WASHINGTON (Legal Newsline) – Congress has the authority to pass protections for businesses that are worried reopening during the coronavirus pandemic will lead to costly litigation initiated by personal injury lawyers, says a memorandum written by attorneys at Jones Day.
Michael Carvin and Yaakov Roth authored the memo, published May 12 by The Federalist Society. They say there can be no “serious question” of Congress’ authority to pass temporary limits on lawsuits to help restaurants, schools and other industries hoping to reopen.
Congress has already done so “countless times,” they say.
“Although the (Supreme) Court has properly rejected congressional efforts to regulate non-economic activities based on their supposed, aggregated, indirect effects on commerce, the proposals here focus directly on commercial activities, and are plainly driven by an interest in stabilizing the faltering national economy by removing the obstructions created by state tort law,” the memorandum says.
Last week, the business community urged the Senate Judiciary Committee to pass these protections to help companies get operating again. Senate Majority Leader Mitch McConnell has promised the issue will be a major sticking point in the next coronavirus stimulus package, and fellow Republican Sen. John Cornyn is working on a proposal, it was said during the Judiciary hearing.
The battle will likely be partisan, with the Democrat-led House of Representatives representing a major obstacle. Last year, the House attempted to push through a measure regarding the chemical PFAS that would have increased liability to countless businesses.
Senate Republicans prevented that from happening. Now, the COVID-19 pandemic presents the next battle over a possible litigation explosion. Colleges and universities are now facing class action lawsuits that say they should refund part of each student’s tuition because those students can’t enjoy the full campus life they signed up for.
In Chicago, a Walmart worker sued the company after coming down with the disease, and previous Legal Newsline coverage noted a Tennessee law firm is signing up clients to sue a nursing home over an outbreak.
A recent poll commissioned by the U.S. Chamber Institute for Legal Reform, which owns Legal Newsline, showed nearly equal percentages of Democrat and Republican voters favor proposed liability shields. A poll released by the American Association for Justice, the nation’s trial lawyer group, says voters oppose blanket immunity.
But businesses are not asking for blanket immunity. At the Judiciary hearing, temporary protections from lawsuits except in cases of gross negligence were requested – similar to protections passed for health care workers in several Democratic states.
Whether those protections should be instituted will be the subject of debate, but whether they can be implemented is an easy question, the Jones Day memo says.
The U.S. Supreme Court found 101 years ago that the federal government has the authority to deal with “obstructions to interstate commerce” – whether they are physical or economical, the memo says. It also ruled in 2005 that Congress can regulate any activities that “substantially affect interstate commerce.”
“But even the Justices who have disagreed with overly lax applications of the ‘substantial effects’ test have not questioned the core congressional power to protect interstate commerce itself against a burden or threats, including those posed by state law or local condition,” the memo says.
The memo included past examples of limits on state tort laws like:
-The Y2K Act, limiting liability and damages for computer failures;
-The Biomaterials Access Assurance Act, limiting liability for suppliers of certain medical devices; and
-The PREP Act, which granted immunity for countermeasures approved by the Department of Health and Human Services during a public health emergency.
Limiting liability is essential to protecting interstate commerce, the authors concluded.
“(C)onsider a hair salon. Salons as a class undeniably engage in interstate commerce on a regular basis, such as by buying goods shipped interstate, using credit card processing services, internet booking services, telephone equipment, and the like,” the memo says.
“Coronavirus exposure suits that threaten the viability of the hair-salon industry will pose a potent obstacle to interstate commerce, and to the efficacy of the vast sums that Congress is spending to shore up the economy.
“Under the Commerce Clause and/or the Necessary and Proper Clause, Congress is thus authorized to limit such liability, even if it arises from an intrastate haircut for which a customer pays in cash.”