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Covid-19 Liability Shield in Effect for Georgia Businesses (1)

Aug. 6, 2020, 1:03 PM; Updated: Aug. 6, 2020, 6:50 PM

A new liability shield law makes Georgia the most recent and the most populous state to protect businesses and other organizations from potential lawsuits over Covid-19 exposure.

Gov. Brian Kemp (R) signed the legislation, S.B. 359, late Wednesday limiting liability claims brought by customers, employees, or members of the public who contract or allege exposure to the virus. The new law took effect immediately and is set to expire in July 2021. It applies broadly to claims brought against businesses, nonprofits, and individuals, while also specifically protecting health-care providers.

Like similar laws enacted in seven other states, the new Georgia law allows liability claims to succeed only in cases where the business or other organization showed gross negligence or similar disregard for health and safety standards.

The liability limitations apply “if you’re substantially following the rules” for safe business operations, said Sen. Chuck Hufstetler (R), one of the sponsors of the Georgia legislation. “I thought that was a fair compromise.”

The measure takes effect just as debate heats up in Congress over federal liability protections that could override state efforts.

Senate GOP leadership unveiled legislation on July 27 that would shift claims related to coronavirus exposure into an employer-friendly federal court process, while also providing businesses with a safe harbor against several types of employment claims if they can show they were generally following health and safety guidelines.

Nationwide counterpart sought

The liability proposal is a major sticking point in negotiations over additional Covid-19 relief legislation between the Senate and House, where Democratic leaders have voiced opposition to giving businesses a liability shield.

Republican attorneys general from 22 states praised the liability limitations enacted by states like Georgia but urged congressional leaders to pass a nationwide law limiting Covid-19 liability in a letter sent Wednesday.

“As you are probably aware, states across the country have taken steps to address the need for timely, targeted and temporary civil liability protections in light of the pandemic, but the need for a uniform national baseline of liability protection still exists,” wrote the group of AGs led by Chris Carr of Georgia and Sean Reyes of Utah.

Whether at the state or federal level, liability limitation proposals have drawn praise from business advocates who say they’re crucial to helping businesses reopen and reviving the economy during the pandemic. Worker and consumer advocates meanwhile contend the proposals give businesses a free pass to skimp on safety precautions.

No bar to suit

The state proposals generally provide a defense against virus-related liability claims but don’t save businesses from having to defend themselves in court to show they weren’t grossly negligent.

Georgia joins Kansas, Louisiana, Mississippi, North Carolina, Oklahoma, Utah, and Wyoming in enacting virus-related liability limitations that apply broadly to most or all businesses. A number of other states have enacted narrow liability protections for health-care providers and/or suppliers of personal protective equipment such as masks, gloves, and hand sanitizer.

Lawmakers in several other states are considering liability shield proposals, including Nevada where similar legislation is part of the agenda for a one-week special session that started July 31. Likewise in Ohio a bill limiting liability passed both the House and Senate but with wide differences in the language that would have to be reconciled before it could go to the governor.

Tennessee Gov. Bill Lee (R) on Monday called for a special session to start Aug. 10 and included business liability limits as the first item on the agenda. The House speaker and lieutenant governor, who presides over the Senate, both voiced their support for a liability shield law.

Idaho state lawmakers also have proposed a special session to craft a liability shield bill, partly at the request of school systems that fear the liability risks of reopening schools in the coming weeks.

(Updated to add details about letter to Congress from Republican AGs.)

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: Karl Hardy at khardy@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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