Thursday, Oct. 1, 2020

Posted by: Thomas Wright on Oct 1, 2020

By Judge Thomas Wright and S. Cole Wheeler

We are in the midst of the deadliest global pandemic since the Spanish Flu of 1918.Everyone has been adversely affected. Some have suffered extensively, died, or seen their business shuttered. We have all experienced a certain loss of freedom of movement, association, choice, numerous inconveniences, delays and cancellations. Are there legal remedies for these losses? The Spanish flu pandemic resulted in few precedent-bearing decisions; however, recent legal trends suggest that courts will soon be flooded with COVID-19-related claims. These cases are likely to involve both public and private entities as defendants with varying degrees of success. Suits have already reached the international stage with a complaint filed by the Missouri Attorney General against the People’s Republic of China. The primary focus of this article will be a dive into the potential areas of likely litigation for COVID-19 related lawsuits in both the private and public sectors.

Foreign States

The State of Missouri was the first to file suit in Federal District Court[1] seeking “recovery for the enormous loss of life, human suffering, and economic turmoil” resulting from the COVID-19 pandemic, which commenced in Wuhan Province in late 2019.[2] Missouri alleges “an appalling campaign of deceit, concealment, misfeasance, and inaction by Chinese authorities [which] unleashed this pandemic.”[3] The first count alleges public nuisance in offending against the public order and economy of the state.[4] The second count alleges abnormally dangerous activities under strict liability. Count three details a breach of duty in the Chinese Communist Party’s failure to protect others from unreasonable risk. The relief sought includes all penalties, damages and costs authorized by law.

This case, and other cases brought against China by individuals and businesses,[5] face the huge roadblock of the Foreign Sovereign Immunities Act.[6] FSIA provides foreign states, like China, with immunity from suit in U. S. Courts. While there are exceptions to the immunity,[7] many legal commentators and scholars believe FSIA will result in dismissal of the suits against China.[8] Although it may be a longshot, a bill has been introduced in Congress to strip China of its immunity in connection with pandemic related damages.[9]

Interestingly, Missouri attempts to overcome the hurdle of bringing suit against a foreign country in domestic court by naming the Chinese Communist Party as a co-defendant. However, the communist party has been held to be part of the government in a communist country.[10] As such, it would also be protected by FSIA.

Local, State, and Federal Government

Another possible avenue of relief for plaintiffs seeking recourse for losses related to the COVID-19 pandemic would be filing suit against various levels of government or officials for negligence in enacting pandemic restrictions, failure to enforce such restrictions, and potential violation of civil liberties stemming from implementing restrictions and reopening businesses and public places. While the majority of decision-making has been handed to state governors by the federal government and followed by local leaders, there has been a large degree of variation in scope, length and enforcement of social-distancing lockdown measures. The State of Tennessee’s plan to slow the spread of the virus took shape in March and transitioned to a tiered reopening in May.[11] However, county-level data has led to delayed reopening or required suppression measures such as a face mask mandate[12] in many metropolitan centers. The potential negligence issue lies in oversight and under-preparedness of localities in the unlikely situation that a plaintiff can prove direct causation of sickness or damages. Defense counsel will argue, likely successfully, that officials and governments acted in the public interest to the best of their abilities based upon all available information. Such actions by government actors and officials will generally be immunized as falling squarely within the “discretionary function” exception found in Tennessee’s Governmental Tort Liability Act.[13]

A slightly more tenable case can be made for suits seeking to vindicate protected liberty interests from state or local infringement. However, most of these type suits have met with negative results. Recently a number of bars and “limited service restaurants and clubs” were denied injunctive relief from a Shelby County Health Department Order shutting them down even though similarly situated businesses located on historic Beale Street were not covered by the Order.[14]

One case has even made it to the U.S. Supreme Court where by a 5-4 vote, the court declined to intervene. On the specific issue of reopening, attendance restrictions placed on churches were challenged with an application for injunctive relief based on the Free Exercise Clause of the First Amendment. Writing in concurrence, Chief Justice John Roberts said that, “Our Constitution entrusts ‘[t]he safety and the health of the people’ to the politically accountable officials of the States ‘to guard and protect’….”[15] They must be allowed “especially broad” latitude to act in such situations. “Where those broad limits are not exceeded, they should not be subject to second guessing by an ‘unelected federal judiciary,’ which lacks the background, competence, and expertise to assess public health and is not accountable to the people.”[16]

But there have been successful cases. On June 8, the United States District Court of Connecticut granted a motion for preliminary injunction against Governor Ted Lamont in a case filed by the Connecticut Citizens Defense League on a violation of Second Amendment Rights. Governor Lamont enacted an executive order requiring a halt on all public fingerprinting performed by state and local police. The fingerprints are required to obtain a carry permit. Judge Jeffrey Meyer ruled that based on “irreparable harm,” “likelihood of success on their Second Amendment claim,” and “the balance of equities and public interest” the injunction be granted and fingerprinting resume within one week.[17]

A group of gym owners was granted injunctive relief from the Michigan Governor’s Executive Order closing such facilities when the state was allowing bars, restaurants, bowling alleys, hair salons and other businesses to reopen.[18] The state was unable to articulate a rational basis for the disparate treatment of these commercial activities.

Similarly, but under a heightened level of scrutiny, churches were successful in Kentucky when the governor prohibited faith-based gatherings but allowed activities or businesses such as “law firms, laundromats, liquor stores, and gun shops to continue to operate.”[19] And abortion providers in Tennessee successfully sued for an injunction preventing the Governor’s Executive Order, which prohibited elective surgical procedures, from applying to women seeking abortions who would be adversely affected by waiting for the ban to expire.[20]

Judicial review in these constitutional rights cases is highly deferential to the executive branch.[21] The state’s exercise of police power to protect the health and welfare of its citizens, particularly during a public health crisis, is a legislative and executive function which will not be lightly disturbed by the judiciary. The starting point for analysis in these cases is a review of Jacobson v. Massachusetts,[22] where the U.S. Supreme Court upheld a mandatory vaccination law against the plaintiff’s claim to liberty and bodily integrity under the U. S. Constitution during a small pox outbreak. “[A] community has the right to protect itself against an epidemic of disease which threatens the safety of its members.”[23] Only when such actions have “no real or substantial relation to [the public danger], or [are], beyond all question, a plain, palpable invasion of rights secured by the fundamental law” will the judiciary be empowered to intervene on behalf of the aggrieved.[24]

A final area of litigation against the state involves voting rights in the midst of a pandemic. Because of the timing of the election cycle there have been several cases brought against state governments relating to absentee voting and registration.[25] On the eve of the August primary election the Tennessee Supreme Court vacated a temporary injunction issued by a trial court that required the state to allow anyone that requested an absentee ballot due to the pandemic to be provided with the mail-in ballot.[26]

Private Sector

The private sector is the most likely target of COVID-19 litigation due to the relative likelihood of success. Suits in the areas of negligence, breach of duty, breach of contract, discrimination, and wrongful death will potentially reach the courts in large volume. Negligence in failure to comply with state recommended precautions resulting in damages is likely to be the leading cause of action seen in the wake of the pandemic. However, breach of contract [27] and breach of duty in situations between parties lacking a sort of extenuating circumstances clause are more than likely to stock the dockets as well.[28] Already there are hundreds of cases involving claims for the recovery of lost income under business interruption insurance policies.[29] Suits by those sickened or killed by the virus will likely carry the highest degree of difficulty due to the issue of proving cause in fact. And the degree of difficulty recently got higher in Tennessee.

Legislation has been passed in Tennessee that would provide retroactive legal immunity for losses caused by COVID-19 except in cases of gross negligence or willful misconduct.[30] The Act also increases the burden of proof to “clear and convincing evidence,” and requires a verified complaint and a certificate of good faith that essentially requires a plaintiff to have a causation expert before filing suit. Executive and Legislative action on the state and federal levels has been developing so quickly that we have had to rewrite this section multiple times.[31] On July 1, 2020, Gov. Lee signed Executive Order 53 to grant COVID liability protection to health care providers with the exception of “gross negligence and willful misconduct.”[32] The governor then called for a special legislative session to address the legal immunity from civil liability bill,[33] and Tennessee’s Attorney General has joined in the call for a national limitation of liability in COVID-19 related suits.[34]

Despite the efforts to provide immunity from COVID-19-related suits there are still likely to be an increased number of tort and contract cases related to various aspects of this pandemic.[35] As an example, in 2015, a Washington State medical malpractice case arose out of the Swine flu pandemic and a failure to properly treat a pregnant woman presenting with flu-like symptoms.[36] Numerous suits have been brought against senior living and other health care facilities where it is alleged that the facility failed to follow proper infection control protocols.[37] Similarly many suits have been brought against cruise lines for failure to properly screen travelers and implement infection control protocols on the ship.[38] And there are several cases pending against employers for failing to provide a safe work environment which resulted in the spread of COVID-19.[39] While most employee injury cases will be covered by worker’s comp in Tennessee, there is the narrow exception to the exclusivity provision of our worker’s comp law for intentional injury caused by the employer.[40] We also expect to see a number of retaliatory discharge and whistleblower suits[41] resulting from the many layoffs and other cutbacks employers have been forced to make to try and survive the economic pressure of the pandemic.[42] These actions by employers also pose the possibility of employment discrimination claims if the adversely affected employees are of a protected class.

Faulty PPE supplied by Kimberly Clark during the Ebola outbreak resulted in a class action for fraudulent misrepresentation and concealment.[43] And there are already plaintiffs lining up for class actions alleging defective products and misrepresentations regarding items such as hand sanitizer and air purifiers.[44] One law firm in South Carolina has instituted class actions against nearly 30 colleges and universities. These cases are based on the premise that students paid for in-person instruction and interaction but were forced off-campus and online and are thus eligible for a refund of a portion of their tuition.[45] While this particular firm has yet to sue a Tennessee school, Vanderbilt has been named in a similar class action.[46]

Conclusion

At first reaction, one may envision a drastic increase in court filings as a result of the COVID-19 pandemic and the immense suffering it has wrought; however, the reality may not be so clear. Obviously legislative efforts to limit liability will have an impact. And although the nation is thought to be increasingly litigious, a direct comparison of Federal and Tennessee Circuit Courts shows a diverging trend. Between 2011 and 2019, the annual filings in Tennessee Circuit Court fell by over 13,000[47] while Federal Circuit Court Filings rose by over 8,000.[48] Only time will tell the true story, but possible claims paint a picture of an uphill battle for plaintiffs hoping to vindicate infringements on their liberty or livelihood and for those hoping to cash in on a class action against the Chinese. 

 

TOM WRIGHT graduated from the University of Tennessee College of Law with High Honors in 1984. He is a Circuit Court Judge in the 3rd Judicial District.

S. COLE WHEELER is an East Tennessee native and graduated from Washington and Lee University in 2019. He is currently a 2L at The University of Miami School of Law and served as a Summer Law Clerk for Judge Wright this year.

Notes

1. Mississippi has also filed suit. Mississippi v. People’s Republic of China, No. 1: 20-CV-168 (S.D. Miss. 5/12/20).

2. https://ago.mo.gov/docs/default-source/press-releases/2019/prc-complaint.pdf?sfvrsn=86ae7ab_2.

3. https://ago.mo.gov/docs/default-source/press-releases/2019/prc-complaint.pdf?sfvrsn=86ae7ab_2.

4. St. Louis v. Varahi, 39 S.W.3d 531, 536 (Mo. App. E.D. 2001).

5. E.g., Patella v. Peoples Republic of China, No. 1: 20-CV-433 (M. D. N.C. 5/15/20); see generally, https://www.lawfareblog.com/whats-many-coronavirus-related-lawsuits-against-china#.

6. 28 U.S.C. §1330 et seq.

7. Wright & Miller: Federal Prac. & Proc. s 3662.3 §3662.3. Actions Involving Foreign Nations – Exceptions to Foreign Sovereign Immunity.

8. https://www.latimes.com/politics/story/2020-05-15/can-china-be-sued-in-the-u-s-and-forced-to-pay-for-coronavirus-losses-legal-experts-say-no.

9. https://www.judiciary.senate.gov/meetings/the-foreign-sovereign-immunities-act-coronavirus-and-addressing-chinas-culpability.

10. Saludes v. Republica de Cuba, 577 F: Supp 2d, 1243 (S.D. FL 2008).

11. https://www.tn.gov/governor/covid-19.html.

12. https://www.wbir.com/article/news/local/arbitrary-and-capricious-two-plastic-surgeons-file-lawsuit-against-knox-county-mask-mandate/51-3e6c1d96-da65-4102-b810-c6ebcec3f440.

13. Tenn. Code Ann. §29-20-205(1); Bowers v. City of Chattanooga, 826 S.W. 2d 427 (Tenn. 1992).

14. TJM 64, Inc., et al v. Shelby County Mayor, et al, No. 2: 20-CV-02498-JPM-tmp (W.D. TN 7/9/20); https://www.commercialappeal.com/story/news/health/2020/07/29/judge-denies-memphis-bars-restraining-order-against-health-department/5436322002.

15. https://www.supremecourt.gov/opinions/19pdf/19a1044_pok0.pdf; South Bay United Pentecostal Church v. Newson, 140 S. Ct. 1613, 1614 (2020) (Robert’s J. Concurring).

16. Id.

17. https://ecf.ctd.uscourts.gov/cgi-bin/show_public_doc?2020cv0646-70

18. League of Independent Fitness Facilities v. Witmer, 2020 WL 3421229 (W.D. Mich. 6/19/20); but see, Talleywacker v. Cooper, 2020 WL 3051207 (E.D. N.C. 6/8/20).

19. Maryville Baptist Church, Inc. v. Beshear, 957 F. 3d 610, 614 (6th Circ. 2020); see also, Ransek v. Beshear, 2020 WL 3446249 (E.D. KY 6/24/20).

20. Adams & Boyle PC v. Slatery, 956 F. 3d 913 (6th Circ. 2020).

21. The degree of scrutiny depends upon the nature of the asserted infringement. Compare, League of Indep. Fitness Facilities with Adams & Boyle PC, supra.

22. 197 U. S. 11 (1905).

23. Id. at 27.

24. Id. at 31.

25. See, e.g. Thomas v. Andino, 2020 WL 2617329 (D. S.C. 5/25/20); Democratic National Comm. V. Bostelmann, 2020 WL 1320189 (W.D. Wisc. 3/20/20).

26. Fisher v. Hargett, 2020 WL 4515279 (Tenn. 8/5/20); https://tncourts.gov/press/2020/08/05/tennessee-supreme-court-vacates-temporary-injunction-leaving-place-state%E2%80%99s-revised

27. https://www.tmz.com/2020/04/20/ticketmaster-live-nation-sued-over-refund-policy-amid-covid-19/

28. e. g., Windber Hospital v. Travelers, 2020 WL 4012095 (W.D. Penn. 7/14/20).

29. In re COVID-19 Business Interruption Protection Insurance Litigation, MDL No. 2942, 2020 WL 4760700 (U.S. Jud. Panel on Multidistrict Litigation August 12, 2020); Peg Leg Porker Restaurant v. Society Ins., 3:20-00337 (M.D. Tenn. 2020); see generally, French, “COVID-19 Business Interruption Losses: The Case for and Against Coverage,” 27 Conn. Ins. L.J. 1 (July 1, 2020).

30. Tennessee COVID-19 Recovery Act, SB 8002.

31. https://www.timesfreepress.com/news/local/story/2020/jun/20/gov-lee-weighs-calling-tennessee-lawmakers-ba/525806.

32. https://www.wate.com/news/tennessee/gov-lee-signs-executive-order-providing-liability-protections-for-healthcare-workers/

33. https://www.tennessean.com/story/news/politics/2020/08/03/tennessee-legislature-return-special-session-covid-liability/5558829002/

34. https://www.tn.gov/content/dam/tn/attorneygeneral/documents/pr/2020/pr20-30-letter.pdf

35. https://www.wsmv.com/news/sumner_county/gallatin-nursing-home-cases-push-on-as-lawmakers-push-covid-liability-protections/article_04ca4426-db6d-11ea-8858-4b12cef2e980.html

36. Flyte v. Summit View Clinic, 2015 WL 10382528 (Wash. Super. 10/27/15).

37. e.g., Fields v. Arbor Terrace at Cascade, 1: 20-CV-02346 (N.D. Ga. 6/1/20); Brady v. SSC Westchester Operating Co., 1: 20-CV-04500 (N.D. Ill. 7/31/20); Parker v. St. Jude Operating Co., 3: 20-CV-01325 (D. Or. 8/6/20).

38. Williams v. Princess Cruise Lines, 2: 20-CV-06889 (C.D. Cal. 7/31/20); Vickers v. Carnival Corp., 1: 20-CV-23087 (S.D. Fla. 7/27/20); Maglana v. Celebrity Cruises, Inc., 1: 20-CV-22133 (S.D. Fla. 5/21/20).

39. Requena v. Pilgrim’s Pride Corp., 9: 20-CV-00147 (E.D. Tex. 7/2/20); Palmer v. Amazon, 1: 20-CV-02468 (E.D. N.Y. 6/3/20).

40. Valencia v. Freeland, etc., 103 S.W.3d 239 (Tenn. 2003).

41. Heslin, Carlson, Rome, “Anticipating and Preparing for COVID-19-Related Employment Litigation,” 2020 WL 3584855 (July 2, 2020).

42. Tenn. Code Ann. Sec. 4-21-301, Tennessee Human Rights Act; Tenn. Code Ann. Sec. 50-1-304, Tennessee Public Protection Act; Williams v. City of Burns, 465 S.W.3d 96 (Tenn. 2015). There are also various federal protections for whistleblowers including within the CARES act and the CORE act. See, whistleblowers.gov.

43. Bahamas Surgery Center L.L.C. v. Kimberly-Clark Corporation, 2017 WL 9532060 (C.D. Cal. 4/11/17).

44. Poznansky v. Molekule, Inc., 4: 20-CV-03860 (N.D. Cal. 6/11/20); Logario v. Germbloc, 1: 20-CV-11074 (D. Mass. 6/5/20).

45. Collegerefund 2020.com (current cases listed on the website do not yet include Vanderbilt or the University of Tennessee System).

46. https://www.tennessean.com/story/news/education/2020/04/29/vanderbilt-lawsuit-over-tuition-fees-coronavirus/3043992001/

47. http://www.tncourts.gov/sites/default/files/docs/annual_report_fy2019_0.pdf

48. https://www.uscourts.gov/statistics-reports/judicial-business-2019; https://www.uscourts.gov/sites/default/files/statistics_import_dir/C00Sep11.pdf.

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