Pressure Mounts for Federal Legislation Protecting Businesses from COVID-19 Lawsuits, but Don’t Count on It

New Jersey Law Journal

Thomas Kane, Member of the Firm in the Litigation and Health Care and Life Sciences practices, and Maximilian D. Cadmus, Associate in the Litigation & Business Disputes practice, co-authored an article in New Jersey Law Journal, titled “Pressure Mounts for Federal Legislation Protecting Businesses from COVID-19 Lawsuits, but Don’t Count on It.” (Read the full version – subscription required.)

Following is an excerpt:

A handful of cases have been filed against employers around the country, alleging that employees and customers were exposed to coronavirus through negligent corporate policymaking and lax enforcement. As stay-at-home orders begin to be lifted in some regions, many are expecting this trickle of COVID-19 exposure lawsuits to turn into a deluge, inundating businesses that have already been weakened by the unprecedented economic downturn that the pandemic has caused. To save businesses from this deluge, and bolster their ability to recover, many are advocating broad federal legislation limiting the liability of companies as they try to adapt to the pandemic.

There is already a patchwork of federal and state protections that limit liability for certain health-care providers, manufacturers, and volunteers. For example, the Secretary of HHS used his authority under the 2005 PREP Act to confer limited immunity from liability to certain manufacturers and health-care providers against any claim of loss resulting from the manufacture, distribution, administration, or use of medical countermeasures. The recently passed CARES Act also confers limited immunity on health-care volunteers responding to the pandemic. And some states have also acted to limit the exposure of medical professionals to liability. Governor Cuomo of New York, for example, issued Executive Order 202.10, which limits the civil liabilities of medical practitioners responding the pandemic. Other states, including New Jersey, have taken similar actions.

More recently, on April 28, President Trump announced his intention to sign an executive order to solve “any liability problems” that could prevent meat-processing companies from staying open amid the pandemic.

But these limited grants of immunity will not protect most businesses from potential COVID-19 lawsuits. No law has been passed to protect regular businesses from lawsuits brought by employees or customers who claim they were exposed to the disease because of the company’s actions or inactions. ...

Despite this mounting pressure for coronavirus liability protection, there is no specific legislation on the horizon, and businesses cannot count on any being enacted. Some have proposed, for example, that business liability could be controlled through a compensation scheme similar to the Victim Compensation Fund established following the 9/11 terrorist attacks. The 9/11 Fund was widely praised as a success, and on its face duplicating that effort would be an appealing solution now. But the practical challenges to implementing such legislation to address the COVID-19 pandemic are significant. ...

Legislation to immunize businesses from a deluge of COVID-19 lawsuits would be welcome, but these factors make it uncertain, if not unlikely. As businesses prepare for the lifting of stay-at-home orders throughout the country, they should not assume that they will be immune from civil claims from employees or customers who catch the virus. Companies must scrupulously follow all guidelines published by the CDC, as well as state and local authorities. These guidelines will likely become the de facto benchmarks for how businesses ought to respond to the pandemic. Civil juries may someday judge the reasonableness of company’s conduct based on compliance with these guidelines.