PREP Act Pitfalls: Federal Courts Deny Providers Their Due Protections

Written by: Teresa Pike Tomlinson, Esq. and Leesa M. Guarnotta, Esq.

From the start of COVID-19 litigation, Federal district courts have failed to uphold the bargain Congress made with healthcare workers and facilities to provide them exclusive federal jurisdiction and an exclusive federal cause of action in the face of lawsuits arising from their alleged actions during times of national public health emergency. This partnership between private sector participants and the federal government includes the assisted living and skilled nursing industries that have been on the frontline of the battle against COVID-19. These industries played an especially critical role in fighting the impact of COVID-19 due to the particular threat the virus posed in congregate living settings. In short, the Public Readiness and Emergency Preparedness (“PREP”) Act allows the United States Department for Health and Human Services (“HHS”) to initiate a nationwide network of healthcare providers to implement its directives. In exchange, the federal government preempts all other conflicting federal and state laws and provides immunity from suit and liability to those providers who join the effort. It further provides plaintiffs a streamlined, no-fault alternative remedy funded by Congress. Most importantly for this discussion, the PREP Act provides for exclusive federal jurisdiction for all litigation arising from the use of COVID-19 countermeasures, such as masks, other PPE, thermometers, and tests. Where there are allegations of willful misconduct and plaintiffs have exhausted their administrative remedy under the PREP Act, plaintiffs may file suit only in the United States District Court for the District of Columbia. However, because of misinterpretations by various district courts, assisted living communities and skilled nursing facilities are being hauled into the 50-states’ court systems without the protection from suit promised.

What started out as a misguided reading of the PREP Act based on a single Complaint, has evolved into a web of erroneous decisions nullifying the PREP Act. Initially, district courts denied federal subject matter jurisdiction by stating that the PREP Act cannot apply to allegations of “complete failure” to use and administer a covered countermeasure. When HHS stepped in to direct that claims of “complete failure” were actually decisions not to act, as well as decisions to not act adequately, the federal district courts shifted their reasoning to hold that the PREP Act can only apply where the injured person was directly administered a covered countermeasure (for example, receiving a vaccination), which analysis was antithetical to the whole mitigation concept of staff wearing masks or staff taking visitors’ temperatures to protect residents. In response, HHS provided numerous directives rejecting the district courts’ narrow interpretation of direct administration.

Nevertheless, some district courts still rely on this physical administration standard and have implemented a new “parallel remedy” requirement (i.e. a requirement for an all-encompassing statutory federal cause of action) before complete preemption is applicable––a test not adopted or recognized by the United States Supreme Court. Since the Federal law precludes appellate review of these jurisdictional decisions, healthcare providers are stripped of their PREP Act immunity and forced to defend themselves in state courts. Recently, a federal district court has gone so far as to justify the denial of PREP Act protections by suggesting that a defendant litigate in state court for ultimate appeal to the United States Supreme Court. This immense burden and expense on the senior assisted living and skilled nursing industries, all while continuing to fight against COVID-19, defies the very purpose of the immunity from suit Congress granted the industry.

As a few of these cases have reached the appellate level on other grounds, only time will tell whether assisted living communities and skilled nursing facilities can take comfort in the immunities Congress bestowed on them, or whether they will be forced to fight for their protections by litigating COVID-19 claims through to conclusion at the state level­—in 50 disparate state court systems.