Businesses Want a Shield Against COVID-19 Lawsuits. But What About Customer Safety?

Some argue argue small business owners need protection.

Some argue argue small business owners need protection. Shutterstock

 

Connecting state and local government leaders

As Congress debates liability protections, states step up.

This article originally appeared on Stateline.

Wyoming state Sen. Liisa Anselmi-Dalton worried that a customer could get the coronavirus in her Old Chicago Pizza and Tap Room franchise in Rock Springs, attached to her Holiday Inn, and sue her.

So, the Democrat with other Wyoming lawmakers pushed through a bill to grant immunity from liability lawsuits to businesses that do their best to follow state and federal pandemic guidelines as they reopen, rehire and serve customers. 

Anselmi-Dalton, who is also an attorney, envisioned a scenario where “a bunch of people went to a bar and drank out of the same bottle and now they have COVID” and sue the bar for negligence.

“I know how this game works: Liability attaches,” she said in a phone interview, meaning that even if the suits were unsuccessful, the damage to her business’ reputation would stick.

The Wyoming bill, signed into law in May by Republican Gov. Mark Gordon, took effect immediately.

But critics worry the law will prevent some legitimate lawsuits.

“There are businesses that don’t allow their employees to wear masks, let alone require it,” said Democratic state Rep. Charles Pelkey, who voted against the measure. “I don’t think it’s an exaggeration that you run the risk of killing employees.”

The Wyoming measure is one of at least seven new state laws or executive orders in recent months protecting businesses from coronavirus lawsuits. A few other states are considering similar legislation, and a bill before Congress would temporarily grant protections to businesses nationwide.

"We were motivated to instill some confidence-building measures for business."

State Sen. Dave Kinskey, Republican WYOMING

The new laws range from exempting all businesses from lawsuits brought by people who contracted COVID-19 (Wyoming’s law, for example, exempts “any person or business”) to applying only to specific businesses or industries. Some extend protections for manufacturing plants that may have shifted to producing personal protective equipment, for example, while others apply only to health care facilities.

Most of the laws specifically state that they do not shield businesses that acted with “actual malice” nor apply to cases with “clear and convincing” evidence of deliberate wrongdoing.

The states with new laws or orders include: Connecticut, Louisiana, Mississippi, North Carolina, Oklahoma, Utah and Wyoming. Nevada last week passed a similar bill but excluded schools. New York recently rolled back some liability protections for hospitals and nursing homes.

The actions are supported by the National Association of Manufacturers, the U.S. Chamber of Commerce and other business groups. But plaintiffs’ attorneys and some consumer groups are concerned about weakening protections for potential victims.

The congressional proposal, backed by Republicans and included in their new stimulus bill, would give temporary protection to businesses, schools, health care providers and nonprofits against being sued for alleged coronavirus-related negligence in state courts until 2024. The federal bill, like those in the states, would allow gross negligence allegations to proceed.

Labor union representatives and some Democrats are opposed. The bill is hung up over the liability question and extending enhanced unemployment benefits, among other issues. President Donald Trump issued executive orders on Saturday calling for some kinds of financial support during the pandemic, but did not address the liability shield.

Opponents say the state and federal efforts would give a pass to businesses and health facilities that fail to take proper precautions.

“When you have these kind of immunity statutes what you are doing is creating a ‘wrongdoer protection act,’” said New York plaintiffs’ attorney Richard Bell, who has represented many clients in other negligence suits. “When you protect wrongdoers, you encourage wrongdoing. How about the businesses comply with guidelines, comply with state and local laws and they won’t have to worry about lawsuits in the first place.”

But proponents argue small business owners like those in Wyoming and other states need protection.

Wyoming state Sen. Dave Kinskey, a Republican who introduced a measure that was incorporated into the legislation that passed, said he wanted to protect small hospitals.

“Wyoming is not a litigious state,” he said in a phone interview. “But there was so much talk about lawsuits. We were motivated to instill some confidence-building measures for business.”

One business he had in mind was the hospital in his hometown, Sheridan Memorial. Its CEO, Mike McCafferty, said he told Kinskey about his concerns and those of the state hospital association, of which he is the immediate past chairman. The new law, McCafferty said, goes a long way toward easing them.

“We’re doing our best to follow the guidelines put forward by the CDC [Centers for Disease Control and Prevention], the state health officer and public officials,” he said. “The Wyoming Hospital Association would like to make sure hospitals are protected from frivolous lawsuits for the most part — people out there who see opportunity for lawsuits.”

But Pelkey, the Democrat who opposed the measure, said while he didn’t want to see a small business “destroyed” because of a frivolous suit, he also didn’t want a legitimate victim to have no recourse. He said he was afraid the new law would open the door to uncompensated injuries.

“I had a constituent that worked at a guest ranch and there where very few restrictions and he was anticipating guests from all over the world coming into a small town and not requiring distancing or masks,” he said in a phone interview from Laramie, where he has his law office. (He doesn’t handle personal injury cases.)

In Utah, Republican state Sen. Kirk Cullimore said passing a law to protect businesses was only fair since the government forced them to shut down in the first place.

As companies got ready to reopen, he said, lawmakers were thinking about “what sort of protections could we provide to get our economy on track after what was essentially government-forced shutdowns,” he said in a phone interview. He recalled hearing from constituents with concerns, including owners of a gym, restaurants and other small businesses.

The law protects individuals and businesses from being sued for civil damages over exposure to COVID-19 unless that exposure is the result of “willful misconduct, reckless infliction of harm or intentional infliction of harm.”

While the measure passed handily, House Minority Leader Brian King, a Democrat, opposed it. In a phone interview, he said liability protections for businesses “lower the likelihood that businesses will act reasonably. If you are going to reopen the economy, we need to make sure that business is incentivized to do it safely. When you grant immunity, you are going in the exact opposite direction. It’s a bad, bad idea.”

King, an attorney, said rather than issue blanket protections for businesses, what’s needed is a “mechanism in place that is able to evaluate on a case-by-case basis whether there is fault, and address that fault accordingly, based on individual circumstances. We call that our civil justice system.”

In Kansas, Democratic Gov. Laura Kelly vetoed sweeping legislation that included liability protections for businesses dealing with COVID-19. She said the measure was hastily passed and undermined a “thoughtful compromise” reached earlier in negotiations.

And in New York, lawmakers last week rolled back some liability protections for nursing homes and hospitals. The state legislature and Democratic Gov. Andrew Cuomo initially granted broad legal immunity to fend off lawsuits over care provided to patients in hospitals or nursing homes as part of a budget bill passed in April. But under the new law Cuomo signed, the facilities no longer will have immunity for non-coronavirus-related care.

"When you protect wrongdoers, you encourage wrongdoing."

Richard Bell, New York plaintiffs’ attorney

In Arizona, a bill to protect businesses against lawsuits passed in the state House, but failed to gain traction in the state Senate in an abbreviated session cut short by the rising concern over the virus. That bill would have increased the threshold for proving negligence from a “preponderance of the evidence,” to “clear and convincing evidence,” making it harder to prove in court. Intentional or reckless spreading of the infection would not have been covered.

Arizona state Rep. John Kavanagh, a Republican who sponsored the bill, said there was a consensus among bill supporters that “a lot of businesses were hesitant to open for fear they would be sued by people claiming they contracted COVID on their premises.” Kavanagh said he hopes the issue will be taken up again in January, when the legislature reconvenes.

Oklahoma state Sen. Julie Daniels, a Republican who also supported her state’s liability protection bill, said in addition to encouraging businesses to open and discouraging personal injury lawsuits, there’s another reason for the new law — tax revenue.

“You are not going to generate any tax revenue if you don’t have these businesses open, even if people are reluctant to get back out,” she said in a telephone interview. “Municipal governments are funded exclusively with sales tax” in Oklahoma.

That said, Heidi Li Feldman, law professor at Georgetown University Law Center and a specialist in tort law, said now is not the time to shield businesses “when people may well be tempted to prioritize their own profits over the safety of other people.”

“What these broad liability shields do is say businesses don’t have to be careful,” she said. They would allow companies to concentrate on making money rather than taking steps to protect patrons such as distancing tables or increasing sanitizing efforts, which cost time and money.

“These bills are at best overbroad and at worst part of the general dismantling of health and safety to serve business interests,” she said. “The liability shield will lead to more illness and death.”

Elaine S. Povich is a staff writer for Stateline.

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