States, companies set up their own COVID-19 legal shields

States, companies set up their own COVID-19 legal shields
© Greg Nash

States and some companies aren’t waiting for Congress and the White House to work out a possible liability shield and are instead taking steps to insulate businesses on their own from lawsuits in the coronavirus era.

Many states have granted some form of liability immunity to health care workers and facilities. Utah and North Carolina have gone the furthest, passing laws that offer the strongest immunities yet for a range of industries as stay-at-home orders and business closures are eased.

In Utah, Gov. Gary Herbert (R) signed legislation earlier this month that makes all businesses and individuals immune from litigation based on others’ exposure to coronavirus on their property, with exceptions for things like willful misconduct. Oklahoma lawmakers have sent similar legislation to its governor.

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North Carolina’s law is narrower than Utah’s and applies to “essential businesses” as defined in the state’s emergency declaration, but still offers more protection than other states.

At least six states — Alabama, Illinois, Louisiana, Ohio, South Carolina and Wyoming — have introduced legislation that would also shield more than just health care workers and facilities, according to the National Conference of State Legislatures (NCSL).

Experts note that even if U.S. lawmakers reach a deal on a liability shield, states may be in a stronger position than Congress to adjust state tort laws, which provide remedies for civil wrongs and injuries.

“The practical realities of trying to reopen the economy, combined with the constitutional limitations of federalism, make it more likely than not we will have a patchwork of state-based immunity shields rather than a nationwide set up," said legal analyst Brad Moss.

And with all 50 states now open to some degree, the possibility of lawsuits may be increasing.

One U.S. law firm suggested coronavirus litigation could be “the new asbestos,” referring to a wave of personal injury litigation in the 1970s and '80s related to the carcinogenic material that was once commonly used in building construction.

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“If you just let it all go now, it would be a disaster,” said David Rivkin, a partner at Baker Hostetler, who supports Congress granting businesses temporary immunity. “It would be a tsunami of lawsuits. Hundreds have already been filed.”

To date, nearly 1,300 coronavirus-related lawsuits of all varieties have been filed, according to the law firm Hunton Andrews Kurth. Additionally, more than 14,000 pandemic-era complaints and referrals have been filed nationwide to the U.S. Occupational Safety and Health Administration (OSHA), the federal agency charged with overseeing workplace safety.

Advocates for liability laws argue that the lawsuits could force a number of businesses to close.

“As states look to reignite their economies, it’s possible that the risk of being sued by a customer or employee who is exposed to COVID-19 will dissuade some businesses from reopening,” said Josh Cunningham, an employment and labor expert at NCSL.

Congress in an earlier stimulus bill granted legal immunity to makers of protective equipment amid critical shortfalls. But Democrats, labor unions and trial attorneys have voiced fierce opposition to expanding liability protections to a broader swathe of commercial enterprises, saying they could discourage businesses from taking necessary precautions.

Senate Minority Leader Charles SchumerChuck SchumerLawmakers push Trump to restore full funding for National Guards responding to pandemic Bipartisan senators ask congressional leadership to extend census deadline Lawmakers of color urge Democratic leadership to protect underserved communities in coronavirus talks MORE (D-N.Y.) last week accused Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellMcConnell warns control of Senate 'could go either way' in November On The Money: McConnell says it's time to restart coronavirus talks | New report finds majority of Americans support merger moratorium | Corporate bankruptcies on pace for 10-year high McConnell: Time to restart coronavirus talks MORE (R-Ky.) of focusing on the wrong priorities in insisting on a liability shield.

“We have people starving, we have people being kicked out of their homes, and he's worried about a big businessman being sued because he let one of his workers be susceptible to [COVID-19]?” Schumer said. “Come on, stop the ideological issues.”

McConnell fired back days later and said legal protections for businesses were not negotiable.

“On legal liability reform, the work lies ahead of us,” McConnell said May 14 in a Senate floor speech. “As my Republican colleagues and I have made clear, strong legal protections will be a hard-redline in any future legislation.”

Critics of measures like Utah’s, including that state’s House Minority Leader Brian King (D), say such measures risk making businesses less safe for workers and the public.

“It sends precisely the wrong message to businesses and to landlords and to people out there who should be concerned that they do everything they can that’s reasonable to protect their customers and protect their employees,” King told The Salt Lake Tribune after the law passed.

It’s not just states that are taking action in the face of congressional gridlock. 

The Disney corporation made headlines this week when it issued a new disclaimer that seeks to shift the risk of coronavirus exposure to potential customers.

By visiting its Walt Disney World Resort, the company warned on its website, patrons are assuming the “inherent risk of exposure to COVID-19,” which it describes as “an extremely contagious disease that can lead to severe illness and death.”

Such language reflects a common strategy that corporations employ to preemptively defend against lawsuits, telling customers in effect that they “assume the risk” if things go awry in the course of engaging in business with the company. 

“Even if you don't physically sign anything, you sometimes agree to a waiver simply by your actions,” legal analyst Elie Honig wrote for CNN.

“Expect businesses across the country to follow Disney's effort to insulate itself from potential Covid-19 liability,” he added. “Such waivers are likely here to stay.”