Identifying and Mitigating the Product Liability Risks in the U.S. Posed by SARS-CoV-2/COVID-19

Bryan Cave Leighton Paisner
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As with many aspects of SARS-CoV-2, the novel coronavirus responsible for the disease COVID-19, the resulting impact of the virus is in its infancy, with rapid changes expected. At this stage, we have observed limited products liability litigation in the U.S. resulting from the COVID-19 virus, but more litigation is likely on the horizon. 

If any of the products you manufacture, sell or otherwise handle are alleged to be related to any COVID-19 virus exposure, or if there is any reasonable potential for such a claim, you should be prepared to anticipate products liability suits. If a consumer is exposed to the COVID-19 virus as a result of using a product that is deemed “defective,” that consumer may contend that the manufacturer, distributor, seller or others in the chain of commerce should be held liable. Note that this article is not focused on worker safety standards. Please consult OSHA’s website or our Labor and Employment Task Force to address employee/employer specific issues.

What Types of Product Liability Claims Might Apply with Respect to the COVID-19 Virus?

A products liability claim usually occurs where a business manufactures, sells or otherwise supplies a “defective” product to a consumer, who is then injured as a result of such defect. In a SARS-CoV-2/COVID-19 setting, businesses are most likely to encounter product liability claims tied to marketing representations and alleged breach of warranties. Claims based upon negligence and failure to warn are also possible. Strict liability claims, however, seem unlikely in this context except in certain unique settings. It is important to note that any business in a supply chain, from the manufacturer to the retail store and anyone in between, can be held liable in most products liability claims.

Thus far, in the product context, we are seeing claims against manufacturers alleging that they engaged in consumer fraud, misrepresentation and breached certain warranties by making claims about their product’s abilities to protect against the virus without scientific support.

General Steps to Take to Mitigate Product Liability Risk:

There are a few steps that should be taken in most, if not all, situations. They include:

  • Insurance Notifications: Notify your insurers immediately when any claim has been made or if you believe an event has transpired that might lead to a claim. Tell the insurance company you expect them to obtain all necessary information to defend a claim, including potentially biological materials.
  • Review Insurance Policies: Many times companies do not realize they have coverage when they do. The exclusions are complicated, especially with respect to the definitions of pollution and micro organisms. We have experts that can assist on this front.
  • Review Contracts and Supply Chain: Evaluate risks in your supply chain and enter into and/or revise contracts that allocate risk appropriately with vendors and customers, including indemnifications.
  • Employee Training/Product Protection. If your employees are handling or otherwise touching products or their packaging during the manufacturing process, or through any other portion of the supply chain (including stocking, distributing, shipping, shelving, or delivering), consider requiring employees to take extra precautions such as wearing gloves and masks (if possible, given the current shortage) so to increase the likelihood that the product leaves your custody or control in a non-contaminated state. Furthermore, train employees on the protective hygiene measures set forth in the CDC guidance.
  • Follow the Guidance: This includes the CDC, FDA, OSHA, state and local guidance where applicable. These guidelines are discussed in previous blog posts and include:

https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html;

https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/cleaning-disinfection.html;

https://www.osha.gov/Publications/OSHA3990.pdf.

Marketing Claims

We have already begun to see the FDA send out warning letters to certain companies alleging that they were making false or unsupported claims about their product’s ability to protect against the COVID-19 virus or to treat the COVID-19 virus. We have also seen plaintiffs’ attorneys piggy-back on these warning letters and bring class actions that are based upon, among other theories, state consumer fraud statutes, false advertising claims, the tort of misrepresentation and breach of warranty.

Specific Steps You Can Take To Reduce Marketing Claim Risk:

  • Carefully vet marketing materials that are placed online, in instructions, at stores, and on labels. Support marketing claims with sound science.
  • Revise labeling and marketing materials, if appropriate. Since the COVID-19 virus was previously unknown, it arguably would have been impossible to conduct the studies necessary to support certain claims until now.
  • Follow the recommendations in the Breach of Warranty Section below.

Breach of Warranty Claims

Breach of warranty claims can be based on either express or implied warranties. An express warranty may be either written or oral and can be implied by representations on labels or marketing materials. An implied warranty is not stated. It is implied by law, unless specifically disclaimed by the seller. 

Implied warranties for the sale of goods include the implied warranty of merchantability (see Uniform Commercial Code (“UCC”) § 2-314(1)) and the implied warranty of fitness for particular purpose (see UCC § 2-315).

We have already seen a class action brought against a company that allegedly made representations suggesting that its product protected against the COVID-19 virus. It included breach of warranty claims.

Specific Steps You Can Take To Reduce Breach of Warranty Risk:

  • You should disclaim any and all express and implied warranties as appropriate under the law conspicuously (see UCC § 2-316).
  • You should consider excluding third party beneficiary coverage from contracts to the extent allowed by law (see UCC § 2-318).
  • If you have specific questions on this front, reach out to our Task Force members. Please note that states have adopted various provisions and interpretations of the UCC.

Negligence Claims

Manufacturers, as well as the other businesses in the supply chain, have a duty to exercise reasonable care to place products in the marketplace that do not harm persons or property. To show negligence, the consumer must present evidence that the business breached the applicable standard of care in placing a defective product into the stream of commerce and that by doing so the business caused the plaintiff’s injuries.  

Negligent failure to warn cases abound in the product liability arena. Here, for example, one might argue that a company was negligent in failing to warn that a person with the COVID-19 virus handled the product in question, which then infected a person, or that a company was negligent in not following the applicable guidelines on hygiene practices and cleaning, causing someone to be infected. We have recently seen brand-name grocery stores and distributions centers shut down for cleaning because of known COVID-19 exposures. 

While not a product liability case per se, cruise ship passengers brought a failure to warn claim against a cruise lines, alleging that it negligently failed to warn that the ship previously carried passengers who had contracted the COVID-19 virus.

An example of a failure to warn claim in the contaminated product context can be found in HIV case law. In one case, a hemophiliac child died after contracting HIV from contaminated blood. The lawsuit alleged that the manufacturer of a blood-clotting factor known as Factor IX was negligent in failing to warn that the plasma it used to manufacture the product had not been tested for HIV. Similarly, here, if a business learns that its product has somehow become contaminated with the COVID-19 virus, it might be forced to defend a product liability suit if it fails to warn. 

Specific Steps You Can Take to Reduce Negligence and Failure to Warn Risk:

  • Follow the CDC Guidance set forth above, which will likely be considered as part of establishing a standard of care.
  • Consider providing warnings, especially if you are aware that a person with COVID-19 came into contact with your product. Here, the challenge surrounds determining when to warn, how to warn and the content of the warning, which is unique to each fact pattern. We can help draft what we believe to be an appropriate warning.
  • Consider implementing new workforce and product safety protocols and controls that reduce or prevent the potential for consumers to be exposed to the COVID-19 virus by your product and keep detailed records of such implementation. Such measures could include:
    • Intentionally delaying the shipment of packages to reduce the risk that the virus would survive on the packaging. Recent studies show that the virus survives on plastic and stainless steel for 3 days, cardboard for 1 day and copper for 4 hours. It would be prudent to warn workers, and potentially others, of these survival timelines.
    • Requiring employees to wear gloves and/or masks, if possible, when handling product.
    • Staggering employee shifts so that social distancing is easier.
    • Engage in employee health monitoring.
    • Consider using UV light to “sterilize” products and packages. Please note, however, that the World Health Organization has cautioned against the use of UV light to sterilize hands or skin.

Strict Liability Claims

Under a strict liability theory, a business is liable solely when the product at issue is defective, irrespective of the business’ level of care. An action for strict liability may be based on a manufacturing or design defect, or a failure to warn. In general, a manufacturer or seller will be strictly liable for injuries or damages if its products are deemed to be in a defective condition that is unreasonably dangerous to users and the defect was a substantial factor in bringing about the injury or damages, provided certain exceptions do not apply.

While strict liability seems an unlikely theory under most COVID-19 product scenarios, strict liability was imposed in a case where cruise ship passengers contracted Legionnaire’s Disease after an investigation identified the filters of the ship’s whirlpool spa as the source. The plaintiffs sued the businesses that had designed, manufactured, and distributed the filters under theories of negligence and strict liability. The jury awarded $7 million in punitive damages against the manufacturers based, in part, on strict liability, given that the evidence showed the design of the filter created a danger of infectious disease and that at least three alternative designs existed.

Here, since the virus itself is not a product, but rather in most situations would be contaminating a product, a design defect claim, manufacturing defect claim or failure to warn claim seem unlikely except in extreme situations. In fact, in a food contamination case, a court held that “if the food or beverage was contaminated by Norovirus, it was not because the food or beverage itself was defective” but rather it was contaminated by the negligent acts of the employees. Therefore, the plaintiffs’ strict liability claim failed and they were left with “a general negligence claim, pure and simple.” The same reasoning would appear to apply in a COVID-19 strict liability case. 

However, if you sold a piece of equipment intended to prevent the spread of the virus and it malfunctioned due to a manufacturing defect or contained a design defect, strict liability might be imposed unless the product was covered by immunity. See Countermeasures below.

Specific Steps You Can Take to Reduce Strict Liability Risk: 

  • Be very careful regarding any claims or representations regarding the product unless backed up by sound science.
  • Use good manufacturing practices to ensure products are not defective.
  • Subject products to appropriate testing to determine that no defects are present.
  • Determine whether your products qualify for immunity under the Families First Coronavirus Response Act because they are intended as a countermeasure for the COVID-19 virus, as discussed in more detail below.

The Plaintiff’s Causation Problem

A plaintiff in a products liability case also must show that the alleged defect caused their injury. This causation element is likely to be a very high hurdle in a COVID-19 products liability case.

However, causation has been found in prior disease transmission cases, such as West Nile and Legionnaires. For instance, in a Legionnaires’ case, the court allowed plaintiffs to offer expert epidemiological opinions, based on circumstantial evidence, to prove the source from which the disease was contracted. Legionnaires’ disease is caused by the Legionella bacteria, which exists in several different serogroups and subtypes, and is often contracted by inhaling vapor from a water source in which the bacteria is present. Accordingly, experts have been permitted to opine on the source of a plaintiff’s Legionnaires’ disease by matching the serogroup and subgroup of the particular Legionella bacteria found in the plaintiff with the bacteria found in a particular water source.

Additionally, courts have examined timing when investigating causation. For example, a court found that it was more probable than not that a person contracted West Nile from a mosquito bite at work since he spent significant time at work during the timeframe the West Nile virus would have been incubating despite widespread outbreak elsewhere. Here, experts claim the incubation time can be up to 14 days. While the West Nile case is more akin to a premises liability claim, plaintiff might try and extrapolate it to a product liability setting (e.g., determining whether a warehouse worker spent significant time around a specific product during the time the virus would have incubated). That being said, such an argument likely would be met with significant judicial skepticism.

Plaintiffs have also attempted to prove causation in disease related cases by showing that the disease affected a disproportionate percentage of individuals at a particular location (or possibly a disproportionate number of persons who came into contact with a particular product). In a recent matter, a plaintiff established he was exposed to aspergillus fungus at a jobsite where five co-workers also suffered respiratory illness following work at the same location. On the other hand, courts have found that the lack of an outbreak of cases at one location can defeat a causation claim.

It is difficult to predict how a court might deal with causation issues relating to the spread of COVID-19 because it is not yet clear precisely how the disease is transmitted, whether through respiratory droplets, through surfaces and then touching one’s face or otherwise. See How Coronavirus Spreads, CDC, https://bit.ly/2UihT0z (visited 3/25/2020). 

Over time, it will likely become increasingly difficult to establish that the COVID-19 virus was contracted from any particular source as the virus becomes more widespread. However, since social mobility is partially limited due to certain shelter in place orders, plaintiffs will have an easier time identifying where they might have contracted the virus and/or from what product at this point in time. Grocery stores seem particularly at risk given that workers are stocking the produce immediately before it is picked up by the consumer. In short, however, causation here will be very difficult to prove. 

Specific Steps You Can Take to Build a Potential Causation Defense:

  • Pre-Emptive Sampling: Although a unique approach, you could consider taking environmental samples of the virus (if possible) that are/were present on your product and storing them under appropriate conditions prior to or during cleaning. This type of sampling has been done in hospital settings. https://jamanetwork.com/journals/jama/fullarticle/2762692 (conducted air, surface and personal protective equipment sampling). This could potentially shield you from liability in certain situation, such as when a person with the COVID-19 virus makes you aware that they touched a product within your possession, custody or control and then someone sues you claiming exposure to that product or products that were in the same area. COVID-19 is an RNA virus that mutates often, meaning its genetic sequence will undergo many small changes over time, creating a unique signature. https://www.newscientist.com/article/2236544-coronavirus-are-there-two-strains-and-is-one-more-deadly/. This indicates that multiple strains of the virus exist, each with its own genetic code.      

If litigation occurs and samples were preserved, it would then be possible to compare the whole viral genome sequences of virus sample(s) from your product and from the infected person. If the two sequences are different, there is a potentially good causation defense. If the two sequences are identical, it is possible that the viral infection was in contact with the product. At this point, no available viral diagnostic kits are known to be able to identify differential viral strains. However, as of March 10, 2020, companies were working toward this goal. https://www.illumina.com/company/news-center/feature-articles/illumina-perspective-on-the-novel-coronavirus–covid-19–outbrea.html.

While novel, such sampling could prove to be a strong pre-emptive measure. Such sampling and analysis must be done by someone properly certified and credentialed, who would collect and store your samples using all appropriate sampling, preservation and safety protocols under appropriate chain-of-custody documentation. Furthermore, please note that these samples may contain human pathogens; as such, they can only be analyzed by laboratories certified to process human pathogens. We routinely work with experts in these areas.

  • Sound Recordkeeping: Keep detailed records regarding employees and where they work at specific times; keep detail records regarding products; maintain lot samples of manufactured product.
  • Sick Employees: If an employee or contractor is sick, follow OSHA guidance, including isolating them and taking steps to limit the spread Confidentiality laws limit what you can ask, but if they later tell you they contracted the COVID-19 virus, follow the advice set forth in our blog on this topic at bclpemerging.com.

Countermeasures and Immunity

Certain products that are intended to be countermeasures against the COVID-19 virus are protected against tort liability through October 1, 2024, including FDA-approved or cleared diagnostics, treatment, vaccines, and masks approved by either FDA or NIOSH. 85 FR 15198 (March 17, 2020); Families First Coronavirus Response Act (PL 116-127). However, willful misconduct is not protected. In order to obtain such protection, your product must qualify under the statute, which in most instances requires obtaining FDA Emergency Use Authorization or other federal approvals.

Note: These suggestions mostly assume a circumstance where the business is unaware of any reason why the products at issue would have been exposed to the virus. If a manufacturer or any other business in a supply chain is aware that its products have been exposed to someone who has tested positive for the COVID-19 virus, more detailed advice should be sought from counsel.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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