certain professions, industries and individual companies as profit centers.” The ATRA report “The Plaintiffs’ Lawyer Quest for the Holy Grail: The Public Nuisance ‘Super Tort’” states “[Public nuisance] lawsuits are attempts to subject businesses to liability over societal problems… Their mantra is, ‘Let’s make “Big Business” pay.’” The report concludes “[Public nuisance lawsuits] seek to generate massive liability over a complex crisis despite the lack of legal or factual grounding for targeting the companies sued.”

The ATRA website warns that “Some personal injury lawyers, however, view individuals exposed to COVID-19 as a large new pool of plaintiffs, and health care providers and businesses that aid in the response effort or provide essential services as defendants to cast blame. Personal injury law firms are already recruiting individuals to ‘sue now’ even if they have not contracted the disease.” It goes on to list 18 issues they believe are in need of tort reform.

The funds provided under the CARES Act are designed to help American workers and their families, to help small businesses preserve jobs, to help health care workers and health care facilities impacted by the unprecedented nationwide pandemic. The funds were intended for distribution to those most in need.

Unfortunately, we already see the vultures circling, sensing a lucrative target for their class action lawsuits, looking to fleece these funds from those who are in need.

Congress has the opportunity and the obligation to pass meaningful tort reform to restrict these predators from abusing the legal system and from poaching funds intended for the American people and legitimate businesses to alleviate the economic misery caused by the pandemic.

John M. DeMaggio is a retired Special Agent in Charge for the U.S. Postal Service Inspector General. He is also a retired Captain in the U.S. Navy, where he served in Naval Intelligence. The above is the opinion of the author and is not meant to reflect the opinion of the U.S. Navy or the U.S. Government.