TortsProf Blog

French on COVID-19 Business Interruption Claims

Christopher French has posted to SSRN COVID-19 Business Interruption Insurance Loses:  The Cases For and Against Coverage.  The abstract provides:

The financial consequences of the government-ordered shutdowns of businesses across America to mitigate the COVID-19 health crisis are enormous. Estimates indicate that small businesses have lost $255 to $431 billion per month and more than 44 million workers have been laid off. When businesses have requested reimbursement of their business interruption losses from their insurers under business interruption policies, their insurers have denied the claims. The insurance industry also has announced that business interruption policies do not cover pandemic losses, so they intend to fight COVID-19 claims “tooth and nail.” More than 450 lawsuits throughout the country already have been brought against insurers, including dozens of class actions. Legislators in several states have proposed legislation that would require insurers to pay business interruption claims regardless of whether the claims are covered by the wording of the policies. In the absence of a government bailout, the losers of this epic insurance battle—either insurers or their insureds’ businesses—will likely face bankruptcy. Thus, the financial consequences of this battle, and its implications for America’s economy, cannot be overstated.

This is the first scholarly Essay to discuss the arguments for and against business interruption policies covering COVID-19 business interruption losses. In doing so, it sets forth the strongest arguments on each side of the fight regarding the meaning of the applicable policy language in the context of the existing caselaw and the purpose of business interruption insurance. It also addresses the insurance industry’s claim that pandemic losses are not covered by business interruption policies because such losses are simply uninsurable. Finally, it discusses the competing public policies that support each side.

PA: Suit Filed Over Failure to Properly Restrain 9-Year-Old on Roller Coaster

A father has sued the owner of Hershey Park and the designer and builder of the Storm Runner roller coaster over an incident from June 2018.  The suit alleges that his 9-year-old son was not able to pull the harness down and secure it, and that park employees did not come and help or check that he was securely fastened.  The boy was able to leap off the ride as it was starting.  The suit includes allegations of design defect; plaintiff claims the roller coaster should not be able to move unless all of the harnesses are securely fastened.  Although no physical injuries resulted, plaintiff alleges negligent infliction of emotional distress on behalf of both himself and his son.  PennLive has the story.  Thanks to Shannon Costa for the tip.

COVID-19 Waivers

As the U.S. reopens from COVID-19 quarantine, it is no surprise that businesses are asking both workers and customers to sign waivers.  So far, at least 6 states--Utah, North Carolina, Louisiana, Oklahoma, Arkansas, and Alabama--have created some type of COVID-19 immunity, either through legislation or executive order.  This piece from The Paducah Sun discusses the debate over the waivers.  One law firm is tracking cases; it found that through Monday there were 2,741 lawsuits filed in the U.S. over COVID-19.  The vast majority were over government shutdown orders and which businesses were deemed essential.  Only 7 cases were filed by consumers and 49 were filed by employees over exposure to the virus.

 

Ramirez on Reforming the Police Through Liability Insurance

Rick Newman, Executive Director of the American Museum of Tort Law, interviews Deborah Ramirez about her proposal to require police officers to carry liability insurance.  Police departments would pay the average premium, but officers would have to pay the excess over the average.  The idea is that those officers who posed great risk would be priced out of the market, and would lose their jobs.  For more details, the interview is on the AMTL's website.

Rustad on COVID-19 and Tort Reform

Mike Rustad has published in the Northwestern University Law Review blog  Your Right to Sue, Goodnight.   The gist:

The civil justice system in the U.S. has been under an unrelenting attack since the mid-1980s. For decades “business and professional interests have been claiming that American tort law is out of control, imposing unjustified costs on defendants amounting to billions and billions of dollars annually.” Now, Senator McConnell and the corporate wrongdoer lobby have the perfect Trojan Horse—using COVID-19 as a decoy so that they can enact tort reform at the federal level. The avowed purpose of McConnell’s liability shield suggestion for businesses dealing with COVID-19 is to help the economy. However, in my opinion his true purpose is to deliver tort reform at the federal level for corporate wrongdoers, who contribute mightily to the Republican Party. Those interested in protecting the right to sue in the U.S. should say good night to Mitch McConnell’s legislative proposal.

New at the American Museum of Tort Law

The American Museum of Tort Law in Winsted, Connecticut is the only museum in the United States dedicated exclusively to law.  Two items recently added to its website may be of interest.  First, a video in which Executive Director Rick Newman interviews Tim Lytton about COVID-19 immunity.  Second, an open letter written to President Trump and members of Congress arguing that COVID-19 immunity for businesses is a bad idea.

Boston Globe Editorial on COVID-19 Immunity

The gist:

The [Senate Judiciary [C]]ommittee focused primarily on the question of whether to give businesses immunity from lawsuits over COVID-19. That wouldn’t be a good idea. But luckily, the hearing unearthed the real remedy to reassure businesses that it’s safe to reopen: giving them clear federal rules that will protect both well-meaning business owners and the ability to hold bad actors accountable. Now it’s up to the Trump administration to make that happen.

The entire editorial is here.

Culhane on COVID-19 Immunity for Businesses

John Culhane, writing at Slate, argues that COVID-19 immunity for businesses is unnecessary.

Lytton on Why COVID-19 Immunity is a Bad Idea

Tim Lytton, writing at The Conversation, explains "Why offering businesses immunity from coronavirus liability is a bad idea".

Updated:  Today Tim published a related piece in The Regulatory Review:  "Businesses that Reopen Too Soon Should be Subject to Tort Liability".

J&J Loses Daubert Motion in Talc Powder Cases

J&J is facing thousands of suits alleging the talc in its baby powder causes cancer.  A district judge in New Jersey, overseeing the MDL, just handed down a Daubert ruling allowing plaintiffs' experts to testify.  George Conk has details at Otherwise.

Workers Sue Smithfield Foods Over COVID-19 Working Conditions

Workers have sued Smithfield, which operates a number of meat-processing plants, over working conditions related to COVID-19.  The workers are not suing for money damages, but an injunction to force Smithfield to comply with CDC and public health guidelines:

The suit, brought by a plant worker identified as Jane Doe and by a nonprofit that advocates for plant workers, accuses Smithfield of failing to provide workers with sufficient protective equipment; forcing them to work shoulder to shoulder; giving them insufficient opportunities to wash their hands; discouraging them from taking sick leave; and failing to implement a plan for testing and contact tracing.

Smithfield has had trouble with COVID-19:

Smithfield's South Dakota plant, which handles 5% of U.S. pork production, has become a coronavirus hot spot, with 783 workers testing positive for the virus so far and two of them dying. The first worker there tested positive for the virus on March 24, but the plant was not closed until April 14.

NPR has the story.

French on Climate Change and Insuring Natural Disasters

Christopher French has posted to SSRN America on Fire:  Climate Change, Wildfires & Insuring Natural Catastrophes.  The abstract provides:

America is on fire. The damage, destruction, and loss of life caused by wildfires have exploded over the past few decades. Nine of the ten worse fire seasons have occurred in the past fifteen years, with 2017 and 2018 being the worst years ever. Despite spending approximately $3.7 billion annually on fire suppression, more than 35,000 structures were lost to wildfires in 2017 and 2018, approximately $32 billion in property losses occurred, and more than 100 people were killed. More than forty million homes worth approximately $187 billion in the U.S. are currently at a high risk of destruction due to wildfires. In response to this crisis, the insurance industry has been dropping customers and refusing to insure homes that are considered at high risk for wildfires, while also excluding coverage under homeowners policies for other natural catastrophes such as floods and earth movement. As a result, natural catastrophes are largely uninsured in America today.

In addition to discussing the causes of the wildfire crisis, including climate change, and ways to mitigate the crisis, this Article analyzes the current insurance market for wildfires and other natural catastrophes in America. In doing so, it explores how other developed countries, such as Australia, Belgium, France, New Zealand, Norway, Spain, and Switzerland, insure natural catastrophes. It concludes by seeking to transform the insurance market in America for natural catastrophes by proposing the creation of a governmental insurance program that “bundles” coverages for natural catastrophes together in a single policy. Bundling the coverages would be a way to solve the correlated risk, adverse selection, and moral hazard problems that have driven private insurers from the insurance market for natural catastrophes and that plague insurance programs that cover only a single catastrophic peril, such as the National Flood Insurance Program.

Jerry on COVID-19 and Rationing

Robert Jerry has posted to SSRN COVID-19:  Responsibility and Accountability in a World of Rationing.  The abstract provides:

The COVID-19 pandemic is the first modern public health crisis with the potential to overwhelm the public health care system. Health care is a shared society resource, and thus the ethical principles guiding its rationing require health care services, drugs, and equipment to be applied where they are most effective, which gives priority to patients most likely to benefit from treatment. Health care providers—primarily physicians—will make these rationing decisions, and providers deserve considerable latitude for good-faith decisions guided by settled ethical frameworks. Those disadvantaged by these decisions are likely to second-guess those who make them. Providers have a responsibility to make these decisions fairly, both procedurally and substantively, and, like all professionals, they should be held accountable for them. The legal standard of care requires health care professionals to exercise the skill and knowledge normally possessed by providers in good standing in the same field or class of practice in similar communities acting in the same or similar circumstances. But practicing medicine in crisis conditions, like those created by COVID-19, is not the same as or similar to practicing in non-crisis conditions. Thus, the standard of care, properly applied, expects less of health care professionals making decisions under the stress of COVID-19’s triage conditions. Because many health care providers do not perceive this to be true, and for pragmatic and normative reasons, policymakers should articulate clearer rules that limit the liability for health care providers’ rationing decisions, as well as other acts and omissions, occurring in crisis conditions. Clarified limitations on liability should not create absolute immunities, however. Health care providers should be accountable when practicing in crisis conditions for their acts, omissions, and decisions—including rationing decisions—that are criminal, reckless, willful or wanton, grossly negligent, or unlawfully discriminatory, or that are intentional violations of settled ethical norms.

NY: Temporary COVID-19 Med Mal Protection

In an attempt to incentivize health care workers and retired health care workers to join the fight against COVID-19, Governor Andrew Cuomo issued an executive order relieving health care workers of medical malpractice liability while providing services in the state's response to the disease.  There is an exception for conduct which is grossly negligent or worse.  The protection, modeled on Good Samaritan statutes, was later enacted in the state budget and will remain in place until the disaster emergency declaration is over.  The Times Union has the story.

NJ: Legal Malpractice Claims Against Public Defenders Subject to Tort Claims Act

George Conk has coverage at Torts Today.  The gist:

"Attorneys serving under the public defender, whether full-time staff attorneys or contracted pool attorneys, meet the definition of an OPD employee for TCA purposes, and have been treated as public employees in previous cases, Justice Jaynee LaVecchia wrote for the court. The OPD is an office within the executive branch, whose head is appointed by the governor with the advice and consent of the state Senate, LaVecchia said. It relies on state funding appropriated through the annual state budget."

USSC: Cert Granted in FTCA/Bivens Case

Mandy Gillip at Ballotpedia News writes:

The Supreme Court of the United States agreed to hear a case in its October 2020-2021 term concerning the Federal Tort Claims Act (FTCA). The case, Brownback v. King, came on a writ of certiorari to the United States Court of Appeals for the 6th Circuit.

In 2014, James King violently resisted arrest after being stopped by FBI Special Agent Douglas Brownback and Grand Rapids Police Department Detective Todd Allen. King was tried and acquitted of charges of assault with intent to do great bodily harm, aggravated assault of a police officer, and resisting arrest. He then sued the United States under the Federal Tort Claims Act (FTCA) and Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics (1971). The U.S. District Court for the Western District of Michigan held Brownback and Allen had not violated King’s constitutional rights under Bivens. The district court also decided against King’s FTCA claims. On appeal, the 6th U.S. Circuit Court of Appeals reversed the district court’s ruling.

SCOTUS will consider the following issue:

• • Whether a final judgment in favor of the United States in an action brought under Section 1346(b)(1), on the ground that a private person would not be liable to the claimant under state tort law for the injuries alleged, bars a claim under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), that is brought by the same claimant, based on the same injuries, and against the same governmental employees whose acts gave rise to the claimant’s FTCA claim.

PA: Workers Compensation and Coronavirus

Rebecca Moss of Spotlight PA has a story about obtaining workers compensation benefits for coronavirus in Pennsylvania.  The gist is that it will be extremely difficult for workers to prove they developed the sickness on the job:

The state Department of Labor and Industry assured workers on March 16 by saying those who contract the coronavirus on the job might be eligible for workers’ compensation benefits. But legal and public health experts say that help may be very hard to obtain.

To be eligible for workers’ compensation, a claimant must prove they were injured or made sick at their workplace. For a disease that's scope is both constantly changing and unprecedented, proving it was contracted while on the job will be challenging, if not impossible.

First Coronavirus Lawsuit

At Maryland Injury Lawyer Blog, Ron Miller covers the first coronavirus lawsuit.  It stems from the Grand Princess cruise ship.

Experts: Suing Successfully for Quarantines is Difficult

Governments are given wide latitude in responding to public health emergencies is the bottom line from this piece in Claims Journal.

Bernstein at the Faculty Lounge

Anita Bernstein is blogging at the Faculty Lounge.  Her most-recent post is about June Medical Services, LLC v. Russo, argued yesterday at SCOTUS.