COVID-19 Liability Considerations For Nonmedical Businesses

By Kathleen Carrington and Mitchell Morris
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Law360 (July 31, 2020, 4:45 PM EDT) --
Kathleen Carrington
Kathleen Carrington
Mitchell Morris
Mitchell Morris
It's been nearly six months since the U.S. Secretary of Health and Human Services declared COVID-19 a public health emergency. As communities emerge from quarantine, businesses are on high alert regarding potential COVID-19 liability.

Some businesses have already been afforded protection: Suppliers of so-called COVID-19 countermeasures may have immunity under the secretary's Public Readiness and Emergency Preparedness Act[1] declaration,[2] medical providers and nursing homes may have immunity under various state laws and declarations,[3] and others may have defenses based on regulatory guidance.[4]

So what about everyone else? This article explores who else may be exposed to liability, and what defenses may be available to them.

Evaluating Legal Exposure

Lawyers have consistently shown their boundless creativity when it comes to finding people to sue, and there's no reason to expect things will be different in the wake of COVID-19. Therefore, the owner of any premises where transmission may be alleged to have occurred, and the maker of any product that may be alleged to have contributed to transmission, must anticipate potential COVID-19 litigation, no matter how frivolous the claims may be.

The good news is that such claims will be subject to a number of legal defenses — and, in a small but growing number of states, expanded immunity legislation.

Legislation

While many states have been busy considering legislation intended to protect businesses vulnerable to COVID-19 liability, only a handful of states so far have actually passed their proposed legislation. One such state is Utah, which passed a law affording civil immunity to any person for claims of exposure to COVID-19 while on the person's premises, unless the person engaged in willful misconduct or reckless/intentional harm.[5]

North Carolina passed a similar law, but limited its reach to essential businesses and claims from a customer or employee.[6] And in Oklahoma, immunity is tied to the business acting "in compliance or consistent with federal or state regulations" or other applicable guidance.[7]

Other states are taking a more focused approach. For example, Louisiana's legislative package includes a provision specifically immunizing restaurants from suit "for injury or death due to COVID-19 infection transmitted through the preparation and serving of food and beverage products by the restaurant," whether via dine-in, takeout, drive-through or delivery, unless it occurred through gross negligence or intentional misconduct.[8]

And Mississippi, the most recent state to pass COVID-19 legislation, is attempting to immunize persons who design, manufacture, sell or otherwise distribute "a qualified product in response to COVID-19" for injury related to that product.[9]

While these legislative efforts are positive steps for businesses, progress is both slow and uncertain, leaving businesses in most states still vulnerable.

Causation

A cognizable negligence claim arising from COVID-19 will require proof of both general causation — i.e., proof that COVID-19 can be transmitted and contracted in the manner alleged — and specific causation — i.e., proof that the plaintiff did in fact contract COVID-19 as pled.

The substantial unknowns and conflicting information regarding the spread of COVID-19, including how long the virus survives on various surfaces or lingers in the air in different atmospheric conditions, and the incubation period between exposure and symptom onset will make a plaintiff's burden of proof especially difficult to meet.

Several cases illustrate the problems COVID-19 plaintiffs will face on causation. In Korte v. Mead Johnson & Co.,[10] the court granted summary judgment on claims alleging that bacteria in the defendant's infant formula caused their child to develop bacterial meningitis. While the defendant conceded general causation, it successfully disputed specific causation based on the absence of a temporal relationship between the infant's ingestion of the product and the onset of infection, and the plaintiffs' failure to rule out other possible sources of infection.

In Parker Land and Cattle Company Inc. v. U.S.,[11] the court granted summary judgment on a rancher's claim that its cattle died after contracting a bacterial infection from the defendants' elk and bison. Although the court found the defendants were negligent in managing their herds, and that some of their animals were infected with the relevant bacteria, the plaintiff failed to meet its burden of proving that the defendants' infected elk and bison were the actual cause of the outbreak.

Finally, in Ebaseh-Onafa v. McAllen Hospitals LP,[12] a hospital obtained summary judgment on claims that the decedent contracted the H1N1 virus while working in the hospital's pediatric intensive care unit. Although the plaintiff's expert testified that there were likely unconfirmed cases of H1N1 in the pediatric ICU because it was spreading in the community at the time, the plaintiff did not demonstrate that the pediatric ICU was actually the source of the decedent's H1N1 rather than the community at large.

As these cases reveal, proving causation in an infection disease case is difficult. The numerous unknowns with COVID-19 will make it even more difficult for claimants to prove any one particular place or product was the source of exposure.

Foreseeability, Notice and Product Misuse

Another prima facie element of a negligence claim, either as a component of duty or proximate cause, is foreseeability. A compelling argument exists that before the current pandemic, premises owners and nonmedical product suppliers could not reasonably foresee the risk of COVID-19 transmission as a consequence of their ordinary operations or use.[13]

Nor can it reasonably be said that such businesses heretofore had "fair notice" that they could be held liable for the transmission in a public place of an infectious disease that did not originate from them.[14]

But what if you manufacture a fingerprint scanner that is located in an assisted living facility? Are you protected if someone claims they contracted COVID-19 by placing their bare finger on the scanner to open a door? Does the CDC guidance followed by the assisted living facility shield you? As with most legal answers, it depends.

If your product is on a premises with defined guidance, you may have an indemnity claim or third party claim, but the likelihood that you can directly benefit from guidance in the same manner as the premises owner is slim. More likely than not, you'll need to turn elsewhere for protection.

Another consideration: What if you manufacture a non-health care product that is used in an unintended or unforeseen manner in a health care space — for example, salon or restaurant sterilizer cabinets being used to sterilize masks in a walk-in clinic? Product defendants routinely raise the defense of misuse in litigation, and true misuse should provide the anticipated protection here.

But the defense won't be available if the manufacturer knows of the misuse and encourages it. The U.S. Food and Drug Administration regulates the labeling and marketing of medical devices, and the known misuse of a non-health care product as a medical device could subject the manufacturer to FDA penalties if the misuse violates FDA regulations.[15]

Beware the Nuisance Claim

There are also emerging instances of claimants bringing common law public and private nuisance claims related to COVID-19. For example, McDonald's Corp. and Amazon.com Inc. are currently facing nuisance claims from workers and their family members, who claim that insufficiently rigorous workplace safety standards put them at risk of contracting COVID-19.[16]

Nuisance claims can be particularly challenging for defendants, because they do not always have the same causation and other requirements that negligence claims do. While claims brought by employees against their employers will likely face significant hurdles related to workers compensation or U.S. Occupational Safety and Health Administration regulations,[17] those defenses will not be available against nuisance claims brought by nonemployees — like customers or even neighboring businesses.

Conclusion

The uncertainty about when the COVID-19 era will end brings with it the expectation that additional defense options for product businesses operating during the pandemic will emerge. In the meantime, businesses should stay informed, follow applicable guidance and continue using best practices in their day-to-day operations.



Kathleen Carrington and Mitchell Morris are attorneys at Butler Snow LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


[1] Public Readiness and Emergency Preparedness Act, 42 U.S.C. § 247d-6d.

[2] Kat Carrington & Mitch Morris, "HHS Declares Liability Immunity for Certain COVID-19 "Countermeasures"; Response Act Expands Protections for Mask Makers (March 19, 2020), available at https://www.butlersnow.com/2020/03/hhs-liability-immunity-covid-19-countermeasures/ (last accessed July 13, 2020).

[3] See, e.g., Y. Peter Kang, 6 States With COVID-19 Medical Immunity, And 2 Without, Law360 (April 17, 2020); Matthew Santoni, Pa. Gives Civil Immunity To COVID-19 Health Care Providers, Law360 (May 6, 2020).

[4] Carrington, Kat, et al., Revisiting "Is 'The Government Said I Could' A Civil Liability Defense?" During COVID-19 (May 21, 2020), available at https://www.butlersnow.com/2020/05/revisiting-is-the-government-said-i-could-a-civil-liability-defense-during-covid-19/ (last accessed July 13, 2020).

[5] Utah Code Ann. 1953 § 78B-4-517.

[6] N.C.G.S.A. § 66-460(a)(1), (b).

[7] 76 Okla. Stat. Ann. § 111.

[8] La. R.S. 29:773.

[9] S.B. 3049, available at http://billstatus.ls.state.ms.us/documents/2020/html/SB/3000-3099/SB3049SG.htm (last accessed July 13, 2020).

[10] Korte v. Mead Johnson & Co. , 824 F. Supp. 2d 877 (S.D. Iowa 2010).

[11] Parker Land and Cattle Company Inc. v. U.S. , 796 F. Supp. 477 (D. Wyo. 1992).

[12] Ebaseh-Onafa v. McAllen Hospitals LP , 2015 WL 2452701 (Tex. Ct. App. May 21, 2015).

[13] See, e.g., N.N.V. v. Am. Assoc. of Blood Banks (1999), 75 Cal. App. 4th 1358 (where the plaintiff contracted AIDS through blood transfusion, court held it was not reasonably foreseeable in 1984 that "direct questioning, directed donations and surrogate testing … would have reduced the risk of AIDS contaminated blood supply"). But see Munn v. Hotchkiss School , 165 A.3d 1167 (Conn. 2017) (public policy did not preclude imposition of duty on school to warn about or protect against foreseeable risk of serious insect-borne disease when organizing trip abroad).

[14] See, e.g., Air & Liquid Sys. Corp. v. DeVries, 139 S. Ct. 986, 999 (2019) (Gorsuch, J., dissenting) (noting "fair notice problem" with newly-announced "duty [defendants] could not have anticipated then and one they cannot discharge now"). See also generally https://www.butlersnow.com/2019/04/justices-asbestos-decision-poses-fair-notice-problem/.

[15] The penalties for violating these regulations are steep, and the government is not excusing companies during this pandemic; instead, it is cracking down on regulatory violations. So far, the FDA has issued more than 80 warning letters to companies selling products that they claim may prevent, diagnose, cure, treat or mitigate COVID-19, and attorneys general at the state and federal level are filing lawsuits when warning letters are failing to deter the misconduct. See U.S. Food & Drug Admin., Fraudulent Coronavirus Disease 2019 (COVID-19) Products, available at https://www.fda.gov/consumers/health-fraud-scams/fraudulent-coronavirus-disease-2019-covid-19-products#Warning%20Letter%20Table (last accessed July 7, 2020).

[16] Vin Gurrieri, Law360, COVID Suits Test 'Public Nuisance' Claim in Workplace Cases (June 9, 2020), available at https://www.law360.com/articles/1281347/covid-suits-test-public-nuisance-claim-in-workplace-cases (last accessed July 13, 2020).

[17] See, e.g., Rural Cmty. Workers All. v. Smithfield Foods Inc. , No. 5:20-CV-06063-DGK, __ F. Supp. 3d__, 2020 WL 2145350, at *1 (W.D. Mo. May 5, 2020) (declining to entertain suit brought meat processing plant workers alleging that the plant "failed to adequately protect [them] from the virus that causes COVID-19" based on "the primary-jurisdiction doctrine to allow the Occupational Health and Safety Administration to consider the issues raised by this case").

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