During the COVID-19 pandemic, many businesses were forced to take quick measures to protect their customers, clients and employees.  In the aftermath of the COVID-19 pandemic, some of those businesses have been subjected to lawsuits from those claiming injuries from the business owner’s failure to take additional steps to protect the public or to enact specific measures.  To combat this new emerging threat of lawsuits, On April 5, 2021, Arizona Governor Doug Ducey signed legislation limiting liability to a wide range of businesses, persons, and providers for pandemic-related claims.

Why the need for the law?

In the aftermath of COVID-19 response, a cottage industry of lawsuits has emerged – brought by persons that claimed that that a business did not take enough measures to protect the person from contracting COVID-19. The blowback in business community was substantial and included:

  • Direct impact on business productivity through losses in litigation expenses, loss of time and key employees being involved in litigation
  • Increased costs through rising insurance premiums from new COVID-19 related claims
  • Has been a hot button issue in Washington, but no protection has been enacted at the federal level
  • Approximately 25 states have enacted pandemic shield protections

SB1377 codified in A.R.S. 12-515 and 12-516 provides “Qualified Immunity:”

  • 12-515 is the general pandemic shield protection for businesses.
  • 12-516 provides protection for health care providers and institutions.

SB1377 provides qualified immunity to businesses, and specifically provides that if the Governor declares a state of emergency for a public health pandemic, a person or provider who acts in good faith to protect individuals from the pandemic is not liable for damages in a civil action. The law is retroactive to claims that arose on or after March 11, 2020 and before December 31, 2022 are included in this protection, which covers any claims arising from the Governor’s March of 2020 Executive Orders through the COVID pandemic.

SB1377 is broad and applies to a provider of services.  The term “provider” applies to a wide range of entities and persons, including the following:

  1. A person who furnishes consumer or business goods or services or entertainment.
  1. An educational institution or district.
  1. A school district or charter school.
  1. A property owner, property manager or property lessor or lessee.
  1. A nonprofit organization.
  1. A religious institution.
  1. The State of Arizona or an agency or instrumentality of the state.
  1. A local government or political subdivision of the state, including a department, agency or commission of a local government or political subdivision of the state.
  1. A service provider as defined in Arizona Revised StatutesSection 36-551.
  1. A health professional as defined in Arizona Revised StatutesSection 32-3201, including a person who is supervised by the health professional in the course of providing health care services.
  1. A health care institution as defined in Arizona Revised StatutesSection 36-401.

To prove a claim related to a pandemic injury against a provider, plaintiffs will have to show; 1) the provider or business failed to protect the individual from the effects of the pandemic (i.e. that the business owner took no actions at all to enact reasonable measures to protect the customer or public), or 2) by a showing of clear and convincing evidence the provider or business failed to act or acted with willful misconduct or gross negligence.

SB 1377 is designed to provide a balance through a legal framework for determining when a COVID-19 claim may be brought while still ensuring claims involving gross negligence and willful misconduct can go forward.  This gives the business owner the freedom to adopt reasonable measures consistent with government public health guidelines without the fear of being sued. SB1377 provides small businesses certainty if they act in good faith, they will be protected from frivolous lawsuits.

SB1377 does not exempts workers compensation claims—employers will still have to address those situations through their worker’s compensation carrier.

A business or provider presumably acted in good faith and adopted and implemented reasonable policies or practices if they relied on and reasonably attempted to comply with published pandemic guidelines issued by federal and state agencies.  Business can also introduce other evidence that they took reasonable steps and acted in good faith.

12-516 provides that health professionals and health care institutions, which act in good faith are not liable for damages in civil injury cases directly or indirectly sustained because of the health professional’s or health care institution’s actions or omissions while providing health care services unless it is proven by clear and convincing evidence the health professional or health care institution failed to act or acted with willful misconduct or gross negligence.

The protection applies to any act or omission during screening, assessment, diagnosis, or treatment whether related to the pandemic or in the course of proving healthcare services are unrelated if the act or omission was in good faith support of the state’s response to the state of emergency. This specifically includes delaying or cancelling non-urgent or elective dental, medical, or surgical procedures; providing nursing care or procedures; altering a person’s diagnosis or treatment in response to orders or guidelines issued by federal, state, and local governments; and lack of staffing, facilities, supplies, or other resources due to the pandemic.

What Business Should Think About Now in the Wake of SB1377

Starting now, you should identify and archive emails and notes that help show that your business responded to Covid in good faith. Ideally, you’ll have documents you can point to from throughout 2020 and through today that show that your company was staying up to date on developments and expert recommendations. This could be especially important for essential businesses that stayed open throughout 2020. Consider:

  • Mask wearing will likely be a focus in litigation. For the first few months experts didn’t believe that masks were necessary, but that advice changed as we learned more about the virus. How did your company react, and does it require masks today? What did it base its decisions on?
  • Vaccines will also be a contested issue. Is your company asking (or requiring) employees to get vaccinated? Are you making return-to-work decisions based on vaccination levels? What policies has your company put into place on these issues?

If you have questions about how to protect your business, contact David Williams, Chair, of Litigation Department at Davis Miles McGuire Gardner at

(480) 344-4047 or email him at dwilliams@davismiles.com

 

 

 

Leave a Reply