Associate Chief Counsel, U.S. Chamber Litigation Center
November 13, 2020
Recent reporting and commentary on COVID-19 litigation covered: the U.S. Chamber’s petition for rulemaking concerning pandemic-related securities litigation; research suggesting that defendants will face widespread juror bias in cases related to COVID-19; and more.
Pandemic Securities Litigation
The U.S. Chamber of Commerce, through its Institute for Legal Reform and Center for Capital Markets Competitiveness, petitioned the SEC for rulemaking addressing COVID-19 related securities litigation. The petition argues that, despite the Private Securities Litigation Reform Act, there has recently been “an explosion of securities class action filings,” driven by questionable “event-driven lawsuits that are filed when a public company’s stock declines after a negative event,” including the coronavirus pandemic. The U.S. Chamber urged the SEC to (among other things) exercise its authority “to expand the PSLRA’s statutory safe harbors and create additional exemptions from liability . . . to place reasonable limits on securities litigation arising out of the COVID-19 pandemic.”
On The D&O Diary, Kevin M. LaCroix (cited favorably in the Chamber’s rulemaking petition) wrote that the petition “represents an interesting initiative, especially given the explosion of securities litigation that has flooded into the courts in recent years. These recent trends undoubtedly suggest that we are likely to continue to see more COVID-19 related securities litigation.” At JD Supra, Cydney Posner of Cooley LLP also takes a close look at the petition’s liability and disclosure proposals.
Juror Bias in COVID-19 Litigation
On Law.com, jury-selection consultant Josh Dubin cautions that defendants facing trials “need to be aware of the potential biases prospective jurors may have against those accused of coronavirus-related wrongdoing.” While Dubin’s survey research “found that defendants are likely to be met with widespread juror bias, there are ways,” he notes, “to anticipate the characteristics of jurors that have the potential to be especially harmful.” For example, “the more a prospective juror has been directly impacted by the coronavirus, the more likely their anger, anxiety, and fear will translate into a high damages award.” Dubin also recommends that “litigators should propose voir dire questions about a juror’s experience and attitudes relating to the pandemic.” He offers several sample questions.
State Liability Protections
JD Supra includes a helpful summary from Seyfarth Shaw attorneys of state coronavirus liability protections. At October’s end, sixteen states have enacted COVID-19 liability shields via statute or executive order. “These laws differ in substantive scope,” the attorneys explain—for example, which businesses they apply to, what types of actions or omissions they protect—"as well as temporal scope.” They “also differ with respect to the exact types of protections they create”—complete filing bars, heightened standards of proof, health guidance safe harbors, damages caps, and more. Even so, according to the lawyers’ analysis, the state protections “generally share” three features:
- They protect businesses (as well as their employees) from civil suits related to actual or potential exposure to COVID-19;
- They do not protect willful, reckless, intentional, or grossly negligent misconduct; and
- They do not prevent employees from filing workers’ compensation claims related to actual or potential workplace exposure to COVID-19.
According to the Columbia Daily Tribune, Missouri lawmakers are likely to consider COVID liability protection in special legislative session. If Missouri adopts such protections, it would make the seventeenth such state.
Reopening Legal Risks
Finally, on Law.com, two Littler Mendelson attorneys discuss the legal risks to businesses of reopening too fast. They caution that “[o]pening prematurely can constitute an invitation to unwelcome and intrusive government oversight of workplaces, and can result in significant legal liability.” They further warn that coronavirus lawsuits are rising. To minimize legal risk, the attorneys recommend that businesses encourage working from home, try to minimize personal contact among employees, and follow health protocols when infections arise. While “employers have good reasons for wanting their employees return to their physical workspaces,” they conclude, “now is the time for caution.”