Jonathan D. Urick, U.S. Chamber Litigation Center
COVID-19 litigation was a hot topic this week. Most of the reporting and commentary focused on the first wave of tort suits over worker deaths, debate over the Senate GOP’s proposed liability protections, and an MDL panel hearing to consider the consolidation of hundreds of business-interruption insurance lawsuits. Here’s a summary (I read the full articles so you don’t have to!) along with links.
A Close Look at the First Wave of COVID Litigation
The Wall Street Journal examines the first wave of COVID-19 personal-injury lawsuits against companies over worker deaths. “Employers across the country are being sued by the families of workers who contend their loved ones contracted lethal cases of Covid-19 on the job.” And this is just the beginning: “The cases are part of an unfolding liability threat facing U.S. companies of all industries as many resume operations after having employees work remotely or being shut down altogether for months.”
Legislative Wrangling Over the Senate GOP’s Proposed Liability Protections
Hence the debate over liability protections. To review the current state of affairs, Bloomberg Law takes a close look at the coronavirus liability protections in the Senate Republicans’ proposed SAFE TO WORK Act. This legislation would create an exclusive federal cause of action for coronavirus-exposure claims, along with a safe harbor for companies that “make good faith efforts to follow government standards and guidance to stop the spread of Covid-19, and attempt to meet the legal requirement at issue.” Among its various procedural safeguards, the bill would also allow defendants to remove such claims to federal court. These procedural and substantive protections would cover alleged injuries occurring from December 2019 to October 2024.
The New York Times reports that, while the debate over federal liability protections remains “contentious,” Senate Majority Leader Mitch McConnell continues to insist that such protections must be part of any coronavirus relief bill. According to the Times, President Trump has been somewhat “noncommittal” on lawsuit protections (directing questions to Sen. McConnell), but “an aide to Mr. McConnell said on Wednesday that the White House had indicated that it also viewed liability protection as a ‘red line’ that must be part of any agreement.”
The Times article also quoted the Chamber’s Chief Policy Officer, Neil Bradley, on the challenges faced by Congressional leaders as they debate liability protection. “The right thing to do is provide an incentive for employers and universities to make sure they are adopting the right public health measures and give them the confidence that, having done so, they are not going to be dragged into court and second-guessed years from now.” According to the Times, “Bradley also noted an increase in activity from trial lawyers keen on exploiting the pandemic for profit: ‘You’re not advertising to attract clients to sue someone unless you think there’s an opportunity to sue.’”
A Couple Uncontroversial Points
There’s a wide divergence of opinion out there, but a couple commentators emphasize uncontroversial points. Over at The D&O Diary, Kevin LaCroix concludes that the proposed legislation would be impactful. “The Senate liability shield bill, if enacted, could significantly diminish the potential liabilities of businesses and other organizations for the transmission of the COVID-19 disease in their facilities,” with “significant implications” for their liability and D&O insurers. “It seems likely,” LaCroix concludes, “that the bill would not only allow the various organizations to better defend themselves, but it would in many circumstances discourage prospective claimants from filing their actions in the first place.” According to one analysis, “claims against directors and officers (D&O) in connection with COVID-19 have also been on the rise.”
Aaron Nicodemus urges in Compliance Week that businesses awaiting federal liability protections should take steps in the meantime to limit their potential exposure. “While Congress does what Congress does,” Nicodemus advises, “there is a lot your firm can and should be doing to prepare for a potential coronavirus-related lawsuit by an employee or employees. The best defense against” such lawsuits “is to follow and implement workplace safety protocols as recommended by federal agencies like OSHA and the CDC,” as well as “state, county, and local coronavirus safety protocols where your workplace is located.”
The Controversy
Beyond that, opinions vary. Writing on National Review Online, Kevin Williamson urges Congress and the White House to work together to enact COVID-19 liability protections. “The coronavirus epidemic is an extraordinary event that requires an extraordinary legislative response,” Williamson argues. The epidemic “has revived interest in tort reform” among small and large businesses alike, he observes, and thus presents Republican politicians “a rare opportunity here that combines good politics with good policy.”
University of Chicago legal historian Amy Dru Stanley offers a contrary take in a Washington Post editorial. In her view, federal coronavirus protections based on the Constitution’s Commerce Clause would contradict “the Republican Party’s opposition to expansive congressional power, and trespass far into the domain of traditional state authority.”
Back in May, however, Mike Carvin and Yaakov Roth of Jones Day concluded, after a thorough analysis of Supreme Court cases both before and after the New Deal, that “there can be no serious question that under long-established law Congress is fully empowered to” enact coronavirus liability protections “pursuant to its power to regulate interstate commerce.”
Also writing in the Washington Post, law professors Daniel Hemel (Chicago) and Daniel Rodriguez (Northwestern) argue for a narrow compromise: “A safe harbor from tort liability for businesses that inform customers about potential exposures within 24 hours of the business receiving notice that one of its employees or another customer on its premises had covid-19.”
Consolidating Business-Interruption Insurance Litigation in Federal Court
The National Law Review recounts a July 30 Zoom hearing of the Judicial Panel on Multidistrict Litigation to consider a motion filed by plaintiffs’ lawyers to consolidate the over 700 business interruption claims filed across the federal-court system. Proponents of consolidation emphasized the need for efficiency and consistency, lest the cases overwhelm the federal courts, while insurers opposed to consolidation argued the cases involve different policy language, different types of losses, and different states’ laws.
According to NLR, the panel carefully probed “whether consolidation would actually provide the purported benefits that proponents suggested.” Based on the judges’ questions and the differences among the various cases, the article concludes that “it seems likely that plaintiffs’ motion to consolidate will be denied.” Law360 also covered the hearing.
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