On May 15, the U.S. House of Representatives passed a $3 trillion supplemental spending bill. A third of that figure — or $1 trillion — was reserved for direct payments to state and local governments as reimbursement for the COVID-19-related costs they have absorbed.
In the U.S. Senate, Majority Leader Mitch McConnell, R-Ky., responded by noting that “trial lawyers ... are descending already on hospitals and doctors and businesses.” He declared that “we can’t pass another bill unless we have liability protection,” calling it a “red line” issue that must be addressed if the Senate is to act. His remarks prompted House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., to oppose the introduction of the issue into the debate.
On May 12, though, Senate Judiciary Committee Chairman Lindsey Graham, R-S.C., convened a hearing aimed at finding a potential collaborative solution, and it appears, as a practical matter, that some sort of solution is a condition precedent to sending more money to the states and localities that are clamoring for it.
The solution, however, if there is one, is neither simple nor obvious.
It seems clear that when businesses reopen their doors, they will do so cautiously. They cannot fairly expect to survive if they also have to grapple with predatory class-action lawsuits, even if their exposure were limited to the worst of the pandemic.
During his testimony before the Senate Judiciary Committee, Georgetown Law School Professor David Vladeck reassuringly said, “The touchstone of common law torts has always been reasonableness: There is no liability so long as the entity acts reasonably.”
That’s certainly true, as a matter of law, but it ignores reality in a litigious environment like businesses are facing now. The claims trial lawyers are poised to bring will likely be not so much aimed at proving actual liability as they will be intended to coerce quick and lucrative settlements. This especially is true for companies or industries that simply cannot tolerate the brand damage that will be the inevitable product of the trial bar’s orchestrated publicity campaign, made worse by accompanying organized social media protests.
Another problem is pre-emption. There is no reason to enact federal liability protections if state law is left unaltered. However, since most tort claims are litigated in the states, pre-emptive immunity, at least for the duration of the pandemic, would have to be accompanied by the creation of unambiguous national standards. While it is prudent to defer to states the power to decide when and to what extent they open up for business, once they do, it is a federal responsibility to regulate interstate commerce and supervise the nation’s re-entry into the world economy.
In the end, resolving this problem will be a delicate — but necessary — exercise, and it might involve multiple steps.
First, eliminate all class actions only insofar as they relate to lawsuits focused on COVID-19 issues, and recognize that customers assume the risk of contracting the virus whenever they decide to enter a theater, restaurant or some other public venue. Customers have to balance their options and choose, and every one of them is capable of doing that.
Second, the Centers for Disease Control and Prevention (CDC) and the Occupational Safety and Health Administration (OSHA) must issue precise and unambiguous “best practices” for the creation of a reasonably safe workplace environment — understanding that clarity too often is elusive where “guidance” is concerned, but it absolutely is imperative that it exist here.
Third, small businesses need to be protected. After all, in 2019 they employed 47.3% of the private workforce. That is best done by giving those who employ 100 or fewer employees blanket immunity for the duration of the pandemic, as defined by the CDC, so long as they don’t engage in gross negligence.
Fourth, once these guidelines are issued, businesses should receive either a rebuttable presumption of reasonableness or an affirmative defense against liability, based on a showing that they have incorporated best practices into their daily routines.
Last, these best practices would not be mandated, simply because of enforcement resource limitations within OSHA and the CDC, as well as the need to move quickly. But any business that fails to adopt and implement them would be left on its own.
Congress and the White House must understand that, like it or not, businesses need to be protected as they inch their way back to somewhere close to normal, and liability protection is a necessary component of that journey. Time is no longer a luxury the economy can afford.