Texas Legislature passes bill to shield businesses from pandemic-related lawsuits

by | May 26, 2021 | Litigation & Local Counsel

In his State of the State speech on February 1, 2021, Governor Greg Abbott designated five emergency items for the 2021 legislative session. One of these emergency items was civil liability protections for individuals, businesses, and healthcare providers that operated safely during the pandemic.

“Texas businesses that have operated in good faith shouldn’t have their livelihoods destroyed by frivolous lawsuits,” Abbott said.

While Abbott allowed many businesses to stay open for in-person operations during the pandemic, he also implemented, reversed, and modified dozens of executive orders, often causing confusion for business owners who struggled to comply with a patchwork of federal, state, and local coronavirus-related rules. (See our related blog post: Can He Do That? The Governor’s Authority to Suspend Texas Law During the COVID-19 Pandemic)

Hundreds of COVID-19 lawsuits have been filed in Texas since Governor Abbott declared a state of disaster on March 13, 2020. According to Hunton Andrews Kurth’s COVID-19 Complaint Tracker, 737 pandemic-related complaints have been filed in Texas courts as of May 22, 2021. The types of lawsuits include wrongful death (30 cases), requests for refunds from educational institutions (7 cases), products liability (2 cases), and conditions of employment, such as exposure to COVID-19 at work (20 cases).

Responding to the governor’s call to action, Senator Kelly Hancock and Representative Jeff Leach filed identical legislation in both chambers (SB 6 and HB 3659) aimed at shielding certain institutions and businesses from pandemic-related claims.

SB 6—known as the Pandemic Liability Protection Act—has now been passed by both chambers and awaits the governor’s signature. The bill’s passage was applauded by industry groups, including the Texas Association of Business, the Texas Hospital Association, and the Texas Restaurant Association.

Who does SB 6 protect?

SB 6 provides civil liability protections for:

  • physicians, health care providers, and first responders;
  • persons involved in designing, manufacturing, selling, or donating PPE, medical supplies, tests, and other pandemic-related products;
  • persons involved in causing an individual to be exposed to COVID-19; and
  • educational institutions.

What does a plaintiff have to prove to overcome the civil liability protections in SB 6?

SB 6 sets a high bar for plaintiffs who seek to hold a person or entity liable for a pandemic-related injury.

Physicians, health care providers, and first responders. SB 6 protects physicians, health care providers, and first responders for care, treatment, or failure to provide care or treatment relating to or impacted by a pandemic disease. To come within the liability protection, the physician, health care provider, or first responder must prove by a preponderance of the evidence that:

  • a pandemic disease or disaster declaration related to a pandemic disease was a producing cause of the care, treatment, or failure to provide care or treatment that allegedly caused the injury or death; or
  • the individual who suffered injury or death was diagnosed or reasonably suspected to be infected with a pandemic disease at the time of the care, treatment, or failure to provide care or treatment.

SB 6 does not protect physicians, health care providers, and first responders in cases of reckless conduct or intentional, willful, or wanton misconduct.

Product liability. SB 6 protects a person who designs, manufactures, sells, or donates certain pandemic-related products (including PPE, medical supplies, tests, and vaccines) unless (1) the person had actual knowledge of a defect in the product or acted with actual malice in designing, manufacturing, selling, or donating the product and (2) the product presents an unreasonable risk of substantial harm to an individual using or exposed to the product.

Liability for causing exposure to a pandemic disease. SB 6 provides that a person is not liable for injury or death caused by exposing an individual to a pandemic disease unless the individual can show that the person knowingly exposed the individual to the disease and knowingly failed to comply with government-promulgated pandemic rules. If there were conflicting government rules, the person is protected from liability so long as they made a “good faith effort” to “substantially comply with at least one conflicting order, rule, or declaration.”

Educational institutions. SB 6 exempts public and private schools from liability for damages or equitable monetary relief (like restitution) arising from a cancellation or modification of a course, program, or activity if the cancellation or modification arose during a pandemic emergency and was caused by the emergency. This would impact lawsuits brought by college students for tuition refunds. For example, a University of Texas student filed a class action lawsuit against the university in February 2021, arguing that online courses are “subpar” compared to in-person classes and student organization activities have been curtailed or cancelled. A Rice University student filed a similar lawsuit against that university.

When will SB 6 take effect, and will it apply retroactively?

If signed by the governor, SB 6 will take effect immediately. It will apply retroactively to any lawsuits filed on or after March 13, 2020 for which a judgment has not become final before the date SB 6 takes effect.

The legislature acknowledged in the bill’s findings that “some settled expectations regarding claims to which this Act applies may be impaired by this Act,” but that the protections provided by the Act serve a “compelling public interest.”

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