Businesses plead with Judiciary Committee for help from coronavirus lawsuits, warn of ‘liability cliff’

By John O’Brien and John Sammon

WASHINGTON (Legal Newsline) – The business community asked members of the U.S. Senate on Tuesday to ease some of the concerns they will have when it comes time to start fully reopening the economy.

At a hearing before the Senate Judiciary Committee, representatives advocated for a temporary shield against litigation – though they stopped short of asking for protection in instances of gross negligence. Targets for personal injury lawyers in a coronavirus world are seemingly endless, as Legal Newsline has previously reported.

Polling has indicated that Democrat and Republican voters favor some protections for non-essential businesses when they open back up. In some states, health care providers have been aided by legislation in Democratic and Republican states that immunizes them from lawsuits except in instances of gross negligence and reckless conduct.

The battle for immunity will possibly be partisan in Congress, though. During Tuesday’s hearing, Democrats like Dianne Feinstein said businesses who act appropriately already have enough protections while bashing OSHA.

But Leroy Tyner, general counsel at Texas Christian University, spoke of a liability cliff that will keep businesses from fully reopening.

“My torts professor taught us that uncertainty about the standard of care creates what he calls a ‘cliff problem,'” he said.

“When we know there’s a liability cliff – some line that will be catastrophic to step across – but we don’t know exactly where the edge of the cliff is, we will avoid the ground near the cliff altogether.”

Senate Majority Leader Mitch McConnell has vowed liability protections will be a part of the next coronavirus stimulus package. Judiciary Chair Lindsey Graham indicated that Sen. John Cornyn is working on that proposal.

Kevin Smartt, the CEO of a chain of southern convenience stores (Kwik Check) who also has food and fuel companies, has had to shut down operations when an employee tested positive. He said he valued people over profits but he shouldn’t be punished for not knowing how to follow “shifting guidelines.”

“We are considered an essential business because of food and fuel sales and have remained open,” he said. “We have experienced supply chain deficiencies but we have practiced intensive clean protocols (safety precautions).

“We don’t want to protect bad actors, but we should not be hit with unfair lawsuits.”

Resistance will seem to come from Democrats, who own the majority of the House of Representatives and are complaining about inaction from the Occupational Safety and Health Administration (OSHA) to come up with employer standards to safeguard workers and the White House, which reportedly turned back proposed recommendations submitted by the Center for Disease Control (CDC).

“We’re trying to find a way to reopen the country,” Graham said. “We hope it will be sooner than later. It has to be data-based and we don’t want bad actors to get a break. If you’re responsible we don’t want you to get sued on top of everything else.”

Fear had been expressed that a tidal wave of lawsuits could result from workers suing their employers for exposing them to the virus. There are instances of personal injury lawsuits already, including a Chicago Walmart employee suing the chain after he contracted COVID-19.

Lawyers are also rounding up nursing home clients. Nursing homes often don’t get to enjoy the same protection from malpractice cases that health care providers do. Most of the litigation has been on behalf of businesses suing their insurance companies for not providing business interruption coverage.

Anthony Perrone, representing the United Food and Commercial Workers International, a union with 1.3 million meat packing and retail workers, said guidelines for worker safety must be science-based, including social distancing and testing.

“You must not provide blanket immunity,” Perrone said. “This should not be about politics. No company should be shielded from adopting irresponsible policies.”

Tyner, of TCU, said 24 million students are impacted by the pandemic and that returning to normalcy is critical. There are two major challenges, he said – the financial loss and the liability uncertainty.

Tyner said currently there is no playbook on how to deal with the situation. A campus with its myriad of services, food, housing, stores, gyms and more is like trying to run a small city. He compared it to trying to guess where the edge of a cliff is.

“We need you to define the edge of the cliff,” he said. ‘We do not seek immunity for bad acts, but those who make good-faith efforts should not be liable.”

Helen Hill, CEO of Explore Charleston, a South Carolina tourism organization, told the gathering the industry is being devastated.

“Of 15.8 million (tourism-related) jobs, half have been lost,” she said. “That’s half of one trillion dollars, or nine times more than after 9-11 (World Trade Center attacks). We’re seeking protection for businesses acting in good faith that should be protected temporarily from frivolous lawsuits.”

Graham asked if the situation would be better if OSHA issued industry-specific guidelines.

The panelists agreed.

Tyner told the senators currently there are 130 class action suits related to the COVID-19 virus against colleges and universities. They allege refunds are in order since students can’t physically experience campus life.