Skip to main content

Liability In the Time of Covid: When Should Businesses Be Sued for the Spread of Infectious Disease?


When businesses reopen, what liability should they face related to the spread of Covid? Can businesses who remained open during the pandemic, or those who were open before the lockdowns began, be held liable if their customers caught the virus within the businesses’ walls? If so, what would a customer-plaintiff need to prove? 

Defending even a meritless lawsuit can be prohibitively expensive. For this reason, it is important to define ahead of time what harms can lead to successful lawsuits. Limitations on causes of action can reduce unwarranted suits by kicking them out of the legal system earlier in the process. So what should businesses be liable for?

There are two distinct categories of business liability that might arise from Covid. The first is products liability. The second is liability for infection spread within a business. 

Products Liability
First, any willful fraud perpetrated in relation to Covid should be severely punished. This would include selling false cures, mislabeling products, and any other situation where the purveyor knows what he is selling isn’t the same as what he’s advertising. Putting an N95 label on a less protective dust mask, or guaranteeing that your miracle drug will prevent or cure Covid when you know it’s just a sugar pill are concrete examples. This type of bald-faced lie should result in an award to the plaintiff in both compensable (compensating for the actual harm cause) and punitive (punishment for bad behavior) damages. This type of fraud should also result in criminal prosecution of the seller. 

One step below outright fraud is a seller acting recklessly.  A reckless seller doesn’t know that his claims are false, but he also has no reasonable basis for believing they are true. So someone who guarantees their homemade mask with coffee filter insert is just as effective as an N95 mask, without some good reason for believing it, would be reckless. These merchants should also face liability if someone gets sick while using their product. 

Sellers have a duty not to make reckless claims in selling their products, and any injury resulting from such a claim should be compensated. However, criminal prosecution is unlikely and would not be a good use of state prosecutors’ resources, since crimes usually require a willful state of mind. 

Finally, we turn to the trickiest part of products liability in the time of Covid: negligence and strict liability. Negligence is a breach of duty that one person owes to another, that causes a harm. If someone is in the business of making N95 masks and they don’t use ordinary care, leading to the mask being too thin and allowing micro-particles to pass through it, they might have been negligent. Strict liability means that the presence of a defect is all a plaintiff has to prove in order to receive compensation. These differences matter a great deal in the context of litigation, but for our purposes they can be treated the same. 

These standards may make sense under normal circumstances. But in times of crisis, we want entrepreneurs to seek profits by producing undersupplied goods (this profit incentive is why anti-price gouging laws should be abolished). It may be in our best interest to encourage this transition by relaxing standards to some degree. This is especially true for those who are donating items, or selling them at-cost, so long as their consumers are on notice that they are homemade goods, or were produced as a “better than nothing” alternative, and may not be as effective as comparable products. 

There may be a case for allowing new and even existing professional manufacturers to market their products as “better than nothing,” which would encourage more makers to transition from their primary operations to these needed products, provided they come with adequate notice. 

Spread of Covid within a Business 
Liability for the spread of Covid is where the legislature can do the most good in terms of stopping meritless suits before they are filed. Covid is a highly infectious disease. Going about your business in public could lead to an infection. The risks are, at this point, well documented. 

While there are reports of some grocery stores throwing away thousands of dollars worth of food after customers coughed on it, we should consider carefully whether we want that to become the norm (obviously intentional spread of disease can and should be punished, but it should the customer, not the store, who bears the cost). We as consumers would pay the price for such precautions, through higher prices. Stores can’t monitor every item on their shelves every second of the day. It is a virtual certainty that uncontaminated goods will be thrown away, and contaminated goods will make their way home to consumers. Should we stop what little commerce is left, and starve to death instead? 

There should, of course, be liability for anyone who acted willfully or recklessly. If a cruise line knew that passengers on a previous voyage had or likely had Covid, failed to warn future passengers, and did not sufficiently clean the ship, they might well be liable. On the other hand, if they had no such knowledge, they should bear no more blame for continuing to operate normally than their passengers bear for continuing to vacation normally. In a pandemic, one assumes the risk of infection simply by going out in public. Businesses should only be liable if they had reason to know of a heightened risk and failed to warn their patrons or remediate the problem. 

The legislature has the power to limit or eliminate causes of action. They can and should strike a balance that allows legitimate lawsuits to go forward as normal, while stopping frivolous suits before they start, especially for those who stepped up, or stayed open to provide vital services, in a time of emergency.  

Our Covid response has already wreaked havoc on the economy. Those businesses that survive the lockdown should not then be fed to a pack of ravenous lawyers, unless they knowingly or recklessly increased the risk of contagion. One economic crisis is enough for this year. 

Mike Davis is a Research Fellow at 1889 Institute. He can be reached at mdavis@1889institute.org. 

The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.

Popular posts from this blog

COVID Inspires Tyranny for the "Good" of Its Victims

The Christian philosopher, C.S. Lewis, once said, "Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies." The moral busybodies C.S Lewis warns of reminds me of those who would have Americans give up their liberty to combat COVID-19.   A recent Oklahoman op-ed compared COVID-19 to World War II, stating that the number of deaths from COVID-19 is approaching the number that died fighting for this country and the freedoms it protects. This comparison is, of course, nonsense. This suggests that a virus with a high survivability rate is an equivalent threat to the Nazi and Japanese regimes that brutally murdered millions. The piece uses wartime rationing of meat and cheese, a sacrifice necessary to ensure men on the front lines had adequate nutrition, to justify Americans accepting counterproductive lockdowns in exchange for additional stimulus c...
Read more

How Oklahoma Can Be Number One in Covid Policy

South Dakota, that sound you hear behind you is footsteps. Oklahoma can be Number One in the policy response to Covid-19. We’ve done fairly well to this point compared to other states, but to take us to the top, our leaders will need good, accurate information, must ignore hyperbole (often outright falsehoods) from the media-politico controversy machine, and should trust individual Oklahomans to do what is best for themselves and their families. Oh, and it would help to have some courage in the face of criticism (or ear plugs to tune out the whining). Fortunately, 1889 Institute has compiled a very helpful webpage containing the cold, hard facts about SARS-CoV-2. Based on these facts, not hysteria and virtue signaling, we recommend some straightforward policy responses. The page is here for anyone who wants to arm themselves with knowledge, rather than bask in the newly virtuous habit of broadcasting how afraid and ignorant one is. For example, did you know that the evidence for wid...
Read more

Played for Chumps: The Waste and the Trap that Is MAPS 4

If you own a business and an employee constantly shows incompetence, are you likely to give that incompetent a raise, or promote him to a management position? Obviously, there’s no way. Yet, this is what Oklahoma City’s residents are being asked to do, by passing a 1-cent sales tax for a fourth round of Metropolitan Area Projects (MAPS). These are projects that have a history of being seen, but not really making much of a positive difference in most Oklahoma City residents’ lives. Oklahoma City’s voters should politely decline the “opportunity.” Oklahoma City’s government often demonstrates incompetence in providing basic city services. Take traffic management, for example. There was a period of time when my own commute on Northwest Expressway was interrupted repeatedly – three times in one week at one point – by malfunctioning traffic lights. The flashing lights turned a controlled intersection into a 4-way stop and traffic on the Expressway backed up for almost a mile, unexpecte...
Read more

Muddy, Shallow Thinking Versus Clarity in Education Reform

Monopolies are the best! If we are to gain maximum efficiency and create the greatest value for people, monopoly is the way to go. Competition creates administrative inefficiency since instead of one set of managers, there are as many as there are companies, and all of them cost money. Competitive companies make products that do the same basic things, but waste resources by making products with different features. Standardized products would save money. Were research and development under one roof, instead of many competitive ones, researchers could coordinate more closely, saving money and ultimately being even more innovative. Monopolies would therefore benefit everyone. Everything in the first paragraph is, of course, balderdash . Monopolies, especially those created by government, stifle innovation, develop bloated management, produce too little at low quality, and charge too much. Why? Because they can. They’re monopolists. Without competition and with nearly guaranteed ...
Read more