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 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 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
City of Surprise
City of Yuma
County Supervisors Association of Arizona
East Valley Chambers of Commerce Alliance
Education Finance Reform Group
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
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
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
Town of Queen Creek
Tucson Metro Chamber
United Dairymen of Arizona
United Services Automobile Association
University of Arizona
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