Congress Must Act to Avoid Trial Lawyers’ ‘Brewing Litigation Storm’ From Virus Pandemic, Group Says

May 7, 2020 Updated: May 7, 2020

Millions of American businesses will soon be assaulted by “meritless and abusive civil litigation” unless Congress enacts new CCP virus liability protections like those unveiled May 7 by the Institute for Legal Reform (ILR), the group said.

“The brewing litigation storm is a recipe for economic havoc,” the ILR said in a study entitled “COVID-19: Federal Problems and Solutions.” The study was prepared jointly by ILR, which is a project of the U.S. Chamber of Commerce, and attorneys with the Skadden Arps law firm.

The Epoch Times refers to the novel coronavirus, which causes the disease COVID-19, as the “CCP virus” because of the role of the Chinese Communist Party, which has absolute control of China, in allowing the disease to spread internationally.

“Exposure-based lawsuits are perhaps the greatest litigation threat to American enterprise because virtually any business whose employees or customers contract the coronavirus is potentially at risk, irrespective of whether such a business heeded government guidance related to COVID-19 or whether the business was actually the source of any relevant exposure,” the study said.

The study pointed to an April 21 article on the legal analysis website Law 360—“The Coming Wave of COVID-19 Class-Actions”—in which a top attorney at one of the most active trial lawyer firms described the intensity of preparations.

“We’ve never been busier,” Adam Levitt, a partner at the Chicago-based DiCello Leavitt Gutzler LLP, told Law360. “It’s almost odd how quickly the days and weeks have been passing with my partners, my associates and I working literally 12 to 14 hours days on our cases.”

Trial lawyers use the threat of class-action lawsuits to force big corporations, doctors, and small businesses to settle malpractice and consumer “tort” liability cases out of court to avoid jury trials that often produce costly judgments for plaintiffs and enrich their opportunistic attorneys.

A 2018 ILR study found that such litigation costs the U.S. economy $429 billion annually, an average of more than $3,300 per U.S. family. Such litigation has been a major factor in rising health care costs because it forces doctors and other providers to practice “defensive medicine” that boosts insurance premiums.

The present ILR study points to four major areas in need of new liability protections:

  • Exposure liability in which firms that have remained open and those beginning to reopen are taken to court for allegedly failing to protect an employee or customer from the disease.
  • Product liability involving a manufacturer of test kits, treatment tools, and protective gear face litigation claiming a product failed to perform perfectly as promised.
  • Medical malpractice claims against health care providers who are sued for treatment or care decisions they may or may not have made while providing virus-related services.
  • Securities litigation against companies that are alleged not to have given investors sufficient prior warning needed to avoid economic losses due to coronavirus.

“Whether couched in terms of simple negligence or public nuisance, exposure-based lawsuits could undermine the economic and social recovery of our country if they are not limited to legitimate circumstances,” the study stated.

To do so, the study encouraged Congress to establish a coronavirus liability “floor” for individuals and businesses “provided they were relying on and generally followed applicable government standards and guidance.”

Federal jurisdiction over most such cases should also be established, the study said.

Current pandemic product liability laws and regulations should be revised by Congress to make coverage clear for personal protective equipment (PPE) makers and sellers, as well as for “Good Samaritans” donating such items, the study said.

Regarding medical malpractice coverage recently enacted by Congress under the Coronavirus Aid, Relief and Economic Security Act (CARES), the study stated, “There is a compelling reason for extending such protections to health care providers, as well as health care facilities whose jobs require that they render COVID-19 medical services, particularly given that those jobs oblige them to put their own lives at risk.”

To prevent abusive securities litigation, the study recommended that Congress ensure that all “securities lawsuits involving alleged fraud related to COVID-19 would have to be brought in federal court.”

There should also be “a temporary stay of proceedings until a certain period after the date on which the President rescinds his declaration of a national emergency” to allow businesses to focus “on pressing health and economic recovery issues than responding to potentially meritless securities class actions with early motions to dismiss, answers, or discovery,” according to the ILR study.

Contact Mark Tapscott at Mark.Tapscott@epochtimes.nyc.