Liability shield fight threatens to blow up relief talks

A sharp disagreement over whether to provide coronavirus liability protections to businesses, schools and other organizations has quickly emerged as one of the biggest obstacles to getting a deal on COVID-19 relief legislation.

Both sides are digging in, with Senate Majority Leader Mitch McConnell (R-Ky.) and Democratic leaders — Speaker Nancy Pelosi (Calif.) and Senate Minority Leader Charles Schumer (N.Y.) — calling the issue a looming dealbreaker.

Not only is the disagreement standing in the way of passing the first major coronavirus package since late March, it’s also pitting key Republican and Democratic constituencies against each other: the business community versus unions and trial lawyers.

Negotiations between the White House and congressional Democrats stalled this week largely because of the standoff over the liability shield in the GOP’s coronavirus package unveiled Monday.

White House chief of staff Mark Meadows told reporters after Wednesday’s talks that Pelosi and Schumer “don’t appear to be in a negotiating mood.”

“In fact, if anything, I think they’re more entrenched now than they were even a week ago. So I’m not optimistic we’ll reach any kind of comprehensive deal,” he said. 

A day earlier, McConnell declared he will not bring coronavirus relief legislation to the Senate floor unless it includes liability protections crafted by Sen. John Cornyn (R-Texas), an influential member of the Judiciary Committee.

“There is no chance, zero chance, America can get back to normal without the Cornyn liability protection, and no bill will be put on the Senate floor that does not include it,” McConnell said. 

Schumer and Pelosi immediately countered that there would be no deal on the broader package unless McConnell backed down. 

“What the leader said today sounded like a person who had no interest in having an agreement,” Pelosi told reporters.

The deadlock has prompted McConnell and Senate Republicans to discuss the possibility of moving a smaller relief package that would not include Cornyn’s liability shield proposal.

“We’re looking at all the options,” McConnell told PBS’s “NewsHour” in an interview Wednesday afternoon when asked about moving a smaller bill.

Republicans initially envisioned securing liability protections for large- and medium-sized businesses, as well as health care providers and other organizations, in exchange for hundreds of billions of dollars Democrats want for cash-strapped state and local governments.

But that was a couple of months ago. Since then, coronavirus cases and deaths have spiked, and President Trump’s poll numbers have fallen, giving leverage to Democrats in negotiations over the next relief package.

For Democrats to give McConnell a huge concession that would anger two of their biggest campaign donor groups — unions and trial lawyers — so close to the election would be playing with political fire.

“We are completely opposed to the bill that Cornyn put out. They said in advance it was going to be limited, restricted, carefully drawn and it’s none of that. It’s overbroad. It’s very, very long-term,” said Yona Rozen, associate general counsel for the AFL-CIO.

Cornyn’s bill would limit liability for personal injuries arising from COVID-19 exposure at businesses, schools, colleges and nonprofit organizations. It also would protect health-care providers and facilities from coronavirus-related liability claims for five years. It sets a willful misconduct or gross negligence standard for coronavirus-related medical malpractice suits. It would apply retroactively from Dec. 1, 2019, and extend to Oct. 1, 2024.

One of the chief criticisms of the proposal is that it does not require employers, health care providers and organizations to adhere to any one set of standards for protecting workers, patients and customers.

“It’s very vague in terms of the standards. There are voluntary standards, state standards, local standards. They make it almost impossible for somebody to bring a claim,” Rozen said.

The AFL-CIO and other labor advocates argue the Trump administration has gone in the opposite direction of what is needed to establish coronavirus liability standards by failing to issue workplace standards under the Occupational Safety and Health Administration (OSHA).

“There are not enforceable standards currently, other than the general duties clause, OSHA has not done what it should have done in terms of issuing temporary emergency standards as we asked,” Rozen said.

Trial lawyers, another major interest in the Democratic coalition, are also staunchly opposed to Cornyn’s bill.

While a number of states, including New York, have adopted laws or implemented executive orders limiting liability during the pandemic, critics argue that Cornyn’s proposal would go far beyond the legal protections extended at the state level.

“We believe any immunity will make the public less safe. But in regards to Sen. Cornyn’s bill, it is far more extreme than anything that has passed at the state level. It gives corporations license to behave recklessly with impunity in the face of a pandemic,” said Peter Knudsen, a spokesperson for the American Association for Justice, formerly known as the Association of Trial Lawyers of America.

Like the AFL-CIO, the trial lawyers group says clear, enforceable standards for protecting workers, customers and the general public from the coronavirus must be implemented before considering a liability shield. 

Pelosi and Schumer also must weigh the fact that Democratic lawmakers overwhelmingly view Cornyn’s liability shield as terrible policymaking.

“I think the whole idea is preposterous,” said Sen. Sheldon Whitehouse (D-R.I.), a member of the Senate Judiciary Committee, which has jurisdiction over the issue.

“This is a fake [issue] because there is not a business reopening problem from fear of liability. We’ve witnessed that over the last months, so the supposed need for it is imaginary. The proposal is so ridiculously excessive that it really doesn’t provide an opening point for negotiations,” Whitehouse added. 

He went on to say, as other Democrats have, that there have been few lawsuits filed related to potential coronavirus exposure because existing law already provides employers with plenty of protections.

“The law already covers this circumstance. There’s a reason there’s been essentially no lawsuits filed, because people look at this and say, ‘Wait a minute, unless somebody’s done really bad stuff, we’re not going to win in a lawsuit in this environment.’ ”

Whitehouse said no lawsuits related to coronavirus exposure have been filed in Rhode Island.

Democrats have accused McConnell of pushing the provision on behalf of the U.S. Chamber of Commerce. 

The chamber first made a strong call for liability protection in May. In mid-July, Harold Kim, president of the U.S. Chamber Institute for Legal Reform, said, “The solutions that we have recommended to the congressional leadership are akin to timely, targeted, temporary.”

After the GOP package was introduced on Monday, the chamber praised the legislation.

“The Chamber thanks Leader McConnell for putting forward the Senate Republican proposal and especially for the focus on liability protections for businesses who follow public health guidelines,” the organization said in a statement.

Alex Gangitano contributed to this report, which was updated at 8:59 a.m.