PREP Act immunity: federal courts weigh in

On March 10, 2020, the Department of Health & Human Services (HHS) issued a declaration (Declaration) under the Public Readiness and Emergency Preparedness Act (PREP Act), providing immunity from liability for certain activities undertaken in response to the coronavirus disease 2019 (COVID-19) pandemic.[1] 

As we wrote in April 2020, HHS subsequently issued an Advisory Opinion to clarify its position on the scope of these immunity provisions, which suggested that HHS views the provisions as broadly applicable to a range of activities related to the “manufacture, testing, development, distribution, administration, and use of [ ] covered countermeasures.”[2]  At the time of issuance of the opinion, very few courts had considered the scope of PREP Act immunity, and none had evaluated the issue in the context of the COVID-19 pandemic-specific Declaration.  Thus, while the HHS opinion offered a helpful window into the agency’s interpretation, questions remained as to how the immunity provisions would be interpreted in federal and state courts. 

Two recent decisions from district courts in New Jersey and Kansas provide some early answers on that topic.  Those decisions, discussed below, suggest that PREP Act immunity may apply broadly to manufacturers and related entities but may be more limited for hospitals, nursing homes, healthcare providers, retailers, employers and others.

In the past two weeks, federal courts in New Jersey and in Kansas issued the first two orders addressing PREP Act immunity in the context of the COVID-19 Declaration.  See Estate of Maglioli v. Andover Subacute Rehabilitation Center I, 2020 WL 4671091 (D.N.J. Aug. 12, 2020) (slip op); Baskin v. Big Blue Healthcare, Inc., 2020 WL 4815074 (D. Kan. Aug. 19, 2020) (slip op).  In each case, the defendants operated residential healthcare facilities (nursing homes and/or rehabilitation centers), while plaintiffs represented residents who allegedly had died at those facilities from COVID-19-related complications. See Maglioli, 2020 WL 4671091 at *1; Baskin, 2020 WL 4815074 at *1.  In each case also, the claims originally were filed in state court and were removed to federal court by the defendants.  See Maglioli, 2020 WL 4671091 at *2; Baskin, 2020 WL 4815074 at *1-2.

The defendants’ primary argument for removal was that all of plaintiffs’ causes of action were preempted by the PREP Act.  See Maglioli, 2020 WL 4671091 at *2; Baskin, 2020 WL 4815074 at *2.  As a result, both orders focus primarily on whether the PREP Act provides “complete preemption,” making “what is ostensibly ‘a state-law claim purely a creature of federal law, and thus removable from state to federal court from the outset.’”  Baskin, 2020 WL 4815074 at *3 (internal citation omitted); see also Maglioli, 2020 WL 4671091 at *4.  Both courts found that it does not and remanded the cases.  The federal question-remand aspect of the decisions has been discussed by others and is not the focus of this post.

Instead, we are taking a closer look at what the orders tell us about how courts may interpret the scope and application of the PREP Act’s substantive immunity provisions.  Not surprisingly, the results are mixed.

First, the positive:  both orders appear to recognize the broad scope of liability immunity provided under the PREP Act.  For example, in Estate of Maglioli, the district court acknowledged that “claims related to the administration of designing, manufacturing, and distributing covered countermeasures to individuals [are] preempted,” Maglioli, 2020 WL 4671091 at *8.  The Maglioli court also noted that the purpose of the Declaration “is to embolden caregivers, permitting them to administer certain encouraged forms of care (listed COVID “countermeasures”) with the assurance that they will not face liability for having done so.”  Id. at *8.

The district court in Baskin was more explicit:

In sum, the PREP Act creates immunity for all claims of loss causally connected to the administration or use of covered countermeasures, which are certain drugs, biological products, or devices. Exceptions to immunity exist for claims of willful misconduct but suit must be brought in the United States District Court for the District of Columbia. All other claims for injuries “directly caused by the administration or use of a covered countermeasure” must be pursued through the Covered Countermeasure Process Fund. State laws that differ or conflict regarding the administration or use of covered countermeasures are preempted.

Baskin, 2020 WL 4815074 at *5.  The Baskin court also recognized that the immunity provisions apply to a wide range of circumstances and situations, including:

• injuries “arising out of, relating to, or resulting from” the administration of covered countermeasures (rather than those directly “caused” by the use), id. at *7
• “activities and decisions directly relating to public and private delivery, distribution and dispensing of the countermeasures to recipients,” id.
• “management and operation of countermeasure programs, or management and operation of locations for purpose of distributing and dispensing countermeasures,” id.
• situations where the injured party was not the one who “received the countermeasure,” id. at *8 and
• situations involving a variety of countermeasures including biological products, devices, and respiratory protective devices. Id.

All of that is reassuring and consistent with the language of the PREP Act, the Declaration and our interpretation.

At the same time, in both cases, the courts determined that plaintiffs were not alleging the deaths occurred as a result of the use of COVID-19 countermeasures, but rather that they were caused by the defendants’ failure to use such measures – ie, “that inaction rather than action caused the death.”  Baskin, 2020 WL 4815074 at *6.  In the courts’ view, such “inaction” is not covered by the immunity provisions of the PREP Act:

Defendants argue that Plaintiffs’ interpretation of the PREP Act does not comport with Congress's intent to provide broad immunity. But Congress’s intent to provide broad immunity for the claims covered by the PREP Act does not mean that the PREP Act covers the claims here. Indeed, if Congress intended the PREP Act to apply as broadly as Defendants advocate, it certainly could have written it to clearly apply to inaction as much as action.  Instead, the PREP Act addresses the administration or use of covered countermeasures. There is simply no room to read it as equally applicable to the non-administration or non-use of covered countermeasures. Id. at *8 (emphasis added).

“[T]he PREP Act . . . is designed to protect those who employ countermeasures, not those who decline to employ them . . . Its effect is confined, for example, to the administration of certain countermeasures, and requires case by case analysis.”  Maglioli, 2020 WL 4671091 at *9 (emphasis added).

The district court in Baskin also emphasized that a causal connection between use of a countermeasure and the injury is a necessary predicate for the PREP Act to apply—“the “PREP Act still requires a causal connection between the injury and the use or administration of covered countermeasures.”  Baskin, 2020 WL 4815074 at *7 (emphasis added).  Indeed, the court’s decision appeared to turn on this very “causation” point: “Plaintiffs’ case is premised on inaction.  There is no clear allegation that any injury or claim of loss was caused by the administration or use of any covered countermeasure, let alone that the loss arose out of, related to, or resulted from the same.”  Id. (emphasis added).

What does all of this mean?  For pharmaceutical and medical device companies (and related entities), these cases present relatively good news.  Although it is early and all of the relevant statements are dicta, both courts seem to interpret the PREP Act broadly to provide expansive liability protection in situations where injuries (or damages) occur as a result of the use (or even misuse) of medications and medical devices intended to treat, prevent, or otherwise assist in the care of patients with COVID-19.

For healthcare providers, hospitals, long-term care facilities, retailers, employers and others who may be making decisions as to what countermeasures are implemented or provided, the analysis is more complicated.  While on the surface these decisions are limited in scope, the underlying analysis suggests that case-specific factors may play an outsized role in how future cases play out.  In particular, if Baskin is any indication, courts will closely examine the nature of the causal connection between the use of a covered countermeasure and the alleged injury to determine whether immunity applies.  The more attenuated that connection, the more likely it is that a court may find against PREP Act immunity.  It is unclear at this time where that “slippery slope” will stop, but we expect more litigation and additional case law in this area in the coming months.  Stay tuned.

If you have any questions regarding this development, please contact the authors or your DLA Piper relationship attorney.

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[1] See Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19, 85 Fed. Reg. 15,198  (Mar. 10, 2020).  The Declaration has been twice amended, once to specifically include NIOSH-approved respiratory protective devices and again to include products that “limit the harm” caused by the COVID-19 pandemic.  See Amendment to Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19, 85 Fed. Reg. 21,012 (Apr. 10, 2020); Second Amendment to Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19.

[2] See https://www.dlapiper.com/en/us/insights/publications/2020/04/hhs-clarifies-prep-act-immunity-for-covid-19-related-activities/