Lobbysts, Republicans push to give immunity to corporations against negligence claims, as insurance industry predicts largest event in its history.

LEGAL • BUSINESS 05.30.20

As the country begins lifting the COVID-19 lockdown, business is asking for limits on its own liability exposure. Legal scholars question the constitutionality of such unprecedented immunity protection. Public interest groups warn it could mean everything will be blamed on "the plague."

Over 2,000 thousand lawsuits have been filed in connection with the novel coronavirus for matters including breach of contract, civil rights violations, negligence, wrongful death, and labor and employment.

Indeed, the insurance industry is braising itself for " 'the largest event in its history,' " according to Chubb Ltd. CEO, Evan Greenberg, Insurance America, reports.

A COVID-19 Complaint Tracker from the Hunton Andrews Kurth law firm showed that as of May 29, there were 2,300 Complaints filed.

Claims arising out so called "acts of God" fall under the legal concept of force majeure, which may "intersect with pandemics," Torsten Kracht, an attorney at the firm told the Washington Post . These claims would test areas of the law that "haven't gotten a lot of attention."

“ 'What we don’t know yet, because this is all so new, is what judges are going to do with those cases,' ” New York attorney Aaron Crowell, told the Washington Post.

But judges may never get to hear some cases.

States are granting lawsuit protections "to insulate businesses on their own," The Hill reports.

And lobbyists are asking Congress for protection from litigation, citing the anthrax attacks of 2001 and Y2K as precedents, Reuters reports.

The U.S. Chamber of Commerce's "top legislative goal" is to obtain broad protections from lawsuits brought against companies that follow the Centers for Disease Control and Prevention (CDC) guidelines, Roll Call reports.

"Basically, if companies follow the government suggestions, they shouldn’t face lawsuits, the chamber says," Roll Call.

The chamber "expects another COVID-19 bill before July 4." It's calling for protection for claims arising out of the following:

  • Health privacy violations.
  • Employment discrimination.
  • Safe workplace requirements.
  • Employment practices.
  • Exposure to customers/employees/patients/public.
  • Product liability.
  • Medical liability.
  • Securities litigation.
  • Customer communications.
  • False claims for firms receiving federal loans and relief.

Nathan Morris, a lobbyist for the chamber, said the proposals call for "temporary," "targeted," "timely" reforms, "tied specifically" to the coronavirus.

They are " 'narrowly tailored and exclude liability protection for gross negligence, willful misconduct, or recklessness. ' " Roll Call.

Passage of the next relief package may be contingent on liability protection.

Senate Majority Leader Mitch McConnell said liability protection is a " 'red line' priority for Republicans."

And Trump has said he favors " 'curbs on frivolous litigation … a thing I know something about. There’s a lot of frivolous litigation.' "

Senator Lindsey Graham said the goal is not to "preempt all state laws," or "replace the tort system," but to reopen the country "without rewarding bad actors." JD supra reported.

Others say it will lead to a lack of accountability, comparing it to easing Environmental Protection Agency (EPA) standards during the pandemic.

It could allow corporations to apply pandemic liability limits in cases not related to COVID-19, Public Citizen executive president, Lisa Gilbert said.

“ 'COVID-19 is impacting every facet of American life right now. You could have a situation where customers and workers don't have legal recourse…because anything could perhaps be blamed on the fact we’re in the midst of a pandemic, ' ” Roll Call.

Legal scholars say there is no precedent for blanket immunity.

There is no precedent for "bestowing broad immunity from liability," Georgetown Law professor, David C. Vladeck testified before a Senate Judiciary Committee hearing on liability during the pandemic.

It is "far from clear" if it is Constitutionally permissible "to simply wipe away state liability rules without enacting substantive legislation imposing federal regulatory oversight or an alternative compensation system, or both."

According to Anthony Sebok, Cardozo Law School,

" 'They have to come up with, I think, an adequate substitute for the tort rights they are replacing,' " Court House News reported.

If you want to shield a restaurant chain with "blanket immunity," he added, "the right way to do it would be to come up with an equivalent like we’ve done in the past," suggesting a compensation fund like the one created for 911 victims.

University of Virginia law professor, J.H. "Rip" Verkerke notes,

"This looks to me more like, ‘Let’s get rid of liability. ' ” It could be “constitutionally suspect."

Elaine Sarduy is a freelance writer and content developer @Listing Debuts