When we read between the lines in the first wave of COVID-19 case filings, a few key lessons emerge. As the Wall Street Journal noted on July 30 in “Families File First Wave of COVID-19 Lawsuits Against Companies Over Worker Deaths,” the earliest personal injury claims in courts across the country have stemmed from employment settings, but are not contained to that context. Senior management of companies that anticipate being in the cross-hairs of this litigation should carefully consider their organization’s current readiness for mass tort lawsuits.

Employee Claims

Two broad categories of employers were targeted in the first wave – first, big box retail and grocery organizations that serve broad segments of the public, and second, manufacturing operations that are not generally open to the public, but employ large numbers of people on the production floor, as well as in the front office. It is worth noting that these defendant employers are among the many large companies that conducted business operations consistently throughout the pandemic shut downs.

The first wave of filings were made mostly on behalf of employees and their families against employers. As a general matter, most states have workers’ compensation statutes that limit an employee’s ability to sue an employer for tort damages in a civil lawsuit. The remedy for an employee injured on the job is typically limited to a statutory amount as determined by an administrative process. However, there are exceptions to the limited remedy afforded by most workers’ compensation programs, particularly situations where the employee’s injury was the result of intentional or grossly negligent employer conduct. Not surprisingly, the first wave of claims COVID-19 attempt an end-run to avoid statutory limits by claiming intentional, reckless or grossly negligent behavior by employees and management.

Judicial Hellholes

Every year the American Tort Reform Foundation (ATRF) compiles a Top 10 list of “Judicial Hellholes,” which are, by ATRF’s definition, jurisdictions “where judges in civil cases systematically apply laws and court procedures in an unfair and unbalanced manner.”[1] It is surprising to see that of the five cases reported in the WSJ article, only two were filed in one of ATRF’s Judicial Hellholes. However, two of the other cases were filed in Texas courts which are very familiar to mass tort practitioners.

The Value of “Immunity” Statutes

In addition to workers’ compensation programs that generally limit access of claimants to the civil courts, many states have also enacted various forms of COVID-19 immunity statutes that purport to shield prospective defendants from civil tort claims arising from conduct undertaken during the pandemic. As with workers’ compensation statutes, however, the immunity afforded by this legislation is typically subject to exceptions for wanton, willful, reckless, intentional, criminal, grossly negligent or other egregious levels of misconduct. While immunity statutes may ultimately shield defendants from liability, the first wave shows that such laws cannot protect defendants from being sued. By alleging exceptional misconduct by employers and their management, a case can be successfully filed and will in most instances proceed beyond the initial pleadings threshold into the next stage of litigation – discovery.

Aggressive, Wide Ranging Discovery Practice

For plaintiffs’ attorneys, proving intent, gross negligence or other elevated levels of misconduct by employers is particularly difficult, but many courts are inclined to give ample latitude to conduct broad discovery of facts that may prove the serious allegations in their cases. Thus, defendant employers should expect intensive and far-reaching discovery inquiries that seek to capture all facets of an employer’s response to pandemic concerns, including financial, health and safety measures to protect employees, business invitees and customers. These requests manifest themselves in written interrogatories, requests for admission, requests for production of documents and multiple depositions of corporate managers and supervisory employees.

It would be a mistake to see these early filings as isolated, one-off cases involving potential liability from a single plant or store. A better approach would be to consider these claims an attack on the enterprise as a whole. Even though the first wave of cases involves only a handful of individual employees, discovery will seek to encompass the employer organization’s entire business operations as they relate to COVID-19 issues. From this perspective, a response to initial discovery will require a thoughtfully planned internal investigation, will likely consume considerable internal resources that are otherwise engaged in managing ongoing business hampered by COVID-19 considerations, and should encompass a comprehensive defense of the company’s overall approach to COVID-19 challenges. Defendants must carefully respond to such discovery inquiries on a strategically coordinated basis because any responses may, as a practical matter, be etched in stone for use by plaintiffs in all future cases as well.

Suing Individual Managers and Supervisors

The first wave of cases reveals that employer organizations are not the only potential defendants. Plaintiffs have targeted individual managers and supervisors in these suits as well. Thus, plant and store level managers and supervisors can also expect to be ensnared in COVID-19 lawsuits and to face potential liabilities. The naming of individual management employees creates complexities in the defense of any mass tort case. As an initial matter, the employer must determine whether it can indemnify or provide a defense for its management employees. In addition, the company must determine whether to appoint independent counsel to individual employees. If the company does not or is unable to provide a defense to a named employee, there is always a concern for maintaining a coordinated and consistent defense on behalf of the employer enterprise. The potential for conflict of interest between the company and its management employees must be carefully addressed and resolved in the earlier stages of the litigation.

Preparing for Customer or Consumer Cases

Any lawsuit that survives the initial motions to dismiss and enters the discovery phase will begin generating information that can be used in future lawsuits. The disclosure of information by defendants during the first wave of employee claims will form the evidentiary foundation for later suits filed on behalf of customers, consumers and other third-parties. COVID-19 lawsuits involving non-employees generally will not require proof of elevated misconduct and it remains unclear extent to which the various “immunity” statutes will relieve defendants from potential liability. In any event, the next wave of lawsuits will not be filed as matters of first impression. Instead, plaintiffs will be armed with volumes of documents and testimony from defendants. By drawing from a war chest of facts developed from the first wave of suits, the incentive to file future lawsuits increases while the burden and cost of bringing them is lessened.

The Next Wave

Although the number of future COVID-19 personal injury claims is not predictable with any accuracy, the cases are already on the docket. Immunity legislation in some states may curtail ultimate liabilities, but are not likely to eliminate the filing of lawsuits or the expensive pretrial discovery process. Companies and senior management personnel responsible for implementing COVID-19 programs should take the opportunity now to chart a course for the company that contemplates the next wave of claims not only by employees, but also by customers, consumers, business invitees and other third-parties.

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