April 20, 2021

Kentucky’s COVID-19 Liability Shield—What Business and Premises Owners Need to Know

Written By

Benjamin M. Fiechter
Counsel, Stoll Keenon Ogden PLLC

On April 1, 2021, Kentucky’s General Assembly passed Senate Bill 5, joining the legislatures of many other states to provide immunity to business and premises owners from potential tort damages arising from COVID-19. Governor Andy Beshear did not sign or veto the Bill within ten days as required by statute; as a result, S.B. 5 became law on April 11, 2021. S.B. 5’s protections are broad, though not absolute, and owners should familiarize themselves with its terms and understand the practical impact of the protections it offers.

The intent of S.B. 5 is to shield business and premises owners from liability “for any alleged injury, loss, or damage to persons or property arising from a COVID-19 claim.”[1] A claim is considered to “aris[e] from COVID-19” if the alleged injury was caused by (a) “possible exposure to, transmission of, or contraction of COVID-19,” (b) “[s]ervices, treatment, or other action performed to limit or prevent the spread of COVID-19,” or (c) “[s]ervices performed by an entity outside the normal course of its business in response to COVID-19.”[2]  In addition, owners are not required to “[e]xtend any assurance that the premises are safe from any risk of exposure…or to conditions caused by the COVID-19 declared emergency” and do not “owe a duty to protect from or warn about any risk related to or caused by COVID-19.”[3]

However, the immunity established by S.B. 5 is not unconditional or absolute; rather, only a business or premises owner “who follows any executive action to prevent the spread of COVID-19” can take advantage of the Bill’s protections.[4] In addition, such owners are not immune to damages arising from “gross negligence, or wanton, willful, malicious, or intentional misconduct.”[5] Unlike similar measures in other states, S.B. 5 does not itself create a heightened burden of proof that the plaintiff must meet in order to recover damages, and it does not create a rebuttable presumption in favor of the defendant business owner.[6] S.B. 5 does not provide protection from other types of lawsuits against business and property owners, such as a breach of contract claim.

While S.B. 5 will ultimately shield many business and premises owners from liability for damages, it is likely that they will still be required to litigate COVID-19 related tort lawsuits to an extent. Even though “a party entitled to immunity is immune not only from liability, but also ‘from the burdens of defending the action,’”[7] S.B. 5’s immunity is contingent upon the trial court’s determination that the owner acted in accordance with government restrictions during the COVID-19 pandemic and did not otherwise act in a grossly negligent manner. Courts are cautioned to “proceed expeditiously” once a defendant raises the issue of potential immunity, but “continuation with discovery regarding…immunity would neither amount to a substantial miscarriage of justice nor fly in the face of orderly judicial administration”[8] since “the decision of whether immunity applies in a given situation involves the determination of the material facts.”[9] In other words, where a plaintiff asserts in a complaint that the business or premises owner failed to act in accordance with executive actions related to COVID-19, or acted in a grossly negligent manner, a trial court will likely permit discovery, with its attendant expense, to determine whether the evidence supports those assertions.

Finally, although S.B. 5 was not passed until earlier this month, by its terms it applies to any COVID-19-related “injury or harm that allegedly occurred on or after…March 6, 2020.”[10] Though courts are hesitant to apply a statute in a retroactive manner, they will do so “if it is absolutely certain the legislature intended such a result,” particularly where “the legislation is substantive and not remedial, and new rights and new duties are created.”[11] Since the General Assembly specifically referenced the onset of the COVID-19 emergency in March 2020, it is likely that the courts will apply its protections to lawsuits arising out of occurrences between the declaration of emergency and S.B. 5’s effective date. However, S.B. 5’s retroactive applicability to causes of action that have already accrued could be a key litigation point.  As recent Kentucky Supreme Court decisions have made clear, legislative action that reduces an individual’s ability to redress an injury through the courts may be subject to scrutiny.[12]

In short, S. B 5 provides significant protections for the Kentucky business community. However, as of this writing, there are no Kentucky court opinions that interpret S.B. 5 or apply it to a plaintiff’s lawsuit. Until further guidance is available, to maximize the likelihood that they will be able to take advantage of S.B. 5’s protections, business and premises owners should continue to operate in a safe manner consistent with executive orders and government restrictions, develop relevant policies and procedures as needed, and keep good records regarding their efforts. If faced with a lawsuit that implicates S.B. 5, owners should select and retain legal counsel with experience litigating negligence actions involving immunity defenses. SKO’s Kentucky attorneys stand ready to assist owners in their efforts and will continue to monitor for developments. We will continue to provide updates as the courts analyze and apply S.B. 5.

****

Stoll Keenon Ogden understands that these are trying times for our clients and our country. Our firm operations have continued uninterrupted and our attorneys are equipped to serve as we always have – for more than 120 years.

Healthcare is a dynamic environment with increased scrutiny from governmental agencies and the strictest compliance standards. Our firm’s Healthcare attorneys, both litigation and transactional, stay abreast of the industry’s landscape in order to counsel our clients in constructive and creative ways that will maximize their opportunities, while maintaining compliance with all legal requirements.

Please also be sure to consult the Stoll Keenon Ogden Coronavirus Resource webpage for additional articles and information related to the latest information on new laws and directives enacted by federal, state, and local governments in response to the Coronavirus pandemic.

[1]              S.B. 5, Section 1(2)(c).

[2]              Id., Section 1(a)(1)-(3).

[3]              Id., Section 1(2)(a)-(b).

[4]              Id., at Section 1(2).

[5]              Id., at Section 1(3).

[6]              See Miss. Code Ann. 11-71-11(1) (revoking immunity where the plaintiff shows, by clear and convincing evidence, that the defendant acted with actual malice or willful, intentional misconduct) and Arkansas Executive Order 20-33 (June 15, 2020) (creating a rebuttable presumption that all persons are substantially complying, or acting in good faith while attempting to comply, with health and safety directives).

[7]              Presbyterian Church U.S.A. v. Edwards, 566 S.W.3d 175, 179 (Ky. 2018) (quoting Rowan Cty. V. Sloas, 201 S.W.3d 469, 474 (Ky. 2006).

[8]              Id. (quoting Rodgers v. Com., 285 S.W.3d 740, 755 (Ky. 2009)).

[9]              Norton Hosps., Inc. v. Peyton, 381 S.W.3d 286, 290 (Ky. 2012).

[10]             S.B. 5, Section 1(1)(a).

[11]             Com., Dep’t of Agriculture v. Vinson, 30 S.W.3d 162, 168 (Ky. 2000); see also KRS 446.080(3) (“No statute shall be construed to be retroactive, unless expressly so declared.”).

[12]             See Com. V. Claycomb, 566 S.W.3d 202 (Ky. 2018).

Written By