As lawmakers debate the contours of the next COVID-19 economic response package, extending legal liability protections to businesses has emerged as a central sticking point between congressional Republicans and Democrats. This alert provides an overview of the debate around liability protections, including legislation that has been introduced and positions taken by key lawmakers and advocacy groups.
State of Play
Congressional Republicans view liability protections as essential for a robust economic recovery and argue such protections are necessary to shield businesses from an onslaught of lawsuits from employees and customers. Senate Majority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarthy (R-CA) have indicated Republicans are united in their demand to include the provisions in “Phase Four” legislation, and McConnell has even said the next package will not “pass the Senate without it.”
Congressional Democrats, on the other hand, have resisted this effort. House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) have voiced their opposition to liability protections, arguing that such a measure could threaten worker safety. Opposing McConnell, Pelosi indicated House Democrats “would not be inclined to be supporting any immunity from liability.”
Like congressional Republicans, the Trump administration favors legal liability safe harbors and is reportedly examining what unilateral authority the president may have in the absence of congressional action. At the same time, President Trump has said Phase Four legislation must contain provisions “having to do with liability for COVID.” National Economic Council Director Larry Kudlow has lent his support for the idea, arguing that “You’ve got to give the businesses some confidence that if something happens … you can’t take them out of business.” Treasury Secretary Steven Mnuchin, who has been the administration’s lead negotiator with Congress, has continued to say that liability protections remain a top priority for the administration.
Business organizations have also been advocating on both sides of the issue. The U.S. Chamber Institute for Legal Reform (ILR) has been leading the effort to enact liability protections and is joined by right-leaning think tanks and business advocacy groups seeking to secure legal protections.
Spearheading the opposition is the American Association for Justice (AAJ), which is joined by labor unions and consumer advocacy groups.
It remains unclear how the American electorate views the issue. Two recent polls offer competing views of public support for liability protections. ILR conducted a survey that revealed 61% of voters support additional protections for businesses, while 27% oppose such measures. At the same time, AAJ published a survey showing just the opposite—that 64% of voters opposed liability protections, while 36% supported them.
Congressional Activity: Senate Judiciary Committee Hearing
On May 12, the Senate Judiciary Committee joined the liability protection debate by holding a hearing, entitled “Examining Liability During the COVID-19 Pandemic,” during which lawmakers explored the issue in greater depth.
Although the issue has starkly divided the two parties, lawmakers were able to find common ground during the hearing. Both Republicans and Democrats acknowledged that, in order to protect workers and consumers and guard businesses from unnecessary lawsuits, enforceable federal guidelines outlining proper procedures for businesses would be necessary. A bipartisan group of lawmakers called on the Trump administration to issue guidance, either through the Occupational Safety and Health Administration (OSHA) or Center for Disease Control and Prevention (CDC). Democrats said such guidance would provide a measure against which business actions to protect worker safety could be gauged, and some Republicans appeared reassured that the guidance would provide businesses a “regulatory compliance defense” against unscrupulous lawsuits, allowing them more confidence in reopening.
There was also bipartisan hesitancy about the role of Congress, as some lawmakers interpreted liability protections as an issue squarely within the jurisdiction of states. Sen. Mike Lee (R-UT) and Sen. Josh Hawley (R-MO) both observed that tort law is a states’ issue and that federalism concerns are important considerations. On the Democratic side, Sen. Patrick Leahy (D-VT) noted that Republicans who often cite federalism and states’ rights have been notably absent from the debate.
There was bipartisan agreement that, since it may be difficult to determine whether or not an employee or consumer contracted the virus at a particular business, establishing causation would be challenging. Despite this, Republicans and Democrats had different views about the ramifications of widespread COVID-19-related litigation. Republicans said the proliferation of lawsuits would provide a deterrent to economic growth as businesses would be hesitant to reopen under fear of being sued, despite their best efforts. Democrats, on the other hand, doubted there would be a large number of liability lawsuits due to difficulty in establishing causation, but asserted that potential lawsuits against negligent actors would encourage employers and business owners to take appropriate care, and would afford those injured by negligent actors a means of redress.
Prior to the Senate Judiciary Committee hearing, broad statements of support or opposition from lawmakers consumed the public debate related to liability protections. The issue has been advanced by several industry advocacy groups, which have taken relatively more detailed positions and outlined more thorough arguments.
Below is an overview of the major players on both sides of the debate.
Organizations for Legal Protections
Broadly speaking, organizations advocating for liability protections have not called for blanket immunity. Instead, they tend to advocate for specific safe harbors that will provide protection from lawsuits for businesses who comply in good faith with governmental guidance. Many of these groups have suggested no liability protection would be afforded to those who are grossly negligent or who act with intentional or willful disregard for safety. Businesses and nonprofits fear overzealous plaintiff attorneys will burden them with “meritless and abusive civil litigation” and point to a list of lawsuits that have already been brought as evidential support. The groups argue that even the possibility of lawsuits could discourage some businesses from reopening before the pandemic completely subsides, further delaying and potentially prolonging an economic recovery.
ILR has been the loudest voice in pushing lawmakers to adopt liability protections. It has urged Congress to enact legislation that would protect businesses behaving in accordance to governmental standards and guidance from legal action. ILR suggests this legislation should act as a “floor” for liability protections, establishing uniformity among the states, above which states could enact more robust protections. Businesses involved in gross negligence or willful misconduct would not enjoy liability protection under their proposal. In addition, ILR has urged lawmakers to establish federal jurisdiction over lawsuits between parties whose citizenship differs. It argues this “minimal diversity” would prevent forum shopping in which certain “magnet state courts” become the location for most COVID-19 related litigation.
ILR is joined by an army of think tanks and trade associations. The Heritage Foundation, for example, has released a report in which it provides eight suggestions for federal legislation, including retroactive protection, federal jurisdiction for interstate cases and protection for future pandemics. Like ILR, Heritage recommends protections should not cover businesses engaging in willful misconduct or committing fraud during administrative review.
The National Federation of Independent Business (NFIB), like Heritage, has released a list of Liability Protection Principles, which it hopes will ensure small businesses are protected from pandemic-related lawsuits. NFIB suggests Congress (1) provide businesses immunity from COVID-19-related cases except for instances of gross negligence and (2) impose sanctions on attorneys bringing frivolous COVID-19-related claims. However, unlike ILR and Heritage, NFIB has asked Congress to ensure that employer liability for physical injury due to COVID-19 be adjudicated under state workers compensation laws.
Scholars at the American Enterprise Institute (AEI) have also joined the debate. In an op-ed published in the Washington Post, AEI Resident Fellow Marc Thiessen argued that, absent congressional action, businesses could be subject to legal suits despite their best efforts. Without further protections, Thiessen argues that even businesses following federal guidelines could be sued for negligence if an employee contracts COVID-19. Because of this, he called for legislation that protects businesses acting in good faith, while not shielding bad actors.
Americans for Tax Reform (ATR) is another group advocating for legal protections. In an op-ed published in The Hill, ATR President Grover Norquist argues it is virtually impossible to determine where and when an illness—particularly one that can go undetected for days—was contracted. He argues that even unsuccessful lawsuits would drain millions from businesses that must defend themselves.
Hundreds of organizations have sent letters asking lawmakers to include legal protections in Phase Four legislation. A sample of recent letters is below.
• Groups representing hospitals, health systems and other health care organizations urged congressional leadership to adopt legal protections that shield health care professionals acting in good faith.
• Over 100 organizations from the hospitality, travel, restaurant, retail and gaming industries sent a letter to congressional leadership asking for liability protections for businesses acting in good faith.
• Hundreds of organizations sent a letter to congressional leadership urging lawmakers to protect businesses from lawsuits, particularly those in essential industries.
• Over 20 state attorneys general sent a letter to the leaders of the Senate Judiciary Committee and the minority and majority leaders asking for “a common-sense framework to provide liability protections.”
Organizations Against Legal Liability Protections
Groups opposing liability protections argue that the threat of lawsuits will enhance worker and consumer protections. They believe businesses have a responsibility to ensure the safety of all those on their premises. They often cite similar obligations businesses are required to meet, such as protecting employees and customers from slippery floors or other dangerous situations. Further, these groups suggest that protections have already been enacted into law in the form of “affirmative defenses” for businesses that provide “countermeasures” for combatting the disease, so more protections are unnecessary and could risk employee and consumer safety.
The opposition has been led by AAJ, which has argued that workers and consumers will be reluctant to re-enter an environment in which they feel at risk of contracting COVID-19. They claim these individuals will be “deterred from coming back to work” if “adequate protective equipment and other safety measures” are not taken. Because of this, AAJ argues that “establishing legal immunity for businesses that operate unsafely would do the opposite of instilling public confidence.” Rather than focus on legal protections during Phase Four legislation, AAJ has urged lawmakers to focus on other provisions that provide relief to businesses and individuals currently enduring economic strain. The group’s CEO, Linda Lipsen, has even accused McConnell of holding the “COVID package hostage with his agenda,” calling it “unpatriotic.”
Organized unions have also opposed including liability protections in Phase Four legislation. At the forefront of the debate has been the AFL-CIO, which joined more than 100 other organizations in a letter to lawmakers arguing that legal protections would undermine public confidence. They claim legal immunity would “introduce new anxieties” for those uncertain as to whether a return to normalcy is appropriate. Like ILR, they point to the numerous lawsuits that have already been filed since the onset of the pandemic. However, unlike ILR, the AFL-CIO interprets these suits as evidence that legal protections are necessary to ensure the pandemic does not become “an excuse for failing to protect workers and the public.”
Ahead of the this week’s hearing, the AARP sent a letter to Senate Judiciary Committee Chair Lindsey Graham (R-SC) and Ranking Member Dianne Feinstein (D-CA) expressing their opposition to blanket immunity for businesses. In the letter, AARP Chief Advocacy and Engagement Officer Nancy LeaMond said “it is essential that long-term care providers, as well as health care providers more broadly, remain responsible for any negligent actions that fail to protect the health and lives of residents.” The group urged Congress to ensure nursing homes and other facilities are held responsible while providing care.
In addition, consumer advocates, such as the Consumer Federation of America and the National Association of Consumer Advocates, oppose liability protection efforts. In a letter to congressional leadership, consumer organizations claim calls for legal immunity “are premised on a false choice between the return to a healthy economy and allowing businesses to be held accountable if their carelessness causes people to get sick.” They posit that such efforts seek to override state laws, as they provide the mechanism through which individuals seek redress. The groups also accused longtime advocates of legal protections for their “opportunistic attempt to use the anxiety that we all share today to push through a groundbreaking weakening of the law.”
Mary Kay Henry, president of the Service Employees International Union (SEIU), has called on Democratic lawmakers to resist the temptation to compromise on liability protections, asking “Why in the world would we engage in a conversation about compromise now?” She has also called it “an outrage that employers and corporations are seeking to shirt their responsibility when workers on the frontlines of this crisis don’t have what they need.”
Below is a list of legislation that has been introduced related to liability protection.
• The Facilitating Innovation to Fight Coronavirus Act (S.3630), introduced by Sen. Ben Sasse (R-NE), would limit the liability for health care providers treating patients with COVID-19. The legislation has no cosponsors.
• The Coronavirus Public Safety and Economic Recovery Act (H.R.6664), introduced by Rep. Tim Burchett (R-TN), would require the Center for Disease Control and Prevention (CDC) to develop guidelines for an economic reopening. Businesses that adhere to the guidelines would be offered liability protection under federal law. The legislation is cosponsored by three House Republicans.
• The Employer and Employee COVID Protection Act, introduced by Rep. Mike Turner (R-OH), would guard employers complying with federal and state laws from tort claims by employees who contract COVID-19.
• Rep. Andy Biggs’s (R-AZ) H.R.6601 would require federal courts, during civil actions arising from the transmission of COVID-19, to instruct juries that negligence may not be decided solely on the basis of holding oneself open for business. The legislation has no cosponsors.
• The Good Samaritan Health Professionals Act of 2020 (H.R.6283), introduced by Rep. Raul Ruiz (D-CA), would limit the liability of health care volunteers in response to a disaster. The liability would not apply if the harm was caused by willful or criminal misconduct, gross negligence or conscious flagrant indifference to the rights or safety of those harmed. The legislation is cosponsored by five House Democrats and 10 House Republicans.
A Senate companion (S.1350) to H.R. 6283 was introduced by Sen. Bill Cassidy (R-LA) in May 2019. The Senate version is cosponsored by eight Senate Republicans, in addition to Sens. Jeanne Shaheen (D-NH), Joe Manchin (D-WV) and Angus King (I-VT).
House Democrats made the opening bid in Phase Four discussions when they released legislation on May 12. As expected, the bill does not include liability protections. The House could vote to approve the package as soon as May 15.
Senate Republicans are expected to continue objecting to legislation devoid of liability protections. Instead, they are drafting legislation that is expected to contain liability reforms. This legislation could be unveiled soon. At the same time, Senate Republicans are in no rush to approve more spending packages before the full effects of previous economic response packages can be realized and reviewed. Because of this, the Senate is unlikely to consider Phase Four legislation until June.