Welcome
Health Law & Business News

Iowa Governor Signs Bill Protecting Businesses in Virus Lawsuits

June 18, 2020, 10:26 PM

Iowa Gov. Kim Reynolds on Thursday signed into law a bill that gives businesses liability protections against being sued for exposing employees and customers to Covid-19.

The protections, retroactive to Jan. 1, 2020, cover whether the exposure occurs at the workplace or during any activity managed by the business unless the business “recklessly disregards” a substantial risk of infection, commits actual malice, or intentionally exposes the person to Covid-19. The law proscribes people or their estates from bringing a civil action against a business unless the person is hospitalized or dies because of the disease.

Protected industries include the state’s hospitals, medical professionals, and long-term health-care facilities, which total more than 400. The measure also protects from possible lawsuits the state’s meat-processing centers, many of which have reported hundreds of positive cases of Covid-19 this year.

Reynolds (R) has repeatedly said the meat-processing plants must remain open to contribute to the U.S. food supply. The state’s agriculture sector could lose more than $3 billion if it shut down because of the pandemic, Reynolds said in May.

Six other states already have enacted Covid-19 exposure-related liability protections—Kansas, Louisiana, North Carolina, Oklahoma, Utah, and Wyoming—and Alabama and Arkansas enacted protections through executive order, U.S. Chamber of Commerce spokeswoman Sabrina Fang said.

More Litigation?

Lobbyists for health-care companies—including Unity Point Health and Wellmark Inc.—plus the Iowa Pharmacy Association, Iowa Insurance Institute, and the Iowa Hospital Association all supported the bill. The Iowa Academy of Trial Lawyers, several church groups, and the Iowa Federation of Labor opposed it.

The Iowa State Bar Association, which generally opposes granting immunity to possible litigants, unsuccessfully tried to change the bill’s text and ended up opposing the law. Language permitting only hospitalized infected persons to sue their employers “excludes a lot of very serious injuries and conditions that came about as a result of the coronavirus,” said Jim Carney, association chief legislative counsel. Those infected could be in the care of outpatient specialists for months and still not be able to sue their employers, he said.

The legislation also shields from lawsuits companies in “substantial compliance” with federal or state health and employment guidelines. Carney said that language could lead to additional litigation because it is open to interpretation.

Scared to Reopen

The state House approved the legislation 52-44 on June 5 on a straight party-line vote, and the state Senate passed the measure June 10, 31-18. First-term Sen. Jim Carlin was the lone Republican in the Senate voting with Democrats to oppose the measure.

Lawmakers supporting the law argued it gives employers certainty about their legal exposure and allows them to reopen their businesses with confidence. The bill also shields employers from frivolous cases claiming impairments due to Covid-19, Republicans said during floor debate. But opponents said the legislation provides companies with immunity from being sued when they negligently expose their employees to the virus. “Essentially this means that companies have been given the privilege of legal protection without the responsibility to maintain a safe workplace to prevent further spread of a deadly disease in our state,” state Rep. Chris Hall (D) said.

Rep. Gary Carlson (R) said during debate that the measure will help the state’s economy recover by allowing businesses closed by the pandemic to reopen without fearing lawsuits alleging they caused Covid-19 infection or spread. “We are dealing with an uncertain time. And uncertainty is what holds back economies more than anything else,” he said.

Companies want to reopen, “but they’re scared to death they are going to be sued when they have tried to do their best” to protect workers and customers, Carlson said, adding that the bill’s language ensures that those acting recklessly or with malice won’t enjoy the liability protection.

The legislation also shields health-care providers from liability in case of injury or death resulting from screening, assessing, diagnosis, caring for, or treating individuals with suspected or confirmed cases of Covid-19. It also bars lawsuits against health-care providers when a person uses prescribed pharmaceuticals to treat Covid-19 that were approved by the Federal and Drug Administration for a different use.

To contact the reporter on this story: Stephen Joyce in Chicago at sjoyce@bloomberglaw.com

To contact the editors responsible for this story: Tina May at tmay@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

To read more articles log in. To learn more about a subscription click here.