States Adding Laws to Shield Businesses From Liability for Coronavirus Claims

By | June 2, 2020

The bills signed into law by the governors of North Carolina, Oklahoma, Utah and Wyoming go far beyond the immunity that several states granted to health care providers at the onset of the coronavirus pandemic. North Carolina provides immunity to a broader swath of “essential businesses,” such as grocery stores and restaurants, from liability for any harm caused by COVID-19. Oklahoma, Utah and Wyoming provide immunity to everyone, as long as safety rules are followed and no laws are broken.

Bills to create similar liability protections have also passed the Louisiana House of Representatives and Senate, the Kansas Senate and the Arizona House. They now await consideration by the other chamber.

North Carolina’s civil liability immunity provision was included in Senate Bill 704, a COVID-19 relief package approved by Gov. Ray Cooper (D) on May 4. The law provides immunity to any entity deemed “essential” in the emergency orders, retroactive March 27, which is when Cooper first ordered businesses to close or scale back to prevent the spread of coronavirus.

Wide But Not Absolute

Attorney Jeffrey P. MacHarg noted that the immunity protection covers a wide swath of businesses and organizations: Grocery and hardware stores, pharmacies, banks, takeout eateries and even attorneys were deemed essential in the March 27 order. A second May 20 order that reopened many businesses, such as dine-in restaurants, will also expand the immunity protection to cover them, as well, he said in a blog post.

The immunity is not absolute. It does not bar regulatory actions, criminal charges or workers’ compensation claims, MacHarg said. Also, there is no immunity for gross negligence, recklessness or intentional infliction of harm.

The immunity continues until emergency orders expire or are rescinded. MacHarg said that may be awhile.

“As of this writing, we are aware of no immediate plans to rescind North Carolina’s emergency declaration, so this immunity would apply to acts occurring now and likely through a full reopening of the economy,” he wrote.

SB 704 sailed through the North Carolina’s legislature, passing both the Senate and the House unanimously in votes taken four dates apart.

The bill appears to have slipped under the radar of the state’s trial lawyers. The North Carolina Advocates for Justice didn’t post a notice about the bill until three weeks after it passed.

Attorney Carma L. Henson, with HensonFuerst in Raleigh, noted that 375 residents of North Carolina nursing homes had died of COVID-19. Blatant disregard for standards of care have been reported, she said.

“Suits have been filed on behalf of grieving families in some of these cases, but plaintiff’s attorneys are already having to make heart-wrenching decisions to turn down cases due to the language of the law,” Henson said in a May 26 blog post.

Hard to Prove

John O’Neal, an attorney in sole practice in Greensboro, said he did not become aware that civil immunity legislation had been passed until last week, when he read an email blast from Advocates for Justice.

O’Neal said he said he understands that business owners want to protect themselves, but he thinks it would be harder to prove a COVID-19 claim than many think. He said any attorney who takes such a claim would have to prove where the plaintiff contracted COVID-19, which would require expert witnesses and a thorough investigation.

“The threat of litigation is there, there’s no question about it,” he said. “But the plaintiff has a huge burden of proof and a financial burden that is really going to cost.”

Oklahoma’s Senate Bill 1946 offers broader protections than North Carolina’s new law. The legislation, signed into law by Gov. Kevin Stitt (R) on May 21, makes everyone immune from liability for any claim by a person who was exposed to COVID-19 as long as no laws were violated and the person of business accused followed official safety guidance.

SB 1946 passed the Oklahoma Senate 34-11 on May 11 and the House 76-20 on May 14.

Gov. Stitt also signed into law on May 15 Senate Bill 1947, which provides immunity from product liability claims against people who manufacture or supply personal protective equipment or medications used to treat COVID-19, even if dispensed for off-label use.

Similarly, Utah’s SB 3007 provides immunity to all persons and premises from liability for injury resulting from exposure to COVID-19, unless there was willful misconduct or reckless or intentional infliction of harm. The bill passed the Senate 22-6 and the House 54-21 on April 23 and was signed into law by Gov. Gary Herbert (R) on May 4.

Wyoming’s Senate File 1002 provides immunity from COVID-19 claims to any person or business who acted in good faith and followed safety instructions for the duration of the public health emergency. The bill expires on June 30, 2021.

The bill passed the Wyoming Senate 25-4 on May 15 and the House 23-1 on May 16. Gov. Mark Gordon (R) signed it into law on May 20.

More than half the states in the country have granted some form of immunity to health care providers, according to the American Tort Reform Association. The organization says such polices are necessary to protect the COVID-19 response effort.

“Personal injury law firms are already recruiting individuals to ‘sue now’ even if they have not contracted the disease,” ATRA says on is website. “The first lawsuits targeting health care providers, employers, retailers and other businesses for COVID-related injuries have been filed. Many more are to come.”

The governors of Alabama, Arizona, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Illinois, Iowa, Kansas, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Tennessee, Vermont and Virginia signed executive orders granting various degrees of limited immunity to health care providers and facilities, an ATRA report says.

Legislation to provide immunity to health care providers and facilities was passed legislatures in Alaska, District of Columbia, Kentucky, Massachusetts, New Jersey, New York, Wisconsin.

About Jim Sams

Sams is editor of ClaimsJournal.com, the online resource and daily newsletter for property/casualty insurance claims professionals. ClaimsJournal is a member of the Wells Media Group. Sams can be reached at jsams@wellsmedia.com More from Jim Sams

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