Bars, restaurants, and wineries, breweries, and distilleries with tap rooms should look to hospitality wins like this recent cruise industry defeat of COVID-19 “fear” and “proximity” cases for lessons and guidance on what to expect in upcoming coronavirus cases.
Yes, expect it. Even with many states passing or considering COVID-19 protections for businesses choosing to open the lawsuits will mount for a time as courts consider how to treat coronavirus lawsuits. Thankfully, precedents grow for the hospitality industry establishing boundaries and criteria for liability. One recent case, stemming from an outbreak of COVID-19 aboard the Princess Cruise Line ship, the Grand Princess, involved people that didn’t contract the virus but who were passengers aboard the ship that was set to travel from San Francisco to Hawaii. Two weeks into the cruise, people started testing positive for COVID-19. The plaintiffs in this lawsuit, along with others later consolidated into this action, sued the cruise line even though they did not suffer symptoms or test positive for COVID-19.
The claims made in the complaint (You can read the complaint that the plaintiffs had filed here. It is nearly identical to the multiple complaints that were consolidated into this action for case management.) were styled claims for negligence and gross negligence, but were premised on the fear of contracting the virus and not on actual harm from actually getting the virus. Because the lawsuits did not assert actual physical harm, the court found they were not, in fact negligence claims, but were better characterized as claims for negligent infliction of emotional distress. As the claims involved a ship, federal maritime law applied.
The test for negligent infliction of emotional distress under federal law requires the plaintiff to satisfy the “zone of danger” test announced by the Supreme Court in Consolidated Rail Corp. v. Gottshall, 512 U.S. 532 (1994).
In Gottshall, the Supreme Court explained that when a plaintiff seeks to recover for negligently inflicted emotional injury, the plaintiff must satisfy the zone of danger test. Gottshall, 512 U.S. at 556. This test limits recovery for emotional injury to two categories of plaintiffs: (1) “plaintiffs who sustain a physical impact as a result of a defendant’s negligent conduct”; and (2) plaintiffs “who are placed in immediate risk of physical harm by that conduct.” Id. at 547–48 (emphasis added).
Briefly, under these standards, physical impact is not mere exposure to a situation/substance that imposes a future risk but requires that the plaintiff manifest some symptom of the feared disease. The Supreme Court has mandated this as it is an easy way to ensure trivial claims of “exposure” are separated from serious claims. The immediate risk of physical harm test requires a “near-miss” style event (as in “near-miss” collisions) that is something “more than minimal.”
Applying these standards to the complaint, the Court dismissed the claims outright without giving the plaintiffs a right to re-plead their assertions. The Court found that under the NEID standards were not only not met, but that this scenario is exactly the type under which the test is meant to keep claims from arising for the benefit of businesses, including bars, restaurants, and tap rooms, that might otherwise have to deal with frivolous lawsuits if the claims were allowed to proceed:
The Court agrees that… the Plaintiffs in this case cannot recover for NIED based solely on their proximity to individuals with COVID-19 and resulting fear of contracting the disease. For one, Plaintiffs’ proposed reading of [relevant precedent] would lead to bizarre results… passenger aboard the Grand Princess who was merely exposed to an individual with COVID-19 could only recover under the first prong of the zone of danger test if they either contracted COVID-19 or manifested symptoms of it. Yet under Plaintiffs’ proposed interpretation, that same passenger could recover without manifesting any symptoms whatsoever so long as they cleverly pled their claim under the second prong of the test. This result is nonsensical and “means that it would be possible to sneak in through the back door what the Court [in the precedent] expressly forb[ade] from coming in through the front.” … In short, the exception would swallow the rule.
The Court also went on to discuss the public policy concerns in both allowing these claims or creating some special rule for the cruise industry that would operate as a distinct rule for ships:
The public policy concerns identified in Gottshall (and reiterated in Metro-North) further support the Court’s conclusion. In Gottshall, the Supreme Court acknowledged that “the potential for a flood of trivial suits, the possibility of fraudulent claims that are difficult for judges and juries to detect, and the specter of unlimited and unpredictable liability” were “well-founded” concerns that informed the Court’s decision to limit liability by NIED plaintiffs. Gottshall, 512 U.S. at 557.
…
To be sure, Plaintiffs argue that concerns of unlimited liability are overblown. Plaintiffs aver that here Defendant had experience with the disease outbreak on two of its prior sailings, knew how fast the virus could spread among passengers, yet consciously decided to sail knowing the virus was on its ship. Plaintiffs contrast this scenario with “restaurants, shops and the like [which] are not inviting the public in with the knowledge of the virus circulating on their properties.” (Opp. at 7, ECF No. 32.) According to Plaintiffs, ” [n]o other business has experienced the kind of widespread outbreak of this disease other than cruise lines, beginning with Defendant’s outbreak on the Diamond Princess, followed by the two outbreaks on the Grand Princess, resulting in significant illness and even death. No other business has experienced such a catastrophe.” (Id.)
The Court disagrees that fears of unlimited liability are overblown and declines to carve out the cruise-ship industry from Metro-North’s mandate. The risk of exposing individuals to COVID-19 is not unique to cruise ships–quite the contrary, in fact, as restaurants, bars, churches, factories, nursing homes, prisons, and other establishments across the country continue to report COVID-19 cases. It is true that cruise-ship goers are a captive audience in a way that is not the case in other contexts. But this alone does not warrant creating a “cruise-ship exception” to the zone of danger test. What of an individual who is exposed to COVID-19 while imprisoned? The individual is “captive” in a more extreme sense than a person on a cruise ship. And the prison exerts more control over the environment than a cruise-ship operator. Setting aside concerns with qualified immunity, the Eleventh Amendment, and the like, can a prisoner recover for NIED against the prison based solely on their proximity to individuals with COVID-19 and their fear of contracting the virus? Based on Gottshall and Metro-North, the answer appears to be “no” for all of the reasons discussed above.
You can read the full opinion in favor of the hospitality provider from the court here.
Even without the Court’s direct correlation to bars and restaurants, the impact and understanding for related hospitality businesses, like tap rooms, concert venues, tasting rooms and the like is evident. Regardless of a state’s decision to protect businesses from negligence suits involving COVID-19 cases, the determination and protections available against claims of “fear” of contracting the virus – say your bar has a reported outbreak and people drinking there nights before decide to file lawsuits claiming they fear getting the virus even though they test negative and have not symptoms – will not find substantiation under the law and courts should act quickly around the country to put an end to such suits with similar decisive opinions.
