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Litigation Amid the Covid-19 Pandemic: Emerging Trends in Virus Related Claims

May 20, 2020

This is the first of a series of articles spotlighting emerging trends in Covid-19-related litigation. This week we focus on the initial wave of litigation, third-party negligence and injury claims and healthcare.

The Covid-19 Pandemic is a singular event. There is no analogous historical precedent. The impact of this disease and the social distancing measures taken to address it have had both local and international effects. The economic impact has been immediate and sharp. Unlike past recessions, the halt in economic activity was precipitous and driven not by a financial crisis, commodities shortages or inflation, but by public health measures. This makes projections risky, as precedents are few and inexact.

But we are now far enough into the Pandemic and the response to it that we can begin to see trends. Our views are shaped by experience in past economic downturns and knowledge of the industries in the areas in which we practice. This series of articles present our views on how multiple practice areas will be impacted as Courts return to operation and the pace of litigation returns to normal.

Part of the expected impact of Covid-19 will simply be the result of the economic downturn. Litigation in general has been a counter-cyclical practice area. Business disputes increase and individuals’ willingness to file suit to obtain compensation are more determined when money is scarce. Layoffs and furloughs lead to employment lawsuits. If losses are arguably covered (and even when they are not), insurance claims are made. This increased litigiousness may be tempered by a willingness on the part of plaintiffs to settle more quickly because of a need for funds. The plaintiffs’ bar may suffer from the same lack of liquidity, limiting their willingness to finance more questionable claims and encouraging early settlements.

But the impact of the Pandemic will not be limited to the expected effects of an economic downturn. Nothing has been expected about Covid-19. In the immediate aftermath of the lockdowns and rising death toll, priorities were public safety and health. But a search for blame followed quickly. Missouri’s attorney general has already filed a lawsuit in federal court seeking to hold Beijing and the Chinese Communist Party responsible for the spread of the coronavirus. We expect many similar lawsuits, big and small, to follow, all seeking to assess blame and impose liability for the impact of Covid-19.

Open questions regarding the impact of the coronavirus on litigation include the role of science and scientific evidence. America has become a nation of amateur epidemiologists. Dr. Anthony Fauci is looked upon as perhaps the most trusted man in Washington D.C. Will the endless news cycle focused on testing methodologies and the interpretation of data regarding infection and mortality rates cause jurors to rely more heavily on numbers and the results of scientific research? Of course, there is a counter-balance, those who believe that economic concerns must take precedence. Is this group more likely to accept risk as inherent in all facets of life and reject certain claims for compensation as a result?

We don’t have all the answers to these questions, but we do have insight. And we know these questions will be asked as the first post-Pandemic juries get picked.

First Wave of Litigation

The initial salvo of lawsuits filed as a result of Covid-19 have been predictable. The targets are those who have been in the headlines – cruise lines, managed care facilities and big box retailers deemed essential businesses – and the insurance industry. Princess Cruise Lines was sued in federal court in San Francisco while it was still disembarking passengers from the Covid-19 impacted Grand Princess. The daughter of a woman who died of coronavirus at the Life Care Center nursing home in Kirkland, Washington filed a wrongful death lawsuit against the parent company, claiming the facility covered up the outbreak. Both cruise ships and nursing homes have been hotspots of Covid-19 and these two incidents are often considered starting points for the Pandemic in California and Washington state. Lawsuits for wrongful death and bodily injuries based upon failure to warn and negligence theories are expected to multiply rapidly.

Another area with increased activity is first party claims against insurers for denial of business interruption claims. There is no question regarding the ongoing losses to American businesses caused by shut down orders and social distancing requirements. Most insurance carriers have denied claims based upon these losses. The Courts will have to determine whether many insurance contracts exclude losses due to a Pandemic. Among dozens of lawsuits filed to date is one by the Choctaw Nation casinos in Oklahoma and another by the Los Angeles law firm of celebrity attorney Mark Geragos.

Wood, Smith, Henning & Berman has formed a Covid-19 practice group with specialists in each impacted practice area. We provide risk management and counsel to those dealing with claims from the pandemic, from first party claims to class actions. Our group closely monitors Covid-19-related filings and the data regarding the underlying public health crisis. Based on this information, we provide this forecast for the industries we serve and the areas in which we practice.

Injury Lawsuits Fueled By Negligence Theories: A Threat To Reopened Businesses?

Cruise ships and nursing homes were obvious targets of coronavirus litigation. Of more concern to American businesses and their underwriters should be a lawsuit against Walmart filed in early April. A relative of a Walmart employee in Illinois who died from Covid-19 complications filed a wrongful death lawsuit against the retail giant, alleging the store did not do enough to protect employees. There are currently over 90,000 deaths in this Country attributed to Covid-19 and over 1.5 million infections. Every large business, not just Walmart, has numerous employees, customers or vendors who may have been exposed to the virus at their locations. This is particularly true for those who directly serve the public.

How many lawsuits will be filed by those who attribute their illness or the death of a loved one to a specific business? As restaurants, hotels and stores reopen, as others continue to operate as essential businesses, how much risk do they face?

We expect many businesses to be named in third party lawsuits. Legal theories will include premises liability, negligence and failure to warn. But individuals or groups asserting personal injury claims as a result of Covid-19 face a basic problem: Coronavirus is a biological pathogen, not man made. People can carry the virus and transmit it, but is that alone a basis for liability? A suspicion that an infection occurred at a place of business, absent more, may be insufficient to support a claim. This is true both because of the nature of transmission – person-to-person – and the unfortunate prevalence of the disease in this Country. Known facts about the disease also contribute to the difficulty of proving causation. Covid-19 is known to be transmitted by asymptomatic carriers. Symptoms may develop from 2 to 14 days after exposure. All of these factors make a forensic investigation almost impossible. The overwhelming number of cases has also caused the contact tracing system to break down.

We expect that what will be significant are large numbers of confirmed cases associated with one location. A hotel or restaurant that is linked to numerous cases may be held liable. Statistical evidence and epidemiology may be key to third party bodily injury and exposure law suits.

A handful of customers at the same store developing Covid-19 may also not be epidemiologically significant. A lawsuit may fail due to a lack of evidence of a single source of infection, particularly as the infection rate in the population as a whole grows. But when large numbers of individuals on a cruise ship, airplane, in a nursing home, hotel or other facility become infected with coronavirus, litigation becomes more likely. Cruise passengers and nursing home patients are confined for long periods of time, limiting other possible sources of infection. As social distancing measures increase, that will become true for more of the general population as well. To avoid litigation, businesses must avoid becoming hotspots. The more time customers, employees or vendors spend at one location, the greater the risk. Covid-19 mitigation and risk management will become part of overall good business practice to limit these potential liabilities.

Health Care on Frontline of Virus and Future Litigation

In March, heroic medical professionals on the frontline of the Covid-19 pandemic started pressing state and Federal legislators and officials for legislation and executive orders protecting them from civil liabilities through immunity to claims based upon negligence and adjusting the standard of care. Facing surging patient counts and battling a multi-faceted disease with no standard treatment protocol, these professionals wanted to work free from the threat of litigation. In some instances, government listened. On March 24, 2020, New York Governor Andrew Cuomo signed an Executive Order limiting the malpractice exposure of health care workers treating Covid-19 patients. The Order directs that an action against healthcare professionals providing medical services in response to the outbreak can only be maintained if gross negligence is established, a higher standard than traditional malpractice and general negligence claims.

Even where partial immunity to civil claims is enacted, we forecast a rise in claims, including those based upon gross negligence and criminal negligence standards; claims against virtual healthcare companies and professionals where diagnoses are done without taking vital signs or other real world diagnostic techniques; claims against hospitals by non-employee healthcare workers and other third parties for failure to provide appropriate PPE equipment; claims for failure to diagnose and treat other medical conditions in the wake of the COVID pandemic; individual and class action law suits against nursing homes and senior living facilities; product liability claims with respect to the Public Readiness and Emergency Preparedness Act (PREP Act) as they pertain to PPE equipment, including N95 masks and GM and Ventec ventilators; and claims against assisted living, nursing homes and long term healthcare facilities.

Here are a few of the early health care litigation cases that we’ve tracked in the wake of this pandemic:

  • A plaintiff challenged a facility’s announcement that public COVID-19 testing would be limited to patients of medical practices that they own and operate.
  • A wrongful death case was filed against a hospital, alleging that the death was due to a nosocomial coronavirus infection.
  • A lawsuit was filed against a managed care facility after plaintiff developed a stage IV pressure sore. Following the Coronavirus outbreak, defendants had closed their building to visitors and as a result, the assigned wound specialist no longer visited the facility. The suit also alleges that no physician has seen the patient since early March.
  • Class action medical malpractice suit alleging that defendants failed to adequately protect the plaintiff class from exposure to COVID-19 at their nursing home facility, leading to infections and death.

To date, litigation has focused on health care facilities, particularly long term and senior care, and the corporations that own and operate these facilities. Current statistics show that at least one third of Covid-19 deaths in the United States are linked to these facilities. Claims against other health care related hot spots and individual practitioners may eventually follow.

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