MANHATTAN (CN) — When the Senate debates the next stimulus package, it is almost certainly going to include a key provision for Republicans: liability protections for businesses affected by Covid-19.
However, the main sticking point requested by businesses — crafting legal safe harbors that protect companies from torts except in the case of gross negligence — may not be legally possible.
Senate Majority Leader Mitch McConnell told Fox News in a Thursday interview that “that will have to be part of any [stimulus] package,” and earlier legislation proposed by Representative Michael Turner, R-Ohio, would shield employers from “any injury that resulted from an employee contracting Covid-19,” though it also would pay unemployment benefits to any employee who felt unsafe at work.
The idea of Covid-19 liability shields originates from various trade groups and the U.S. Chamber of Commerce, which proposed safe harbors except in cases involving “gross negligence or willful misconduct.” Earlier this week, 21 state attorneys general also called for similar protections.
“It doesn’t matter if you’re a Fortune 500 company or a coffee shop in Georgia,” Harold Kim, president of the U.S. Chamber of Commerce’s Institute for Legal Reform, said in an interview. “The reality is, we’ve never, I’ve never seen a pandemic like this.”
The U.S. Chamber has alternately called for Covid-19 safe harbors for businesses that don’t commit “gross negligence,” “recklessness,” or “willful misconduct.”
However, advocacy groups say corporate immunity is a decades-long attempt to neuter tort law, while legal experts say carve-outs for “gross negligence” are meaningless.
“I’ve thought from the beginning of these proposals that the insertion of gross negligence shows either a deep misunderstanding of the current state of tort law, or a cynical substitution of a non-existing category to benefit businesses,” said Heidi Li Feldman, a tort law professor at Georgetown University. “Or both.”
During a hearing before the Senate Judiciary Committee on Tuesday, one of Feldman’s colleagues at Georgetown, law professor David Vladek, testified that federal legislation that displaces state liability statutes “is not only unprecedented, it is likely also unconstitutional.”
Vladek added during his testimony that juries and judges decide whether a tort is negligent or grossly negligent at the end of a case, not at the outset.
“Any tort claim can constitute gross negligence depending on wrongdoer’s state of mind,” he testified.
Many courts have eliminated the category of gross negligence as a distinct category, Feldman said, adding that business groups hope Congress will draft a “vague standard” that will cover a wide swath of business practices.
“They know that by using the term gross negligence will create a climate of uncertainty, and they like that uncertainty,” Feldman said. “This is just a stepping stone for immunization for all tort liability all the time.”
Business trade groups say this isn’t so, and also argue universal get-back-to-work guidelines won’t work for disparate industries.
“We do not think one-size-fits-all guidelines make sense for small business,” Karen Harned, executive director for the National Federation of Independent Businesses, wrote in an email. “Everyone needs a plan for keeping the workplace, employees, and customers safe. But plans will vary dramatically depending on the type and size of business. A small auto-repair shop is likely going to have a very different Covid-19 prevention plan than a restaurant that seats 100.”
Kim said that the idea behind such safe harbors is to kill baseless litigation in the crib.
“The name of the game here is to get past the motion to dismiss,” Kim said, noting many tort lawyers aim to merely scare companies into settling lawsuits quickly. “The amount of discovery and litigation costs, you have to pay for attorneys and the amount of time that’s taken just to defend the case for the business is where damage is done.”