McConnell Wants Broad Liability Shield In Next COVID-19 Bill

By Andrew Kragie
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Law360 (April 27, 2020, 8:59 PM EDT) -- Senate Majority Leader Mitch McConnell said Monday that a broad liability shield will be a top Republican priority for the next COVID-19 relief bill, arguing that companies need protection from lawsuits as they reopen and try to revive the moribund economy.

Senate Majority Leader Mitch McConnell, R-Ky., arrives at the Capitol Building in Washington, D.C., recently. (AP)

McConnell outlined liability protections that would go beyond health care providers to cover everyone from small-business owners to big companies. The Kentucky Republican's declaration will cheer business groups and many conservatives but is sure to draw opposition from plaintiffs attorneys, worker advocates and Democrats who see the effort as an excuse to push tort reform.

"While our nation is asking everyone from frontline health care professionals to essential small-business owners to major employers to adapt in new ways and keep serving, a massive tangle of federal and state laws could easily mean their heroic efforts are met with years of endless lawsuits," McConnell said in a statement.

To provide "stability, clarity and certainty," the majority leader said, Republicans "will proudly insist" on liability protections in future relief measures while opposing "tangential left-wing daydreams."

In an interview Monday on Fox News Radio, McConnell added that a liability shield for businesses and health care workers will be his "red line" in the next round of negotiations because "trial lawyers are sharpening their pencils to come after health care providers and businesses, arguing that somehow the decision they made with regard to reopening adversely affected the health of someone else."

The president of the U.S. Chamber of Commerce said earlier this month that a wave of employee lawsuits amid reopening is "the largest area of concern" for U.S. businesses. Business groups and conservative advocates have been pressing for a broad employer liability shield, while plaintiffs attorneys and worker advocates argue that lawsuits are the last resort for employees to protect their rights.

President Donald Trump and his top economic adviser, Larry Kudlow, have both said publicly that the administration is considering proposals to protect businesses.

"We have tried to take liability away from these companies," Trump said at a White House briefing last week. "We just don't want that because we want the companies to open and to open strong."

"If they're practicing the rules and regs and guides that they should be, and regrettably someone — a customer or an employee — gets the infection or is infected by the virus, I don't think there should be a lawsuit," Kudlow told reporters Friday.

Congressional Democrats are expected to fight such a liability shield, which would have to pass the Democrat-led House. A spokesman for House Speaker Nancy Pelosi said Monday that "the House has no interest in diminishing protections for employees and customers."

Democrats went along with a March proposal to give more than four years of liability protection to face-mask manufacturers, an effort to encourage production surges.

"I didn't like doing that but, weighing the equities, knew we had to get the masks out," the California Democrat said in March.

On Wednesday, Democratic leaders continued to sound skeptical.

"Is he saying that if an owner tells a worker they have to work next to somebody who might have coronavirus, without a mask or PPE, that that owner wouldn't be liable? That makes no sense," Senate Minority Leader Chuck Schumer, D-N.Y., said on a press call.

House Judiciary Committee Chairman Jerry Nadler, D-N.Y., tweeted that it was "unbelievable" McConnell "is opposing aid unless tied to undefined and potentially unlimited changes in state liability laws."

A Hunton Andrews Kurth LLP partner, Matthew D. Jenkins, predicted the extensive limits that McConnell described would spark a "pitched political battle."

"The more particularized and targeted the protections are made, the more it begins to look like a Christmas tree with each particular industry wanting their own ornament on that tree," said Jenkins, arguing that a better approach would be a broad shield for liability absent wanton or willful conduct, or limiting recovery in pandemic-related cases to economic damages without punitive or other awards.

Jenkins, the firm's health care practice leader, also predicted lawmakers would not alter any evidentiary standards but would instead exculpate, or release from blame, any actions that aren't criminal or grossly negligent.

Another Hunton partner, Mark S. Hedberg, said it seemed Republicans want to restrain lawsuits from various parties, including employees, customers and the public. He added that legislators would be wary of protecting any entity from fraud claims as the public demands accountability and oversight for the trillions spent on the pandemic.

"Both sides of the aisle would need to be real careful about any action they took that looked like it would directly limit the government's ability to fight fraud and abuse that might happen with those funds," Hedberg said, suggesting that a targeted expansion of safe harbors could minimize controversy. "Anything more sweeping that would speak to the False Claims Act would strike me as less likely and politically kind of dangerous."

The $2 trillion CARES Act included some liability limits — such as protection for health care workers who volunteer across state lines, Hedberg said — but Republicans want more. A bill from Sen. Ben Sasse, R-Neb., for example, would give broad immunity to health care providers providing treatment outside their specialties.

Hunton's Jenkins suggested that health care providers could benefit from protection in other virus-related situations, such as off-label prescribing or delayed care while hospitals focused on COVID-19.

State lawmakers in hard-hit New York and New Jersey have already passed laws giving health care providers immunity. Health care and insurance lobbyists are pushing for similar shields through executive orders in California and Florida. Many torts are governed by state rather than federal laws.

Plaintiffs attorneys argue that health care companies and the insurance industry are just using the pandemic as an opportunity to achieve long-sought tort reform.

Rather than liability protection, congressional Democrats are focused on funding for state, local and tribal governments that have seen high expenses along with a precipitous drop in revenues.

Republicans have been wary of what they call "blue-state bailouts." Last week, McConnell said he "would certainly be in favor of allowing states to use the bankruptcy route."

But a senior Senate GOP aide told Law360 last week that "everyone sees the writing on the wall that eventually there has to be something for state and local governments." McConnell himself seems to be softening, telling Fox News Radio on Monday, "There probably will be another state and local funding bill."

Political leaders reached a deal last week for nearly $500 billion in aid to small businesses and hospitals, but that was just an "interim" bill. Schumer said he expects the next relief package will be "similar in size and ambition" to the $2 trillion bill passed in late March.

Trump and Democrats have voiced interest in a massive infrastructure plan to serve as economic stimulus, although it would take months if not years to see the impact. House Democrats touted the idea earlier this month — with $760 billion for transportation infrastructure and $86 billion for broadband — before Pelosi dropped infrastructure from her list of priorities for the so-called CARES 2 package. Many congressional Republicans have been wary of a massive infrastructure plan.

Trump has for weeks urged payroll tax cuts to incentivize hiring, pitching the idea in his speech last month from the Oval Office. Democrats previously rejected payroll tax cuts as ill-suited to the crisis, arguing it would help the rich more than the poor and fail to do anything for the unemployed.

In his statement Monday, McConnell also confirmed the Senate will resume in-person business next week, albeit with modified routines. McConnell may use the floor time to make good on his promise to return to judicial confirmations, which have been on ice for two months during the pandemic.

--Additional reporting by Y. Peter Kang and Joyce Hanson. Editing by Gemma Horowitz.

Update: This article has been updated with more Democratic reaction on Tuesday.

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