While federal authorities have granted immunity to certain entities in the fight against the coronavirus pandemic, the fact that it is not all-encompassing could spur litigation down the road.
On March 17, the Department of Health and Human Services (DHHS) authorized application of the Public Readiness and Emergency Preparedness (PREP) Act, and backdated it to Feb. 4, providing “liability immunity” to certain medical countermeasures except in cases of “willful misconduct.”
But it doesn’t apply automatically, Erik Swanholt, a partner with Foley & Lardner LLP, said in an email to the Northern California Record.
“For some companies yes, for others no. The PREP Act is designed to shield companies from tort liability, including products liability, if those companies qualify as ‘covered persons’ and if those companies are providing ‘covered countermeasures’ pursuant to a federal contract or authorization from an ‘authority having jurisdiction.’ Many companies fit these criteria while some do not,” Swanholt said.
“For companies who cannot check all of these boxes, particularly the third one, that nevertheless want to help, they want to repurpose manufacturing capabilities to build PPEs (Personal Protective Equipment) for example, there can be exposure to litigation. In that regard, the Declaration/PREP Act does not go far enough as there are willing and able entities out there that can help and that should not face litigation exposure simply because they do not have a federal contract or other authority; particularly where obtaining authorization during a pandemic can be difficult as the authorities having jurisdiction are quite busy.”
The immunity coverage, while wide-ranging, would not extend to delivery of medical services, Elizabeth Mann, a partner with Mayer Brown told the Record by email.
“The immunities reach a very broad group of persons who are involved with these activities, including manufacturers, distributors, ‘program planners’ and their officials, agents, employees and suppliers. Additionally, the immunities extend to persons authorized ‘to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures, and their officials, agents, employees, contractors and volunteers’, and those ‘authorized to perform an activity under an Emergency Use Authorization’ under the Federal Food, Drug, and Cosmetic Act. These terms are broadly defined, with the goal of extending these immunities as fully as possible to people and companies involved in providing life-saving drugs, biologics and medical devices,” Mann said.
She also said the PREP Act does not cover the administration or delivery of medical services, adding that hospitals, doctors and other clinicians remain subject to standard medical malpractice risk.
“Some states, including Illinois and New York, have enacted specific Disaster Declarations that give clinicians treating persons as part of a COVID-19 response effort broad liability immunity for everything except willful misconduct. These protections are necessary to induce clinicians to work in non-traditional COVID-19 treatment facilities and to cover, for example, retirees who return to practice to help out in these trying times,” Mann said.
“The bottom line is that the PREP Act helps, but does not insulate clinicians from malpractice risk for the delivery of medical services."
Swanholt said it is important that businesses assess specific risks at the outset.
“For entities that want to help but do not want to assume additional risk, in addition to traditional disclaimers and waivers, it is important to make sure that your contemplated conduct – be it making PPEs, expediting the development of medical devices or educating people on the use of protective equipment – is a ‘covered countermeasure’ and that you have the requisite authority to provide that countermeasure," Swanholt said.
"It is also important that those entities consider other types of liability protection that may exist, including state laws that can be triggered in the event of a declaration of a state of emergency (see e.g., California Government Code Section 8659) or executive orders issued to provide specific immunity or protection (see e.g., Michigan executive order 2020-30), to determine whether that added protection applies to them. In all events, even during a crisis, it is critical to assess the path before beginning to walk it.”
As the COVID-19 situation continues to unfold, so will interpretation of the PREP Act.
“The PREP Act provides some effort toward a measure of immunity in limited circumstances,” Kenneth Perri, a partner with Gordon Rees Scully Mansukhani, LLP, told the Record by email. “It is definitely not providing blanket immunity for anything related to COVID-19 and the policy makers will need to address how far this or other legal measures should go.”