Bill to shield responsible businesses and others from “predatory” Covid-19 lawsuits moves forward

A bill to protect Arizona businesses, schools, healthcare providers, government agencies, and others from frivolous Covid-19 lawsuits took another step forward Wednesday when the state House Judiciary Committee approved the measure. 

The legislation, Senate Bill 1377, is needed to ensure that responsible businesses and employees, particularly those on the frontlines of the pandemic, are not targets of meritless lawsuits, said the sponsor of the bill, Sen. Vince Leach, R-Saddlebrooke, who testified at the hearing. 

As federal lawmakers have failed to pass protective legislation, about half the states have taken the matter into their own hands and passed Covid liability protection bills, Leach said.   

“In other words, they are seeing the effect of ‘sue and settle’ — going after entities from schools to businesses to the medical community,” he said. 

Safe harbor from unwarranted litigation

Judiciary committees from both houses have approved the legislation. The bill offers protection from reckless litigation for businesses and others who act in “good faith” to implement reasonable policies to protect their customers, clients and patients. 

SB 1377 also offers protection for injuries that result from indirect causes, such as a patient who was unable to get admitted to a hospital when healthcare facilities were barred from performing non-elective surgeries during the public health emergency. 

Under the legislation, plaintiffs would have to prove “clear and convincing evidence that a person or provider failed to act or acted with wilful misconduct or gross negligence” in order to win a civil suit. 

Representatives from industry, education, healthcare testify 

A number of representatives from the business, education and the healthcare community spoke on behalf of the bill at the hearing.

While the bill offers “targeted and reasonable” liability protection for responsible entities, it does not protect “bad actors,” said Courtney Coolidge, vice president for government affairs at the Arizona Chamber of Commerce and Industry. 

“SB 1377 is not blanket immunity. It protects responsible actors working diligently under extraordinary circumstances while preserving reasonable recourse for truly bad actors,” Coolidge said.  

The bill also does not provide a new shield for employers, she said, and specifically exempts any claims that are already subject to the workmans’ compensation statute.

National law firms spending millions on ads to lure clients 

As businesses and employees continue to work on the frontlines to operate and respond to the crisis, many are in fear of malicious lawsuits, said Coolidge and others who testified at the hearing.  

Litigation tracking organizations show that their fears are not unfounded. Millions of dollars are being spent by plaintiffs-firms on television ads, a “clear indication of what’s to come,” Coolidge said. 

According to a report issued last month by the American Tort Reform Association, plaintiff-side law firms funneled an estimated $34.4 million into television ads last year to attract COVID-19 clients. 

The report shows that 176,053 television ads offering legal services or soliciting legal claims mentioning COVID-19 aired in the U.S. from March through December 2020. The biggest spender is a large national firm that spent $10.5 million airing 70,000 ads advertising pandemic-related matters. 

Small businesses most vulnerable 

Mike Huckins, vice president of public affairs for the Greater Phoenix Chamber of Commerce, also spoke on behalf of the bill at the hearing, stating that small businesses are among the most vulnerable to meritless claims.

“This bill is important to all businesses, but especially crucial to small businesses, many of whom our chamber represents,” Huckins said. “Those small businesses don’t have the legal resources necessary to protect themselves from frivolous lawsuits. 

“This bill will give them a lifeline in order to help businesses recoup after pandemic as long as they adhere to common sense health guidelines.”

Since the federal government has failed to pass a national law for liability protection, now is the time for Arizona to step up, he said.

“It’s time that Arizona lived up to its business-friendly reputation and join 25 other states that have already enacted the legislation.” 

The legislation is not without its detractors. Barry Aarons, a lobbyist for the Arizona Trial Attorneys Association, voiced opposition to the bill, saying it places the standard for proof so high that legitimate medical malpractice claims will be almost impossible to litigate.

Thousands of employers support liability protection

Meanwhile, stakeholder groups have spent months working with legislators to craft SB1377. Language in the bill is similar to other liability laws passed in Arizona and other states. Governor Doug Ducey, in his State of the State address, also identified the need to protect job creators and health care workers against predatory COVID exposure lawsuits. 

To read the bill’s full text, go to: Covid-19 liability protection.

Organizations supporting the bill

A coalition of nearly 100 businesses, trade associations, schools, nonprofits, health providers and other organizations in Arizona support SB 1377 including:

21st Century Healthcare

Alliance of Arizona Nonprofits

American Academy of Pediatrics, Arizona Chapter

American Heart Association

American Property Casualty Insurance Association

Americans for Prosperity

Amigos Trade Association

Apache Junction Chamber of Commerce

Arizona Academy of Family Physicians

Arizona Alliance of Boys and Girls Clubs

Arizona Assisted Living Homes Association

Arizona Association of Community Managers

Arizona Association of Health Plans

Arizona Association of Providers for People with Disabilities

Arizona Automobile Dealers Association

Arizona Automotive Wholesalers Association

Arizona Bankers Association

Arizona Board of Regents

Arizona Chamber of Commerce & Industry

Arizona Chapter National Safety Council

Arizona Charter Schools Association

Arizona Council of Human Services Providers

Arizona Dental Association

Arizona Farm Bureau Federation

Arizona Foot and Ankle Medical Association

Arizona Health Care Association

Arizona Hispanic Chamber of Commerce

Arizona Hospital and Healthcare Association

Arizona LeadingAge

Arizona Licensed Beverage Association

Arizona Lodging and Tourism Association

Arizona Manufacturers Council

Arizona Medical Association

Arizona Mining Association

Arizona Multihousing Association

Arizona Nurses Association

Arizona Optometric Association

Arizona Osteopathic Medical Association

Arizona Petroleum Marketers Association

Arizona Pharmacy Association

Arizona Realtors

Arizona Restaurant Association

Arizona Retailers Association

Arizona Rock Products Association

Arizona School Risk Retention Trust, Inc.

Arizona Small Business Association

Arizona Soccer Association

Arizona State Association of Physicians Assistants

Arizona State University

Arizona Technology Council

Arizona Trucking Association

Associated General Contractors of America Arizona Chapter

Buckeye Chamber of Commerce

Building Owners and Managers Association of Greater Phoenix (BOMA)

Carefree Cave Creek Chamber of Commerce

Chandler Chamber of Commerce

Chubb Insurance

City of Surprise

City of Yuma

Coconino County

County Supervisors Association of Arizona

East Valley Chambers of Commerce Alliance

Education Finance Reform Group

Experience Scottsdale

Fountain Hills Chamber of Commerce

Fresenius Medical Care North America

Gilbert Chamber of Commerce

Glendale Chamber of Commerce

Greater Flagstaff Chamber of Commerce

Greater Florence Chamber of Commerce

Greater Oro Valley Chamber of Commerce

Greater Phoenix Chamber of Commerce

Greater Phoenix Economic Council

Greater Phoenix Leadership

Green Valley Sahuarita Chamber of Commerce & Visitor Center

Health System Alliance of Arizona

Home Builders Association of Central Arizona

HonorHealth

InvisionAZ

Lake Havasu Area Chamber of Commerce

League of Arizona Cities and Towns

Marana Chamber of Commerce

Mesa Chamber of Commerce

Mutual Insurance Company of Arizona

National Association of Industrial Office Properties, Arizona Chapter

National Federation of Independent Business 

Nationwide Mutual Insurance Company

Northern Arizona University

Page-Lake Powell Chamber of Commerce

Peoria Chamber of Commerce

Pharmaceutical Research and Manufacturers of America 

Phoenix Formulations

Prescott Valley Chamber of Commerce

Queen Creek Chamber of Commerce

Republic National Distributing Company of Arizona

Republican Liberty Caucus of Arizona

Scottsdale Chamber of Commerce

Southern Arizona Home Builders Association

Southern Arizona Leadership Council

Southwest Valley Chamber of Commerce

Southwest Veterans Chamber of Commerce

State Farm Insurance Companies

Surprise Regional Chamber of Commerce

Tempe Chamber of Commerce

Total Spectrum

Town of Queen Creek

Tucson Metro Chamber

United Dairymen of Arizona

United Services Automobile Association 

University of Arizona

Valley Partnership

West Valley Chambers of Commerce Alliance

Western Plant Health Association

Wickenburg Chamber of Commerce

Wine and Spirits Wholesalers Association of Arizona

Yavapai County Contractors Association