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Senate Judiciary Committee Hearing on COVID-19 Liability

Senate Judiciary Committee

“Examining Liability During the COVID-19 Pandemic”

Tuesday, May 12, 2020

Witnesses

  • Kevin Smartt, Chief Executive Officer, Kwik Chek Convenience Stores
  • Anthony “Marc” Perrone, International President, United Food and Commercial Workers International Union
  • Rebecca Dixon, Executive Director, National Employment Law Project
  • Leroy Tyner Jr., General Counsel, Texas Christian University
  • David Vladeck, A.B. Chettle Chair in Civil Procedure, Georgetown University Law Center
  • Helen Hill, Chief Executive Officer, Explore Charleston

Opening Statements 

Chairman Lindsey Graham (R-S.C)

In his opening statement, Graham outlined that this hearing is designed to try to find a way to address liability issues that businesses may face as they reopen along with the economy writ large. He emphasized that an effective solution to this issue will involve business and labor interests working together. Graham continued that while the federal role in business liability matters should be limited and not preempt state law, the federal government does have some role to play in making sure that business can reopen in accordance with proper procedure without the fear of being sued. He concluded by highlighting Sen. John Cornyn’s (R-Texas) ongoing work to craft a legislative solution addressing this very issue.

Ranking Member Dianne Feinstein (D-Calif.)

In her opening statement, Feinstein highlighted the spread of COVID-19 in certain industries, specifically referring to the current conditions at meat packing plants and nursing homes. She asserted that unsafe working conditions have contributed to the increased number of cases linked to these businesses. Feinstein noted that even as certain states begin to reopen their economies and ease restrictions, the federal government, specifically the Occupational Safety and Health Administration (OSHA), has not yet released industry specific standards. She concluded by encouraging the release of workplace specific standards as soon as possible.

Testimony 

Kevin Smartt, Chief Executive Officer, Kwik Check Convenience Stores

In his testimony, Smartt presented his experience as a retailer, wholesaler, and distributor in dealing with the impact of the COVID-19 pandemic. He outlined that as his businesses were deemed essential, all remained open throughout the pandemic as they continually adjusted operations, sometimes on a daily basis, in order to keep employees safe. While Smartt emphasized that he is more than willing to do whatever it takes to safeguard the health of employees, he noted that the constantly shifting guidelines and directives from state and federal entities have made it difficult to do so. To this end, Smartt stated that as no business can safeguard entirely against the risk of infection, businesses that remained open throughout this crisis while complying with official guidelines should not be punished with unjust lawsuits. He concluded that in addressing this issue, Congress should focus on four points: 1) protect the essential business that were asked to stay open throughout this crisis; 2) tailor liability protections to cover businesses that took adequate precautions and do not reward bad actors; 3) separately evaluate any questions of compensation for people who get sick from the question of whether and when businesses should be liable; and 4) limit the duration of these protections so that they apply to situations related to the current crisis but do not result in permanent changes to liability laws.

Anthony “Marc” Perrone, International President, United Food and Commercial Workers International Union

In his testimony, Perrone first highlighted the efforts of America’s food workers who are risking their health and safety to preserve the nation’s food supply. He said that in order to protect this food supply, it is essential that workers are also protected, noting that 162 of his members have died due to COVID-19 while thousands of others have tested positive for the virus. Perrone specifically criticized OSHA for the lack of enforceable standards tailored to the unique challenges posed by COVID-19. Perrone emphasized that enforceable regulations are necessary as immunity laws would exacerbate bad actors by sending the message that businesses are not responsible for the safety of their workers.

Rebecca Dixon, Executive Director, National Employment Law Project

In her testimony, Dixon outlined that worker health is public health and immunity laws would result in disincentives for employers to adequately protect their employees. She noted that the lack of appropriate safety measures contributes to the spread of COVID-19, which has been shown to disproportionally impact minority communities. She echoed previous comments criticizing OSHA for their failure to issue mandatory and enforceable guidance for employers. Dixon called on Congress to focus on incentivizing business to protect the health and safety of their employees.

Leroy Tyner Jr., General Counsel, Texas Christian University 

In his testimony presented as a representative of the American Council of Education, Tyner outlined the importance of the nation’s campuses and the unique challenges facing institutions of higher learning as a result of the COVID-19 pandemic. He said that enabling the reopening of the nation’s colleges and universities is a critical aspect in reopening America as these campuses are huge economic drivers and job creators. Tyner continued that in order to fully reopen, institutions of higher learning need increased certainty and clarity regarding the standard of care and liability. As such, Tyner concluded that some form of temporary, targeted safeguard against liability is necessary in order to fully reopen said institutions.

David Vladeck, A.B. Chettle Chair in Civil Procedure, Georgetown University Law Center

In his testimony, Vladeck echoed previous comments outlining the need for science-based, enforceable COVID-19 guidelines from the public health agencies. He noted that businesses that act reasonably to safeguard employees are already protected against liability and that it would be counterproductive for Congress to bestow immunity on companies that act poorly in this crisis. Vladeck emphasized that weakening the liability regime would deprive the public of adequate safeguards and that legislation that displaces state laws is most likely unconstitutional.

Helen Hill, Chief Executive Officer, Explore Charleston

In her testimony, Hill summarized how the tourism industry in the United States has been devastated by the COVID-19 pandemic. Like some of her fellow panelists, Hill called for the establishment of limited, temporary protections for businesses as soon as possible. She concluded that these measures should protect responsible businesses from unfair lawsuits.

Question & Answer

Industry Specific Guidelines

Sens. Patrick Leahy (D-Vt.), Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.), Amy Klobuchar (D-Minn.), Chris Coons (D-Del.), Feinstein and Graham all asked the witnesses questions regarding the need for OSHA to issue industry specific guidelines to protect workers and stop the spread of COVID-19. All panelists agreed that the issuance of such regulations is necessary, with Perrone reiterating the inadequacy of OSHA’s current efforts and Vladeck stating that clear, science-based guidelines from the public health agencies will create a regulatory compliance shield for responsible employers.

Lawsuits & Legal Challenges

In responding to a variety of questions from Sens. Thom Tillis (R-N.C), Josh Hawley (R-Mo.), Mike Lee (R-Utah), Klobuchar, Whitehouse, Feinstein and Graham, Vladeck noted that the regulatory guidance defense is already recognized by every state, and as such, responsible employers will be protected if they comply with a science-based, federal standard of care promulgated by OSHA and the Center for Disease Control (CDC). He emphasized that the best way to protect business is via the issuance of enforceable guidelines but noted that if there continues to be a dearth of federal standards, the courts will then be forced to step in. Vladeck also outlined his belief that an immunity bill would not be considered as a preemption and would “wipeout” liability regimes before reiterating his belief that such legislation is likely unconstitutional. Whitehouse specifically highlighted that insurance companies would receive a windfall if businesses are made immune to compensatory action. Lee took this opportunity to highlight his Federal Court Access Act and opined that revising the minimal diversity requirement could be beneficial in the COVID-19 pandemic environment.

Sens. Mazie Hirono (D-Hawaii), Leahy, Durbin, Tillis, Hawley and Feinstein all inquired regarding ongoing and possible future litigation related to COVID-19, with Democrats pushing back on the assertion that there will be a “wave” of liability litigation. In response, Vladeck stated that as this virus is easily transmitted, it is extremely difficult to blame a specific location or business for contraction of the virus. He continued that this difficulty in establishing causality is part of the reason why there have been so few instances of tort cases. Dixon added that most litigation observed thus far is businesses suing other businesses and cases related to insurance coverage.

Closing Statements 

Chairman Lindsey Graham (R-S.C)

In closing, Graham charged the committee with using the knowledge gleaned from this hearing to chart the best path forward for the country. He reiterated the need for enforceable federal standards to be put in place in order to aid businesses as they reopen.

For more information on this hearing, please click here.

For an archive of past SIFMA hearing coverage, please click here.