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Stop the lawsuit virus before it spreads

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Many states already have Covid liability protection, and many other states have made it a priority for debate in this year’s session of their legislatures. Arizona has, too, and as SB1377 begins its journey through the Legislature, lawmakers should pass it at every stage with all due dispatch.

What SB1377 would do is keep small-business owners out of the crosshairs of Covid lawsuits from plaintiffs who could have contracted the virus anywhere. Like the laws already in effect around the country and the proposed legislation this year, it holds a business not liable for someone – a customer, employee, vendor – contracting Covid unless the business owner “failed to act or acted with willful misconduct or gross negligence.”

In a related court case in California challenging that state’s OSHA with regulatory overreach, the National Federation of Independent Business and the National Retail Federation said of the agency, “Without a hint of irony, Defendants’ [Cal/OSHA] Opposition seemingly blames employers for the recent ‘spike’ in COVID-19 cases. … Notably, Defendants’ supporting authority states nothing about this spread being work-related. … Retail employees (and all California employees, for that matter) face the hazard of COVID-19, not because they are employees, but because they are human beings living on this planet. The threat exists wherever they are – Thanksgiving dinner, nights out with friends, holiday celebrations with families, and any number of other life activities, all of which an employer cannot control. Cal/OSHA rightfully expects employers to institute protocols to keep employees safe while they are at work. But it is wrong to impose on employers the massive costs and burdens of a global pandemic where employers can control a person’s activities only during a fraction of their day.”

Except for Utah, which correctly chose not to wait, most states were slow on the draw to get their businesses liability protection. Many state policymakers banked on Congress coming up with one national standard but that didn’t happen, something NFIB-member, small-business owners in Arizona were given an early indication would not from U.S. Sen. Kyrsten Sinema in an exclusive June conference call with them.

“Generally speaking, we don’t want Washington, D.C., overruling Arizona law. However … if stakeholders believe that we need to have a federal standard to provide liability protection, I want to make sure we fashion it in a way that doesn’t undercut state law or isn’t preemptive of laws in Arizona,” said the senator.

chad-heinrich

Chad Heinrich

Well, it didn’t undercut Arizona law because Congress punted on coming up with a solution. Now, Arizona needs to step in with a law of its own, and SB1377 is the opportunity. How, in good conscience, can a state ask its small-business owners to reopen or stay open when it allows them to remain fat geese for trial attorney slaughter?

Prior to the coronavirus pandemic, employment law attorney Jon Hyman estimated that defending a discrimination or other employment lawsuit case through discovery and a ruling on a motion for summary judgment could cost an employer between $75,000 and $125,000. If an employer loses summary judgment, the employer can expect to spend a total of $175,000 to $250,000 to take a case to a jury verdict at trial. Safe bet that those estimates are higher now. These amounts are impossible for any small-business owner to afford – better to shut up shop and call it quits.

It hasn’t been that long ago since many Arizona small-business owners found themselves on the receiving end of a shake-down lawsuit filed by aggressively entrepreneurial attorneys for the most miniscule violations of the American With Disabilities Act — so notorious these actions were dubbed “drive-by lawsuits.”

These actions were so outrageous that even disability advocates were aghast. Fortunately for Arizona, our state attorney general — and state Legislature — put a stop to it.

Where comparisons between ADA lawsuit abuse and Covid lawsuit abuse end are in involvement and cost. The latter is expected to involve much more time and money. The law firm of Hunton Andrews Kurth has been keeping a “COVID-19 Complaint Tracker,” and it’s reassuring to see Arizona has not cracked into the top ten. There have been 86 complaints, however. 

Let’s not speculate on how many more there can be. Let’s not keep our small-business owners in a state of constant worry. Let’s do the right thing, let’s do the just thing, and pass SB1377.

Chad Heinrich is Arizona state director for National Federation of Independent Business and managing partner of Heinrich Public Affairs.

One comment

  1. There is nothing in the bill limiting liability protection to “small businesses”. This is merely a standard blanket waiver of liability for corporations for any negligence arising from The COVID-19 emergency, being marketed as small business protection.

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