Legislation meant to shield Indiana businesses and individuals from COVID-related liability was met with a groundswell of support on Wednesday, though some raised concerns that the language of the bill could have unintended legal consequences.
Sen. Mark Messmer, R-Jasper, presented Senate Bill 1 to the Senate Judiciary Committee at its first meeting of the 2021 legislative session.
The legislation provides a “person” with immunity from civil liability for damages if an individual is exposed to COVID-19 “(1) on the premises owned or operated by the person; (2) on any premises on which the person or an employee or agent of the person provided property or services to the individual; or (3) during an activity managed, organized, or sponsored by the person.”
Given the “looming cloud of uncertainty” surrounding the coronavirus and its spread, Messmer said he looked to such states as Utah, Iowa, Tennessee, South Carolina and Ohio as a guide when considering how best to protect Indiana employers. Federal discussions about COVID liability immunity have stalled, but multiple state governments have taken steps to protect their businesses from lawsuits brought by individuals who claim to have gotten the virus on a business’ property.
However, SB 1 does not give protection to “bad actors,” Messmer said. Specifically, under the language of the bill, “a person whose actions or omissions constitute gross negligence or willful or wanton misconduct as proven by clear and convincing evidence” is not entitled to immunity.
“This will provide certainty in very uncertain times,” said Mike Ripley, vice president for health care policy and employment law at the Indiana Chamber of Commerce.
The Indiana Chamber was one of more than 20 organizations represented at Wednesday’s meeting by in-person testimony in favor of SB 1, alongside a handful of others that submitted written support of the legislation. Educational entities, trade groups, municipal associations, economic organizations and other groups rose in support of Messmer’s bill, saying it would enable their businesses — many of which are already struggling because of the pandemic — to focus on serving their customers without the looming of question of whether they could face a COVID-related lawsuit.
“No amount of diligence is ever going to completely prevent the spread of COVID,” said Ryan Hoff, general counsel for the Association of Indiana Counties. “This will allow us to focus on providing services without having to worry about paying for damages or defending a lawsuit.”
Much of Wednesday’s testimony focused on the impact the pandemic and the related economic downturn has had on Hoosier small businesses.
According to Barbara Quandt, Indiana State Director of the NFIB, if economic conditions do not improve, it is predicted that one in four small businesses will go under. What’s more, she said, COVID lawsuits would not be costly just in the financial sense, but also in the emotional sense.
“If they (small businesses) have stayed open, some are just one frivolous lawsuit away from closing for good, taking the livelihoods and the jobs they create with them,” Quandt said.
Among others testifying in favor of SB 1 was Indiana Attorney General-elect Todd Rokita. He said he was speaking in his capacity not just as an incoming statewide officeholder, but also as general counsel of health insurance consulting firm Apex Benefits.
“What we’re seeing in our clients (at Apex) is, as much as leaders are being creative in solving the challenges the pandemic has created and will continue, they are also scared,” Rokita said. Providing liability immunity for good-faith efforts to protect employees and customers will help alleviate the fears of business owners, he said.
But not everyone is in support of the immunity legislation. The lone in-person testimony against SB 1 came from Shawn Crist, secretary-treasurer of the Indiana State AFL-CIO.
Crist said the bill’s standard for proving a COVID negligence claim against bad actors — gross negligence proven by clear and convincing evidence — is more stringent than the standard required of a typical negligence case. He suggested that the language require only “negligence” proven by the preponderance of the evidence to defeat immunity.
Also, Crist said, there have been only a couple of COVID liability claims against businesses in the United States so far, and none confirmed in Indiana.
“This is not the major problem that businesses are painting it to be,” he said.
Crist’s concern about the evidentiary standard for gross negligence was shared by others.
The general counsel for Indiana State Building & Construction Trades Council has likewise suggested that the language be changed to a preponderance-of-the-evidence standard, according to Pete Rimsans, executive director of the council, which supports SB 1. Similarly, requiring clear and convincing evidence seems like “piling on,” Sen. Tim Lanane, D-Anderson, said.
The Indiana Trial Lawyers Association took a neutral position on SB 1, with Kathy Farinas, an at-large member of the ITLA board, offering suggestions on behalf of the association. While ITLA believes the mission of the bill is “on point,” Farinas said some of the language could lead to unintended legal consequences.
She pointed first to the provision of liability for a “person,” which is defined in 11 ways: an individual; an association; an institution; a corporation; a company; a trust; a limited liability company; a partnership; a political subdivision; a government office, department, division, bureau or other body of government; or any other organization or entity.
Sen. Lonnie Randolph, D-East Chicago, raised a similar concern, asking if the language including “any other organization or entity” could be narrowed and noting that laws can be found unconstitutional for being overly broad. Messmer, however, said he intended for the language to be broad so he would not leave anyone out.
ITLA’s suggestion was to use the phrases “business invitee” or “social invitee” instead of “person.”
ITLA also raised concerns about the phrase “civil liability,” which Farinas said can include tort law, contract law or ordinance law. She suggested that the bill be amended to reference “tort liability.”
Farinas also cautioned against writing the law so broadly that bad actors would unintentionally be protected. She gave the example of a northern Indiana nursing home that falsely represented to a family that it had no COVID cases among its residents. The family then selected that facility, and their family member contracted the virus and died.
It should be clear that such misrepresentation or other fraud is not protected from COVID liability, she said.
Additionally, Farinas suggested that the expiration date of the law be changed from Dec. 31, 2024, to Dec. 31, 2022. Crist of the AFL-CIO gave the same suggestion, also asking that the bill not be retroactive to March 1, 2020.
During committee discussion, Sen. Greg Taylor, the Indianapolis Democrat who is now the Senate Minority Leader, questioned whether the “omissions” not protected from liability would include an employer who does not enforce a mask mandate. Messmer said he believed that would be included, but he pushed back on Taylor’s suggestion that the language be amended to reflect that interpretation.
“That’s the purpose of the process of a court action,” Messmer said.
Wednesday’s hearing on a bill about the coronavirus reflected the ongoing pandemic.
Lawmakers sat socially distanced in the basement of the Indiana Statehouse while witnesses were in a room on the fourth floor and testified electronically. Some kept their masks on while speaking.
The hearing also reflected the political turmoil that has been ongoing since the November election.
During his testimony, AG-elect Rokita said, “This is still America … at least until Jan. 20,” referencing the upcoming inauguration of President-elect Joe Biden.
Sen. Taylor tried to call out Rokita after public testimony was finished, and at first, committee chair Sen. Liz Brown, R-Fort Wayne, told Taylor to keep his comments focused on SB 1. After pushing back, though, Taylor proceeded and said Rokita’s comments had breached the committee’s decorum rules.
“We don’t need to go down that path,” Taylor said.
“That’s exactly right,” Lanane added in support of his Democratic colleague.
The full video of the meeting will be available online.