Viewpoint: Federal and State Civil Immunity from COVID-19 Lawsuits

Hundreds of COVID-19 lawsuits have been filed across the country and business leaders say liability immunity is necessary in order to protect against abusive and meritless lawsuits. The stakes are high. Big and small businesses alike are targets for opportunistic lawsuits. Just the mere threat of litigation may cause many businesses to remain closed or delay reopening because few businesses can afford the costs of defending a lawsuit following weeks of business disruption amid the sudden economic recession. Plaintiffs’ lawyers across the country are already recruiting individuals to sue businesses by pouring millions of dollars into advertising.

However, federal and state civil immunities vary greatly. Knowing if there are legal protections in your jurisdiction is just the first question when considering the steps necessary to protect businesses from a COVID-19 lawsuit. Sixteen states have enacted legislation providing some form of civil immunity from COVID-19 lawsuits for a broad range of businesses. Those states include Georgia, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Mississippi, Nevada, New Jersey, New York, North Carolina, Oklahoma, Tennessee, Utah, Wisconsin and Wyoming. About a dozen other states have legislation pending that, if enacted, would provide varying degrees of civil immunity.

On July 21, 2020, 21 governors, including those from many states that already passed some form of civil immunity, forwarded a letter to Capitol Hill seeking new federal protections to preempt the widely inconsistent and ever-changing patchwork of liability-limiting state laws. The letter states “it is our duty to provide clarity, consistency, and stability to our citizens and their businesses, and the uniformity that federal law provides is critical to America’s industries that work across state lines.” A uniform approach to civil immunity protections is believed to be necessary to prevent unjustified COVID-19 lawsuits and critical to an economic recovery.

Who has immunity and what conduct is protected is a state-dependent inquiry. New York, Alaska, and Oklahoma provide immunity to healthcare providers but not other entities or individuals. North Carolina extends protections to essential businesses. Utah extends liability immunity to any company for injuries resulting from exposure of an individual to COVID-19 on their premises. Tennessee provides civil immunity for all premises liability, product liability, and medical liability claims occurring prior to July 1, 2022. Georgia created a rebuttable presumption that an individual assumes the risk of infection where the premises owner posts a sign warning that there is no liability for injury or death of a person entering the premise that results from contracting COVID-19. Iowa limits COVID-19 lawsuits unless a plaintiff can show a minimum injury such as a diagnosis of COVID-19 that requires inpatient hospitalization or results in death. All sixteen states providing some form of civil immunity have exceptions for wanton, reckless, willful, or intentional misconduct.

Given the wide range of laws, Senate Republicans, led by Majority Leader Mitch McConnell and Texas Senator John Cornyn, are seeking national uniform COVID-19 civil liability protections in the SAFE TO WORK (Safeguarding America’s Frontline Employees To Offer Work Opportunities Required to Kickstart the Economy) Act, S.4317. The proposed legislation would provide broad liability immunity for businesses, healthcare workers and facilities, educational institutions and local governments. Senator Cornyn claims that this bill “would protect those acting in good faith from being sued into oblivion while ensuring bad actors who willingly put their patients, employees, or customers in danger will still be held accountable.”

Republican State Attorneys General from 22 states sent a letter to Senate leaders supporting the COVID-19 civil liability protections proposed in the SAFE TO WORK Act, citing a potential “surge in frivolous civil litigation targeting well-intentioned businesses, educational institutions and non-profit organizations.” The State Attorneys General acknowledge that some states have implemented civil immunities but argue “the need for a uniform national baseline of liability protection still exists.”

The SAFE TO WORK Act, which was introduced on July 27, 2020, would provide civil immunity to businesses, healthcare workers and facilities, educational institutions and local governments by creating procedural and substantive hurdles for plaintiffs claiming COVID-19 exposure due to negligence. With limited exceptions, the proposed law would create an exclusive federal cause of action for exposure to COVID-19, thus preempting state and tribal laws covering the same activity (unless such laws take a stricter approach). The Act would permit any covered lawsuit to be filed in or removed to a federal district court by any defendant. In addition, it would apply retroactively to all cases filed on or after December 1, 2019.

To safeguard against frivolous claims, the Act would impose heightened pleading requirements. Every COVID-19 plaintiff would be required to show why they believe the defendant is the cause of exposure to COVID-19. Conversely, the plaintiff has to identify all places and persons with whom they had contact with during the 14-day-period before the onset of symptoms and show why they believe those people were not the cause of the exposure. The plaintiff would have to verify, under penalty of perjury the truthfulness of the allegations and provide certified medical records documenting their treatment. The plaintiff would also be required to provide an affidavit from a qualified non-treating physician supporting causation and injury.

The Act limits the award of compensatory damages to economic losses, except that the court may award damages for noneconomic losses caused by the willful misconduct of the individual or entity. Punitive damages would also be available for willful misconduct but may not exceed the amount of compensatory damages awarded. Such limits are designed to reduce the economic incentives for plaintiffs’ attorneys seeking grossly inflated damages to scare businesses into quick settlements. To add to this deterrent effect, the Act would enable a defendant to sue a plaintiff (and their attorneys) for damages, punitive damages, and attorneys’ fees if the lawsuit is later determined to be meritless. These protections also extend to presuit demand letters seeking settlement in exchange for releasing, waiving, or otherwise not pursuing a COVID-19 claim.

To limit the inevitable “bet-the-company” multi-million-dollar class action lawsuits, the Act would require that each putative class member be provided with notice and a description of the lawsuit. The plaintiffs’ attorneys prosecuting the class action shall include in the notice the attorneys’ hourly fees being charged or alternatively the contingency fee percentages with an estimate of the total amount that would be paid if the requested damages were to be granted. Only then could a putative plaintiff become a class member by affirmatively opting-in (instead of being automatically included in the class by the courts).

Republican-led efforts have met resistance from Democrats, who say additional legal protections would encourage wrongdoing and put individuals at risk. U.S. House of Representatives Speaker Nancy Pelosi indicated that Democrats would not support protections against COVID-related litigation. Pelosi stated “[e]specially now, we have every reason to protect our workers and our patients in all of this. So we would not be inclined to be supporting any immunity from liability.” Such arguments have not been successful in the context of public health emergencies. Indeed, lawmakers have historically placed constraints on the types of lawsuits during public health emergencies.

Federal law currently provides civil immunity to a subset of individuals and entities for damages arising from the fight against the COVID-19 pandemic. On March 17, 2020, the Secretary of Health and Human Services declared a public health emergency and invoked the Public Readiness and Emergency Preparedness Act (PREPA). PREPA, 42 U.S.C. § 247d-6d (2005), provides liability immunity to health care providers and businesses such as manufacturers, distributors, and retailers operating mainly in the in the pharmaceutical and medical device spaces, for any claim under federal or state law for damage caused by, arising out of the use of pharmaceuticals, biologics and medical devices to combat the COVID-19 pandemic. This includes claims for wrongful death, personal injury, emotional damage, medical monitoring, property damage, and business interruption loss.

PREPA creates a rebuttable presumption that immunity applies to covered persons engaged in recommended activities pertaining to covered countermeasures. PREPA states “[T]here shall be a rebuttable presumption that any administration or use, during the effective period of the emergency declaration … of a Covered Countermeasure shall have been for the category or categories of diseases, health conditions, or threats to health with respect to which such declaration was issued.” Thus, the burden is on the plaintiff to show that immunity does not attach. PREPA does not extend immunity to covered persons engaged in “willful misconduct.” A plaintiff alleging willful misconduct must prove by clear and convincing evidence an “act or omission that is taken—(i) intentionally to achieve a wrongful purpose; (ii) knowingly without legal or factual justification; and (iii) in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit.” If suit alleging willful misconduct is initiated, it “shall be filed and maintained only in the United States District Court for the District of Columbia” and requires a verified complaint and an affidavit of a non-treating physician attesting to the causal relationship between the covered countermeasure and the alleged damages. If the complaint is not verified in accordance with the act, it is subject to dismissal.

While the SAFE TO WORK Act would, if it becomes law, provide new procedural and substantive protections from COVID-19 lawsuits, knowing if there is an existing applicable law is the key to successfully invoking civil immunity. Until such time as federal uniform legislation passes, COVID-19 civil immunity will continue to vary across the country and be based on the ever-changing patchwork of liability-limiting state laws.