On Monday, July 11, 2022, Governor Roy Cooper announced that he would end North Carolina’s State of Emergency in response to the COVID-19 Pandemic on August 15, 2022, nearly two and one-half years after first declaring it. Governor Cooper’s announcement will have significant legal consequences.
The Governor’s announcement will mark the end of the temporary immunity that the North Carolina General Assembly unanimously created in 2020 for healthcare providers against ordinary negligence claims and for businesses generally against ordinary negligence claims for transmission of the virus. The healthcare legislation previously was explained to you here. The legislation protecting the business community against claims based on negligent transmission of COVID previously was explained to you here.
This Client Alert reviews the provisions of S.B. 704 and H.B. 118, creating temporary immunities from certain claims for healthcare providers and businesses during the pandemic and forecasts the effects of the Governor ending the State of Emergency (and those immunities) on August 15, 2022.
When COVID exploded around the globe in March 2020, the rules of life and business were rewritten for billions of people in just a few weeks. COVID placed extreme burdens on our healthcare providers. In a matter of days, our healthcare providers became front-line responders to a new, highly contagious virus for which we had limited protections, few treatments and no vaccines. In those many months before vaccines, our healthcare providers were self-quarantining from their families and were ensuring their wills were in order and businesses were scrambling to determine how to operate safely and take care of their employees.
S.B. 704 (May 2, 2020)
The North Carolina General Assembly unanimously enacted the COVID-19 Recovery Act ("An Act to Provide Aid to North Carolinians in Response to the Coronavirus Disease 2019 (COVID-19) Crisis," S.B. 704) on May 2, 2020 to address these new challenges. The General Assembly sought to "broadly protect the health care facilities and health care providers in [N.C.] from liability that may result from treatment of individuals . . . under conditions resulting from the circumstances associated with the COVID-19 public health emergency." N.C. Gen. Stat. § 90-21.131.
To do that, the General Assembly created a temporary immunity for "civil liability for any harm or damages" caused by acts or omissions in the rendering of health care services, if those health care services were impacted directly or indirectly by decisions made "in response to or as a result of the COVID-19 pandemic" and were provided in good faith. N.C. Gen. Stat. § 90-21.133(a). In such circumstances, a health care provider or facility cannot be sued for negligence for healthcare provided during the COVID-19 emergency.
H.B. 118 (June 23, 2020)
Next, on June 23, 2020, with overwhelming bipartisan support, the General Assembly created immunity from claims based on the negligent transmission of COVID-19. Specifically, H.B. 118 provided that in any "claim . . . arising from any act or omission alleged to have resulted in the contraction of COVID-19 . . . no person shall be liable for any act or omission that does not amount to gross negligence, willful or wanton conduct, or intentional wrongdoing." The definition of "person" included all natural persons and every type of legal entity.
While SB 704 provided temporary immunity for the healthcare facilities and providers against negligence lawsuits regardless of whether the claim arose from the alleged contraction of COVID, H.B. 118 provided temporary immunity to all businesses statewide from claims arising from actions alleged to have resulted in the contraction of COVID.
As predicted, litigation challenging the temporary immunities under S.B. 704 and H.B. 118 ensued. So far, the initial results in our state trial courts are varied, with no appellate decisions yet addressing the issues. Some claims have been completely dismissed based on the temporary immunity under S.B. 704, as covered here, while some have survived initial procedural challenges under the laws. Overall, however, the temporary immunity provisions of S.B. 704 and H.B. 118 have been very successful in stemming a possible tide of malpractice and negligence litigation during the pandemic. These temporary immunities have so far achieved their purpose of enabling our healthcare heroes to provide healthcare during extraordinary conditions and for businesses to keep the state’s economic engine running, giving them extra breathing room to operate in good faith by adjusting our normal standards of liability to account for these abnormal times.
The Forecast Ahead
Governor Cooper’s announcement to end the State of Emergency on August 15 is significant and will have consequences in the short and long term. For purposes of the immunity created by H.B. 118, the immunity protections will continue for an additional 180 days (i.e., February 11, 2023), but S.B. 704’s protections will end on August 15, 2022. As noted, however, H.B. 118’s protections are limited to contracting COVID-19, whereas S.B. 704 provided broader protections against most ordinary negligence claims arising from healthcare during the State of Emergency.
What does all of this mean going forward?
With the end of these temporary immunities on the horizon, healthcare providers and businesses in general should ensure that they are positioned to take full advantage of the protections provided by the General Assembly. After all, the statute of limitations for filing a general negligence or medical malpractice action generally is three years, two years for a wrongful death action and all are subject to potential extensions, e.g., in the case of minors. Thus, the statute may provide immunity in the case of wrongful death actions filed as late as August 15, 2024 and medical malpractice and negligence claims filed as late as August 15, 2025, and some as late as February 11, 2026, or even beyond in the instance where a tolling or other extension may apply.
Healthcare providers and other businesses should carefully document the effects of COVID-19 on their operations during the Pandemic. For example, what was the impact of COVID-19 on a healthcare provider’s staffing? What other actions, directly or indirectly, were taken to mitigate the effects and risks of COVID? As memories fade, having evidence of these measures and of other good-faith efforts may be critical to defending future cases that have yet to be filed, but which arose during the course of the State of Emergency.
For businesses generally, efforts to satisfy the notice provisions of H.B. 118 should be documented. H.B. 118 required businesses to give "reasonable notice of actions taken" to "reduc[e] the risk of transmission of COVID-19" to persons on premises owned, possessed or controlled by a business. It did not condition its immunity on compliance with this requirement, but evidence of a failure to comply could be used to challenge the immunity. Other efforts to reduce the risk of COVID-19 transmission should also be documented in order to demonstrate reasonable efforts and that employers were not reckless or acting in bad faith.
If you have any questions related to this Alert, please feel free to reach out to the authors of this Alert or any Smith Anderson lawyer with whom you work. Also, the firm’s Coronavirus (COVID-19) Business Resource Center remains available to you here. It is kept updated with useful materials and resources related to COVID-19.
 If the Governor has cause to declare a subsequent State of Emergency, the protections of S.B. 704 return for the period of the emergency, which we explained to you earlier here.