By Mitchell Morris, Kathleen Carrington and Jorge Solis

Law360 (June 5, 2020, 5:11 PM EDT )

Mitchell Morris

Kathleen Carrington

Jorge Solis

Late last year, we wrote a guest article for Law360 about a decision finding that a mine operator could not be held liable for unpermitted discharges under the Clean Water Act, because it had properly disclosed them to the state permitting authority, which "chose not to list them in the Permit."[1]

The court reasoned that the mine had done what the permitting authority had told it to do, and that it "should be able to rely upon the clear directives of its regulators without being subjected to liability."[2] In the court's view, although the federal government disagreed with what the state permitting authority required, "it would be unfair to place [the mine] in the middle of a battle between federal and state regulators."[3]

We explained that, as a matter of fundamental fairness, the same principles should apply to any business operating pursuant to the directives of state or federal regulators. That is, companies should not be subject to civil liability when acting pursuant to, or in accordance with, active government supervision or guidance.

Fast forward to the new normal of the COVID-19 era. State and federal regulators are telling the public what to do and not to do at unprecedented levels — and the messages seem to change daily.

In light of this unparalleled and ever-changing intervention, supervision and associated uncertainty, people should be entitled to rely, now more than ever, upon the directives of regulators without being subjected to liability.

After all, "the point of due process — of the law in general — is to allow citizens to order their behavior," and "elementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice ... of the conduct that will subject him [or her] to punishment."[4]

The Case for Nonliability

The U.S. Supreme Court has long recognized a constitutional prohibition against "an indefensible sort of entrapment by the State — convicting a citizen for exercising a privilege which the State had clearly told him was available to him."[5] It has similarly held that "[o]rdinarily, citizens may not be punished for actions undertaken in good faith reliance upon authoritative assurance that punishment will not attach."[6]

Thus, in U.S. v. Pennsylvania Industrial Chemical Corp.,[7] the court overturned an industrial defendant's criminal conviction resulting from its reliance on the U.S. Army Corps of Engineers' interpretation of a federal pollution law. The court ruled that the defendant "had a right to look to the Corps of Engineers' regulations for guidance," because the Corps is the "responsible administrative agency."[8]

Although the Corps' rulings, interpretations and opinions are not legally controlling, the court found "they do constitute a body of experience and informed judgment to which litigants may properly resort for guidance."[9]

On the civil side, the court has noted the "interest of citizens in some minimum standard of decency, honor, and reliability in their dealings with their Government."[10] Thus, in FCC v. Fox Television Stations Inc.,[11] the court precluded the Federal Communications Commission from levying civil forfeiture penalties for indecency against broadcasters who had relied upon preexisting FCC policy, and, therefore, lacked fair notice of the FCC's new interpretation.[12]

The applicability of the foregoing principles to state action in the form of imposing civil tort liability should not be subject to debate.[13] Indeed, the Supreme Court recognized decades ago that "state regulation can be as effectively exerted through an award of damages as through some form of preventive relief," and that "[t]he obligation to pay compensation ... is designed to be[] a potent method of governing conduct and controlling policy."[14]

Application During COVID-19

On March 17, the secretary of the U.S. Department of Health and Human Services issued a declaration of immunity for manufacturers and suppliers of certain products used to combat COVID-19.[15] Since that time, a number of states have declared varying levels of COVID-19 immunity for health care providers.[16]

Meanwhile, Congress is debating potential immunity for businesses against civil claims arising from employee and customer transmission of COVID-19.[17] It remains unclear, however, whether and when such legislation will pass and, if it does, what the scope of any such immunity will look like.

Businesses that are not covered by existing express immunity should consider whether and how they may be able to raise "the government said I could (or couldn't)" as a defense to potential claims arising in connection with the COVID-19 pandemic.

Among the regulators at the forefront of the federal government's COVID-19 response are the U.S. Food and Drug Administration and the U.S. Centers for Disease Control and Prevention Both agencies have issued extensive guidance on a multitude of subjects that either already are, or may become, the target of civil litigation.

FDA Guidance

Take hand sanitizers, for example. The CDC's coronavirus website states that "[e]veryone should ... [w]ash your hands often," and "[i]f soap and water are not readily available, use a hand sanitizer that contains at least 60% alcohol."[18]

The FDA, meanwhile, acknowledges "that some consumers and health care professionals are currently experiencing difficulties accessing alcohol-based hand sanitizers," and that, "[i]n response to the demand for alcohol-based sanitizers, certain entities that are not currently regulated by FDA as drug manufacturers" are producing "hand sanitizer products for the public's use."[19]

Thus, the FDA has declared that it "does not intend to take [enforcement] action against firms that prepare alcohol-based hand sanitizers for consumer use and for use as health care personnel hand rubs for the duration of the [COVID-19] public health emergency" so long as the product is manufactured as set forth in the FDA's guidance document.[20]

Of course, the FDA's guidance document contains all of the usual bureaucratic disclaimers, including: "Contains Nonbinding Recommendations"; "[D]oes not establish any rights for any person and is not binding on FDA or the public"; and "[Does] not establish legally enforceable responsibilities ... and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited."[21]

But the fact remains: The FDA — the supreme federal regulatory authority over food and drugs — is effectively telling businesses: "If you do it this way, we won't come after you for breaking the law."

While hand sanitizers with prior FDA approval may well be subject to Health and Human Services' March 17 immunity declaration if all other requirements are met, nonapproved products subject to the aforementioned FDA guidance likely are not. As a matter of fundamental fairness, entities to whom the FDA's guidance applies that are preparing hand sanitizer should not be exposed to tort liability for acting in accordance with that guidance.[22]

Compounding pharmacies also have been the subject of recent FDA guidance.[23] Recognizing "that due to the COVID-19 pandemic, some compounders are currently experiencing difficulties obtaining PPE [personal protective equipment]," the FDA has declared that it "does not intend to take enforcement action ... when drugs intended or expected to be sterile are compounded without standard PPE," provided that they are compounded as set forth in the guidance document.[24]

Predictably, the compounder guidance contains the same qualifiers as the hand sanitizer guidance.[25] But, again, due process-rooted fundamental fairness dictates that the FDA's guidance must mean something to those who rely upon it. Compounders should not be subject to tort liability as a result of having deviated from standard PPE requirements during the pandemic as provided for by the FDA.[26]

CDC Guidance

The CDC is "the nation's health protection agency," tasked with, among other things, "fight[ing] disease and support[ing] communities and citizens to do the same."[27] In this role, the CDC issues guidance for the public's benefit.

Regarding COVID-19, the CDC has issued more than 100 guidance documents on a broad range of topics — including cleaning and disinfecting households, guidance for manufacturing workers and employers, mitigation and prevention guidance for retirement communities, and guidance for reopening buildings after prolonged shutdown.[28]

While the CDC's guidance documents appear to include fewer express qualifiers than the FDA's, most of them nevertheless are identified either as interim guidance subject to change, or have been updated with new guidance since their initial issuance.

There has already been litigation arising from the alleged failure to adhere to the CDC's COVID-19 recommended best practices, and such litigation can be expected to continue. Generally, courts are equating CDC guidance with a threshold standard of care, and are reaching decisions based on whether there is evidence of guidance compliance.

For example, one federal court denied an attempt by workers in a Missouri meat processing plant to obtain a preliminary injunction regarding the plant's alleged failure to adequately protect them consistent with applicable joint guidance issued by the CDC and OSHA.[29]

Although primarily finding the case should be dismissed because OSHA had primary jurisdiction, the court, "to aid in any appellate review," found the plant operator "has taken substantial steps to reduce the potential for COVID-19 exposure at the Plant and appears to the Court to be complying with the Joint Guidance regarding the same."[30] The court concluded that "[t]hus, Plaintiffs are not substantially likely to prove [the operator] breached any duty."[31]

Another federal court denied a homeless woman's motion for a temporary restraining order to prevent the city of St. Louis from closing a tent encampment that allegedly posed a health risk to occupants and the public.[32]

Noting "the CDC's guidance that encampments should not be cleared '[u]nless individual housing units are available,'" the court found that the city "has taken pains to bring its public health initiative in line with the CDC's guidance by ensuring that it has an individual housing unit available for every displaced resident of the encampments."[33] Ultimately, the court declined to interfere with the city "taking the steps it reasonably deems necessary to slow the spread of Covid-19," i.e., by abiding by CDC guidance.[34]

On the other hand, the U.S. District Court for the District of Columbia partially granted a temporary restraining order regarding a psychiatric facility's failure to follow certain CDC guidance applicable to the facility to protect its residents.[35]

The court extended the TRO in a later opinion, and expanded the facility's compliance obligations in light of additional CDC guidance that the facility was not adequately following.[36] Acknowledging "the exercise of professional judgment" may, under certain circumstances, provide a viable reason for not following CDC guidance, the court found such was not the case here, thus warranting judicial intervention.[37]

In sum, the trend thus far suggests that compliance with CDC guidance may serve as a shield to civil liability, while the decision not to follow CDC guidance invites risk — notwithstanding that CDC guidance, standing alone, is not mandatory.

Litigants should remain mindful of due process-based arguments for nonliability when acting in accordance with CDC directives. During this unprecedented pandemic, surely the CDC's expert guidance "constitute[s] a body of experience and informed judgment to which" would-be "litigants may properly resort for guidance."[38]

Good-faith attempted compliance with CDC guidelines should be especially relevant to claims asserting novel theories of liability. For example, as Congress has recognized in debating expanded immunity, businesses may face claims by nonemployees alleging COVID-19 transmission on their premises. 

The notion of a premises owner being held liable because a person allegedly transmitted a previously unknown virus on its premises is, to be sure, novel at best. Such claims will be subject to many defenses ranging from duty to causation. Due process provides another arrow in the quiver.

How can a business be said to have "fair notice" — indeed, any notice — that it could be held liable for such claims, especially when attempting in good faith to adhere to CDC guidelines?[39] Under such circumstances, a compelling argument exists that "[e]lementary notions of fairness ... dictate that" there should be no liability for alleged virus transmission by third parties.[40]

Conclusion

There are many other examples of COVID-19-related governmental directives that arguably may provide a shield to tort claims. Pursuant to long-recognized due process principles, litigants should be entitled to reasonably rely on regulatory guidance, and, in appropriate cases, assert it as complete defense to civil liability.

Litigants should remain mindful of these principles, and the defenses they may support, as they attempt to navigate the uncharted waters that lay ahead.

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Mitchell K. Morris, Kathleen Ingram Carrington and Jorge A. Solis are attorneys at Butler Snow LLP.

Butler Snow attorney Xan Ingram Flowers also contributed to this article. 

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] S. Appalachian Mountain Stewards v. Red River Coal Co. Inc. , 420 F. Supp. 3d 481, 495–96 (W.D. Va. 2019).

[2] Id. at 497.

[3] Id.

[4] State Farm Mut. Auto. Ins. Co. v. Campbell , 538 U.S. 408, 417–18 (2003) (citations omitted).

[5] Raley v. State of Ohio , 360 U.S. 423, 426 (1959).

[6] United States v. Laub , 385 U.S. 475, 487 (1967).

[7] 411 U.S. 655 (1973).

[8] Id. at 674.

[9] Id.

[10] Heckler v. Cmty. Health Servs. of Crawford Cty. Inc. , 467 U.S. 51, 61, n.13 (1984).

[11] 567 U.S. 239 (2012).

[12] See also, e.g., U.S. v. Hoechst Celanese Corp. , 128 F.3d 216, 227 (4th Cir. 1997) (affirming district court decision declining to find defendant liable for regulatory violations where defendant "did not have fair notice of EPA's interpretation" of the applicable standards).

[13] See State Farm, supra; see also, e.g., Honda Motor Co. Ltd. v. Oberg , 512 U.S. 415, 434–35 (1994) ("A decision to punish a tortfeasor by means of an exaction of exemplary damages is an exercise of state power that must comply with the Due Process Clause of the Fourteenth Amendment"); Sessions v. Dimaya , 138 S.Ct. 1204, 1225 (2018) (Gorsuch, J., concurring in part) ("Perhaps the most basic of due process's customary protections is the demand of fair notice," which applies "in civil cases affecting a person's life, liberty, or property").

[14] Cipollone v. Liggett Grp. Inc. , 505 U.S. 504, 521 (1992) (citation omitted).

[15] See Kathleen Ingram Carrington and Mitchell K. Morris, HHS Declares Liability Immunity for Certain COVID-19 "Countermeasures"; Response Act Expands Protections for Mask Makers, Product Lines (March 19, 2020), available at https://www.butlersnow.com/2020/03/hhs-liability-immunity-covid-19-countermeasures/ (last visited May 21, 2020).

[16] See, e.g., Y. Peter Kang, 6 States With COVID-19 Medical Immunity, And 2 Without, Law360 (April 17, 2020); Matthew Santoni, Pa. Gives Civil Immunity To COVID-19 Health Care Providers, Law360 (May 6, 2020).

[17] Y. Peter Kang, Sens. Say Safety Regs Must Precede COVID-19 Biz Immunity, Law360 (May 12, 2020).

[18] See Centers for Disease Control & Prevention, Coronavirus Disease 2019 (COVID-19), How to Protect Yourself & Others, available at https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/prevention.html (last visited May 20, 2020).

[19] U.S. Food & Drug Admin., Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-19) (updated Apr. 15, 2020), available at https://fda.gov/media/136289/download (last accessed May 19, 2020) at 3.

[20] Id.

[21] Id. at 1-2.

[22] Cf. St. Regis Paper Co. v. United States, 368 U.S. 208, 229 (1961) (Black, J., dissenting) ("Our Government should not by picayunish haggling over the scope of its promise, permit one of its arms to do that which, by any fair construction, the Government has given its word that no arm will do").

[23] U.S. Food & Drug Admin., Temporary Policy Regarding Non-Standard PPE Practices for Sterile Compounding by Pharmacy Compounders not Registered as Outsourcing Facilities During the COVID-19 Public Health Emergency (Apr. 2020), available at https://fda.gov/media/136841/download (last accessed May 19, 2020).

[24] Id. at 4.

[25] See id. at 1-2.

[26] See, e,g., Allergan USA Inc. v. Prescribers Choice Inc. , 364 F. Supp. 3d 1089, 1105–06 (C.D. Cal. 2019) ("[T]he Court should not ignore the FDA's ... guidance it provides for outsourcing facilities ... If the FDA is allowing outsourcing facilities to manufacture and distribute drugs during an interim period ... the Court is hesitant to hold Defendants liable for complying with the FDA's guidance").

[27] Centers for Disease Control & Prevention, CDC Organization, available at https://cdc.gov/about/organization/cio.htm (last accessed May 14, 2020).

[28] Centers for Disease Control & Prevention, Coronavirus Disease 2019 (COVID-19) Communication Resources: Guidance Documents, available at https://cdc.gov/coronavirus/2019-ncov/communication/guidance-list.html?Sort=Date%3A%3Adesc (last accessed May 14, 2020).

[29] See Rural Cmty. Workers Alliance v. Smithfield Foods Inc. , 2020 WL 2145350 (W.D. Mo. May 5, 2020).

[30] Id. at *11.

[31] Id.

[32] See Frank v. City of St. Louis , No. 4:20-CV-00597 SEP, --- F. Supp. 3d ---, 2020 WL 2116392 (E.D. Mo. May 2, 2020).

[33] Id. at *3–*4.

[34] Id. at *5.

[35] See Costa v. Bazron , No. CV 19-3185 (RDM), 2020 WL 2025701 (D.D.C. April 25, 2020).

[36] See 2020 WL 2410502 (D.D.C. May 11, 2020).

[37] Id. at *4.

[38] Pa. Indus. Chem. Corp., 411 U.S. at 674.

[39] See State Farm, 538 U.S. at 417; see also Air & Liquid Sys. Corp. v. DeVries , 139 S. Ct. 986, 999–1000 (2019) (Gorsuch, J., dissenting) (noting "fair notice problem" posed by "retrospective[]" application of "novel duty"). For a more in-depth discussion of Justice Gorsuch's dissent in DeVries, see Mitchell K. Morris, Justices' Asbestos Decision Poses Fair Notice Problem, Law360 (April 25, 2019), available at https://www.law360.com/articles/1152840/justices-asbestos-decision-poses-fair-notice-problem (last accessed May 21, 2020).

[40] State Farm, 538 U.S. at 417.

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