Should Congress Preempt Coronavirus Liability for Businesses That Reopen?

Even after the shutdown orders are lifted, businesses may fear liability if they reopen and someone supposedly gets sick as a result—when Congress concludes reopening is safe, should it block such liability?

My colleague Prof. Jim Salzman (UCLA Law / UCSB Bren School of Environmental Science & Management) passed along this proposal:

Assuming the curve steadily flattens, I suspect one of the reasons businesses such as universities still may be hesitant to start up in the Fall is potential liability should students living in dorms or attending classes catch the virus and have bad outcomes.

What do folks think of a federal law that would prevent common law actions based on these types of claims? The basic idea would be that we, as a society, have decided to accept this added level of risk for certain business activities without the possibility of recompense through the tort system. If students decide to attend classes or live in dorms, for example, they will do so with a greater assumption of risk than normal.

I like this proposal.  There's an important risk-benefit analysis to be conducted when it comes to reopening institutions (as there was when it came to closing them). It's a complicated analysis that requires considering a vast range of direct and indirect costs and benefits.

I'm not sure that either the President or Governors or Congress will do a great job with this analysis. But it seems to me clear that they'll do a much better job—both in reaching the right result and creating predictability—than would juries throughout the country deciding on a case-by-case basis whether some company's decision to reopen was "reasonable."

I also think this would be a sound use of Congress's Commerce Clause powers. Tort liability for enterprises accused of injuring people as a result of their moneymaking activity is a form of governmental regulation of commerce. That's so whether it happens through the common law or through statute. And it's so even though the lawsuits may be brought by private parties—they are still authorized by the government, and they rely on government power for their enforcement. It may be justifiable regulation or it might not be justifiable, but it is commercial regulation.

Congress may therefore constitutionally preempt such state-law burdens on commerce, just as it may preempt state statutes that burden commerce. That's particularly clear for organizations that are involved in interstate commerce, as most large businesses and nonprofits are. And under modern law, Congress may reach intrastate commerce when "the activity substantially affect[s] interstate commerce"; that would likely be satisfied even for small businesses, such as bars and restaurants.

But if you have a narrow view of Congress's Commerce Clause power, then at least it would be justified to preempt liability as to large enterprises (whether businesses or universities) that draw huge interstate clienteles or have huge networks of interstate suppliers. And my guess is that any such preemption would quickly lead states to similarly limit liability as to smaller enterprises: Few states would want to leave small local businesses liable while their large national competitors are immune.