“Protecting Your Business from COVID-19: New Exposure Liability Laws”


July 01, 2020

Philips, McMahen Present BRAC Webinar on Legislative Bills

Click here to watch the webinar

Taylor Porter attorneys Skip Philips and Coulter McMahen presented a BRAC Business Webinar – “Protecting Your Business from COVID-19: New Exposure Liability Laws,” which took place on Monday, June 29, 2020. The webinar was sponsored by Horizon Financial Group. 

A package of newly-passed state legislation provides protection from liability in COVID-19 exposure lawsuits for companies, non-profits, government entities, and others, as long as they are in substantial compliance with relevant health and safety laws. Philips and McMahen reviewed practical application of these laws, what business owners should do, and what to expect. In addition to this newly-passed legislation, there is proposed federal legislation that Philips and McMahen also discussed.

The following is a summary of the relevant legislation:

Protections for General Business and Government Agencies

  • Act No. 336, La. R.S. 9:2800.25 and La. R.S. 29:773
     
  • This is the most all-encompassing COVID-19 related law that seeks to protect all businesses and government agencies from litigation exposure.
     
  • The law shields any defendant from liability unless a plaintiff can show that the plaintiff’s injury was caused by the failure to substantially comply with applicable COVID-19 procedures established by a federal, state, or local agency and the injury was caused by that businesses’ gross negligence.
     
  • In the situation where there are two or more sources of procedures applicable at the time of a person’s actual or alleged exposure, the defendant must show substantial compliance with any one of the applicable procedures.
     
  • Gross negligence has been defined by courts as follows:
     
    • The “want of that diligence which even careless men are accustomed to exercise.” State v. Vinzant, 200 La. 301, 315; 7 So.2d 917, 922 (1942).
       
    • Gross negligence has been termed the “entire absence of care.” Hendry Corp. v. Aircraft Rescue Vessels, 113 F.Supp. 198 (E.D. La. 1953) (applying Louisiana law).
       
    • Over the years, willful or wanton conduct and gross negligence have merged and the two terms have now been interpreted by Louisiana courts as having taken on the same meaning. Tudor Chateau Creole Apartments P'ship v. D.A. Exterminating Co., Inc., 96-0951 (La. App. 1 Cir. 2/14/97, 4); 691 So.2d 1259, 1262
      .
  • In sum, Act No. 336 allows a plaintiff to recover damages only if it can show that the defendant failed to substantially comply with applicable COVID-19 procedures and the injury was caused by that defendants’ gross negligence.
     
  • Employees still, however, retain certain rights and remedies under the Louisiana Workers’ Compensation Law. This means that if an employee is injured or dies due to COVID-19 during the course and scope of his employment, that employee can seek relief pursuant to Louisiana Workers’ Compensation Law.
     
  • This Act went into effect on June 13, 2020.
     
  • This law does not have an expiration date. In other words, the law covers the time period after the Governor’s declared COVID-19 health emergency ends.

Protections for the Restaurant Industry

  • Act No. 305, LA. R.S. 29:773
     
  • This law is specifically tailored to the restaurant industry and designed to limit restaurants’ liability.
     
  • This law applies to entities serving prepared food and beverage products by dine-in, takeout, drive through, or delivery.
     
  • Act 305 heightens the burden of proof for plaintiffs to recover damages for COVID-19 exposure. In other words, if a restaurant is sued by a plaintiff due to contracting COVID-19 at the restaurant, a plaintiff must prove that the restaurant was grossly negligent.
     
  • The law also provides restaurant owners and employees must be in substantial compliance with Proclamation Number 25 JBE 2020 and any subsequent related proclamations and applicable COVID-19 procedures established by federal, state, or local agency to avoid civil liability for injury or death due to COVID-19 infection.
     
  • In the event you are sued for COVID-19 related injuries incurred at your establishment, if you are able to show substantial compliance with an applicable procedure, the liability immunity provided by the statute will insulate the restaurant from damages.  
     
  • Again, like Act 336, in the situation where there are two or more sources of procedures applicable to restaurant operations at the time of a person’s actual or alleged exposure, you are only required to show substantial compliance with any one of the applicable procedures.
     
  • Proclamation Number 83 JBE 2020 is the most current proclamation. As to restaurants, the Governor’s proclamation provides for the following:
     
    • No establishment shall exceed 50% of the total occupancy as determined by the State Fire Marshal.
       
    • All employees and owners at such businesses shall maintain moderate social distancing between themselves and members of the public and shall wear face coverings at all times if interacting with the public.
       
    • Waiting areas shall be closed. Members of the public should be required to make reservations or to wait outside, while maintaining moderate social distancing, or in vehicles.
       
    • Any bar with an approved food service permit from the Louisiana Department of Health may operate under the same requirements in subparagraph G(1)(b) above.
       
    • Any bar without an approved food service permit from the Louisiana Department of Health may reopen but shall not exceed 25% of the total occupancy as determined by the State Fire Marshal.
       
    • Any business operating pursuant to this subsection shall follow the applicable guidance from the State Fire Marshal published at https://opensafely.la.gov/ and the Louisiana Department of Health with regard to sanitization and disinfection.
       
  • Restaurant employees still, however, retain certain rights and remedies under the Louisiana Workers’ Compensation Law. This means that if any employee is injured or dies due to COVID-19 during the course and scope of his employment that employee can seek relief pursuant to Louisiana Workers’ Compensation Law.
     
  • The best practice is to closely follow https://gov.louisiana.gov/index.cfm/newsroom to ensure you’re in substantial compliance with the most up to date proclamation and/or procedure relative to restaurants.
     
  • This Act went into effect on June 12, 2020.

Protections for Donations and Pivoting Businesses

  • Act No. 303 (Amends, Reenacts, and Enacts Various Provisions of Title 29 of the Revised Statutes)
     
  • La. R.S. 29:735.3.1 (Immunity for Volunteers): This law is designed to protect people and businesses who render or donate any disaster relief, recovery services, or products from liability in COVID-19 related injury or death or property damage thereof.
     
  • The gross negligence standard discussed in connection with Act 336 is established in Act 303.
     
  • In addition, in the event you are sued, you need to show that the rendering or donating of any disaster relief, recovery services, or products was done in coordination with the state or its political subdivisions to be protected from liability under this statute.
     
  • La. R.S. 29:735.3.2 (Immunity for Emergency Efforts):  This law protects individuals or companies who render disaster relief, recovery services, or products outside of typical course and scope of their operations, such as hand sanitizer and protective clothing. This law, unlike La. R.S. 29:735.3.1, includes language of coordination with the federal government, not just the state, or its political subdivision. So in the event you are sued, you need to show that the rendering or donating of any disaster relief, recovery services, or products was done in coordination with the federal government, the state or its political subdivisions to be protected from liability under this statute.
     
  • This Act went into effect on June 12, 2020.
     
  • One notable difference from the aforementioned laws, is that this law’s protections don't just last through the current pandemic. They apply to any declared Louisiana state emergency (hurricanes, floods, future pandemics, etc.).

Special Session Immunity Bill Relating to Protections for Louisiana Schools

  • House Bill 59
     
  • Would limit liability for the following entities and/or persons during COVID-19 declared health emergency:
     
    • Public and private schools, public and private school districts, public and private schools, governing authorities, charter school governing authorities, public and private postsecondary education systems, public and private postsecondary education institutions, public and private postsecondary education management boards, and the officers, employees, and agents.
       
  • Plaintiffs will not have a viable cause of action under a theory that the actions or failure to act by school’s or institution’s officers, employees, or agents caused a person to contract COVID-19 at a public or private school or postsecondary institution, other public or private school or postsecondary institution facilities, on a public or private school bus, or at a public and private school or postsecondary institution sponsored event.
     
  • However, the aforementioned entities and/or persons will be unable to avail themselves of the immunity provided for in this bill if the action or failure to act was in violation of a policy, rule, or regulation adopted by the school, the system, the institution, the school district, or the management board or was in violation of any procedure mandated by law or by rule or regulation adopted by a federal or state agency in accordance with the Administrative Procedure Act.
     
  • Not only would a plaintiff be required to show that the action or failure to act violated a policy, rule, or regulation, but a plaintiff would also be required to show that such action or inaction was grossly negligent to overcome the immunity provided by the Act.
     
  • Additionally, the legislation provides that not later than July 15, 2020, the State Board of Elementary and Secondary Education (“BESE”) must adopt emergency rules informed by the Centers for Disease Control and Prevention (“CDC”) guidelines to provide minimum standards, policies, medical exceptions, and regulations to govern the reopening of schools for the 2020-­2021 school year to ensure that students, faculty, staff, and others on school property are protected to the extent possible and practical from COVID-19.
     
  • And prior to the beginning of the 2020-2021 school year, each public school board must implement policies, rules, and regulations in accordance with the rules and regulations adopted by BESE.
     
  • As it relates to postsecondary institutions, the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, the Board of Supervisors of Southern University and Agricultural and Mechanical College, the Board of Supervisors for the University of Louisiana System, and the Board of Supervisors of Community and Technical Colleges must adopt the same policies as it relates to reopening schools for the 2020-2021 school year.
     
  • This legislation now goes to Governor Edwards’ desk.

Federal Legislation (“Coronavirus Safe Harbor for Small Business Act”)

  • Federal legislation currently under discussion in Congress provides “No person shall be liable in any civil action for spread or possible transmission of SARS-COV-2 caused by an act or omission of the person acting in good faith during the public health emergency with respect to COVID-19.”
     
  • “Person” means one or more individuals, business trusts, legal representatives corporations, companies, associations, firms, partnerships, societies, joint stock companies, nonprofits, religious organizations, or any organized group of persons that acts in interstate commerce or whose activities affect interstate commerce.
     
  • “Good faith” means acting in compliance with the recommendations of the Centers for Disease Control and Prevention and the guidance of the public health authority of a state, territory, a political subdivision of a State or territory, or an Indian tribe.
     
  • However, if the harm was caused by an act or omission constituting willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious flagrant indifference to the rights or safety of the individual harmed by the person or business, then you don’t get to avail yourself of the immunity statute.
     
  • This section preempts the laws of a State or any political subdivision of a State to the extent that such laws are inconsistent with this section, unless such laws provide greater protection from liability.
     
  • It is anticipated that the immunity provided by this legislation would extend to causes of action arising within 18 months of the termination of the current health emergency.
     
  • If ultimately passed by Congress and signed by President Trump, the law as currently written could preempt the aforementioned laws previously passed by the Louisiana Legislature.
     
  • This legislation does not appear to provide immunity for employment-related claims, at least in its current form.

Disclaimer: These bills will not prevent you from being sued for COVID-19 related injuries. However, these bills are designed to protect individuals and businesses in the event they are sued in COVID-19 related litigation.

About Skip Philips: Taylor Porter Partner Skip Philips has been focusing his legal practice since 1983 in state and federal civil trial and appellate litigation, including banking, commercial, insurance, personal injury, insurance coverage, and products liability cases. His practice also includes corporate law as counsel to several non-profit organizations. Skip has been ranked by his peers and clients in Benchmark Litigation, Chambers USA, Louisiana Super Lawyers and Best Lawyers. Skip formerly served for nine years as the Taylor Porter Managing Partner and for many years as a member of the Firm's Executive Committee.

About Coulter McMahen: Coulter McMahen is an Associate at Taylor Porter, where he practices in various areas of general commercial litigation. Coulter earned his J.D. in 2017 from Louisiana State University Paul M. Hebert Law Center. Following law school, Coulter was a judicial law clerk for the Honorable S. Maurice Hicks, Jr., Chief Judge, United States District Court for the Western District of Louisiana.

BRAC, a regional economic development organization that includes more than 1,500 investor members, has produced several webinars since COVID-19, and has relevant resources and information for businesses at: https://brac.org/recovery/


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