Friday, November 13, 2020
Kentucky Supreme Court Upholds Governor's Emergency Covid Executive Actions Including Creation of Workers' Compensation Presumptions
WorkCompCentral has a good story here. (behind a paywall).
The “brisk” 92-page opinion is reducible for my purposes to two propositions. First, the executive generically has broad emergency powers. Second, under Kentucky law the legislature has specifically delegated the executive broad emergency powers.
The delegation portion of the opinion may not stand as the Governor's foes have vowed to effectively strip the delegation by legislation. The question of the limits of Executive Orders/Unilateral Action would be more intellectually interesting if it arose in a context other than a pandemic-level emergency. It is hard to say what diminished level of emergency would trigger separation of powers pushback by state courts. Under federal law, of course, the U.S. Supreme Court said the Korean War wasn’t enough of an emergency to justify Harry Truman’s seizure of the steel mills (which, of course, is distinguishable because it involved the unambiguous deprivation of private property).
I suspect that many state courts will react similarly to Kentucky in concluding that Covid is enough of an emergency for the executive to act unilaterally in certain traditionally legislative areas without legislation. And, in the case of employers'/carriers' liberty/property 14th amendment challenges focused on workers' compensation Covid presumptions established by executive order, I suspect the federal courts would apply deferential rational basis review to executive actions. As we know, this is the traditional "police power" mode of judicial review by federal courts of most state workers’ compensation legislation, which is deemed historically an exclusive matter of state law. I would expect the federal courts to have a similar attitude concerning all state workers' compensation law, whether the product of legislation or executive action. (I don't always agree with this reflexive approach, but it is undeniably customary). Obviously, this is just a surmise, and in the new 6-3 reality at the U.S. Supreme Court I'll be betting my primary residence on nothing.
Michael C. Duff
Sunday, November 8, 2020
I was pleased to participate in this panel back on October 27. I actually snuck the phrase "bursting bubble presumption" into the conversation. I'm warming up for taking over my law school's Evidence course next semester (for the second time). Here's the Ametros website summary:
To learn how the pandemic has disrupted workers’ compensation, we have presented webinars with regulators, physicians, Administrative Law Judges and pharmacy experts. In this webinar recording we are featuring what the academic legal community is thinking. In this webinar discussion, two distinguished law professors will share their views.
Joining Paul H. Sighinolfi, Ametros' Senior Managing Director will be Professors Michael Duff and John Lazzara. Professor Duff is a graduate of Harvard Law School, a prolific writer, including a text on workers’ compensation, and commentator. He teaches at the University of Wyoming Law School. Judge Lazzara distinguished himself as a former Judge of Compensation Claims in Florida. He was a founding member of The National Association of Workers’ Compensation Judiciary where he was elected to the Board and served as president. He now teaches as an Adjunct Professor at the Florida State University College of Law.
The panel discusses:
Efforts states have taken to adjust workers compensation to the COVID-19 pandemic including legislative, regulatory, and executive actions introducing compensability presumptions into the law
What is a presumption, how do they work, and why should they apply to certain categories of workers and not others?
Should there be a more comprehensive national disability option addressing incapacity caused by a virus?
The link to the video is here.
Michael C. Duff
Friday, November 6, 2020
NASI's annual "costs and benefits report" is just out and is updated to include 2018 data (the most recent available). Yours truly and Pennsylvania Workers' Compensation Judge David B. Torrey--co-editors of this blog--are members of NASI's workers' compensation data panel, which advises NASI policy analysts tasked with creating the report. From the summary:
The 23rd annual report produced by the Academy on Workers' Compensation: Benefits, Costs, and Coverage (2018 Data) provides the only comprehensive data on workers' compensation benefits, coverage, and employer costs for the nation, the states, the District of Columbia, and federal programs. Drawing on a unique combination of data from state workers’ compensation agencies, A.M. Best, and the National Council on Compensation Insurance, the report is guided by a Study Panel of experts with diverse research, policy, and practice experience. While trends in this five-year study period (2014-2018) largely continue those presented in the past few reports, expanded discussions about who pays for workers’ compensation, which similar programs might belong in future analyses, and other social insurance and safety-net programs that complement workers’ compensation protections, offer new insights and timely information in the context of the current COVID-19 pandemic.
The Report is here.
Michael C. Duff
Sunday, October 11, 2020
One of the more interesting fact scenarios playing out in recent months centers on the scope of workers’ compensation exclusivity: an employee becomes exposed to coronavirus but does not herself become disabled by Covid-19. Instead, she carries the disease home and exposes certain others in her household to the virus, and one or more of those others develops Covid-19. The situation is analogous to the employee who becomes exposed to asbestos at work, does not herself develop the signature disease of mesothelioma, but someone else in the household does develop that disease. While I have no empirical data on the frequency of these kinds of Covid-19 cases, I am hearing and reading that they are being litigated.
The Larson’s treatise terms these “independent breach” claims (§101.03): a dependent spouse or parent brings an action against the employee’s employer suing not derivatively, in connection with the employer’s breach of a duty to the employee (a negligence breach clearly subsumed by exclusivity), but independently in connection with a wrong committed directly against the spouse or parent. This is not, for example, a meatpacking plant worker’s wrongful death suit filed by a surviving family member eligible for workers’ compensation benefits. That type of suit is preempted by workers’ compensation exclusivity (at least in the absence of intentional/willful/wanton/malicious conduct, where the action may theoretically be available depending on the state in question). In an independent breach claim the employee “bringing home” asbestos (or Covid 19) is simply a conduit for transmission of the disease agent. For this reason it should also not matter if a state bars workers’ compensation for infectious diseases since the claim does not arise under workers’ compensation.
I think the argument that employers in these situations owe an independent duty of reasonable care to protect foreseeable household family members from harm is substantial, and the handful of reported decisions I have found that address the question are in accord with my intuition. See Simpkins v. CSX Corp., 401 Ill. App.3d 1109, 929 N.E.2d 1257, 343 Ill. Dec. 178 (2010); 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) (For a robust general counterargument that exclusivity should apply see the dissenting opinion in Quisenberry).
Let’s consider the implications if this kind of broad, independent MacPherson v Buick Motor Co. duty applies to this claim. Plaintiffs no doubt get an easier road to a jury. But causation challenges remain formidable. In the negligence regime a plaintiff must establish actual and proximate causation. Proximate causation—usually evaluated by asking whether a harm was foreseeable or was within the scope of the negligently created risk (the “risk rule”)—will likely be easy to establish. But actual causation is always challenging when there are multiple possible causes of injury (or illness). The modern tort trend is to not rigidly apply the “but for” causation test when there are multiple causes that have caused a harm. Suppose that both workplace and outside-of-workplace exposures have caused the employee’s family member to contract Covid 19. Strict application of but for causation would defeat the family member’s claim because “but for” the workplace exposure the employee would still have contracted the disease. Under the Restatement Third of Torts, Section 27, however, the workplace exposure could be an actual cause of the Covid-19 if the workplace exposure by itself was sufficient to cause the disease.
This brings me to the main problem I want to discuss. Suppose an employer’s employee is stricken with Covid-19 and found eligible for workers’ compensation through operation of a Covid presumption. Suppose further that a member of the employee’s family is thereafter stricken by Covid-19. Is the family member bound by exclusivity in this type of situation? Assuming that the family member is able to pursue a tort claim on an independent breach theory, does a finding of causation in the workers’ compensation claim somehow estop the employer/insurance carrier from contesting causation in the subsequent independent breach tort claim?
The first question seems much more difficult than the independent breach claims presented in the asbestos cases. In a very real way the family member’s illness arose out of the employee’s injury or illness and the agent of disease had its origin in a sick employee who was sickened at work. It strikes me as a kind of “ticking timebomb” case in which the an employee’s injury has its causal origin in work which does not manifest in the workplace. (The “timebomb” is placed on the employee in the workplace but “goes off” in her living room). The twist is that the family member is arguably not in privity with the employer in the manner contemplated by workers’ compensation statutes. If the courts apply exclusivity in these circumstances, they will have to explain the precise causal mechanisms at play, and my instinct is that many of them will not extend exclusivity this far on policy grounds.
The second question requires considering whether the causation issue in sequential workers’ compensation and torts cases are sufficiently similar to prevent “re-litigation” of causation by the employer in the second (independent breach) proceeding. The causation standards governing workers’ compensation and negligence obviously differ. A finding of workers’ compensation causation—say, whether a workplace increased the risk of contracting an injury or disease and whether medical causation has been established—is very different than what I wrote below describing causation in a negligence/torts claim. In the words of the Restatement 2nd of Judgments, § 83, comment g:
Since the tribunal's authority is delimited in substantive legal terms, the tribunal ordinarily lacks authority to adjudicate claims arising out of the transaction in question but based upon other substantive legal premises. Thus, a workers’ compensation commission usually lacks authority to consider claims for punitive damages for injuries intentionally inflicted on an employee in the course of employment; an employment discrimination agency may lack authority to consider claims based on breach of contract. These limitations on authority of the tribunal should carry corresponding limitations on the scope of “claim” for purposes of the rule of claim preclusion. (Emphasis supplied)
In other words, a workers’ compensation agency cannot make binding findings on tort causation. Estoppel notions seem especially weak in the context of presumptions, which by definition prevent full litigation of (even) workers’ compensation causation issues.
Employers and carriers may have valid reasons to attempt to rebut workers’ compensation Covid-19 causation presumptions, but I do not think fear of defensive causation estoppel in subsequent independent breach tort litigation is realistic.
Michael C. Duff
Monday, October 5, 2020
From the front material:
Work Law Under COVID-19
This book is a first stab at explaining the ways that COVID-19 has thus far affected work law – mostly in the U.S. with a comparative look at few other countries. The book is a work in progress. Just as the pandemic is ongoing, we are adding and updating contributions to this book as we go as events and information change. To that end, feel free to email comments and suggestions – including what we missed and what we got wrong.
This online collection is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Why read this book
This book is for you if you want to know more about COVID-19’s effect on work law, but don’t have the training, time, or patience to read the law itself or traditional legal commentary. As a result, the contributions are relatively short, but with links to cited primary and secondary sources if you want to dig deeper. The focus is mostly on the United States with a few cross-country comparisons.
Michael C. Duff is a Professor of Law at the University of Wyoming.
Anthony Forsyth is a Professor in the Graduate School of Business and Law at RMIT University.
Jeffrey M. Hirsch is the Geneva Yeargan Rand Distinguished Professor of Law at the University of North Carolina.
Sachin S. Pandya is a Professor of Law at the University of Connecticut.
Elizabeth Pendo is the Joseph J. Simeone Professor of Law at Saint Louis University.
Elizabeth Tippett is an Associate Professor of Law at the University of Oregon.
Deborah Widiss is a Professor of Law at Indiana University.
Ruqaiijah Yearby is a Professor of Law at Saint Louis University.
The link is here.
Michael C. Duff
Monday, August 17, 2020
In an important white paper, published by Sedgwick, the authors review the recent popularity of presumptions (including those for COVID-19) in workers’ compensation laws. David Langham & Chris Mandel, American Workers’ Compensation – A Study in Disparities and the Expanded Use of Presumptions (Sedgwick Institute, July 2020), https://www.sedgwick.com/assets/uploads/documents/Sedgwick-Institute_Workers-Comp_7.8.20-1.pdf.
The authors first provide a short history of workers’ compensation from its inception. They note, among other things, that in some jurisdictions, laws provided for presumptions of compensability, giving the injured worker the “benefit of the doubt” in ambiguous cases that the injury arose out of the employment. These types of laws (never the rule in my state, Pennsylvania), have, over the recent decades, been repealed, with most jurisdictions currently obliging the injured worker to prove his or her claim as in a tort case.
Now, however, a narrower type of presumption has developed, legislated typically at the behest of certain lobbies (firefighters seeking cancer presumptions; police officers seeking mental trauma presumptions). The authors, perhaps with provocative intent, describe such presumptions as “discriminating” and reflecting “disparate treatment by government.”
The authors discuss, accurately, how the development of these laws has laid the groundwork for executive and legislative action in the form of presumptions of causation in the realm of worker infection by COVID-19. The authors analyze the likely cost increases to the system brought about by the virus, and the application of presumptions, and caution against their indiscriminate use in this and other contexts. In the authors’ view, the overuse of presumptions unfairly upsets the bargain or compromise which is the basis of the system. This is particularly so, they suggest, because the etiology of non-occupation-specific diseases (and psychic injuries, for that matter) is still not well understood.
With regard to costs, the authors seem to acknowledge that the true total costs of COVID-19 in the workplace, and the effect of the presumptions enacted as a consequence, is difficult to estimate. Some of the cases will feature modest costs while others will exhibit serious expenditures. Still, the authors posit that, whatever the total costs, a particular jurisdiction’s adoption of a COVID-19 presumption may induce businesses to relocate to another state, or offshore its operations altogether. Notably, the authors reject the idea that such a phenomenon reflects some “race to the bottom” but, instead, characterize the same as a legitimate attempt by such businesses to avoid increased costs – particularly medical expenditures.
It is difficult to argue with many of the points made by the authors. Still, it is important to remember that occupational disease presumptions have long been part of workers’ compensation laws. A list of diseases, paired with occupations in which incurrence was thought to be a special risk, was a feature of the second British law of 1907. E.P. Hennock, The Origin of the Welfare State in England and Germany, 1850-1914: Social Policies Compared (Cambridge University Press. 2007). Pennsylvania, notably, was to emulate that approach in its enactments of 1937 and 1939.
It is also important to remember that not all presumptions are created equal. For example, in Pennsylvania, the Section 301(e) presumption enjoyed by an occupational disease victim “drops out” as soon as the employer presents evidence of an alternate cause for the disease. And, when it does so, the injured worker once again carries the burden of proof on causation. Thus, to a certain extent, the presumption is a paper tiger. (It may be that the dynamic is different under Act 46 of 2011 (cancer in firefighters)).
In any event, in Pennsylvania we know from decades of workers’ compensation black lung litigation that no lawyer would ever rely on the presumption alone; he or she would always develop expert evidence on the causation issue.
Finally, not all presumptions are created equal for another reason, and in an aspect which the authors, in their brief against this legal device, do not discuss. In this regard, one presumption which has gained popularity works in employers’ favor. That device is the presumption (rebuttable) that when, in the wake of an injury, the worker is found to have any level of marijuana metabolites in his or her blood, intoxication from that agent is the cause of the accident. Arkansas and Florida seem to maintain such laws; a leading case is Brinson v. Hospital Housekeeping Services, LLC, 263 So.3d 106 (Fl. Ct. App. 2018) (housekeeper, at end of shift, rushing to report an emergency, who slipped and fell, dislocating shoulder, barred from recovery when it was found that she had THC in her blood).
This type of presumption, which operates free of any intoxication “threshold,” does not seem to be supported by scientific evidence and, when coupled with mandatory drug-test rules, no doubt suppresses the prosecution and payment of many claims where drug use had nothing to do with the accident.
Though this type of presumption (still a minority approach) is not noted by the authors, they would be unapologetic, one senses, about such results. In this regard, a well-known social science dictum is that mass justice programs can, at times, work inequities. Here, the authors describe that phenomenon more poetically: “It is … generally accepted that workers’ compensation systems are imperfect…. The systems operate on a macro analysis of compromise. As a result, there are individual outlier examples in which the results are less than ideal. The systems are imperfect, drawn by people who are imperfect, and therefore necessarily imperfect results will ensue.”
Tuesday, August 11, 2020
I am very clear on why certain people do not “understand” COVID-19 workers’ compensation causation presumptions. There is that very old (gendered) Upton Sinclair saw: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” Insurance carriers report that expanded coverage occasioned by COVID-19 presumptions could result in increased business costs spread across an entire industry. Yes – some would argue that is precisely what we want to happen. Some say, “but this is not what we have done in the past.” That was exactly the reaction of many employers to the established negligence order when workers’ compensation was proposed in the early 20th century. The whole idea of strict liability (or something like it) for workplace injury was simultaneously preposterous and deemed necessary (considering the alternative of widespread enactment of liability statutes – organized labor’s preferred solution to the work-injury epidemic). It was not until 1850 that we were even clear that the plaintiff had the burden of proof in an injury case to show that a defendant failed to act as a reasonably prudent person under the circumstances. Before then, defendants had the burden of proving their actions conformed with a standard of care (think about running a business in that world and you will understand why the rule had to be changed to accommodate industrialism). The point is that law is changing all the time and those changes are measured against constitutional baselines.
It is also interesting to note how some observers can simultaneously be hostile to COVID-19 workers’ compensation causation presumptions but be uncritically receptive to COVID-19 civil immunity for business. Surely those observers realize that imposing liability on actors only in cases of gross negligence proven by clear and convincing evidence acts as an irrebuttable presumption against negligence. (Irrebuttable presumptions are in reality rules of law—so these are rules extinguishing ordinary negligence).
For many years I have been an ardent defender of state-based workers’ compensation. I have defended the system not because I think it always works well—I think no such thing. Rather, as a substitute for negligence, I have seen state workers’ compensation as rights-based and policed by principles of federalism, at least in theory. I have often seen federal social insurance, on the other hand (and very roughly speaking), as discretionary. But seeing how quickly many state legislatures have been willing to throw negligence “under the bus” in the current crisis, my back-of-the envelope heuristics may have been jolted. As I opined today in Bloomberg Law (in so many words), you do not cavalierly throw a body of law away because rights afforded under it become expensive or inconvenient. Rules afford rights as well as defenses. If the rule of law is not enforceable against the wealthy and powerful, it does not mean much.
Michael C. Duff
Friday, July 31, 2020
Departing sharply from notions of “liability immunity” member scholars at the Center for Progressive Reform (CPR)—including yours truly—have offered in a new report sustained argument for establishment of a Private Right of Action under the OSH Act. Although not directly related to workers’ compensation, occupational safety regulation and enforcement, like tort and workers’ compensation, proceed from the proposition that one of the first duties of government is to protect its citizens, including those who happen to be working. Sometimes, however, government must be “poked” to remind it of this duty. If a government agency lacks the resources or political will to accomplish its statutory mandate, “private attorneys general” may be able to lend assistance. It is worth noting that the House of Representatives passed a bill last February—the Protecting the Right to Organize Act (the “PRO Act”)—that would amend labor law by allowing a private right of action under the National Labor Relations Act. Originally, I did not think the PRO Act had much chance of passing the Senate. But the political dynamics are changing dramatically and rapidly. I suspect the Senate may feel very different next January. Given the obvious ineptitude of OSHA during the pandemic, we think the potential for our recommendation receiving serious consideration by policy makers is high. From the CPR Report:
As the 50th anniversaries of the Occupational Safety and Health Act (OSH Act) and OSHA approach in December 2020 and April 2021, respectively, it is time to address the law’s and agency’s shortcomings and chart a course of action to revolutionize worker health and safety for the next 50 years.
Fixing the current system requires an updated and vastly improved labor law that empowers workers to speak up about health and safety hazards, rather than risk their lives out of fear of losing employment and pay. It also requires that workers be empowered to fight back when government agencies fail to enforce safety and health requirements. Our vision is to guarantee all workers a private right of action to enforce violations of the OSH Act, coupled with incentives for speaking up and strong whistleblower protections to ensure workers can and will utilize their new authority. In addition, this private right of action should cover the millions of workers who are currently unprotected by OSHA, including misclassified independent contractors, agricultural workers, and public sector workers in states under federal OSHA’s jurisdiction. Congress should also ban mandatory arbitration as a condition of employment, since the purpose of such arbitration requirements is to disempower workers by denying access to the courts. Finally, Congress should require that all states and territories that operate their own occupational safety and health programs in lieu of federal OSHA incorporate a private right of action into their state plans.
Promoting laws and regulations that safeguard workers physically and financially and that rebalance the power dynamic between employers and workers is a necessary and vital step in building strong, resilient families and communities. Providing a private right of action, a common tool in a variety of other laws, is a long overdue measure that would empower workers to ensure safer and healthier workplaces when the agency tasked with protecting them is unwilling or unable to do so. Engaging workers more meaningfully in the enforcement of health and safety standards will not only improve their immediate conditions but also disrupt the cycle of worker disempowerment that contributes to unsafe and unhealthy working conditions, giving workers a voice to achieve lasting improvements in the workplace.
The rest of the report is here.
Michael C. Duff
Thursday, July 30, 2020
Senator Zorn, the Michigan state republican senator who allegedly wore a protective face mask on the Michigan Senate floor depicting a design similar to the battle flag of the Confederate States of America, has proposed his own type of workers’ compensation COVID-19 presumption—an irrebuttable presumption against coverage. (Maybe you think the Confederate Flag stuff is irrelevant but I will get back to that shortly). First the bill, Michigan Senate Bill 1019:
(1) Notwithstanding any other provision of this act, and except as otherwise provided in subsection (2), an employee who receives a personal injury arising out of and in the course of employment by an employer who is subject to this act at the time of the injury is not eligible to be paid compensation as otherwise provided for in this act if all of the following conditions are met:
(a) The personal injury was the result of the employee's exposure to COVID-19.
(b) The employee was exposed to COVID-19 during the COVID-19 emergency.
(c) The employer was in compliance with a federal or state statute or regulation, executive order, or public health guidance that was relevant to, and applicable at the time of, the employee's exposure to COVID-19. If more than 1 relevant public health guidance applied to the employer at the time of the exposure, the requirements of this subdivision are satisfied if the employer was in compliance with any relevant and applicable public health guidance.
(2) Subsection (1) does not apply to a personal injury that was the result of an intentional tort as described in section 131.
(3) This section does not do any of the following:
(a) Create, recognize, or ratify a claim or cause of action of any kind.
(b) Eliminate a required element of a claim of any kind.
(c) Amend, repeal, alter, or affect any other immunity or limitation of liability.
(4) This section applies retroactively to a personal injury that occurs after March 11, 2020.
(5) As used in this section:
(a) "COVID-19" means the novel coronavirus identified as SARS-CoV-2 or a virus mutating from SARS- CoV-2.
(b) "COVID-19 emergency" means the state of emergency declared under 1945 PA 302, MCL 10.31 to 10.33, on March 10, 2020, and any subsequent orders or amendments to those orders.
(c) "Public health guidance" means written guidance related to COVID-19 issued by the Centers for Disease Control and Prevention or the Occupational Safety and Health Administration of the United States Department of Labor, or by the department of health and human services or another agency of this state.
So if an employer is in compliance with any “public health guidance” (and how could it not be given the weakness of the guidance we have seen across the political landscape) an employee is “not eligible to be paid compensation” for any COVID-19 claim that does not rise to the level of an intentional tort. This formulation is, of course, rife with notions of “fault”: the employer was not at fault because it was attempting in good faith to comply with public health compliance. This sounds like a negligence defense which, as you know dear readers, is irrelevant under “classical” workers’ compensation doctrine.
Back to the Confederate Flag. I am not going to bother linking you to the variety of public health authorities pointing out the racial disparities with respect to who has been able to work from home and who has not. I cannot believe that the author of this Michigan bill could have much concern for the workers most likely to be exposed to the coronavirus. I suspect you can complete my syllogism.
If this and the McConnell/Cornyn immunity bill were to become law, workers would—as a matter of law—have no cause of action for wrongful contraction of COVID-19. They may have access to health insurance depending on their plans’ coverage. And they may have access to private disability plans (though under ERISA employers may terminate employee welfare benefit plans at any time—a point no one seems to want to believe). Social Security Disability covers only total disability—and even then there is a five-month waiting period and it is difficult to qualify. Bottom line—workers are dancing on a razor’s edge. I find it difficult to believe this could become law, but it does shine light on why the McConnell/Cornyn bill repeatedly recites that it would not preempt stricter state immunity. “Nothing in this subtitle shall be construed to affect the applicability of any provision of any Federal, State, or Tribal law that imposes stricter limits on damages or liabilities for personal injury caused by, arising out of, or related to an actual, alleged, feared, or potential for exposure to coronavirus, or otherwise affords greater protection to defendants in any coronavirus exposure action than are provided in this subtitle.” Sec. 121(b)(2). As bad as McConnell/Cornyn is, it would not set a floor, which is a scary thought.
Michael C. Duff
Monday, July 27, 2020
The bill is here. It is every bit as sweeping as advertised. It is described in this manner: “To lessen the burdens on interstate commerce by discouraging insubstantial lawsuits relating to COVID–19 while preserving the ability of individuals and businesses that have suffered real injury to obtain complete relief.” I will not in this brief exposition discuss the structure of the Act in detail but it is comprised of three titles: Title I, “Liability Relief;” Title II, “Products;” and Title III, “General Provisions” (severability). This discussion solely concerns Title I (Liability Relief). Subtitle A pertains to “Individuals and Entities Engaged in Businesses, Services, Activities, or Accommodations.” Subtitle B pertains to “Health Care Providers.”
Bill’s Central Justification (From Sec. 2, Findings and Purposes):
“One of the chief impediments to the continued flow of interstate commerce as this public health crisis has unfolded is the risk of litigation. Small and large businesses, schools, colleges and universities, religious, philanthropic and other nonprofit institutions, and local government agencies confront the risk of a tidal wave of lawsuits accusing them of exposing employees, customers, students, and worshipers to coronavirus. Health care workers face the threat of lawsuits arising from their efforts to fight the virus.” There is other similar, rambling language like the need “to prevent litigation brought to extract settlements and enrich trial lawyers rather than vindicate meritorious claims.” You get the idea.
A Very Important First Point
The bill would be effective until at least October 1, 2024 (!!)
A Very Brief Analysis
For this audience I will first say that the bill does not preempt state workers’ compensation law. Sec. 121(b)(3).
The bill “supersedes any Federal, State, or Tribal law, including statutes, regulations, rules, or standards that are enacted, promulgated, or established under common law, related to recovery for personal injuries caused by actual, alleged, feared, or potential for exposure to coronavirus.” Sec. 121 (b)(1). (So much for Federalism)
Under Sec. 122(a), “Notwithstanding any other provision of law, and except as otherwise provided in this section, no individual or entity engaged in businesses, services, activities, or accommodations shall be liable in any coronavirus exposure action unless the plaintiff can prove by clear and convincing evidence that
(1) in engaging in the businesses, services, activities, or accommodations, the individual or entity was not making reasonable efforts in light of all the circumstances to comply with the applicable government standards and guidance in effect at the time of the actual, alleged, feared, or potential for exposure to coronavirus;
(2) the individual or entity engaged in gross negligence or willful misconduct that caused an actual exposure to coronavirus; and
(3) the actual exposure to coronavirus caused the personal injury of the plaintiff.”
Under Sec. 3 definitions, gross negligence “means a conscious, voluntary act or omission in reckless disregard of— (A) a legal duty; (B) the consequences to another party; and applicable government standards and guidance.
Under willful misconduct “means an act or omission that is taken— (A) intentionally to achieve a wrongful purpose; (B) knowingly without legal or factual justification; and (C) in disregard of a known or obvious risk.”
Under Subtitle C, Sec. 161(a) the federal and state courts have original concurrent jurisdiction. Under Sec. 161(b)(1) a defendant may remove to federal court. Under Sec. 161(b)(1)(A) any defendant may remove over the objection of co-defendants. Under Sec. 161(b)(1)(B), actions already pending in state courts may be removed to federal court upon the enactment of the bill.
Bottom line: Coronavirus cases would be heard in, and routinely dismissed by, federal courts.
The bill does not preempt stricter state immunity laws. Sec. 121(b(2).
I recommend you read the bill in its entirety but it is clear to me that it quite simply extinguishes the law of negligence with respect to COVID-19 claims for over four years. Immunity is so sweeping that defense lawyers may find it worthwhile to connect any negligence action (somehow) to a COVID-19 theory: a real negligence holiday. All I can say, is that if you are a worker in a state in which workers’ compensation infectious diseases are excluded as a matter of law; or if you are a gig worker; or if you are a customer doing almost anything – watch out! If this becomes law my family will modify its activity accordingly. And I doubt we will be alone. The risk of pandemic carelessness in one fell swoop will have been shifted to the general public in an unprecedented and shameful manner, and in utter contravention of public safety. Workers without the luxury of being able to work remotely from home (overwhelmingly, Black, Brown, and poor) will be the real losers. Customers can at least reduce their offline shopping and dining.
Michael C. Duff
Sunday, July 26, 2020
I recently saw a short piece on workers’ compensation. Essentially the piece contended that there will be few COVID workers’ compensation claims, the claims are not expensive, and the impact of presumptions has been minimal. Workers’ compensation premiums have not dropped, so workers’ compensation insurers are making large profits (actually claims may be going down because workers are often afraid to file claims in a bad economy for fear of job loss—a point that Emily Spieler and John Burton have been making for years). Furthermore, due to a lack of medical inflation and a drop in drug prescription costs overall medical costs are going down. The upshot is that it is unseemly for insurers to be profiting so much in a time of pain.
Maybe. This is all microanalysis, and it is interesting, but it is not the kind of detail I focus on. First of all, we have not even gotten to the real pressure COVID-19 will be putting on workers’ compensation. That pressure will come now as the economy continues to reopen and workers (disproportionately Black, Brown, and poor, by the way) are forced into an insanely dangerous workplace where they will face, among other things, irate customers who do not want to wear masks. Workers may fear filing claims but in the end have no choice but to file as they are overcome with illness. Second, even if workers’ compensation insurers are making large profits in their primary business, their “air bags” (institutional reserves) may not be sufficient (regardless the unerring and elegant mathematical models insisting otherwise) for the scope of the collision that is coming. Only certain quarters of the popular press, well compensated for not seeing the obvious, fail to see what is about to happen with evictions, mass unemployment, and, yes, the securities markets (which will soon learn what we all know – except perhaps Robinhood traders – even under the MMT schools there is some limit to what private debt the Fed will be willing to take onto its balance sheets).
About five years ago or so the press asked me what I thought the chance of federalization of workers’ compensation might be in light of the punishing inadequacy and unfairness of workers’ compensation benefits (which has continued unabated under any fair view of a tort quid pro quo). I said that given the current political environment federalization was almost impossible to conceive. It is a gross understatement to say that we are no longer in that political environment. Fifty million workers have lost their jobs in roughly one fiscal quarter and forty percent of the jobs lost may never return. The national government dithers while millions of additional people—again, disproportionately Black and Brown—are on the precipice of home loss. In this political environment what I expect is reconfiguring of the entire sociopolitical, legal, and economic landscape—though I suspect there will be preliminary Hooveresque fits and starts. I have no idea what it will look like. But those of you who have read my writing over the last few years know that I have felt for quite some time that the social compact has been unraveling. And the period of renegotiation has arrived. As Thomas Frank noted in his recent book, The People, NO, A Brief History of Anti-Populism, respectable quarters have long scorned populist “Calamityites,” but in 1929 you did not need to be such a person to know that things would never be the same.
Perhaps the current social configuration will survive, but as a member of the National Academy of Social Insurance I can report that many new “air bag” (social insurance) ideas are afoot. It is about time.
Michael C. Duff
Tuesday, July 21, 2020
I wrote in general terms back on June 10 about the “liability shield” that will probably be front and center in the debate over the next COVID-19 Relief Bill. No bill has yet been produced, but everyone is pretty clear about the immunity provisions it will contain. My gut tells me that the most feasible political solution may be a national pandemic program (regrettably, it looks like we may need a plan for future such outbreaks) akin to the National Vaccine Injury Compensation Program. But it is very important to remember that no compromise of this type, or like workers’ compensation, could ever occur without the default liability pressure of the tort regime. And the tort theory for liability is simple: it is not fair that those who benefit most from productive activity should pay an inadequate share of costs incurred by victims harmed by the activity. This is certainly true where those conducting the activity are negligent--in fact if harm can be avoided by reasonable conduct it should be. But under an “enterprise theory” of tort, it is also true when primary “activity beneficiaries” are non-negligent, if those beneficiaries are the moving, or initiating agents of the activity, and if the activity is sufficiently large in scope or scale. When the characteristic activity of a business involves a lot of “big stuff moving around,” we know darned well that we will have victims. Those conducting activity actuarially/statistically known to create risks of harm, even when all due care to prevent harm is exercised, should not be able to escape compensation for the harm caused simply because they (fortuitously?) failed to foresee a particular victim in a particular accident. This is a common justification for application of strict, or non fault-based, liability.
In any event, I think that strict liability, negligence, and administrative schemes like workers’ compensation, each recognize a core fundamental right of all persons to safety and security (remedies for harm are important, too, but as Greg Keating has forcefully argued the core right is avoidance of harm, and post-hoc remedies for harm are always second best). Moreover, I—following among others John Stuart Mill—believe security to be the highest of absolute rights. In 1863, Mill wrote, in Chapter 5 of his influential work Utilitarianism,
To have a right, then, is, I conceive, to have something which society ought to defend me in the possession of. If the objector goes on to ask, why it ought? I can give him no other reason than general utility. If that expression does not seem to convey a sufficient feeling of the strength of the obligation, nor to account for the peculiar energy of the feeling, it is because there goes to the composition of the sentiment, not a rational only, but also an animal element, the thirst for retaliation; and this thirst derives its intensity, as well as its moral justification, from the extraordinarily important and impressive kind of utility which is concerned. The interest involved is that of security, to every one’s feelings the most vital of all interests. All other earthly benefits are needed by one person, not needed by another; and many of them can, if necessary, be cheerfully foregone, or replaced by something else; but security no human being can possibly do without on it we depend for all our immunity from evil, and for the whole value of all and every good, beyond the passing moment; since nothing but the gratification of the instant could be of any worth to us, if we could be deprived of anything the next instant by whoever was momentarily stronger than ourselves. Now this most indispensable of all necessaries, after physical nutriment, cannot be had, unless the machinery for providing it is kept unintermittedly [without interruption] in active play. Our notion, therefore, of the claim we have on our fellow-creatures to join in making safe for us the very groundwork of our existence, gathers feelings around it so much more intense than those concerned in any of the more common cases of utility, that the difference in degree (as is often the case in psychology) becomes a real difference in kind. The claim assumes that character of absoluteness, that apparent infinity, and incommensurability with all other considerations, which constitute the distinction between the feeling of right and wrong and that of ordinary expediency and inexpediency. [Emphases supplied]
These may be words to remember as the citizenry is herded back to work (assuming there is any work). I cannot imagine the panic that could ensue if people experiencing sharply higher rates of COVID-19 disease resulting from (merely?) negligent business practices realize that all avenues of legal recourse have been cut off because they cannot prove those practices were the product of “recklessness” or “gross negligence.” Simply terrifying.
Michael C. Duff
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