Even homeowners could be in danger of lawyers trying to cash in on coronavirus

By Daniel Fisher

They’ve already sued cruise ship operators, soap manufacturers and insurance companies, but COVID-19 will give entrepreneurial lawyers plenty more opportunities to make money by targeting nursing homes, hospitals, pharmaceutical manufacturers, retailers and possibly even homeowners over the disease.

“Plaintiff lawyers right now are trying to think about possible classes” they can assemble into lawsuits, said Victor Schwartz, co-chair of the Public Policy Group at Shook Hardy & Bacon and lead author of a 2009 article that predicted shortages of N-95 respirators in a pandemic because of tort litigation.

“Trial lawyers are capitalists, after all.”

To that point, law firms that specialize in nursing-home litigation are blitzing the internet in search of clients whose “loved one sustained a serious infectious disease” due to the novel coronavirus. Already preparing for likely defenses, TW Law in Orlando, Fla., advises potential clients that causation might be tough to prove with a disease as widely distributed as COVID-19, but plaintiffs will have a better chance if there’s a “unique set of circumstances” such as strong evidence the victim got sick in a hospital.

A handful of law firms including Milberg Phillips Grossman formed a “Coronavirus Task Force” to bring lawsuits over securities fraud, false claims, negligence and foreclosures, among other things. One adventurous law firm in Florida even sued the People’s Republic of China, blaming it for allowing Hubei Province to become “essentially a giant Petri dish” spreading the novel coronavirus to the world.

Grocery stores and pharmacies are also likely targets for coronavirus lawsuits, simply because they have insurance and plaintiff lawyers have plenty of experience suing them over slip-and-falls and other injuries. Proving causation again will be difficult, as stores will undoubtedly argue the plaintiff caught the disease somewhere else. But creative plaintiff lawyers will likely produce evidence showing their clients only left the house to buy groceries or pick up needed medicine, leaving the stores as the most plausible site of transmission.

Manufacturers of products designed to protect against catching COVID-19 are likely to face more lawsuits like the class actions filed against Gojo Industries, which makes Purell hand sanitizer. Citing a January warning from the Food and Drug Administration that Gojo may have overstated the effectiveness of Purell, plaintiff lawyers sued the company in March, accusing it of misleading consumers.

Class action lawyers are also likely to prepare massive lawsuits seeking “medical monitoring” payments for millions of people, exploiting an emerging theory that some courts have endorsed in which plaintiffs receive money that they are supposed to use for future medical tests after being exposed to a hazardous substance.

In a tacit acknowledgment that trial lawyers may have exacerbated the shortage of N-95 respirators, Congress gave mask manufacturers limited protection from liability suits under the Families First Coronavirus Act signed by President Trump last month. But that only happened after more than a decade of mostly behind-the-scenes combat between the manufacturers of safety equipment and trial lawyers who started suing over respirators after they drove most of the companies that made and sold asbestos into bankruptcy.

A Mississippi jury tagged 3M for $150 million in an asbestos trial in 2005, for example, after most of the other defendants dropped out. The Mississippi Supreme Court ultimately reversed the decision but despite this victory, 3M has paid out hundreds of millions of dollars to settle respirator claims. One effect of all the litigation was to shift production of N-95 masks overseas, just as the federal government was trying to build stockpiles of the masks for a potential pandemic.

Congress temporarily protected the respirator industry by including it in the PREP Act, which prohibits many kinds of lawsuits against companies that develop, make or use medical equipment used during a public health emergency. But the law only applies during pandemics or terrorism-related emergencies and doesn’t cover “willful misconduct,” which some courts interpret broadly.

Insurance also will be a rich area for litigation. Many commercial insurance companies added exclusions for epidemic diseases after the SARS outbreak, limiting the potential for lawsuits over the failure to provide business-interruption insurance. But lawyers will likely try to tap homeowners and liability policies on behalf of clients who caught COVID-19 in a residence.

Most such efforts to sue over HIV infection failed, as insurers were able to argue the transmission of the disease was a deliberate act not covered under the policies. But negligence theories might work with COVID-19, since uninfected people can pass on the disease unless they practice vigorous protective measures like social distancing.

COVID-19 does present some challenges for trial lawyers. Causation is the biggest, since the disease is a pandemic and plaintiffs will have difficulty identifying exactly where and when they were infected. Defendants also will make a traditional assumption-of-the-risk argument: When even small children know the dangers of the disease and the fundamentals of social distancing, plaintiffs will be hard-pressed to argue they didn’t know they could be infected by shopping for groceries.

Unfortunately for many defendants, lawyers get to choose where they sue and they will gravitate toward courts with judges who are lenient on causation and strict on assumption of the risk. Medical-monitoring class actions are likely to crop up in places such as West Virginia, which has embraced the concept, or in federal courts where judges interpreting state law have determined the legal theory will apply.

 A federal judge in Ohio last year refused to dismiss a proposed class action on behalf of virtually everyone in the U.S. seeking medical monitoring for exposure to the ubiquitous chemical PFAS, for example. Expect many more of these related to coronavirus unless Congress and states step in to prevent it.