Wednesday, June 10, 2020

What Exactly is a Liability Shield?

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

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