Monday, July 20, 2020
The Ontario workers’ compensation agency has made public a commissioned report on how the law can be improved so that science more properly informs the manner in which presumptions can aid the compensability of occupational cancers. And the focus is indeed cancer, but the author notes at the outset that the one issue he will not be addressing is the thorny issue of cancer in firefighters – an issue in Canada as well as in the U.S. See Paul A. Demers, Ph.D., Using Scientific Evidence and Principles to Help Determine the Work-Relatedness of Cancer (Jan. 9, 2020), https://www.ontario.ca/document/using-scientific-evidence-and-principles-help-determine-work-relatedness-cancer.
Ontario, of course, has a mandatory workers’ compensation system, with a proactive administrative agency. The program is similar to those of U.S. states, though all Canadian provinces feature fund systems like those of Ohio and Washington. Such programs typically have powerful agencies. The Canadian system, according to the report, is supposed to be non-adversarial.
This report is definitely for the wonk, but is educational in myriad ways. The author explains, for example, the current scientific thinking about how cancer manifests itself. Reflecting on this point, the report posits that disease manifestation provisions can exclude claims of individuals whose diseases manifest late but are nonetheless work-exposure-related. The author also explains that, for decades, research has focused on the carcinogenic effect of an array of suspected agents, but research is much weaker, or absent, in addressing such effects when an individual is exposed to multiple agents at the same time, over a period of time, and/or at successive workplaces.
Of special interest to the U.S. reader is the author’s discussion of presumptions. This feature of workers’ compensation laws, he explains, is common to Europe, Canada, and the U.S. (Indeed, they were part of the English enactments which formed the basis of early American laws.) Notably, under the Ontario system, workers with the necessary exposure who incur two particular cancers enjoy a non-rebuttable presumption of causation. These are mesothelioma in workers exposed to asbestos and, in a feature unknown to state laws in our country, nasal and sinus cancer in workers in specific workplaces. (Exposure to “any process at the Copper Cliff sinter plant of Inco, Limited.”)
Many critiques of workers’ compensation – for decades – have derided the workers’ compensation system for not adequately covering occupational diseases. One response to that critique, from the trenches, has been that cigarette smoking muddies the analysis in many cases, leading to denials and litigation. In any event, in a convenient list, the author provides a recounting of “why the compensation of occupational cancers is so challenging.” These are:
- The clinical and pathological expression of cancers do not generally differ by cause. For example, there is no lab test that can tell us if a lung cancer was caused by smoking or asbestos or another carcinogen.
- Almost all cancers have multiple causes and individuals differ in susceptibility.
- Cancers can be diagnosed long after exposure and it can be very difficult to estimate the level and length of exposure, which are strong predictors of the likelihood of people developing cancer.
The practicing attorney or judge is benefited in particular by the author’s technical but plain-English review of the scientific principles that are employed in understanding the causation of cancer.
Sunday, July 12, 2020
The California-based website WorkCompCentral presented, this week, a free webinar featuring a panel discussing the challenges that African-Americans, Latinos, and other people of color face in entering and rising through the ranks of the workers’ compensation industry.
The panelists were Marques Torbert of Ametros; Rosa Royo of the Miami Dade County Public Schools; and Margaret Spence of Douglas Claims & Risk Consultants. If you have attended the gala WCI workers’ compensation event in Orlando over the years, these names and/or faces may be familiar to you.
This amazing session, which I highly recommend, was inspired by the current unsettled character of race relations in our country, brought on, proximately, by the shocking video of the beating death of Mr. George Floyd.
The panelists, one of whom identified as lesbian, extended the discussion beyond the program title to capture industry challenges faced by members of the LGBT community. The addition was remarkable in that, traditionally, issues of equality and discrimination faced by Blacks have been conceived of, by some, as qualitatively different from those of LGBT individuals. This has been so because most gays can hide their orientation and/or be untruthful about it; and because sexual orientation, in the past, has been thought of, incorrectly, as a matter of choice.
In any event, the basic thesis of the panelists, all of whom were people of color, was that the workers’ compensation industry endures as a decidedly white male enterprise. True, efforts have been made over the decades to recruit Blacks into the field, but such efforts are said have to have been inadequate. Further, once such minorities secure the basic industry job – claims adjuster – they are rarely promoted. Instead, upper-level jobs within insurers go to outside hires, presumably white, who are said to be more qualified. The panelists suggested that either racial animus, or at least obliviousness to giving people of color a chance (the inequity of the title), is the culprit. Meanwhile, Ms. Spence, at least, ridiculed the frequent recruiter complaint that qualified people of color are simply not available for hire.
Notably, the term “industry” was the ubiquitous phrase to describe the workers’ compensation field, and the webinar focus was indeed on the familiar world of underwriting, claims, and the vendor community. Still, Ms. Spence did import the legal profession into the discussion, noting that law firms, those for both injured workers and employers, had not done enough to recruit Blacks into practice.
The panelists asserted that industry leaders should do more to recruit and promote people of color. They also strongly suggested that the best and the brightest of the next generation will reject employment opportunities at enterprises that have no minorities on staff. It was in this aspect of the critique that LGBT individuals were seemingly implicated – such potential hires, along with Blacks and Latinos, will be dissatisfied with seeking employment at a workers’ compensation enterprise which lacks diversity and is perceived of as unwelcoming.
The panelists acknowledged that the insurance industry as a whole had made strides in the area of diversity and inclusion. The panelists recognized recent efforts by the magazine Business Insurance to highlight the issue. However, the panelists asserted that workers’ compensation endures as an exception to such progress.
Ms. Spence suggested that many gestures within the corporate world at diversity, in general, are mere tokenism. Consistent with the frank nature of the panel’s discussion, she admonished, “African-Americans should stop taking the ‘Diversity Director’ position.”
The moderators stated that the session will be available for subsequent viewing. It is well worth an hour of one’s time. If you are like me, you will be highly affected by it.
I am unable at this moment to track down the URL, but for more information, see https://ww3.workcompcentral.com/education/course/course_pk/1320.
Friday, July 10, 2020
Is a New Extrahazardous Economy Upon Us? May States Choke Off All Worker Injury Rights in Reaction to It?
From the beginning of the pandemic I have harbored an intuition that the most difficult COVID-19 legal issues would manifest not during lockdown but while the economy was reopening. My suspicion has been that at some point it would be declared that the cost of remaining closed was simply too high and that workers needed to charge back into the economy “come what may.” Whether this happened before the first wave completely ended or after the second wave started (or at some point in between) the dynamic was bound to emerge. And, as in war, it is often the case that those yelling loudest for engagement with the enemy stand farthest in the rear.
Now we are on the brink of the real “action”—people will be going to work at precisely the time when the virus is peaking, an almost incredible development. It seems to me that the entire working terrain has become presumptively “extrahazardous,” and readers may recall that workers’ compensation at its birth applied only to extrahazardous employment (indeed, in Wyoming it still technically does). Despite concerns that the U.S. Supreme Court might strike down early versions of workers’ compensation, it was broadly assumed the Court would not do so in the case of the extrahazardous employment that was a feature of many early 20th century workplaces—such regulation simply seemed too close to traditional state police powers to be subject to federal supervision. Perhaps it will be generally true again that courts will grant wide latitude to legislatures grappling with the extraordinary and extrahazardous work of the COVID era. But how much latitude? And why might boundaries be tested?
From the perspective of workers, in the “best” case scenarios in which they may contract COVID-19 in the workplace, workers’ compensation may broadly cover first responders and essential workers, and tort may cover workers if employers intentionally, maliciously, wantonly, or willfully (or some combination thereof) cause them to die or become ill, which will obviously be a rare occurrence. But in the worst case scenarios, workers’ illness—even illness negligently caused by employers—may be without legal remedy. Both workers’ compensation and tort claims may be denied. Workers’ compensation covers work-related disability (through cash/indemnity and medical benefits) but the disability must “arise out of” and “in the course of” employment, a phrase that has been litigated so frequently that it is darkly humorous that the architects of the system imagined it would remain “lawyer-free.” “Arising out of” refers to the causal origins of an injury or disease. “In the course of” refers to the “time, place, or circumstances” surrounding an allegedly work related injury or disease. In most jurisdictions an injury is said to “arise out of” employment if it is incident to employment, or if employment increases the risk of suffering disease, injury, or some other disability. In a smaller number of jurisdictions an injury or disease is compensable if, but for an employee’s position in the workplace, the disability would not have occurred (the “positional risk” test).
There are essentially two major problems when considering “disease” under workers’ compensation. First, occupational diseases (in-work diseases with some potential connection with work)—unlike “accidents”—do not happen all at once. It is much harder to see precisely whether an occupational disease “arose from employment” than it is to make the same judgment about a traumatic injury. I can see the sharp blow to the employee’s head occasioned by a steel pipe. I cannot see the gradual onset of a disease brought on by incremental exposure to dangerous substances; I can only infer it. True, we can speculate after long institutional and legal experience that if, for example, a coal miner who has worked underground for thirty years develops black lung, the condition was probably caused by work—this is really just a kind of collective intuition of increased risk. Sometimes we feel so strongly about the intuition that we create statutory presumptions for such situations—firefighters’ cancer presumptions were, prior to COVID-19, the latest workers’ compensation version of those “probably caused” shorthand techniques. We may, of course, later abandon the intuition if science definitively renders it invalid. And, if the coal miner (or the firefighter) was also, for example, a smoker, we may want to let the employer attempt to “rebut” the presumption by proving that cigarettes in fact caused the disease under consideration.
A second major, and related, occupational, “in-work” disease problem centers on “out of work” background causation: out-of-work and in-work causes may “mix” to spur development of what we have designated an occupational disease. How do we separate the causes to determine which predominate? We really do not, because we seldom can. We normally either place “the burden of proof” on the employee to prove causation (the burden of production and persuasion is continuously on the employee) or on an employer/insurance carrier to disprove causation once a claimant has made a threshold showing of plausible workplace causation (the burden of persuasion shifts to the employer/carrier after the employee has satisfied a burden of production). This is all very clunky and hard to think about but whatever this process may be in practice it is far removed from scientific causation--we simply line up experts and use phrases like "to a reasonable degree of medical probability," as if causation expressed in such a fashion is convincing. This lack of precision confuses laypersons but it may be merely performative; we want to convince ourselves we have done something rational. As an aside, one should note that states have done something very similar when considering multiple “negligent” causes of harm in tort law—that is how it is possible to ever litigate asbestos cases in which several manufacturers may have jointly, negligently caused a plaintiff’s disease. Otherwise it would be nearly impossible to prove that “but for” the negligence of any one of them the plaintiff would not have been harmed; so we devised a different test to make tort causation in such cases possible. (See Restatement Third of Torts § 27). Why do we go through these machinations? For the same reasons we created workers’ compensation a hundred years ago or so: in the absence of such techniques the loss from injury or disease would fall on workers most of the time and, as a matter of justice and policy, we concluded this is unacceptable. The party who can bear the loss in borderline cases should bear the loss.
States may also tinker with the quantum, or amount, of proof required to make out a claim in such joint causation cases. For example, a work injury may combine with another in-work or out-of-work cause to produce disability. If a state requires that the work injury be the “major contributing cause” of present disability, and places the burden of production and persuasion on the employee to make such a showing, claims will be screened out of workers’ compensation and their costs shifted or directed to the injured/sick worker or to some other benefit system. The impact of this rule on a COVID claim would be significant. COVID may logically be the product of both in-work and out-of-work coronavirus exposures and employees would be hard-pressed to prove that any particular exposure was the "major" cause of disabling COVID-19. In a similar exclusionary vein, a state workers’ compensation system may outright exclude “ordinary diseases of life,” a path that appears to have been followed by Arizona, Arkansas, Georgia, Kansas, Michigan, North Carolina, Oregon, and Virginia. Larson § 52.03. Standing by itself the phrase is vague and must be interpreted by state courts, but it is easy to foresee that some states may determine COVID-19 is an “ordinary disease of life” because the general public is contracting it outside of work.
What I wrote in the prior three paragraphs is background for why roughly seventeen states (as of this writing) have established some form of workers’ compensation COVID-19 presumption: without a presumption, some states have concluded, it will be too hard to establish workers’ compensation claims and, from the perspective of these states, that would be a bad policy outcome. But what if a state declines presumptively to cover COVID-19 under workers’ compensation? And what if a state additionally broadly provides immunity to businesses, immunity that covers ordinary negligence lawsuits brought by the businesses’ own employees? Is this de facto a “dual denial” of all remedies for worker injuries? The employee will be denied workers’ compensation and even if exclusivity therefore does not apply the employee could not bring a tort suit. There is an argument that it is not “denial” where an illness is covered by workers’ compensation but difficult to prove. Larson § 100.05[A]. The pure case of denial would be where a workers’ compensation system categorically denies workers’ compensation coverage of COVID-19, though I think the case that denial has occurred could be made out contextually, perhaps using statistical methods.
But assuming denial, is such denial constitutionally justifiable given the nature of the COVID-19 emergency? My bottom-line answer is that it is constitutionally justifiable only if, upon court challenge by an employee denied any remedy, a state can demonstrate that there was no lesser restrictive alternative to complete denial of a remedy. My sense is that a number of the state blanket liability immunity provisions around the country are overly-broad. Under current law they would probably be upheld because they have a “rational basis.” I believe that the “rational basis” standard of review is too low when what is at stake is the obliteration of (as opposed to tinkering with) remedies for death or injury caused by work. Such laws are not “merely commercial,” and should be attackable on grounds other than that they are “irrational.” But a new theory is required to hammer home the point, the attempted development of which is at the center of my research agenda. I am not prepared to concede that workplace injury is damnum absque injuria. On the contrary, I am preparing to argue that injury/"personal security" rights are "privileges or immunities of citizens of the United States."
Michael C. Duff
Thursday, July 2, 2020
Trump’s OSHA Too Tough for Smithfield? & Why the Defense Production Act Probably Does not Immunize Anyone From Tort Claims
Trump’s OSHA has committed the unpardonable sin of subpoenaing Download DOH subpoena from the South Dakota Department of Health certain information that Smithfield Foods provided it during the early days of the Covid outbreak: employee reports of illness; COVID-19 test results; correspondence between the South Dakota Department of Health and Smithfield representatives; interviews conducted with employees or management officials related to the outbreak of COVID-19; statistical data reflecting any potential clusters of COVID-19 within the plant, including production lines, work stations, or common areas; photographs and/or video taken of the plant, including work stations, processes, or equipment; and any recommendations issued to Smithfield by the State of South Dakota, Department of Health, to combat the spread of the virus.
Ladies and gentlemen, as a former prosecuting attorney for the National Labor Relations Board I will represent to you that in the context of a workplace COVID outbreak that is about as tame a subpoena as one could draft. Every item is clearly relevant, even critical. If a national workplace safety agency does not have prompt access to such information it is not a “real” safety agency. But there is more afoot here. Smithfield filed a Motion to Quash Download Smithfield MTQ on a few very interesting theories.
- The Motion argues that “enforcement of the Subpoena will inevitably chill ongoing cooperation between employers and public health agencies during COVID-19—cooperation that is critical given how much remains unknown about the novel virus and the fact that essential employers are currently uniquely situated for scientific study.”
- Translation: if the feds can get investigative materials from state authorities we may stop cooperating with state health authorities.
- The Motion complains that “OSHA initiated its investigation at the Plant well after DOH initiatedits investigation.”
- Translation: we are not as cautious with state authorities as with federal authorities and we did not have the opportunity to impose message discipline in the early days of the crisis.
- The Motion objects, “the Subpoena seeks information that is not relevant or proportionate to OSHA's investigation of Smithfield's Sioux Falls plant.”
- Translation: Only we get to say how company-wide safety protocols may be relevant to safety at an individual facility.
- Here it may be useful to return to the items mentioned in the first paragraph
- Incredibly, Smithfield demanded the right to inspect in advance documents provided by South Dakota authorities to OSHA on privacy grounds. I seem to remember something about disclosure of documents to third parties destroying claims of privilege.
What might a suspicious mind think? Could there be documents in the state trove that do not quite jibe with what federal officials have been provided? Might document preservation be more assured in federal hands? Might that be of no small moment given the looming complexity and persistence of tort litigation?
Some may be surprised that I even mention tort litigation given the pervasive urban myth that the Defense Production Act has absolutely immunized meatpacking facilities from tort liability. I have a curt response for those embracing the view: please produce one reported case in which the Defense Production Act has ever immunized a Defense Production Act contractor from tort liability. I just looked again a couple of hours ago and I could not find a single case. The DPA immunity cases actually have quite a different ring. In response to a defendant’s claim of DPA immunity for tort liability, in Hercules, Inc. v. U.S. (one of the “Agent Orange” cases), the Circuit Court of Appeals for the Federal Circuit stated at page 203 (in an opinion upheld by the U.S. Supreme Court on other grounds):
Thompson contends that because section 101 of the DPA authorizes the President . . . to compel contract performance as well as contract acceptance, the “risk imposed” is not limited to breach of contract actions arising out of preference given to DPA contracts, but rather extends to possible tort suits by third parties arising from subsequent use of the product produced under the DPA contract . . . We disagree. As did the district court in the Agent Orange litigation and the Claims Court in this suit, we read section 707 of the DPA as providing a defense for a DPA contractor against a suit by a non-government customer in the event that the DPA contractor is forced to breach another contract to fulfill the government's requirements. Section 707 does not provide the kind of protection asserted by Thompson.
That sounds pretty clear to me. The liability pertains to breach of contract actions not tort actions. A similar result was reached in U.S. v. Vertac, 46 F.3d 803 (1995) (No immunization for CERCLA liability because immunity would exceed the risk imposed by 101(a) of the DPA). But if anyone has a DPA case upholding tort immunity for DPA contractors I would be very interested to read it.
Michael C. Duff
Wednesday, July 1, 2020
Workers’ compensation was a means to an end and not an end in itself. It addressed the outrageous frequency of workplace injury and death caused by railroads in the late-19th/early 20th century. The unholy trinity of affirmative tort defenses—assumption of the risk, contributory negligence, and the fellow servant rule—meant that workers or their survivors were not being compensated adequately or, in many cases, not at all. For this reason expert American investigators were dispatched to Europe during the period 1909-1911 to study the already existing workers’ compensation systems of Europe. Those experts’ work set American workers’ compensation baselines. The oddity is that while Europeans moved on to universal benefit systems, we continue to use their 19th century work-injury system. (I write about these developments here). Additionally, the United States briefly flirted with the prospect of broadly establishing “liability statutes” in which employees’ burdens for bringing railroad and maritime civil actions were lightened, and affirmative defenses limited. (These experiments have more narrowly lived on in the form of FELA and the Jones Act). The railroad experience, and dangerous industrial work generally, made everyone realize, virtually simultaneously, that the then-current system was not going to work. Workers’ compensation was the result. Perhaps something like workers’ compensation would have emerged even without railroad injuries, but we will never know.
Of course, American society might have said, circa 1910, “Well, because workers cannot prove negligence, and affirmative defenses will probably defeat their tort claims, there will simply be no recoveries for workers.” It would have been a lot cheaper for business, in monetary terms, if we had set up a 1910 version of a Mitch McConnell liability shield. Instead, we collectively said that if the law was not up to the task of remedying injuries, the law would have to change.
So, when folks confront workers’ compensation causation presumptions (or similar novel solutions), and react by saying, “that’s not what workers’ compensation was meant to do,” I think they are missing the forest for the trees. Workers’ compensation was “meant” to adequately remedy workplace disability and, more narrowly, to fix tort’s shortcomings. Sure, it was all supposed to work at a reasonable cost—but it was supposed to work. A cheap, non-working system is no system at all. If workers’ compensation, standing in the shoes of tort law, can no longer adequately remedy workplace disability, my response is not to throw up my hands and say, “oh well, I guess there will be no recovery for disability.” Rather, I start wondering whether workers’ compensation has become more ornamental than useful.
I know that we are in “historical waters” when folks start discussing, with complete seriousness, whether all negligence causes of action and all workers’ compensation remedies might be discarded for an indeterminate amount of time; and whether it is really so bad for employers to negotiate preinjury waivers of liability with their employees! My answers to these questions, of course, are “no” and “yes,” respectively. But as I read reports of a new H1N1 virus, ruminate on the likelihood of a severe and long-term economic recession, and contemplate what I think will almost certainly be increased reshoring of industry to the U.S., I cannot help but wonder whether we will look back on spring 2020 as our version of the railroad “shock” of the early-20th century. I used to assure my late dad that it was really ok for me to be taking so many legal history courses in law school (he was a non-lawyer and was not convinced). Somewhere along the line my professors convinced me that history was always under construction. It is now almost impossible for me to believe that we are not on the precipice of profound changes to our workplace injury, and labor and employment laws.
Michael C. Duff
Tuesday, June 30, 2020
Contrary to all prior Federal circuit courts that have decided the question, the Texas Supreme Court, in Texas Mut. Ins. Co. v. PHI Air Medical, LLC, 2020 WL 3477002, has decided that the Airline Deregulation Act (ADA) does not preempt state regulation of air ambulance costs. As many readers will know, the air ambulance expense associated with transport of employees suffering work-related injuries has been a heavily litigated matter for a number of years. (I have written about the issue here, and here, and here, and here.) All federal circuit courts considering the issue have concluded that air ambulance services fall under the ADA and that the ADA preempts state regulation of air ambulance rates. The controversy has intensified as air ambulance service providers charge tens of thousands of dollars per trip while state workers’ compensation systems wish to pay far less.
The ADA preemption provision is modelled on ERISA’s preemption language and I have been pointing out for years that while ERISA preemption seemed to be loosening (in particular, read Souter’s opinion in the Travelers case) ADA preemption analyses seem to have been ignoring these parallel ERISA developments. The same is true of FAAA preemption, which has been “butting heads” with the California “ABC” employee definition under AB5. In short, the argument goes, forcing interstate trucking outfits to treat truckers as employees may raise costs which in turn may have an impact on trucking prices.
I gave a CLE presentation on this topic in Wyoming last week focused on the 10th Circuit’s 2017 EagleMed case, which Texas Mutual necessarily carefully distinguished. (Interestingly, Texas Mutual intervened in the EagleMed case and lost despite raising the same arguments as in the Texas state case). One point I made in the CLE was that state authorities could have avoided federal courts by seeking declaratory judgment in state court on purely state law grounds under the well-pleaded complaint rule. Federal preemption in such cases is raised as a defense in the state proceeding, which cannot involuntarily be removed to federal court on that basis. The exception to this rule is known as “complete preemption.” Complete preemption occurs only under Section 502 of ERISA, Section 301 of the Labor Management Relations Act, and under certain provisions of the National Bank Act of 1864. Under complete preemption doctrine, when state law pleadings raise preemption issues under the federal statutes I just mentioned, the case is immediately removable to federal court despite sounding in state law.
I do not have time to parse the Texas Mutual case (Tom Robinson does a really nice job here), but suffice it to say it is completely at odds with the federal circuits, and it would not surprise me if the U.S. Supreme Court took it up. The two underlying issues are the sweep of the ADA preemption provision (how much actual impact on “airline prices” must be shown?); and the extent to which the McCarran-Ferguson Act of 1945—a statute creating a presumption that federal statutes not be interpreted to interfere with traditional state regulation of the “business of insurance”—"reverse preempts” ADA preemption of state airline regulation. (It is not every day that I get to write the words “preemption” and “presumption” so often in the same sentence). While I am with the Texas Mutual dissenters on that question (M-F probably does not apply—though I would probably focus on an implied repeal theory), the real issue there is whether the federal courts will continue to treat ADA preemption like the Supreme Court did early-on in its ERISA preemption cases (see e.g. Shaw v. Delta Airlines). If they do, McCarran-Ferguson arguments will certainly not prevail at the federal level.
Of course, the federal courts may eventually come to accept the argument that ADA and FAAAA preemption should be tracking ERISA’s Traveler’s case (as I’ve argued in the past) which seemed to reinvigorate the idea that there is a “presumption against preemption.” And, for those readers who may not recall the puzzle, it is extremely unclear how the broad ERISA preemption provision ever came into existence.
Michael C. Duff
Thursday, June 25, 2020
Two things have emerged with respect to the new public nuisance filings. First, plaintiffs seem to be doing better in state than federal courts, which is an outcome I anticipated. Second, trial level judges do not seem to be analyzing public nuisance issues especially deeply. For this reason I am reluctant to explore trial court rulings, like the one yesterday in Illinois, in much depth. If defendants appeal, it must happen quickly, and there will be a good deal more analytical material to work with then.
One thought crossed my mind today. It is not difficult to imagine a patchwork of rulings in which plaintiffs prevail in “blue” states and do not prevail in “red” states. The fear of national nonuniformity of employment benefit regulation drove implementation of sweeping ERISA preemption, which is an unsettling thought.
In any event, the Illinois trial court ordered two entities, “McDonald’s Restaurants of Illinois” and “DAK4,” not to train employees on social distancing in a way that is inconsistent with the Governor of Illinois’s Executive Order; and to enforce mask wearing policies when employees are “not 6 feet apart to come into compliance with the Governor’s Order.” The court's order explicitly excludes McDonald’s corporate and McDonald’s USA “because they do not own any of the McDonald’s at issue here,” (which is a regrettably limited analysis of a potential joint employer issue). It also did not enjoin the “35th Street store,” apparently because of a change in the store’s ownership (I do not see the discussion of successor liability one might have expected).
As in the Oakland, CA case, plaintiffs obtained no monetary damages, so the workers' compensation/quid pro quo question is not in play. Interestingly, the negligence theory was flatly denied on standing grounds. See pp. 29-30). You cannot have negligence without injury, and the court found none -- which, as an aside, renders the injunction entirely anticipatory. Given the limited scope of the order, and the absence of significant liability, I would not expect an appeal by the defendants, at least at this juncture. (Unless, of course, defendants now seek a war of attrition to make a point - I do not see how plaintiff attorneys’ fees would not be a problem considering the lack of a monetary recovery).
The Oakland case seems to me more likely to generate an appeal, requiring as it did: affirmative granting of sick leave requests, alteration of stay-at-home polices, management training, deep cleaning of company facilities by “professional cleaners,” provision of “adequate” masks and gloves, wellness checks and temperature testing, paid breaks every 30 minutes for handwashing and “other sanitization procedures,” contact tracing of all persons known or suspected to have been infected with the Covid-19 virus while physically present at the restaurant (including employees), and post-diagnosis paid employee leave for the duration of the Alameda Public Health Quarantine Order. I will be surprised if that TRO is not appealed somewhere.
Michael C. Duff
Tuesday, June 23, 2020
Another McDonald’s Covid-19 Case: Oakland, California Workers Win Preliminary Injunction on Public Nuisance Theory
All the stars aligned for a worker-filed a public nuisance suit--at least chapter one of the suit--the most important of which were probably that the case was brought in a California state court and involved California code law rather than the common law of public nuisance torts. It is also notable that the suit did not involve McDonald’s corporate (or its lawyers). In short, the state court mandated a McDonald’s franchisee to take OSHA-like remedial measures to make its restaurant safer.
This was another case in which plaintiffs were restaurant workers and (a 10-month old child of one of the workers was also a plaintiff). Plaintiffs in addition to seeking injunctive relief demanded compensatory damages. I note that the preliminary injunction was granted “in part” so I am not clear which portion of the injunction was denied.
The dance in the case will be the attempt to not characterize the compensatory damages sought as negligence so as to bring them within the workers’ compensation exclusivity bar. In addition to public nuisance injunctive relief and compensatory damages plaintiffs seek compliance with Oakland sick leave ordinances and a finding of the commission of Unfair and Unlawful Business Practices under Cal. Bus. & Prof. Code §§ 17200 et seq. As remedies for those violations, plaintiffs seek “disgorgement of profits, interest, penalties, attorneys’ fees and expenses pursuant to Code of Civil Procedure § 1021.5, and costs of suit.”
Unfortunately, the judge’s decision contains little analysis so I am unable to parse its rationale. From a distance, however, I note that “[u]nder California law, a nuisance is defined as ‘[a]nything which is injurious to health, ... or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property.’” Cal. Civ.Code § 3479. Moreover, “[a] public nuisance is one which affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal.” Id. § 3480. The complaint must allege damages “specially injurious to [plaintiff], but not otherwise.” Cal. Civ.Code § 3493.
As I have mentioned in prior posts, under the common law an injunction for public nuisance cannot lie unless the petitioner is eligible to recover damages, has authority as a public official or public agency to represent the state or a political subdivision in the matter, or has standing to sue as a representative of the general public, as a citizen in a citizen’s action or as a member of a class in a class action.
The Restatement also recites that “[i]t has been the traditional rule that if a member of the public has not suffered damages different in kind and cannot maintain a tort action for damages, he also has no standing to maintain an action for an injunction.” Under the common law the difficulty here would be whether the plaintiffs have suffered Covid-19 injuries (or imminent threats thereof) different in kind (not extent) from the general public. To complicate matters, the nuisance in question is partially anticipatory. “The doctrine of anticipatory nuisance is brought into focus normally when a moving party is seeking to prevent commencement of what is alleged will become a nuisance.” The doctrine “has existed under the common law for many years . . . [but] is under-utilized because of the high burden of proof (e.g., reasonable certainty or high probability) . . . normally set.” (See page 688 here).
What makes these public nuisance cases so interesting is that any underlying tort/negligence/nuisance damages would seem to be instantly subsumed by workers’ compensation exclusivity. But we simply do not seem to have cases on the books challenging exclusivity in circumstances where only injunctive relief is sought—there would have been no substantial incentive to pursue such actions in the past.
And however this case might come out under the common law, I am not a California lawyer. As we all know, California law (especially tort law, as my students will attest) is often different.
Michael C. Duff
Wednesday, June 17, 2020
I am co-author --with Tom McGarity of University of Texas School of Law and Sid Shapiro of Wake Forest Law -- of a new report titled, "Protecting Workers in a Pandemic: What the Federal Government Should Be Doing." The report has been issued today by the Center for Progressive Reform. Tom, Sid, and I are scholar-members of that organization. A link to the report is here. An executive summary follows:
The "re-opening" of the American economy while the coronavirus that causes COVID-19 is still circulating puts workers at heightened risk of contracting the deadly virus. In some blue-collar industries, the risk is particularly acute because of the inherent nature of the work itself and of the workplaces in which it is conducted. Moreover, for a variety of reasons, that risk falls disproportionately on people of color and low-income workers – people whose economic circumstances and less reliable access to health care renders them all the more vulnerable. These workers are being treated as expendable, forced by the threat of losing their jobs to accept risks no member of Congress or White House staffer would accept for themselves or their families.
During the period when much of the nation was on lockdown – roughly the middle of March to the end of April 2020 – the evidence that workplace transmission of COVID-19 is a very serious threat became all too clear. Workers in a variety of "essential industries" – health care, meatpacking, transportation, warehousing, and more – suffered from localized outbreaks.
Public health officials warn that, in order to avoid a repetition of these outbreaks on a far larger scale, we must take appropriate precautions. In the workplace, that typically includes limiting interactions and expanding distancing among workers, rigorous and frequent sanitization and cleaning, engineering controls such as plexiglass barriers and adequate ventilation systems, medical-grade protective clothing, and masks for workers. Even so, such measures are likely to slow but not stop transmission – effectively bending the curve of transmission so as to buy time for a vaccine or improved treatment of COVID-19.
Implementing such measures requires a nationwide commitment built on determined leadership, robust standard-setting and enforcement, and education and research about what works and what does not. Unfortunately, the federal government has largely failed to provide such leadership and has instead used the pandemic as a rationale to roll back enforcement of existing workplace safety measures. Instead of seizing the opportunity, with both carrot and stick, to ensure that the nation's workers are not subjected to significant risks on the job, the Occupational Safety and Health Administration (OSHA) and other protector agencies have shrunk into the background. Meanwhile, conservative leaders and the White House are pushing to insulate businesses from litigation brought by workers and customers who are harmed by the failure to institute appropriate safety measures – thus incentivizing unscrupulous businesses to ignore the risks in the pursuit of profit.
While the federal government has shown little interest in taking a lead role in protecting workers from the coronavirus, such leadership is not beyond its reach. In the pages that follow, we describe the risks to workers, with a particular focus on "essential" industries. We review the existing workplace safety authorities at the disposal of OSHA, several other agencies of the federal government, and state labor agencies. We also discuss the various, limited rights workers have to protect themselves or to demand that their employers provide protection, the role of unions and workers' compensation. Finally, we discuss the likely impact of the proposed liability shield for businesses.
Throughout the paper, we offer a series of recommendations, some specific to preventing the spread of the virus, and some that apply the lessons of the virus to enduring workplace safety issues. These recommendations include:
- The Occupational Safety and Health Administration (OSHA) should promulgate an emergency temporary standard on pathogen protection for workplaces where employees are at high risk of exposure to COVID-19.
- OSHA should promulgate a permanent standard for pathogens in workplaces where such pathogens pose a significant risk to workers.
- OSHA should aggressively enforce the general duty clause of the Occupational Safety and Health Act by issuing citations to any company that fails to comply with generally recognized pathogen protection practices, drawing on OSHA and CDC guidelines as well as other indicia of proper safety practices relevant to pathogens as evidence of recognized safety practices.
- The United States Department of Agriculture should require that meat and poultry packing plants reduce line speeds to a level at which employees can maintain a safe distance between one another and have time to maintain personal hygiene.
- The Federal Aviation Administration should promulgate interim final regulations protecting aircraft crew members from the risk of contracting COVID-19 drawing on OSHA and CDC guidance as well as other indicia of proper safety practices relevant to pathogens and make those regulations immediately applicable to aircraft in operation.
- The Mine Safety and Health Administration should promulgate standards requiring mine operators to protect miners from the risk of contracting COVID-19.
- The National Labor Relations Board and the courts should give employees who collectively leave workplaces where they face a significant risk of contracting COVID-19 the benefit of the doubt in exercising their rights under the National Labor Relations Act to refuse dangerous work.
- State legislatures and workers' compensation agencies should create a presumption that at a minimum any “essential” worker who suffers from COVID-19 contracted the infection at the workplace and is therefore presumptively entitled to workers' compensation.
- Congress should enact legislation making paid sick leave a universal requirement for all employees, providing strong whistleblower protections for workers reporting dangerous conditions to authorities, and giving workers a private right of action in federal court to enforce OSHA standards and the general duty clause.
Michael C. Duff
Monday, June 15, 2020
As I read through Michael Grabell, Claire Perlman and Bernice Yeung’s ProPublica article on COVID-19 chaos in the meatpacking plants I kept thinking three things:
A broad liability shield is a really bad idea.
Yes, I do think I could win these workers’ compensation claims without the aid of a causation presumption.
Sometimes Federalism looks really, really bad:
In an emailed response to questions, Tyson acknowledged the delay in releasing the test results in North Carolina. “When we learned that there was a delay with our lab partners, we acknowledged the urgency of the situation and worked to address the situation immediately,” spokesman Gary Mickelson said.
He said Tyson formed a coronavirus task force in January to assess risks and work on mitigation plans and began engaging with the CDC and other health officials shortly thereafter. “At the majority of our facilities across the country, there have been no cases of COVID-19 that we know of,” he said. ProPublica found cases at slightly less than half of Tyson’s major processing plants.
But the scores of emails and other records show that best practices to protect workers, such as slowing the processing line to accommodate social distancing, installing plexiglass barriers and having workers wear masks, weren’t implemented until outbreaks began to occur. Instead, meatpacking companies spent crucial early weeks urging officials to keep their plants open.
In mid-March, a few weeks before a massive outbreak at its South Dakota pork plant, Smithfield Foods’ chief executive Kenneth Sullivan sent a letter to Nebraska Gov. Pete Ricketts saying he had “grave concerns” that stay-at-home orders were causing “hysteria.”
“We are increasingly at a very high risk that food production employees and others in critical supply chain roles stop showing up for work,” Sullivan wrote. “This is a direct result of the government continually reiterating the importance of social distancing, with minimal detail surrounding this guidance.”
“Social distancing,” he added, “is a nicety that makes sense only for people with laptops.”
The piece is a must read.
Michael C. Duff
Saturday, June 13, 2020
While I suspect that workers’ compensation claims, even without the aid of workers’ compensation causation presumptions, may fare better than some actuaries suspected (preliminary scuttlebutt of about a 40% success rate is higher than I expected), there is no reasonable doubt that large numbers of workers will ultimately go uncovered under workers’ compensation. As I have argued throughout my postings on this blog, workers’ compensation exclusions and denials will pose many challenging legal questions. In the meantime, however, many disabled workers will simply find themselves uncompensated (some may receive assistance under the Federal Pandemic Unemployment Compensation Program; eligibility is tricky, however, because under state unemployment compensation law an individual must generally be available for work—and not disabled—in order to qualify, a topic beyond the scope of this post and perhaps of this blog).
In short, there are gaps and fissures appearing under state workers’ compensation and tort laws—and gaps even under the state-federal compensation models applicable to disabilities (Social Security Disability, for example, does not cover compensation for partial or temporary disability). In apparent response to such gaps, Carolyn B. Maloney, the Chairwoman of the Committee on Oversight and Reform, held “a remote hearing to examine the health and economic burdens shouldered by essential workers and their loved ones during the coronavirus pandemic . . . H.R. 6909, the Pandemic Heroes Compensation Act of 2020, was introduced by Chairwoman Maloney to create a compensation fund modeled after the September 11th Victim Compensation Fund (VCF).” The bill was introduced on May 15, 2020. I provide here a brief summary and my initial impressions of the bill.
- Noneconomic losses shall not exceed such limit as the Special Master (see below) may impose.
- Claims are reduced “by the amount of the collateral source compensation the claimant has received or is entitled to receive as a result of the claimant suffering from COVID–19.”
- No punitive damages
Special Master with regulatory powers
- Claimant designated an essential worker during the eligibility period or was a family member of such an essential worker who resided with the essential worker during the eligibility period
- Expressed symptoms consistent with COVID–19, including those with laboratory confirmations, diagnosis by a healthcare provider, or for whom there is or was an absence of an alternate diagnosis that explains claimant’s or decedent’s symptoms
- Suffered economic loss
- One claim per worker filed either by worker or on behalf of a worker who is deceased
Any individual, employee, or contractor working for a person, business, nonprofit entity, or Federal, State, Tribal, territorial or local government that is determined, during the response to the COVID–19 pandemic, to be essential, based on State, local, Tribal, or territorial orders or declarations (or equivalent), or Federal guidance published by the Cyber & Infrastructure Security Agency (CISA), and who performed work outside their place of residence.
Both “such amounts as may be contributed by individuals, business concerns, or other entities to carry out this Act, under such terms and conditions as the Attorney General may impose” and “[t]here is established in the Treasury of the United States a fund to be known as the “COVID–19 Compensation Fund” (contributed amounts must be used prior to appropriated amounts).
The Special Master shall have the sole discretion to determine reasonable compensation for services rendered for attorney fees for services rendered, if any.
Right of Subrogation:
U.S. has right of subrogation with respect to any claim paid by the U.S.
“There is authorized to be appropriated for purposes of carrying out this Act such sums as may be necessary for fiscal year 2020 and each fiscal year thereafter through fiscal year 2026, to remain available until expended.”
Ultimately, it is hard to assess the bill because the appropriation levels and caps on compensatory damages are not known. With respect to compensatory damages, many will recall the tremendous level of discretion afforded to the Special Master under the Victim’s Compensation Fund. It is difficult to assess how this will carry over to a much larger potential class of claimants. It may be workable to the extent that COVID-19 victims seek disability benefits for “closed window” durations. The difficulty is that we do not know if COVID-19 impacts will be temporary. With respect to appropriations, the ongoing funding battles over the 9-11 Fund are well known, and Jon Stewart is unlikely to live forever. I think there are also deep questions about the relationship between one-time disaster czars and the rule of law.
The eligible class is expanded beyond first responders, but there will continue to be debate over who qualifies as an essential worker. The bill would effectively punt that question to the states, which will now have an incentive to classify workers as “essential,” or to avoid doing so, based (one presumes) on the political winds in a given state—an outcome I do not prefer. My final preliminary observation is that the eligibility of “any individual, employee, or contractor . . .” would seem to extend eligible claimants well into the Gig economy. The truth of it is--we have to start somewhere. As some of us have been yelling for a long time (and others are just beginning to understand), there is no additional risk that workers can bear. Ignore it at your peril.
Michael C. Duff
Wednesday, June 10, 2020
In today’s the Hill a story ran containing in part the following language:
More than a thousand COVID-19 lawsuits have been filed in the past six weeks, prompting business groups to refocus almost all their lobbying efforts on securing liability protections from Congress.
Almost 1,300 coronavirus-related lawsuits have been filed since May 1, according to the law firm Hunton Andrews Kurth LLP. On Friday alone, 23 complaints were filed.
The lawsuits range from a fired nursing home employee who had told her boss she was going to self-quarantine to a negligence suit against Princess Cruise Lines for failing to warn passengers of the risk of COVID-19.
Business groups say those are just the tip of the iceberg, and they are now almost singularly focused on persuading lawmakers to include a liability shield provision in what may be the last coronavirus aid bill of 2020.
A business lobbyist quoted in the story insisted:
“The key to getting this across the finish line has always been to be reasonable about it and not to overreach, to focus on limited safe harbor [protections] that don’t shield bad actors,” Kelly said. “That is the only kind of proposal that will be successful and appeal to the moderates if we’re going to be successful.”
Is that what business wants? Maybe. But yours truly testified at a Wyoming legislative committee session last week (here at about 3:56). Also testifying was a representative of the Wyoming Business Alliance. Do you know what he proposed? Nearly full immunity for—well—any entity in connection with Covid-related negligence claims. A Covid-19 liability action would in theory be available for gross negligence proven by clear and convincing evidence (evidence that is highly and substantially more probable to be true than not and in which the trier of fact must have a firm belief or conviction in its factuality). Gross negligence (as an aside, poorly defined under Wyoming law) is, according to Black’s Law Dictionary:
A lack of even slight diligence or care. • The difference between gross negligence and ordinary negligence is one of degree and not of quality. Gross negligence is traditionally said to be the omission of even such diligence as habitually careless and inattentive people do actually exercise in avoiding danger to their own person or property.
So you have to prove that was the defendant’s state of mind, and you have to do it with clear and convincing evidence. Sometimes I do not “dance” well with others. Do not try to tell me that under this standard plaintiffs could win. Indeed, the standard seems explicitly designed to prevent a case from ever getting to a jury. (English monarchs did not like juries, either). As a thought experiment imagine all the obviously careless things a business might do that does not quite meet the truly awful gross negligence standard. None of what you just imagined would be actionable. (This is soon likely to become Wyoming law). Still, I have not yet heard those advocating a federal immunity shield proposing something so draconian, though I also do not imagine the federal bill—when it comes—will be drafted so as to preempt extreme state-based immunity shields. (I am not supportive of federal preemption of state tort law but it nevertheless happens all the time and it is elucidating to consider what Congress preempts and what it does not).
I have not mentioned the constitution much lately. But I want you to consider a scenario in which a state’s workers’ compensation law categorically excludes (on some theory) coverage of Covid-19 and sickened workers are simultaneously prevented from bringing any negligence action under a liability shield. Such "dual denial"—to borrow Professor John Burton’s term—would be problematic under many state constitutions. As an instance of elimination of both tort actions and the constitutionally-approved tort substitute known as workers’ compensation, the 5th and 14th amendments each seem implicated. (Liability elimination is, after all, a bit more dramatic than a tort cap or a statute of repose). Of course, one is told, it would only be for a short while in an extreme and unusual circumstance. The proposed shield is made to seem almost “procedural.” But as Justice Roberts once wrote in the bankruptcy case Stern v. Marshall:
“Slight encroachments create new boundaries from which legions of power can seek new territory to capture.” . . . Although “[i]t may be that it is the obnoxious thing in its mildest and least repulsive form,” we cannot overlook the intrusion: “illegitimate and unconstitutional practices get their first footing in that way, namely, by silent approaches and slight deviations from legal modes of procedure.”
And I still do not think I have heard a U.S. Senator deny that workers’ compensation is on the table when it comes to a federal liability shield. We may be forced into the position of very seriously considering a broad federal Covid-19 worker-relief program of the type championed by former New York Workers’ Compensation Board Chair Robert Snashall Download COVID 19 CLE CORNELL ILR As Mr. Snashall has persuasively argued, volunteer workers at hospitals, food banks, homeless shelters, schools, and other charities were already excluded from workers’ compensation and facing the dual denial problem. Then there is the army of Gig economy workers. The cracks and fissures in the system may be expanding. Is this defensible? All of it begs the question: who exactly should be shielded from what?
Michael C. Duff
Monday, June 8, 2020
Pennsylvania Insurance Drama: New Third Circuit Case Says WC Policy Rescission Actions are for the Admin. Tribunal, but Larson Would Say, Correctly, that They Shouldn't be Permitted at All
The Third Circuit, in a non-precedential decision, has affirmed a district court ruling dismissing a workers’ compensation carrier’s declaratory judgment action seeking rescission of the policy it had written for its insured. The appellate panel agreed with the trial court that the proper forum for such an action was before the workers’ compensation judge. See American Builders Ins. Co. v. Custom Installations Contracting Services, Inc., 2020 WL 2787640 (3rd Cir. 2020), affirming, 2017 WL 5501357 (U.S. W.D. Pa., filed August 18, 2017).
In this new case, a carrier (American Builders) had written a policy of insurance for an enterprise (Custom Installations). During the policy period, a Custom Installations worker (Scott) sustained serious injuries while undertaking roofing work. According to American Builders, however, Custom Installations had, during the underwriting, “falsely represented that it did not perform roofing work.” After issuing an NCP, and paying disability and medical benefits, American Builders filed a declaratory judgment action in federal court, seeking rescission of the policy.
In the 2017 district court ruling which followed, the court found that the sought-out rescission reflected a workers’ compensation dispute and therefore one exclusively within the WCJ’s jurisdiction. A lawsuit in rescission by the carrier against its erstwhile insured for alleged misleading in the underwriting was hence held not cognizable.
The court recognized, notably, that Commonwealth Court authority existed allowing rescission in proceedings commencing before the workers’ compensation authorities, and it cited that case as even more evidence of where such disputes are appropriately litigated. SWIF v. Hering, American Eagle Express), 833 A.2d 343 (Pa. Commw. 2003).
Notably, the court allowed the carrier’s associated fraud action.
The Third Circuit has affirmed. The court stated, “We agree with the District Court’s reasoning and disposition of this case…. We continue to approve of our observation in Winterberg [Winterberg v. Transportation Ins. Co., 72 F.3d 318 (3rd Cir. 1995)] quoted by the District Court, that courts ‘have been very cautious about permitting common law litigation in matters arguably connected with work-related injuries.’…. We are also mindful of the Supreme Court of Pennsylvania’s admonitions in Kuney [Kuney v. PMA Ins. Cos., 578 A.2d 1285 (Pa. 1999)] that the Pennsylvania workers’ compensation statute was ‘designed and intended to establish exclusive jurisdiction, practice and procedure in all matters pertaining to such subject matter’ … [(quoting American Cas. Co. of Reading v. Kligerman, …, 74 A.2d 169, 172 (Pa. 1950))], and that ‘[w]hen the allegations of a claim have as their ultimate basis an injury compensable under the [Workers’] Compensation Act, the claim must be considered within the framework of the statute,’ …. Accordingly, we will affirm the District Court’s judgment.”
It is submitted that the better rule is that the issue of fraud in the underwriting is one exclusively between insurer and insured. Thus, the policy should not be rescinded either in civil court or before the compensation judge.
The fact of such alleged fraud should never prejudice the helpless injured worker. It makes no sense, and it is unjust, to create a no-fault social insurance scheme, and then let insurers undermine the process via rescission actions.
This advocacy is hardly radical. Indeed, that this outcome (the policy rescinded and claimant left with nothing), is unsatisfactory, and must not be allowed, has long been recognized.
In this regard, Larson many years ago admonished in his treatise, “The employer’s misstatements affecting the risk do not relieve the insurer of its obligations to the employee,” though “they may vitiate the contract as to the employer.” Larson, Workers’ Compensation, section 152.01 (Lexis online version).
Such vitiation is accommodated by the fraud action which the district court held cognizable. If a carrier believes that it has been misled by the employer, its insured, the carrier can sue the same and seek indemnity.
In any event, no social insurance system undergirded by private carriers will work if such carriers can try to avoid workers’ compensation responsibilities via rescission actions.
Pennsylvania law in fact says that the carrier is making a direct promise to pay the injured worker. Title 40, § 811, provides, “Every policy of insurance against liability under ‘The Workmen’s Compensation Act’ ... shall contain the agreement of the insurer to pay all compensation ... for which the insured employer may become liable under such [law] during the term of such insurance .... Such agreements shall be construed to be a direct promise to the injured employe ... having a claim under such acts, and shall be enforceable by action brought in the name of such injured employe .... Such obligation shall not be affected by any default of the insured, after an accident ... in the payment of premiums or in the giving of any notices required by such policy or otherwise.”
In previous posts I have been arguing that employees could probably not succeed in public nuisance suits because of the exclusive remedy rule. But that leads to an additional problem: suppose COVID-19 is categorically not covered by workers’ compensation in a particular state, is a public nuisance suit subject to the exclusive remedy rule then? Here one should distinguish situations in which a disease is categorically excluded from coverage from those in which the disease is not excluded from coverage but it is very difficult to prove under workers’ compensation causation principles. Where an injury or disease is categorically excluded from workers’ compensation coverage, exclusivity generally does not apply and a tort suit, including a public nuisance suit, can probably be pursued. Where an injury or disease is covered but not proven, or where workers’ compensation provides what is thought an inadequate recovery, exclusivity usually applies nonetheless. (The Larson’s treatise has a good discussion on the relationship between non-coverage and exclusivity at 9 Larson's Workers' Compensation Law § 100.04).
In this regard, readers may recall that in 2013 the Pennsylvania Supreme Court held, in Tooey v. AK Steel Corp., the exclusivity provision of the Pennsylvania Act did not apply to common law claims brought by employees for occupational diseases manifesting outside of the 300-week period prescribed by the act (as it existed at that time). Why? The short explanation is that if the disease manifested after 300 weeks (not an unusual development in many occupational disease cases) it was no longer an “injury” as defined under the Pennsylvania Act. Under those circumstances, a tort claim with respect to contraction of the disease could no longer constitutionally be barred under exclusivity (or more precisely the Pennsylvania legislature could not have intended such a result) because the claimant would be left with no remedy.
A number of states categorically exclude “infectious diseases” from coverage under their workers’ compensation statutes, or only include them where the diseases are incident to some “injury.” (4 Larson's Workers' Compensation Law § 51.01). Strictly enforced in the COVID-19 context claimants not allowed a tort action (including in public nuisance) might be denied any recovery, raising the Tooey problem discussed above. Some state statutes explicitly exclude coverage of diseases to which the general public is equally exposed. (4 Larson's Workers' Compensation Law § 51.02). Note here the interplay between the workers’ compensation causation presumptions and tort law: the more coverage under workers’ compensation the less potential coverage under tort, including public nuisance. (As I constantly press my torts and workers’ compensation classes, does the employer really not want to be covered by workers’ compensation?). The conclusion is that workplace public nuisance cases will be strongest where a state’s workers’ compensation system has either categorically excluded infectious diseases from coverage or has made it almost impossible to recover under workers’ compensation. The public nuisance suits will be weakest where states have enacted workers’ compensation COVID-19 presumptions.
One final point. In my last post I mentioned in passing the general rule that workers’ compensation also affords employees’ dependent family members their exclusive remedy for injury derivative of the employee’s work-related illness, injury, or death. This rule encompasses survival and wrongful death actions as well as actions in which the employee is disabled but not killed. One exception to the rule involves situations which the Larson’s treatise terms “independent breaches of duty toward a spouse or parent.” For the most part these “independent breach” cases involve unusual facts in which spouses (in particular—though there are some interesting “unborn child” cases) were subject to alleged tortious conduct by the employer, often of a conscience-shocking variety. (9 Larson's Workers’ Compensation Law § 101.03). As the treatise also mentions, however, three courts have allowed “bystander liability” tort claims in connection with spouses or families of employees exposed to asbestosis. Anderson v. A.J. Friedman Supply Co., Inc., 416 N.J. Super. 46, 3 A.3d 545 (2010), Kesner v. Superior Ct., 1 Cal. 5th 1132 (Dec. 1, 2016), Quisenberry v. Record No. 171494 Huntington Ingalls, Inc., 818 S.E.2d 805 (Va. 2018).
Quisenberry is interesting because there is no discussion of exclusivity in the majority opinion (possibly because it was responding to certified questions of state law posed by a federal court).
In Friedman there remained a question as to whether one spouse was in fact exposed to asbestos derived from the other spouse’s employment. Secondarily (and vaguely), the court relied on the “dual persona doctrine.” The dual persona doctrine would apply in situations when an employer has undertaken a completely separate and independent role with respect to an employee. It must be possible to say that the duty arose solely from the non-employer persona, rather than the other way around. It is not enough . . . that the second persona impose additional duties. They must be totally separate from and unrelated to those of the employment.
In Kesner, the California Supreme Court—also with no discussion of the workers’ compensation exclusivity problem—held that “the duty of employers and premises owners to exercise ordinary care in their use of asbestos includes preventing exposure to asbestos carried by the bodies and clothing of on-site workers. Where it is reasonably foreseeable that workers, their clothing, or personal effects will act as vectors carrying asbestos from the premises to household members, employers have a duty to take reasonable care to prevent this means of transmission.”
Quisenberry, Friedman, and Kesner are perhaps not true workers’ compensation exclusivity cases if exclusivity is viewed narrowly. After all, asbestosis is not an infectious disease. The gravamen of the complaints were not that the employee contracted asbestosis and then infected household or family members. The employee’s physical condition was essentially irrelevant to the cases: the wind might have blown the asbestos through the window, the employee was a mere instrumentality of carrying asbestos fibers into the house. In COVID-19 contexts, the employee herself would become exposed (though possibly asymptomatically) and then transmit the disease to family members. But viewing exclusivity broadly these cases “could have” cut off tort liability through workers’ compensation exclusivity but did not; and for that reason I suspect the public nuisance plaintiffs will be looking at them closely.
Michael C Duff
Saturday, June 6, 2020
Another public nuisance lawsuit has made the news. On Wednesday, June 3, Make the Road New York, Public Justice, and the Terrell Marshall Law Group of Seattle, WA filed a lawsuit on behalf of Derrick Palmer, Kendia Mesidor, Benita Rouse, Alexander Rouse, Barbara Chandler, and Luis Pellot-Chandler against Amazon.Com, Inc. and Amazon.Com Services, LLC.
The 35-page complaint alleges that defendants violated New York public nuisance law and seeks declaratory judgment to that effect. The complaint also alleges that defendants breached their duty to protect the health and safety of employees as required by New York Labor Law § 200 (the state law analogue to OSHA’s general duty clause (I note in passing that Federal OSHA, unlike New York law, provides no private right of action for alleged breaches of the general duty clause). Finally, the complaint alleges that defendants failed to pay plaintiff Barbara Chandler “quarantine leave” pay as required under New York law. (I discuss only the public nuisance claim in this post).
The setting of the dispute is Amazon’s huge fulfillment center known as “JFK8.” According to the complaint, “[t]he JFK8 facility is a small city that runs twenty-four hours a day, seven days a week and has a footprint of more than fourteen football fields.” Moreover, “[o]n average there are approximately 3,500 workers at JFK8. During peak seasons, which include months leading up to Christmas and the time around Amazon Prime Day in July, the workforce swells to approximately 5,000 workers.” The facility is huge and has been almost frantically busy and in much turmoil during the pandemic for reasons too obvious to require discussion.
One initial legal observation is that plaintiffs filed in federal court in the Eastern District of New York. I suspect this means that plaintiffs have some reason to suppose that the EDNY is less likely to be swayed by the primary jurisdiction argument that prompted dismissal of a similar claim by a different federal court in the Smithfield Foods case in Missouri (also filed by Public Justice). Readers may recall that plaintiffs in the recently-filed McDonald’s public nuisance case in Chicago chose to file in Illinois state court, which, I have speculated, may have been motivated in part by a desire to sidestep the primary jurisdiction problem (and apparently has because the judge in that case has denied a preliminary motion to dismiss).
I cannot do 35-pages of pleadings justice in a blogpost, but here is my (reasonably) short form account. First, the factual allegations lead us to the plaintiffs’ conclusions that employees often work while sick because the employers’ leave policies in one way or another compel them to do so. Second, the plaintiffs allege that, because of the blistering pace of the working conditions, social distancing really cannot succeed even where they have been half-heartedly (as the complaint alleges) implemented. Thus, employees may come to work sick, or may get sick at work, but in either event leave work sick, go home sick and—and here is where the public nuisance angle enters—get others sick. This is the factual lynchpin of the case.
The complaint meticulously alleges the public nuisance claims as being brought on behalf of both employees and family members of the employees. As in other recent cases, plaintiffs do not seek damages and will doubtless press the argument that its claims are therefore not barred by workers’ compensation exclusivity. As I have written elsewhere, regardless what happens at the trial level I suspect that the public nuisance claims of employees may eventually be barred by operation of the exclusive remedy rule. (In New York, the situation seems even clearer since at least one court has held that public nuisance actions are subject to exclusivity. Acevedo v. Consolidated Edison Co. of New York, Inc., 189 A.D.2d 497, 501 (1993)). In short, under the restatement, I do not think employees could obtain public nuisance injunctive relief unless they could obtain public nuisance damages, and I do not think they could obtain public nuisance damages because of workers’ compensation exclusivity (which seems likely in New York).
In any event, plaintiffs who are co-inhabitants with the employee-plaintiffs, present different kinds of legal problems. (Plaintiffs Mesidor, Alexander Rouse, and Luis Pellot-Chandler). These family members may also be subject to workers’ compensation exclusivity depending on the nature of their family relationship to the employee-plaintiffs (the facts on this point are somewhat vague in the complaint). As readers of this blog will know, dependent and eligible family members of injured and deceased workers, as defined by an applicable workers’ compensation statute, are also subject to exclusivity unless a breach of reasonable care, as to them, is “independent.” This issue is too involved to discuss here but interested readers should review 9 Larson's Workers’ Compensation Law § 101.03.
Nevertheless, the inclusion of “family member/householder” plaintiffs in the public nuisance claims is aimed squarely at the requirements of New York law. Under New York public nuisance law, “A public nuisance exists for conduct that amounts to a substantial interference with the exercise of a common right of the public, thereby offending public morals, interfering with the use by the public of a public place or endangering or injuring the property, health, safety or comfort of a considerable number of persons . . . A public nuisance is actionable by a private person only where the person suffered special injury beyond that suffered by the community at large.” Moreover, “the requisite ‘special’ or ‘peculiar’ injury suffered by private persons must be different in kind, and not just degree, from that sustained by the community surrounding the source of the public nuisance.”
Therefore, a member of the general public might always have difficulty succeeding in a public nuisance claim because that person’s injury resulting from the nuisance is the same as everyone else’s (this is really a prudential standing requirement). Well, who could suffer a special injury in a workplace nuisance context (where, in other words, the workplace is injuring the entire community)? I think it could probably only be an employee or someone to whom an employee has probably given the disease. The probability of exposure/causation goes up in the case of members of the employee’s immediate household. (The problem is akin to secondary asbestos exposure).
I have already discussed the employee’s exclusivity obstacles. I think the family member of the employee—assuming he or she escapes exclusivity—will be challenged to explain how the special injury suffered is different in kind from that sustained by the surrounding community. Perhaps the answer is as simple as that the surrounding community is injured merely through heightened risk of COVID-19 exposure whereas the family member has in fact sustained a COVID-19 injury. See REST 2d TORTS § 821C comment d.
Michael C. Duff
Thursday, June 4, 2020
According to news accounts yesterday, see here, and here, in a videoconference hearing Illinois Judge Eve Reilly denied McDonald’s USA’s motion to dismiss the multi-plaintiff public nuisance suit filed against it recently. The judge reportedly ruled:
- Government health and worker safety agencies had jurisdiction over claims involving McDonald’s response to the pandemic
- Whether McDonald's has followed guidelines issued by those agencies is “a factual dispute . . . which the court is very well suited to handle”
- “The court has no cause to abdicate its judicial function, even if a remedy could be found in administrative bodies.”
These statements, while somewhat incongruous, demonstrate at a minimum that the case will be more likely to make it to trial than the Smithfield Foods case dismissed by a federal court in Missouri. To review why I thought that might be the situation see here. I have not seen a full transcript of the judge’s remarks, but I do not detect a warm embrace of the primary jurisdiction argument that won Smithfield Foods its early exit in the Missouri case.
Michael C. Duff
Monday, June 1, 2020
The law of mental stress causing mental disability, and its compensability under workers’ compensation (the law of the “mental-mentals”), has been the subject of considerable study. The topic is treated in encyclopedias published for lawyers, most famously in the multi-volume treatise originally authored by Arthur Larson. And, when mental-mentals constituted a crisis area of workers’ compensation, the academic law journals were full of pro and con analyses of whether coverage of such claims was proper and, if so, under what conditions.
In a book chapter I have prepared for the insurance expert Don DeCarlo, I have tried to examine anew this still-controversial aspect of workers’ compensation.
I have undertaken this effort in a period when, after several decades during which many states withdrew or limited coverage, legislatures are enacting or considering presumption and other laws to ease the ability of first responders (police, fire, and emergency medical professionals) to secure coverage for mental injury and disability, particularly Post-Traumatic Stress Disorder (PTSD). The present day is also marked by a seeming parallel trend: at least some state courts are reading their traditional laws in the mental-mental area liberally so as to award compensation to such traumatized workers. Finally, I have undertaken this survey and analysis in the aftermath of successive Middle East wars, which generated an epidemic of mental illness and suicide among soldiers, a phenomenon which raised awareness about PTSD and which only now is being fully analyzed.
The book chapter (here, in the link below, presented as an article) concludes with tables in which the laws of the state and federal programs are identified and specifically referenced by statute and/or important caselaw. The first table is an unabridged recounting of the mental-mental laws; the second identifies the special first responder laws which have been enacted, or which are being considered; and the third details the statutory features of the first responder laws that have been enacted as of April 27, 2020.
(Professor Duff has alerted me, however, that the Wyoming law which I characterize as proposed has now become law.)
This article first provides an historical account of how mental injuries have been addressed in workers’ compensation laws. This article then sets forth the arguments, pro and con, with regard to compensability. Thereafter, this article, addressing the first of the tables, discusses the laws among the states on the subject of mental-mental injuries. In that discussion, a discrete examination of each jurisdiction’s laws is necessarily not undertaken (the current Larson treatise “digest,” which admirably undertakes this feat, runs to 275 pages), but the discussion sets forth key statutory features and details how lawyers and judges have approached and interpreted them. That discussion is followed by an analysis of the first responder PTSD laws, which constitute the emerging development in this area. That analysis addresses the tables of the second and third appendices. This article concludes with recommendations for how mental-mental cases are best treated under workers’ compensation laws.
Note: How the State Line Up
Currently, among the 50 states, 33 permit recovery, under various tests, for mental-mental injuries. Seventeen, meanwhile, exclude such claims. The District of Columbia, the Longshore Act, and FECA also allow recovery for mental-mentals.
Still, it is difficult, in this realm, to speak in absolutes. Nuance attends some state laws. Thus, in Arkansas, mental-mentals are prohibited, except when the mental stress is attended by an act of violence. Thus, presumably, an employee who is robbed, kidnapped, tied up, and otherwise terrorized, with no physical injury, can establish a claim. Meanwhile, in California, mental-mentals are prohibited for gradual stress experienced in the first six months of employment, but such claims may be cognizable even during this initial period of employment if having their genesis in a “sudden and extraordinary employment condition.” And, of course, some of the most restrictive states, like Florida, have established carve-outs accommodating mental-mentals, particularly for PTSD, in the case of first responders.
Thursday, May 28, 2020
A news reporter asked me today whether a public nuisance suit is barred by workers’ compensation exclusivity. It strikes me as a difficult question.
Obviously, one cannot sue one’s employer in negligence for physical injury or death because of the workers’ compensation exclusive remedy rule. Similarly, the next of kin of a decedent are barred by workers’ compensation exclusivity from suing the decedent’s employer in wrongful death. These principles are too well established to warrant extended discussion. You may change the law if you like and if you can, but you cannot really argue with what it says.
The tactic in recent public nuisance suits is, at least in part, to try to overcome workers’ compensation exclusivity by 1) suing in nuisance rather than negligence; and 2) seeking injunctive rather than compensatory relief. (Thus far, I have not located lines of prior cases on conflicts between nuisance law and workers’ compensation). Many of us are aware of cases involving various non-workers’ compensation laws in which workers’ compensation exclusivity was found to “trump” causes of action under those laws. (See 9 Larson's Workers' Compensation Law § 100.03). The typical situation involves plaintiffs seeking alternative kinds of damages for physical harm. I have a pretty firm conviction that any suit for damages related to physical harm filed by an employee against his/her employer will be found (somehow) subject to workers’ compensation exclusivity.
The injunction question seems much trickier. It appears to me doubtful that a plaintiff could successfully maintain a negligence or wrongful death action seeking an injunction but not damages. The prima facie elements of a negligence claim are, after all, duty, breach, causation, and harm/damages. The defense’s argument in a COVID-19 negligence action involving physical injury that does not seek recovery for harm/damages might simply be that, where there is no harm/damages, there is no prima facie negligence claim. And where there is no prima facie negligence claim, there is no possibility of obtaining an injunction, which, after all, depends for its issuance on the likelihood of success on the merits of an underlying negligence (or some other) claim. Injunctions in the air will not do.
What about a public nuisance suit? The plaintiff’s prima facie nuisance case might seem almost by definition not to involve monetary damages. Plaintiffs often primarily seek "abatement"—to stop the defendant from doing something that may harm the plaintiff (and others similarly situated). The plaintiff’s syllogism here might be: a) workers’ compensation is the exclusive remedy for tort/negligence damages only; b) public nuisance involves no tort damages, ergo c) workers’ compensation exclusivity does not apply, and the public nuisance suit is viable.
But wait a minute. Consider the Restatement Second of Torts explanation of public nuisance.
Under Section 821B:
(1) A public nuisance is an unreasonable interference with a right common to the general public.
(2) Circumstances that may sustain a holding that an interference with a public right is unreasonable include the following:
(a) Whether the conduct involves a significant interference with the public health, the public safety, the public peace, the public comfort or the public convenience, or
(b) whether the conduct is proscribed by a statute, ordinance or administrative regulation, or
(c) whether the conduct is of a continuing nature or has produced a permanent or long-lasting effect, and, as the actor knows or has reason to know, has a significant effect upon the public right.
I think that if an employee attempted to obtain damages from her employer on a public nuisance theory (which, contrary to our earlier syllogism, the Restatement informs us is possible), the action would be barred under workers’ compensation exclusivity.
What about a public nuisance injunction?
Under Section 821C:
(1) In order to recover damages in an individual action for a public nuisance, one must have suffered harm of a kind different from that suffered by other members of the public exercising the right common to the general public that was the subject of interference.
(2) In order to maintain a proceeding to enjoin [or] to abate a public nuisance, one must
(a) have the right to recover damages, as indicated in Subsection (1), or
(b) have authority as a public official or public agency to represent the state or a political subdivision in the matter, or
(c) have standing to sue as a representative of the general public, as a citizen in a citizen's action or as a member of a class in a class action.
Under Comment b of the section: “The private individual can recover in tort for a public nuisance only if he has suffered harm of a different kind from that suffered by other persons exercising the same public right. It is not enough that he has suffered the same kind of harm or interference but to a greater extent or degree.”
Under Comment j: “A person who has suffered damages that are different from those suffered by other members of the public and who is thus able to bring an action in tort for his damage is able to seek an injunction against the public nuisance. It has been the traditional rule that if a member of the public has not suffered damages different in kind and cannot maintain a tort action for damages, he also has no standing to maintain an action for an injunction.”
I think this leads me to the (provisional) realization that an employee could probably not obtain an injunction unless the employee could also sue for “harm of a kind different from that suffered by other members of the public . . .” But that different harm would probably be contraction of COVID-19 (or risk thereof), which seems, however the harm is quantified, to lead back to damages and therefore back to exclusivity. Thus, by this circuitous route my suspicion is that a court might conclude an action by an employee for public nuisance injunctive relief is barred by exclusivity: it is ultimately derivative of a right to obtain tort damages, and therefore encompassed by exclusivity. On the other hand, any non-employee seeking relief would obviously not be barred by exclusivity, but would have to deal with the formidable standing requirements built into 821C(1) as fleshed out in Comments b and j: how is the plaintiff’s harm different from that suffered by other members of the public? See Alaska Native Class v. Exxon Corp. (In re Exxon Valdez), 104 F.3d 1196 (9th Cir. Alaska 1997).
Michael C. Duff
Wednesday, May 27, 2020
The new Illinois workers' compensation Covid-19 presumption is actually three presumptions. The full text of the statutory language is here.
The first two presumptions apply in the case of death and are applicable specifically to “policemen” and “firemen.” Here is my stripped own rendering:
The death of any [police officer/firefighter] as a result of the exposure to and contraction of COVID-19 [as reliably diagnosed] shall be rebuttably presumed to have been contracted [from work] and the [police officer/firefighter] shall be rebuttably presumed to have been fatally injured while in active service. The presumption applies to exposures sustained between March 9, 2020 and December 31, 2020; but does not apply if the [police officer/firefighter] was not required to work for 14 or more consecutive days prior to contracting COVID-19. The legally operative date of contraction is either the date of diagnosis or the first date of disability from the disease, whichever came first.
The third presumption is an injury/occupational disease presumption applicable to “COVID-19 first responders or front line workers” [defined as all individuals employed as police, fire personnel, emergency medical technicians, or paramedics; all individuals employed and considered as first responders; all workers for health care providers, including nursing homes and rehabilitation facilities and home care workers; corrections officers; and any individuals employed by essential businesses and operations as defined in Executive Order 2020-10].
The list of essential businesses is expansive, so the presumption should apply to many employees. Also, the lawyer in me recognizes that the larger the list of essential businesses the higher the number of gray areas allowing a business to argue that it is essential, or for an employee to argue that she is employed by an essential business. In any event, the individuals are covered by the presumption if they are “required by their employment to encounter members of the general public or to work in employment locations of more than 15 employees.” An employee’s home or place of residence is not a place of employment, except for home care workers.
How does the injury/occupation disease presumption work? Here is my distillation:
If the employee [is disabled by COVID-19] the [disability] is rebuttably presumed to have arisen out of and in the course of employment and the injury or occupational disease is rebuttably presumed to be causally connected to the hazards or exposures of the employee's “first responder or front-line worker employment.”
The presumption may be rebutted by evidence, including, but not limited to, the following:
(A) the employee was working from his or her home, or on leave from his or her employment . . . for a period of 14 or more consecutive days immediately prior to the employee’s [COVID-19-related disability]; or
(B) the employer was engaging in and applying to the fullest extent possible or enforcing to the best of its ability industry-specific workplace sanitation, social distancing, and health and safety practices based on updated guidance issued by the Centers for Disease Control and Prevention or Illinois Department of Public Health or was using a combination of administrative controls, engineering controls, or personal protective equipment to reduce the transmission of COVID-19 to all employees for at least 14 consecutive days prior to the employee's [COVID-19 related disability].
(C) the employee was exposed to COVID-19 by an alternate source.
The rebuttable presumption applies to cases tried after the effective date of the legislation and in which the disease diagnosis was made between March 9, 2020 and December 31, 2020. The disease must be reliably diagnosed and the presumption created in this subsection does not apply if the employee’s place of employment was solely the employee's home or residence for 14 or more consecutive days immediately prior to the employee’s onset of COVID-19 disability.
The most important thing to realize about the rebuttal criteria above in A/B/C (in their own right a hot mess of ambiguity)—and doubtless a reason why Illinois presumption advocates could “live with” them—is that they are no more than permissible inferences. Once any causation presumption is set up it is to be anticipated that employers/carriers would offer precisely this kind of evidence to rebut it. Here the presumption may be rebutted by A, B, and C. Of course, it may not be—according to the weight afforded the evidence by a fact finder. In other words, operatively these exemplars of rebuttal appear to do very little because they are merely permissive. They do not (as they might have) operate to burst the bubble of the presumption. Under that “Thayer-Wigmore” model, once any of the A/B/C criteria were established the presumption of causation might have “burst,” returning the claimant to the position of having to affirmatively prove causation. (See here at page 7). That is not at all my reading of these "rebuttals." If the proponents of the presumption offered these “A/B/C rebuttal criteria” as a quid pro quo for the extremely broad swath of employees the presumption covers, I have little doubt who prevailed in that negotiation. In the end, this injury/occupational disease presumption is a rebuttable presumption of causation that is not significantly distinguishable from generic rebuttable presumptions of causation. An employer/carrier is permitted to do what it could always have done under a rebuttable presumption.
Michael C. Duff
Friday, May 22, 2020
Originally published on Legal Planet, By Daniel Farber. Reprinted with permission.
Proposed Tort Liability Protection for Businesses
Sen. Mitch McConnell is demanding that any future coronavirus relief law provide a litigation shield for businesses, and other conservative/business interests have made similar proposals.
So far, the supporters of these proposals have engaged in some dramatic handwaving but haven’t begun to make a reasoned argument in support of a litigation shield.
In this post, I’m going to limit myself to negligence suits against businesses. Basically, these lawsuits claim the plaintiff got the virus due to the failure of a business to take reasonable safety precautions.
Even without a business shield, these are not going to be easy cases to win. Plaintiffs will have to show that they were exposed to the virus due to the defendant’s business operation, that better precautions would have prevented the exposure, and that they weren’t exposed elsewhere.
Tort lawyers may be reluctant to take on such claims except in the unusual cases where there was no other significant exposure to the virus. In addition, the plaintiff will have to show that the business failed to take reasonable precautions, which won’t be easy in many cases. Even if they prove all that, the damage award will be lowered if the plaintiffs failed to take reasonable precautions to protect themselves. A lawsuit will have to jump all these hurdles. The question is whether businesses need additional protection beyond that already provided by the ordinary rules of negligence law.
Proposed Limits on Litigation
I’ve collected some of the specific proposals. They differ in details but there are some common threads.
Chamber of Commerce
The Chamber of Commerce is the #1 representative of business interests in Washington, D.C. Here’s a description of the Chamber’s views on April 13, 2020. They were calling for the following:
- “[I]n the negligence space, providing a safe harbor for companies following CDC or state/local health department guidance could be helpful so long as the companies’ actions do not amount to gross negligence, recklessness, or willful misconduct.”
- “Procedural reforms such as channeling certain claims into federal court rather than allowing them to remain in various state courts could be helpful.”
National Federal of Independent Businesses (NFIB)
NFIB’s core proposal is that “Businesses should be protected from liability to customers and other third-parties unless those customers or parties prove the business knowingly failed to develop and implement a reasonable plan for reducing the risk of exposure to COVID-19 and that failure caused the injury.” The paragraph setting forth this proposal makes it clear that this liability protection would apply even if a business was not fully in compliance with federal or state health rules.
NFIB also proposes some subsidiary reforms:
- Worker’s compensation would be the exclusive remedy for employees (apparently regardless of whether they’re injured by the employer or by third-parties.)
- Liability would only cover people whose illnesses required hospitalizations.
- Lawyers who bring frivolous actions should be liable for the attorneys’ fees and other costs of the lawsuit to the business.
The Heritage Foundation has a multi-part proposal:
- [D]ismissal of claims based on negligent implementation of pandemic mitigation or response measures.
- Businesses could obtain this protection in two ways: (a) by having their safety plans approved by a federal agency, or (b) by demonstrating to a judge as soon as they are sued that they are complying with “regulations, best practices, or guidance issued by federal or state health officials.”
- A plaintiff could overcome the shield by showing that the agency committed fraud in obtaining federal approval or willful misconduct in implementing its safety plan.
- Lawsuits against businesses could only be brought in federal courts.
Evaluating the Proposals
Before turning to the specifics of the proposals, I should note that there are two key assumptions underlying them. None of the proposals attempts to defend those assumptions.
The first assumption is that frivolous tort claims are going to be a serious problem. I haven’t seen any evidence to support this, either based on past experience or on lawsuits brought to date. Despite all the talk about unscrupulous plaintiffs’ lawyers, we don’t know how much of a problem they are.
The second assumption is that federal intervention is required. Tort law is a matter of state concern. If personal injury lawsuits are going to be an unfair burden on businesses and prevent the economy from reviving, why can’t we trust state legislatures to respond? A related assumption seems to be that state courts can’t be trusted to handle these cases. Again, there’s no evidence to support this assumption. Whatever happened to states’ rights?
Beyond the failure to defend these assumptions, there are other serious gaps in the argument for these proposals:
Overlooked benefits of liability.
The proposals conspicuously ignore any possible justifications for imposing liability. In general, negligence liability has two justifications. First, it provides an incentive to exercise reasonable care. It’s not implausible to assume that businesses will be more likely to take reasonable care if they face the threat of liability for carelessness. Second, negligence liability is based on the moral sense that someone who is at fault should compensate the victims of their carelessness. The reform proposals would undermine both goals to the extent that they protect businesses that actually failed to exercise reasonable care.
Failure to consider alternatives. If in fact unfounded lawsuits are an undue burden on businesses, there are alternative solutions. One would be some kind of federal support for business liability insurance, such as a tax credit for liability premiums. Another alternative would be to cap damages. A different option would be to add special procedural requirements for these lawsuits in order to allow frivolous claims to be weeded out quickly and inexpensively.
Workability issues. Shunting these lawsuits to federal court seems unworkable, given the limited number of federal judges and their already overloaded dockets. The proposal to have the federal government certify safety plans assumes that federal agencies have spare resources to devote to this task. Moreover, because many federal and state safety requirements are vague, it may be difficult for businesses to establish that they were in compliance. (Moreover, at this writing, the White House seems unwilling to allow CDC to issue reopening guidelines.) The requirement that plaintiffs show gross negligence may or may not be a deterrent to “unscrupulous trial lawyers.”
In short, at this point the supporters of these proposals have failed to show that negligence law is in need of a federal cure, that the cure will not be worse than the feared “epidemic” of unfounded litigation, or that the cure will work.