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What About Me? Liability Considerations and Protections For Businesses Outside the Drug and Device Space in the COVID-19 Era

It’s been nearly six months since the HHS Secretary 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 Prep 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.

Am I Exposed?

Lawyers have consistently shown their boundless “creativity” when it comes to finding people to sue, and there’s no reason to expect COVID-19 will be different.  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 / 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. that COVID-19 can be transmitted and contracted in the manner alleged, and specific causation, i.e. 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., 824 F. Supp. 2d 877 (S.D. Iowa 2010), 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. United States, 796 F. Supp. 477 (D. Wyo. 1992), 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 its animals were infected with the relevant bacteria, the plaintiff failed to meet its burden of proving the defendants’ infected elk and bison were the actual cause of the outbreak.

Finally, in Ebaseh-Onafa v. McAllen Hospitals, L.P., 2015 WL 2452701 (Tex. Ct. App. May 21, 2015), a hospital obtained summary judgment on claims that the decedent contracted the H1N1 virus while working in the hospital’s pediatric ICU.  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 non-medical product suppliers could not reasonably foresee the risk of COVID-19 transmission as a consequence of their ordinary operations or use.[10]  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.[11]

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-healthcare product that is used in an unintended / unforeseen manner in a healthcare space?  For example, using salon or restaurant sterilizer cabinets to sterilize masks in a walk-in clinic.  Products 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 & Drug Administration (“FDA”) regulates the labeling and marketing of medical devices, and the known misuse of a non-healthcare product as a medical device could subject the manufacturer to FDA penalties if the misuse violates FDA regulations.[12]

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, McDonalds and Amazon are currently facing nuisance claims “by workers and their family members, who claim that lax workplace safety standards put them in danger of contracting COVID-19.”[13]  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 workers compensation or OSHA-related hurdles,[14] those defenses will not be available against nuisance claims brought by non-employees like customers or even neighboring businesses.

Conclusion

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


[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 (Mar. 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]  See, e.g., N.N.V. v. Am. Assoc. of Blood Banks (1999) 75 Cal. App. 4th 1358 (where plaintiff contracted AIDS through blood transfusion, court held 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).

[11]  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/

[12]  The penalties for violating these regulations are steep, and the government is not excusing companies during this pandemic; instead, it’s 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).

[13]  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).

[14]  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 (“OSHA”) to consider the issues raised by this case”).