The Coronavirus Liability Immunity Act

Photo by Bill Oxford on Unsplash

On Monday, Senate Majority Leader Mitch McConnell introduced an economic relief package backed by Senate Republicans to address the need for additional federal assistance to combat the COVID-19 pandemic. Titled the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act, it includes, among other provisions, a second round of payments to individuals, a continuation of supplemental unemployment benefits (though at a level substantially lower than that proposed by the House Democrats), an expansion of the Payroll Protection Act, and a set of tax credits.

In addition, the HEALS Act includes a section that would limit the exposure of businesses and healthcare providers to liability that arises in connection with COVID-19. This particular section has its own title, and is called the “Safeguarding America’s Frontline Employees To Offer Work Opportunities Required to Kickstart the Economy Act” (or the “SAFE TO WORK Act”).

The SAFE TO WORK Act would come into play when someone is or may have been exposed to COVID-19 or is hurt by a healthcare provider in connection with COVID-19-related care, and wants to sue the person who caused (or may have caused) the exposure or the healthcare provider.

Under current law, such a lawsuit would generally have to be filed in a state court under state law. State law, not federal law, typically governs the liability of those who cause others harm. When someone seeks compensation in a state court proceeding, the person seeking the damages (the plaintiff) usually must prove the defendant’s liability by what is known as a “preponderance of the evidence.” This standard means that the plaintiff’s evidence is more likely to be true than not true. In most cases, the defendant will be liable if the evidence shows that the damages were the result of the defendant’s breach of a duty or obligation to the plaintiff, or if the defendant acted negligently (or worse). If the plaintiff can prove this by the preponderance of the evidence, they will be entitled to compensation for their loss.

As I discussed in a prior blog post, associations representing business interests have been seeking relief from this standard for COVID-19-related litigation. They fear an avalanche of lawsuits, many frivolous, arising from the pandemic. The Republicans in Congress have been sympathetic, concerned that this risk would lead many businesses to refuse to open, impairing the nation’s economic recovery.

To be clear up front and notwithstanding its name, the SAFE TO WORK Act is not designed to enhance the safety of workplaces. In large part, it applies to any circumstance where someone has been exposed to COVID-19 or feared being exposed (whether through their place of employment, at a store or business they visited, at a school, or at a house of worship). It also applies to anyone who was hurt by a healthcare provider in connection with coronavirus-related care.

While the details are complex, in broad outline, the SAFE TO WORK Act overrides all contrary state law, and does the following:

• It gives jurisdiction over any coronavirus-related litigation to the federal courts. If someone is sued in a state court for liability related to COVID-19, they have the right to have that case transferred to a federal court.

• In order to prove liability, the plaintiff must satisfy a higher standard than the usual preponderance of the evidence. Instead, the plaintiff must provide “clear and convincing evidence.” Under this standard, the evidence of liability must be substantially more likely to be true than not true. This level of proof is usually applicable only where something more than just money is at stake, such as civil liberties (for example, loss of parental rights and conservatorships).

• In the case of a lawsuit for exposure or potential exposure to COVID-19, the plaintiff must prove, by clear and convincing evidence, that the defendant engaged in gross negligence or willful misconduct that resulted in the exposure. Evidence of simple negligence is not sufficient.

  • Under the Act, “gross negligence” means a conscious, voluntary act or omission in reckless disregard of a legal duty, the consequences to the plaintiff and governmental recommendations. “Willful misconduct” means an action or omission intended to achieve a wrongful purpose, knowingly without legal or factual justification, and in disregard of known or obvious risks so great that it is highly probably that the harm outweighs the benefit.

  • As defined, these actions are much more egregious than the usual negligence standard for liability.

  • Even if the plaintiff can prove all of that, the defendant still won’t be liable if it can show it was making reasonable efforts to comply with governmental guidelines.

• In a lawsuit against a healthcare provider, the plaintiff must prove, by clear and convincing evidence, that the harm was directly caused by the provider’s gross negligence or willful misconduct (again as defined above).

• The amount of damages a plaintiff can receive is substantially limited by the Act, and even if awarded, is reduced by any amount the plaintiff received from someone else, such as their health insurer.

• In order to file suit, the plaintiff must identify in the complaint everyone they had contact with in the 14 days prior to the onset of symptoms, along with a factual basis for why the plaintiff does not believe they contracted COVID-19 from any of those other people.

The SAFE TO WORK Act contains other provisions that limit discovery, restrict class actions and multidistrict proceedings, and exclude actions taken by employers in reliance on governmental guidelines from coverage under various federal employment laws.

All of this represents a substantial imposition of federal law on a domain normally left to the states. There are, in fact, material questions about the constitutionality of the SAFE TO WORK Act; and it is no small irony that it has been proposed by the party that normally frowns on governmental overreach into states’ rights and intrastate commerce.

Taken together, the provisions of the Act would make it nearly impossible for any plaintiff to prevail in a suit for damages related to COVID-19. As it requires complaints be filed with detailed evidence showing causation before any discovery can take place, most will be unable to even bring a suit in court. Even if a plaintiff can satisfy the filing criteria, the burden to show clear and convincing evidence of gross negligence or willful misconduct would, in nearly all conceivable circumstances, be an insurmountable standard; and far higher than for any other type of civil liability.

Do employers need a shield from liability of such an unprecedented nature? In the findings in the preamble to the SAFE TO WORK Act, the Republican authors argue that the unprecedented peril of the COVID-19 pandemic provides such justification. Yet, we have seen innumerable businesses reopen throughout the nation over the last several months without any such protection. At this point, unless there is evidence that many businesses are indeed remaining closed as a consequence of fears of liability, this seems nothing more than a gift to businesses.

Gifts are not free, however. Someone must give them.

For each lawsuit that would have been filed and won but for the SAFE TO WORK Act, there will be a person who contracted COVID-19 or was hurt by a healthcare provider. The damages they suffered will remain. The only change is who bears them. Instead of the business, the losses will fall on the person sickened or hurt. Perhaps they will receive coverage from their insurance carrier, or by the government via Medicare or Medicaid. If not, the individual will bear it, or if they don’t have the funds, they may file for bankruptcy, so the loss falls on their creditors.

Why are they the right place to set this burden? Why them rather than the business that, through its own negligence, caused the harm?

If one supports the SAFE TO WORK Act, the only legitimate answer is because it benefits the nation’s economy by freeing businesses from this threat of liability and convinces them to open; and this benefit to society outweighs the costs imposed on the individuals, or their insurance carriers, or the government, or their creditors.

Yet even if this argument is correct, there is no question that for all businesses that have already reopened, the SAFE TO WORK Act is simply a gift. And even if the law results in other businesses reopening, is there any justification for imposing the losses on innocent parties to obtain a general benefit to society?

Supporters of the SAFE TO WORK Act must not only defend the need to shield business; and explain why an unprecedented intrusion into state tort law is necessary and appropriate; they must also explain why those who will end up bearing the losses should do so for the good of others.