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“Cautiously Optimistic” Update on COVID-19 Litigation in Virginia and Beyond

In March 2020, organizations across the world rapidly mobilized in response to the COVID-19 public health emergency. The World Health Organization officially declared it a pandemic, President Trump declared it a national emergency, and – for the first time in history – each of the 50 states independently declared a state of emergency. In Virginia, Governor Northam declared a state of emergency which led to a shelter-in-place order that was gradually lifted in May. In addition to the on-going public health crisis, the pandemic has also affected nearly every aspect of society, including disruptions to the normal operations of businesses and our legal system.

At the outset, little was known about the novel coronavirus, including how quickly it would spread, how to protect against it, and how to treat COVID-19 patients. Although it did not take long for the CDC and healthcare professionals to acknowledge the important role that masks and other PPE played in preventing transmission, healthcare facilities (along with the rest of the world) struggled to obtain adequate PPE supplies due to global shortages. Other preventative measures, such as government ordered shutdowns were intended to slow transmission and “flatten the curve” but did not offer long-term solutions due to the economic impacts, practical problems with enforcement, and constitutional challenges.

One of the early actions taken by Governor Northam was directed at an anticipated wave of litigation arising from COVID-19. Past national disasters, such as the September 11 terrorist attacks and Hurricane Katrina, have taught us that in addition to dealing with immediate public health and safety problems and the costs associated with re-building, we should also expect an influx of lawsuits.

Recognizing the uncertainty facing the healthcare providers on the front line of the public health crisis, Governor Northam acted swiftly by issuing Executive Order 60. That Order granted immunity to health care providers in connection with their response to COVID-19. Specifically, Executive Order 60 noted that as a result of “critical shortages of personal protective equipment (PPE) and other supplies,” healthcare providers were being “required to reuse PPE” and, at times, prevented from transferring patients. Together, this created “less than optimal conditions to deliver the healthcare indicated by conventional standards of care.” In combination, these circumstances created problems sufficient for the Governor to declare an emergency for purposes of statutory immunity. Thus, healthcare providers could only be held liable for gross negligence or willful misconduct but would be immune for simple negligence to the extent the provider was “unable to provide the requisite health care” as a result of the emergency.

This executive order was amended in December 2020 to extend protections to those involved in the vaccine rollout. That amendment also provided immunity for other healthcare related entities that were not covered by the initial version, including hospices and adult day care centers. This expansion of immunity for healthcare related entities was also reflected in legislation passed in October of 2020. Maryland, Indiana, and Louisiana offer similar immunity, but other states have been slower to grant immunity or have offered immunity with a more limited scope.

Additionally, Virginia’s Department of Labor and Industry promulgated workplace safety standards, advising businesses of “Proposed Permanent Standard Infectious Disease Prevention” in connection with COVID-19.  These standards provided some clarity and guidance for businesses seeking to re-open following the end of the shelter in place order. Legislation has been proposed and rejected by Virginia’s legislature and the federal government that would have provided sweeping immunity against COVID-19 personal injury suits against businesses. Some states, particularly in the Mid-West and South, have passed broad civil-immunity statutes. Although President Biden’s recent federal mask mandate demonstrates movement toward a uniform standard, businesses across the country still largely face a patchwork of unclear regulations and guidelines with regard to what preventative measures they must take to avoid potential liability.

As a result, businesses in Virginia and elsewhere face uncertainty due to the potential for lawsuits filed by either their customers or employees who claim it is the business’ fault they contracted COVID-19. In either context, plaintiffs will struggle to show causation. Almost by definition, there are numerous other potential sources of transmission during a pandemic. Plaintiffs will also struggle to establish the existence of a duty: Virginia law has traditionally held that duty must be established based upon the specific relationship between the parties and rejected the notion that anyone owes a duty to the world at large. However, a recent Virginia Supreme Court decision in a products liability case has called this into question by finding that a business owed a duty to its employees’ spouses. Where the lawsuit is brought by an employee, rather than a customer or an employee’s spouse, the business may be able to avail itself of the workers’ compensation bar. However, there is still some uncertainty about whether employees may even avail themselves of the more limited remedies provided through workers’ compensation because, as with any COVID-19 claim, the plaintiff will struggle to establish causation.

What is clear, however, is that two of the categories of potential defendants that might otherwise see massive litigation have been given legislative immunity. The first group, as noted above, are healthcare providers protected under Executive Order 60. In addition, federal legislation protects against product liability suits that might be filed against those involved in manufacturing and distributing PPE as well as vaccines. Under the Public Readiness and Emergency Preparedness (“PREP”) Act, these businesses have been provided immunity for certain claims relating to the “manufacture, testing, development, distribution, administration, or use” of medical countermeasures. Immunity here extends to a broad range of entities while involved in the production of PPE or other countermeasures related to the pandemic. In addition to PREP, defendants in products liability suits will be able to avail themselves of the usual defenses in suits alleging design defect, manufacturing defect, or failure to warn – all of which will likely apply to suits against, for example, manufacturers of PPE.

Likely due in part to the quick and effective actions taken by Virginia’s leadership and the healthcare providers working on the frontlines, Virginia has not been as devastated as other states by the pandemic or COVID-19 litigation. That said, lawsuits have already been filed in Virginia. However, only one of these lawsuits involves a personal injury claim. That suit advances a wrongful death claim arising out of a nursing home. The only “products liability” suit filed in Virginia alleges that the plaintiff did not receive masks of the character and quality required by the contract, but there are no allegations that anyone contracted the virus as a result. In short, it appears that so far, Virginia’s COVID-19 litigation has been largely cabined to non-personal injury claims such as business interruption, breach of contract, employment suits, and the civil rights claims relating to the government ordered shutdown.

While Executive Order 60 and PREP may explain the relative absence of personal injury suits against immune defendants, there is no such immunity for other businesses in Virginia. It is notable that no suits have yet been filed against non-immune businesses, such as those that remained open during the shelter-in-place order to provide essential services or which re-opened promptly after that order was lifted. These lawsuits may yet be on their way, but it also possible that problems with establishing causation and duty will prove too difficult except in limited circumstances such as the cruise ships targeted by the first COVID-19 lawsuits which were filed in California. Last, immunity from liability is not immunity from litigation and even lawsuits that are successfully defended impose a burden on businesses’ time and resources.

The vaccine has provided a light at the end of the pandemic’s tunnel, leading Dr. Anthony Fauci to encourage the nation to be “cautiously optimistic.” Business and life will return to normal or at least, a version of life that is a lot more normal than we have experienced since March 2020. But that will not signal the end of COVID-19 litigation. To the contrary, that litigation is only just beginning. The limited number of suits so far gives some additional cause for optimism but it is far too early to celebrate.

MRC is proud to represent many of the healthcare providers who are responsible for leading Virginia’s commendable response to this pandemic. As soon as Governor Northam declared a state of emergency, MRC attorneys began researching potential liability and defenses so that we could advise our clients, regardless of industry, on how to avoid lawsuits and continue operating while keeping their employees and customers safe. Like many others, we saw that the pandemic and shutdowns were going to cause a period of profound uncertainty for our clients about how and whether they could continue business operations as well as concerns about their potential liability. Our goal has been to stay one step ahead of the trial lawyers seeking to add a wave of litigation to the public health crises and economic hardship facing our communities. If and when the tsunami of COVID-19 lawsuits comes, MRC’s attorneys are ready.