Sharing the Risk: Reopening America

We live in a time of vast unknowns: No one knows how long the COVID-19 pandemic will last, or how long social distancing requirements will restrict our day-to-day activities. As stay-at-home orders are gradually lifted, COVID-19 cases will continue to emerge until a vaccine is available. Businesses small and large, devastated by state-mandated stay-at-home orders, will reopen, bringing employees back as well, to reverse the shutoff of revenue and income. Customers will slowly return.

The highly contagious virus will require businesses to take special precautions to protect workers and customers, but the chance of infection remains, potentially leaving businesses at risk of costly and protracted lawsuits that they can ill afford after weeks of closure. Lawmakers must determine who should bear the risk of new cases of COVID-19; we contend the risk needs to be shared by businesses and customers in order for businesses to reopen.

COVID-19 is caused by a virus that's readily transmittable through respiratory droplets; the virus also survives for hours to days on a variety of frequently touched surfaces, including cardboard, plastic and metal. Determining when a person was exposed to the virus that caused their illness is virtually impossible and requires detailed contact tracing and readily available testing — things still lacking in many communities. Absent gross negligence or intentional exposure, COVID-19 should not be a new source of liability to businesses trying to regain traction and provide jobs to their employees, as both emerge from stay-at-home orders. Strict liability and negligence weren't intended to address the spread of a virus during a pandemic.

Strict liability relieves individuals who claim they're injured by a product of the burden to prove a potential defendant’s negligent conduct; it has been referred to as “liability without fault” (Bylsma v. R.C. Willey, 416 P.3d 595, 605, Utah, 2017). In the products liability context, manufacturers and sellers of products are strictly liable to consumers for putting products in the stream of commerce that are deemed defective, shifting the risk of loss from the consumer to the manufacturer. Not all states allow the theory of strict liability, but for those that do, product manufacturers face a high burden to escape liability. Strict liability eases the burden on plaintiffs: A plaintiff doesn't need to prove a defendant breached a duty; he need only prove that the defendant placed the defective product in the stream of commerce (Werner v. Upjohn Co., Inc., 628 F.2d 848, 857, 4th Cir., 1980). It focuses not on the conduct of the manufacturer, but on the product itself, holding the manufacturer liable if the product is defective (Brown v. Super. Ct., 751 P.2d 470, 474, California, 1988).

The rationale behind the theory is that “the loss should be borne by the individual who is responsible for placing the defective product into the market and is profiting by its sale” because that individual is “in the best position to prevent the defect, and can distribute the risk of loss to users of the product in the form of higher prices.” (Lay v. Vip’s Big Boy Rest., Inc., 548 P.2d 117, 119, N.M. App. 1976). However, courts have declined to impose strict liability where the “fundamental principle of fairness” isn't served, including where strict liability will not improve the manufacture of the goods, will not prevent defects from being passed on to consumers, and where sellers “are not well situated to bear the cost of insuring the goods they sell.” (See King v. Damiron Corp., 113 F.3d 93, 97 (7th Cir. 1997) (quoting Harber v. Altec Industries, Inc., 812 F.Supp. 954, 965–66 (W.D.Mo.), aff'd, 5 F.3d 339 (8th Cir. 1993)).

Businesses should not be held strictly liable for customers who believe they contracted COVID-19 during their visits to the business or from a business’ employee. Businesses are not profiting from putting COVID-19 in the stream of commerce; in fact, the disease has decimated many businesses that are doing their best to halt the virus’s spread. Businesses face hard choices about whether they have the financial security to continue operations once restrictions are lifted. Perhaps in recognition of the many challenges businesses face in the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) extends immunity under federal law for all claims arising from manufacturing, distributing or administering covered countermeasure protections, subject to conditions laid out at 42 U.S.C. 247d-6d.

What if claims of COVID-19 exposure at a business are evaluated under a theory of negligence? Under a negligence theory, an injured person must prove that the defendant owed a legal duty to him, breached that duty and that breach was the proximate cause of the plaintiff’s damages. (Lee Lewis Const., Inc. v. Harrison, 70 S.W.3d 778, 782, Texas, 2001). A defendant’s actions must be a substantial factor in bringing about the plaintiff’s harm, and that harm must be foreseeable. The negligence must cause the harm.

To prevail, a patron would have to prove that the business owed them a legal duty (such as an obligation to follow state or federal guidelines to mitigate COVID-19 exposure), the business breached that duty, and the patron was injured by the business’s failure to mitigate exposure. Even so, negligence may impose too harsh a burden on businesses because the risk of contracting COVID-19 from any manner of public contact is foreseeable and well known. With negligence, the plaintiff’s own actions come into play as most states recognize a variation of comparative negligence. For example, if the plaintiff fails to wash their hands frequently, wear a mask, or doesn't take other precautions to protect themselves, their own actions could bar their claim. Allowing COVID-19 lawsuits based upon strict liability or negligence potentially will result in thousands of lawsuits, where no one has acted with intent or carelessness to cause the virus to spread.

Gross negligence is a heightened degree of negligence and involves two factors: (1) viewed objectively, a defendant’s action must involve an “extreme degree of risk, considering the probability and magnitude of the potential harm to others,” meaning that there's more than a remote possibility of harm, but rather a likelihood of serious injury (Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921, Texas, 1998); and (2) the actor must have “actual, subjective awareness of the risk involved, but nevertheless proceed in conscious indifference to the rights, safety or welfare of others,” meaning that the actor knew about the danger but their actions demonstrated a lack of care. Imagine a business that does nothing to stop the spread of COVID-19 by opening despite mandated closures, not requiring workers and customers to wear masks, conduct disinfection routinely, practice social distancing, and other measures.

This heightened degree of negligence should be the appropriate level of liability for businesses that don't adhere to CDC and state guidance on preventing the spread of COVID-19, including social distancing and sanitation guidelines. Neither the business, its employees nor its customers want COVID-19 to spread; only those who fail to try to stop its spread through reasonable means should be at risk of liability.

Sharon L. Caffrey is partner and co-chair of the Trial Practice Group, and Theresa A. Langschultz is an associate and trial attorney at Duane Morris, a law firm with more than 800 attorneys in offices across the United States and internationally.