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Virus Liability Shields Move Ahead in Louisiana, Other States

June 4, 2020, 2:11 PM

Louisiana is the latest in a small but growing number of states advancing plans to shield businesses from lawsuits by employees or customers who contract Covid-19 in the absence of federal liability protection.

Multiple bills are awaiting review by Louisiana Gov. John Bel Edwards (D), including at least four to shield various categories of businesses, organizations, and government entities from coronavirus-related lawsuits. Among them, SB 508 would provide immunity for restaurant operators from civil liability related to Covid-19, while HB 826 would more broadly shield businesses and specifically block employees from bringing a complaint in court, limiting their relief for on-the-job infections to the state’s workers’ compensation system.

If Edwards signs the legislation, Louisiana would join North Carolina, Oklahoma, Utah, and Wyoming in enacting broad liability protections for businesses related to Covid-19. Similar bills have passed one legislative chamber in Arizona and Ohio, as other states consider liability proposals and still more have enacted narrow liability limits specific to health-care providers.

Supporters of liability shields see them as a way to limit the legal risk for businesses reopening during the Covid-19 pandemic and to potentially help spur economic recovery. Opponents see them as making it harder to hold businesses accountable if they neglect virus-related safety precautions for workers and customers. The issue has been a high priority for chambers of commerce and other business groups, and U.S. Senate Majority Leader Mitch McConnell (R-Ky.) insisted that liability protection be included in any future federal Covid-19 relief legislation. Nonetheless, federal legislation has yet to come to fruition, leaving the action on liability to the states.

“The whole point of this is to try to give some sort of reassurance. Any way that we can help just a little bit to give these businesses a chance to come back and reestablish themselves—it was a no-brainer,” said Louisiana state Sen. Patrick McMath (R), who sponsored SB 508.

A spokeswoman for Edwards said the governor will review the bills and then decide whether to sign them. Each of the bills got final passage in the legislature with unanimous or nearly unanimous votes.

Opponents such as the plaintiffs’ lawyers group American Association for Justice say the state and federal immunity proposals are driven by an unfounded fear of frivolous litigation over Covid-19. The way to revive the economy will be to assure consumers and workers that businesses are taking appropriate precautions to keep them safe, said Daniel Hinkle, the association’s senior state affairs counsel.

“They need to be doing what is necessary to make their patrons feel safe to return to their business, and I don’t think giving them immunity helps,” Hinkle said.

Pressure for State Action

The potential for inaction in Congress makes the push for state legislation all the more significant, said Sherman “Tiger” Joyce, president of the American Tort Reform Association.

“Given the fact that it may not do something, which we don’t know, then I think it’s incumbent on states to address potential liability as it relates to Covid-19,” Joyce said.

As a number of states press ahead with their own proposals, the conservative policy group American Legislative Exchange Council is close to completing model legislation that state lawmakers could adopt or use as a guide for business liability protections.

The draft of the model, which Ronnie Lampard, an ALEC staff member who heads the group’s civil justice task force, provided to Bloomberg Law, calls for immunity from civil liability for any business or entity related to a disaster or declared public emergency, as long as the business followed the guidance or regulations issued by local, state, or federal authorities in response to the emergency.

“This is not just a blanket ‘get out of liability free’ card,” Lampard said.

If no guidelines or recommendations are issued, then businesses would be immune from liability related to an emergency as long as their actions didn’t amount to “recklessness or willful misconduct,” according to the draft policy.

ALEC’s civil justice task force approved the model May 29, and it’s due for a final vote by the full ALEC board within days, he said.

Julia Duncan, senior director of government affairs at the American Association for Justice, said advocates for liability limitations have a history of seeking to limit legal claims during and after disasters and public health crises such as the swine flu outbreak and the Sept. 11 terrorist attacks.

The ALEC model, which doesn’t specifically reference Covid-19 but would apply broadly to public emergency declarations, is “very telling,” Duncan said. “They’re using this moment in time, but is it really about this moment in time?”

‘Not a Blanket Shield’

For businesses and employers trying to limit their liability risk, the legislation moving in states like Louisiana helps but doesn’t absolve them of their duty to maintain safe operations for workers and customers, said Kristen Nesbit, a Los Angeles attorney who co-chairs Fisher Phillips’ California litigation practice.

“It gives them some reassurances, but it’s not a blanket shield,” Nesbit said. Most of the legislation passed or proposed in states requires that companies follow local, state, or federal guidance or regulations related to preventing the spread of Covid-19 in order to qualify for immunity, she noted.

Despite the uneasiness and desire to avoid litigation, Nesbit also said businesses could take some comfort in knowing plaintiffs would have to prove they contracted the coronavirus at a particular location to win a lawsuit against that business.

“That’s an extremely high burden for an employee or a member of the public to prove,” she said.

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

To contact the editor responsible for this story: Karl Hardy at khardy@bloomberglaw.com

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