As of July 20, 2020, the Centers for Disease Control and Prevention reported more than 3.7 million COVID-19 cases, resulting in more than 140,000 deaths.  The virus is primarily transmitted person-to-person by droplets, aerosols and fomites. Nursing homes, rehabilitation and long-term care centers and facilities caring for people with psychiatric disabilities assist persons of a wide range of ages, but the majority of residents are elderly. Individuals that require the services of these facilities are particularly vulnerable to respiratory pathogens such as the influenza virus and present environments conducive to infections which can be introduced into these facilities by staff, visitors and new residents with devastating consequences.

Nursing home residents account for nearly one in ten of all COVID-19 cases in the United States and more than a quarter of the deaths.[1]  Data shows that nursing homes have been overwhelmed by the effects of the virus. Nursing homes hold large populations of elderly residents many of whom have compromised immune systems due to pre-exiting medical conditions and age. Given the typical living arrangements which place patients and residents within close proximity to one another and caregivers supporting numerous individuals in the same facility, nursing homes and long-term care facilities present substantial opportunities for the spreading of infections. Nursing homes frequently provide a community-based atmosphere, consisting of “family” meals, entertainment, fitness classes, group activities such as card or board games, and a general encouragement of social interaction.

Within high-risk groups of our population, these environments and related activities offer the perfect opportunity for a virus such as COVID-19 to spread if proper precautions, including social distancing and enhanced hygiene protocols, are not established, initiated and followed. The CDC has set out specific guidance and recommendations for Nursing Homes & Long-Term Care Facilities to address potential COVID-19 exposures.[2]  Failure to follow a prevention and control program in these settings can result in illness, death and litigation.  Oversights in the prevention and control of COVID-19 ultimately leads to potential legal exposure for nursing homes, long-term care facilities, individual healthcare providers, service providers and contractors that provide dining or cleaning services, as well as the individual employees themselves at a higher risk for becoming the target of litigation.

An example of the potential scope of legal liability faced by nursing homes and similar facilities as a result of the pandemic can be seen in a proposed class action filed in the United States District in Massachusetts pursuant to the Fourteenth Amendment and 42 U.S.C. § 1983.  Sniadach, et. al. v. Walsh, et. al., stems from COVID-19 infections and deaths afflicting 160 Veterans that resided at the Soldiers’ Home in Holyoke, Massachusetts resulting in the deaths of 76 Veterans.  The proposed class action alleges that the Soldiers’ Home, its management and staff failed to follow proper COVID-19 procedures.

The Holyoke facility was investigated and a report entitled “An Independent Investigation Conducted for the Governor of Massachusetts” was published on June 23, 2020 which examines the causes of the outbreak.[3]  The report lists alleged errors made by the Soldiers’ Home leadership team which included:

  • combining two locked dementia units housing Veterans with a mix of COVID-19 conditions;
  • failing to ensure an appropriate standard of care within the combined unit;
  • failing to promptly isolate patients suspected of COVID-19 even though rooms were set aside for isolation;
  • allowing delays in testing additional Veterans for COVID-19 when they were showing symptoms;
  • delays in closing common spaces;
  • failing to stop rotation of staff among units;
  • inconsistent policies and practices with respect to personal protective equipment; and
  • various recordkeeping and documentation failures.

Sniadach was brought as a Federal civil rights action under §1983 against a series of individual defendants including the former Superintendent, the former Chief Nursing Officer and the former Assistant Director of Nursing of the Soldiers’ Home as well as the former Massachusetts Secretary of Veterans’ Affairs.  The Complaint alleges that the defendants “showed deliberate indifference “to the basic needs of the veterans at the Soldiers Home.

The deliberate indifference standard is a necessary component to any claim for monetary damages under §1983 against individual government employees who would otherwise be shielded from liability under the Federal Tort Claims Act (“FTCA”).[4]  The legal approach and scope of the allegations in the Sniadach complaint focus on the acts and omissions of the individually named defendants apparently both to circumnavigate the pre-suit procedural requirements of the FTCA and in an effort to defeat a “qualified immunity” defense[5] which still looms as a hurdle that the plaintiff must overcome with respect to the §1983 claims for monetary damages.[6]

Lawsuits have been filed across the country against privately run nursing homes and long-term care facilities relating to injuries and deaths stemming from the COPVID-19 pandemic.  Litigation has been filed in California, Illinois, North Carolina, and Washington. Many theories of liability apply to these COVID-19 based lawsuits including, but not limited to, negligence, wrongful death, willful and wanton misconduct, fraudulent misrepresentation, and violations of various local, state, and federal laws, seeking a variety of relief, including punitive damages in some matters.

  • The People of the State of California v. Lakeview Terrace Skilled Nursing Facility LLC, d/b/a Lakeview Terrace, et al., Case No. 20STCV25436, was filed in the Superior Court of the State of California, in the County of Los Angeles. This matter involves alleged acts and omissions during the COVID-19 pandemic brought by the People of the State of California seeking a permanent injunction, civil penalties, restitution, and other legal and equitable relief, claiming an intentional violation of an injunction, unfair competition, violations of local, state, and federal law, a failure by the facility to report abuse and neglect as well as a failure to maintain adequate records.
  • Pamela Colwell, as Administrator of the Estate of Helen A. Osucha, deceased, v. Geneva Nursing and Rehabilitation Center, LLC d/b/a Bria Health Services of Geneva, Case. No. 20-L-000244, was filed in the Circuit Court of Sixteenth Judicial Circuit, in Kane County, Illinois. The Plaintiff administrator of her late mother’s estate filed suit against her late mother’s nursing home seeking monetary relief alleging violations of the Illinois Nursing Home Care Act (210 ILCS/Art. I), negligence, willful and wanton misconduct, and wrongful death after her mother passed away from complications associated with COVID-19.
  • Vanessa Sherod, as Administrator of the Estate of Elizabeth Wiles and in her own right, v. Comprehensive Healthcare Management Services, LLC d/b/a Brighton Rehabilitation and Wellness Center, et al., Case No. GD-20-007319, was filed in the Court of Common Pleas of Pennsylvania, in Allegheny County. The Plaintiff administrator of her mother’s estate seeks compensatory and punitive damages alleging negligence, fraudulent misrepresentation, intentional misrepresentation, and wrongful death.  Suit was filed against the nursing home, its management agency, the owners of the nursing home, and the housekeeping and laundry service for Brighton Rehabilitation as well as an employee.
  • Deborah de Los Angeles, individually and as Daughter and Personal Representative of the Estate of Twilla June Morin, v. Life Care Centers of America, Inc. d/b/a Life Care Center of Kirkland, a foreign corporation, et al., Case No. 20-2-07689-9, was filed in the Superior Court for King County in the State of Washington. The Plaintiff is the personal representative of her late mother’s estate alleges violations of the state’s Abuse of Vulnerable Adults Act (Chapter 74.34 RCW), negligence, fraud, fraudulent concealment, and negligent misrepresentation.  The Defendants include the nursing home, its management agency, the director of Life Care Center, the Vice President of Operations for Life Care Centers, and other staff members and health care providers who oversaw the care provided to the Plaintiff’s late mother.

Members of the country’s population that require substantial daily (and perhaps hourly) care, assistance and monitoring due to health issues are inherently at-risk even in the absence of the threats posed by a global pandemic such as COVID-19.  COVID-19 substantially raises the threat level for this segment of our population far beyond the dangers associated with influenza.  The scope of the potential health risks and corresponding exposure to legal liability will only increase. There are approximately 15,600 nursing homes across the United States, holding 1.3 million Civilians and Veterans alike.[7]  By 2050 the Census Bureau projects that the number of Americans age 65 and older will be 88.5 million.[8]

At the same time that the health, and in fact the life, of America’s at-risk population dependent upon comprehensive care housed in nursing homes and other healthcare facilities, nursing homes and other healthcare facilities are severely threatened by potential liability over COVID-19 related claims. Along with an increase in COVID-19 illnesses, such facilities along with the owners, managers and employees of the facilities are faced with an exponential increase in legal liability.  Some states have taken steps to limit or immunize the threat of litigation.

For example, as early as mid-April, Governor Baker of Massachusetts signed into law “An Act to Provide Liability Protections for Health Care Workers and Facilities During the COVID-19 Pandemic.”[9]  The law immunizes state and private hospitals, skilled nursing facilities, assisted living residences, rest homes, community health centers and other facilities along with healthcare professionals “in the course of providing healthcare services” during the pandemic from both lawsuits and liability unless the damages were “caused by an act or omission constituting gross negligence, recklessness or conduct with an intent to harm or to discriminate based on race, ethnicity, national origin, religion, disability, sexual orientation or gender identity by a health care facility or healthcare professional.”

A provision tracking the Massachusetts law was signed by Governor Cuomo of New York as part of the state’s annual budget.  Other states including, Connecticut, Kentucky, New Jersey, North Carolina, and Pennsylvania and Oklahoma have enacted similar legislation and certain governors such as Governor Pritzker of Illinois have issued executive orders with similar effect.  Legal challenges to these statutes and executive orders should be expected along with legislative initiatives to repeal such laws.  The balancing act of protecting the health of those Americans with the highest risk of harm from COVID-19 against the legal risk to healthcare facilities and providers will undoubtedly continue well into the future.

 

[1] https://www.nbcnews.com/health/health-news/government-counts-26-000-covid-19-deaths-nursing-homes-s-n1221496

[2] https://www.cdc.gov/coronavirus/2019-ncov/hcp/long-term-care.html

[3] https://www.mass.gov/doc/report-to-governor-baker-re-holyoke-soldiers-home/download

[4] Individual government employees are immune from suit under the FTCA for “tort” claims. See 28 U.S.C. § 2679(b)(2).

[5] Government officials engaged in performing “discretionary functions” are shielded from liability for civil damages and immunity from suit, generally speaking, unless their conduct violates a clearly established constitutional right of which a reasonable person in the position of the official would have known. See Harlow v. Fitzgerald, 457 U.S. 183, 191 (1984); see also Stamps v. Town of Framingham, 662 F.3d 100, 104-05 (1st Cir. 2011); J.R. v. Gloria, 593 F.3d 73 (1st Cir. 2010).  Qualified immunity is a question of law to be decided by the court in the early phases of the proceedings because, if the defense is available, it is immunity from suit and not just a defense to liability. Mitchell v. Forsyth, 472 U.S. 511, 526 (1985); Tatro v. Kervin, 41 F.3d 9, 15 (1st Cir. 1994).

[6] See Anderson v. Creighton, 43 U.S. 635, 640 (1987); see also Ahmad v. Department of Correction, 446 Mass. 479, 44 (2006).  Although likely not an applicable concern in Sniadach, it is common for private facilities to incorporate mandatory dispute and claim arbitration clauses into contracts for care. Mandatory arbitration clauses, in most circumstances and jurisdictions, are recognized as valid and enforceable under both the Federal Arbitration Act and parallel state statutes. See e.g., GGNSC Administrative Services, LLC v. Schrader, 484 Mass. 181 (2020) (interpreting application of Massachusetts law to enforce mandatory arbitration clause in nursing home contractual agreement in wrongful death suit).

[7] https://www.cdc.gov/nchs/fastats/nursing-home-care.htm

[8] It is expected that nearly a third of the population in Europe will be over 60 years old by 2050. See World Health organization Report on Ageing and Health (2015).

[9] Chapter 64 the Acts of 2020.

On July 15, 2020, the Massachusetts Appeals Court affirmed a Superior Court decision allowing the Defendants’ motion to dismiss under Rule 12(b)(6) with respect to the Plaintiff’s employment-based claims stemming from an alleged constructive discharge brought against Lowell General Hospital and the Plaintiff’s supervisors. Kelleher v. Lowell General Hospital, 96 Mass. App. Ct. 49 (2020). The Plaintiff’s complaint involved allegations of: (1) constructive discharge; (2) defamation; (3) intentional interference with advantageous business relations; (4) intentional infliction of emotional distress; and (5) breach of the implied covenant of good faith and fair dealing.

The Plaintiff claimed that she endured months of intolerable working conditions at Lowell General Hospital, which she described as “daily, unprovoked angry and humiliating outbursts” and that these conditions ultimately led to her resignation, which constituted constructive discharge. The Plaintiff identified three specific occurrences in which she was berated or humiliated by her supervisor in front of co-workers and patients. Two of the instances were connected to scheduling issues and the last outburst was in response to Plaintiff’s inability to help her supervisor with a patient because she was busy with her own work. The third incident involved Plaintiff’s supervisor allegedly shouting “you never help!” in front of patients and co-workers.

Constructive discharge does not constitute a distinct cause of action under Massachusetts law, but can be an element of a viable wrongful termination employment claim stemming from a well-defined public policy or a contractual right. The Plaintiff was an “at-will employee,” defined as an employment relationship in which either the employer or employee may terminate the employment at any time without cause, for any reason, except for a reason proscribed by statute or public policy. M.G.L. c. 151B et seq.; Fortune v. National Cash Register Co., 373 Mass. 96, 101 (1977); Wright v. Shriners Hosp. for Crippled Children, 412 Mass. 469, 472 (1992). Well-established Massachusetts law, continually affirmed by Massachusetts appellate courts, demonstrates that an at-will employee can be terminated at any time “for almost any reason or for no reason at all.”[1]

The Plaintiff’s defamation claim failed because the two statements described in the Plaintiff’s complaint, consisting of “you never help!” and “I’m done with her,” were found to be either a subjective state of mind or “rhetorical hyperbole,” that cannot be reasonably understood to be a statement of actual fact or one that implies defamatory facts. A viable defamation claim requires a plaintiff to show that: (1) a false statement was made to a third party; (2) of and concerning the plaintiff; that (3) is capable of damaging plaintiff’s reputation in the community; and (4) either caused plaintiff economic loss or is actionable without proof of economic loss.

The elements of a claim for intentional tortious interference with advantageous business relations are: (1) the plaintiff had a contract or advantageous business relationship with a third party; (2) the defendant knowingly induced the third party to break the contract or to forego the business relations; (3) the defendant’s interference was improper in motive or means; and (4) the plaintiff was harmed by the interference. In the case of an at will-employee making such a claim under Massachusetts law against a supervising employee, a plaintiff is also required to prove that the supervisor acted with actual malice and that the malice was the “controlling factor” in defendant’s conduct. Additionally, the plaintiff must prove that the defendant’s purpose was unrelated to any corporate interest. The Appeals Court in Kelleher noted that the three instances described by Plaintiff all arose out of work-related issues and the Plaintiff failed to allege specific facts that the individual defendants acted with actual malice.

Finally, the Court disposed of Plaintiff’s claims for intentional infliction of emotional distress and breach of the covenant of good faith and fair dealing with little discussion. The Plaintiff made no argument in support of her claim for breach of the covenant of good faith and fair dealing. As for the intentional infliction of emotional distress claim, the Court noted that the actions alleged “are not different in kind from many actions encountered in the workplace that while regrettable, are a not uncommon expression of the human condition.”

The Plaintiff’s claims arose from conduct that is considered typical workplace bullying and while the conduct was not considered unlawful by the Massachusetts Appeals Court, the decision should not be interpreted by employers to afford some false sense of security moving forward. Anti-bullying statutes have been enacted in schools nationwide and there have been multiple bills proposed in the Massachusetts’ legislature over the past decade seeking to make workplace bullying and harassment unlawful without regard to protected class status. Most recently, the Senate Committee on Labor and Workforce Development referred Bill S.1072 “An Act Addressing Workplace Bullying, Mobbing and Harassment, Without Regard to Protected Class Status” favorably to the Senate Committee on Ways and Means.

As currently written, the Bill would create a private right of action for abusive conduct and an abusive work environment. Trends suggest that such a bill eventually might be codified into law in Massachusetts. If such a bill is eventually passed through the Massachusetts’ legislature, the “regrettable . . . not uncommon expression the human condition” described by the Kelleher Court, might evolve into unlawful workplace behavior and subject employers to significant damages. Employers are cautioned to address this type of behavior that traditionally was considered commonplace through training and the implementation of policies in advance of such a law not only to avoid litigation costs and damages, but also to create a healthy environment that fosters growth and open dialogue free from abuse of any kind.

 

[1] See Wright, 412 Mass. at 472; Kyle v. Massachusetts General Hosp., 61 Mass. App. Ct. 1118 (2004); Bennett v. Abiomed, Inc., 2020 WL 1429847, *9 (D. Mass. Mar. 24, 2020).

MG+M The Law Firm (“MG+M”) Boston Attorneys Jennifer Whelan, Brian Gross, and Christos Koutrobis successfully obtained summary judgment for their client in a wrongful death case brought in the Superior Court of New Hampshire, Grafton County.

Plaintiff’s decedent was struck and killed by a motor vehicle while crossing a New Hampshire highway towards a newly constructed store owned by MG+M’s client (the “Client”). Prior to the construction of the new store, there was a crosswalk at or near the location in the highway where the Plaintiff’s decedent was struck and killed. The crosswalk was removed as part of the construction project, so that a turn lane into the store could be created. The client and its contractors proposed to replace the crosswalk, but the New Hampshire Department of Transportation determined that the crosswalk should not be replaced, based on its judgment that the crosswalk location created an unreasonable risk to pedestrians. Plaintiff argued it was foreseeable that pedestrians would continue to cross the highway to access the store at the location of the old crosswalk and the client owed Plaintiff’s decedent a duty to either construct an alternative pedestrian pathway across the highway or to warn pedestrians that crossing the highway at that location was no longer authorized.

In her opposition to the Client’s summary judgment motion, Plaintiff argued it was foreseeable to the Client that pedestrians would cross the highway to access its store, thereby creating a duty on the part of the Client. In doing do so, Plaintiff sought to rely upon the New Hampshire Supreme Court’s decision in Kellner v. Lowney, 145 N.H. 195 (2000), which held that a landowner owed a duty to a person crossing a state highway under a unique set of circumstances. In rejecting Plaintiff’s argument, the judge noted that Kellner was factually distinguishable in several significant respects, including: 1) the defendant owned and operated a motel with facilities on both sides of the highway; 2) the defendant permitted religious services to be conducted on the opposite side of the highway from where the motel guests’ living quarters were located; and 3) the plaintiff’s son was struck by a motor vehicle while crossing the highway to return to his living quarters after attending religious services. As distinguished from Kellner, the Client’s premises is located on only one side of the highway and no special relationship existed between it and the Plaintiff’s decedent, unlike the special innkeeper-guest relationship that was present in Kellner. The Court agreed with MG+M’s arguments and granted the Client’s motion for summary judgment.

This practical view and application of classic reasonableness standards affirms the general rule that a landowner’s duty typically does not extend past its boundary lines. Further, the decision highlights the State’s sole authority to make design changes on its roadways. While private individuals and corporations will continue to make design changes to state roadways and intersections, those changes are subject to the approval of the New Hampshire Department of Transportation, which remains the ultimate decision-making authority.

On November 11, 2013, Timothy Frazier allegedly slipped and fell in a fast food restaurant restroom owned and operated by Mita Enterprises, LLC (“Mita”).  Frazier v. Liberty Mut. Ins. Co., No. 2018-288-Appeal, 2020 WL 3117048, at *1 (R.I. June 12, 2020).  Three years later, in November 2016, Frazier filed suit against Mita to recover damages for his alleged injuries.  Id.  Mita, however, failed to respond to Mita’s complaint and Frazier filed a motion to default for Mita’s failure to respond to the complaint.  Id.  The Rhode Island Superior Court granted Frazier’s motion and default entered.  Id.  Subsequently, Mita filed a motion to vacate the entry of default and to dismiss the case for lack of sufficient service of process.  Id.  The first trial judge granted Mita’s motions and the case was dismissed on August 4, 2017.  Id.

Frazier later filed a new complaint against Mita in July 2017.  Id.  The process server, however, returned the summons non est inventus (“he is not found”), as Mita was not located.  Id.  Pursuant to Rule 21 of the Rhode Island Superior Court Rules of Civil Procedure, Frazier then moved to substitute Liberty Mutual, Mita’s insurance carrier, as a defendant.  Id.  Objecting to Frazier’s motion, Liberty Mutual argued, in part, that the statute of limitations barred Frazier’s claim.  Id.  Before addressing Liberty Mutual’s defense, however, Frazier renewed his motion to substitute and moved to amend his complaint.  Id.  The parties subsequently agreed that Frazier’s motion to substitute would be granted, but that Liberty Mutual reserved the right to assert any and all defenses, including the statute of limitations defense.  Id.  After Frazier amended his complaint on April 9, 2018, Liberty Mutual moved to dismiss it by arguing that the applicable statute of limitations barred Frazier’s claim.  Id. at *2.  In opposition to Liberty Mutual’s motion, Frazier relied on Rhode Island’s savings statute, arguing that Liberty Mutual was not a stranger to the first action against Mita, and thus, his claim was preserved for an additional year.  Id.  Rhode Island’s savings statute, R.I. Gen. Laws § 9-1-22, provides that:

If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, [the plaintiff] may commence a new action upon the same claim within one year after the termination.”  G.L. 1956 § 9-1-22.

The second trial justice disagreed with Frazier and granted Liberty Mutual’s motion reasoning that Frazier’s claim was not preserved by the savings statute and was barred by the applicable three-year statute of limitations.  Frazier, 2020 WL 3117048, at *2.  Frazier timely appealed.  Id.

On appeal, the Rhode Island Supreme Court held that the second trial judge erred in granting Liberty Mutual’s motion to dismiss because Mita and Liberty Mutual shared “a sufficient commonality of interest,” and, thus, Liberty Mutual was not a “stranger to the original action.”   Id. at *4 (quoting Luft v. Factory Mut. Liability Ins. Co. of America, 155 A. 526, 527 (1931)).  The Court reasoned that “modern society and evolving jurisprudence present a different view” of whether an insurer who appears on behalf of its insured is considered a “stranger to the original action.”  Id. at *3.  Moreover, initiating an action against an insurance company “places the injured person in precisely the same position with relation to the insurer” that the policyholder would have had if he or she had paid the judgment and then sought to be indemnified by the insurer.  Id. at *4 (quoting Hunt v. Century Indemnity Co., 192 A. 799, 803 (1937)).  Thus, in light of this “sufficient link” and “commonality of interest” between an insurance company and its insured, “an insurance company is not . . . a stranger to the original action against its insured” for purposes of the savings statute.  Id. at *3.  Importantly, the Court reasoned that this “sufficient link” existed between Liberty Mutual and Mita because Liberty Mutual employed lawyers to request the trial court to dismiss the first action against Mita for lack of adequate service of process.  Id. at *4.  Therefore, as a result, Liberty Mutual was not a stranger to the original action and Frazier’s claim against it should not be deprived the benefit of the savings statute.  Id.

In one of his last acts before retiring, Justice Indeglia authored a dissent.  Justice Indeglia asserted that the Court should not “depart from longstanding precedent” and should observe the principles of stare decisis, observing legal precedent.  Id. at *5 (Indeglia, J., dissenting).  Although the dissent agreed that the savings statute cannot be applied against a party who “was a stranger to the original action,” it disagreed with the Court’s interpretation of the word “stranger.”  Id.  Justice Indeglia pointed out that the Court’s jurisprudence and plain language suggests that the meaning of the term “stranger” is used to refer to someone who is not “a named party.”  Id. at *5-6; see also, Luft, 155 A. at 526-27.  Thus, he argues, Liberty Mutual was a stranger to the suit because “they were not a party” to the original action, and more importantly, were not named in either of Frazier’s initial complaints against Mita.  Frazier, 2020 WL 3117048, at *6.  As a practical matter, the dissent points out that broadening the applicability of the savings statute to include insurance companies that were not named in the original action provides “plaintiff[s] with an additional one year, plus 120 days, tacked onto the statute of limitations.”  Id. at *5 (citing G.L. 1956 § 9-1-14(c), 9-1-22).  This, the dissent worries, will carry tremendous negative financial consequences for consumers because insurance companies will now face an increase in potential liability which will, in turn, pass the cost onto the insured in the form of increased insurance premiums.  Id.

This decision carries with it obvious (and quite alarming) consequences.  As an initial matter, it is important to note that the Court’s ruling in Frazier may have limited application. This is because in Rhode Island, an injured party or their estate may not bring an action against the alleged tortfeasor’s insurer unless: (1) service of process was returned non est inventus; (2) the alleged tortfeasor has died and probate proceedings have not yet been initiated; or (3) the alleged tortfeasor has filed for bankruptcy. See R.I. Gen. Laws §§ 27-7-2 and 27-2-2.4.  Aside from these narrow applications, however, the savings statute should be precisely that: a “savings” statute.  That is, even if plaintiffs fail to name an insurance company in their original action and the statute of limitation has expired, the claim will be “saved” because of the now shared “commonality of interest” that exists between insurance companies and their insureds.  This means that an insurance company likely never will be a “stranger to the original action,” and the savings statute always may come to the rescue in the event the insured cannot be located or the plaintiff fails to name the insurance company in the original action.

As for insurance companies, the take away is not as comforting.  The Court’s ruling in Frazier means that insurance companies now will be exposed to potential liability for a longer period of time.  As the dissent points out, this may cause an increase in costs for insured persons in the form of increased premium rates to account for the increased risk to which insurance companies are now subjected.  Additionally, and strategically speaking, insurance companies now will be potentially at a significant disadvantage when defending against an action in which they were not named.  This is because the Court in Frazier views insurance companies and their insured as one in the same.  As a result, this could mean that insurance companies will no longer be able to raise certain affirmative defenses such as lack of notice or improper service of process, even if the insured fails to notify its insurer of the suit or the insurer is never served with process.  In sum, the lesson from this case for insurance companies is to keep an eye out for potential lawsuits against individuals they insure and prepare for prolonged exposure to potential liability.

As phased reopening plans are initiated across the country, many business owners are fearful that reopening may bring with it the possibility of significant liability exposure for COVID-19 related lawsuits. Businesses already feeling the impact of a national economic crisis could face an even more devastating financial impact absent some type of protection. It is inevitable that members of the public will continue to contract COVID-19, despite the precautionary measures in place and those contemplated by businesses that have yet to open. Many argue that in order to seriously consider reopening, businesses must be afforded some legal certainty that they will not face a flood of lawsuits from individuals that contract the virus. While it may be difficult for a plaintiff to ultimately prove that they contracted COVID-19 from a particular business, rather than from some other source, the costs associated with defending such lawsuits could place some businesses in financial jeopardy. In an effort to address these concerns and provide businesses with the confidence to reopen, a growing number of states have considered legislation aimed to immunize companies in various sectors from liability for potential lawsuits by individuals that contract COVID-19.

In the early stages of the pandemic, many states granted immunity to health care providers through legislation or executive order. More recently, states have both considered and enacted legislation that extends immunity to a much broader scope of businesses and other entities. For instance, North Carolina has enacted legislation offering limited immunity from civil liability for essential businesses in the state with respect to claims by customers and employees for injuries or death alleged to have been caused as a result of contracting COVID-19.[1] Emergency response entities are also afforded this immunity in North Carolina. There are, however, limitations to the immunity provided. There is no immunity if the injuries or death were caused by an act or omission of the essential business or emergency response entity that constituted gross negligence, reckless misconduct, or intentional infliction of harm.

Oklahoma offers even broader protection, as its recent legislation affords anyone who conducts business in the state immunity from liability in any civil action involving allegations of exposure or potential exposure to COVID-19 if the act or omission alleged to violate a duty of care was in compliance or consistent with federal or state regulations, executive orders, or guidance applicable at the time of the alleged exposure.[2] If two or more sources of guidance are applicable to the conduct or risk at the time of the alleged exposure, the person or business will not be liable if the conduct was consistent with any applicable guidance.

Similarly, Wyoming has passed legislation that provides immunity from liability for any health care provider or other person, including a business entity, who in good faith follows the instructions of a state, city, town, or county health officer or who acts in good faith in responding to the public health emergency.[3] Immunity does not, however, apply to acts or omissions that constitute gross negligence or willful or wanton misconduct. Following the enactment of this legislation, the Wyoming Business Alliance urged the Joint Judiciary Committee to consider amending the statute to eliminate perceived ambiguity in its terms. Specifically, it proposed revisions to the statutory language to expand and define the specific entities that are shielded from liability, as the current version does not address its applicability to non-profit organizations, unincorporated organizations, or political subdivisions, which are equally susceptible to COVID-19 liability exposure.[4] The Joint Judiciary Committee ultimately voted to draft a bill to incorporate these suggestions, though it rejected others, such as a proposal to require “clear and convincing evidence” to prove gross negligence under the statute.

Utah has also passed legislation that provides immunity from civil liability to all persons and premises for damages or injury resulting from the exposure of an individual to COVID-19, but it does not apply to willful misconduct, reckless infliction of harm, or intentional infliction of harm.[5] In addition, the Governor of Louisiana recently signed a bill into law that provides immunity to restaurants from civil liability for COVID-19 related lawsuits, provided that they are in substantial compliance with applicable COVID-19 procedures.[6] The Louisiana legislation similarly provides an exclusion for injury or death caused by gross negligence or willful and wanton misconduct. Iowa was the most recent state to enact similar business immunity legislation on June 18, 2020.[7]

The Governor of Arkansas bypassed the legislature and signed an executive order that expands COVID-19 related civil liability immunity for businesses. The executive order provides all businesses and their employees with immunity from civil liability for damages or injuries caused by or resulting from exposure to COVID-19, though immunity does not apply to willful, reckless, or intentional misconduct.[8]

In addition to the states profiled above that have passed legislation to protect businesses, several other states have also introduced legislation to immunize businesses from COVID-19 lawsuits. For instance, the Georgia legislature has introduced a bill that would provide broad protections from civil liability to Georgia businesses under certain circumstances[9] and the Tennessee legislature is considering similar legislation.[10] North Carolina, which previously passed legislation to immunize essential businesses from liability, has now introduced a bill which would extend those protections to essentially every business in the state, as well as government agencies.[11]

On the other hand, a number of states, including those in New England, have failed to take significant steps towards extending the immunity that protects their health care industries to other businesses. All of this may be moot, however, as it is expected that the federal government will pass legislation to protect a broad spectrum of businesses, as Senate majority leader Mitch McConnell has identified business immunity as his top priority, with the White House echoing that sentiment.[12]

Efforts to immunize businesses from liability for COVID-19 related lawsuits have been met with a great deal of opposition across the country. Those opposed to immunity legislation have stressed that negligence and other laws have been established to ensure that businesses take the proper precautions to ensure the safety of those to whom they open their doors. They argue that if businesses are allowed to take the possibility of liability off the table, they may not adhere to the applicable health and safety standards, thereby putting more people at risk and endangering lives. They also argue that the threat of being held accountable in court provides businesses with a strong incentive to ensure that they are acting both safely and responsibly. Proponents of immunity legislation contend that the exclusions for more egregious conduct, such as gross negligence, offer a compromise, as the legislation serves to protect businesses, while incentivizing their compliance with applicable safety regulations and furnishing an avenue for recovery against those who fail to comply with those safety regulations.

Lawmakers across the country continue to attempt to strike a balance between the need to financially protect businesses amid a financial crisis and the need to ensure the safety of the public during a global pandemic. The protections afforded to certain businesses from civil liability in some states are not without limitations and do not provide blanket immunity. This conditioned immunity legislation should serve to limit COVID-19 claims by providing businesses with a defense. Such legislation does not, however, prevent plaintiffs from filing such lawsuits in the first place. Accordingly, all businesses must be careful to monitor and strictly comply with the evolving state and federal mandates and safety guidelines pertaining to their specific businesses and/or industries as the country continues to navigate these unprecedented times.

[1] The Governor of North Carolina signed Senate Bill 704 into law on May 4, 2020.

[2] Senate Bill 1946 was approved by the Governor of Oklahoma on May 21, 2020.

[3] Wyoming’s Senate File No. 1002 was signed into law on May 20, 2020.

[4] A representative of the Wyoming Business Alliance presented these proposed revisions, among others, to the Joint Judiciary Committee at a meeting held on June 4, 2020.

[5] Utah S.B. 3007 was signed into law by its Governor on May 4, 2020.

[6] The Governor of Louisiana signed Senate Bill No. 508 into law on June 12, 2020.

[7] The Governor of Iowa signed SF2338 into law on June 18, 2020.

[8] The Governor or Arkansas issued Executive Order 20-33 on June 15, 2020.

[9] Georgia’s Senate Public Safety Committee passed House Bill 216 on June 15, 2020.

[10] The Tennessee Safe Harbor and Recovery Act (SB2381/HB2623) continues to advance and is close to being approved by Tennessee lawmakers.

[11] House Bill 118 is in the process of being reviewed by the North Carolina Senate.

[12] In an interview on May 21, 2020, McConnell told Fox News that one of his “red lines” in the next bill is liability protection, though it would not protect against gross negligence or intentional misbehavior.