Corporations and consumer groups battle over COVID-19 liability

Few lawsuits filed so far

Senate Majority Leader Mitch McConnell, R-Ky.,  shown here in the Senate Hart Office Building on Wednesday, has called for business liability protections in any new coronavirus aid bill.  (Tom Williams/CQ Roll Call)
Senate Majority Leader Mitch McConnell, R-Ky., shown here in the Senate Hart Office Building on Wednesday, has called for business liability protections in any new coronavirus aid bill. (Tom Williams/CQ Roll Call)
Posted May 21, 2020 at 6:00am, Updated at 6:00am

Corrected 10:40 a.m. | Businesses say they need protection from the uncertainty of "frivolous" lawsuits as they seek to help revive the economy, but consumer groups allege corporations pushing for new limits on the legal rights of people who get sick with COVID-19 are exploiting the pandemic.

The proposal for a coronavirus liability limit in the next pandemic relief bill has revived a long-standing Beltway battle between advocates for workers and employers about so-called tort reform — business groups' campaign to limit certain legal rights. 

The U.S. Chamber of Commerce and the National Association of Manufacturers are pushing lawmakers to restrict lawsuits brought on behalf of people who get sick or die or are otherwise harmed after exposure to the novel coronavirus. Nearly 95,000 Americans have died from COVID-19, according to Johns Hopkins University.

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President Donald Trump said Tuesday he supports “curbs on frivolous litigation … a thing I know something about. There’s a lot of frivolous litigation.”

Senate Majority Leader Mitch McConnell called a new liability limit an imperative "red line" priority for Republicans in an upcoming relief package. McConnell said the flood of lawsuits could amount to a “second pandemic” and that he won't accept Democratic demands such as state and local government aid without liability protections.

[Ideological fault lines of economic reopening emerge]

The idea that lawsuits will increase because of the pandemic is a “red herring,” countered Joanne Doroshow, executive director of the Center for Justice & Democracy.

Lawsuits are already difficult to bring because of the stealthy way the virus spreads, she said. Without widespread testing and contract tracing, it's hard to pinpoint infections. Front-line employees most exposed to the coronavirus face challenges suing their employers because of the workers' compensation system, which preclude a worker from suing an employer in most cases.

But, Doroshow says, “it’s important that the law be there because it ensures some accountability and provides confidence to the public, consumers and society.” 

Lisa Gilbert, a lobbyist for consumer advocacy group Public Citizen, said corporations could apply a pandemic liability limit to cases that have nothing to do with getting sick. For example, after the EPA eased environmental law enforcement during the pandemic, a company that pollutes might try to quash suits through new liability protections​​​​, or a company might defend itself from privacy violations that way.

“COVID-19 is impacting every facet of American life right now. You could have a situation where customers and workers don't have legal recourse…because anything could perhaps be blamed on the fact we’re in the midst of a pandemic,” she said.

The legislative language has not been hammered out yet. Senior Senate Judiciary member John Cornyn, R-Texas, is working with McConnell to draft it. 

“We’re setting up for what could be one of the biggest bonanzas in terms of litigation in history. You better believe those who could find themselves on the receiving end of these lawsuits are taking notice,” Cornyn said on the Senate floor Monday. 

Cornyn is working on the issue with two groups that back tort reform.

“I’m listening to everyone from professional sports owners to businesses back home. I had a conference call today with the groups Texas Civil Justice League and the Texans for Lawsuit Reform,” Cornyn said Monday in an interview with CQ Roll Call. 

The Texas Civil Justice League applauded Cornyn's approach to limiting corporate liability in its brief description of the call. Corporations on the league’s board of directors include drug companies like Johnson & Johnson and Pfizer, petroleum companies like Exxon Mobil and Koch Industries.

The group's board of directors includes Nathan Morris, the top lobbyist at the Institute for Legal Reform, the chamber’s advocacy arm dedicated to tort law changes. Morris, a former Senate Judiciary Committee aide, said the chamber "is advocating for timely, targeted, and temporary liability reforms — tied specifically to the coronavirus — to prevent the kind of lawsuit abuse that would undermine justice for those with legitimate claims."

He said the proposals "are narrowly tailored and exclude liability protection for gross negligence, willful misconduct, or recklessness."

The Chamber of Commerce, which plans a press call Thursday, sent a letter to lawmakers Wednesday saying protections should last for the duration of the pandemic response and cover businesses following CDC guidance; health care facilities; manufacturers of protective equipment; companies that donate supplies to hospitals; and public companies facing securities lawsuits, including those driven on stock price drops.

Texans for Lawsuit Reform, a top donor to Cornyn throughout his political career, advocates for limiting lawsuits from wrongful death, asbestos exposure, injuries from products people buy and medical malpractice, according to its website. The group has lobbied for these changes since 1995.

Cornyn said he did not consult labor unions on the liability limit provision. 

Even as meatpacking plants, train stations and Amazon warehouses became COVID-19 hot spots, few people have sued. 

There have been at least 35 confirmed worker deaths in the meatpacking industry and 3,272 workers tested positive, were quarantined or showed virus symptoms, while at least 60 grocery store workers died and 4,157 workers may have been infected, according to the United Food & Commercial Workers International Union.

More than 100 nurses have died, according to a National Nurses United survey that found 87 percent reuse personal protective equipment. In mid-April, at least 9,000 nurses had been infected, though that was an underestimate, according to the Centers for Disease Control and Prevention. 

In comparison, just 47 claims have been made related to personal injury or medical malpractice, according to Public Citizen, citing a COVID-19 claims database. The database displays four wrongful death claims.

Variety of views

Meanwhile, some businesses are seeking greater clarity on how to protect employees and customers.

At a May 12 Senate Judiciary Committee hearing on the liability issue including representatives from labor, higher education and the private sector, each panelist voiced support for clearer guardrails on reopening.

The CDC quietly released a 60-page memo on reopening last weekend after weeks of delay and internal administration debate.

A Wednesday letter to Congress by the Main Street Alliance, a left-leaning group of small business owners, opposed any corporate immunity. 

“Main Street small businesses should not be forced into unfair competition with irresponsible businesses seeking immunity for their decisions to ignore health and safety standards for workers and consumers,” the group wrote. 

The group said a set of science-based guidelines to reopening and sufficient personal protective equipment are what’s needed to open their doors. 

The chamber has proposed tying an immunity clause to CDC guidance, saying if a business follows CDC guidance, it should not be held accountable for sicknesses. 

That hasn’t quelled advocates for workers, who worry about the way the White House’s Office of Management and Budget edited the CDC guidelines. 

Cornyn has also compared the situation to tort reform before the year 2000. That echoes the chamber's arguments. The business lobby said in an April memo that lawmakers should look to a 1999 law that limited liability claims and capped damages related to computers' challenges in updating as the millennium changed, as a model.

Speaker Nancy Pelosi said last week that the House and Senate would “have a discussion” about liability but reiterated Democrats’ demands for mandatory Occupational Safety and Health Administration standards for employers. OSHA issued guidance in April but businesses are not required to follow it.

“It's unlikely that at a time of the coronavirus that we would say, ‘Just be cavalier. We know it’s contagious, the way it spreads, but you're off the hook if anything happens, even if you do not comply with the OSHA regulation,’” Pelosi said in an interview on MSNBC. “So, we'll have that discussion, but I think we have a common goal. We want people to go safely to work.”

Some House Republicans, meanwhile, want more lenient CDC and OSHA guidance. 

Reps. Vicky Hartzler and Sam Graves, Missouri Republicans from areas with several meatpacking plants, including a Missouri Smithfield plant that became a hot spot, asked in a letter to CDC Director Robert Redfield last week about "commonsense flexibilities" that could be made to CDC and OSHA guidance that "is not feasible to incorporate" in plants.

The New Center, a group formerly known as the No Labels Foundation, is pitching the moderate Problem Solvers Caucus on a plan to pair liability limits with added worker protections. In exchange for liability limits, the proposal suggests Democrats demand mandatory infection control rules and that the federal government fund up to 75 percent of implementation costs. The memo suggests the federal government subsidize sick leave for businesses that don't offer it.

Correction: This report was revised to accurately identify the New Center group.