Iowa Legislature Passes Law to Help Protect Businesses Against COVID-19 Lawsuits

Dentons Davis Brown

Davis Brown Law Firm

The Iowa Legislature and Governor Kim Reynolds wasted no time enacting new legislation that offers broad protections to businesses, landlords, employers, and medical providers, among others, in the face of expected litigation stemming from COVID-19.

The new law, SF2338, the COVID-19 Response and Back-to-Business Limited Liability Act, creates a higher bar for individuals bringing civil actions alleging either exposure or potential exposure to COVID-19. It also contains other provisions aimed at protecting businesses and individuals against COVID-19 lawsuits.

Heightened “Actual Injury” Requirement for Plaintiffs

Under the law, to bring or maintain a COVID-19 lawsuit alleging exposure or potential exposure to COVID-19, a plaintiff must, among other things, demonstrate one of the following three requirements, which is referred to in the law as the “actual injury” requirement.

  1. The individual-plaintiff was either hospitalized due to or died from COVID-19
  2. The defendant acted with the intent to cause the plaintiff harm
  3. The defendant acted with actual malice

Regarding the third basis, actual malice means conduct that is done with ill-will, hatred, or the desire to do the other party harm.

If a party cannot establish one of the three elements above, the party will be unable to maintain an action in an Iowa court. 

This new “actual injury” requirement creates a higher bar for any plaintiff seeking to pursue litigation, which should substantially limit the number of lawsuits based on COVID-19 exposure.

Safe Harbor Defense for Defendants Complying with COVID-19 Guidance and Regulations

The law also provides a safe harbor defense for businesses and individuals against whom lawsuits are filed. The law states that a business or person shall not be held liable for civil damages for any injuries sustained from exposure or potential exposure to COVID-19 if their conduct was in substantial compliance or was consistent with federal or state regulations, executive orders, or public health guidance related to COVID-19 applicable at the time the alleged exposure occurred.

Such guidance and regulations can come from the CDC, the Centers for Medicare and Medicaid Services, OSHA, the office of the governor, or other state agencies, including the Iowa Department of Public Health.

There is no limit as to the types of defendants this section applies to, as the definition includes individuals, corporations, limited liability companies, governments and their subdivisions or agencies, business trusts, estates, partnerships, associations, and other legal entities.

This safe harbor defense emphasizes the importance of businesses understanding and following governmental guidance on COVID-19. Specifically, based on this section, landlords, employers, businesses, and other individuals and entities can most easily protect themselves from liability by consistently checking and following COVID-19 guidance from the above noted governmental authorities.

If allegations of COVID-19 exposure were to arise, it will be important to demonstrate what public health guidance was being followed and in what ways. Continuous documentation and recordkeeping of these efforts is suggested.

Seek legal counsel to discuss these risk management topics in more detail.

Protection for Property Owners, Landlords, and Other Businesses in Possession of Real Property

The law provides that a business or person who possesses or is in control of real property (including commercial, residential, and public businesses, residences, and other real property) is protected from liability related to exposure to COVID-19 unless the plaintiff can prove that the business or person possessing or in control of the property:

  1. Recklessly disregarded a substantial and unnecessary risk that others would be exposed to COVID-19
  2. Exposed an individual to COVID-19 through conduct constituting actual malice
  3. Intentionally exposed an individual to COVID-19

Individuals who are “in control” of property include tenants and occupants, not just the outright property owner. Therefore, this section applies broadly and would include employers in control of their premises, no matter whether they own, rent, or simply occupy the property. This portion of the law should also help substantially limit lawsuits based on COVID-19 exposure.

As with the above safe harbor provision, this portion of the law emphasizes the importance of businesses understanding COVID-19 risks and governmental guidance on COVID-19. Seek legal counsel if you have any questions.

Additional Provisions Applicable to Health Care Providers

The law sets forth several additional provisions limiting the liability of health care providers. A separate post focusing on this portion of the law will be published soon.

Big Picture

As the COVID-19 pandemic continues to threaten our communities, it is important to continue to consult with public health experts and legal counsel to determine the right steps to protect yourself and your organization.  Keeping records of the guidance and the steps you’ve taken to abide by this guidance may reduce your risk of future lawsuits.

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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